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Eurostar row: UK ‘has no obligation’ to save rail service despite France pressure | UK | News

Eurostar’s annual revenues collapsed from £1billion (€1.1billion) in 2019 to about £180milllion (€208million) in 2020. It has already borrowed £400million (€450m) and acquired a money injection of £170million (€197m) from its homeowners. The operator, which runs providers between London St Pancras and Paris, Brussels and Amsterdam, suffered an enormous droop in demand.

It carried 11 million passengers in 2019, however noticed 95 % fall in customized because the coronavirus pandemic restricted journey.

This led to discuss of a possible UK bailout for the company, with French politicians calling for a joint London-Paris answer.

The French transport minister, Jean-Baptiste Djebbari, advised a committee in January that the state would “be there at Eurostar’s side to maintain this strategic link between our two countries”.

Mr Djebbari mentioned the federal government was working with the UK on “mechanisms for aid, proportional to everyone’s involvement in Eurostar.”

But Professor Iain Begg of the London School of Economics told the UK has “no obligation” to help given it is no longer a stakeholder.

However, he added contributing to Eurostar’s long-term future may be in the UK’s interest.

He said: “There two aspects to this – one is whether there is an obligation or an interest to support Eurostar.

“There is no obligation in the sense that it’s a company owned by French and Belgian railways as well as a hedge fund in Canada, but it may be in Britain’s interest because Brits find the service desirable.

READ MORE: Eurostar crisis as service’s value ‘rapidly eroded’

“The next question is if it is not rescued, will something replace it or will there be uncertainty? Will there be a lack of connectivity between the UK and the continent?

“I think the danger is that there could be a lack of decision which would make things very difficult.”

The UK sold its stake in Eurostar in 2015 for over £750million in what then-Chancellor George Osborne branded a “fantastic deal”.

However, Professor Begg believes Prime Minister Boris Johnson could also be contemplating a reversal of this – shopping for again a stake in Eurostar.

He mentioned: “One question that might be requested is whether or not there’s a funding mechanism by way of which the British taxpayer is protected.

“Or it could be a reversal of what David Cameron did in 2015, and take a new equity stake.

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“That often is the smart long-term possibility for the Brits, to renew its possession of the enterprise.

“It’s an option, but there aren’t any easy options in this because there will be a howl if taxpayers’ money is used to shore up a French company.

“I doubt that strange punters could be that exercised about it, nevertheless it’s one thing the Government will think about, virtually definitely the calculation that will probably be happening is whether or not the shareholders ought to be anticipated to lengthen their assist for longer.”

Eurostar’s short-term future was secured last month after lenders reportedly agreed to allow the company to refinance its £400million debt.

Last week, reports in the New York Times claimed Eurostar will increase its timetable on May 27 to two trains per day on its once heavily traveled Paris-London route, up from just one round-trip train per day imposed during the pandemic.

A spokesman for Eurostar said that it had no new details on a financial rescue, but that “conversations are still progressing.”

The spokesman added that it was “too early to predict a recovery to pre-pandemic levels — this would be very much dependent on the easing of international travel restrictions which are yet to be confirmed.”

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