EU patience runs out on Greek Olympic air aid

Greece is to be hauled before the EU courts again over repeated failures to comply with Brussels rulings on Athens state aid to the Olympic air carrier.

The European commission decided on Wednesday that Greece was not taking sufficient action to claw back cash from the troubled national carrier.

“This decision required Greece to quantify and recover all the unlawfully granted aid to Olympic Airways and Olympic Airlines since December 2002,” said a statement.

“It also asked Greece to immediately suspend all further payments of aid to Olympic Airways and Olympic Airlines, and gave Greece two months to inform the commission of the steps taken to comply.”

Up to €540m in loans, payments and tax breaks from the Greek government to Olympic is in the commission’s sights.

A €40m cash injection to cover part of the costs to Olympic Airlines of leasing aircraft is highlighted.
 
An “unjustified payment” of €90m from Athens was “achieved by overvaluing the assets transferred to the state” when Olympic Airlines became Olympic Airways.

Debts assumed by the Greek state of up to €60m must be repaid, the commission is demanding.

Also under fire is “toleration of Olympic Airways’ failure to pay more than €350m in tax and social security liabilities due between December 2002 and December 2004”.

The commission’s patience has run out with Athens after “Greece was required to recover the aid without delay”.

“At this stage, the exact amount to be recovered has not been determined yet,” said the commission.
 
“No recovery has taken place, and Greece has not demonstrated that it is has suspended all payments of new illegal aid.”

Greece is a multiple offender on state aid to Olympic and may become liable under prior EU competition action for hefty fines.

The European court of justice has already ruled against Greek aid to Olympic, covering 2002, in May 2005 – a separate but related case to the decision on April 26.

In a separate legal action, the commission on April 4 referred Greece back to the courts for failing to recover €161m given to Olympic between 1998 and 2002.

“Depending on the answer of the Greek authorities, the commission may also refer Greece to the court on this ground to request penalty payments,” said Wednesday’s statement.

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