Europe’s rail liberalisation has a structural flaw

The Talgo Avril — the trainset Renfe could not get approved for operations north of Lyon. Photo: Talgo.

COMMENTARY: The rules say infrastructure and operations must be separated. What the rules do not say is that the separation must be real.

Renfe has run trains to Lyon for two years. Certified, operating, passengers on board. North of Lyon — the stretch that would have made Barcelona–Paris possible — approval never came. That outcome may reflect entirely legitimate technical and regulatory processes. It may not. The problem is that the structure of the French market makes it impossible to know which.

Why the doubt itself is the problem

A Spain–Paris high-speed service would have put Renfe in direct competition with SNCF on France’s most commercially valuable corridor. SNCF Réseau, which controls access to that corridor, sits under the same holding company as SNCF Voyageurs, which would have faced that competition. The Fourth Railway Package permits this arrangement.

The package does not require ownership separation. It requires that infrastructure managers make decisions independently of operators.

Four groups, one pattern

An examination of 13 EU member states, covering all of the continent’s major rail markets, produces a result that should unsettle anyone who believes the legislation has done its job.

Ranking countries on regulatory performance is inherently contested. The lines between groups are judgment calls, not measurements. We have made them anyway — because the pattern matters more than the precision:

GROUP 1 — full separation, functioning competition. Spain, Sweden, Czech Republic, Denmark, Netherlands.

GROUP 2 — holding model, functioning competition. Italy, Austria.

GROUP 3 — holding model, competition minimal or blocked. France, Germany, Hungary, Poland.

GROUP 4 — full separation, statutory monopoly. Belgium.

The pattern is not what the legislation predicted. Belgium has separated its infrastructure from its operator. It also retains a statutory monopoly on domestic passenger services. The structure did not produce the outcome.

Portugal is outside the four groups. Portugal has full institutional separation and an open market — but operates on Iberian gauge, and no private operators have yet entered. The absence of competition reflects market conditions, not regulatory failure.

Poland has one of Europe’s largest rail networks and a holding structure that persists despite ongoing reform pressure. Czech open-access operator RegioJet entered the domestic market in September 2025 and announced its exit less than eight months later, citing depot access barriers, restricted sales points and incumbent pricing pressure. PKP Intercity receives substantial public funding across much of its network, while RegioJet operated without subsidy.

What separates the leaders from the rest

The countries in group one share three things that their counterparts in groups three and four do not. Full ownership separation between infrastructure and operations. An active and independent regulator with demonstrated willingness to find against the incumbent. And political acceptance that opening the market will produce outcomes the incumbent dislikes.

But group one countries are not problem-free

Spain’s competition regulator found in March that the country’s mixed-gauge network gives incumbent Renfe a structural advantage its open-access competitors did not create and cannot easily overcome.

In the Netherlands, NS holds an exclusive concession on the main network until 2033 — open-access competition on the core network remains a future prospect.

In Denmark, the state moved to terminate one of its contracts with operator GoCollective in 2025 after persistent service failures — stepping in to protect passengers rather than letting the market collapse around a failing operator.

The asymmetry that cannot be explained

Paris–Lyon carried 52 million passengers in 2019. It is Europe’s busiest high-speed line. Up to 460 trains run on it daily. SNCF Réseau manages access to it. SNCF Voyageurs is its dominant commercial user. Both are subsidiaries of SNCF SA.

Trenitalia France gained authorisation to operate on that corridor. It entered in 2021, expanded in 2025, and now operates Paris–Marseille as well as the original Paris–Lyon–Milan service. Trenitalia competes with SNCF on some domestic segments. It does not threaten SNCF’s position on the route Renfe was targeting — Barcelona–Paris.

France’s own rail regulator, ART, has scrutinised access conditions on the French network. The European Union contributed 117 million euros to upgrade the signalling system on the Paris–Lyon line to ERTMS — the European standard designed specifically to make cross-border and open-access operations easier. Renfe still has no approval to run north of Lyon.

There may be entirely legitimate explanations for each of these facts individually. The problem is that the structure of the market makes it impossible to assess them collectively with any confidence. When the infrastructure manager and the threatened operator share a parent company, the process cannot be separated from the interest — even if, in every individual decision, it was.

The flaw is in the design

The Fourth Railway Package was written to create a single European railway area where any licensed operator could access any network on non-discriminatory terms. But it allowed for a structure where the entity controlling access is within the same group as the entity that benefits from restricting it.

The two considerations are in clear conflict. The legislation chose to obscure the contradiction rather than resolve it. The deeper consequence is a liberalisation framework where doubts can never be fully resolved - because the law was designed to allow doubts to persist.

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