The European Commission has discovered that rail freight operator CFR Marfa obtained not less than €570 million incompatible state support from Romania by a debt write-off and failure to gather money owed from the corporate. CFR Marfa is the incumbent rail freight transport companies supplier in Romania.
The firm, which is totally state-owned, has been in financial difficulties for a variety of years. On 18 December 2017, the Commission opened an in-depth investigation to ascertain whether or not a number of Romanian measures in favour of CFR Marfa had been consistent with EU State support rules. The Commission discovered that actions by the State imposing CFR Marfa’s social safety money owed and excellent taxes in direction of the State funds as of June 2013 had been market conform.
However, with respect to the remaining recognized measures, the Commission concluded that the general public help from Romania gave CFR Marfa an unfair financial benefit over its opponents. Therefore, these measures represent State support inside the which means of EU rules. The Commission assessed the assorted measures beneath its Rescue and Restructuring Guidelines.
EU state support rules permit a State intervention for a corporation in monetary problem beneath particular situations. In the current case, these situations weren’t met: no sound restructuring plan was notified to the Commission, there was no contribution to the price of a restructuring by the corporate, nor had been compensatory measures to make sure that competitors distortions are restricted in place.
The Commission due to this fact concluded that the general public funding granted by Romania to CFR Marfa, totaling a mixed quantity of not less than €570m plus curiosity, is incompatible with EU state support rules and due to this fact must be recovered by Romania. Executive Vice President Margrethe Vestager, in control of competitors coverage, mentioned: “The rail freight market is an essential component of any economy’s transport links. Certain public support measures in favour of the state-owned incumbent CFR Marfa have given them an unfair economic advantage vis-à-vis other operators. They consist of the cancellation of public debts and the failure of public creditors to collect debts from the company. This is in breach of EU State aid rules. Romania will now have to recover the incompatible aid.”