Brussels, 14 September 2005
The European Commission today declared illegal a number of measures taken by the Greek State which gave an unfair advantage to Olympic Airways and Olympic Airlines, the new company which has taken over its flight operations. This decision closes the investigation, started on 16 March 2004, into the State aid granted since December 2002, when the airline was ordered to repay €160 million in illegal aid.
Between 1994 and 2000 the Commission took a number of decisions authorising public aid for the restructuring of Olympic Airways. In December 2002, however, the Commission found that further aid had been granted to the airline which was incompatible with the common market, and demanded that €160 million be repaid.
That aid has still not been repaid. Following a detailed analysis of the finances of both Olympic Airways and Olympic Airlines, the Commission today found that Greece has continued to grant further aid to these companies, which is incompatible with the common market and therefore illegal, including:
The exact amount to be recovered by the Greek state will be defined during the execution of today's decision.
By granting this aid, Greece has given Olympic Airways and Olympic Airlines an advantage not available to their competitors. The Commission therefore asked Greece to recover the illegal aid payments. Greece has two months in which to inform the Commission of the measures it intends to take to comply with the decision.
On 11 December 2002 the Commission took a final decision ruling that aid granted to Olympic Airways was illegal, and asked Greece to recover €160 million. At the end of 2003 Greece adopted a specific law setting up a new company, Olympic Airlines, which took over the flight operations and most of the assets of Olympic Airways, leaving behind almost all of its debts.
The creation of this new company, contrary to standard economic and accounting practice, would have had the effect of circumventing the obligation to recover the aid, as the Court found in its judgment of 12 May 2005.
When it opened its investigation in March 2004, the Commission expressed doubts about the compatibility with the Treaty of the continuing non-payment by Olympic Airways of tax and social security liabilities and about the way in which Olympic Airlines was established in late 2003.
These new aid payments constitute a violation of the “one time, last time” principle, as the company had already benefited from restructuring aid in the past.
 Case C-415/03.