The German state has been authorised by the European Commission to pay additional aid to DB Cargo amounting to 88 million euros to compensate for the effects of the health crisis.
The German government will provide DB Cargo with an additional 88 million euros. Berlin received authorisation from the European Commission at the end of December to provide the company with additional aid in order to offset the effects of the health crisis suffered between March 16 and May 17, 2020.
Rail freight traffic in the Federal Republic fell by around 20% during the first lockdown. Many car manufacturers and the metal and chemical industries had stopped production.
No alteration of the rules of free competition
The Commission considered that the sum of EUR 88 million did not exceed the damage suffered and therefore did not represent an infringement of the rules of free competition.
It must be emphasized that DB Cargo (formerly DB Schenker Rail and Railion) is the largest rail freight operator in Europe, with subsidiaries in more than ten European countries the largest of which is based in Germany.
However, The company has been facing a continuous decline for years. Since 2014, DB Cargo's turnover has fallen from 4,5 billion euros to 3,8 billion euros (2020).
In ten years, the company has seen halve the tonnage transported, to 213 million tonnes in 2020, while its losses rose to 728 million euros in 2020, compared to 308 million euros of losses in 2019.
Germany concerned about fate of DB Cargo
The fate of DB Cargo is a matter of considerable concern in Germany. And yet, Angela Merkel's last government had made the development of the railways one of its priorities, with a view to meet climate goalsThe State will invest billions of euros in the coming years to meet this challenge.
The new envelope of 88 million granted by the Commission This is in addition to several subsidy envelopes. In particular, aid of 350 million euros per year allocated since June 1 for the development of the railway, in addition to the sum of 627 million euros per year granted to the various Deutsche Bahn companies for finance infrastructure development, including 294,5 million euros for DB Cargo.
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