ECONOMY

EU Commission wants to ensure that plan for New Olympic keeps the rules

BRUSSELS (Reuters) – The European Commission will insist that Greece reveal its plans to help ailing national airline Olympic Airways to see if they break EU rules banning state aid to the sector, it said yesterday. Greece plans to create a slimmed-down version of its debt-ridden flag carrier which could be operational by September, the country’s transport minister said last month. He has yet to formally unveil the plan for New Olympic Airways. But the Commission, the European Union’s executive arm which polices competition and state aid rules in the 15-country bloc, said it must have a chance to vet any moves which might include alleviating the airline’s debt or providing it with new capital. «They cannot take any decision without discussing with the Commission first,» EU spokesman Gilles Gantelet said. «The Commission will have to study it and see if everything they are doing is compatible with EU rules.» A source at the Commission said the EU body was considering issuing Greece with a legal order within the coming weeks to hand it the plan. The Commission is already planning to take Greece to court over 194 million euros of aid it alleges Athens paid Olympic illegally in the past. EU rules ban governments from bailing out airlines which have to compete for business in an open market. States can step in to provide short-term emergency aid to keep firms from going bust, but they must then provide a restructuring plan. Greece has failed to find a buyer for Olympic, which last month reported a half-billion-euro accumulated net loss at the end of 2001. The creation of New Olympic would ensure the country has an airline during the 2004 Olympic Games which Greece is to host. The relaunched airline will take over Olympic’s logo, most of its schedules, aircraft and flying crew, leaving out non-core operations, Greece said on July 10. Its work force is also expected to be leaner, estimated at 1,830 compared with about 7,000 at the end of 2002.