Monday, 14 July 2014

Govt Aid for SAS Legal

It was all smiles for Scandinavian airline SAS last week when A 400 million euro credit arrangement given to them by the governments of Sweden, Denmark and Norway back in 2012 was not illegal under European Union state aid rules.
The EU Commission opened its investigation into the revolving credit facility in 2013, after it "doubted" it had been carried out under market conditions because the exposures of the governments and the banks involved were different.

EU rules ban state aid which distorts competition and says that support for companies has to be made on the same terms as a private player operating under market conditions would offer. The Commission said on Wednesday last week that while the exposure of the states and banks were different, the facility was accompanied by a robust business plans to save the troubled airline. In other word's they got away with it and thus saving them from having to pay the money back, although apparently the credit facility was never used and cancelled in March of this year.