It seems the future of the famous Nurburgring, site of the German grand prix (alternating every year with Hockenheimring), continues to roller coaster up and down. First it appeared that all hope was lost when the European Commission failed to approve a €13M state aid package to make a July 31 payment deadline for the track’s loan. Then, state-owner Rhine-Palatinate, which asked the track’s operating company to declare bankruptcy shortly the missed deadline, came to the rescue in the 11th hour with a new loan that would cover the bulk of the original €330M loan. The €254M pledged by the state would service the loan and keep the interest from running out of control, which costs the state €47,000 each day the original loan isn’t paid down.
But then the EU stepped in again with a statement issued on August 8 questioning the legality of the state’s bailout. They claim it may have breached the EU’s free market laws and “the Commission will now investigate whether these repeated public interventions were in line with EU state aid rules.” Further, the Commission is concerned whether “the companies are even viable without continued state support.” The issue revolves around the fact that the operating company, Nurburgring GmbH, received previous aid in 2008. According to EU rules, “rescue or restructuring aid to a company in financial difficulties may be granted to a given company only once in a period of 10 years” due to its detrimental effects on competition in the free market.
The ‘Ring has been plagued by several years of losses because its operating company Nurburgring GmbH has been unable to pay the interest on the original loan. The company, which also has been unable to even make its lease payments, has even more debt totaling €413 million. This is nothing new, unfortunately. The Nurburgring has lost money year after year of operations, the gravest of which started in 2004 when the failed hotel/amusement park complex we reported on earlier was constructed.