(Bloomberg) -- Margrethe Vestager, the European Union’s antitrust chief, said she’s “neutral” on Italy’s plans to nationalize Alitalia SpA as the coronavirus wreaks havoc with the region’s aviation industry.
She told reporters that approval for the proposed transaction could depend more on “the way it’s done” and “if it’s done at market prices,” which might be “quite low” in current circumstances.
Italy, the euro area’s third-biggest economy, has been under lockdown since early March, as the nation became the epicenter of the Covid-19 outbreak. Flight cancellations across Europe have badly hurt airlines as revenue craters.
Alitalia was seeking help before the crisis and has already cost the taxpayer more than 2 billion euros ($2.1 billion.) Italy’s government last month approved a fund worth 500 million euros to set up a new state company to take over the carrier.
Vestager warned that companies in economic difficulty before the crisis shouldn’t get subsidies intended to help firms suffering as a result of the pandemic. But they can avail from some compensation for damage received during the crisis and anticipated damages.
“There are different ways of supporting the airlines. It’s not a given that for the specific airline nationalization is the better help,” she said, pointing to a French program to exempt airlines from some taxes. Government subsidies shouldn’t overcompensate but seek to help “in the cheapest possible manner.”
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