INaftemporiki — The EU Commission on Friday lifted a significant obstacle standing in the way of the privatization of Greece’s state-run rail operator (Trainose) by announcing that past state aid funnelled towards loss-making rail companies in the country was in line with EU state aid rules.
The Commission said its decisions showed that state aid controls are able to address ‘problematic issues’ around debt levels at some incumbent operators, helping them avoid serious financial difficulties or having to significantly reduce staff, while easing the transition to an open and competitive market ‘to the benefit of consumers and taxpayers alike’.
For OSE, the Commission has decided that the transfer of 217 maintenance employees and annual grants of up to €340m implemented before October 22 2014 were in-line with state aid rules. The cancelling of €14bn of debt, transfer of 757 employees and grants implemented after October 2014 did not constitute state aid, as they related to OSE’s activities as the infrastructure manager and as such could not distort competition or affect trade between member states.
The Commission concluded that debt cancellation, an equity increase and annual grants to Trainose worth a total of €1bn were also permissible, as they were intended to create the conditions for privatisation and the opening of the market to competition.
The Commission said the measures had the legitimate objective of avoiding serious disturbance to the Greek economy which could occur if the two companies could not continue to operate.
The development means that purchase of Trainose by Italy’s Ferrovie dello Stato can proceed as planned, with a signing ceremony set for next month in the presence of both the Greek and Italian prime ministers.
Italian PM Paolo Gentiloni told the Italian senate this week that Italy’s state-run railways will soon acquire a major portion of Greece’s rail transports.