Parties

Grounds

Operative part



Parties

In Case T-68/03,

Olympiaki Aeroporia Ypiresies AE, formerly Olympiaki Aeroporia AE, established in Athens (Greece), represented initially by D. Waelbroeck and E. Bourtzalas, lawyers, J. Ellison and M. Hall, Solicitors, and A. Kalogeropoulos, C. Tagaras and A. Chiotellis, lawyers, and subsequently by P. Anestis, lawyer, and T. Soames, Solicitor,

applicant,

v

Commission of the European Communities, represented by D. Triantafyllou and J.L. Buendía Sierra, acting as Agents, and A. Oikonomou, lawyer,

defendant,

APPLICATION for annulment of Commission Decision 2003/372/EC of 11 December 2002 on aid granted by Greece to Olympic Airways (OJ 2003 L 132, p. 1),

THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (Second Chamber, Extended Composition),

composed of J. Pirrung, President, A.W.H. Meij, N.J. Forwood, I. Pelikánová and S. Papasavvas, Judges,

Registrar: C. Kantza, Administrator,

having regard to the written procedure and further to the hearing on 29 November 2006,

gives the following

Judgment

Grounds

Background to the dispute

I – The 1994 decision

1. On 7 October 1994, the Commission adopted Decision 94/696/EC on the aid granted by Greece to Olympic Airways (OJ 1994 L 273, p. 22; ‘the 1994 decision’). According to Article 1 of that decision, the restructuring aid granted, or proposed to be granted, to Olympic Airways (Olympiaki Aeroporia Ypiresies AE, formerly Olympiaki Aeroporia AE; ‘OA’ or ‘the applicant’) was compatible with the common market pursuant to Article 87(3)(c) EC, provided that the Greek Government complied with 21 commitments set out in that article. That aid consisted of:

– loan guarantees extended to OA up to 7 October 1994 pursuant to Article 6 of Greek Law No 96/75 of 26 June 1975 (FEK A’154/26.7.1975);

– new loan guarantees totalling USD 378 million for loans to be contracted before 31 December 1997 for the purchase of new aircraft;

– easing of the undertaking’s debt burden by GRD 427 billion;

– conversion of GRD 64 billion of the undertaking’s debts to equity;

– a capital injection of GRD 54 billion in three instalments of GRD 19, 23 and 12 billion in 1995, 1996 and 1997 respectively.

2. The last four of those five aid measures formed part of a recapitalisation and restructuring plan for OA for the years 1994 to 1997, which had initially been submitted to the Commission.

3. However, Article 1 of the 1994 decision made the compatibility of the five aid measures conditional on compliance with the 21 commitments, which were given by the Hellenic Republic to ensure that the aid did not adversely affect trading conditions to an extent contrary to the common interest. According to certain of those commitments, which concerned both OA and its subsidiary Olympic Aviation, the Hellenic Republic was required, inter alia:

‘(a) … to repeal by 31 December 1994, Article 6 of Greek Law No 96/75 which permitted the Greek State to extend guarantees for the loans contracted by OA;

(b) … not to interfere in the management of OA except within the strict limits of its role as shareholder;

(c) … to give OA, by 31 December 1994, the fiscal status of a public limited company comparable to that of Greek undertakings under ordinary law, except, however, for exonerating OA from any taxes likely to affect the recapitalisation operations envisaged in the recapitalisation and restructuring plan communicated to the Commission;

…

(e) … not to grant any further aid to OA in any form whatsoever, in conformity with Community law;

(f) … to have adopted immediately the legislation necessary for the effective implementation of the salary, social and financial aspects of the [restructuring] plan;

…

(h) … first, to submit to the Commission each year, at least four weeks before payment of each instalment of the capital increase scheduled in January 1996 and January 1997, a report on the implementation of the [restructuring] plan to enable the Commission to comment and to postpone by four weeks payment of those instalments should the Commission wish to submit the report in question for scrutiny by an independent consultant;

(i) … not to carry out the capital increases scheduled in 1995, 1996 and 1997 if the objectives of the restructuring plan, as set out in Part IV of [the 1994 decision], had not been attained for the previous years;

…

(p) … to ensure that OA does not act as price leader on the scheduled routes Athens-Stockholm and Athens-London during the period 1994 to 1997 inclusive …;

…

(s) … [to ensure] that throughout the entire duration of the [restructuring] plan, the number of seats offered by OA on scheduled flights in the EEA, … excluding services between continental Greece and the Greek islands, will not exceed that offered by OA in the EEA market in 1993 (3 518 778 seats), taking account, however, of a possible increase proportional to the growth of the market in question.

(t) … [to ensure] that the remaining loan guarantees extended to OA and the new guarantees to be extended before 31 December 1997 explicitly provided for in the [restructuring] plan to the amount of USD 378 million, comply with the conditions set out in the letter of 5 April 1989 from the Commission to the Member States.

…’

4. In 1995, the first instalment of capital provided for under the 1994 decision, amounting to GRD 13 billion, was paid to OA.

II – The 1998 decision

5. In 1996, since the Commission considered that the Hellenic Republic was in breach of some of the commitments set out in Article 1 of the 1994 decision, and entertained doubts as to the compatibility of new and non-notified aids with Article 87 EC, it opened the procedure laid down in Article 88(2) EC. In July 1998, the Hellenic Republic transmitted a revised restructuring plan to the Commission. In order to take account of unlawful aid to OA, that revised plan provided for a reduction in the amount of the second and third instalments of capital under the 1994 decision, which had not yet been paid.

6. That procedure led to the adoption of Commission Decision 1999/332/EC of 14 August 1998 on aid granted by Greece to Olympic Airways (OJ 1999 L 128, p. 1; ‘the 1998 decision’), in which the Commission accepted the revised plan mentioned above. In Article 1(1) of that decision, the Commission declared that the loan guarantees, the reduction of debt and its conversion to equity, which had been approved in 1994, were compatible with the common market, as were new loan guarantees for loans to be contracted before 31 December 2000 for the purchase of new aircraft. It reduced the capital injection of GRD 54 billion, provided for in the 1994 decision, to GRD 40.8 billion, to be paid in three instalments of GRD 19, 14 and 7.8 billion in 1995, 1998 and 1999 respectively.

7. The grant of that aid was coupled with a revised restructuring plan for the period from 1998 to 2002 (‘the restructuring plan’ or ‘the 1998 restructuring plan’) and was subject, under Article 1(1) of the 1998 decision, to compliance by the Hellenic Republic with the following commitments:

(a) ‘… [to fulfil] the [21] undertakings referred to in Article 1 … of the [1994] decision;

(b) … [to ensure] that OA does not act as price leader on the scheduled Athens‑Stockholm and Athens-London routes during the period 1998 to 2002 inclusive;

(c) … [to ensure] that until 31 December 2002 inclusive, the number of seats offered by OA on scheduled flights in the [European Economic Area], including additional and seasonal flights and including services between continental Greece and the Greek islands, will not exceed that offered by OA in the [European Economic Area] market in 1997 (7 792 243 seats), taking into account, however, a possible increase proportional to the growth of the market in question;

(d) … [to ensure] that by 1 December 1998, OA will have implemented a fully operational and adequate management information system [and] shall submit by 1 December 1998 a report to the Commission on this matter.’

8. According to Article 1(2) of the 1998 decision, the payment of the last instalment of GRD 7.8 billion (approximately EUR 22.9 million) was subject to compliance with all the conditions imposed in order to secure the compatibility of the aid with the common market and the actual implementation of the 1998 restructuring plan and achievement of the expected results, in particular as regards cost and productivity ratios. At least 10 weeks before the release of the last instalment planned for 15 June 1999 and by the end of the months of October 1999, March 2000 and October 2000, the Hellenic Republic was to submit a report to the Commission on the fulfilment of all the conditions imposed to secure the compatibility of the aid and the implementation of the 1998 restructuring plan and achievement of the planned results.

III – OA’s development following the 1998 decision

9. In September 1998, the Hellenic Republic paid OA the second instalment of capital, in the amount of GRD 14 billion (approximately EUR 41 million), provided for in the 1998 decision and issued to it part of the authorised loan guarantees.

10. By letter of 7 May 1999, the Hellenic Republic submitted a report to the Commission concerning the implementation of the 1998 restructuring plan. By letters of 12 May and 19 May 1999, the Commission asked the Greek authorities for certain information. In June 1999, they supplemented the abovementioned report by a memorandum. That report was scrutinised by an independent expert (Deloitte & Touche) in accordance with the provisions of the 1998 decision (Article 1 of the decision and Article 1(h), of the 1994 decision).

11. By letter of 27 July 1999, the Commission transmitted to the Greek authorities the analysis of the alleged failures concerning the implementation of the 1998 restructuring plan, set out in the Deloitte & Touche report of 21 July 1999. In that letter, the Commission, in particular, called upon the Greek Government to submit to it an updated restructuring plan for OA so that the Commission could consider it from the point of view of the conditions surrounding the third and final instalment of capital, an amount of EUR 22.9 million. In its reply to the Commission of 26 August 1999, the Hellenic Republic accepted that the restructuring plan would have to be revised to meet the planned results and to allow the Commission to consider positively the granting of the last instalment.

12. By letter of 7 July 1999, the Greek authorities informed the Commission of their intention to appoint, through an international open tender, an experienced international management company to run OA. Speedwing, the consultancy subsidiary of British Airways, was awarded the contract. That contract also provided for an option for British Airways to purchase a stake of up to 20% in OA within one year from signing the management contract.

