13 December 2018 (<a href="#Footnote*" name="Footref*">*</a>)

(State aid — Public financing of the Fehmarn Belt fixed link project — Individual aid — Decision not to raise any objections — Decision finding no State aid and declaring the aid compatible with the internal market — Definition of State aid — Adverse effect on competition and effect on trade between Member States — Conditions governing compatibility — Aid to promote the execution of an important project of common European interest — Necessity of the aid — Incentive effect — Proportionality of the aid — Serious difficulties justifying the initiation of the formal investigation procedure — Obligation to state reasons — Communication on State aid to promote the execution of important projects of common European interest)

In Case T‑631/15,

Stena Line Scandinavia AB,

established in Gothenburg (Sweden), represented by P. Alexiadis, Solicitor, and L. Sandberg-Mørch, lawyer,

applicant,

supported by

Föreningen Svensk Sjöfart,

established in Gothenburg, represented by L. Sandberg-Mørch and J. Buendía Sierra, lawyers,

intervener,

European Commission,

represented by L. Armati, L. Flynn and S. Noë, acting as Agents,

defendant,

supported by

Kingdom of Denmark,

represented initially by C. Thorning, and subsequently by J. Nymann-Lindegren, acting as Agents, and by R. Holdgaard, lawyer,

intervener,

APPLICATION pursuant to Article 263 TFEU for annulment of Commission Decision C(2015) 5023 final of 23 July 2015 on State aid SA.39078 (2014/N) (Denmark) for the financing of the Fehmarn Belt fixed link project (OJ 2015 C 325, p. 5),

THE GENERAL COURT (Sixth Chamber),

composed of G. Berardis, President, D. Spielmann and Z. Csehi (Rapporteur), Judges,

Registrar: P. Cullen, Administrator,

having regard to the written part of the procedure and further to the hearing on 26 April 2018,

gives the following

Background to the dispute

The applicant

The applicant, Stena Line Scandinavia AB, is part of a ferry operator group founded in 1962 engaged in the transport of passengers, cars, trains and freight. It operates a number of ferry routes between Denmark, Germany, Latvia, Poland, Sweden and Norway.

The project

The Fehmarn Belt fixed link project between Denmark and Germany (‘the project’) was approved by the treaty between the Kingdom of Denmark and the Federal Republic of Germany concerning the Fehmarn Belt fixed link signed on 3 September 2008 and ratified in 2009 (‘the international agreement’).

The project consists of, on the one hand, infrastructure (‘the fixed link’), and, on the other, road hinterland connections in Denmark (‘the road connections’) and rail hinterland connections in Denmark (‘the rail connections’) (together, ‘the hinterland connections’). The Federal Republic of Germany is responsible for the financing of and modifications to the German hinterland connections, which are not at issue in the present proceedings.

The fixed link takes the form of an immersed tunnel between Rødby on the island of Lolland in Denmark and Puttgarden in Germany; it will be approximately 19 kilometres long and consist of an electrified railway line and a motorway. The rail connections will include the expansion and upgrade of the existing rail link between Ringsted (Denmark) and Rødby, covering approximately 120 kilometres, which is owned by Banedanmark, the Danish State public rail infrastructure manager.

The project was preceded by a planning phase. The Commission was given notification of the financing of that phase, as regards the fixed link and the hinterland connections, for reasons of legal certainty. By its decision of 13 July 2009 in Case N 157/2009 — Financing of the planning phase of the Fehmarn Belt fixed link (OJ 2009 C 202, p. 2, ‘the project planning decision’), the Commission concluded, first, that the measures relating to the financing of the planning of the project may not constitute State aid and, second, that those measures were in any event compatible with the internal market. It therefore decided not to raise any objections within the meaning of Article 4(2) and (3) of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article [88 EC] (OJ 1999 L 83, p. 1).

The estimated cost of the entire project, in fixed 2014 prices, is 64.4 billion Danish krone (DKK) (approximately EUR 8.7 billion): DKK 54.9 billion (approximately EUR 7.4 billion) for the planning and construction of the fixed link, and DKK 9.5 billion (approximately EUR 1.3 billion) for the planning and construction of the upgrading of the hinterland connections.

According to Article 1 of the international agreement, the Kingdom of Denmark will be the sole owner of the fixed link and will have sole responsibility and bear the full risk of financing the fixed link, as well as the upgrading of the Danish hinterland connections.

