Ministry's Optimism on Estonian Air Decision Not Shared by Legal Expert ({{commentsTotal}})

Source: Photo: ERR

The Ministry of Economic Affairs is optimistic that the European Commission will greenlight the restructuring plan of Estonian Air, but University of Tartu senior lecturer Carri Ginter thinks otherwise.

The ministry handed over its plan to restructure the troubled national airline on Thursday, with the Commission set to decide whether the state funding so far transferred to the company is legal, ETV reported on Thursday.

If the loans and the €40-million-euro bailout are deemed illegal, the state will have to ask for the loans to be repaid, with interest, a move that would drive Estonian Air bankrupt.

“The first signs from the Commission are not positive, as only a few months ago they said that any funds released to the company before its approval are illegal,” said Ginter.

“The most important question on the subject of the previous transfers is whether they will be classified as a sensible investment by owners. In other words, would a [private] business have sanctioned these investments, or will they be grouped under direct state assistance, in which case we will be in serious trouble,” Ginter said.

“The European Commission has rejected only one case - Malev [Hungary's national carrier]. And no restructuring plan was even submitted to the Commission in the Malev case. We are more positive than negative,” said Ahti Kuningas, a deputy secretary general at the ministry. He noted that a similar case concerning the Maltese national carrier was cleared.

Ginter said that Malta had asked the Commission for approval before bailing-out Air Malta and the transfers where later classified as investments.