The EU pushing it’s privatisation of rail across EU members countries steps up a gear with its 4th railway package
What is the 4th railway package?
The 4th railway package aims to remove the remaining barriers to the creation of a single European rail area. The proposed legislation would reform the EU’s rail sector by encouraging competition and innovation in domestic passenger markets.
The European Parliament rubber stamped the ‘market pillar’ of the EU’s Fourth Railway Package which means that train operators must have complete access to the networks of member states to operate domestic passenger services.
The European Council had already agreed that mandatory competitive tendering should be the main way of awarding public service contracts.
RMT general secretary Mick Cash said that the failed Tory privatisation of rail over twenty years ago using EU directive 91/440 was now being imposed on over 500 million people by EU diktat without any real mandate.
“This rail package is designed to privatise railways across Europe and its proposals are remarkably similar to the McNulty report on the future of GB railways, imposing further fragmentation and attacks on workers.
Competitive tendering started EU-wide in 2019, although the government and local authorities can invoke get-out clauses that will delay effective free-tender competition until 2033 the EU are pushing their rail privatisation ‘Directive’.
France was the fist to take up the Directive, making an early start with Macron opposing the unions and diving straight into the fourth railway package.
Emmanuel Macron has been confronted with the strongest social mobilisations in France since his election. Even though these mobilisations are heterogeneous and gather a large variety of struggles, they were originally triggered by Macron’s rail reform which embodies the President’s harsh neoliberal agenda.
On March 14 2018, French Prime Minister Edouard Philippe announced the main features of the rail reform to come. A week later, the rail workers and the civil servants demonstrated together nationwide and a few days later, as the rolling strikes called by the railway unions were beginning, the student’s mobilisation against the implementation of restrictive admissions procedures in the universities really kicked off.
French rail strike: workers protest at Paris station
privatisation is linked to the third main feature of the reform, which is the precise schedule of the opening to competition of the French railway market. The opening to competition is one of the main justifications of the advocates of the privatisation, as competition will force the SNCF to align its standards on the private sector in order to maintain price competitiveness.
The reform, when adopted, will organise a gradual phase-out of the SNCF’s passenger rail monopoly, starting with competition on high-speed lines in 2020. The regional train lines will follow until 2023, except for the Ile de France region which will have until 2033 due to the specificities of France’s most populated region.
The obligation for every public administration to organise call for bidders for any public market related to the rail industry will be fully enforced by 2033. In addition to the risk of a privatisation in the medium term in the wake of the completion of the opening to competition, such an opening will most probably disorganised the rail services, increase the prices of the tickets and led to the deterioration of the infrastructures and the closure of non-profitable train lines.
British Rail a blueprint to privatisation
Such consequences are not fantasies but based on the observation of the railway industry in several European countries after the opening to competition was completed. This was the case in the U.K. with British rail which was the laboratory used for experimenting neoliberal reforms in the last three decades.
The opening to competition and the privatisation in the 1990s led the British rail transport to become a disaster to such an extent that a large majority of British people are in favour of its renationalisation. The comparison with other countries in Europe where opening to competition, deregulation and privatisation have been implemented brings us to look at the origin of these processes: the European Union’s fourth railway package.
The 4th Railway Package basically outlaws national publicly owned monopolies operating rail services.
If this sounds familiar it’s because in 1992 John Major’s Tory government used the EU’s infamous rail directive 91/440/EC as a blueprint to break up and privatise British Rail.
This approach, known as “unbundling,” has allowed Germany’s Deutsche Bahn (DB), Europe’s largest state-owned operator, and France’s SNCF to massively expand into foreign rail markets but both countries are opposed to having this EU model imposed on themselves.
DB has expanded considerably in the rail freight market with the purchase of the freight section of the Dutch railway company NS (now DB Schenker Rail Nederland), EWS in Britain and DSB goods in Denmark among others.
The involvement of the EU in the railway industry started in the end of the 1990s with a White Paper advocating for liberalising the rail sector and introducing market-based logics. In 2001 a first package of European directives were adopted by the European Council imposed the organisational and accounting separation of the rail infrastructures form the rail companies.
This led to disorganisation and additional charges for the maintenance of the railway lines that caused a lack of investment in the infrastructure and extra charges for the rail companies due to rail tolls. The second package (2004) intensified the opening to competition of the rail freight while the third (2007) extended the opening to competition to the international passenger railways which took effect only in 2010, in order to give some time for the public railway companies to be prepared for competition.
