Public state aid to Alitalia (notified as rescue aid by Italy) - follow-up to question E-002974-17 following EC decision to investigate EUR 900 million loan

Subject: Public state aid to Alitalia (notified as rescue aid by Italy) - follow-up to question E- 002974-17 following EC decision to investigate EUR 900 million loan

Paragraph 38(g) of the Commission communication entitled ‘Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty’ mentions transparency of aid and states that ‘the public must have easy access to all relevant acts and pertinent information’1.

The loan was notified as rescue aid by Italy, with no restructuring plan provided2.

However, the Commission will require a credible restructuring plan from the Italian Government, both involving more state aid and proposing other alternative scenarios not involving more public support, in order to see if the company has any chances to operate under normal market terms.

1. When will the detailed restructuring plan and alternative scenarios without aid for Alitalia from the Italian Government be requested, and will the data be made public?

Regarding ‘economic discontinuity’ between the undertaking which previously received rescue or restructuring aid and any new undertaking in the context of the future ‘new’ Alitalia:

2. What are the key elements that would establish economic discontinuity and therefore obtain the green light from the Commission for more public aid from the Italian Government?

Considering Alitalia’s competitors’ market shares in Italy and their increased share of the cake in recent years, and the fact that the Commission is also investigating the ‘common interest’ for the Italian taxpayers and for the EU of keeping a persistently loss-making and non-restructuring company afloat3:

3. What are the elements that the Commission will take into consideration when verifying whether a ‘common interest’ does exist?

1 OJ C 249, 31.7.2014, p. 1 - https://eur-lex.europa.eu/legal-

content/EN/TXT/PDF/?uri=CELEX:52014XC0731(01)&from=EN

2 https://www.ft.com/content/8001912e-46f2-11e8-8ae9-4b5ddcca99b3

3 http://www.corriere.it/economia/cards/alitalia-costo-salvataggio-concorrenza-lowcost-gli-stati-uniti/conto-lo-

stato-l-ipotesi-5-miliardi_principale.shtml

Answer given by Ms Vestager on behalf of the Commission

(27 June 2018)

Following a preliminary investigation by the Commission, the loan to Alitalia was notified as rescue aid by Italy. No detailed restructuring plan has been provided. In view of the doubts concerning the compatibility of the loan with the state aid rules, the Commission adopted on 23 April 2018 a decision to open a formal investigation.

A non-confidential version of the decision will be published in the Official Journal of the EU and interested parties will have the opportunity to make observations.

Economic continuity comes into play when deciding whether incompatible aid can be recovered from any successor company to which the assets of the beneficiary may have been transferred. The Commission analyses the existence of economic continuity using a set of indicia including the scope of the assets transferred, the transfer price, the identity of the buyer, the timing of the transfer and the economic logic of the transaction. The decision-making practice has been upheld several times by the Union courts.

Any rescue aid needs to pursue an objective of common interest to be considered compatible with the internal market. Member States must thus demonstrate that the aid addresses a specific social hardship or severe market failure by showing, for example, that unemployment in the regions affected is persistently higher than the national or EU average or there is a risk of disruption to an important service which is hard to replicate and where it would be difficult for any competitor simply to step in. Verifying the existence of such common interest in the case at hand will be part of the formal investigation.

⋅1∙ OJ C 249, 31.7.2014, p. 1 — https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52014XC0731(01)&from=EN

⋅2∙ https://www.ft.com/content/8001912e-46f2-11e8-8ae9-4b5ddcca99b3

⋅3∙ http://www.corriere.it/economia/cards/alitalia-costo-salvataggio-concorrenza-lowcost-gli-stati-uniti/conto-lo-stato-l-ipotesi-5-miliardi_principale.shtml