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EU demands bankruptcy of Elan

Two years after finding that 10 million of state aid to the Slovenian sky-maker Elan is not in accordance with the rules of the EU common market, the Commission issued that illegal state aid is repaid from the funds recovered from the bankruptcy of the company. It seems that the Commission has grow tired of waiting for the promised privatization of Elan, from which it was promised the funds would come from. It seems Slovenia has successfully delayed the recovery of 10 million euros with the promise of privatization for 20 months. As the privatization process of Elan was not completed within the prescribed period, the Commission also demanded a detailed explanations regarding the transparency of the sale from the responsible ministry. Slovenia published a public tender for the sale of Elan already in 2011.

The Commission requires that the process of liquidation or bankruptcy of Elan is initiated within 20 days. Commission spokesman Ryan Heath, who confirmed the first unofficial writings of the Commission’s plans, also added that it is normal that the Commission is asking for the liquidation of the company, if it cannot repay the funds. He also said that it was normal that irregular obtained State aid is returned within four months after the Commission’s finding. Slovenia is aware of the irregularity from the 19th September 2012.

But there is also the question of how to meet the requirements of the Commission as the disputed funds will not be returned to Slovenia, but to state-owned companies KAD and Triglav Investments. One possible solution would be that the Bank asset management company convert their claims from Elan into capital from which the state aid could be repaid, but this itself could again constitute state aid under EU rules. Moreover, state and Elan are tackling the decision of the Commission of September 2012 before the General Court of the EU. However the appeal to the General Court of the EU does not withhold enforcement.

B.U.

Sources:

http://www.sloveniatimes.com/european-commission-demands-elan-s-bankruptcy

http://www.24ur.com/novice/slovenija/evropska-komisija-zahteva-bankrot-elana.html

http://europa.eu/rapid/press-release_IP-12-984_en.htm

http://www.evropa.gov.si/si/vsebina/novica/news/bruselj-glede-elana-pritisnil-na-slovenijo/0e46eef3da4805d2fe9f8de9d10bd54d/

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