Olympic’s sale sole option

Transport and Communications Minister Michalis Liapis said yesterday that the unfavorable proposal by Advocate General of the European Court Leendert Geelhoed on Tuesday that Olympic Airways should still be asked to return some 194 million euros of illegal subsidies, despite legal complications and a lack of assets, must not be allowed to jeopardize the current attempt to privatize its revamped successor, Olympic Airlines, the country’s flag carrier. Liapis, who met with Transport Commissioner Jacques Barrot in Brussels on Tuesday to discuss the privatization, said that finding a buyer was the only option available. «For Olympic, the solution is a one-way street. It is finding a buyer,» he said. «There is an ongoing tender and we’re hoping for a good outcome.» He said that Olympic Airlines will be privatized within the next three months. In 1998, the European Commission approved restructuring aid for then Olympic Airways under certain conditions, but four years later ordered the government to recover 41 million euros in such aid and 153 million in operating subsidies, judging that the use of the funds contravened its directives designed to promote fair competition. About a year later, in December 2003, and in an attempt to privatize the ailing carrier, the government split the company into two, renaming one Olympic Airlines and transferring its huge debts to the other. The attempt failed, all the same. Geelhoed on Tuesday proposed that the European Court of Justice «declare that Greece has failed to live up to its obligations under Community law,» and blasted the then government for complicating the issue by splitting the company in two. He pointed out that regardless of the renaming, Olympic continues to enjoy a competitive advantage due to past subsidies. According to the Commission’s timetable, the current privatization tender must be completed by February 11. In a written statement yesterday, Liapis’s predecessor, Christos Verelis, who presided over the splitting of the carrier, charged the government and Olympic with inertia and negligence in defending the case for the carrier. He argued that Greece should have asked for a postponement of the case and said that the government favors the liquidation of the airline which will benefit its competitors with some 200 million euros.

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.