OA told to cough up aid

EU says Greece must recover hundreds of million of euros given to airline

Olympic Airlines employees demonstrate at Athens International Airport yesterday calling for the cancellation of the sale of the state-owned national air carrier. Hundreds of employees marched through the airport chanting and holding banners in a bid to get their message across to government officials. No attempts were made to disrupt flights. The European Union ruled yesterday that the airline must pay back to the government hundreds of millions of euros it received in state aid — a decision which could cause its financial collapse.

The European Union ordered Greece yesterday to recover hundreds of millions of euros given to Olympic Airlines (OA) in illegal subsidies in a decision that could spur the company's financial collapse, as the government appeared downbeat about the national air carrier's future.

The EU ruled that OA must pay back financial assistance it has received from the government in recent years which some estimates place as high as 700 million euros.

«Greece has given Olympic Airways and Olympic Airlines an advantage not available to its competitors,» the Commission said.

«The Commission therefore asked Greece to recover the illegal aid payments,» it added, giving Athens two months to show that it intends to comply with the decision. It is not clear how this will be judged.

EU laws ban state subsidies to airlines, and companies that received such funds are required to repay them.

Yesterday's decision makes the privatization of OA, currently in progress, more difficult, according to Transport Minister Michalis Liapis. «The decision adds a crucial burden to the already troubled condition of OA,» he said.

The government signed a preliminary agreement last month to sell OA to a consortium of investors. The previous Socialist government had attempted to privatize OA on four unsuccessful occasions.

Government spokesman Theodoros Roussopoulos played down the interest shown by potential buyers, saying that he doesn't think anyone considers OA to be profitable.

«I don't think there has been any interest in buying Olympic as it is, with its thousands of employees and its problems,» he highlighted.

The government has said that it will protect the jobs of the 8,000-strong work force at the airline regardless of the future of the company. Sources say that the state is already working on implementing an early retirement scheme at OA aimed at more than 2,000 employees.

A joint ministerial meeting is scheduled for today which will examine the government's options.

Hundreds of workers protested at Athens International Airport yesterday shortly before the EU decision. The demonstrating workers marched through the departure area of the airport chanting against the sale of the airline but made no attempts to disrupt flights.