EU Likely To Order Olympic To Repay Aid

The European Commission is likely to rule on Wednesday that Olympic Airlines must pay more state aid back to the Greek government, a Commission source said on Tuesday.

"It's likely," the source said when asked whether the Commission would require more aid to be repaid by the airline.

European Transport Commissioner Jacques Barrot is due to announce the Commission's decision regarding Olympic on Wednesday morning.

The probe looked at hundreds of millions of euros given as aid to the Greek flag carrier. As part of its attempt to rescue the airline, Greece created Olympic Airlines as a successor to debt-laden Olympic Airways in 2003.

The Commission's inquiry looked at four points: conditions granted to Olympic Airlines for leasing planes, payment of different subsidies by Greece to the airline, evaluation of its assets when the successor carrier was created, and Olympic's failure to pay tax and social security debts.

Another EU source said a definitive amount that Olympic must repay would not be announced on Wednesday because the social security repayments still have to be determined.

This is not the first case in which the Commission has told Greece to recover aid from its flag carrier.

It has already ruled Olympic must repay EUR160 million (USD$196.3 million) in illegal aid, a decision upheld by the European Court of Justice earlier this year.

That figure was revised from an original EUR194 million (USD$237.9 million) after clarifications were made with Greek authorities, according to a Commission official.

Olympic Airlines said on Tuesday it was operating normally and servicing all its scheduled flights, regardless of the Commission's decision.

(Reuters)