Public financing of Fehmarn Belt fixed link approved by European Commission

Tuesday, March 24, 2020

The European Commission has recently concluded that Denmark’s public financing model for the Fehmarn Belt rail and road tunnel to Germany is compatible with EU state aid rules.

It was back during July 2015 that the Commission first approved the model. However, the ferry companies Scandlines and Stena Line subsequently appealed. Years later, in December 2018, the General Court partially annulled the Commission’s decision. The decision was annulled because it had not undertaken a formal investigation before making the approval.

Last year, around the month of June, The Commission opened an in-depth investigation. After carrying out the investigation it was confirmed that the project qualified as an Important Project of Common European Interest. It also stated that the project justified state aid.

Following some more discussions, the Danish authorities implemented few changes to the financing structure. The changes included limiting the use of state guarantees and loans to a maximum of €9.3 billion. It also restricted the usage to the first 16 years of operation instead of 55 years as originally planned.

Based on updated figures and these changes, the Commission concluded that the public support was proportionate, necessary and in-line with EU state aid rules.

Margrethe Vestager, Vice-President in charge of competition policy said in a recent press statement that the fixed link will contribute to the cross-border integration of the two regions it will connect. She mentioned that the committee concluded that Danish measures to support this project of common European interest are in line with EU state aid rules. She also said that the positive effects of the project clearly outweigh any potential distortion of competition.

In addition, Scandlines said that it welcomed the clarification and the limits on public support. Søren Poulsgaard Jensen, CEO, Scandlines added that they are looking forward to reading the approval in its entirety but they have already noticed that they succeeded in the main complaints.

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