(Adds government statement)

EU Competition chief Joaquin Almunia has accused the Maltese government of failing to provide the information needed to agree to its €130 million state aid rescue plan.

Replying to questions by MEP Edward Scicluna as to why the Commission was delaying the urgently needed rescue plan, Commissioner Almunia insisted that "the Maltese authorities are not providing us with the information we require; or the restructuring plan they submitted to us is not in agreement with our state aid rules".

Under the EU treaties any financial aid given to a company by a national government which breaches the rules of the EU internal market requires approval from the Commission. The government wants to push through a restructuring plan worth €130 million for Air Malta.

In a report on the Air Malta case sent by the Commission to the Foreign Minister in January, the Commission expressed doubts about the government plan describing it as "too optimistic" with regard to its market share, plans to return to profit and overall viability. It added that the government was yet to provide a detailed impact assessment under various scenarios.

Commissioner Almunia concluded that "we need to continue negotiations as we cannot impose our own ideas on the restructuring plan, to negotiate with the national authorities and to ask for additional information" in a bid to reach an agreement.

Prof Scicluna said:

"Maltese taxpayers are rightly perplexed that they see billions being provided by the EU to bailout banks while at the same time it is taking ages for the Commission to give the go ahead for the government to restructure our national airline using our own money."

"The Commission produced a detailed review of the Air Malta case in January in which it called on the government to provide further information before they could approve the bail-out. But Commissioner Almunia says he is still waiting.

"The government keeps claiming that the Commission is holding up the deal but Almunia insists that the government is the road-block to reform."

He concluded:

"Air Malta is vitally important to our economy. We cannot have a situation where its future is hanging in the wind for months and years because the government has neglecting its duties."

Prof. Scicluna ignored vice President Almunia's opening remark - government

In a reply to Prof. Scicluna’s statement, the government said it failed to understand why Prof. Scicluna ignored vice-President Almunia’s comments on Air Malta during the hearing of the ECON Committee on Wednesday.

Vice-President Almunia confirmed during the hearing that the Commission has been working on the restructuring of Air Malta for a long time; and the process was hopefully nearing its end. It was misleading of Prof. Scicluna to ignore this remark, the government said.

“The accusation that government has, in any way, delayed the process through inaction is ludicrous; quite to the contrary, the complex negotiations with the European Commission on Air Malta’s restructuring have progressed well and it is expected that by the end of the process initiated by the Commission, the efficiency with which Government handled the Air Malta case will be evident.

“Out of the seven State aid cases dealing with European airlines in the past seven years, all but one case would have been concluded at a quicker pace, namely the Austrian Airlines case.

“All other state aid investigations launched since 2006, namely those into the restructuring of Cyprus Airways, Alitalia, Olympic Airways, Malev and Czech Airlines took at least a year to complete.

“In the latter case, the Commission investigation was launched a whole year prior to that launched into Air Malta’s restructuring, and is still pending.

“Furthermore, it is important to keep in mind that the Commission has often exercised its right to reject a restructuring plan, throwing airlines into complete disarray. In this context, the government is determined to forge ahead with ensuring that the best possible outcome for Air Malta is secured, thereby guaranteeing a viable national airline well into the future.

“MEP Scicluna should be aware of the fact that such competition cases, particularly in the sensitive sector of aviation, take longer than just a few months to complete.”

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