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The European Commission has discovered €73.02 million of Italian help in favour of Alitalia to be consistent with EU state help guidelines. This measure goals at compensating the airline for the damages suffered on 19 routes because of the coronavirus outbreak between 16 June and 31 October 2020.
Executive Vice President Margrethe Vestager, accountable for competitors coverage, mentioned: “The aviation industry continues to be one of the sectors hit particularly hard by the impact of the coronavirus outbreak. This measure enables Italy to provide further compensation for direct damages suffered by Alitalia between June and October 2020 due to the travel restrictions necessary to limit the spread of the coronavirus. We continue working closely with member states to ensure that national support measures can be put in place in a coordinated and effective way, in line with EU rules. At the same time, our investigations into past support measures to Alitalia are ongoing and we are in contact with Italy on their plans and compliance with EU rules.”
Alitalia is a serious community airline working in Italy. With a fleet of over 95 planes, in 2019 the corporate served tons of of locations everywhere in the world, carrying about 20 million passengers from its fundamental hub in Rome and different Italian airports to varied worldwide locations.
The restrictions in place each in Italy and in different vacation spot nations so as to restrict the unfold of the coronavirus have closely affected Alitalia’s operations, in specific relating to worldwide and intercontinental flights. As a consequence, Alitalia incurred important working losses till at the very least 31 October 2020.
Italy notified to the Commission an further help measure to compensate Alitalia for additional damages suffered on 19 particular routes from 16 June 2020 to 31 October 2020 because of the emergency measures essential to restrict the unfold of the virus. The help will take the type of a €73.02 million direct grant, which corresponds to the estimated injury immediately precipitated to the airline in that interval in accordance to a route-by-route evaluation of the 19 eligible routes. This follows the Commission choice on 4 September 2020 to approve Italian damage compensation measure in favour of Alitalia compensating the airline for the damage suffered from 1 March 2020 to 15 June 2020 ensuing from governmental restrictions and containment measures taken by Italy and different vacation spot nations to restrict the unfold of the coronavirus.
The Commission assessed the measure below Article 107(2)(b) of the Treaty on the Functioning of the European Union (TFEU), which permits the Commission to approve state help measures granted by Mmember states to compensate particular corporations or sectors for injury immediately brought on by distinctive occurrences. The Commission considers that the coronavirus outbreak qualifies as such an distinctive prevalence, as it’s a rare, unforeseeable occasion having important financial affect. As a consequence, distinctive interventions by the Mmember state to compensate for the damages linked to the outbreak are justified.
The Commission discovered that the Italian measure will compensate for damages suffered by Alitalia which are immediately linked to the coronavirus outbreak, as the lack of profitability on the 19 routes because of the containment measures in the course of the related interval may be thought of as injury immediately linked to the distinctive prevalence. It additionally discovered that the measure is proportionate, because the route-by-route quantitative evaluation submitted by Italy appropriately identifies the injury attributable to the containment measures, and subsequently the compensation doesn’t exceed what is important to make good the injury on these routes.
On this foundation, the Commission concluded that the extra Italian injury compensation measure is consistent with EU state help guidelines.
Background
Based on complaints obtained, on 23 April 2018 the Commission opened a proper investigation process on €900m loans granted to Alitalia by Italy in 2017. On 28 February 2020, the Commission opened a separate formal investigation process on a further €400m mortgage granted by Italy in October 2019. Both investigations are ongoing.
Financial help from EU or nationwide funds granted to well being providers or different public providers to sort out the coronavirus state of affairs falls exterior the scope of State help management. The similar applies to any public monetary help given on to residents. Similarly, public help measures which are accessible to all corporations reminiscent of for instance wage subsidies and suspension of funds of company and worth added taxes or social contributions don’t fall below state help management and don’t require the Commission’s approval below EU state help guidelines. In all these instances, member states can act instantly.
When state help guidelines are relevant, member states can design ample help measures to help particular corporations or sectors affected by the results of the coronavirus outbreak consistent with the present EU State help framework. On 13 March 2020, the Commission adopted a Communication on a Co-ordinated economic response to the COVID-19 outbreak setting out these potentialities.
In this respect, for instance:
- Member states can compensate particular corporations or particular sectors (within the type of schemes) for the injury suffered due and immediately brought on by distinctive occurrences, reminiscent of these brought on by the coronavirus outbreak. This is foreseen by Article 107(2)(b)TFEU.
- State help guidelines based mostly on Article 107(3)(c) TFEU allow member states to assist corporations address liquidity shortages and needing pressing rescue help.
- This may be complemented by a wide range of further measures, reminiscent of below the de minimis Regulation and the General Block Exemption Regulation, which may also be put in place by member states instantly, with out involvement of the Commission.
In case of notably extreme financial conditions, such because the one at present confronted by all member states and the UK due the coronavirus outbreak, EU state help guidelines enable member states to grant help to treatment a severe disturbance to their financial system. This is foreseen by Article 107(3)(b) TFEU of the Treaty on the Functioning of the European Union.
On 19 March 2020, the Commission adopted a state help Temporary Framework based mostly on Article 107(3)(b) TFEU to allow member states to make use of the complete flexibility foreseen below state help guidelines to help the financial system within the context of the coronavirus outbreak. The Temporary Framework, as amended on 3 April, 8 May 2020, 29 June and 13 October 2020, gives for the next kinds of help, which may be granted by member states: (i) Direct grants, fairness injections, selective tax benefits and advance funds; (ii) State ensures for loans taken by corporations; (iii) Subsidized public loans to corporations, together with subordinated loans; (iv) Safeguards for banks that channel Sstate help to the actual financial system; (v) Public short-term export credit score insurance coverage;(vi) Support for coronavirus associated analysis and improvement (R&D); (vii) Support for the development and upscaling of testing amenities; (viii) Support for the manufacturing of merchandise related to sort out the coronavirus outbreak; (ix) Targeted help within the type of deferral of tax funds and/or suspensions of social safety contributions; (x) Targeted help within the type of wage subsidies for workers; (xi) Targeted help within the type of fairness and/or hybrid capital devices; (xii) Targeted help for uncovered fastened prices of corporations.
The Temporary Framework can be in place till the top of June 2021. As solvency points might materialize solely at a later stage as this disaster evolves, for recapitalization measures solely the Commission has prolonged this era till the top of September 2021. With a view to making sure authorized certainty, the Commission will assess earlier than these dates if it must be prolonged.
The non-confidential model of the choice can be made accessible below the case quantity SA.59188 within the state aid register on the Commission’s competition web site as soon as any confidentiality points have been resolved. New publications of state help choices on the web and within the Official Journal are listed within the State Aid Weekly e-News.
More data on the Temporary Framework and different motion the Commission has taken to handle the financial affect of the coronavirus pandemic may be discovered here.
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