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Brussels, 14 October 2009

Commission authorises state aid for the voluntary redundancy scheme of Olympic Catering

The European Commission has today decided not to raise any objections to the plans of the Greek authorities to cover part of the costs of the voluntary redundancy scheme that Olympic Catering SA plans to implement in respect of certain of its staff. The Commission considers that the proposed measure, which pays part of the abnormal costs of the scheme, does not prejudice the common interest and can be considered compatible with the common market. The abnormal costs in question result from certain Olympic Catering staff taking part in an early retirement voluntary redundancy scheme. These staff members enjoy a permanent status and salaries which were negotiated when the company was a state-owned undertaking and are therefore not comparable to normal market conditions.

Olympic Catering founded in 1976 was a subsidiary of the then Greek national flag carrier Olympic Airways. At the time of its establishment and as part of the State-owned Olympic Airways group its employees were employed under the same labour and social protection conditions as all other employees of the Olympic Airways group. Although privatised since 2002, the company's relationship with its employees hired prior to its privatisation is the subject of specific labour regulations and guarantees that were introduced before its privatisation and which continue to apply today. These specific labour laws provide for enhanced employment protection and benefits as compared with private sector employees.

Olympic Catering needs to reduce its workforce but legally cannot do so; therefore the Greek authorities propose to pay for part of the costs of an early retirement voluntary redundancy scheme by compensating Olympic Catering for the abnormal costs thereof. These abnormal costs relate to the fact that the personnel in question (121 staff members - approximately a quarter of the workforce) have job security and salaries which were put in place when Olympic Catering was a state-owned entity.

The Commission has decided that since the aid to be granted does not exceed the extra burden imposed on Olympic Catering, the planned contribution of the Greek State to the costs of the voluntary redundancy scheme calculated at €29 million is an aid measure which pursues an objective of common interest in a necessary and proportionate way without adversely affecting trading conditions. The aid can therefore be found compatible with the common market under Article 87(3)(c) of the Treaty.

In previous decisions of 17 September 2008 1 and 10 March 2009 2 , the Commission declared that the plan of the Greek authorities to sell certain assets of Olympic Airlines and Olympic Airways Services prior to the liquidation of the two companies did not involve state aid, provided that certain undertakings given by the Greek authorities were fully complied with.

1 :

See IP/08/1336 , 17 September 2008

2 :

See IP/09/374, 10 March 2009

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