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State aid: Commission approves €557 million German support to compensate Deutsche Bahn for damages suffered by its subsidiary DB Fernverkehr due to the coronavirus pandemic

The European Commission has found a €557 million German support measure in favour of 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 the damage suffered by its subsidiary DB Fernverkehr between 1 November 2020 and 16 May 2021 due to the coronavirus pandemic and the restrictive measures in place.

This follows another measure aimed at compensating Deutsche Bahn for damages suffered by its subsidiary DB Fernverkehr due to the coronavirus pandemic 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), which the Commission approved on 10 August 2021 (SA.63846).

DB Fernverkehr is a German rail services operator, which provides national and international long distance rail passenger services in Germany. 

The German support measure

DB Fernverkehr, as other companies active in the rail sector, suffered high operating losses due to the coronavirus pandemic and the restrictive measures that Germany and other countries had to implement to limit the spread of the virus.

The restrictions in place between November 2020 and May 2021 had in particular a direct negative impact on rail traffic and long distance travel by train in Germany. During that period, the number of long distance rail passengers of DB Fernverkehr reached only approximately one third of the one recorded in the corresponding period in 2019. This led to a significant drop in revenues for DB Fernverkehr.

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 considers that the coronavirus pandemic qualifies as an exceptional occurrence, as it is an extraordinary, unforeseeable event having a significant economic impact. As a result, exceptional interventions by the Member States to compensate for the damage linked to the coronavirus pandemic are justified.

The Commission found that the German measure will compensate the damage suffered by DB Fernverkehr, which is directly linked to the coronavirus outbreak. It also found that the measure is proportionate, as the envisaged compensation does not exceed what is necessary to make good the damage.

The Commission therefore concluded that the measure is in line with EU State aid rules.

Click here for the full press release

 

Original article link: https://ec.europa.eu/commission/presscorner/detail/en/IP_22_7103

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