The European Commission has told governments to end "hidden" state aid to railway companies by the end of next year or face a crackdown (link below.)
http://www.rmtbristol.org.uk/2008/05/brussels_warns_on_railways_sta.html#moreThe Commission wants to boost competition at a time when several rail companies have been acquiring privately owned train operators. It had hoped the new entrants would provide competition for the state-owned operators that still dominate in every European country except the UK and Estonia.
Heiko Fischer, chief executive of VTG, Europe's largest rail wagon leasing company, said concern about such transactions might have motivated the move.
The rules aim to stamp out these distortions. While freight services have been liberalised, passenger services will not follow suit until 2010. Then the big operators should no longer be able to use high freight charges to subsidise passenger fares. Freight operations would be eligible for aid only if they were set up as separate legal entities.
States had spent €7bn ($11bn, £5.5bn) on infrastructure since 2004 and paid companies €15bn a year to maintain unprofitable routes, the Commission said.
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