The European Union agreed to a seven billion euro French aid to Air France conversation

On Monday, the European Commission allowed France to provide seven billion euros of support to Air France to face the repercussions of the emerging crisis of the Corona virus. “This guarantee and the shareholder loan granted by France, amounting to seven billion euros, will provide Air France with the liquidity it urgently needs to withstand the repercussions of the global epidemic,” European Competition Commissioner Margaret Fiegger said in a statement.

In mid-March, the European Commission on Competition Protection in the European Union relaxed its rules on state aid to allow it to support companies that needed it. As for Air France, the French loans will be distributed between four billion bank loans secured by 90% by the state and three billion direct loans from the state, in exchange for pledges to improve its returns and reduce its emissions of carbon dioxide.

“France has also shown evidence that all other possibilities for obtaining liquidity in the markets have been explored and exhausted,” the commission said, considering that “in the absence of official support, Air France will likely be at risk of bankruptcy after its activities decline.”

“This could potentially cause serious damage to the French economy,” she noted. Air France has witnessed a tremendous decline in its activity after the restrictions imposed on the whole world on flights to reduce the outbreak of the new Corona virus, which reflects a large operational losses on it. France and the Netherlands each own 14% of the French-Dutch group formed by the airline, with the company “KLM”. The Dutch government, for its part, intends to provide KLM two to four billion euros in loans and guarantees