ITALY - ALITALIA

Berlusconi challenges Brussels over Alitalia case

2 min

Italy's incoming prime minister says the EU is "making things difficult," after Brussels criticized Italy's plan for an emergency loan to Alitalia as potentially illegal state aid.

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Italy's incoming prime minister Silvio Berlusconi Thursday criticised the European Commission for questioning a move by the state to bail out cash-strapped flag carrier Alitalia with a loan.

"They are making things difficult," Berlusconi said at a public meeting, the domestic news agency ANSA reported.

"But I'm not worried by this question, the European Union should help just causes and not create difficulties."

The Italian government on Wednesday notified the Commission, Europe's top competition watchdog, of its plan to offer a 300-million-euro (480-million-dollar) state loan for Alitalia, underscoring that it was being made on market terms.

"We have doubts about the nature of the measures and we want to have a better understanding of the details," commission spokesman Michele Cercone told reporters in Brussels.

In Dublin, Irish low-cost airline Ryanair urged the Commission to prevent Rome from extending what it described as "unlawful state aid," which it said "makes a mockery of EU state aid rules."

But Berlusconi said the loan was the "only thing" to do. "Alitalia cannot not be absorbed by the French," he added, in reference to earlier moves by Air France-KLM for a takeover.

Air France-KLM has since withdrawn that offer.

The Italian government last came to the rescue of the carrier in 2001. Under EU rules, Alitalia is not allowed state aid again until 2011.

The EC has given Rome two weeks to hand over extra details surrounding the loan, while Berlusconi said on Wednesday that Italian investors would present a rescue package within the next five weeks.

Alitalia is losing about one million euros (1.6 million dollars) a day and had about 170 million euros in the bank at the end of March.
 

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