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Thu July 18 2019

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EU opens investigation into Fehmarnbelt financing

17 Jun An investigation has been launched into whether the public financing model for the Fehmarnbelt road and rail link is in line with European Union rules.

The European Commission’s investigation will look into Denmark's public financing model for the fixed rail-road link between Denmark and Germany.

The decision to investigate follows the EU General Court's annulment of a previous European Commission’s decision approving support.

Commissioner Margrethe Vestager, in charge of competition policy, said: "The Fehmarnbelt link will contribute to the cross-border integration of the two regions it will connect. The Commission previously approved support measures for the financing of the link in 2015, but the Court annulled this decision, finding that the Commission should have opened an in-depth investigation. Today's opening of such an investigation is an invitation for all stakeholders to provide their input, which will allow the Commission to adopt a new, well-informed final decision.”

The link is a key element to complete the main north-south route connecting central Europe and the Nordic countries. It includes an undersea tunnel between Rødby on the island of Lolland in Denmark and Puttgarden in Germany and the rail and road connections on land. The tunnel will be approximately 19km long and consist of an electrified, double-track railway and a four-lane motorway.

An intergovernmental agreement between Denmark and Germany has mad Denmark the sole owner, bearing the full risk for the financing of the fixed link, as well as for the upgrading of the Danish road and rail connections. Germany is responsible for the financing and upgrading of its own hinterland connections, and is not subject to the Commission's investigation.

In Denmark, two public undertakings have been entrusted with the planning, construction and operation of the project: A/S Femern Landanlæg for the Danish hinterland connections and Femern A/S for the fixed link.

In July 2015, the Commission approved the public financing model of the Fehmarn Belt fixed rail-road link between Denmark and Germany under EU State aid rules. The Commission considered that the financing measures granted to Femern Landanlæg did not constitute State aid. It also found that it was not necessary to conclude whether the public financing measures granted to Femern A/S for the sole purpose of planning, constructing and operating the Fehmarn Belt fixed rail-road link constituted State aid. This is because they would in any case be in line with EU State aid rules since they promoted the execution of an important project of common European interest.

In December 2018, following an appeal against the Commission's 2015 decision by Scandlines and Stena Lines, the General Court partially annulled the Commission's decision on procedural grounds. The General Court confirmed the Commission's decision with respect to the financing granted to Femern Landanlæg for the hinterland connections. However, it found that the Commission should have opened a formal investigation under EU State aid rules to assess the measures granted by Denmark to Femern A/S before adopting its decision.

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