International travel on EU railways should be thrown open to competition from 2010 and passengers on all international routes should get compensation for delays, the European Commission will propose next week.
The proposals, to be officially considered by the EU executive next Wednesday, are part of a key package of new laws for EU railways, whose industry body has expressed unease at the prospect of costly new regulations.
The proposals will also include a law on how freight rail operators should compensate customers for delays or damaged goods and a licence for European train drivers.
"The very substantial pressure of competition from low-cost airlines on routes between the major European cities poses a very serious threat to international rail services," the Commission says in the draft proposal.
"The opening to competition must enable rail transport to develop new initiatives and to reduce its costs in order to offer competitive international services by 2010," it added.
Rail has struggled to fight competition from air and road.
The passenger sector is in various stages of privatisation in the EU. Britain has operators such as National Express and Go-Ahead. In other states, including France and Spain, state-controlled firms still dominate.
The freight market has been open to competition since March last year, but transport by road has over the decades eaten away at its share of the market. Commission figures show that in 1970 railways carried 21 per cent of freight in the EU 15 but that by 2000 this was 8.1 per cent.