Pursuant to Article 6 of the international agreement and the Lov n^o 575 om anlæg og drift af en fast forbindelse over Femern Bælt med tilhørende landanlæg i Danmark (Law No 575 on the construction and operation of the Fehmarn Belt fixed link project and Danish hinterland connections) of 4 May 2015 (‘the Construction Law’), two public undertakings were entrusted with the execution of the project. The first, Femern A/S, established in 2005, is responsible for financing, construction and operation of the fixed link. The second, A/S Femern Landanlæg, established in 2009, is responsible for the construction, operation and financing of the Danish hinterland connections. Femern Landanlæg is a subsidiary of Sund &amp; Bælt Holding A/S, which is owned by the Danish State. Femern became a subsidiary of Femern Landanlæg following the latter’s establishment.

The works relating to the construction of the fixed link will be carried out by Femern under construction contracts subject to public procurement procedures.Once the fixed link is operational, Femern will collect fees paid by users for using the link. Construction of the works necessary for upgrading the road connections will be undertaken by the Danish Highways Directorate on behalf of the Danish State. The latter will retain ownership of the hinterland road infrastructure, which will be made available free of charge to all users. Femern Landanlægwill be responsible for the construction and management, including maintenance, of the rail connections. Ownership of the rail connections is to be shared between Banedanmark (20%) and Femern Landanlæg(80%). Banedanmark will be responsible for all the costs relating to the operation of the rail connections, while the costs relating to the maintenance of the rail connection will be borne by Femern Landanlægand Banedanmark on a pro rata basis according to their respective shares.

Femern and Femern Landanlæghave obtained loans to finance the project (see paragraph 12 below). Those undertakings will be unable to obtain loans for activities other than the financing, planning, construction and operation of the fixed link and hinterland connections. In addition, Femern will receive the charges paid by users of the fixed link in order to discharge its debt and will pay dividends to Femern Landanlæg, which the latter will use to discharge its own debt. Femern Landanlæg will also receive 80% of the fees paid by the railway operators for use of the rail connections, charged by Banedanmark, as ownership of those connections will be shared by it and Banedanmark.

The contested measures

The contested measures, notification of which was given by the Danish authorities, include (i) a capital injection for the benefit of Femern and (ii) a State guarantee and State loans for the benefit of Femern and Femern Landanlæg (‘the measures at issue’).

More specifically, the planning, construction and operation of the fixed link and the hinterland connections are financed by loans, raised on the international financial markets and covered by the State guarantee, or, as an alternative method of financing, by government-backed State loans from Danmarks nationalbank (National Bank of Denmark).

Administrative procedure

During 2014 and 2015, the Commission received five complaints, the first lodged on 5 June 2014, claiming that the Kingdom of Denmark had granted unlawful State aid that was incompatible with the internal market to Femern and Femern Landanlæg.

During that same period, the Commission’s departments sent several requests for information to the Danish authorities, which replied and provided further information on a number of occasions.

By letter of 22 December 2014, the Danish authorities gave the Commission notification, pursuant to Article 108(3) TFEU, of the measures at issue.

The contested decision

On 23 July 2015, the Commission adopted Decision C(2015) 5023 final on State aid SA.39078 (2014/N) (Denmark) for the financing of the Fehmarn Belt fixed link project (OJ 2015 C 325, p. 5, ‘the contested decision’).

The operative part of that decision is divided into two parts.

In the first part, the Commission concluded that the measures granted to Femern Landanlæg for the planning, construction and operation of the hinterland connections do not constitute State aid within the meaning of Article 107(1) TFEU.

In particular, the Commission concluded, in the first place, that the upgrading of the road links did not constitute an economic activity and, in the second place, (i) that the national rail network was operated and managed on a market that is not open to competition and (ii) that the financial support granted to Femern Landanlæg is not liable to affect trade between Member States, as its activities were carried out on a national, separate and geographically closed market.

In the second part, the Commission concluded that, even if the measures granted to Femern for the planning, construction and operation of the fixed link did constitute State aid within the meaning of Article 107(1) TFEU, they are compatible with the internal market pursuant to Article 107(3)(b) TFEU.

