Brussels, 06 March 2013
State aid: Commission opens in-depth inquiry into state measures in favour of Hellenic Defence Systems S.A.
The European Commission has opened an in-depth investigation to find out if State support measures granted by Greece in favour of Hellenic Defence Systems S.A. (HDS, or Ellinika Amyntika Systimata A.E. – EAS in Greek) comply with EU state aid rules. These measures include a direct grant by the State of €10 million, a capital increase of €158 million and several State guarantees for loans of up to €942 million during the period 2004-2011.
HDS is 99.8% owned by the Greek State, 0.18% by Piraeus Bank (a private financial institution) and 0.02% by individuals, and is included in the Greek privatisation programme. It has been in economic difficulties since at least 2004 and the measures seem to involve state aid. Therefore, the company may only receive state aid under the strict conditions set out in the EU guidelines on state aid for the rescue and restructuring of companies in difficulty.
Under these guidelines, a company may only receive such aid once in a period of 10 years (in accordance with the so-called "one time, last time" principle) and the aid must be terminated after 6 months or granted on the basis of an appropriate restructuring plan.
In this case, the Commission has doubts that the measures under scrutiny have been terminated or that they are in line with the other conditions of the guidelines.
Opening an in-depth investigation does not prejudge the outcome of the investigation. It gives Greece and interested third parties the opportunity to comment on the measures the Commission is assessing.
Public support measures are state aid if they were not made on terms that a private player operating under market conditions would have accepted. This is the market economy investor principle (MEIP). If the MEIP is not respected and any of the measures do involve state aid, the Commission then examines whether they comply with EU state aid rules.
HDS manufactures both defence-related and civil-use products. Under Article 346 TFEU, state aid measures are exempt from Commission assessment when they are deemed necessary to protect the essential security interests of a Member State. If the Greek authorities were to rely on that provision and justify its application the Commission would take this into account when assessing the support measures.
The non-confidential version of the current decision will be made available under the case numbers SA.34308 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.