These reforms turned out to be ineffective and very costly: they raised the prices of the tickets, the number of accidents increased while the freight railway continued its decline. Regardless of any evaluation of the previous changes to rail transport regulation, the European Commission persisted with its ideological goal of completing the liberalisation of the rail and produced a fourth railway package which was voted by the European Parliament in December 2016.
The technical aspect of this aims at systematise the interoperability of the rail system among the whole EU, unify safety standards and authorisation for rolling stocks. On the other hand, the political aspect consists in one single objective: the opening to competition of the market for domestic passenger transport services by rail.
The fourth railway package started its roll out in December 2018 and therefore the opening to competition has to take place by the end of 2020. In other words, France has to comply with this set of European directives and modify its legislation for integrating these rules in 2018 and enforce them before 2020.
Such a legal obligation tends to confirm the thesis according to which the EU is responsible for all neoliberal evils among Europe. The spectrum of the EU competition dogma EU is widely seen, among the opponents, as the true origin of Macron’s rail reform. The implementation of the fourth railway package during Macron’s five years term was inevitable unless the French government was ready to engage a harsh power struggle against the EU’s directives, which is a very unlikely possibility given Macron’s neoliberal stances.
Next in line.
The European Commission sent a reasoned opinion to Greece and Ireland urging to communicate the national measures taken to transpose EU rules on the opening of the market for rail domestic passenger transport services and the governance of the railway infrastructure, as part of the 4th Railway Package.
What is a reasoned opinion?
The European Commission establish many reasoned opinions about member states breach of EU-law. A member state can then decide whether to accept or negotiate the opinion or risk that the Commission will bring the case to the European Court of Justice.
EU reasoned opinion to Greece and Ireland. As at the end of 2016, the EU states agreed to transpose the Directive (Directive (EU) 2016/2370)) into national law by 25 December 2018. As the two countries did not complied with the directive, the EC sent at the beginning of 2019 a letter of formal notice. To date, Greece and Ireland have still not communicated to the EC which measures have been taken to that end.
Greece and Ireland have two months to comply with their obligations, otherwise, the Commission may decide to refer the cases to the Court of Justice of the EU.
Railway infrastructure: Commission urges GREECE and IRELAND to enact EU law on rail market opening and governance
July 2019, the Commission decided to send a reasoned opinion to Greece and Ireland urging them to communicate the national measures taken to transpose EU rules on the opening of the market for domestic passenger transport services by rail and the governance of the railway infrastructure (Directive (EU) 2016/2370) which are parts of the 4thRailway Package. In December 2016, Member States agreed to transpose the Directive into national law by 25 December 2018. In January 2019, the Commission sent a letter of formal notice requesting Greece and Ireland to comply with the Directive. To date, however, Greece and Ireland have still not communicated to the Commission which measures have been taken to that end. They now have two months to comply with their obligations; otherwise, the Commission may decide to refer the cases to the Court of Justice of the EU.
Single European railway area: Commission calls on DENMARK, IRELAND, the NETHERLANDS, and POLAND to fully transpose EU law
July 2019, the Commission decided to send a letter of formal notice to Denmark, Ireland, the Netherlands, and Poland for failing to transpose certain provisions of the EU rules on establishing a single European railway area (Directive 2012/34/EU). The Directive aims to create a single European rail area, notably on competition issues, regulatory oversight and financial architecture of the railway sector, the power of national regulators, improved framework for investment in rail, and fair and non-discriminatory access to rail infrastructure and rail related services. In November 2012, Member States adopted the Directive and agreed to transpose these rules into national law by 16 June 2015. The Member States concerned now have two months to reply. Otherwise, the Commission may decide to send a reasoned opinion.
for all those that suggested the EU would not force privatisation on member states railways think again, for all on the Left that wish to see UK rail nationalisation notwithstanding EU competition laws here’s another reason it will never happen within the EU.
This year in the UK Train fat cats receive £1.2 billion in share payouts as rail network crumbles
Firms who provide trains for the country’s crumbling rail network have paid out a staggering £1.2billion to shareholders, an investigation has revealed. The little known companies have links to a tax haven and make a fortune from leasing the rolling stock to train operators across the UK.
The huge payments come as millions of passengers are suffering delays, overcrowding and rocketing rail fares”
Taking back the railways is going to be a tough track and not possible within the EU LINK
Nationalisation of utilities is and always has been a non starter, The Labour party really need to be up front with its supporters about what is possible while ever we remain within EU rules and its articles.
Tony Benn once said:
“The EU has the only constitution in the world committed to capitalism … it destroys the prospect of socialism anywhere in Europe, making capitalism a constitutional requirement of that set-up.”