13. After a meeting in Brussels on 3 August 1999 between the new management team formed by Speedwing and Commission officials, the Greek authorities submitted, by letter of 18 November 1999, a revised restructuring plan prepared by Speedwing (‘the Speedwing plan’). It is apparent from the file that the revised plan was accompanied by a business plan and covered the years 2000 to 2004. Implementation of the Speedwing plan was begun without awaiting the outcome of the Commission’s consideration thereof. Deloitte & Touche expressed concerns in regard to certain aspects of the plan in its initial report. The major difference between this plan and that of 1998, implemented in 1998 and the beginning of 1999, was the emphasis placed on increasing revenue and expanding the company’s activities.

14. By letter of 20 March 2000, the Commission submitted the final Deloitte & Touche report on the Speedwing plan, dated March 2000, confirming the initial concerns to the Greek authorities. Speedwing contested the conclusions of the report and departed from the management of OA in mid-2000. By letter of 29 August 2000 to the Commission, the Greek authorities confirmed that OA had no official results for 1999 in the form of audited accounts and committed themselves not to grant the last capital injection. The Hellenic Republic asked the Commission to abstain from adopting a decision in regard to that matter.

15. In autumn 2000, the consultancy PricewaterhouseCoopers was asked by OA to provide a compilation report on the unaudited preliminary consolidated balance sheet as of 31 December 1999, so as to provide a sound basis for future restructuring. The Greek authorities appointed Crédit Suisse First Boston as financial adviser with a view to privatising OA.

IV – The 2000 decision

16. By letter of 17 July 2000, the Hellenic Republic notified the Commission of its intention to use the remaining authorised aid for new loan guarantees to be contracted before the end of 2000, for investment in relation to the relocation of OA from Elliniko airport to the new Athens airport at Spata, and to extend the deadline for the loan guarantees to 31 March 2001. By then, the Greek State had issued loan guarantees totalling USD 201.6 million for the purchase of four Airbus 340s.

17. On 4 October 2000, the Commission decided not to raise any objections to that project and amended Article 1(1) of the 1998 decision accordingly. Consequently, new loan guarantees totalling USD 378 million which had been approved by the 1998 decision, for the purchase of new aircraft and for investment necessary for the relocation of OA to the new airport at Spata could be issued by 31 March 2001.

V – HACA’s complaints and the formal review procedure

18. On 12 October 2000, the Hellenic Air Carriers’ Association (‘HACA’) lodged a complaint in which it claimed that the Greek State was still granting various aids to OA, contrary to what had been provided for in the 1994 and 1998 decisions. The Greek authorities submitted their observations on that co mplaint by letter of 19 February 2001. On 24 July 2001, HACA lodged a further complaint, to which the Greek authorities responded by letters of 25 October, 7 November and 11 December 2001.

19. Following complaints, the Commission, by decision of 6 March 2002 (OJ 2002 C 98, p. 8), initiated the procedure laid down in Article 88(2) EC, on the ground that the restructuring plan had not been implemented and that some of the conditions laid down by the 1998 decision had not been fulfilled. In addition, the decision required the Hellenic Republic to provide the Commission with information pursuant to Article 10 of Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article [88 EC] (OJ 1999 L 83, p. 1).

20. The Hellenic Republic submitted its answers to the Commission by letter dated 11 April 2002.

21. On 9 August 2002, the Commission addressed to the Hellenic Republic a second request to provide information. The Greek authorities replied by letter of 30 September 2002.

22. In November 2002, the Greek authorities transmitted to the Commission two reports drawn up by Deloitte & Touche: the ‘Report on the Limited Review of Olympic Airways’ Performance as compared to its 2002 Financial Plan (July 2002)’, and a report on OA entitled ‘Restructuring and Privatisation (November 5th, 2002)’.

VI – The contested decision

23. On 11 December 2002, the Commission adopted Decision 2003/372/EC on aid granted by Greece to Olympic Airways (OJ 2003 L 132, p. 1; ‘the contested decision’). It finds therein that most of the objectives of the 1998 restructuring plan had not been attained, that the conditions imposed by the 1998 approval decision had not been fully met and that the restructuring aid had therefore been wrongly implemented.

24. In addition, the Commission refers to the existence of new non-notified aid, which consists, in essence, in the tolerance by the Greek State of the non-payment, or deferment of the payment dates of social security contributions, value added tax (VAT) on fuel and spare parts, rent payable to airports, airport charges and a tax imposed on passengers on departure from Greek airports, called ‘spatosimo’. The Commission regarded that aid as unlawful, being incompatible with the common market. It considered that the grant of that aid infringed the Greek State’s commitment not to grant any further aid to OA and was a breach of the ‘one‑time, last-time’ principle. In addition, while not respecting the 1998 restructuring plan, OA still has no alternative restructuring plan that would allow the Commission to conclude that the company will return to viability in the medium and long term.

25. The Commission required the recovery of the aid declared incompatible. However, with regard to reconstruction aid, it considered as follows (recital 229):

‘[I]t cannot be excluded that the positive decision of the Commission in 1998 has created some kind of expectations that the aid package of 1994 was unproblematic. Consequently, in the light of the very specific circumstances of this case, no recovery is necessary for the aid granted before 14 August 1998.’

26. The operative part of the contested decision is worded as follows:

‘ Article 1

The restructuring aid granted by Greece to [OA] in the form of:

(a) loan guarantees extended to the company until 7 October 1994 pursuant to Article 6 of Greek Law No 96/75 …;

(b) new loan guarantees totalling USD 378 million for loans to be contracted before 31 March 2001 for the purchase of new aircraft and for investment necessary for the relocation of [OA] to the new airport in Spata;

(c) easing of OA’s debt burden by GRD 427 billion;

(d) conversion of GRD 64 billion of the undertaking’s debt to equity;

(e) a capital injection of GRD 54 billion reduced to GRD 40.8 billion in three instalments of GRD 19, 14 and 7.8 billion in 1995, 1998 and 1999 respectively,

is considered to be incompatible with the common market within the meaning of Article 87(1) [EC], as the following conditions, under which the initial authorisation of the aid has been granted, are no longer met:

(a) the full implementation of the restructuring plan aimed at the achievement of the long-term viability of the company;

(b) the observance of 24 specific undertakings attached to the authorisation of the aid; and

(c) the regular monitoring of the implementation of the restructuring aid.

Article 2

The State aid which Greece has implemented in the form of tolerance of a persistent non-payment of social security obligations, of VAT on fuel and spare parts payable by Olympic Aviation, of rentals for different airports, of airport charges payable to Athens International Airport and other airports, of [s]patosimo tax is incompatible with the common market.

Article 3

1. Greece shall take the necessary measures to recover from the beneficiary the aid of GRD 14 billion (EUR 41 million) referred to in Article 1 which is not compatible with the Treaty and the aid referred to in Article 2 and unlawfully made available to the beneficiary.

2. Recovery shall be effected without delay and in accordance with the procedures of national law provided they allow the immediate and effective execution of the decision. The aid to be recovered shall include interest from the date on which the aid was at the disposal of the beneficiary until the date of its recovery. Interest shall be calculated on the basis of the reference rate used for calculating the grant equivalent of regional aid.

Article 4

The Hellenic Republic shall inform the Commission within a period of two months from the date of notification of the present decision of the measures to be taken to comply with it.

…’

Procedure and forms of order sought

27. By application lodged at the Registry of the Court of First Instance on 24 February 2003, the applicant brought the present action.

28. The applicant claims that the Court should:

– annul the contested decision in whole or in part;

– order the Commission to pay the costs;

– order any measure of organisation of procedure or means of giving or obtaining evidence which it considers necessary;

– order any other measure it considers appropriate.

29. The Commission contends that the Court should:

– dismiss the action as unfounded;

– order the applicant to pay the costs.

30. Upon hearing the report of the Judge-Rapporteur, the Court (Second Chamber, Extended Composition) decided to open the oral procedure without any prior measures of inquiry.

31. The parties presented oral argument and answered questions put by the Court at the hearing on 29 November 2006.

Law

32. The applicant contests the contested decision in so far as it finds that the reconstruction aid authorised by the 1998 decision and the alleged new aid are incompatible with the common market and requires the aid to be recovered.

33. Before examining the two parts of the application, and the plea alleging a misuse of powers, common to both parts, the Court considers it appropriate to set out, first and by way of preliminary remark, the legal framework in which the applicant’s claims regarding the reversal of the burden of proof, infringement of procedural rules and the right to be heard and, second, to consider immediately the plea alleging an infringement of the applicant’s right to be heard.

I – Preliminary remarks on the burden of proof, the procedural obligations of the parties and the claims concerning the infringement of the right to be heard

34. The applicant rightly argues that it is, in principle, for the Commission to provide proof, in the contested decision, both of the misapplication of the restructuring aid and the grant of new aid. It follows from the provisions of Article 88(2) and (3) EC that, if that is not established, the existing aid is covered by the earlier decision approving it and the new measures cannot be regarded as State aid within the meaning of Article 87(1) EC (see, with regard to the burden of proof in cases of misappropriation of previously approved aid, Joined Cases T‑111/01 and T‑133/01 Saxonia Edelmetalle and Zemag v Commission [2005] ECR II-1579, paragraph 86, and, with regard to the burden of proof in cases where new aid has been granted, Joined Cases C‑324/90 and C‑342/90 Germany and Pleuger Worthington v Commission [1994] ECR I‑1173, paragraph 23). On the other hand, the burden of proof of the compatibility of aid with the common market, by way of derogation from Article 87(1) EC, is borne principally by the Member State concerned, which must show that the conditions for that derogation are satisfied.

35. However, it should be pointed out that that apportionment of the burden of proof is subject to compliance with the procedural obligations imposed on the Commission and the Member State concerned in the course of the exercise by that institution of its powers to cause the Member State to provide it with all the necessary information.

