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EU gives Italy till end May to answer Alitalia concerns

14 May 2008, 15:46 CET

(BRUSSELS) - The European Commission has given Italy until the end of the month to answer its doubts that a state loan to ailing airline Alitalia is legal, a spokesman said Tuesday.

"Following a request from the Italian authorities, the commission decided that the deadline for presenting additional information would be May 30," spokesman Michele Cercone told journalists in Brussels.

The outgoing government of centre-left leader Romano Prodi made an emergency loan of 300 million euros (480 million dollars) to Alitalia after takeover negotiations with Air France-KLM collapsed last month.

The European Commission has raised doubts that the loan meets EU state aid rules, under which Rome cannot give public support to the company until 2011 because of its previous assistance to the carrier.

On Tuesday, Italian Prime Minister Silvio Berlusconi vowed that flag carrier Alitalia would recover from its deep financial crisis without being nationalised or sold off cheaply.

In his first speech to parliament, the billionaire businessman said that the struggling airline would be rescued "with the financial support of Italian companies."

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