Eurostar could force Boris Johnson to bail out UK despite dispute with France UK

Eurostar could force Boris Johnson to bail out UK despite dispute with France UK

The rail service has been saved from bankruptcy after signing an agreement with its lenders last month. Eurostar will refinance hundreds of millions of pounds of debt in hopes of recovering from a huge drop in demand during the pandemic. A group of banks, including Natwest, have agreed to refinance £ 400 million in loans due to be repaid this summer.

The business may still need more support if travel restrictions and other health measures stay in place longer than expected.
Professor Iain Begg of the London School of Economics tells how the UK might end up providing money for rail service.

He suggested Prime Minister Boris Johnson will want to keep his green credentials and could therefore help Eurostar.

Professor Begg explained: “One potential consideration is the green agenda as a whole, Boris is very keen to sell the COP26 (United Nations Climate Change Summit) in Glasgow, and do something that would encourage people to take the plane rather than taking the train could sell badly in terms of ecological credentials. ”

The economist also explained that while the UK has no “obligation” to save the company in the future, it can in its “interest”.
He added: “There are two aspects to this – The first is whether there is an obligation or an interest in supporting Eurostar.

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

“The next question is whether he is not saved, will something replace him or will there be uncertainty?”

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

READ MORE: Eurostar line overflows as France, Belgium ‘think UK is crazy’

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“In the meantime, you’d have a serve that most parties really don’t want. “

Eurostar’s annual revenues have grown from £ 1 billion (€ 1.1 billion) in 2019 to around £ 180 million (€ 208 million) in 2020.

It has already borrowed £ 400m (€ 450m) and received a cash injection of £ 170m (€ 197m) from its owners.

The operator, which provides connections between London St Pancras and Paris, Brussels and Amsterdam, carried 11 million passengers in 2019.

But Eurostar is believed to have already faced a 95% drop in demand as the coronavirus pandemic continues to make travel restrictions necessary.


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