OA funding above board, minister says

Commission probes airline aid

Greece yesterday denied that Olympic Airways, the national carrier, had received illegal aid from the government, one day after the European Commission opened a formal investigation that could lead to the end of the struggling airline.

National Economy and Finance Minister Nikos Christodoulakis said that support for the company had been legitimate. «All of the financing that has gone to Olympic Airways is absolutely legal and in line with European rules,» he told a news conference.

Deputy Press Minister Telemachos Hytiris said the investigation «is an investigation, not the filing of charges. The process has many stages. And the Greek side will present its opinions and will clarify what the true situation is.»

Nevertheless the investigation is a blow, raising the possibility that Olympic could be compelled to pay back millions of euros. Last month a bid to sell a majority stake in the company fell through. The commission is investigating the legality of a loan of 19.5 million euros made by state-controlled Commercial Bank to Olympic last month and the «potential misuse of aid granted in 1994 and 1998.»

The commission said that since Olympic was being privatized, it would look into «conditions under which the air carrier is currently conducting its business.»

On Tuesday, Olympic said it will call on the government to give it 57 million euros in compensation for being evicted from the old international airport at Hellenikon and moved to the new airport at Spata. It had asked for 200 million euros for the move but received only 143.5 million.

The opposition New Democracy party accused the government of incompetence in handling the Olympic Airways issue.

«It is a clear example of how government policy is degrading our national assets,» said Athanassios Heimaras, the conservatives' shadow transport minister. He charged that government policy had cost taxpayers 1 trillion drachmas (290 million euros).

Olympic employees, meanwhile, yesterday called a three-hour work stoppage for March 20 and a 24-hour strike to be held at a later date. Their federation, OSPA, rejects the government's reform plan, which was made public last month after the privatization bid collapsed. Among other things, the plan calls for incentives for about 2,000 employees to take early retirement.