The European Commission is investigating Italy's EUR 400 million loan to Alitalia
On 28 February 2020, the European Commission announced the opening of an investigation into a 400 million euro loan granted by Italy to Alitalia. The investigation verifies whether this state aid complies with European Union rules. The Commission is working closely with the Italian authorities on this issue.
At the end of 2019, the Italian government announced that it will support Alitalia airline with EUR 400 million, money given in the form of a loan. The goal is to make the company more efficient and maybe someone will find themselves buying the company's assets.
Alitalia is in the middle of an EU investigation
Since May 2017, Alitalia is under extraordinary administration in accordance with the Italian bankruptcy law. The restructuring and efficiency plan was rejected by the company's employees. It provided for the dismissal of 1700 employees out of the 11000 that the company has. Since then, the Italian government has been looking for more buyers, but without success.
We should mention that in 2018, the European Commission opened another investigation for a state aid worth EUR 900 million. The investigation is ongoing and independent of the new in-depth investigation.
The state aid is subject to very strict monitoring by the European executive. It can bring an unfair advantage to the company to the detriment of the competitors and thus can distort competition in the European Union. State aid is normally forbidden, but there may be exceptions.
We also talk about the exception in the case of TAROM, which received a state aid amounting to EUR 36,7 million (about RON 176 million). This loan has been approved by the European Commission.
The Commission's rescue and restructuring aid guidelines allow Member States to support companies in difficulty. The rescue aid can be offered with a repayment term of six months, during which time the company must come up with a restructuring and efficiency plan.