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Brussels opens an investigation into French state aid to Fret SNCF

Has France helped Fret SNCF too much? The European Commission has doubts and suspicions since it announced on Wednesday the opening of an investigation into state aid granted to the subsidiary of the chronically loss-making French national railway company. These aids are suspected of violating EU rules.

Brussels “fears that certain measures in favor of Fret SNCF, granted during the period 2007-2019, do not comply with EU rules on state aid”, she said in a press release. During this period, the losses of Fret SNCF SAS, a 100% subsidiary of the French public railway group SNCF, were “continuously covered” by the parent company “by means of intra-group cash advances, which constitute public resources shareholding and state control”, explained the European executive.

The investigation will focus in particular on the cash advances made by the SNCF from the beginning of 2007 until its transformation into a commercial company on January 1, 2020. Their amount is estimated between 4 and 4.3 billion euros. The commission will also examine the cancellation of the financial debt (totalling 5.3 billion euros, including cash advances) of Fret SNCF as well as a capital injection of 170 million euros. in this subsidiary, at the time of its transformation into a commercial company in 2019. “The opening of an in-depth investigation gives France and other interested third parties, including the beneficiary, the opportunity to submit their observations. It in no way prejudges the outcome of the investigation,” the Commission stressed.

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