February 26. 2024. 5:58

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Alitalia loan illegal, EU Commission wants €400 million repayment

The €400 million bridging loan Italy granted to former flag carrier Alitalia in 2019 constitutes illegal state aid under EU rules, and Italy must recover it, plus interest, the European Commission said on Monday.

Alitalia had already benefited from two loans in 2017 worth €900 million, which were never repaid and were already declared illegal by Brussels in 2021. These were granted on 26 October 2019 to Alitalia and were commissioned in May 2017 while the government of Paolo Gentiloni, EU economy commissioner since 2019, was in power.

But according to the Commission, the third and last loan from 2019 also “violated the one-time obligation under the guidelines” of EU rescue and restructuring aid.

“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 focused solely on wanting to ensure the continuity of Alitalia’s domestic and international flight service”, the Commission added.

According to the Commission, “the aid gave Alitalia an unfair economic advantage over its competitors on domestic, European and global routes”, representing “incompatible state aid”.

ITA Airways, the new company that replaced Alitalia on 15 October 2021 by acquiring its brand name, is not the economic successor and is not liable for reimbursement, despite having taken over part of Alitalia’s assets, the Commission also pointed out.

“The exclusion of ITA from the requests for repayment of the bridge loan to Alitalia proves that we are in the right and will continue on this path. The conclusions of the EU Commission were widely expected”, Economy Minister Giancarlo Giorgetti (League/ID) commented.

The EU competition spokesman explained that the elimination of the distortion of competition originated by the illegal public aid could be done “by recording the repayment post in the liability under the ongoing insolvency proceedings,” and the repayment “can be made within the limits of the revenues obtained from the sale of Alitalia assets”.

Exulting is Codacons, a consumer association that had filed a series of exports on the various loans granted to Alitalia and from, which have resulted in the infringement procedures opened by the EU.

“The decision of the European Commission […] is a victory for Italian consumers”, the association comments.

“Back in 2021, the EU Commission accepted our complaint and harshly condemned the decision of former minister Carlo Calenda and the government led at the time by Gentiloni, who had, in fact, gifted 900 million euros to Alitalia”, recalled Codacons.

However, the funds spent “are unlikely to be recovered and return to the availability of the community”, Codacons concluded.

Calenda guaranteed ‘market’ conditions despite the fact that it appeared ‘unlikely that Alitalia would be able to generate sufficient liquidity to repay them’, the association added.

Calenda is now a senator, leader of Azione (Renew) and working on the ‘Third Pole’ political project together with former prime minister Matteo Renzi (Italia Viva/Renew).

(Federica Pascale | EURACTIV.it)