EC: Loan to Estonian Air Could Be in Violation of EU Rules (1)

Photo: Postimees/Scanpix
1/9/2013 11:20 AM
Category: Economy

The European Commission is investigating whether the government's decision last month to give Estonian Air an 8.3-million-euro loan classifies as premature government aid.

Joaquin Almunia, the commissioner responsible for competition, told Eesti Päevaleht that the Commission is investigating the loan. In addition to the loan, the Estonian government recently turned to the commission, requesting permission for another bailout for Estonian Air, without which the national carrier could slide into bankruptcy.

Almunia said the loan may qualify as government aid and would hence be in violation of EU regulations which say that member states must first ask permission for aid from the commission. If the government is indeed found to be in violation of the rules, the commission's two-month period for reviewing the government's request could drag on for longer.

The head of Estonian Air's supervisory board, Erkki Raasuke, recently said that the carrier would need 50-70 million euros.

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