=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2003/01/14/f= inancial1231EST0116.DTL ---------------------------------------------------------------------- Tuesday, January 14, 2003 (AP) EU Parliament backs retaliatory action against other airlines on subsidies CONSTANT BRAND, Associated Press Writer (01-14) 09:31 PST BRUSSELS, Belgium (AP) -- The European Union Parliament backed plans Tuesday to bolster EU airlines and slap economic sanctions against non-European carriers if they received unfair subsidies. The draft proposal passed the 626-member EU Assembly meeting in Strasbourg, France, by a show of hands and was the parliament's first evaluation of the bill. It will now be sent to EU transport ministers for further study. The plan calls for the EU's executive Commission to impose restrictions = on slot allocations, landing rights or impose duties on airlines that "cause significant material injury" to EU carriers. Under the proposal, the Commission will decide which airlines receive excessive support. "The distortions to fair competition have increased substantially" since the attacks on New York and Washington on Sept. 11, 2001, the parliament said in its draft bill. It blamed "substantial emergency support granted" to non-EU airlines. It pointed to the United States and Switzerland as major proponents of "unfair practices" in providing multibillion dollars in assistance to their airline industries, which enabled carriers to drop fares on key routes also operated by European carriers. "There is a need for an instrument to offer protection against subsidized non-EU air carriers or those receiving other benefits from governments," the parliament added. The EU assembly said the 15-nation bloc's hands were tied when it came to subsidizing its own national carriers. It said existing rules limited government bailouts. The EU so far has no powers to impose similar retaliatory measures already in place in the United States and elsewhere. The parliament urged caution in applying retaliatory measures, warning that while the bill should be passed to ensure an equal playing field with the United States, it must not lead to new trade conflict. "We need to be careful," said British conservative member Jacqueline Foster. "Slapping extra duties on non-EU carriers and placing restrictions on their slot allocations could precipitate an unnecessary trade war with non-EU carriers." While the EU ended emergency government-backed insurance guarantees for airlines last October, Washington continues to provide such guarantees for its airline industry. After Sept. 11, 2001, U.S. carriers obtained a $5 billion cash bailout a= nd a $10 billion loan guarantee program from the government to aid the airline industry. The European Parliament hopes the new retaliatory legislation, if passed, will help in boosting the survival of current national airlines. Belgian carrier, Sabena went bankrupt November 2001. Greek airline Olymp= ic Airways has been accused of violating EU state aid rules. =20 ---------------------------------------------------------------------- Copyright 2003 AP