To get more bonuses ?: Deutsche Bahn does not call for billions in aid

Friday, January 22, 2021

To keep getting bonuses?
Deutsche Bahn does not call for billions in aid

In times of pandemics, Deutsche Bahn is on the move with empty trains and is therefore recording high losses. Nevertheless, the group has not yet requested government aid of six billion euros. The DB board may fear that the EU would otherwise prohibit its own bonus payments.

Although Deutsche Bahn is making billions in losses due to the corona crisis, the state-owned company has so far rejected financial aid from the federal government of around six billion euros. According to a report by "Spiegel", the main obstacle is that such aid would have to be approved by the EU Commission and that the Brussels terms and conditions displeased the railway board. According to the report, especially fairer competitive conditions for DB competitors and a ban on board bonuses meet with resistance from rail management. The paper relies on a memo from the federal government.

According to "Spiegel", the Federal Ministry of Transport has already clearly sided with Deutsche Bahn in the matter. The ministry under Andreas Scheuer accuses the EU Commission of taking advantage of the coronavirus emergency of the railway to decide the dispute in transport policy in the interests of Brussels. This includes, for example, the wish of the EU to open the German rail network more to private providers.

According to "Spiegel", further conditions from Brussels emerge from the memorandum of the federal government. Accordingly, the commission wants to oblige the railway to provide precise evidence of the financial damage caused by the corona pandemic for each of its routes. Private competitors are also to be supported, for example by opening the DB Navigator booking platform for them. This would, for example, benefit the rail competitor Flixtrain, whose parent company Flixmobility had filed a complaint with the Commission in December 2020 about the equity increase of the railways.

"Avoid bonus restrictions"

Another stipulation from Brussels could be even less popular with the rail board. Right at the beginning of the corona crisis, the EU Commission’s Vice President Margrethe Vestager announced that the taxpayer’s corporate aid would be "linked to conditions", "including a ban on dividends and bonuses". The magazine quotes from the federal government's memorandum that the concern is now about "avoiding the governance requirements (bonus restrictions)".

Finance Minister Olaf Scholz only announced on Tuesday that six billion euros from the federal budget for Deutsche Bahn had not yet flowed out because the aid proceedings with the EU were still ongoing. However, he did not explain the background to this. Shortly before Christmas, the federal government's rail commissioner, Enak Ferlemann, put the pandemic loss of the railroad at 13 billion euros.