ECONOMY

Olympic subsidy probe

BRUSSELS (AFP) – The European Union’s executive Commission is preparing to mount a new case against state aid provided by Greece to its flag carrier Olympic Airways, an EU source said here yesterday. The Commission in December 2002 ordered Olympic to reimburse the State 194 million euros ($237 million) in assistance it had deemed illegal. The panel is now consulting with its competition services on launching a further case targeting subsequent assistance by the Greek State to the airline, which could amount to tens of millions of euros, the source said. The EU is particularly interested in a 130-million-euro advance made by the State to finance Olympic’s restructuring and privatization as well as the fate of 26 million euros in airport modernization taxes levied on passengers. The Commission in addition wants to probe the conditions under which the Greek State at the end of last year put together a new carrier, renamed Olympic Airlines, which took over the activities of debt-ridden Olympic Airways. The new company is to be privatized but the Commission has been unable to determine if a future buyer will pay a fair price and has not ruled out the possibility that the privatization procedure amounts to illegal state aid, the source added. Olympic Airlines will be the official carrier for the Athens Summer Olympic Games this year. Greek authorities have defended their approach by arguing that the failure and liquidation of Olympic Airways could have been far more costly to the public treasury. (Transport Minister Christos Verelis has repeatedly declared that the government recognizes that it provided 41 million euros and illegal subsidies to Olympic.)