EU ministers favour air insurance aid extension

European Union governments want to be able to continue helping airlines cover their war and terrorism risks, opposing EU Commission…

European Union governments want to be able to continue helping airlines cover their war and terrorism risks, opposing EU Commission plans to ban such aid from the end of the month, official said this afternoon.

EU transport ministers said they were in favour of extending government insurance guarantees to airlines beyond a deadline of the end of October set by the Commission, which says airlines should buy such cover on the market.

Although the Commission will take the final decision, pressure from governments could persuade it to allow the aid to continue. Airlines have also pleaded for an extension.

"A clear majority of countries expressed the need to prolong [state insurance guarantees] beyond October 31st," a spokesman for Denmark, which holds the rotating EU presidency, said in Luxembourg.

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Earlier, the Commission's transport spokesman said he believed most EU states wanted to stop providing the cover as Denmark, Sweden and Luxembourg had already done.

"It is not that the Commission wants at any cost to cancel [state insurance guarantees] at the end of October," Gilles Gantelet told reporters.

"But it seems that there is a majority ofmember states that do not want to go further than November." At a lunchtime debate, that proved not to be the case and ministers agreed to pass the issue to EU finance ministers who meet next Tuesday.