Germany's Deutsche Bahn must cut off DB Cargo aid after EU probe, say sources
BERLIN, Aug 22 (Reuters) -Germany's state-owned Deutsche Bahn will no longer be able to financially support its loss-making freight operator DB Cargo as the result of an investigation by EU competition regulators, according to German government and supervisory board sources.
The European Union opened an investigation into whether German support for DB Cargo could have given it an advantage in 2022 after receiving a complaint about the measures.
An official decision is due in October.
Deutsche Bahn and the European Commission did not immediately respond to requests for comment.
According to the Sueddeutsche Zeitung newspaper, which first reported the outcome, the aid would have to stop from next year.
"The economic situation of DB Cargo is currently challenging and immediate measures are unavoidable," said a German government representative.
Under an open-ended profit and loss transfer agreement dating from 2012, Deutsche Bahn covers losses at DB Cargo, which has rapidly lost market share in recent years and now accounts for less than half of rail freight transport in Germany.
Last year, losses at DB Cargo leapt to almost 500 million euros ($556.90 million), twice as bad as expected.
($1 = 0.8978 euros)
Reporting by Markus Wacket in Berlin and Kate Abnett in Brussels, Writing by Miranda Murray, Editing by Rachel More
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