Brussels — The European Commission announced on Monday that an additional €400 million ($431 million) loan given by Italy to bankrupt airline Alitalia in 2019 is illegal and must be repaid under EU competition law.
Alitalia was placed under bankruptcy proceedings in 2017 and kept operational thanks to two major state loans worth a total of €1.3 billion.
The commision's decision means that also the second loan over €400 million was unlawful, as Italy "did not act like as a private operator would have done, as it did not assess in advance the probability of repayment of the loans," a press release said.
The payouts "gave Alitalia an unfair economic advantage vis-à-vis its competitors on national, European and world routes," the commission concluded, adding that both loans have never been repaid.
The loans can also not be regarded as bail-outs, which are possible under EU law, as Alitalia was the beneficiary of previous state aid.
To recover the loans, the claims are to be registered as liabilities in the ongoing insolvency proceedings, a commission spokeswoman said.
Whether the entire sum can be recovered by the state will depend on the revenues obtained from asset sales, she added.
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