92000E2635

WRITTEN QUESTION E-2635/00

by Karin Riis-Jørgensen (ELDR) to the Commission

(1 August 2000)

Subject: Illegal state aid to Combus A/S

The State-owned Danish coach company Combus A/S has, with the help of State aid, been able to compete with private (domestic and foreign) coach companies charging fares well below real cost.

According to my information the Association of Danish bus and coach operators had a meeting with the Commission in Autumn 1999 at which they expressed their objections to the illegal State aid to Combus A/S, and were given to believe that the Commission was going to take the matter further.

The Commission:

1. Has it completed its inquiries following the visit to Brussels of the Danish bus and coach operators in Autumn 1999?

2. If its investigations are still under way, can the Commission tell me what progress has been made and in particular when it expects to have dealt with the question of illegal State aid to Combus A/S?

Answer given by Mrs de Palacio on behalf of the Commission

(23 October 2000)

State funding which distorts or threatens to distort competition by favouring certain undertakings and which affects trade between Member States requires, in principle, the Commission's prior clearance. No state aid notification under Article 88 (ex Article 93) of the EC Treaty has reached the Commission on the issue of the financing of the Danish public transport company Combus A/S.

However, financial compensation for the provision of public transport by road and rail is exempted from an a priori notification and assessment by the Commission under the Treaty's state aid regime if granted in accordance with Council Regulation (EEC) No 1191/69 of 26 June 1969 on action by Member States concerning the obligations inherent in the concept of a public service in transport by rail, road and inland waterway(1) as amended by Council Regulation (EEC) No 1893/91 of 20 June 1991(2).

Within the framework of the Regulation, Member States are free to choose the form of compensation they grant companies to balance costs for the provision of public services. The Commission will react however in cases of documented misuse of such aid provided that both a harmful impact on competition and an effect on cross-border trade can be established.

The Commission has not taken a formal decision regarding its assessment of the financing of Combus A/S. In view of the current market situation the Commission believes an immediate reaction is not required.

(1) OJ L 156, 28.6.1969.

(2) OJ L 169, 29.6.1991.