ECONOMY

EU to demand rail subsidy return

eu-to-demand-rail-subsidy-return

The Greek railway system faces the risk of having to return state subsidies of over 5 billion euros and several millions in European Union funding, as the Trainose privatization is moving slower than a whistlestop train going uphill.

The issue was raised recently by EU Deputy Director-General for State Gert Jan Koopman, who has made reference to the delay in the past as well. It also gained additional urgency following a letter from Joachim Luecking, head of the directorate’s Industrial Restructuring unit, to the Greek government calling for the submission of a timetable for the valuation of the carriage stock owned by the Hellenic Railways Organization (OSE), Trainose’s parent company.

The letter from Brussels is seen as reopening the issue of state subsidy return by OSE, which has loan obligations of 4.78 billion euros guaranteed by the state, plus another 1.2 billion that Brussels considers as state subsidies, including debts of 714 million euros that have been written off.

Sector professionals estimate that the European Commission will deduct from the sum of the above amounts the value of the carriage stock, branding the rest as state subsidies that have to be returned.