Hungarian government prepares to discuss Malev's future

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Hungary's government is to discuss its strategy regarding the future of Malev at a meeting next week, following the European Commission's ruling that the flag-carrier must repay a vast sum of state aid.

The ministry of national development said it had "prepared various scenarios" ahead of the possible ruling against Malev's funding and these will be "updated and finalised" in light of the decision.

But the ministry stated that the operation of an airline based in Budapest "remains a priority objective", and said negotiations with a strategic investor "are in progress".

The Commission found that financing granted to Malev during 2007-10, related to the airline's privatisation and renationalisation, amounted to illegal state support.

Hungary's government will discuss the ministry's recommendations on Malev's future on 16 January.

The ministry indicated that the government would comply quickly with the Commission's ruling, and would draw up a package of actions to deal with the situation.

It added that the ruling was a direct result of failure by previous Hungarian governments and Malev managers to carry out the "long overdue" restructuring of the airline. The ministry reiterated its accusation that the lack of a long-term plan and the loss of valuable assets set Malev on "an inescapable path".