By Robin Pomeroy STRASBOURG, France, March 12 (Reuters) - The European Union will be able to slap a surcharge on foreign airlines it believes are using government cash to undercut EU carriers, under measures proposed by the EU Commission on Tuesday. EU Transport Commissioner Loyola de Palacio insisted the measure was not aimed at any one country, but the move is clearly a response to fears among EU carriers that U.S. airlines are abusing government aid they received after September 11. "It is a case of having the appropriate legal instruments to safeguard our airlines in the European Union, making sure there is fair competition and avoiding predatory practices by third countries, filling in a legal gap," de Palacio told a news conference. Following the September 11 hijacked airliner attacks on the United States, Washington provided billions of dollars of subsidies and loans to buoy up its beleaguered airline sector. The EU declined to give similar support to its own industry which also suffering an economic crisis, limiting state aid to cover direct losses suffered immediately after the attacks, terrorism insurance cover and extra security measures. "There have been complaints from European airlines saying U.S. airlines are using these state aids to reduce their prices to such an extent that it is unfair," de Palacio said, adding the Commission was investigating the claims. An EU official said Germany's Lufthansa (LHAG) had complained that U.S. airlines were using subsidies to offer unreasonably cheap fares on trans-Atlantic routes. The new measures, which require approval by EU governments and the European Parliament before coming into practice, will allow the Commission to follow up such complaints and impose penalties on foreign carriers if appropriate. If the EU finds evidence of price dumping by airlines competing with its carriers on routes into and out of the bloc, it could impose a duty on the offending airline, possibly via an airport charge. The size of the penalty would be calculated on the amount of aid the airline had received, but would not be higher than an amount needed to remedy the problem, the proposal says. The measures would be put in place for an initial six-month period which could be extended ad infinitum. Trade Commissioner Pascal Lamy said the fact that the proposal had been unveiled just days after the United States sparked a major trans-Atlantic trade row by imposing import tariffs on EU steel was a pure coincidence. "It is not aimed against any particular economic partner," Lamy told the news conference. "So there is no link, apart from the date, with what happened last week with steel." Air traffic is not covered under World Trade Organisation rules and the bilateral deals that govern international aviation do not usually contain clauses to deal with price dumping, hence the need for the new regulation, the Commission said. ©2002 Reuters Limited.