Angela Merkel has a fight on her hands after EU officials in Brussels slammed Germany for an £8billion bailout to support Germany’s dominant airline Lufthansa. A big row has erupted between Chancellor Angela Merkel and European Commission competition chief Margrethe Vestage after Merkel fears Lufthansa will be made an example of by the Commission.
On Wednesday the airline had to reject the bailout after the Commission attached severe conditions to the acceptance of the aid package. Brussels wanted the airline to give up some airport slots in two of its major airline hubs in Frankfurt and Munich. Lufthansa didn’t accept this as they felt it “would lead to a weakening” in its place in European aviation.
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As the two sides meet in Brussels next week, red lines are readily drawn for a major showdown as time is running out to achieve...
Merkel reacted, saying: “We won’t allow that to happen.”
France has already bailed out Air France to the tune of £6billion with Italy pitching in £2billion to renationalize Alitalia.
German Minister for Economy Peter Altmaier said: it’s “not only in Germany’s interests but also in the EU’s interests to avoid a sell-off of strategic interests in the industrial sector as a result of this pandemic”.
The bailouts have been enabled due to the bloc relaxing rules on its strict state aid guidelines due to the pandemic.
Ryanair CEO wasn’t pleased as he lodged a complaint labelling Lufthansa “addicted” to bailouts.
He added: “It is deeply ironic that the German Government, which lectures all other EU countries about respecting EU rules, has no difficulty breaking the State Aid rules when it comes to Lufthansa.
“It waved through Lufthansa’s purchase of Air Berlin 2 years ago, which gave Lufthansa a monopoly in the German domestic market, and now when Lufthansa claims it needs even more State subsidies, the German Government writes a cheque for €9billion, at a time when its competitors Ryanair, EasyJet, BA, among others, do not need such State subsidies to survive.”
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