Scandlines loses court fight against aid for Denmark, Germany tunnel

By Foo Yun Chee

BRUSSELS (Reuters) - Ferry operator Scandlines on Wednesday lost its fight against state funding for a planned $10 billion rail and road tunnel linking Denmark and Germany as Europe's second-top court sided with EU competition regulators which approved the aid.

The case before the Luxembourg-based General Court dated from 2016 when Scandlines Danmark and Scandlines Deutschland took its grievance about the Fehmarn Belt fixed link to the European Commission.

The 19-kilometre long fixed link is a tunnel under the Baltic Sea which will connect Denmark to Germany.

Responding to Scandlines' complaint, the EU competition watchdog said capital injections, state loans and state guarantees provided to Danish public entity Femern A/S, which will build and operate the fixed link, complied with EU state aid rules.

The General Court dismissed Scandlines' challenge.

"The Commission was entitled to find that the Fixed Link project is of common European interest, inter alia because that project makes a significant and concrete contribution to the achievement of the European Union's transport policy objectives and broader EU objectives," judges said.

The Court also rejected Denmark's appeal against the Commission's decision that the funding for the project constituted state aid.

Judges said the aid gave Femern A/S a selective advantage against the ferry operator and other companies.

The cases are Cases T-7/19 Scandlines Danmark and Scandlines Deutschland v Commission, T-364/20 Denmark v Commission and T-390/20 Scandlines Danmark and Scandlines Deutschland v Commission.

(Reporting by Foo Yun Chee; editing by Jason Neely)