April 25, 2008	Friday	Rabi-us-Sani 18, 1429

BRUSSELS, April 24: The European Commission voiced concern on Thursday about Italian plans for a bailout of Alitalia, raising the prospect that EU regulators might block a vital state loan to the ailing airline.

“We have doubts about the nature of the measures and we want to have a better understanding of the details,” commission spokesman Michele Cercone told reporters in Brussels.

In Dublin, Irish low-cost airline Ryanair urged the Commission to prevent Rome from extending what it described as “unlawful state aid,” which it said “makes a mockery of EU state aid rules.”

“Alitalia has already received over five billion euros in unlawful state aid but the European Commission, as always in the case of flag carriers, turns a blind eye and does nothing,” Ryanair said in a statement.

The Italian government on Wednesday notified the Commission, Europe’s top competition watchdog, of its plan to offer a 300-million-euro state loan for Alitalia, insisting that it was being made on market terms.

“Italy maintains that the measures are not state aid because the loan is being made available on commercial terms,” Cercone said. However “we want to understand if this is a commercial operation or has elements of state aid.”

Italy is currently banned from offering outright state aid to the airline because of past bailouts and could be forced to recover the money if EU regulators deem the loan to be illegal state aid.

The government, which is to be replaced in mid-May following elections last week, said on Thursday it would provide details of its emergency loan to the European Commission within 10 working days.

Alitalia’s crisis is fast becoming a source of contention both in Italy and elsewhere in Europe, complicating any rescue and imperilling the airline’s future.

In a last-ditch effort to save the company, the outgoing Italian government of Prime Minister Romano Prodi agreed on Tuesday to extend the emergency loan after Air France-KLM withdrew a takeover offer.

—AFP