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European Commission

Press release

Brussels, 6 March 2013

State aid: Commission opens in-depth inquiry into possible Greek state aid to Larco General Mining and Metallurgical Company S.A.

The European Commission has opened an in-depth investigation to verify whether State support measures granted by Greece to Larco General Mining and Metallurgical Company S.A. (Larco) for an amount of over EUR 105 million comply with EU state aid rules. The Commission has doubts that the measures are in line with EU rules, in particular the rules on state aid for the rescue and restructuring of companies in difficulty. Opening an in-depth investigation does not prejudge the outcome of the investigation, however. It gives Greece and other interested third parties the opportunity to comment on the measures the Commission is assessing.

It appears that Larco may have benefited from several state aid measures in the past in excess of EUR 105 million. These include a capital increase in 2009 and several State guarantees for loans in the period 2008-2010, the possible non-collection by the State of a debt since 2004, and a waiver of a tax fine pre-payment in 2010. Based on its financial data, Larco appears to have been in difficulty at least since 2008.

The Commission will now investigate whether these measures constitute state aid in the meaning of EU rules. Public support measures constitute state aid if they were not made on terms that a private player operating under market conditions would have accepted. If any of the measures do involve state aid, the Commission will then examine whether they are compatible with EU state aid rules.

The 2004 guidelines on rescue and restructuring aid set out strict conditions under which companies in difficulty can receive state aid. In particular, rescue and restructuring aid can only be granted once in a period of 10 years (according to the so-called "one time, last time" principle). Moreover, such aid must either be terminated after 6 months or must be granted in order to implement an appropriate restructuring plan. The Commission doubts whether, for Larco, the measures were granted in the context of such a plan and whether they have been terminated. The Commission also doubts that the "one time last time" principle has been complied with.


Larco is specialised in the extraction and processing of laterite ore, extraction of lignite and production of ferronickel and by-products. It is exporting most of its production to EU/European countries, mainly targeting the aluminium and steel industries and is one of the top 5 sellers worldwide. In 2012 55.2% of Larco's shares were owned by the Greek State, 33.4% by the National Bank of Greece (a private financial institution) and 11.4% by Public Power Corporation SA (the incumbent electricity producer in Greece, of which the State is the majority shareholder).

Larco has been in difficulties at least since 2008 and is included in the Greek privatisation programme.

Public interventions in companies that carry out economic activities can be considered free of state aid in the meaning of the EU rules when they are made on terms that a private player operating under market conditions would have accepted (the so-called "market economy investor principle" – MEIP). If the MEIP is not respected, the public intervention constitutes state aid in the meaning of the EU rules (Article 107 of the Treaty on the Functioning of the European Union – TFEU), because it procured an economic advantage to the beneficiary that its competitors did not have. The Commission will then proceed to assess, whether such aid can be found compatible with the common EU rules that allow certain categories of aid, such as the 2004 Guidelines on state aid for the rescue and restructuring of companies in difficulty.

The non-confidential version of the current decision will be made available under the case numbers SA.34572 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.

Contacts :

Antoine Colombani (+32 2 297 45 13)

Maria Madrid Pina (+32 2 295 45 30)

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