Brussels, 20/07/2004 (Agence Europe) - The European Commission took a stance on Tuesday on rescue aid granted by the Italian government to the airline company, Alitalia, by validating the agreement reached last week between Loyola de Palacio, Transport Commissioner, and the government representatives and the company concerned (see EUROPE of 14 July, p.16). The Commission clears a bridging loan of EUR 400 million but on one condition, that it be in the form of a formal written commitment by the Italian authorities, and that the State becomes a minority holder in the capital within twelve months, journalists were told by Amador Sanchez Rico, Ms de Palacio's spokesman.
The Commission assures that the credit guarantee, which corresponds to the amount strictly necessary for management of the company, should be reimbursed within 6 months, or one year if the Italian authorities request extension. In any case, Italy will forward either a liquidation plan or a restructuring plan within the next 6 months, without any element of State aid. The Commission also considers that the decision comprises the elements needed to prevent adverse effects within the other Member States, mainly through Alitalia's commitment not to open up new routes.
The European Low Fares Airline Association (ELFAA) that called on Commissioners not to endorse the Italian initiative had, before the decision, shown its intention to refer the decision to the Court of Justice. The Commission recalls that the "one time last time" principle only applies to restructuring aid and not to rescue aid as is the case here. The Commission had authorised restructuring aid for Alitalia in June 2002. It did not suffice, however, for the company to make profits again (see EUROPE of 20 June 2002).