EC approves €1.9b in state aid for German rail company

The European Commission approved a German state aid scheme worth €1.9 billion on Friday for DB Cargo, a subsidiary of the German rail operator Deutsche Bahn AG, reported dpa.

In 2022, the European Union's top competition regulator opened up a probe into the German state support measure for DB Cargo after a complaint from a competitor.

The Brussels authority investigated the profit-and-loss arrangements between Deutsche Bahn and DB Cargo. The open-ended operation permitted Deutsche Bahn to cover DB Cargo's losses since 2012.

The commission's probe also extended to Deutsche Bahn providing services to DB Cargo at a favourable rate and potentially advantageous financing conditions offered for internal loans.

The EU executive arm also checked the provisions for the payment of salaries of employees at DB Cargo that previously worked at Deutsche Bundesbahn, the former national railway company.

The bloc's top competition authority determined that the profit-and-loss transfer agreement constituted state aid. This agreement has now been terminated and will cease to be effective from January 1.

The three other measures do not infringe the EU's regulations for state support and were "in line with market conditions," according to the commission's findings.