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EU court rules on Greek subsidies to Olympic Airlines

EU court rules on Greek subsidies to Olympic Airlines

Olympic Airlines won a small victory Wednesday in its legal battle with EU regulators, as a court said the carrier must pay back most _ but not all _ of Greek government subsidies deemed illegal under European Union rules.
The European Commission had demanded the airline repay millions of euros (dollars) in aid and subsidies it received from the Greek government amid restructuring efforts to keep Olympic afloat.
The Luxembourg-based court ruled, however, that the Commission failed to prove some of the funds violated EU state aid rules. Those funds involved unpaid taxes on fuel and spare parts, as well as unpaid fees to Athens International Airport.
EU transport spokesman Michele Cercone said the ruling meant Olympic would have to repay euro130 million (US$180 million) of an original euro160 million (US$221 million) in aid it got from the Greek government.
"The action will now continue and will as necessary be adapted to take the decision of the court into account," Cercone said. "The Greek government has not operated an effective recovery."
The court also said previous Commission decisions dating back to 1998 against the airline's restructuring plan were valid, and that Greece had failed in its responsibility to submit a revised restructuring plan after EU regulators rejected earlier ones.
The Commission had been "right to conclude that neither the company's short term nor long term viability had been restored," the court said in its ruling.
For years, Greece supplied subsidies to the struggling national airline, which in 2001 had debts totaling some euro120 million (US$166 million). In 2003, the government incorporated the assets of debt-ridden Olympic Airways and two subsidiaries into the newly named Olympic Airlines.
The EU head office in 2002 ordered the Greek government to recover euro160 million in restructuring and operating aid.
Three years later, the EU's Court of Justice ruled that Greece had failed to take necessary measures to recover the subsidies from the carrier, prompting the Commission to request in 2006 that the EU court impose fines against Greece.
It had requested the Greek government pay a lump sum for failing to comply, as well as a fine of euro10,000 (US$13,800) a day since a May 12, 2005, court ruling that backed regulators.


Updated : 2021-07-31 12:03 GMT+08:00