EU on collision course with states over rail aid

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European regulators are on a collision course with Britain, France, Italy and Portugal over state guarantees offered to rail companies, an EU official said on Monday.

Letters to the four governments concerning state support for railways were issued in February, reminding the governments of a July 22, 2010 deadline for withdrawing backing that is "not compatible" with state aid rules.

Changed guidelines agreed two years ago mean state aid must be re-defined to meet market liberalisation goals, said Amelia Torres, spokeswoman for the European Union's competition commissioner, Joaquin Almunia.

The French government has taken the issue to the European Court of Justice in Luxembourg, arguing that it has no intention of changing the legal status of national rail operator SNCF.

France has already changed the status of its national postal service in order to meet Brussels' demands.

The commission was unable immediately to say which British rail operators were concerned.

© 2010 AFP

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