By Chris Jones - 4th April 2006
Greece must recover illegal state aid it granted to ailing carrier Olympic Airways or face the threat of further penalties, the European commission has warned.
The Greek government has allowed millions of euros in aid for Olympic since it agreed a recovery plan for the troubled airline in 1994.
But in 2002 Brussels claimed that the terms of that plan – in particular the restructuring of Olympic – had not been met, and that €161m in aid granted between 1998-2002 must be recovered.
Greece’s appeal against the decision was rejected by the European courts in May last year, and the commission on Tuesday sent a letter to the authorities in Athens demanding action.
“If the Greek response proves unsatisfactory, the commission will refer the case to the court of justice and request financial penalties,” the EU executive said in a statement.
Greece now has two months to respond to the commission’s letter.
Olympic has already been obliged to repay around €350m in aid dating from after 2002 following a commission ruling in September 2005.
Most of the “aid” was in the form of unpaid taxes and social security payments waived by the Greek government.
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