More specifically, the Commission took the view that the aid allegedly granted to Femern was compatible with Article 107(3)(b) TFEU and with the Communication of 20 June 2014 on the criteria for the analysis of the compatibility with the internal market of State aid to promote the execution of important projects of common European interest (OJ 2014 C 188, p. 4, ‘the IPCEI Communication’), as well as with the Notice on the application of Articles [107] and [108 TFEU] to State aid in the form of guarantees (OJ 2008 C 155, p. 10, ‘the Guarantee Notice’), for the following reasons:

–first, in accordance with Section 3.1 of the IPCEI Communication, the construction of the fixed link (and hinterland connections) is a specific, precise and clearly defined project;

–second, in accordance with Section 3.2 of the IPCEI Communication, the project is, on the one hand, a project of European interest and, on the other, an important project which benefits the European Union as a whole;

–third, in accordance with paragraph 28 of the IPCEI Communication, the aid is necessary because no private investor would carry out the project without public support;

–fourth, in accordance with paragraph 31 of the IPCEI Communication, the aid is proportional since: (i), its intensity is below the project’s funding gap; (ii), it is limited in scope and time and covers only the debt related to the planning, construction and operation of the fixed link until that debt is fully repaid; and (iii), the Danish authorities undertook to limit the guarantee and State loans to loans obtained no later than 55 years after the opening of the fixed link, to give fresh notification of any subsequent measure, and to report annually on progress in the repayment of Femern’s debt;

–fifth, in accordance with paragraph 40 of the IPCEI Communication, the significant positive effects of the project for the European Union as a whole outweigh the limited negative effect on competition and trade between Member States;

–sixth, in accordance with paragraph 49 of the IPCEI Communication, the Kingdom of Denmark has undertaken to submit annual reports regarding progress in the repayment of Femern’s debt;

–seventh, in accordance with Section 5.3 of the Guarantee Notice, the mobilisation of the State guarantees is contractually linked to specific conditions, which may go as far as the compulsory declaration of bankruptcy of the beneficiary undertaking.

The Commission therefore decided not to raise any objections to the measures at issue.

Procedure and forms of order sought

By application lodged at the Court Registry on 11 November 2015, the applicant brought the present action.

On 18 February 2016, the Commission lodged its defence. The reply and the rejoinder were lodged within the period prescribed.

By document lodged at the Court Registry on 6 April 2016, the Kingdom of Denmark sought leave to intervene in the present proceedings in support of the Commission. By order of 29 June 2016, the President of the Ninth Chamber of the Court granted such leave. The Kingdom of Denmark lodged its statement in intervention and the main parties submitted their observations on that statement within the period prescribed.

Following a change in the composition of the Chambers of the Court, pursuant to Article 27(5) of the Rules of Procedure of the General Court, the President of the Court reallocated the case to another Judge-Rapporteur, who was assigned to the Fifth Chamber.

By document lodged at the Court Registry on 7 April 2016, Föreningen Svensk Sjöfart sought leave to intervene in the present proceedings in support of the applicant. By order of 30 November 2016, the President of the Fifth Chamber of the Court granted such leave. Föreningen Svensk Sjöfart lodged its statement in intervention and the main parties submitted their observations on that statement within the periods prescribed.

By separate document lodged at the Court Registry on 25 May 2016, the applicant submitted an application for confidential treatment in relation to the Kingdom of Denmark and Föreningen Svensk Sjöfart. On the same day, the applicant also lodged a non-confidential version of the application.

On 10 January 2017, pursuant to Article 27(2) of the Rules of Procedure, the President of the Court reallocated the case, for reasons relating to the fact that the cases are connected, to another Judge-Rapporteur, assigned to the Sixth Chamber.

The applicant, supported by Föreningen for Svensk Sjöfart, claims that the Court should:

–annul the contested decision;

–order the Commission to pay the costs.

The Commission, supported by the Kingdom of Denmark, contends that the Court should:

–;dismiss the application;

Law

The applicant puts forward four pleas in law in support of its action.

–the first plea alleges infringement of Article 107(1) TFEU in so far as the Commission erred in finding that the measures granted to Femern Landanlæg for the planning, construction and operation of the rail connections do not constitute State aid;

–the second plea, divided into five parts, alleges infringement of Article 107(3)(b) TFEU in so far as the Commission erred in finding that the aid measures granted to Femern for the planning, construction and operation of the fixed link are compatible with the internal market;

–the third plea, alleging breach of Article 108(2) TFEU in so far as the Commission infringed its obligation to initiate the formal investigation procedure, is made up of two parts, the first alleging infringement of the obligation to initiate the formal investigation procedure on account of the length of the procedure and certain circumstances connected with the conduct of the procedure, and the second alleging such infringement on account of an insufficient and incomplete analysis of certain aspects of the contested decision concerning (i) the measures granted to Femern Landanlæg and (ii) the measures granted to Femern;

–the fourth plea alleges failure to state adequate reasons.

