EU probes state aid to Deutsche Bahn after receiving complaint

EU

European Union regulators are examining whether German state-owned railway company Deutsche Bahn AG received illegal subsidies, acting on a complaint. „We have an informal inquiry going on,” Stefaan De Rynck, a European Commission spokesman, told reporters yesterday in Brussels. „We have written to the German authorities to ask certain questions.” At issue is whether German state aid intended for Deutsche Bahn's network business went to the holding company, according to De Rynck, who declined to identify the complainant. Deutsche Bahn is also involved in businesses including logistics and real estate. EU rules prohibit state aid that distorts competition. The 25-nation EU is gradually opening its railway market to competition, removing the remaining barriers to cross-border freight-train services this year after a partial opening in 2003 and agreeing to open domestic cargo-train markets in 2007 so services improve. EU lawmakers are also debating plans to deregulate the international passenger-train market. The European Parliament wants to open this part of the market in 2008 and EU governments want such a step in 2010, a timeline supported by the commission, the bloc's executive arm. The German government plans to sell shares in Berlin-based Deutsche Bahn as early as 2008. Germany's Federal Auditors Office said in a report last week the railway attributed some of the network's subsidies to its holding company, according to German newspapers including Die Welt. (Bloomberg)

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