LUXEMBOURG: EU court partially annuls Olympic Air aid decision

In the latest twist in a saga over Greece's support to the airline, the Court of First Instance - the EU's second-highest court - rejected on Wednesday (September 12) Olympic's arguments against a European Commission ruling in 2002 that the restructuring aid must be repaid. But the court said the EU's executive arm did not give adequate reasons for finding fault with the airline's prolonged non-payment of airport charges due to Athens International Airport and of value-added tax (VAT) on spare parts and fuel. Reading the sentence, Savvas S. Papasavvas, judge at court of first instance, explained what the was decided. "The cancellation of articles 2 and 3 of decision 2003/372 by the commission dated 11 December 2002 on the issue of support given by Greece to Olympic Airlines, as regards the acceptance of perpetual non payment of airport fees owed to the Athens International Airport and the non-payment of VAT taxes for fuel and VAT on spare parts. The court dismisses all other claims. The appellant is charged to pay 75 percent of court costs and commission costs. The commission is charged to pay 25 percent of court costs and commission costs," he said. The combined value of the restructuring aid and debts that the Commission ordered to be repaid in 2002 totalled 41 million euros (56.9 million U.S. dollars), the court said. Olympic Airways was split into two units in 2003: a debt-heavy services company and a debt-free carrier, Olympic Airlines. Brussels still regards it as one company. Olympic Airlines was thrown a lifeline last December when Greece's Supreme Court ordered the state to pay the debt-laden carrier 563 million euros (782 million U.S. dollars) for unpaid services it had rendered in the past. The Commission first ruled in 1996 that Greece was in breach of EU state aid rules.

ITN Source | September 12, 2007

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