EU probes hotel subsidies

The European Commission has launched a competition inquiry into alleged subsidies paid by the Italian government to hotels on the island of Sardinia.

The EU executive on Tuesday said the aid investigated falls between €8 and €10 million.

European regulators approved the aid in principle in 1988, but the payment breached two essential procedural steps.

For while Brussels authorises subsidies given on a case-by-case basis to projects for ailing hotel industries, the payment must both contribute to regional aid set under EU law and be notified to the EU before money changes hands.

And the commission believe that this aid case breached both of the caveats – so necessitating an in-depth inquiry.

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