36. In particular, it follows from the case-law that, in order to obtain approval of new or modified aid by way of derogation from the Treaty rules, the Member State concerned must, in order to fulfil its duty under Article 10 EC to cooperate with the Commission, provide all the information necessary to enable that institution to verify that the conditions for the derogation from which it seeks to benefit are satisfied (see, to that effect, Case C‑364/90 Italy v Commission [1993] ECR I-2097, paragraph 20; Case T‑171/02 Regione autonoma della Sardegna v Commission [2005] ECR II-2123, paragraph 129; and Case T‑17/03 Schmitz-Gotha Fahrzeugwerke v Commission [2006] ECR II-1139, paragraph 48). In addition, the Commission is empowered to adopt a decision on the basis of the information available when it is faced with a Member State which fails to comply with its obligation of cooperation and refuses to provide information requested from it either for the purpose of assessing the compatibility of new or modified aid with the common market or of verifying whether aid previously approved has been properly applied. Before taking such a decision, however, the Commission must order the Member State to provide it, within the time-limit it lays down, with all the documentation, information and data necessary to carry out its review. It is only if the Member State, notwithstanding the Commission’s order, fails to provide the information requested that the Commission is empowered to terminate the procedure and make its decision, on the basis of the information available to it, on the questions whether or not aid has been granted and if it has, whether or not that aid is compatible with the common market (Case C‑301/87 France v Commission [1990] ECR I‑307 (‘ Boussac ’), paragraph 22, and Germany and Pleuger Worthington v Commission , cited above at paragraph 34, paragraph 26), or on deciding that aid previously approved had been properly applied ( Saxonia Edelmetalle and Zemag v Commission , cited above at paragraph 34, paragraph 93, and Case T‑318/00 Freistaat Thüringen v Commission [2005] ECR II-4179, paragraph 73).

37. Those procedural obligations are binding both on the Member State concerned and on the Commission in order to permit the latter to carry out its review on the basis of sufficiently clear and precise information while ensuring respect for the right of the Member State concerned to be heard. It should be pointed out that, according to settled case-law, observance of the rights of the defence is, in all procedures initiated against a person which are liable to culminate in a measure adversely affecting that person, a fundamental principle of Community law which must be guaranteed even in the absence of any specific rules (see, by analogy, Joined Cases C‑48/90 and C‑66/90 Netherlands and PTT Nederland v Commission [1992] ECR I‑565, paragraph 44, and Joined Cases T‑228/99 and T‑233/99 Westdeutsche Landesbank Girozentrale and Land Nordrhein-Westfalen v Commission [2003] ECR II‑435, paragraph 121).

38. The abovementioned procedural obligations have been taken up and made specific by Article 2(2), Article 5(1) and (2), Article 10, Article 13(1) and Article 16 of Regulation No 659/1999.

39. In this case, the applicant complains, essentially, that the Commission failed to identify and call for essential evidence which would have resolved the doubts as to the nature of the measures being considered or the compatibility of the aid with the Treaty. The defendant institution thereby reversed the burden of proof and infringed the Hellenic Republic’s right to be heard. The infringement of that right directly influenced the outcome of the procedure ( Boussac , cited above at paragraph 36, paragraph 31, and Case C‑142/87 Belgium v Commission [1990] ECR I-959 (‘ Tubemeuse ’), paragraph 48). In addition, it adversely affects the right to be heard of the applicant, which is entirely owned by the State, and which was the only possible source of the essential evidence which the Commission regarded as lacking.

40. It follows from that argument that by invoking an infringement of the right of the Member State concerned to be heard, and its own right in that regard, the applicant is complaining, more specifically, that the Commission warned neither the Hellenic Republic nor itself of important factors in regard to which that institution continued to entertain doubts and to have refrained from asking for additional information on those factors before the adoption of the contested decision.

41. The claims concerning the reversal of the burden of proof and the related infringement of the Hellenic Republic’s right to be heard, put forward by the applicant in regard to the restructuring aid and the various alleged new aids which were declared incompatible with the common market in the contested decision, must be considered in the light of the abovementioned procedural principles.

II – The plea alleging an infringement of the applicant’s right to be heard

42. With regard to the plea alleging an infringement of the applicant’s right to be heard, it should be pointed out from the outset that Article 88(2) EC permits interested parties, including the beneficiaries of the measure under consideration, to submit their observations. That provision has been interpreted as meaning that interested parties have only the right to be involved in the administrative procedure to the extent appropriate in the light of the circumstances of the case (Joined Cases T‑371/94 and T‑394/94 British Airways and Others v Commission [1998] ECR II‑2405, paragraph 60, and Westdeutsche Landesbank Girozentrale and Land Nordrhein-Westfalen v Commission , cited above at paragraph 37, paragraph 125). Respect for the procedural rights of interested parties, as so defined, is an essential procedural requirement violation of which can have the result that the contested decision should be annulled. That is the case, in particular, where the beneficiaries of aid to be recovered have not, in practice, been able to submit their observations in the course of the formal review procedure because they had not been identified by the Commission in the initiating decision or at a later stage and where it cannot be excluded that had it not been for such an irregularity, the outcome of the procedure might have been different (see, to that effect, Case T‑34/02 Le Levant 001 and Others v Commission [2006] ECR II-267, paragraphs 82 to 95 and 137).

43. However, in so far as the procedure in regard to State aid is instituted solely against the Member State concerned, interested parties cannot, in principle, avail themselves of the right to a fair hearing enjoyed by the individuals against whom a procedure has been instituted, who are entitled to engage in a discussion with the Commission, such as that engaged in with the Member State concerned ( British Airways and Others v Commission , cited above at paragraph 42, paragraph 60; Westdeutsche Landesbank Girozentrale and Land Nordrhein-Westfalen v Commission , cited above at paragraph 37, paragraphs 122 and 125; Case T‑198/01 Technische Glaswerke Ilmenau v Commission [2004] ECR II‑2717, paragraph 192; and Schmitz-Gotha Fahrzeugwerke v Commission , cited above at paragraph 36, paragraph 54).

44. In this case, it must be stated that the applicant invokes no circumstance in particular which suggests that it was not involved in the administrative procedure to the extent appropriate in the light of the circumstances of the case. The only fact put forward by the applica nt, namely that it was the sole possible source of the evidence which the Commission considered necessary, does not justify that institution asking it for information. As has already been pointed out (see paragraph 36 above), it is in principle for the Member State concerned to provide the Commission, at its request, with all the necessary information. Under those circumstances, the applicant’s procedural rights can be affected neither by the Commission’s alleged failure to identify the essential evidence necessary to still its doubts nor by the absence of requests for additional information on the part of that institution (see paragraph 40 above). Those claims will therefore be considered solely in the context of the plea alleging an infringement of the Hellenic Republic’s right to be heard, also relied on by the applicant.

45. Moreover, it must in any event be considered that the applicant was able to take part indirectly in the administrative procedure, through the intermediary of the Member State concerned, which is its sole shareholder. In addition, it is apparent from the file that the OA’s management took part in the meetings between the Commission’s staff and the Greek authorities throughout the administrative procedure.

46. For all of those reasons, the plea alleging an infringement of the applicant’s right to be heard must be dismissed as unfounded.

III – The restructuring aid (Articles 1, 3 and 4 of the contested decision)

47. The applicant denies the factors on which the Commission based itself in the contested decision when declaring the existing restructuring aid incompatible with the common market. First, it criticises the Commission’s contention that the 1998 restructuring plan was not implemented. It then claims that the Hellenic Republic fulfilled its obligations under Article 1(1)(d) of the 1998 decision to implement a management information system (‘MIS’). In addition, the Hellenic Republic fulfilled its obligations under Article 1(2) of the 1998 decision concerning the submission of reports in relation to the implementation of the conditions laid down in that decision. Finally, the conditions set out in Article 1(b), (c) and (e) of the 1994 decision have also been fulfilled.

A – The failure, alleged in the contested decision, to implement the restructuring plan properly

48. The applicant considers that the implementation of the 1998 restructuring plan was aimed at achieving the long-term viability of OA. It claims, first, that the Commission’s conclusions on the implementation of the plan did not take account of the fact that it had been amended and that, consequently, they are vitiated by an error of fact, a manifest error of assessment and/or a failure to state reasons. Secondly, the Commission did not duly consider whether the aid approved in 1998 could be regarded as compatible with Article 87(3)(c) EC, on the basis of the amended restructuring plan, applicable at the time that the contested decision was adopted. The contested decision was therefore vitiated by a manifest error of assessment and an infringement of Article 87(3)(c) EC. Thirdly, the Commission committed a manifest error of assessment by concluding that no step had been taken to restructure OA.

1. The claim that the amendment of the restructuring plan was not taken into account

(a) Arguments of the parties

49. On the one hand, the applicant claims that the Commission committed an error of fact and a manifest error of assessment in failing to take into account the amendments to the 1998 restructuring plan, which had been approved, according to the applicant, by the Commission in the context of a single, prolonged restructuring process and which OA had successfully put into effect. The Commission reviewed OA’s compliance with its restructuring obligations on the basis of the initial, 1998, version of the restructuring plan. However, when the contested decision was adopted, the amended plan called for the privatisation of a majority stake in OA, cost-cutting measures and a sell-off of non-core business. The only interruption in the restructuring process was due to the events of 11 September 2001. The first part of the privatisation process had already been carried out at the date of the contested decision.

50. On the other hand, the contested decision is vitiated by a failure to provide adequate reasons, inasmuch as the Commission did not analyse the amended plan but based its findings on the unamended 1998 plan. Consequently, the Commission did not provide relevant reasons supporting its conclusion that the restructuring plan (as amended) did not achieve the long-term viability of OA.

51. In support of the abovementioned pleas, the applicant contests the Commission’s claim in the contested decision (recital 173) that the Hellenic Republic did not propose the amendments to the restructuring plan that it considered necessary. It alleges that it was obvious to all the parties concerned during the administrative procedure that the restructuring plan had been amended.

