Brussels, 14/04/2010 (Agence Europe) - The European Commission decided on Wednesday 14 April to refer Greece to the European Court of Justice for failing to comply with the Commission decision of 8 July 2008 that found that state aid had been unlawfully granted to Hellenic Shipyards (HSY) and should, therefore, have been recovered.
On 2 July 2008, the Commission decided that subsidies granted by Greece to Hellenic Shipyards S.A. were incompatible with the common market because they distorted competition. This is because Greece did not respect the conditions attached to the restructuring and closure aid approved by the Commission in its prior decisions of 1997 and 2002. Moreover, various loans and guarantees provided by the Greek state and the then state-owned bank ETVA to Hellenic Shipyards constituted incompatible aid as they were provided either below market price or at a time when the financial situation of Hellenic Shipyards had become so difficult that it could not find bank financing. All of these measures benefited the civil activities of HSY, giving it an unfair advantage over its competitors. Hellenic Shipyards is involved in both civil and military activities, but in this decision, the Commission only examined aid which had exclusively benefited its civil activities because the subsidies that Hellenic Shipyards received for its military activities are exempted from EU state aid rules under Article 346 of the Treaty on the Functioning of the EU. HSY, therefore, has to reimburse around €230 million of aid plus interest, from its civil activities. The Commission has been in discussions with the Greek authorities and Hellenic Shipyards since July 2008, on possible ways of implementing the decision, taking into account the company's financial difficulties. The aim is to ensure an effective implementation of the decision while respecting the national security interests of Greece and bearing in mind the company employees' best interests. These efforts have so far proved fruitless, however. The Commission has, therefore, decided to refer Greece to the Court of Justice. (O.L./transl.rt)