# C_2006022EN.01001902.xml

| 28.1.2006 | EN | Official Journal of the European Union | C 22/19 |
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28.1.2006

EN

Official Journal of the European Union

C 22/19

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Action brought on 25 November 2005 — Hellenic Republic v Commission of the European Communities

(Case T-415/05)

(2006/C 22/37)

Language of the case: Greek

Parties

Applicant: Hellenic Republic (represented by: A. Samoni and P. Milonopoulos)

Applicant:

Defendant: Commission of the European Communities

Defendant:

Form of order sought

The applicant claims that the Court should:

| — | annul Commission Decision C(2005) 2706 final of 14 September 2005 in its entirety or otherwise in part; |
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annul Commission Decision C(2005) 2706 final of 14 September 2005 in its entirety or otherwise in part;

| — | order the Commission to pay the costs. |
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order the Commission to pay the costs.

Pleas in law and main arguments

When the Greek state airline Olympic Airways was privatised, the new company Olympic Airlines (‘NOA’) began operating, taking over the flying operations, while Olympic Airways — Services S.A. (‘OA’), as the old company was renamed, retained all other activities, principally ground services, maintenance and aircraft repairs. In the contested decision, the Commission held the grant to NOA and OA of State aid to be incompatible with the Treaty, by reason of:

| — | payment by NOA, for the subleasing of aircraft, of rental payments lower than those paid for head leases, causing loss to the Greek State and to OA, |
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payment by NOA, for the subleasing of aircraft, of rental payments lower than those paid for head leases, causing loss to the Greek State and to OA,

| — | overvaluation of NOA's assets at the time when it was set up, |
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overvaluation of NOA's assets at the time when it was set up,

| — | payment of money to OA by the Greek State, and payment by the latter, instead of OA, of certain loan instalments and rental payments on leases, |
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payment of money to OA by the Greek State, and payment by the latter, instead of OA, of certain loan instalments and rental payments on leases,

| — | the continuous forbearance displayed by the Greek State towards OA with regard to tax debts and social security contributions. |
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the continuous forbearance displayed by the Greek State towards OA with regard to tax debts and social security contributions.

By its action, Greece contests first of all the part of the decision that relates to the rental payments for aircraft which NOA pays. It maintains that there is no State aid and that therefore the contested decision infringes Article 87(1) EC. According to Greece, both OA and the Greek State acted as any well-advised individual would act while, in addition, the rental payments made by NOA correspond to market prices. In the same context, Greece pleads that the duty to state reasons for the contested decision has been infringed.

So far as concerns the part of the decision relating to the value of NOA's assets, Greece considers that the Commission's assessment was manifestly mistaken as regards quantification of the assets of OA that were transferred to NOA and that the Commission's conclusions in this regard suffer from a lack of reasoning. In any event, Greece considers that the Commission also failed to state reasons with regard to the part of the contested decision that relates to the conditions for rescue aid and for application of Article 87(3) not being met, and also submits that the Commission's legal assessment is mistaken on this point.

Greece observes with regard to payment by the Greek State of certain loan instalments and rental payments on leases that it made those payments because of its liability as guarantor, on the basis of guarantees which had been given before adoption of a previous relevant Commission decision and are covered by that decision. According to Greece, after payment of the sums in question, the procedure provided for by Greek law for their forced recovery from OA was followed. On the basis of those submissions, Greece pleads that the reasons stated in the contested decision are inadequate, leading, in its view, to a manifestly mistaken legal assessment.

So far as concerns the part of the decision that reaches the conclusion that NOA is OA's successor, Greece sets out a series of arguments to rebut the Commission's view and, on this basis, pleads infringement of Articles 87(1) and 88(2) EC and a failure to state reasons.

Greece further pleads infringement of the right to be heard and of the principle of good administration, since it considers that it was not given the opportunity to set out its views on the study by the independent experts whom the Commission had instructed. Finally, it pleads infringement of the principle of proportionality and a failure to state reasons, since the contested decision seeks the recovery of aid in respect of the period from 2002 to 2004 from NOA too, although it began to operate only on 11 December 2003.

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