The European Commission voiced concern Thursday about Italian plans for a bailout of Alitalia, raising the prospect that EU regulators might block a vital state loan to the ailing airline, the AFP reported.
"We have doubts about the nature of the measures and we want to have a better understanding of the details," commission spokesman Michele Cercone told reporters in Brussels.
In Dublin, Irish low-cost airline Ryanair urged the Commission to prevent Rome from extending what it described as "unlawful state aid," which it said "makes a mockery of EU state aid rules."
"Alitalia has already received over five billion euros in unlawful state aid but the European Commission, as always in the case of flag carriers, turns a blind eye and does nothing," Ryanair said in a statement.
The Italian government on Wednesday notified the Commission, Europe's top competition watchdog, of its plan to offer a 300-million-euro (480-million-dollar) state loan for Alitalia, insisting that it was being made on market terms.
" Italy maintains that the measures are not state aid because the loan is being made available on commercial terms," Cercone said. However "we want to understand if this is a commercial operation or has elements of state aid."
Italy is currently banned from offering outright state aid to the airline because of past bailouts and could be forced to recover the money if EU regulators deem the loan to be illegal state aid.
The government, which is to be replaced in mid-May following elections last week, said Thursday it would provide details of its emergency loan to the European Commission within 10 working days.
Alitalia's crisis is fast becoming a source of contention both in Italy and elsewhere in Europe, complicating any rescue and imperilling the airline's future.
In a last-ditch effort to save the company, the outgoing Italian government of Prime Minister Romano Prodi agreed Tuesday to extend the emergency loan after Air France-KLM withdrew a takeover offer.
Prodi will hand over to conservative leader Silvio Berlusconi in mid-May following the billionaire's victory in elections during which the airline's crisis loomed large.
During the campaign, Berlusconi repeatedly claimed that an all-Italian consortium was in the offing to rescue Alitalia but none has so far materialised.
Air France-KLM left the negotiating table on April 2 after the unions demanded that all Alitalia operations be kept intact -- something Europe's largest airline had already ruled out.
Air France-KLM's definitive withdrawal, ending three weeks of speculation over whether it might reconsider, left the cash-strapped airline few options but to contemplate bankruptcy or receivership.
Alitalia, which is losing about one million euros (1.6 million dollars) a day and had about 170 million euros in the bank at the end of March, cannot receive state aid until 2011 under EU rules due to an earlier government bail out.
In Rome, outgoing Foreign Minister Massimo D'Alema described Alitalia's crisis as one of the "first messes" of the new Berlusconi leadership -- and he "hasn't even formed a cabinet yet."
Also in the Italian capital, which will hold a run-off mayoral election at the weekend, posters have gone up showing an Alitalia plane in a nosedive, reading: "Romans thank Berlusconi and (right-wing candidate for mayor Gianni) Alemanno."
Among Italy's EU partners there are doubts that Alitalia can remain in business in its present state.
In Berlin, German State Transport Secretary Matthias von Randow said he saw a future for Alitalia but "as part" of a bigger group rather "than as an independent single state-subsidized airline."
"We are convinced there will be a consolidation on the aviation market in Europe," he said, adding that Air France-KLM and Lufthansa-Swiss were leading the way.