52. The Commission accepted as early as 1999 that the restructuring plan should be amended. It encouraged amendments to the plan under the management of Speedwing, as can be seen from its letters to the Greek Government of 12 May, 27 July and 23 August 1999. It was informed in advance of that first proposed amendment by letters from the Greek Government dated 7 May, 23 June and 7 July 1999. The extremely detailed Speedwing plan was thus the first amendment to the restructuring plan. It was submitted to the Commission on 18 November 1999 under cover of a letter from the Greek Government. In its letter to the Hellenic Republic of 29 March 2000, the Commission accepted that the Speedwing plan had already been implemented.

53. Since the Commission did not approve the Speedwing plan, the Greek Government informed it in 2000, in particular by letters of 29 August and 6 September 2000, of a second amended version of the restructuring plan providing for the privatisation of OA, as can be seen inter alia from recitals 73 and 175 in the contested decision. Detailed information on the privatisation process was submitted to the Commission, in particular, in a memorandum drawn up by Crédit Suisse First Boston in December 2000 and in a letter from the Greek Government dated 16 May 2001.

54. It is clear from correspondence exchanged that, from 2000, the restructuring plan consisted of the privatisation of a majority stake in OA, cost-cutting measures and a sell-off of non-core business. The applicant points out that the cost-cutting measures, accepted by the Commission as may be seen from the contested decision (recitals 106 and 174), began in 1998, in accordance with the 1998 decision.

55. Several statements by the Commission confirm that it accepted that the 1998 plan had been amended to adapt it to the new situation and that the restructuring of OA necessarily involved privatisation. In its decision of 4 October 2000 formally authorising amendment of the 1998 plan, the Commission did not express its concerns as to the progress of restructuring but referred explicitly to privatisation, indicating, in particular, that ‘… the current management is transitional, pending [OA’s] privatisation early next year …’.

56. In addition, the Commission recognised that active steps had been taken towards privatisation, in particular in a letter to the Greek authorities dated 25 April 2001 and in a letter from the Vice-President of the Commission responsible for transport, Ms Loyola de Palacio, to the Greek Minister for Transport and Communications dated 5 July 2001. That letter referred to a meeting, held on 29 May 2001, between Commission officials and members of Ms Loyola de Palacio’s Cabinet, on the one side, and the Greek Government’s financial and legal advisers, on the other, ‘on the issue of the [then] ongoing privatisation process of [OA]’.

57. Moreover, the fact that the final instalment of the aid approved in the 1998 decision (EUR 22.9 million) was not paid demonstrates that the Greek Government and the Commission accepted that the 1998 restructuring plan had been amended as early as 1999 to take account of the state of the aviation market and OA’s situation. Having regard to that amendment or alleged abandonment of the restructuring plan, represented, in particular, by the non‑payment of the last instalment of the aid, the contested decision, which concluded that the 1998 restructuring plan had not been respected and ordered recovery of the second instalment of the aid, also infringes the principle of the protection of legitimate expectations, essential procedural requirements and the ne bis in idem principle. The Commission should have indicated, before it adopted the contested decision, that it did not accept the abovementioned amendment. In addition, the Commission should have taken into account the non-payment of the last instalment of the aid in determining the amount of aid to be recovered.

58. The implementation of the second amended restructuring plan was interrupted by the events of 11 September 2001. By letter of 1 February 2002, the Greek Government notified the Commission of the new measures adopted by OA under that amended restructuring plan to deal with the general reduction in air traffic. The privatisation of a majority stake in OA, cost-cutting measures and a sell-off of non-core business constitute genuine and appropriate restructuring measures in the light of the circumstances.

59. The present privatisation process was successfully begun in 2002, as may be seen from the Greek Government’s letter to the Commission of 22 February 2002. In 2002, OA’s business significantly improved. The Hellenic Republic informed the Commission of the state of the privatisation process and cost-cutting measures, in particular in its replies of 11 April 2002 to the Commission’s first request for information, in its letter of 16 July 2002 and its replies of 30 September 2002 to the Commission’s second request for information, and of 9 August 2002. In those replies, it confirmed, in particular, the sale of a 58% stake in its subsidiary, Olympic Catering.

60. The minutes of the meeting held on 16 October 2002 prove that the Commission was once again informed of the situation on that occasion. It was expressly stated that the 1998 restructuring plan (in the form approved in 1998) was ‘no longer current’ (last paragraph of point 2, entitled ‘Commercial and Financial Presentation’). The minutes also indicate (Annex II, paragraph 16) that Ms Loyola de Palacio had met Mr Verelis, the Greek Minister for Transport and Communications, on 2 and 3 October 2002 and had asked for a new restructuring plan to be drawn up before the end of 2002.

61. Moreover, the ‘Report on the Limited Review of Olympic Airways’ Performance as compared to its 2002 Financial Plan (July 2002)’, which was transmitted to Ms Loyola de Palacio’s chef de cabinet on 5 September 2002, and sent to the Commission’s staff on 14 November 2002, referred to a significant improvement in OA’s operating results in 2002. Under those circumstances, the postponement until after the end of 2002 of the privatisation of a majority stake in the flying operations was of no significance.

62. On 21 November 2002, the detailed report of 5 November 2002 on the restructuring and privatisation of OA was transmitted to the Commission. That report set out the privatisation proposal in great detail, to the level of detail of numbers of staff, and included financial projections for flying operations from 2003 to 2005 demonstrating that the undertaking was viable.

63. By letter from the Greek Minister for Transport and Communications dated 2 December 2002, the Member of the Commission responsible for transport was informed that six private investors had expressed an interest in acquiring a majority stake in OA (see recital 9 in the contested decision).

64. In that context, contrary to what the Commission alleges, the second amended restructuring plan was submitted ‘in all relevant detail’, in accordance with point 3.2 of the Community guidelines of 1999 on aid for rescuing and restructuring firms in difficulty (OJ 1999 C 288, p. 2; ‘the Guidelines’). In particular, the report dated 5 November 2002, mentioned above, contains all the ‘data, hypotheses, forecasts, measures, objectives and conditions’ required and its title clearly indicates that it is a restructuring plan. In addition, the abovementioned Guidelines merely state, in point 3.2.4, that a Member State may ‘ask’ the Commission to agree to changes being made to the restructuring plan. In this case, therefore, the copious correspondence between the Hellenic Republic and the Commission constitutes a valid request. Moreover, the second amended restructuring plan was submitted to the Commission in accordance with the same procedure as was followed in regard to the Speedwing plan and with which the Commission seemed to be satisfied.

65. For its part, the Commission contends that the plea of fact put forward by the applicant, namely that the privatisation plan was submitted to, and approved by, the Commission was never put forward by OA or the Greek authorities during the administrative procedure, whether as a request for further aid or as a new restructuring plan replacing that of 1998. Even at the meeting of 16 October 2002, it was pointed out that the Commission would examine the Hellenic Republic’s compliance with the commitments imposed by the 1998 decision. The applicant cannot therefore rely on that plea as a new fact (see, a contrario , the Opinion of Advocate General Darmon in Germany and Pleuger Worthington v Commission , cited above at paragraph 34, points 33 and 107, and the judgments in British Airways and Others v Commission , cited above at paragraph 42, paragraph 81, and Joined Cases T‑126/96 and T‑127/96 BFM and EFIM v Commission [1998] ECR II-3437, paragraph 88). With regard to the substance, the Commission denies that OA was the subject of a ‘single, prolonged, restructuring process’ based on an amended restructuring plan. It alleges that the Speedwing plan was completely different from a privatisation plan. In addition, following the abandonment of the Speedwing plan, no restructuring plan was submitted to it, much less approved by it.

66. The Commission argues that, according to settled case-law ( BFM and EFIM v Commission , cited above at paragraph 65, paragraphs 98 to 100), a mere declaration of intent is not sufficient to amend a restructuring plan. The formal submission of an amended plan (accompanied by data, hypotheses, forecasts, measures, objectives and conditions) for the Commission’s consideration is necessary. The Greek authorities were also clearly aware of the applicable procedure inasmuch as they followed it both in the case of the adaptation of the 1994 plan, which the Commission approved in the 1998 decision, and in regard to the Speedwing plan.

67. In this case, the correspondence referred to by the applicant can in no way be regarded as fulfilling the conditions for an amended restructuring plan. In particular, the report entitled ‘Report on the Limited Review of [OA’s] Performance as compared to its 2002 Financial Plan (July 2002)’ is based on unconfirmed information and hypotheses and on data which have sometimes been shown to be incorrect and incomplete. The report of 5 November 2002 on the restructuring and privatisation of OA presents the privatisation process as a ‘concept’ although it had been submitted to the Commission in November 2002, that is to say, two months before the expiry of the restructuring plan approved in 1998. Moreover, neither of those reports was expressly submitted as a revised plan.

68. Finally, the argument that non-payment of the last instalment of the aid proved that the 1998 plan had been amended by common accord is out of time since it was not raised during the administrative procedure. In addition, it is unfounded. It is also in contradiction to the observations which the Greek authorities submitted on 21 November 2002 according to which payment of the last instalment was not approved by the Commission, thereby preventing the plan from bearing fruit.

69. In those circumstances, since the plan approved by the 1998 decision was reaching the end of its validity, the Commission was required to assess that plan.

(b) Findings of the Court

70. The objection of inadmissibility raised by the Commission against the applicant’s argument regarding the amendment of the restructuring plan must be considered before dealing with the pleas alleging, on the one hand, a failure to state reasons and, on the other, an error of fact and a manifest error of assessment.

The Commission’s objection of inadmissibility

71. The Commission contends that the applicant’s argument based on the alleged submission of a privatisation plan amending the 1998 restructuring plan is inadmissible inasmuch as it was not put forward during the administrative procedure.

