Brussels, 17/10/2001 (Agence Europe) - Through the voice of Commissioner Loyola de Palacio, the Commission officially announced on Wednesday that, under rescue aid, it was authorising the bridging loan of 125 million euro that the Belgian State is considering granting the airline company Sabena (see yesterday's EUROPE, p. 11). This decision was adopted under point A, signifying unanimity within the College on the proposal of "DG Transport". The Commission saw no objection to authorising the loan as it complies with the guidelines established in 1999 for State aid for rescuing and restructuring firms in difficulty. A firm is in difficulty, according to these guidelines, "where it is unable, whether through its own resources or with the funds it is able to obtain from its owners/shareholders or creditors, to stem losses which , without outside intervention by the public authorities, would almost certainly condemn it to go out of business in the short or medium term". Aid provided in this form is authorised if, among other things, it complies with five precise conditions: 1) take the form of loan guarantees or interest-bearing loans at market rates; 2) be limited to the amount strictly necessary to keep the firm in business; 3) be granted for a period not exceeding six months; 4) be warranted on the grounds of serious social difficulties and have no unduly adverse spillover effect on other Member States; 5) be accompanied by an undertaking to restructure or liquidate the aid beneficiary, or to reimburse the loans.
"Rescue aid is by nature temporary assistance. It is a question of providing the company with a temporary financial capability", Ms. de Palacio stressed. There are then two possible outlets, either the company's liquidation, or its restructuring, she continued, clearly making the distinction, in the last case, between aid to restructuring, which is subjected to the strict principle of "one time, last time", and rescue aid that is not subject to that principle. "If it is a question of restructuring, Sabena has already benefited from "one time, last time" kind of aid in the past (1991: Ed) and there is no second chance. It may not therefore, in any case, then claim aid in the framework of its plan. For the Belgian State there can be no question of granting aid and then for the company re-merge under another name, as that too would amount to aid to restructuring", she also pointed out. Concluding, Ms. de Palacio recalled that the Commission would in no case no agree to airline companies using the events of 11 September as pretext for justifying their financial difficulties outside the four days in which American air space was closed to traffic. "There were already difficulties, and 11 September must not serve as pretext to delay the process already underway", she repeated.
Crisis at Aer Lingus: We know the rules, says Ahern, while noting
that Commission can show flexibility
At a joint press conference with Romano Prodi in Brussels on Wednesday (see above), questioned about aid the airline company Irish Aer Lingus could request to ease the effects of the attacks of 11 September, the Taoiseach, Bertie Ahern said he was "grateful" for having been able to have "quite a lengthy exchange" with the European Commission on the subject, but added that they had to wait to learn of the details of the plan Aer Lingus had to adopt. "We know the rules" in force at Community level, but we would like "flexibility", Bertie Ahern said on several occasions, recalling that 40% o the traffic and 60% of revenue for the Irish company were "transatlantic". How to hope that the Irish will finally say "yes" to the Nice Treaty if the particular problems of Aer Lingus are not taken account of? "Let's wait for that plan", is all Ahern repeated, in answer to that question. The Irish public is "mature enough" to make up its mind, said Romano Prodi in turn, while adding: if the questions means that the Commission should treat one Member State or another differently, "I tell you this is not the case". Aer Lingus experts are to meet Ms. de Palacio in Brussels on Friday.