BUSINESS

EU demands return of OSE’s loans

VANGELIS MANDRAVELIS

TAGS: Finance

The European Commission is putting Greece on the spot over the return of state subsidies granted to Hellenic Railways Organization (OSE).

The EC’s Directorate General for Competition (DG Comp) last week sent Greek authorities a document referring to the loans received by the organization with Greek state guarantees.

Up until end-2011 OSE collected bank loans amounting to 8 billion euros, using Greek state collateral. European authorities argue that no commercial bank would have loaned this money to OSE without the state’s guarantees and that, as a result, all loans issued in this manner should be returned.

Sources suggested the government was taken aback by the document, as it had underestimated the magnitude of the issue. It believed that after the agreed privatization of railway service subsidiary Trainose and carriage maintenance subsidiary Rosco, the OSE case would be closed without causing any further problems.

However, the handling of the case by the Greek authorities – particularly so by the Transport Ministry – has yielded the opposite results.

It is noted that last year the state paid some 300 million euros to cover guarantee calls for OSE loans. This is expected to increase to 400 million this year.
 

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