72. The Court points out that in the context of an action for annulment brought under Article 230 EC, the legality of a Community measure must be assessed on the basis of the elements of fact and of law existing at the time when the measure was adopted. In particular, the assessments made by the Commission must be examined solely on the basis of the information available to it at the time when the assessments were made ( British Airways and Others v Commission , cited above at paragraph 42, paragraph 81, and Case T‑349/03 Corsica Ferries France v Commission [2005] ECR II-2197, paragraph 142).

73. Consequently, an applicant may not, in principle, on pain of inadmissibility, rely on factual arguments which are unknown to the Commission and which it has not notified to the latter during the formal investigation procedure. On the other hand, there is nothing to prevent the interested party from raising against the final decision a plea in law not raised at the stage of the administrative procedure (Case T‑110/97 Kneissl Dachstein v Commission [1999] ECR II‑2881, paragraph 102, and Saxonia Edelmetalle and Zemag v Commission , cited above at paragraph 34, paragraph 68).

74. In this case, the Commission does not deny that the question of privatising OA, raised, in particular, in its exchanges of correspondence with the Greek authorities and in some of the reports transmitted to it by those authorities, on which the applicant bases its plea concerning the existence of an amended restructuring plan approved by the Commission, was made known to that institution during the administrative procedure.

75. However, the question whether a privatisation plan amending the 1998 restructuring plan was properly submitted to the Commission for approval in accordance with the applicable procedural rules is a matter for judicial assessment, on the basis of the abovementioned facts which no party denies were made known to the Commission.

76. Since, therefore, the submission is a plea in law and not a purely factual argument, the applicant’s argument as to the alleged existence of a privatisation plan replacing the 1998 restructuring plan is admissible, regardless of whether or not it was raised during the administrative procedure.

77. For the same reasons, the objection of inadmissibility raised by the Commission against the applicant’s legal argument that the failure to pay the final instalment of the aid approved by the 1998 decision proves that the 1998 restructuring plan was amended with the Commission’s agreement must also be rejected.

The plea alleging a failure to state reasons

78. As a preliminary point, the scope of the applicant’s argument concerning the failure to state reasons must be considered.

79. The Court points out that the duty to state reasons is an essential procedural requirement, as distinct from the question whether the reasons given are correct, which goes to the substantive legality of the contested measure. Claims and arguments intended to deny that the measure is well founded are thus of no effect in the context of a plea alleging the lack or inadequacy of a statement of reasons. The statement of reasons required by Article 253 EC must be appropriate to the act at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in question in such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the competent Court to exercise its power of review (Case C‑17/99 France v Commission [2001] ECR I-2481, paragraphs 35 to 38; Corsica Ferries France v Commission , cited above at paragraph 72, paragraphs 52 and 59; and Schmitz-Gotha Fahrzeugwerke v Commission , cited above at paragraph 36, paragraphs 70 and 71).

80. Moreover, according to settled case-law, the question whether the statement of reasons for a decision meets the requirements of Article 253 EC must be assessed in the light of not only its wording but also its context and all the legal rules governing the matter in question ( British Airways and Others v Commission , cited above at paragraph 42, paragraph 94, and Freistaat Thüringen v Commission , cited above at paragraph 36, paragraph 202).

81. In this case, the applicant complains, essentially, that the Commission failed to state the reasons, in the contested decision, for its conclusion concerning OA’s lack of viability under the amended restructuring plan.

82. It is true that, in the contested decision, the Commission reviewed the effective implementation of the restructuring plan compared to the plan provided for in the 1998 decision. None the less, in recital 173 in that decision, it stated that the reason for that approach was the absence, as it saw it, of a specific proposal on the part of the Greek State, OA’s sole shareholder, to amend the 1998 restructuring plan following the Commission’s rejection of the Speedwing plan. In the third indent of recital 116, it had already pointed out that although the red line of 50% loss of the share capital had been crossed in 1999, the share capital had not been increased and ‘important adaptations’ to the restructuring plan had not been undertaken in time.

83. In order to determine whether that explanation actually constitutes an adequate statement of reasons, it must be assessed in the context of the procedure which led to the adoption of the contested decision. The Court points out that in its decision of 6 March 2002 to initiate the formal investigation procedure, the Commission indicated, in particular, that the 1998 restructuring plan, on which the 1998 decision approving the restructuring aid under consideration was based, had not been implemented as planned and that the existence of serious doubts as to the compatibility of OA’s current economic and financial situation with the operational and financial indicators of the plan at issue justified a re-examination of the 1998 decision with regard to the correct implementation of that plan. In addition, nothing in the file indicates that the Greek authorities submitted a formal and explicit request to the Commission, whether after the abandonment of the Speedwing plan, and before the adoption of the contested decision, on 11 December 2002, to amend the 1998 restructuring plan in order to undertake the necessary adaptations to that plan, namely by privatising OA.

84. In those circumstances, it must be decided that the Commission was not required to set out more extensively, in the contested decision, the reasons why it considered that it should review the implementation of the 1998 restructuring plan in its initial version.

85. It follows that the plea alleging failure to state the reasons for that decision in regard to whether the amended restructuring plan, referred to by the applicant, made it possible to restore the long-term viability of OA within a reasonable timescale is without foundation.

86. The claims concerning the failure to take account of the amended restructuring plan must now be considered in the context of the applicant’s pleas alleging an error of fact and a manifest error of assessment.

The pleas alleging an error of fact and a manifest error of assessment

87. The applicant relies on four sets of arguments to show that the 1998 plan was revised after the Speedwing plan was abandoned. The legal framework in which the question at issue arises must be set out before considering each of the applicant’s arguments based, first, on the restructuring of OA, which it regards as a single, prolonged process and the need to update the 1998 plan, secondly, on the non-payment of the last instalment of the aid, thirdly, on the decision of 4 October 2000 and, fourthly, on the correspondence between the Greek authorities and the Commission and the reports transmitted to the latter during the administrative procedure.

– Legal framework and question raised in this case

88. According to settled case-law, to be declared compatible with the common market under Article 87(3)(c) EC, aid to undertakings in difficulty must be linked to a viable restructuring plan which must be submitted in all relevant detail to the Commission (Case C‑17/99 France v Commission , cited above at paragraph 79, paragraph 45; BFM and EFIM v Commission , cited above at paragraph 65, paragraph 98; and Technische Glaswerke Ilmenau v Commission , cited above at paragraph 43, paragraph 151). The Guidelines, applicable in this case, confirm that the restructuring plan must restore the long‑term viability of the firm within a reasonable timescale and that it must be submitted in all relevant detail (point 3.2.2(b)).

89. In addition, the Guidelines provide that following approval of restructuring aid, the company must fully implement the restructuring plan that has been accepted by the Commission and must discharge any other obligations laid down in the Commission decision (point 3.2.2(f)). The implementation of the restructuring plan is carried out under the supervision of the Commission, which must be put in a position to make certain that the restructuring plan is being implemented properly, through detailed regular reports communicated by the Member State concerned (point 3.2.2(g)).

90. The Guidelines (point 3.2.4) also provide that where restructuring aid has been approved, the Member State concerned may, during the restructuring period, ask the Commission to agree to changes being made to the restructuring plan and the amount of the aid. The Commission may allow such changes after verifying that they meet certain conditions. In particular, the revised plan must still show a return to viability within a reasonable timescale.

91. It follows from the combined effect of the provisions of Article 87(3)(c) EC and Article 88(2) and (3) EC, as interpreted in the abovementioned cases and implemented by the provisions of the abovementioned Guidelines, that any significant amendment to a restructuring plan accepted by the Commission requires, in principle, that the Member State concerned submit a revised plan in all relevant detail so as to permit the Commission to assess its compatibility with the common market, having regard to the conditions set out in point 3.2.4 of the Guidelines.

92. On the level of procedure, the case-law shows that if one of the conditions to which approval of an aid was subject is not satisfied, the Commission may normally adopt a decision derogating from that condition without reopening the procedure under Article 88(2) EC only in the event of relatively minor deviations from the initial condition (Case T‑140/95 Ryanair v Commission [1998] ECR II-3327, paragraph 88). In particular, when the adaptation of a restructuring plan raises doubts as to the compatibility of the aid, the Commission must carry out a formal reconsideration of the compatibility of the aid with the common market.

93. Those procedural rules confirm that, in the absence of complete implementation of a restructuring plan accepted in the decision approving restructuring aid, the Commission may authorise a significant amendment of the plan, if such is necessary, only on the basis of a formal, thorough consideration of the conformity of the revised plan submitted by the Member State concerned with the abovementioned conditions laid down in the Guidelines. Consequently, where the Member State concerned does not submit a revised restructuring plan, the Commission – when it assesses the compatibility of the aid – is neither required to, nor is it in a position to, take account of any significant modifications which may have been made to the initial plan on the basis of mere declarations of intent on the part of the Member State concerned.

94. In this case, it must therefore be verified whether, in the absence of a formal second request to amend the restructuring plan after the first revised plan notified to the Commission, namely the Speedwing plan, was abandoned (see paragraphs 13 and 83 above), the various factors referred to by the applicant none the less make it possible to consider that a second request to amend the 1998 restructuring plan was submitted to the Commission in all relevant detail to permit it to assess the compatibility of the aid.

