State aid during Corona - EU Commission: Billions in aid for Air France-KLM legal
Billions of euros in state aid from France and the Netherlands for Air France-KLM during the Corona Pandemic have been rightfully approved by the EU Commission, according to the Brussels authority. The EU Commission approved state guarantees of 4 billion euros from France and loans of 3 billion euros, as well as a Dutch guarantee for loans of 2.4 billion euros and a loan of 1 billion euros.
Commission: Aid was necessary, appropriate and proportionate
The EU Court declared both decisions of the EU Commission in December 2023 and in February of that year null and void. According to the Court, the Commission incorrectly considered Air France and KLM as the sole beneficiaries of the French and Dutch state aid measures. The Commission has lodged appeals against both judgments.
After re-examination, the Commission now concludes that both measures are in line with the applicable EU state aid rules. Furthermore, the combination of all French and Dutch measures did not result in an incompatible accumulation of aid. The combined amounts remained below the applicable thresholds. "The Commission concluded that the measures contributed to alleviating the economic effects of the Coronavirus in France and the Netherlands." They were necessary, appropriate and proportionate.
German aid for Lufthansa comes under scrutiny again
Last week, the EU Commission announced that it would re-examine billions of euros in German state aid for Lufthansa. In a detailed investigation procedure, it will be determined whether the previously repaid aid from the German state in 2020 was in line with European competition rules. The initiation of an investigation does not yet say anything about its outcome, emphasized the authority.
Background is also here a judgment of the EU Court. The judges ruled that the Commission should not have approved the German state aid in the amount of around six billion euros. The officials involved made several errors in their assessment, leading to the nullification of the Commission's approval.
- The ECJ previously deemed the EU Commission's decisions, granting billions of euros in aid to Air France from France and the Netherlands in 2023, as null and void, claiming incorrect beneficiary consideration.
- In February 2023, the EU Court also invalidated an earlier decision by the EU Commission regarding Air France-KLM, citing incorrect assessment of beneficiaries.
- The EU Commission, in its re-evaluation of these decisions, has now determined that the French and Dutch state aid measures for Air France-KLM comply with EU state aid rules.
- The EU Commission found that the accumulation of aid from France and the Netherlands did not lead to an incompatible situation, ensuring that the combined amounts remained below the applicable thresholds.
- Similar scrutiny has been applied to German aid for Lufthansa, with the EU Commission initiating a detailed investigation this week to assess if the previously repaid aid of around six billion euros in 2020 was in compliance with European competition rules.
- A 2020 EU Court judgment has prompted this re-examination of Lufthansa's German state aid, as the judges argued that the Commission had made errors in its initial assessment, leading to the nullification of the approval.
- As Europe continues to grapple with the Coronavirus pandemic, major airlines like Air France, KLM, and Lufthansa have sought state aid to weather the economic storm, with the EU Commission playing a crucial role in approving and re-evaluating these measures.
