ECONOMY

Was aid to Olympic Air recouped?

Greece made «unacceptable» arguments to avoid following a European Union order to recover millions of euros in illegal state aid from Olympic Airlines, the European Union’s highest court was told. Lawyers for the European Commission, which vets whether subsidies hinder competition in the 27-nation EU, told the European Court of Justice in Luxembourg that the court should reject Greece’s claim that it wasn’t clear on the amount that should be repaid or the proper time frame. The Commission’s suit was over -540 million ($663 million) in illegal aid. «The Commission cannot accept these arguments,» Dimitri Triantafyllou, a lawyer for the Brussels-based regulator, told the court yesterday. «All of these are spurious excuses» to get «around applying the Commission’s decision.» Today’s case, C-419/06 Commission of the European Communities vs Hellenic Republic, is one of seven between the Commission, Greece and state-owned Olympic Airlines over two EU decisions in 2002 and 2005 that subsidies to the airline were illegal. Greece’s battle with the Commission has hampered efforts to sell the carrier, which faces mounting losses and rising competition. Olympic bankruptcy The 2002 EU decision pushed Olympic Airways, which was founded by late shipowner Aristotle Onassis in 1957, toward bankruptcy. The company is now called Olympic Airways Services and only handles ground services. Olympic Airlines was created in 2003. «If the court accepted our argument, it would be a major step toward the resolution of these disputes» with the Commission, said Paris Anestis, a lawyer for Greece. «We can’t organize a proper reorganization process until we have clarity about the company’s state aid liabilities.» The European Court of Justice, the EU’s top court, ordered the airline in 2005 to repay -194 million in outstanding aid from the first decision. Five months later, the Commission followed with a second decision, adding -540 million to the first amount. «It’s a difficult case,» Panos Mylonopoulos, legal adviser in the Greek Ministry of Foreign Affairs, said in an interview at the court. «We have already recovered all the state aid.» The question that remains is whether Greece recouped the money in the right amount of time, Vassilis Christianos, the lawyer acting for Greece, told a five-judge panel yesterday. The Commission in 2005 gave Greece two months to announce how it will comply with its decision before being taken to the court. «There was no clear-cut time frame in the decision,» Christianos said. «The two months period covered the time to pass on information to the Commission, so, what was the time to recover the aid?»