Brussels - The European Commission on Wednesday ruled that a 300-million-euro (382-million-dollars) loan given to ailing national carrier Alitalia constitutes "illegal state aid" and will therefore have to be recovered by the Italian state.

At the same time, the European Union's executive arm gave its blessing to the company's privatization plan, but only as long as its asset sale is done at "market prices," said Transport Commissioner Antonio Tajani.

Alitalia is currently being taken over by a consortium of private investors. (dpa)