The European Free Trade Association (EFTA) has ruled that a transport contract between the Norwegian state and the coastal shipping line Hurtigruten has included illegal state support of the shipping line. An EFTA court upheld an earlier conclusion by EFTA’s Surveillance Authority (ESA) on Monday, and its ruling can’t be appealed.
Norwegian Broadcasting (NRK) reported that the EFTA court ruling doesn’t specify how much of the NOK 405 million contract between the state and Hurtigruten amounted to excessive and illegal subsidy. The state had paid out around NOK 170 million to Hurtigruten before halting further payments when the European authorities protested.
ESA, however, had claimed NOK 145 million violated the terms of support EFTA does allow, and now both the state and Hurtigruten need to determine the economic consequences. The ruling is viewed as a loss of prestige for the state, which lost its defense of the program that it thought was well within EFTA rules.
It’s not expected the ruling will cause major economic problems for Hurtigruten, which recently completed a financial reorganization and had set aside some contingencies pending the EFTA ruling. Hurtigruten officials said they were “disappointed” with the ruling, however, and will now analyze it to see what alternatives the shipping line has. Among them is the filing of a civil lawsuit against the state, on the grounds it erred in making the payments that violated EFTA rules.