The Court considers it appropriate to examine the pleas in the following order:

–first, the fourth plea, alleging an inadequate statement of reasons;

–second, the first plea and the second part of the third plea in so far as it concerns the measures granted to Femern Landanlæg;

–third, the second plea and the second part of the third plea in so far as it concerns the measures granted to Femern.

The fourth plea, alleging failure to state adequate reasons

35By its fourth plea, the applicant claims that the Commission failed to provide an adequate explanation in the contested decision regarding a number of matters it considered. That matters concern: (i) the analysis of the market for the operation of railway infrastructure in Denmark; (ii) the assessment of the common European interest of the project, the reasons given in the contested decision being, in its view, contradictory as regards the taking into account of competition from ferries; (iii) the examination of the incentive effect of the project; (iv) the analysis of the proportionality of the aid; and (v) the assessment of the negative effects of the aid on competition.

36As a preliminary point, it should be noted that, according to settled case-law, the statement of reasons required by Article 296 TFEU must be appropriate to the act at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in question in such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the competent court to exercise its power of review. The requirements to be satisfied by the statement of reasons depend on the circumstances of each case, in particular the content of the measure in question, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may have in obtaining explanations. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons meets the requirements of Article 296 TFEU must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question (see judgment of 8 July 2010, Freistaat Sachsen and Land Sachsen-Anhalt v Commission, T‑396/08, not published, EU:T:2010:297, paragraph 143 and the case-law cited).

37It should also be noted, with regard to the nature of the measure in question, that the contested decision was adopted at the end of the preliminary stage of the procedure for reviewing aid under Article 108(3) TFEU, the sole purpose of which is to enable the Commission to form a prima facie opinion on whether the aid concerned is wholly or partially compatible with the internal market, without opening the formal investigation procedure laid down in Article 108(2) TFEU, which, in turn, is designed to enable the Commission to be fully informed of all the facts pertaining to that aid (see judgment of 11 October 2016, Søndagsavisen v Commission, T‑167/14, not published, EU:T:2016:603, paragraph 110 and the case-law cited). Such a decision, which is taken within a short period of time, must simply set out the reasons why the Commission takes the view that it is not faced with serious difficulties in assessing the compatibility of the aid at issue with the internal market (see judgment of 11 October 2016, Søndagsavisen v Commission, T‑167/14, not published, EU:T:2016:603, paragraph 111 and the case-law cited).

38It is in the light of those principles that it is necessary to examine the applicant’s arguments.

39In the first place, it should be noted that, in recitals 53 to 55 of the contested decision, the Commission sets out the reasons why it took the view that the market for the operation of Danish railway infrastructure is not open to competition.

40Thus, the Commission concluded, in essence, that the rail connections owned by Femern Landanlæg would be operated by Banedanmark on the same conditions as those of other parts of the Danish railway system and that, given that the management and operation of the Danish national railway is carried out on a national, separate and geographically closed market, which is not open to competition, the public financial support made available to Femern Landanlæg for the rail connections was not liable to affect trade between Member States.

41In the second place, it should be noted that, in recitals 88 to 93 of the contested decision, the Commission sets out the reasons why it took the view that the project has a common European interest.

42The Commission relied essentially on four factors. First, it noted, in recital 89 of the contested decision, that the common European interest of the project had been recognised in the project planning decision. Second, it observed, in recital 90 of the contested decision, that the fixed link is a trans-European transport network project (‘TEN-T’), in particular, a priority TEN-T project (No 20), and will contribute to improving the connection between the Nordic countries and central Europe as well as providing greater flexibility and time savings for road and rail traffic. Third, it stated, in recital 91 of the contested decision, that the project involves two Member States and will bring benefits which have been defined and quantified in a profitability study prepared for the Danish ministry of transport, which showed that the project will produce an economic return of 4.7%. Fourth, it observed, in recital 92 of the contested decision, that the project had received EU funding for the planning activities and an application had been submitted for EU funding for the construction phase.

43In the third place, in recitals 98 to 105 of the contested decision, the Commission sets out the reasons why it considered that the project had an incentive effect.

44The Commission observed, in essence, that the Danish authorities, while stating that there was no viable counterfactual scenario, provided information concerning a scenario in which no public support was granted to Femern, and that the analysis carried out in the preliminary phases as well as an inquiry as to commercial interest conducted in 2001 (‘the 2001 inquiry as to commercial interest’) had concluded that the project could be realised only with substantial public support and that the private sector was interested in participating in the project on condition that support well in excess of that envisaged by the project, as approved, was granted. The Commission also stated that, according to the information provided by the Danish authorities, the internal rate of return (‘the IRR’) of the project, on a debt-free basis, was 4.2% over the expected repayment period of 55 years and was therefore below the weighted average cost of capital (‘the WACC’) that a private investor would be expected to require, estimated at 11.0%.

