- Title: BELGIUM/GREECE: EU seeks daily fines on Greece for Olympic Airways aid.
- Date: 19th October 2006
- Summary: (BN10) ATHENS, GREECE (FILE) (REUTERS) OLYMPIC AIRWAYS PLANES ON TARMAC OF ATHENS INTERNATIONAL AIRPORT OLYMPIC AIRWAYS CHECKOUT DESKS AT AIRPORT MORE OF PLANE ON TARMAC / PASSENGER BRIDGE ATTACHED TO PLANE
- Embargoed: 3rd November 2006 12:00
- Keywords:
- Topics: European Union,Transport
- Reuters ID: LVAC9CW6DE2LIDP3T4F1O37ACCPO
- Story Text: The European Commission escalated its battle with Greece over illegal aid to loss-making Olympic Airways on Wednesday (October 18), asking the EU's top court to impose daily fines on Athens until it recovers the cash.
"The European Commission requests the imposition on Greece of a lump sum payment of 10,512 euros per each day since the 2005 court ruling until the effective implementation by Greece of the 2000 decision," said Michele Cercone, a spokesman for Transport Commissioner Jacques Barrot.
If Greece had not recovered the aid by the court's next ruling, Cercone said the commission could impose a fine of 53,611 euros per day from that date. He said the second fine would be added on top of the first if it had to be applied.
The move is the latest step in a multi-year effort by the European Union executive to crack down on Greece for subsidising the carrier, now known as Olympic Airlines.
The decision refers to at least 161 million euros ($202 million) in state aid given to the company from 1998 to 2002, comprising 41 million euros of "illegal restructuring aid" and roughly 120 million euros in operational aid such as waivers of value-added taxes on fuel and airport charges.
The Commission ruled in 2002 that the funds were illegal and demanded Greece recover the money. The European Court of Justice confirmed on May 12, 2005, that Greece had failed to do so.
Greek Finance Minister George Alogoskoufis said the country would study the decision.
"We will evaluate the EU decision. No decision can automatically lead to Olympic Air's bankruptcy," Alogoskoufis told reporters in Athens.
A spokesman for the court said a decision on the case would likely take 20 months to two years, based on the history of previous cases that involved fines. He added that the Commission's proposals were for suggested fines and that the court was free to alter them.
The Commission has ruled separately that aid of up to 540 million euros given to Olympic after 2002 was also illegal.
Other European carriers would be glad to see the dispute lead to the end of the loss-making Greek carrier, opening up room in a crowded and competitive sector. - Copyright Holder: FILE REUTERS (CAN SELL)
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