EU showdown looms: Furious Merkel vows ‘tough fight’ as Germany defies Brussels orders

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Angela Merkel has vowed a “tough fight” with the EU if officials in Brussels try to weaken Germany’s top airline Lufthansa. Germany’s controversial £8billion bailout for the national airline could see an unprecedented row erupt between Chancellor Angela Merkel and European Commission competition chief Margrethe Vestager. Earlier this week, Lufthansa agreed a bailout with the German government in what would be the largest airline bailout to date in Europe. 

However, the airline’s board then rejected the conditions of the aid package on Wednesday after severe bailout conditions were imposed by the European Commission.

Brussels reportedly required the carrier give up some airport slots at two of its major hubs in Frankfurt and Munich. 

Europe’s second-largest airline felt Brussels’ demands “would lead to a weakening” of its place in European aviation

Angela Merkel is understood to have told CDU party colleagues in Germany: “We won’t allow that to happen.”

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France has already handed over £6billion to help Air France and Italy pitched in £2billion to renationalize Alitalia. 

German officials fear that the European Commission will try to make an example out of Lufthansa.

The German bailout would have seen the state take a huge 20 percent stake in the airline.

One senior German aviation executive told Politico: “The French and Italians put their money in the airlines that they want.”

Other airlines including the Franco-Dutch Air France-KLM and the US carriers American Airlines, United Airlines and Delta Air Lines have also sought state aid.

German Minister for Economy Peter Altmaier warned that it is “not only in Germany’s interests but also in the EU’s interests to avoid a sell-off of strategic interests in the industrial sector as a result of this pandemic”. 

Brussels adopted temporary bailout rules that relaxed the bloc’s strict state aid guidelines during the coronavirus crisis.

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In response to the ongoing bailout battle, Ryanair CEO Michael O’Leary said he intended to lodge an appeal against the deal.

Mr O’Leary said that Lufthansa was “addicted” to state aid.

He added: “It is deeply ironic that the German Government, which lectures all other EU countries about respecting EU rules, has no difficulty breaking the State Aid rules when it comes to Lufthansa.

“It waved through Lufthansa’s purchase of Air Berlin 2 years ago, which gave Lufthansa a monopoly in the German domestic market, and now when Lufthansa claims it needs even more State subsidies, the German Government writes a cheque for €9billion, at a time when its competitors Ryanair, EasyJet, BA, among others, do not need such State subsidies to survive.”

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