Cyprus Problem | European Commission Investigates State Aid

Cyprus Problem | European Commission Investigates State AidCyprus Problem | European Commission Investigates State Aid

Today, the European Commission has said that it will investigate state aid cases which may break EU law. In the south, the Commission are investigating a “€31.3 million capital increase and a rescue aid package of €73 million” given to Cyprus Airways.

According to the press release, it is thought that this money was not given on market terms and that giving the money contravened the EU’s “standstill obligation” state aid rules, which say that state aid must not be granted before the Commission has approved it.

On top of this, there is a further problem because Cyprus Airways had already received rescue and restructuring aid in 2007 and according to EU state aid rules, state companies in difficulty can receive rescue and restructuring aid only once over a period of ten years. That’s not all, the south is also planning to grant extra redundancy payments to Cyprus Airways staff on top of what they are entitled to under the Cypriot law. The European Commission believes this extra compensation would be yet another example of giving advantages to the company which disadvantage competitor airlines from other EU countries.

The south’s complaint that the Cyprus Problem has caused extra problems for Cyprus Airways because of routing problems seems to ignore the fact that every airline entering and leaving the south has the same problems.

Print Friendly, PDF & Email

Comments are closed.