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24th February 2020
Competition & State Aid

State aid recovery decision: in-depth investigation reveals unfair advantages for Romanian rail freight operator

The Romanian state’s debt write-offs in favour of fully state-owned rail freight operator CFR Marfa, and failure to collect (social security, infrastructure and tax) debts from it, were the subject of an in-depth investigation by the European Commission, to discover whether this constitutes State aid, and whether CFR Marfa had been given an unfair advantage in breach of Article 107 TFEU and EU State aid rules. The Commission conducted a “check [of] whether a private investor would have acted in the same way as the public authorities did here and, if not, to assess whether these measures are compatible with EU State aid rules”.

The freight rail transport market in Romania is considered to be highly competitive, with numerous private operators, and the complaint which the Commission is investigating was made by the Association of Romanian Private Rail Freight Operators in March 2017.

The Commission has found that actions by the State enforcing CFR Marfa’s social security debts and outstanding taxes towards the State budget as of June 2013 were ‘market conform’ but for the other measures, the Commission concluded that the public support from Romania gave CFR Marfa an unfair economic advantage over its competitors, consituting State aid in violation of EU State aid rules.

Now, the Commission has issued a recovery decision and Romania must recover €570 million of incompatible aid.

Read the press release of the Commission here.

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