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EU sees no grounds for further Alitalia aid

The European Commission said on Friday it saw no special circumstances that would allow the Italian government to provide further restructuring aid to airline Alitalia, which is threatened with bankruptcy.

“Apart from specific circumstances, which apparently don’t apply, if state aid is paid to a company without prior notification, third parties can bring the matter to courts,” said Commission spokesman Michele Cercone when asked whether Alitalia might be allowed further state aid by Italy before 2011, the earliest date possible under EU rules. “They will be duty bound to instruct reimbursement. That is the basic rule we work along as far as state aid is concerned.”

Cercone was asked by reporters about the idea of the Italian government providing a bridge loan to Alitalia as Rome tries to find a buyer for the airline. “I don’t even think, we can talk about eligibility for such a bridge loan,” he said. “As I have said many times..., the principle to be respected is the private investor principle.” Under the private investor principle, any support for a company provided by a government would have to be based on terms, that the company would find in a purely commercial agreement.

Representatives from Italy’s outgoing and incoming governments have agreed to seek a bipartisan solution to keep Alitalia flying, a source in the outgoing center-left government said on Thursday. Italian media have said that solution could include a bridge loan to the airline, which needs a fresh cash injection by mid-year to continue normal operations. Asked about the bridge loan at a Friday news conference, PM-elect Silvio Berlusconi did not refer to it directly but said the important thing was to keep the national airline flying. (Reuters)