EU court case on OA grants is imminent

BRUSSELS – The European Commission will likely refer Greece to the European Court of Justice this month, demanding that it be fined for illegal state subsidies to Olympic Airways in the 1998-2002 period, which the court has already ruled must be returned to the state. Commission officials suggest that Transport Commissioner Jacques Barrot has already decided to proceed with court action, with only the exact date left to be set by the Commission’s plenary, scheduled for next Thursday. Officially, the EU’s executive body declined to reveal its intentions, but an extension to the schedule cannot be ruled out, as the body usually avoids allowing its decisions to coincide with elections in member states, and Greece has local elections on October 15. Yet Barrot’s spokesperson insisted yesterday that the Commission’s only concern is for the Greek state to have 161 million euros returned, as this had been the subsidy deemed illegal. The Commission realized that OA had not returned those subsidies, so it turned again to the Court, which fined Greece, since the country has not complied with the previous decision. The Court will determine the level of the fine; part of it will be in a lump sum and another part will be a daily fine, possibly over 20,000 euros, until full compliance. At any rate, the Court’s decision is not expected for another 18 months. The 161 million euros of subsidies concern the 41 million euros given to Olympic for its restructuring program in 1994, 1998 and 2000, and operational subsidies of 120 million euros, in the form of write-offs of debts to the state, representing value-added tax on fuel and airport taxes. This case is separate from the one concerning the 540 million euros of allegedly illegal state subsidies to OA in the 2002-2004 period that the Commission has also taken to court.

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