2003/372/EC: Commission Decision of 11 December 2002 on aid granted by Greece to Olympic Airways (notified under document number C(2002) 4831) (Text with EEA relevance)

• Articles: 5

Article 1

The restructuring aid granted by Greece to Olympic Airways in the form of:

(a) loan guarantees extended to the company until 7 October 1994 pursuant to Article 6 of Greek Law 96/75 of 26 June 1975;

(b) new loan guarantees totalling USD 378 million for loans to be contracted before 31 March 2001 for the purchase of new aircraft and for investment necessary for the relocation of Olympic Airways to the new airport in Spata;

(c) easing of the undertaking's debt burden by GRD 427 billion;

(d) conversion of GRD 64 billion of the undertaking's debt to equity;

(e) a capital injection of GRD 54 billion reduced to GRD 40,8 billion in three instalments of respectively GRD 19, 14 and 7,8 billion in 1995, 1998 and 1999 respectively,

is considered to be incompatible with the common market within the meaning of Article 87(1) of the Treaty, as the following conditions, under which the initial authorisation of the aid has been granted, are no longer met:

(a) the full implementation of the restructuring plan aimed at the achievement of the long-term viability of the company;

(b) the observance of 24 specific undertakings attached to the authorisation of the aid and;

(c) the regular monitoring of the implementation of the restructuring aid.

Article 2

The State aid which Greece has implemented in the form of tolerance of a persistent non-payment of social security obligations, of VAT on fuel and spare parts by Olympic Aviation, of rentals for different airports, of airports charges to Athens International Airport and other airports, of Spatosimo tax is incompatible with the common market.

Article 3

1. Greece shall take the necessary measures to recover from the beneficiary the aid of GRD 14 billion (EUR 41 million) referred to in Article 1 which is not compatible with the Treaty and the aid referred to in Article 2 and unlawfully made available to the beneficiary.

2. Recovery shall be effected without delay and in accordance with the procedures of national law provided they allow the immediate and effective execution of the decision. The aid to be recovered shall include interest from the date on which it was at the disposal of the beneficiary until the date of its recovery. Interest shall be calculated on the basis of the reference rate used for calculating the grant-equivalent of regional aid.

Article 4

Greece shall inform the Commission within a period of two months from the date of notification of the present Decision of the measures to be taken to comply with it.

Article 5

This Decision is addressed to the Hellenic Republic.

Done at Brussels, 11 December 2002.

For the Commission

Loyola de Palacio

Vice-President of the Commission

(1) OJ C 98, 23.04.2002, p. 8.

(2) OJ L 273, 25.10.1994, p. 22.

(3) OJ L 128, 21.05.1999, p. 1.

(4) OJ C 176, 19.6.1996, p. 5.

(5) This plan was submitted to the Commission with letters dated 3 and 6 July 1998.

(6) OJ L 240, 24.8.1992, p. 1.

(7) See in particular case C-480/98, points 20-21, European Court Reports 2000, Page I-8717.

(8) OJ L 83, 27.3.1999, p. 1.

(9) It concerns debts, which have to be paid to suppliers and other third parties (airport charges, social security etc.).

(10) It concerns financial debts (banks) or possibly debts related to the financing of the fleet.

(11) See paragraph 75 and followings.

(12) And also before exceptional items.

(13) See paragraph 78: net result could amount par management estimations to + EUR 18 million and following Deloitte analysis to losses from - EUR 3 million to - EUR 50 million. Possible additional exceptional income of EUR 112 million and charge of EUR 23 million could also arise.

(14) Caption Liabilities C 2 of OA's balance sheet.

(15) Captions B: Provisions for liabilities and charges + C: Creditors + D: Accruals and deferred income on Caption A: Net Equity in the liabilities of OA's balance sheet.

(16) As calculated in the preceding footnote: EUR 575 million at the end of 2000, EUR 825 million at the end of 2001.

(17) Pages 55 and 56 of the draft report of 3 July 1998 and page 74 of the report of 21 July 1999.

(18) Appendix 2 of the Greek memorandum forwarded on 11 April 2002.

(19) OJ L 193, 18.7.1983, p. 1.

(20) OJ L 283, 27.10.2001, p. 28.

(21) Greek Law 2238/1994, in particular Article 95 and encyclia of IKA No 42/1999 for the settlement of obligations.

(22) In the Annex 15.

(23) In Annexes 41-44.

(24) OJ L 240, 24.8.1992, p. 8.

(25) Indeed, seven major actions were described under the heading - reorganisation of the cost structure of the company - in the 1998 decision.

(26) OJ C 288, 9.10.1999, p. 2.

(27) Paragraph (5)(a) of section 2.1 specifies that a firm is in difficulty in the case of a limited company, where more than half of its registered capital has disappeared and more than one quarter of that capital has been lost over the preceding 12 months.

(28) Article 1 commitment (c).

(29) Article 1 commitment (b).

(30) The so-called Stardust Marine case. See in particular paragraph 55.

(31) Greek development Law 1846/1951, Article 11.

(32) Case C-387/92 Banco Exterior de Espana V. Ayuntamiento de Valencia (1994) ECR 1-877, paragraph 13.

(33) Case C-256/97 D.M. Transports.

(34) It must be reminded that for the social security the period covers eight years.

(35) According to Law 2676/1999 IKA has the right (not the obligation) to reach a settlement agreement for late payments or debts.

(36) Case C-256/97 D.M. Transports, point 24.

(37) Opinion of the Advocate-general Mischo, Case C-480/98, Magefesa, points 32 to 43, Rep I-8717.

(38) OJ C 350, 10.12.1994, p. 5.

(39) See inter-alia Case C 68/99 Italy, Mesures urgentes pour l'administration extraordinaire des grandes entreprises en dificulté, approved on 16 May 2000, points 70 to 73; Case C 57/97 Spain, Spanish corporate tax laws, approved on 31 October 2000, points 24 to 28; Case C 61/2000 France, Provisions pour les implantations d'entreprises à l'étranger en franchise d'impôt, approved on 21 November 2001, points 32 and 33.