Greece referred to European Court of Justice for failure to recover incompatible aid

18-7-2013 — /europawire.eu/ — The European Commission has referred Greece to the European Court of Justice (ECJ) for failing to comply with two distinct Commission decisions that ordered Greece to recover incompatible state aid from three Greek casinos (see IP/11/635) and from Aluminium of Greece SA (see IP/11/864)In both cases, over two years after the Commission decisions, the full aid amounts have still not been paid back.

“Member States have numerous possibilities to support business in line with EU state aid rules. However, when subsidies procure distortive advantages to selected companies without furthering any common interest goal they must be recovered swiftly. This is necessary to restore a level playing field and to preserve the effectiveness of the rules themselves.” said Joaquín Almunia, Vice President of the Commission in charge of competition policy.

Greek casinos

In 2009 the Commission received a complaint about the taxation of admissions to casinos in Greece. Indeed, a €12 admission tax per person was imposed on private casinos, while the public casinos of Mont Parnès and Corfu and the private casino of Thessaloniki were only paying €4.8. The Commission considered that this different fiscal treatment provides a selective advantage to certain casinos and causes the State to forgo revenues which it would otherwise have collected. In May 2011, the Commission therefore ordered Greece to recover the aid granted through this advantage since 1999 and to end the incompatible scheme.

Aluminium of Greece

In July 2011, the Commission requested Greece to recover incompatible state aid in the form of preferential electricity tariffs from Aluminium of Greece. The aid amount is calculated as the difference between PCC’s revenues from the standard tariff between January 2007 and March 2008 and the revenues from the tariff that was actually applied to Aluminium of Greece SA in the same period. According to information provided by Greece, the Commission calculated the aid principal as amounting to €17.4 million.

Background

In both cases, Greece had four months from the decision to ensure its implementation. In November 2012, one and a half years after the decision, Greece abolished the measure in favour of the casinos. For the casino of Mont Parnès and for the casino of Thessaloniki, the recovery orders are (for their largest part, i.e. approximately 85%-90%) suspended by national courts, in violation of applicable EU rules. For the casino of Corfu, no payment at all has been reported.

Regarding Aluminium of Greece SA, the aid has not been recovered up to date. The recovery procedure has been suspended by a national court, in clear violation of EU law.

In both cases, the beneficiaries and (in the case of the Greek casinos only) Greece have appealed the Commission’s 2011 decisions before the EU General Court. However, no interim measures have been requested (nor granted) and the appeals have no suspensive effect.

Background on recovery

Member States have to recover state aid that has been found incompatible by the Commission, within the deadline set in the Commission decision. This is very important because delays in the recovery of unlawful subsidies maintain the distortion of competition created by the aid. That is why Article 14 of Regulation n° 659/99 and the Notice on the implementation of decisions ordering the recovery of unlawful or incompatible aid(see IP/07/1609) provide that Member States should effectively recover the aid from the beneficiary without delay.

If a Member State does not implement a recovery decision, the Commission may refer the matter to the Court of Justice under Article 108(2) of the Treaty on the Functioning of the EU (TFEU) that allows the Commission to directly refer cases to the Court for violations of EU state aid rules.

If a Member State does not comply with the judgment, the Commission may ask the Court to impose penalty payments under Article 260 of the TFEU.

Contacts :
Antoine Colombani (+32 2 297 45 13 – Twitter: @ECspokesAntoine )
Marisa Gonzalez Iglesias (+32 2 295 19 25)