The General Court of the European Union (EU), first instance, this Wednesday annulled the decision of the European Commission that approved a six billion euro state aid from Germany for the recapitalization of Lufthansa during the covid-19 pandemic.
“The General Court annuls the Commission’s decision approving the recapitalization of Lufthansa carried out by Germany for an amount of EUR 6 billion in the context of the Covid-19 pandemic,” the authority said in a statement.
According to information provided to the press, the General Court finds in this judgment that “the Commission committed several errors, in particular when it considered that it was not possible for Lufthansa to find financing on the markets to cover all its needs. to fulfil”.
However, according to the court, no mechanism was needed that would encourage Lufthansa to reacquire Germany’s participation as soon as possible when it denied that Lufthansa had significant market power at certain airports and when it accepted certain commitments that did not. ensure the maintenance of effective competition in the market”.
The lawsuit was brought by low-cost carrier Ryanair, which challenged several state aids to the aviation sector during the pandemic, namely in relation to TAP.
According to the General Court, “the appellants have standing to challenge the merits of the contested decision by means of the actions for annulment which they have brought”.
In June 2020, due to the impact of covid-19 on aviation, Germany notified the community administrator of state aid in the form of a six billion euro recapitalization to Lufthansa AG, the parent company of the group, a measure that included a series of government aids to to restore liquidity (to a total of nine billion euros).
This support consisted of a participation in the capital of approximately EUR 300 million, a silent participation not convertible into shares of approximately EUR 4.7 billion and a silent participation of EUR 1 billion as a convertible bond.
The European Commission can now appeal against this decision of the General Court, as the case would then have to go to the Court of Justice of the EU.
Source: DN
