The European Commission has approved French and Italian aid packages to companies that delivered milk to Parmalat but did not receive payment when the group was hit by massive financial problems.

The aid packages are aimed at giving help to companies facing financial difficulties because they were not paid for milk deliveries.

The first Italian measure (funded by the Region of Lombardy) provides aid of €1m (US$1.24m) for companies that supplied milk to the Parmalat group during the second half of 2003 and who were not paid for a period of between three and six months. The failure to receive payment for milk deliveries resulted in serious losses of revenue and a crisis situation for some companies in Lombardy.

The second measure, granted by the Italian government, provides for the suspension of the payment of social security contributions by suppliers of Parmalat who were not paid during the six months before the group went into receivership.

The French measure provides aid to cover part of the interest on bank loans taken out by dairy farms facing financial difficulties because of non-recoverable debts.