45In the fourth place, in recitals 106 to 111 of the contested decision, the Commission set out the reasons why it took the view that the aid was proportional.

46After calculating the project’s funding gap ratio at 54.9%, the Commission stated that the aid element granted to Femern was below that ratio. It also noted that the aid was limited in time and scope, because the guarantee covers only debt relating to the planning, construction and operation of the fixed link until the debt is fully repaid, and the Danish authorities had undertaken to limit the State guarantee and loans to the loans obtained in order to finance eligible costs no later than 55 years after the opening of the fixed link, to give fresh notification of any public financing measure granted after that period and to report annually on progress in the repayment of Femern’s debt.

47In the fifth place, in recital 116 of the contested decision, the Commission examined the negative effects of the aid on competitors.

48The Commission took the view that the opening of the fixed link would have a negative impact on ferry operators and probably, as a consequence, also on the ports used by the ferries in terms of traffic volume and revenue. Nonetheless, the Commission considered that those effects were inherent in the project, which seeks to offer a quicker and more convenient alternative to ferry services.

49In the light of the foregoing, it must be concluded that the statement of reasons in the contested decision meets the requisite legal standard.

50It should also be added that, by its fourth plea, the applicant refers, on certain specific points, to the arguments put forward in the first and second pleas concerning the merits of the Commission’s findings.

51Suffice it to observe in this regard that, according to settled case-law, the obligation to state reasons is an essential procedural requirement, as distinct from the question whether the reasons given are correct, which goes to the substantive legality of the contested measure (judgments of 22 March 2001, France v Commission, C‑17/99, EU:C:2001:178, paragraph 35, and of 18 January 2005, Confédération nationale du Crédit mutuel v Commission, T‑93/02, EU:T:2005:11, paragraph 67).

52Lastly, it should also be noted that the applicant has been able to develop its arguments in support of the first, second and third pleas and that the Court is in a position to conduct its review in the light of all the arguments raised by the applicant.

53The fourth plea must therefore be rejected.

The first plea and the second part of the third plea, alleging infringement of Article 107(1) TFEU and infringement of the obligation to initiate the formal investigation procedure in so far as concerns the analysis of the measures granted to Femern Landanlæg for the planning, construction and operation of the rail connections

54In the first plea, the applicant submits that the Commission made an error of fact and of law by concluding that the measures granted to Femern Landanlæg concerning the rail connections did not constitute State aid as they were not liable to distort competition or to affect trade between Member States within the meaning of Article 107(1) TFEU.

55In the first complaint in the second part of the third plea, the applicant refers to the errors alleged in the first plea, arguing that those errors show that the Commission conducted an incomplete and insufficient examination, which brought to light serious difficulties that should have prompted it to initiate the formal investigation procedure.

56The Commission disputes the applicant’s arguments. The Kingdom of Denmark also raises doubts concerning the admissibility of the action, in so far as it relates to measures granted to Femern Landanlæg, on the basis that the applicant is not individually affected.

57It is appropriate to examine first of all whether the applicant’s arguments are well founded.

58Article 107(1) TFEU states as follows:

59‘Save as otherwise provided in the Treaties, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market.’

60Classification of a measure as aid incompatible with the internal market, within the meaning of Article 107(1) TFEU, requires all the conditions laid down in that provision to be fulfilled.

61With regard, in particular, to the conditions relating to the effect on trade between Member States and the distortion of competition, it should be noted that, according to established case-law, the Commission is not required to establish that the aid will in fact have an impact on trade and that competition will actually be distorted and is required only to examine whether the aid is liable to affect such trade and distort competition (see judgment of 9 June 2011, Comitato ‘Venezia vuole vivere’ and Others v Commission, C‑71/09 P, C‑73/09 P and C‑76/09 P, EU:C:2011:368, paragraph 134 and the case-law cited). In particular, according to case-law, the fact that an economic sector has been liberalised at EU level may serve to determine that the aid has a real or potential effect on competition and affects trade between Member States (see judgment of 15 December 2005, Unicredito Italiano, C‑148/04, EU:C:2005:774, paragraphs 56 and 57 and the case-law cited). Moreover, it is not necessary for the recipient undertaking itself to take part in intra-EU trade. Aid granted by a Member State to an undertaking may help to maintain or increase domestic activity, with the result that undertakings established in other Member States have less chance of penetrating the market of the Member State concerned (see judgment of 14 January 2015, Eventech, C‑518/13, EU:C:2015:9, paragraph 67 and the case-law cited).

