European Commission Could Nix Estonian Air Bailout ({{contentCtrl.commentsTotal}})

Source: Photo: Postimees/Scanpix

The European Commission has asked Estonia's government to freeze bailout payments to Estonian Air until a final decision has been made.

The Commission noted that 16.6 million euros was paid out to Estonian Air before the Commission gave its consent on March 5, 2013, Commissioner Joaquin Almunia said in a letter obtained by Eesti Päevaleht. The Commission has taken the position, at the current stage, that the 16.6-million-euro part of the new allocations classify as impermissible state assistance.

Almunia said that the government must wait for a final decision before transferring any new funds to the troubled airline.

The Commission also refused to rule out that all help the airline has received between 2009 and 2012 could be found to be against EU regulations.

The Ministry of Economic Affairs remains upbeat, saying that the Commission may yet rule in favor of Estonia.

"[The letter] does not say that a final decision has been reached. On the contrary - a definite decision will take more time," Ahti Kuningas, a deputy secretary general at the ministry, told today.

Earlier in May, the Cabinet announced a new, 40-million-euro bailout for Estonian Air to see it through its restructuring phase.

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