State aid: Commission approves €550 million German support to compensate Deutsche Bahn for damages suffered by its subsidiary DB Fernverkehr due to the coronavirus outbreak

The European Commission has found a €550 million German support measure in favor of Deutsche Bahn AG (‘Deutsche Bahn’) to be in line with EU State aid rules. The measure, which will take the form of an equity injection, aims at compensating Deutsche Bahn for damages suffered by its subsidiary DB Fernverkehr due to the coronavirus outbreak between 16 March and 7 June 2020 with respect to domestic travels and between 16 March and 30 June 2020 in relation to international travels. The Commission assessed the measure under Article 107(2)(b) of the Treaty on the Functioning of the European Union (TFEU), which enables the Commission to approve State aid measures granted by Member States to compensate specific companies or specific sectors (in the form of schemes) for damage directly caused by exceptional occurrences. The Commission found that the German measure will compensate damages, which are directly linked to the coronavirus outbreak. It also found that the measure is proportionate, as the foreseen compensation does not exceed what is necessary to make good the damage. In estimating the amount of damage to be compensated, the measure also takes into account of track access reductions for long-distance passenger transportation that DB Fernverkher is expected to receive on the basis of a German scheme that the Commission approved on 30 July 2021 (SA.63635). Furthermore, should the German public support exceed the damage actually suffered due to the coronavirus outbreak, a claw-back mechanism will be activated. In other words, the public support received by Deutsche Bahn in excess of the actual damage suffered will have to be returned to Germany. The risk of the State aid exceeding the damage is therefore excluded. The Commission therefore concluded that the measure is in line with EU State aid rules. Executive Vice-President Margrethe Vestager, in charge of competition policy, said:” With this measure, Germany will compensate Deutsche Bahn for damages suffered by its subsidiary DB Fernverkehr between March and June 2020 due to restrictions imposed to contain the coronavirus outbreak. We continue working closely with Germany and all other Member States to ensure that national measures to support all sectors that were hit by the crisis, including the rail sector, can be implemented as quickly as possible, in line with EU rules

You May Also Like

Leave a Reply

Your email address will not be published. Required fields are marked *