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EU launches investigation into Berlin's aid to Lufthansa

The 6 billion measure was rejected by the EU Court

EU launches investigation into Berlin's aid to Lufthansa.

La European Commission has started asurvey in-depth about state aid from 6 billion euros granted by Berlin in favor of Lufthansa for its recapitalization.

The scheme was initially approved on 25 June 2020 by Brussels under the Temporary Framework for State aid to address Covid-related difficulties, but the decision was subsequently canceled by EU Court on May 10, 2023. An appeal filed by the German ski giant is still pending.

The German regime granted to the company led by Carsten Spohr it was divided into three components: a capital participation for 306 million euros, a silent participation non-convertible into shares for 4,7 billion and a silent convertible participation for another billion. In June 2020 the European Commission approved the recapitalization, considering it to be compatible with the conditions set out in the Temporary State Aid Framework put in place during the Covid crisis.

The green light from Brussels was, however, subject to compliance with certain conditions: to benefit from the aid, Lufthansa has in fact had to agree to respect a series of commitments, including a ban on distributing dividends and a strict limitation on the remuneration of its management, including a ban on paying bonuses. Additionally, the crane company was ordered to give up up to 24 daily slots at Frankfurt and Munich airports to allow competing carriers to establish a base there. In the ruling of 10 May 2023, on appeal by the low-cost Ryanair, the Court annulled the Brussels decision noting "several errors" of assessment by the antitrust team led by Margrethe Vestager.

Following the rejection by the Luxembourg judges, Brussels will now carry out a more in-depth investigation, examining the eligibility for aid, the need for a mechanism that incentivises the State's exit from the capital, the price of the shares at the time of the possible conversion, the existence of significant market power of the German air giant in airports other than Frankfurt and Munich - such as the German airport of Dusseldorf or the Austrian one of Vienna -, as well as some aspects of the structural commitments imposed on Lufthansa. In the framework of the EU investigation, now Berlin and rival companies have the opportunity to submit their comments.

L Ue avvia un indagine sugli aiuti di Berlino a Lufthansa

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