Rail transport in Europe is characterised by its diversity, both technical and infrastructural. Rail networks in Western and Central Europe are often well maintained and well developed, whilst Eastern, Northern and Southern Europe often have less coverage and/or infrastructure problems. Electrified railway networks operate at a plethora of different voltages AC and DC varying from 750 to 25,000 volts, and signalling systems vary from country to country, hindering cross-border traffic. The European Union aims to make cross-border operations easier as well as to introduce competition to national rail networks. EU member states were able to separate the provision of transport services and the management of the infrastructure by the Single European Railway Directive 2012. Usually, national railway companies were split to separate divisions or independent companies for infrastructure, passenger and freight operations. The passenger operations may be further divided to long-distance and regional services, because regional services often operate under public service obligations, while long-distance services usually operate without subsidies.
Differences between countries
The 2017 European Railway Performance Index ranked the performance of national rail systems as follows:
While most railways in Europe use —in some other countries, like on the Iberian Peninsula, or countries which territories used to be a part of Russian Empire and Soviet Union: widespread broad gauge exists. For instance Eastern European countries like Russia, Ukraine, Armenia, Moldova, Belarus, Finland, and the Baltic states use a gauge width of or . In Spain and Portugal is used. The reason for different track gauges between countries was mainly because of the idea of preventing trains from an invading country running on "your" track, but historically competition between railroads and perceived benefits of certain gauges also played a role in divergent standards. Ireland uses the somewhat unusual gauge, referred to in Ireland as "Irish Gauge".
Electrification
Likewise, electrification of lines varies between countries. 15 kV AC has been used in Germany, Austria, Switzerland, Norway and Sweden since 1912, while the Netherlands uses 1500 V DC, France uses 1500 V DC and 25 kV AC, and Belgium uses 3 kV DC. All this makes the construction of truly pan-European vehicles a challenging task and, until recent developments in locomotive construction, was mostly ruled out as being impractical and too expensive. The development of an integrated European high-speed rail network is overcoming some of these differences. All high-speed lines outside of Russia, including those built in Spain and Portugal, use tracks. Likewise all European high-speed lines, outside of Germany, Austria and Italy use 25 kV AC electrification. This means that by 2020 high-speed trains can travel from Italy to the United Kingdom, or Portugal to the Netherlands without the need for multi-voltage systems or breaks of gauge.
Signalling
Multiple incompatible signalling systems are another barrier to interoperability. The EU countries have 19 different signalling systems. A unified signalling system, ETCS is the EU's project to unify signalling across Europe. The specification was written in 1996 in response to EU Directive 96/48/EC. ETCS is developed as part of the European Rail Traffic Management System initiative, and is being tested by multiple Railway companies since 1999. All new high-speed lines and freight main lines funded partially by the EU are required to use level 1 or level 2 ETCS signalling.
Loading gauge
The loading gauge on the main lines of Great Britain, almost all of which were built before 1900, is generally smaller than in mainland Europe, where the slightly larger Berne gauge was agreed to in 1913 and came into force in 1914. As a result, British trains have noticeably and considerably smaller loading gauges and smaller interiors, despite the track being standard gauge. This results in increased costs for purchasing trains as they must be specifically designed for the British network, rather than being purchased "off-the-shelf". For example, the new trains for HS2 have a 50% premium applied to the "classic compatible" sets which will be able to run on the rest of the network, meaning they will cost £40 million each rather than £27 million for the captive stock, despite the captive stock being larger.
Additionally, there are a lot of cross-border trains at the local level. Some local lines, like the Gronau to Enschede line between Germany and the Netherlands, operate on the signalling system of the country the line originates from, with no connection to the other country's network, whilst other train services like the Saarbahn between Germany and France use specially equipped vehicles that have a certificate to run on both networks. When there is an electrification difference between two countries, border stations with switchable overhead lines are used. Venlo railway station in the Netherlands is one such example, the overhead on the tracks can be switched between the Dutch 1500 V DC and the German 15 kV AC, which means a change of traction is necessary at the station.
Subsidies
EU rail subsidies amounted to €73 billion in 2005. Subsidies vary widely from country to country in both size and how they are distributed, with some countries giving direct grants to the infrastructure provider and some giving subsidies to train operating companies, often through public service obligations. In general long-distance trains are not subsidised. The 2017 European Railway Performance Index found a positive correlation between public cost and a given railway system’s performance and differences in the value that countries receive in return for their public cost. The 2017 and 2015 performance reports found a strong relationship between cost efficiency and the share of subsidies allocated to infrastructure managers. A transparent subsidy structure, in which public subsidies are provided directly to the infrastructure manager rather than spread among multiple train-operating companies, correlates with a higher-performing railway system. The 2017 Index found Denmark, Finland, France, Germany, the Netherlands, Sweden, and Switzerland capture relatively high value for their money, while Luxembourg, Belgium, Latvia, Slovakia, Portugal, Romania, and Bulgaria underperform relative to the average ratio of performance to cost among European countries.
