Brussels, 10/05/2007 (Agence Europe) - On Thursday, the European Commission decided not to raise any objections to the aid scheme proposed by the Czech Republic to support its railway activities. The Commission feels the measure would contribute to the development of railway transport and is compatible with the proper functioning of the common market. The passenger rolling stock of Czech Railways (Èeske dráhy) is very outdated and needs to be replaced so as to reduce its failure rate and increase the reliability and safety of rail passenger services in the Czech Republic. The Czech authorities therefore intend to guarantee a loan of €30 million: It will be granted by the financing company EUROFIMA in order to facilitate the purchase of new passenger rolling stock, with a very limited adverse impact on trading conditions.
To justify its decision, the Commission explains that Czech Railways is paying an interest rate for the loan, though more advantageous than under full market conditions, as well as the guarantee. Secondly, the guarantee only applies to rail passenger transport in the Czech Republic, a sector not yet open to competition under EU legislation. Furthermore, the Commission considers that the proposed measure contributes to the development of economic activities which are in the common interest of citizens and in line with European transport (ol)