Angela Merkel dealt huge blow as Deutsche Bahn in ‘worst financial crisis in its history’

Angela Merkel: German citizen slams COVID-19 rule 'chaos'

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Germany’s economic growth forecasts for 2021 will be cut to 3.7 percent from 4.7 percent due to a longer than expected COVID-19 lockdown, reports revealed Wednesday. The figures are the latest sign that the economy will need longer than initially thought to reach its pre-crisis level. German output dropped 1.6 percent in February when compared with the previous month. Still, the German economy ministry expressed some optimism that growth momentum will pick up in the months ahead. It said: “The improvement in business confidence and positive trend in orders signal a positive outlook in industry. “Nevertheless, the future course of the pandemic poses uncertainties.”

As the UK and the whole of Europe continues to reel from the global crisis, Germany also saw its state rail service suffer.

In July last year, Deutsche Bahn’s CEO and Chairman Dr Richard Lutz offered an optimistic analysis of the service’s prospects, but admitted it was the “worst financial crisis in its history”.

The EU railway industry lost £22billion (€26billion) in revenue in 2020, figures from the Community of European Railway and Infrastructure Companies (CER), which largely represents the industry in Europe, showed.

Passenger services were more affected than freight, but the pandemic is taking its toll across the board, the data outlined.

The EU rail freight industry was hit with £1.7billion (€2billion) losses when compared to the previous year, a 12 percent decrease.

But the big losses were dealt to passenger services, as traffic declines led to revenue losses of 42 percent compared to 2019.

In the UK, rail companies have also required Government support due to the pandemic.

In September, the Government announced an extended rescue deal for train operators.

The Department for Transport (DfT) said the new contracts, which would last six to 18 months and help operators through the COVID-19 crisis, were a better deal for taxpayers, and heralded the end of franchising.

However, unions and Labour criticised the move as “papering over the cracks” and handing more money to private firms.

The RMT union said the deals were simply “reanimating the corpse” of privatisation.

The general secretary, Mick Cash, said: “COVID-19 has proved that the private rail companies are a waste of time and money and have no place in a railway that’s fit for the future. It’s time to cut out the middleman.”

He said: “COVID-19 put an abrupt stop to the successful growth we were seeing, and plunged DB into the worst financial crisis in its history.”But the virus has also shown how critically important rail is for Germany and Europe. We are essential to the functioning of society. Even in very difficult times, we keep people and goods moving.

“Rail is an eco-friendly form of transport, and we are working each and every day to shift more traffic to rail again.

“We are continuing to invest, as clearly evidenced by the 30 new ICE trains we have purchased.”

Deutsche Bahn had estimated losses of around £4.8billion in 2020, also requiring support in the form of a £3.5billion package from the German government.

French state rail company SNCF also faced losses of up to £4.3billion, and received a £3.5billion capital injection from the government in Paris in December.

The EU railway industry lost £22billion (€26billion) in revenue in 2020, figures from the Community of European Railway and Infrastructure Companies (CER), which largely represents the industry in Europe, showed.

Passenger services were more affected than freight, but the pandemic is taking its toll across the board, the data outlined.

The EU rail freight industry was hit with £1.7billion (€2billion) losses when compared to the previous year, a 12 percent decrease.

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But the big losses were dealt to passenger services, as traffic declines led to revenue losses of 42 percent compared to 2019.

In the UK, rail companies have also required Government support due to the pandemic.

In September, the Government announced an extended rescue deal for train operators.

The Department for Transport (DfT) said the new contracts, which would last six to 18 months and help operators through the COVID-19 crisis, were a better deal for taxpayers, and heralded the end of franchising.

However, unions and Labour criticised the move as “papering over the cracks” and handing more money to private firms.

The RMT union said the deals were simply “reanimating the corpse” of privatisation.

The general secretary, Mick Cash, said: “COVID-19 has proved that the private rail companies are a waste of time and money and have no place in a railway that’s fit for the future. It’s time to cut out the middleman.”

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