EC launches in-depth probe into Italian state loan to Alitalia

The European Commission decided on Wednesday to launch an in-depth probe into a loan granted by the Italian government to the country's struggling airline Alitalia.
The commission said at this stage, it believed that the loan could constitute state aid that is incompatible with the EU rules and could therefore give Alitalia an unjustified advantage over its competitors.
In an effort to save Alitalia from bankruptcy, the Italian government decided in April to grant a loan of 300 million euros (465 million dollars) to the company to enable it to cope with its current difficulties.
Alitalia was later allowed to incorporate the loan into its equity capital, which was intended to enable the company to maintain the value of its capital so as to avoid bankruptcy proceedings and allow its possible privatization.
The commission said as Alitalia has already benefited from rescue and restructuring aid, Italy cannot, in principle, grant it any more aid.
Commission spokesman Mark English said that the commission had up to 18 months to carry out its investigation.