European court lightens the burden for Olympic
A European court yesterday partially annulled a decision by the EU’s executive arm obliging the Greek government to recover state aid it provided to Olympic Airways. While the court agreed with the European Commission that the state should recover illegal state aid to the ailing airline, it overturned the Commission’s decision to seek similar redress for smaller non-notified aid, such as non-payment of VAT and airport charges. This adds up to -37 million. «The Commission decision of 2002 does not contain an adequate statement of reasons in regard to tolerance of non-payment of charges due to Athens International Airport and VAT on fuel and spare parts,» the European Court of First Instance ruled. The European Union’s executive arm found in December 2002 that Athens had granted -161 million in illegal state aid to the airline to help it restructure between 1998 and 2002. Deputy Economy Minister Petros Doukas said the decision is a vindication of the government’s efforts: «We continue steadily toward the full sanitization of the airline,» he said. The Commission’s hand was strengthened by a May 2005 ruling from the European Court of Justice, the EU’s highest court, upholding Brussels’s decision. The case dates from 1998, when the Commission authorized the payment of aid to restructure the airline on condition that a strict plan was implemented that foresaw a combination of cost control and increased productivity. When the Greek government failed to honor these obligations, the Commission declared the aid to be illegal as the behavior was deemed to distort competition. With regard to the restructuring aid, the court rejected all the airline’s claims concerning the allegedly wrongful nature of the Commission’s decision. It concluded that the Greek government had not submitted a revised restructuring plan as required and that «the Commission was right to conclude that neither the company’s short-term nor long-term viability had been restored,» by the state action. However the court rejected the Commission’s line on the non-notified aid, involving the prolonged non-payment of airport charges due to Athens International Airport, prolonged non-payment of VAT on fuel and non-payment by Olympic Aviation, an OA subsidiary, of VAT on spare parts. (AFP, Kathimerini)
