The European Commission (EC) has insisted that “state aid rules are applied in the same way across Member States,” in light of the suggestion by Finance Minister Clyde Caruana that it was “perhaps” treating Malta’s state aid application for Air Malta differently than other countries’.
Responding to questions from BusinessNow.mt concerning the Finance Minister’s suggestion, an EC spokesperson confirmed that it was in contact with Malta regarding aid to Air Malta, but declined to comment on the content of the discussion, or a possible assessment.
It did however, flatly reject any claim that it has treated Malta’s application differently to that of other countries, saying: “equal treatment is a core principle of competition policy.”
Minister Caruana this week claimed that discussions with the EC around the provision of state aid to the flag airline have taken so long is because it is “perhaps asking Malta for more information than other countries.”
He expanded that the EC is “analysing every fair rate, expense and profit, for each and every Air Malta flight, for the duration of the pandemic that we have asked to be financially compensated with.”
Malta’s Government applied to the EC in October 2020 to provide state aid to the airline due to the losses it incurred as a result of the COVID pandemic.
European Union rules prevent Member States from providing financial assistance to any enterprise, whether private or state-owned, in order to preserve competition rules.
However, these rules have been relaxed during the COVID-19 pandemic, especially for companies in the hard hit aviation sector.
Examples of state aid recently given the green light by the EC include €120 million in state aid to Aegean Airlines, €290 million to Brussels Airlines, and €7 billion to Air France, by the Greek, Belgian and French Governments respectively.
“Their [assessment method] is very technical,” said Minister Caruana, “the process is immensely labour intensive and involves very long spreadsheets. We are obliged to respond with all information they asked for.”
Air Malta’s financial woes have been something of a thorn in the side of successive Governments – with the EC previously accepting two applications to provide state aid to the ailing airline in 2010 and 2012 respectively – and the COVID pandemic has only exaggerated this.
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