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EU concerned about state financing of Crossair

The EU wants to assure that Swiss aid to its airline complies with EU rules

The European Commission has voiced its concern about the Swiss government's participation in the revamped Crossair, particularly the financing plan and sums involved.

The Swiss government informed Brussels on Monday of its decision to support the airline. President Moritz Leuenberger was expected to talk with the European transport commissioner, Loyola de Palacio, on Tuesday.

Palacio has already criticised the Swiss government for giving Swissair a SFr450 million bridge loan earlier this month to get its planes back in the air.

The Commission is to study the Swiss plan in light of the information provided by Bern to determine if the state aid complies with Union rules.

“The EU is worried by the announcement and the amount concerned,” said Gilles Gantelet, transport spokesman for the European Commission. “We have to see if we need to call the Swiss to ask them to change the deal.”

Brussels believes Switzerland will have to comply with EU laws, even if a bilateral agreement on air transport has yet to be implemented.

Competition is paramount

The accord says that state aid that distorts or threatens to distort competition is incompatible with the agreement. For the Swiss plan to follow EU law, it must either not be considered state aid, or fall within possible exemptions.

To qualify for an exemption, the plan needs to comply with strict rules. The financing can be one time only, there must be a restructuring plan and Crossair must not use the funds to expand its operations.

As a rule of thumb, the public money used must also take the form of a commercial investment to be legal according to EU officials.

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SWI - a branch of Swiss Broadcasting Corporation SRG SSR