Greece must recover illegal state aid which was “gifted” to companies presumably affected by wildfires in 2007, ignoring a decision of both the European Commission and the EU Court of Justice, an EU executive spokesperson told EURACTIV.com.
“Following the Commission’s decision on 7 October 2019, Greece must recover the incompatible aid, plus interest, granted in the context of the 2007 fires,” the European Commission spokesperson said.
In 2007, without prior consultation with the European Commission, Greece took measures to financially support businesses operating in the prefectures affected by the massive forest fires of 2007.
Seven years later, in 2014, the EU executive launched an investigation over the aid case of Soya Hellas SA following a relevant complaint. In 2016, the Commission broadened the investigation scope focusing on all agri-food companies that received state aid due to fires.
The investigations were completed in October 2019, concluding that the state aid in 2007 was illegal and incompatible with the EU internal market rules.
Therefore, Greece was obliged to recover the aid in question from the beneficiaries within four months of the decision’s notification.
However, the conservative Greek government (EPP) ignored the Commission’s ruling and moved to “gift” the state aid.
Notably, the Ministry of Finance issued a statement saying those companies “are now released from the obligation to return to the Greek State, and even with interest, the aid they received many years ago”.
Several sources in Athens told EURACTIV that the political cost of asking the money back would be enormous for the government.
However, such a move contradicts the pro-EU and reformist narrative that the ruling New Democracy party emphasised before they took power in July 2019.
The EU spokesperson commented that once a recovery decision has been taken, “member states must implement and ensure full recovery of the illegal and incompatible aid, in accordance with their national legislation and procedures”.
“The Commission is in contact with the Greek authorities on implementing the Commission’s recovery decision. We cannot comment on the content of such contacts,” the EU official added.
Lack of transparency
EURACTIV was informed that after adopting the Commission’s recovery decision, Greece filed an action for annulment against it.
On 19 October 2022, the General Court dismissed the action for annulment, among others, on the ground that the two conditions of article 107 (2)(b) TFEU were not met, i.e., the causal link between the damage and the fires on the one hand and on the other the calculation of the damage to avoid overcompensation. The case is now before the Court of Justice, following further appeal brought by Greece.
“This constitutes a flagrant distortion of competition gravely affecting the operations of competitors”, lawyer Spyros Pappas told EURACTIV. [EURACTIV – Archive]
“Legal actions before the EU Courts seeking the annulment of recovery decision by the Commission do not have a suspensive effect,” an EU source familiar with the matter told EURACTIV.
Contacted by EURACTIV, Brussels-based lawyer Spyros Pappas confirmed that he had brought two actions for annulment before the Greek Administrative Supreme Court: one against the decision of the finance minister to relieve the beneficiaries of the obligation to pay back the illegal state aid and a second one against the failure of the minister to disclose the list of the beneficiary companies.
“I regret the lack of transparency regarding the recovery of the illegal state aid and the failure to comply with the decision of the Commission and the judgment of the General Court. This constitutes a flagrant distortion of competition gravely affecting the operations of competitors”, he told EURACTIV.
Source : Euractiv
