Italy’s government breached EU state-aid rules when it gave E900m in rescue loans to Alitalia in 2017, according to a verdict set to be announced by Brussels. The decision by EU competition authorities, which two people with direct knowledge of the matter said was set to be made public on Thursday, though that timing may slip, comes after a three-year investigation into whether bridge loans to Alitalia illegally distorted competition in the bloc. EU law prohibits a member state from granting a company financial support that gives it an advantage over its rivals. The current Italian government, which was not in office when the loans were made, declined to comment. The decision spells the latest ignominious chapter for Alitalia, Italy’s perennially lossmaking flag carrier for 75 years. The Rome government has already been working with Margrethe Vestager, the EU competition chief, on a deal to allow a new airline to be created that will be independent of Alitalia. Brussels will confirm the details of the new airline, known as Italia Transporto Aereo (ITA), which will start flying next month. ITA will be economically independent and will not be liable for any illegal state aid received by Alitalia in recent years, people with direct knowledge of the plans said. Alitalia has faced financial difficulties for decades and has not posted an annual net profit since the start of the millennium.<br/>