– Consideration of the arguments concerning the single, prolonged process of restructuring OA and the need to update the 1998 restructuring plan

95. It should be pointed out, first of all, that the applicant’s argument that OA underwent a single, prolonged restructuring process during which the 1998 restructuring plan was amended is, in any event, irrelevant. Whatever the nature of the restructuring measures implemented or envisaged, once the competent national authorities wished to obtain, as in this case, a major adaptation of the initial 1998 plan (see paragraph 97 below), they were required to submit a revised plan for the Commission’s approval in accordance with the abovementioned provisions of the Guidelines, so as to permit that institution to review the compatibility of the aid with the common market in the light of the revised plan. In particular, it was not sufficient to ask the Commission to examine OA’s financial situation independently of the actual implementation of the 1998 restructuring plan, as the Greek authorities did on many occasions, according to the contested decision (recital 184). It should also be noted that the restructuring of OA began in 1994, as is pointed out in the final report drawn up by Deloitte & Touche on the Speedwing plan in March 2000, and that an updating of the 1994 plan, and an extension of the restructuring period, necessary to allow OA to redress the situation with regard to the achievement of the objectives provided by the initial plan, was authorised by the Commission in the 1998 decision following notification by the Hellenic Republic in July 1998 of a revised restructuring plan accompanied by a detailed implementation plan (see recitals 40, 46, 78 and 85 in that decision). The goal of the 1998 restructuring plan was to re-establish OA’s long-term viability through the full implementation of the restructuring measures already provided for in the 1994 plan, together with additional restructuring measures intended to take account of the deterioration in OA’s financial results for 1997.

96. Moreover, the various measures for restructuring OA implemented during the period in which the 1998 restructuring plan applied were parts of different strategies, thereby creating a lack of continuity in the restructuring process. As the Greek authorities admitted, in particular in their replies of 11 April 2002 to the information request of 6 March 2002, ‘the philosophy of [the Speedwing] plan was far distant from the philosophy of the … plan [authorised in 1998] since it was mainly focusing on expansion and revenue maximisation [rather] than on the cost side’. The Speedwing plan, accompanied by a business plan, was notified to the Commission in November 1999 (see paragraph 13 above). However, the implementation of that plan had been commenced in August 1999, without the Commission’s approval. The implementation of the 1998 restructuring plan was thus suspended from August 1999 until the departure of Speedwing in the middle of 2000 and a new phase of cost cutting and the revival of the 1998 restructuring plan were able to commence in the summer of 2000.

97. In this case, however, it was obvious as early as 1999 that a substantial revision of the 1998 restructuring plan was necessary to achieve the long-term viability of OA, as the Greek Government had pointed out, inter alia, in the Speedwing plan, referring in particular to the Deloitte & Touche report of 21 July 1999 on the implementation of the 1998 restructuring plan (see paragraph 11 above). In that report, attention was drawn to OA’s poor financial situation and the deterioration of market conditions making additional measures to achieve the company’s long‑term viability indispensable. The inadequacy of OA’s financial results expected under the 1998 restructuring plan had already been revealed in the report on the implementation of that plan transmitted to the Commission on 7 May 1999 (see paragraph 10 above), in which the authorities explained that, after the adoption of the 1998 decision, the actual 1997 results as indicated in the audited balance sheet ‘exceeded the most pessimistic estimate made in late February 1998 when the restructuring plan and the associated business plan were formulated’. Finally, it may be seen from the Commission’s minutes of a meeting of 16 October 2002 between Commission officials and the Greek Government’s legal advisers that the latter confirmed that the 1998 restructuring plan had not been up to date since 1999 by reason of the important divergences which had occurred right from the first year of the plan.

98. Having regard to the scale of the amendments which the two parties considered necessary, the abovementioned requirements (see paragraphs 91 and 93 above) concerning the submission by the Member State concerned of a revised restructuring plan during the restructuring period for thorough consideration by the Commission cannot be modified by the mere fact that the Commission encouraged – as it itself points out – the amendment of the 1998 restructuring plan. The Commission encouraged the amendment of that plan, first, during the period of Speedwing’s management, as can be seen inter alia from its letters of 27 July and 23 August 1999, and from the contested decision (recital 29) and later, after the Speedwing plan had been abandoned, as may be seen, for example, from its letter of 29 March 2000, the letter from Ms Loyola de Palacio, the Member of the Commission responsible for transport, dated 5 July 2001, and the fact that, at meetings on 2 and 3 October 2003 with Mr Verelis, the Greek Minister for Transport and Communications, Ms Loyola de Palacio expressed the Commission’s doubts concerning OA’s viability and the urgency of having a new restructuring plan in place before the expiry of the current plan, as may be seen from Annex II to the minutes of the meeting of 16 October 2002.

99. In addition, it is apparent from the file that, on many occasions, and in particular in its abovementioned letter of 23 August 1999, although it was in favour of amending the 1998 restructuring plan, the Commission insisted that it would need to assess the new plan in detail before taking a final position on the compatibility of the aid. Previously, the Commission had pointed out inter alia that the competent national authorities should give priority to the definition of revised financial projections covering the entire period of the plan (see the Commission’s letter of 12 May 1999 to the Greek authorities).

100. In that context, the existence of a consensus between the Greek authorities and the Commission during the administrative procedure as to the need to update the 1998 restructuring plan does not, of itself, make it possible to suppose that a new, revised plan, meeting the abovementioned requirements (see paragraphs 91 and 93 above), had been submitted to the Commission for its approval.

– Consideration of the argument concerning the non-payment of the last instalment of the aid

101. It is clear from the file that the reason for the non-payment of the third and final instalment of the aid was the failure to implement the 1998 restructuring plan. The 1998 decision (Article 1(2)) made payment of that instalment of EUR 22.9 million subject to compliance with all the conditions imposed by the decision in order to secure the compatibility of the aid with the common market, the actual implementation of the 1998 restructuring plan and the achievement of the expected results (particularly with regard to cost and productivity ratios). However, following submission by the Greek authorities, on 7 May 1999, of the report, previously cited, provided for in Article 1(2) of the 1998 decision before payment of the last instalment, the Commission indicated to the Greek authorities, in particular in its letter of 27 July 1999, mentioned above, that the analysis of the failings in the implementation of the 1998 restructuring plan, set out in the Deloitte & Touche report of 21 July 1999 (see paragraphs 10 and 11 above), shows that it could not adopt a decision favourable to payment of the final instalment. As the Court has already pointed out (see paragraph 98 above), the Commission called upon the Greek Government, in that letter, to submit an updated plan for the restructuring of OA so that the Commission might determine whether the payment of capital in the amount of EUR 22.9 million was justified. In its letter of 18 November 1999 notifying the Speedwing plan to the Commission (see paragraph 13 above), the Greek Government asked that institution to be permitted to pay the last instalment of the aid following its review of the revised plan. However, by letter of 17 December 1999, it asked the Commission to delay its decision on payment of the last instalment to enable the Greek authorities to carry out an assessment of the likely impact of the process of allowing private investment in OA, which had just been initiated, and to develop an optimal plan for securing OA’s viability. The contract with Speedwing gave British Airways an option to buy, before July 2000, 20% of OA’s share capital. In that context, it is all the more difficult to explain the failure to pay the last instalment of the aid by the fact that the Greek Government and the Commission considered that the 1998 restructuring plan had been revised since the Speedwing plan had been definitively abandoned following transmission by the Commission to the Greek authorities, by letter of 20 March 2000, of the final, unfavourable, report drawn up by Deloitte & Touche in March 2000 (see paragraph 14 above).

102. Subsequent developments in the case also do not make it possible to consider the non-payment of the last instalment of the aid as evidence that the 1998 restructuring plan had been amended. Since British Airways had not made an offer to purchase OA before July 2000, the Greek Government informed the Commission, by letter of 29 August 2000, of its decision to make an international call for tenders so as to find a strategic investor. In that letter, it repeated its request that the Commission delay its decision on authorising payment of the last instalment until OA ‘had assessed the results of this attempt’ at privatisation. Those facts merely prove that the Commission was informed of the plan to privatise a majority stake in OA in order to facilitate achievement of the restructuring plan’s objectives (see paragraph 106 below). Consequently, although in their answers of 11 April 2002 (point 1.9) the Greek authorities presented the ‘freeze’ of the last instalment of the aid as the result of their compromising approach towards the Commission, that ‘freeze’ cannot be interpreted, in the context set out above, as resulting from the submission of a request to revise the restructuring plan, accompanied by a plan revised in accordance with the Guidelines. The freeze flows exclusively from the implementation by the Commission of Article 1(2) of the 1998 decision (see paragraph 101 above).

103. It follows that, contrary to the applicant’s allegations, the non-payment of the final instalment of the aid may not be regarded as evidence that the 1998 restructuring plan was amended or that a request had been made to the Commission to amend that plan, accompanied by a second revised plan, following the abandonment of the Speedwing plan.

104. Consequently, notwithstanding the failure to pay the last instalment of the aid, the 1998 restructuring plan remains fully valid and is still fully binding on the applicant, in accordance with the provisions of the Guidelines (see paragraph 89 above). In particular, contrary to the applicant’s allegations, the Commission was not required to indicate, before it adopted the contested decision, that it did not accept the alleged modification of the plan, represented by the non-payment of the final instalment of the aid. In addition, when, in the contested decision, it reviewed compliance with the 1998 restructuring plan and adopted a position regarding recovery of the aid already paid which it regarded as incompatible with the common market, it was not required to take account of the abovementioned alleged modification and non-payment of the final instalment of the aid since it had not been properly notified of any amendment to the 1998 restructuring plan. It follows that the additional pleas, invoked by the applicant in connection with the argument concerning the non-payment of the final instalment, alleging infringement of the principle of the protection of legitimate expectations, of essential procedural requirements, and the ne bis in idem principle, must also be rejected as being without foundation.

– Consideration of the argument concerning the decision of 4 October 2000

105. Similarly, the reference – in the Commission’s decision of 4 October 2000 not to raise any objection to the amendment of the 1998 decision – to the transitional nature of OA’s management while awaiting privatisation at the beginning of 2001 does not allow it to be supposed that a second amended restructuring plan, incorporating the privatisation of OA, had been submitted to the Commission after the abandonment of the Speedwing plan. In that context of the decision of 4 October 2000, the abovementioned reference merely constitutes one of the reasons for the Commission’s decision to extend the time-limit for the use of new loan guarantees approved in the 1998 decision (see paragraphs 16 and 17 above). Contrary to the applicant’s allegations at the hearing, only the minor amendment constituted by the extension of the abovementioned time-limit for the use of new loan guarantees was regarded, in the decision of 4 October 2000, as raising no doubts as to the compatibility of the aid, in accordance with case-law, as illustrated by the judgment in Ryanair v Commission (see paragraph 92 above).

