European court rules Greece must reclaim 425 mln euros in state aid to farmers


The European Court of Justice has rejected an appeal by Greece to overturn a previous order to reclaim 425 million euros in state aid granted to farmers in 2009 for damage to crops from adverse weather.

According to the ruling, the farmers' funding is considered to be in violation of competition rules and should, therefore, be reclaimed.

The ruling states that the farmers received the funds through the state-owned Greek Agricultural Insurance Organization (ELGA), with the resulting expenditure covered via a loan contracted by ELGA with banks and guaranteed by the state, rather than from insurance contributions.

The funds, therefore, were paid from the state budget and are therefore considered state aid, which is “incompatible with the internal market.”

“[The Hellenic Republic] shall take all measures necessary to recover from its beneficiaries the incompatible aid… which was granted unlawfully,” the ruling says.

The decision comes amid tension between the leftist-led government and farmers over pension and tax reforms.