Next week crucial for Italy, EU talks over Alitalia - minister

MILAN (Reuters) - Talks between Italy and the European Commission over the revamp of Alitalia will enter a key phase next week, Italian Industry Minister Giancarlo Giorgetti said on Sunday.

Brussels and Rome have been in negotiations for months over Italy's plan to restructure the airline through the launch of a new, state-owned company called ITA.

The new carrier needs the EU's approval for the government injection of 3 billion euros before it can start operating, but risks missing the summer season as talks are dragging on.

"I think next week will be crucial," Giorgetti said, adding the discussion with EU's competition unit had been difficult.

"There is a tug-of-war with Brussels ... in the name of competition, the EU wants (ITA) to free up as many (airport) slots as possible, but this is not in the interest of the new company," he said during a political debate on the internet.

The EU is requesting ITA gives up as much as half of its airport slots at Milan city airport, drops the brand Alitalia and starts without the handling and the maintenance divisions of the old carrier have triggered criticism in Italy, with trade unions claiming the EU was much tougher with Alitalia than with Air France-KLM and Lufthansa.

"Italy has not bent to the EU ... this is why talks have dragged on," Giorgetti said, acknowledging, however, that Alitalia was loss-making in 2019 while Air France-KLM and Lufthansa were profitable when they were hit by the coronavirus crisis.

(Reporting by Francesca Landini; editing by David Evans)