106. It follows that the decision of 4 October 2000, relied on by the applicant, may not be interpreted as meaning that it contains evidence of submission to the Commission of a second revised plan, incorporating the privatisation process, and of approval of that plan.

– Consideration of the arguments based on the correspondence between the Greek authorities and the Commission, and the reports submitted to that institution

107. First of all, it is important to bear in mind that neither the information regularly supplied to the Commission concerning the implementation of the plan to privatise a majority stake in OA, in particular the progress of the two successive privatisation processes begun in the summer of 2000 and February 2002 respectively, nor the meetings which took place on that subject between the Greek Government’s advisers and Commission officials could dispense the Greek authorities from the obligation to submit, in all relevant detail, any significant amendment of the 1998 restructuring plan for the Commission’s approval.

108. It must therefore be verified whether the correspondence and the various reports referred to by the applicant make it possible to consider that a request to amend the restructuring plan, accompanied by a revised plan, was submitted to the Commission in accordance with the requirements of the Guidelines, be it in connection with the first privatisation process or the second.

109. With regard to the first privatisation process, following the adoption, in September 2000, of the decision needed to permit the privatisation of a majority stake in OA, a call for tenders was made in the following December according to the Greek authorities’ answers dated 11 April 2002 to the Commission’s information request of 6 March 2002 (points 2.7.4 and 2.19.2). The Greek Minister for Transport and Communications pointed out in a letter to Ms Loyola de Palacio, dated 6 September 2000, that, according to comments received by Crédit Suisse First Boston from private investors, there would be interest only if a majority stake was for sale and only if OA’s financial parameters were ‘clear’. Crédit Suisse First Boston’s memorandum of 20 December 2000, transmitted to the Commission, was intended to assist a limited number of companies which had expressed an interest in acquiring OA to decide whether or not to carry out additional investigations into that company’s situation. It contained, in particular, the report drawn up by PricewaterhouseCoopers (see paragraph 15 above). The question of adapting the 1998 restructuring plan with a view to re-establishing OA’s viability was raised neither in that memorandum nor in the abovementioned correspondence or answers.

110. The same is true of the letter sent to the Commission by the Greek authorities on 16 May 2001 in reply to a letter of 25 April 2001 from that institution. In the latter letter, which referred to preliminary discussions which had taken place since December 2000 between the Greek Government’s advisers and Commission officials concerning the privatisation of OA, the Commission expressed doubts as to the compatibility of the tendering procedure with its position on privatisations set out in its XXIIIrd Report on Competition Policy 1993 (paragraphs 402 and 403). In addition, the Commission pointed out in that same letter that compliance with the restructuring plan and OA’s return to viability were key conditions under the 1994 and 1998 decisions.

111. On the latter point, the Greek authorities, in the abovementioned reply of 16 May 2001, merely referred to their observations of 19 February 2001 on HACA’s complaint (see paragraph 18 above), without even mentioning a possible amendment of the 1998 restructuring plan. In addition, on the subject of the privatisation process, they merely informed the Commission that three proposals had been received within the deadline and announced that it would receive formal notice of the transaction after informal consultations with its officials. It can also be seen from that exchange of correspondence of 25 April and 16 May 2001 that, at that stage, no request to revise the restructuring plan had been submitted to the Commission.

112. By letter of 1 February 2002, the Greek authorities informed the Commission of the ongoing discussions with one of the bidders. In addition, they informed that institution of the measures intended to cut costs, rationalise OA’s network, improve productivity by reducing fares and apply productivity management techniques. Those additional measures, adopted to deal with the crisis in the air transport market following the events of 11 September 2001 and fully compatible with the 1998 restructuring plan, were not, however, accompanied by a request to amend that plan.

113. It follows that neither the letters and documents referred to by the applicant nor any of the other items in the file reveal that a request, however implicit, that the 1998 restructuring plan be revised was ever submitted to the Commission during the first privatisation process, interrupted in February 2002 by the incapacity of the preferred bidder to demonstrate its financial solidity.

114. With regard to the second privatisation process, the Greek Government informed the Commission, by letter of the Minister for Transport and Communications dated 22 February 2002, that the privatisation process was entering a new phase during which a plan for the reorganisation of OA would be implemented with a view to launching, within a few months, a viable new air carrier. At the same time, OA would cease all air carrier operations. All OA’s assets and subsidiaries would be sold within approximately two years. The privatisation plan and the detailed business plan for the new carrier were to be submitted to the Commission within the following weeks.

115. It is very clear from the documents submitted to the Commission by the Greek authorities that the purpose of the second process intended to privatise OA was to achieve the principal objective laid down in the 1998 decision, namely, to re‑establish the company’s viability. Those documents will thus need to be examined in order to determine whether they may be regarded as containing, even if only implicitly, a revised restructuring plan.

116. In their replies of 11 April 2002 to the Commission’s information request dated 6 March 2002, the Greek authorities pointed out that, since the summer of 2000, the restructuring effort for OA had been twofold, namely, the process aimed at privatising a majority stake in the company through which its long-term restructuring would be achieved and, in parallel, the rationalisation of its operations (in particular, through reductions in capacity and costs) in a way that would not jeopardise the ongoing privatisation process (points 2.7.5, 2.3.13 and 2.7.1). They explained that since the implementation of OA’s restructuring had been delayed by various internal and external factors, recourse to privatisation was intended to expedite the restructuring effort (point 1.6). They briefly indicated that the objectives of privatisation were, in particular, the following: New Olympic Airways (NOA) should operate solely as an airline; Athens International Airport, in Spata, would be NOA’s principal hub; NOA should have the necessary financial strength and the capacity to be financially viable in the long term; the exposure of the Hellenic Republic and the OA Group to any risks and liabilities which remain within the OA Group following its restructuring should be minimised and, finally, sale proceeds should be maximised (point 2.19.8).

117. In their replies of 11 April 2002, the Greek authorities pointed out, in particular, that privatisation of OA was not one of the conditions for the authorisation of the aid under consideration and that it represented an additional assurance for the Commission that the Greek Government was strongly committed to restructuring the company. They emphasised that privatisation constituted an essential element for the restructuring and the long-term viability of OA. Mr Verelis provided Ms Loyola de Palacio with the initial information in summer 2000 concerning the first privatisation process, which interrupted in February 2002 and was followed up at a meeting on 2 October 2000. Since then, the Greek Government’s privatisation advisory team have held a number of meetings with members of Ms Loyola de Palacio’s Cabinet and Commission officials to update that information, in particular since the publication of the request for an expression of interest in acquiring OA and the abovementioned information memorandum of 20 December 2000 (see paragraph 109 above), with a view to ensuring that the privatisation process would be approved by the Commission and, most importantly, that the restructuring objective would be met (points 2.19.3 to 2.19.7).

118. By letter of 16 July 2002, the Greek Government informed the Commission that the sale of Olympic Catering would be finalised by the end of the following month. It indicated that the privatisation of OA, its subsidiaries and its branches would be completed ‘by the end of [next] October’.

119. In their replies of 30 September 2002 to the second information request, dated 9 August 2002, the Greek authorities drew attention to the implementation of measures to cut costs and reduce services. In addition, they pointed out that the revival in financial and operational terms of OA in 2002 showed that the undertaking’s flying operations were viable in the long term once it could strengthen its own capital, in particular, through the privatisation process. They explained that privatisation had two objectives, namely, the immediate constitution of liquid assets through the sale of the group’s shares, shareholdings and branches, and the entry of private capital into the company. A report on the result of negotiations with potential investors was to be submitted before the end of October 2002. Finally, the Greek authorities informed the Commission that if that attempt failed, the flying operations would be separated from the group and given to an OA subsidiary, NOA. They explained that the preference for that solution was due to NOA’s healthy situation, which allowed it to borrow and to the fact that the new contracts of employment for NOA flight crews were in accordance with market conditions. They indicated that the NOA financial plan called for a bank loan secured by the company’s shares. In short, NOA had the following characteristics: a restructured and profitable network without any structurally loss-making routes; a homogeneous and more modern fleet, adapted to the restructured network; and labour agreements corresponding to market conditions.

120. In addition, as has already been pointed out (see paragraph 97 above), it can be seen from the minutes of the meeting of 16 October 2002 that the Greek Government’s legal advisers confirmed that the 1998 restructuring plan had not been up to date since 1999 and that reference should be made to the real and current figures in order to judge OA’s viability. However, no mention is made of a request to make a specific amendment to the 1998 restructuring plan, accompanied by a revised plan taking account of the ongoing privatisation process.

121. The documents which have just been considered above show only that the Commission was kept abreast of the progress of the privatisation process. It is clear in particular from those documents that the privatisation process was initiated by the Greek authorities as a measure complementary to the implementation of restructuring measures – in particular, cost-cutting and service reductions – which formed part of the measures already provided for in the 1998 restructuring plan. It follows from the 1998 decision that the purpose of the plan in question was precisely to re-establish OA’s viability through a reduction in operating costs achieved by a reorganisation of cost structures, an improvement in productivity and the reorganisation of the company. It is common ground that, as early as 1999, the plan had turned out to be incapable of ensuring OA’s viability, in particular because of the deterioration of the company’s financial situation. In that context, as may be seen from the abovementioned replies of 30 September 2002 to the second information request, the purpose of the reorganisation and privatisation of OA was inter alia, on the one hand, to create immediate additional liquidity by the sale, individually and separately, of non-essential assets and ancillary activities, so as to absorb OA’s debts, and, on the other, to regroup and privatise the majority of the flying operations carried out up to that time by OA and its subsidiaries, Macedonian Airlines and Olympic Aviation, so as to permit the reconstitution of the company’s own funds by means of an injection of capital into the future private airline.

