EU Finance Ministers block extension of state guarantee schemes for airlines 

Without casting a formal vote, the majority of ministers supported EU Commissioner de Palacio's stance in favour of returning to market rules as of 1 November 2002. According to the Commissioner, commercial insurers are now offering reasonable prices for third-party war and terrorism insurance cover, and potentially market-distorting government measures are no longer needed.

The national guarantee schemes were introduced with the Commission's consent, when commercial insurers withdrew or drastically scaled back coverage for acts of terrorism following September 11.

The Commission's decision not to prolong the measures beyond 31 October 2002 was received with anger by the European aviation industry. The industry complains that without the support of European governments, Europe's airlines and airports will no longer be able to ensure the continuation of normal operations.

On 3 October, the EU Transport Ministers also voiced their support for an extension of the national support schemes beyond the expiry date set by the Commission (see EurActiv on

7 October 2002).

A permanent solution in form of a mutual insurance fund will still take months to be established.