62In the present case, in recitals 53 to 55 of the contested decision, first, the Commission expressed the view that the measures granted to Femern Landanlæg would not give rise to any distortion of competition, as the rail connections owned by Femern Landanlæg would be upgraded and operated by Banedanmark, the national railway infrastructure manager, under the same conditions as the other parts of the Danish national rail network, and that there was no competition ‘on’ or ‘for’ the market for the operation and management of the national rail network. Second, it found that those measures were not liable to affect trade between Member States, as the management and operation of the network in question were carried out on a national, geographically closed and separate market, which was not open to competition.

63It is in the light of the principles outlined in paragraphs 57 to 59 above and the wording of the contested decision that the applicant’s arguments must be examined.

The preliminary finding that the fixed link and rail connections constitute a single integrated project

63The applicant claims, as a preliminary point, that the fixed link and the rail connections constitute a single integrated project and that, given that the Commission confirmed that the aid relating to the fixed link was liable to distort competition and to affect trade between Member States, it follows that the aid relating to the rail connections was also liable to distort competition and to affect such trade.

64That claim is incorrect. It cannot be concluded that the measures granted to Femern Landanlæg in relation to the rail connections constitute State aid for the sole reason that they were adopted in connection with the same project which granted measures for Femern in relation to the fixed link, and that those measures were categorised as State aid by the Commission. Those are two separate aid measures which, admittedly, concern the same project, but they have a different purpose and different beneficiaries.

65Moreover, the applicant claims that there is a contradiction between, on the one hand, the conclusion that the financing of the costs relating to the hinterland connections does not constitute State aid for the benefit of Femern Landanlæg and, on the other, the fact that the costs relating to the hinterland connections were taken into account for the purpose of determining whether the aid received by Femern for the fixed link was compatible with the internal market.

66In that regard, a distinction must be made between the measures granted to Femern Landanlæg in connection with the cost of the hinterland connections and the measures granted to Femern in connection with the costs of the project as a whole.

67First, as is apparent from paragraphs 69 to 102 below, the measures granted to Femern Landanlæg for the hinterland connections do not constitute State aid because they produce their effects on a market that is closed to competition.

68Second, the measures granted to Femern for the project as a whole may constitute State aid because those measures have an impact, in the main, on the management and operation of infrastructure that is in competition with other transport services, in particular ferry services.

69Against that background, whether the aid granted to Femern is compatible with the internal market must be established in the light of all the measures granted to that company, including those covering the costs of the rail connection. In other words, the fact that the indirect financing of the hinterland connections by dividends paid by Femern to Femern Landanlæg does not constitute State aid for the benefit of the latter company does not mean that the arrangements for the financing of the entire project cannot be examined, in the light of the measures granted to Femern, to determine whether the aid granted to the latter is compatible.

The finding that the rail connections form part of the main Danish national rail network

70The applicant maintains that the mere fact that the rail connections will be operated by Banedanmark is not sufficient to establish that they form part of the main Danish national rail network.

71In that regard, it should be noted that, as is apparent from recital 5 of the contested decision, the rail connections entail the expansion and upgrading of the existing rail link between Ringsted and Rødby, which belongs to Banedanmark, and that, as is made clear in recital 55 of that decision, they will be managed by the latter in accordance with rules applicable to the entire national network. Therefore, according to the provisions governing the project, the rail connections simply connect the fixed link to the existing national network and will thus form an integral part of it.

72In any event, the applicant’s argument is ineffective because the claim that the rail connections do not form part of the main rail network, even if it were established, is not, of itself or in conjunction with the arguments that will be dealt with below, capable of proving that those connections form part of a network the management or operation of which are open to competition.

Competition on the markets for the operation and management of the Danish railway infrastructure

73As regards the distortion of competition, the applicant maintains that the measures at issue granted to Femern Landanlæg affect the markets for the operation and management of the Danish railway infrastructure and that those markets are, de lege and de facto, open to competition.

74The Court must therefore examine whether the Commission committed errors of fact or of law or encountered serious difficulties when it stated, in recitals 53 to 55 of the contested decision, that there was no competition ‘on’ or ‘for’ the market for the management and operation of the national railway network.