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Brussels, 5 May 2010

Internal Market: Commission acts to put an end to special rights of the Greek state in the Public Power Corporation

The European Commission has today acted to ensure compliance with the Treaty rules on free movement of capital by referring Greece to the Court of Justice over the 5% voting cap in the electricity company PPC (Public Power Corporation). These special rights act as a barrier to investors from other Member States. The Commission had sent a “reasoned opinion” to Greece in October 2009 asking it to comply with EU law. As no reply from the Greek authorities was received, the Commission has decided to refer Greece to Court.

What is the aim of the EU rule in question?

Free movement of capital is at the heart of the Single Market and is one of its 'four freedoms'. It enables integrated, open, competitive and efficient European financial markets and services. For citizens it means the ability to do many operations abroad, as diverse as opening bank accounts, buying shares in non-domestic companies, investing where the best return is, and purchasing real estate. For companies it principally means being able to invest in and own other European companies and take an active part in their management.

How is Greece not respecting this rule?

Under Presidential Decree 333/2000, the voting rights of non-state shareholders in the Greek Public Power Corporation (PPC) are limited to 5%. This voting cap applies to all company decisions. The decree also stipulates that 51% of the company is to remain in the hands of the state.

In its reply to the Commission's letter of formal notice, the first stage of an infringement procedure, Greece took the view that the Commission did not sufficiently prove the infringement. However, it is for the Member State to show that its legal measures are appropriate and necessary to attain a legitimate objective.

Greece also contended that the voting cap is justified on the grounds of public interest and security, but failed to explain why Greece would be put at risk without it. In addition, the Greek reply did not satisfactorily specify further objectives of economic policy or general interest. Also, the claimed transitional character of the voting cap could not be accepted as a valid justification as it was not further substantiated. Furthermore, the Commission did not find certain minority rights invoked by Greece suitable for improving the voting position of minority shareholders affected by the voting cap.

As Greece continued to uphold the restrictions, the Commission sent the authorities a reasoned opinion in November 2009 to which the Greek authorities failed to reply. The Commission has now decided to take Greece to Court.

How are EU citizens and/or businesses suffering as a result?

As a consequence of the Decree, direct investors are hindered from effectively participating in the management and control of the PPC. Moreover, portfolio investors, who invest for the purpose of gaining financial returns, are deprived of the full protection of minority shareholders provided by general company law.


A letter of formal notice was sent to Greece on 4 April 2008. The Greek government's reply reached the Commission on 5 June 2008 but was found to be unsatisfactory. As a result, the Commission sent a reasoned opinion on 9 October 2009, to which the Greek authorities had until 9 December 2009 to send a further reply. On the due date, the Greek Government asked the Commission to grant a three-month extension of the deadline. Based on the fact that the request did not contain any further information on a proposal or a concrete timetable for amending the Decree, the Commission told Greece that the extension could not be granted. To date, Greece has not sent a reply to the Commission's reasoned opinion.

About infringement procedures

The European Commission has powers under Article 258 of the Treaty on the Functioning of the European Union (TFEU) to take legal action – known as infringement procedures – against a Member State that is not respecting its obligations under EU rules. These procedures consist of three steps. The first is that the Member State receives a letter of formal notice seeking information if the Commission has concerns that there may be a breach of EU law and has two months to respond. If the Commission's concerns about a breach of EU legislation are confirmed, the Commission sends a reasoned opinion requiring the Member State to comply with EU law within two months. If there is no satisfactory reply, the Commission can refer the matter to the Court of Justice in Luxembourg. If the Court rules against a Member State and the Member State does not comply with the Court's ruling, the Commission can also request that the Court impose a fine on the country concerned.

More information

Free movement of capital:

Latest information on infringement proceedings concerning all Member States:

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