The European Commission has concluded that the €400 million bridging loan granted to Alitalia in 2019 constitutes illegal state aid under EU rules. Italy must therefore now recover the illegitimate state aid, plus interest, from the company. This was announced by the EU executive itself.
The findings of the EU
The Commission considers that, by granting the €400 million State aid loan in 2019, Italy did not behave as a private operator would have done, as it did not assess in advance the likelihood of repayment of the loans, plus interest, but aimed at guaranteeing the continuity of the service of Alitalia’s national and international flights. Furthermore, the Commission considered that the aid could not be approved as rescue aid within the meaning of the Rescue and Restructuring Aid Guidelines. In particular, Alitalia had already benefited from previous aid, namely the two loans granted in 2017.
Violated the one-off obligation
Therefore, the new loan would breach the one-off obligation under the R&R Guidelines. On this basis, the Commission concluded today that no private investor would have granted the loan to the company at the time and that the loan gave Alitalia an unfair economic advantage over its competitors on domestic, European and global routes, which constituted aid of incompatible state. Italy must now recover from Alitalia the illegal state aid of 400 million euros plus interest.
It is not Ita who has to repay the loan
The Commission, it is specified, “already noted in September 2021” that the new Ita Airways “is not the economic successor” of the company, despite having taken over some assets, and “that it is therefore not required to repay the aid received from Alitalia ”.
EU: Rome forced to recover illegal aid
“Italy has a duty to recover illegitimate and incompatible aid from Alitalia” with EU rules “plus interest” and, in the event of the company’s bankruptcy, Alitalia will be able to repay the sum “up to the revenues obtained from the sale of its assets” said a spokeswoman for the European Commission, after the EU decision to declare the 400 million euro bridging loan granted by Rome in 2019 illegal. “The extraordinary administration of Alitalia is still ongoing” and is “aimed at completing the liquidation of the carrier’s assets”, recalled the spokeswoman.