Romanian rail freight company CFR Marfa is not able to pay the wages of its 7,500 employees before the Easter holiday after the railway infrastructure operator CFR blocked its accounts over unpaid debts worth RON836mn (€180mn), Ziarul Financiar daily reported on March 29. Trade unions representing CFR Marfa workers have appealed to President Klaus Iohannis to help the company. 

A publicly funded bailout for the company would be problematic. Last December, the European Commission said it had already opened an in-depth investigation to assess whether debt write-offs by the Romanian state in favour of CFR Marfa and the failure to collect debts from the company have given the company an unfair advantage in breach of EU state aid rules.

State-owned CFR Marfa has to pay a series of bills — including its employees’ salaries — but is unable to do so because its accounts are blocked. Meanwhile, it has been unable to collect the substantial sums it is owed by its clients, many of whom are either bankrupt or under insolvency, so their accounts are also blocked.

In total, CFR Marfa is owed RON650mn by its clients, the trade unions stressed on March 29. Out of this, RON350mn is owed by state-owned companies, with the two mining and power companies SNLO and CNH Hunedoara being among CFR Marfa’s traditional debtors. 

The chairman of the Federation of Train Drivers Federation (FML), Iulica Mantescu, said that he had sent letters to the presidents of the Senate and the Chamber of Deputies, as well as to the Romanian presidency, asking for an urgent solution to the problem. 

The trade union federation pointed out that CFR Marfa operates 37.8% of freight transport in Romania, and plays a strategic role as well by transporting the military equipment.

CFR Marfa has been in economic difficulties for a number of years. It has a high level of debt, mainly towards the national social security and tax administration agencies, as well as towards the Romanian rail infrastructure manager CFR, which is also fully state-owned.

The Commission's investigation will look at a number of state support measures in favour of CFR Marfa concerning a debt-to-equity swap amounting to RON1.66nn (around €360mn) in 2013 and the failure to collect, since at least 2010, of social security debts and outstanding taxes of CFR Marfa, and of debts towards CFR.