NEWS

Olympic must return subsidy

The European Commission has decided that ailing state airline Olympic Airways must return to the State 194 million euros in subsidies it has received illegally since 1998. According to Commission sources, the decision was made on Monday but the official announcement will be made today, after the Commission’s weekly meeting. The subsidies were part of a restructuring program which was approved but never implemented in its entirety and did nothing to improve the cash-strapped airline’s viability. In the meantime, two attempts to privatize the company have failed while a third is under way. Commission officials presented the sum Olympic must return to the State as a compromise and referred to their legal advisers, who had pushed for sum as high as 1.7 billion euros. Recent rumors had put the likely sum at 300 million euros. The Commission conceded that a loan of 19.5 million euros Olympic took out from Commercial Bank was legal, as was a subsidy given to the company to transfer its offices and technical base to the new Athens International Airport last year. The Greek government will likely be officially notified of the decision toward the end of January. It will be given 60 days, from that date, to submit to the Commission a detailed timetable for recovering the money from Olympic Airways. Transport Ministry officials declined to comment on the decision yesterday, saying they preferred to wait for the official announcement. However, Transport Minister Christos Verelis declared on Monday, in a TV interview, that Olympic would appeal against such a decision. Yesterday, Olympic Airways unionists urged the government to fight the decision.