European Commission to Investigate State Aid to Fret SNCF, France Comments on the Situation

foto: Thomas Wolf / Wikipedia/European Commission to Investigate State Aid to Fret SNCF, France Comments on the Situation

26 / 01 / 2023

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Last week, the EU announced the launch of an in-depth investigation into whether France may have violated EU rules on state aid by providing subsidies to the freight division of the national railway operator, Fret SNCF. In turn, France expressed its readiness for the formal procedure and its will to guarantee the future development of rail freight transportation.

In a statement, the Ministry of Transport said that SNCF helped preserve rail freight transportation during the period of increased competition between 2007 and 2019, which is contrary to EU aid rules. Thus, the French government "is committed to providing the Commission with all the relevant information within the framework of this procedure, which it (the government) is approaching in a cooperative and determined spirit."

The government's support for rail transportation was strengthened last year as part of a plan to revitalize the rail sector and reform it into a more energy-efficient and environmentally friendly mode of transportation. At the same time, Fret SNCF was transformed into a commercial company in early 2020, but for 12 years before that, its losses were covered by its state-controlled parent company SNCF.

The investigation will aim to determine whether Fret SNCF gained an economic advantage over competitors in the rail freight transportation sector.

"The opening of an in-depth investigation gives France and other interested third parties, including the beneficiary, the opportunity to comment. It does not prejudge the outcome of the investigation," the Commission's statement concluded.