The German government and flagship carrier Lufthansa have reportedly reached a state aid agreement worth 9 billion euros.
This is the last of a series of rescue packages that help airlines deal with the effects of coronavirus.
Before the pandemic, state aid — state financial aid to domestic firms — was extremely limited, as Brussels believes that this makes competition unfair in a single market. But at the start of the crisis, the European Commission (EU) suspended strict block rules so that governments could help firms prevent the threat of collapse. Temporarily, at least.
“In general, this ensures that public support is limited in time and only focuses on the problems that companies are currently facing,” said Margrethe Westager, EU Executive Vice President.
“Liquidity support can be provided until the end of 2020 to help companies overcome liquidity shortages and prevent layoffs.”
To date, Brussels has approved nearly 2 trillion euros of national rescue programs during the pandemic, with Germany accounting for half of this.
This has raised concern that countries with the deepest pockets are receiving an unfair advantage.