ASSESSING THE LEVEL OF STATE AID TO THE RAILWAY SECTOR IN SELECTED EUROPEAN COUNTRIES: INSIGHTS FROM THE ITALIAN CASE
This paper is aimed at analysing state aid to the railway sector in selected countries of the European Union. Although this is a preliminary exercise, literature lacks of specificity. From the analysis, a highly differentiated situation emerges: a group of countries with permanently lower subsidies (the Iberians, the Scandinavians and Austria); a group of countries with a medium level of subsidies (all of the major countries: Germany, France and the UK) and a group of countries with permanently high subsidies (Italy, Denmark, Belgium and the Netherlands). This paper demonstrates that railways have so far benefited from weakened forms state aid control. This can be motivated (i) by the need for modal rebalance recognised by national transport policies, (ii) by the natural monopolistic character of the network whose duplication is not economically feasible and (iii) by the non-competitive traditional structure, from a legal point of view, of even the transport service. This situation, however, is set to change drastically with the opening up of services to competition, which has already been done in the European Union for the freight sector and in some countries, although only on a voluntary basis, even for the passenger sector. By focusing on Italy, this study finds that the elevated state aid to the rail sector consequently results in both a major public finance problem and a potential factor of competition distortion.
Arrigo U, & Beccarello M. (2000). Il trasporto ferroviario La convergenza europea nel settore pubblico [Railway transport European convergence in the public sector] Franco Angeli, Milano
Arrigo, U, & Di Foggia, G. (2013a). Schemes and levels of state aid to rail industry in europe: evidences from a cross-country comparison European Journal of Business and Economics, 8(3). DOI: http://dx.doi.org/10.12955/ejbe.v8i3.410
Arrigo, U, & Di Foggia, G. (2013b). Gli aiuti di Stato al settore ferroviario nell’Unione Europea [State Aid to Railways in Europe] Working paper of Di SEA DE Retrieved January 1, 2014 from http://boa.unimib.it/bitstream/10281/49292/1/Arrigo-Di%20Foggia%20AIUTI%20DI%20STATO%20U.E.%20ALLE%20FERROVIE.pdf
Beria, P, Quinet, E, de Rus, G, & Schulz, C. (2012). A comparison of rail liberalisation levels across four European countries Research in Transportation Economics, 36(1). 110-120 DOI: http://dx.doi.org/10.1016/j.retrec.2012.03.014
Consolidated versions of Treaty on the Functioning of the European Union. (2008). Article 107 (ex Article 87 TEC). Official Journal of the European Union, C 115, 0001 – 0388
Crössmann, K, & Mause, K. (2014). Rail subsidisation in the European Union: An issue beyond left and right? Comparative European Politics, 1-22 DOI: http://dx.doi.org/10.1057/cep.2014.2
Dehornoy, J. (2011). The evolution of public funding to the rail sector in 5 European countries - a comparison In Fourth Annual Competition and Regulation in Network Industries (CRNI) conference
Directive 2012/34/EU of the European Parliament and of the Council of 21 November 2012 establishing a single European railway area 2011 OJ L 343/32
DG MOVE (2013). EU transport in figures, Statistical Pocketbook. Retrieved from http://ec europa eu/transport/facts-fundings/statistics/doc/2013/pocketbook2013 pdf
European Commission. (2012b). Communication from the Commission to the European parliament, the council, the European economic and social committee and the committee of the regions EU State Aid Modernisation (SAM) 
European Commission. (2012a). State aid Scoreboard, Report on State aid granted by the EU Member States Brussels Retrieved October 10, 2013, from http://ec europa eu/competition/state_aid/studies_reports/studies_reports html
Eurostat. (2013). Railway transport Retrieved August, 3, 2013, from http://epp.eurostat.ec.europa.eu/portal/page/portal/transport/data/database
Eurostat. (2012). Energy, transport and environment indicators European Union, Luxembourg
Friederiszick, H W, Röller, L H, & Schulz, C C. (2003). Evaluation of the effectiveness of State aid as a policy instrument: The Railway Sector [Draft version] Retrieved September, 2, 2013, from idei.fr/doc/conf/rai/papers_2003/friederiszick.pdf
FS (2012). 2012 Financial Statements Retrieved from http://www.fsitaliane.it/fsi-en/Investor-Relations/Financial-Statements
Knieps, G. (2013). Competition and the railroads: A European perspective Journal of Competition Law and Economics, 9(1). 153-169 DOI: http://dx.doi.org/10.1093/joclec/nhs040
Nash, C, Nilsson, J E, & Link, H. (2013). Comparing three models for introduction of competition into railways Journal of Transport Economics and Policy (JTEP). 47(2). 191-206
NERA. (2004). Study of the financing of and public budget contributions to Railways, report to the European Commission – DG Tren, London, 136 p.
Nilsson, J. E, Pyddoke, R, Hulten, S, & Alexandersson, G. (2013). The Liberalisation of Railway Passenger Transport in Sweden Journal of Transport Economics and Policy (JTEP). 47(2). 307-312
Nilsson, J E. (2002). Restructuring Sweden’s Railways; The Unintentional Deregulation Swedish Economic Policy Review, 9(2)
Nitsche, R, Heidhues, P. (2006). Study on methods to analyse the impact of State aid on competition Economic papers no. 244, European Commission Brussels, Belgium
Pflieger, G. (2014). What “Regulatory State”? Explaining the Stability of Public Spending and Redistribution Functions after Regulatory Reforms of Electricity and Rail Services in the United Kingdom and Germany Law & Policy, 36(2). 195-221 DOI: http://dx doi org/10 1111/lapo 12018
Preston, J. (2009). Trends in European railways over the last two decades Built Environment, 35(1). 11-23 DOI: http://dx.doi.org/10.2148/benv.35.1.11
Szekely, B. (2009). Liberalisation of the railway industry in Europe: toward a sustainable system through process view International Journal of Sustainable Economy, 1(2). 167-185 DOI: http://dx.doi.org/10.1504/IJSE.2009.023046
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License (Creative Commons Attribution License 3.0 - CC BY 3.0) that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).
firstname.lastname@example.org, www.cbuni.cz, ojs.journals.cz