122. In the abovementioned documents, however, the Greek authorities refrained from proposing a specific adaptation of the 1998 restructuring plan in a clear and precise manner. On the contrary, they merely suggested that the Commission abandon the 1998 restructuring plan, emphasising in particular the fact that the privatisation of OA – the detailed arrangements for which it intended to submit to the Commission for its approval (see paragraphs 110, 111, 114 and 117 in fine above) – confirmed the Hellenic Republic’s firm commitment to restructuring the company (see paragraphs 117 and 120 above). However, as has already been pointed out, in so far as the 1998 restructuring plan was binding, in particular, on the beneficiary undertaking, the Member State concerned could obtain amendment of it only by submitting a revised plan to the Commission for its approval (see paragraphs 89 to 93 above).

123. It must however be noted that the two Deloitte & Touche reports, sent by the Greek authorities to the Commission in November 2002, also did not contain any information which could be understood as a request to revise the 1998 restructuring plan, accompanied by a revised plan.

124. Although it is true that the Deloitte & Touche report, referred to above, on the limited review of OA’s performance as compared to its 2002 financial plan, transmitted to the Commission as an annex to the abovementioned letter of 13 November 2002, confirmed that there had been a relative improvement in OA’s operating results in 2002 compared to earlier years, the report did not contain any request to update the 1998 restructuring plan in regard, in particular, to the financial indicators and the estimated duration of the restructuring, so as to take account of that improvement and the effect of the ongoing privatisation process. That report expressly indicated that its sole objective was a limited review of OA’s estimated operating results, excluding Olympic Aviation and Macedonian Airlines, for the eight-month period from January to August 2002, prepared solely for the purpose of assisting OA’s management in its assessment of the reasonableness of the forecast financial results for 2002. It was pointed out that OA’s 2002 financial plan summarised the effects of a wide range of organisational, operational and commercial changes intended – amongst other factors – to control capacity, increase prices and, where possible, control costs (paragraph 2.1). In that report, the privatisation process which had begun in 2002 was mentioned only as background to the context in which the 2002 financial plan was developed. The report indicated in that regard that it was expected that the sale of non‑essential assets and the restructuring/privatisation of flying operations, to take place in parallel with the ongoing strategy of reducing capacity and costs while improving revenue and productivity would have produced more favourable financial results in 2002 than in previous years. It contained no projection of OA’s results for 2003 and 2004, during which the privatisation of the OA Group continued.

125. In the Deloitte & Touche report of 5 November 2002 on the restructuring and privatisation of OA, transmitted to the Commission as an annex to the letter of 21 November 2002, the Greek authorities merely developed some information previously supplied to that institution concerning the second privatisation process. That report, which referred neither to the 1998 restructuring plan nor to OA’s financial situation, contained a summary of the estimated results for the future airline NOA and estimated accounts for 2003, 2004 and 2005. However, it was not accompanied by the submission, announced in the letter of 22 February 2002 (see paragraph 114 above), of a real business plan for that new company. The report merely indicated that the objective of the privatisation effort was to set up a private airline based on the current OA Group, during 2003. The new approach consisted of restructuring the OA Group so as to bundle all flight operations and unbundle all other operations. The search for private investors was to be carried out separately for the various operations. NOA was to be a profitable airline, not burdened by the financial problems of the past. The private majority shareholder was to inject fresh equity capital into NOA and assume its management. The report called, in particular, for the acquisition from the OA Group of all assets required by the new airline at market prices (aircraft, brand, commercial relationships, slots at airports in the Community, buildings), and the engagement by NOA of OA Group staff on the basis of new competitive employment contracts. The Macedonian Airlines subsidiary was to serve as a platform for NOA. The new airline would operate a smaller and inherently profitable network. The report contains information on the routes to be served, the number of aircraft and the staff reductions to be carried out. The privatisation process itself was to be carried out in two phases: phase A, already under way, would be completed by the selection of a private investor and phase B consisted of negotiations with that investor. NOA would become operational (‘take off’) before the winter of 2003. With regard to operations other than flying operations, separate privatisation of the various subsidiaries were to be completed in June 2003 and privatisation of the business divisions in June 2004.

126. Examination of its content thus shows that the abovementioned report cannot be interpreted as containing an implicit request to make a specific amendment to the 1998 restructuring plan so as to take account of the reorganisation and privatisation of the OA Group. Even though that reorganisation and privatisation, intended to restore OA’s long-term viability within a reasonable time, necessarily implied an adaptation of the 1998 restructuring plan, the Greek authorities were required to propose in a clear and precise manner the specific adaptations that they wished not merely in regard to the additional restructuring measures intended to reduce costs and capacity but also the financial projections for the period covered by the revised plan. However, no forecast is made, either in the abovementioned report on the restructuring and privatisation of OA or in the other documents in the file, of the effect that the additional restructuring measures and privatisation were expected to have on OA’s financial indicators, as set out in the 1998 decision, and in particular on OA’s long-term viability, especially on its capacity to clear its debts and become financially independent (see paragraph 121 above). Essentially, the abovementioned report contains only a reference to the sale of Olympic Catering for EUR 16 million and a calendar of the probable dates for the sale of the other subsidiaries and business divisions, to be carried out in two phases, the second of which was to be completed in June 2004.

127. Consequently, the report of 5 November 2002 on the restructuring and privatisation of OA, completed by the additional information, mentioned above, provided to the Commission during the administrative procedure, may not be regarded as implicitly containing a revised restructuring plan. In all of those documents, the emphasis is on the viability of the proposed new airline, NOA, which was to be free of all debt, and there is no other specific and precise indication as to particular measures intended to remedy the problems specific to OA (see, to that effect, BFM and EFIM v Commission , cited above at paragraph 65, paragraph 88).

128. Moreover, in the absence of sufficiently precise information concerning the privatisation process itself, the abovementioned report may also not be regarded as containing a request to approve a detailed privatisation plan, notification of which had also been announced to the Commission by letter of 22 February 2002 (see paragraphs 114 and 122 above). Under those circumstances, and bearing in mind that review of the detailed arrangements for the privatisation of OA is different from review of the implementation of the restructuring aid under consideration, the Court notes that the information concerning solely the process for privatising OA contained in the abovementioned report on the restructuring and privatisation of that company may also not be regarded as containing a specific request to revise the 1998 restructuring plan, extending the restructuring period so as to take into account the expected results of the reorganisation and privatisation of OA, intended to re-establish the long-term viability of the company, inasmuch as the detailed arrangements for privatisation had not yet themselves been clearly defined.

129. In that context, the information provided to the Commission by the Greek Government in a letter dated 2 December 2002 that six candidates which had provided proof of their financial strength had expressed an interest in acquiring OA, and that a preferred bidder would be selected within a few days with a view to concluding negotiations within a short period of time, also cannot be understood as containing an implicit request to make a specific amendment to the 1998 restructuring plan.

130. For all of those reasons, the letters, information and documents transmitted to the Commission cannot be regarded as implicitly containing a request to update the 1998 restructuring plan, accompanied by a revised plan, as required by the abovementioned provisions o f the Treaty and the Guidelines (see paragraphs 90 and 91 above).

131. It follows from the above considerations that the applicant has not shown that the Commission had made an error of assessment in concluding, in the contested decision (recital 173), that no new request for a specific amendment to the restructuring plan had been submitted to it during the administrative procedure, following the abandonment of the Speedwing plan, and in considering the compatibility of the aid under consideration with the 1998 restructuring plan.

132. It should be added that it cannot be seen from the file, and the applicant does not claim, that the Greek authorities suggested to the Commission, following transmission to it of the Deloitte & Touche reports in November 2002, that they would shortly thereafter submit to that institution an updated restructuring plan, complementary to those reports.

133. Under those circumstances, it cannot be concluded that the Commission exceeded its discretion by adopting the contested decision, on 11 December 2002, on the basis of a restructuring plan which had not been updated.

134. For all of those reasons, the pleas alleging an error of fact and a manifest error of assessment must be dismissed as unfounded.

2. The alleged infringement of Article 87(3)(c) EC and manifest error of assessment

(a) Arguments of the parties

135. The applicant considers that the Commission did not adequately consider whether the aid at issue, approved in 1998, could be regarded as compatible with the common market under Article 87(3)(c) EC.

136. It alleges that the Commission should have based itself on the restructuring plan as submitted on 11 December 2002, taking account of the probability of privatisation, cost-cutting measures and the improvement of operating results in 2002, in which case it would have concluded that the aid approved in 1998 could once again be approved.

137. The applicant claims that the four conditions for the approval of restructuring aid set out in the Guidelines (point 3.2.2) were fulfilled in this case, contrary to the Commission’s conclusions in the contested decision (recitals 182 to 185).

138. First of all, with regard to the condition concerning viability, the applicant contests, in particular, the Commission’s analysis (recitals 103 to 117 in the contested decision) that OA’s operating results remained weak. That analysis ignores the assessments made in the abovementioned Deloitte & Touche report on the limited review of OA’s performance as compared to its 2002 financial plan. According to that report (page 16), ‘there has been a remarkable improvement in the “Ebitda” [earnings before interests, taxes and depreciation of assets] evolution since 1999 and despite a very negative climate in the aviation industry as a whole’, and ‘[t]his implies that the OA operational performance … is heading toward the right direction’. The report states in that regard (page 18) that, based on the most likely scenario for 2002, OA would make a small operating loss of EUR 39.1 million. When that figure is compared to the estimated loss for 2001 of EUR 148.75 million, it represents, according to the report, a transformation of the company which is all the more remarkable when the effect of the EUR 26.5 million in additional charges at Athens International Airport (AIA) is taken into account. The applicant points out that that improvement is all the more obvious when account is taken of the various factors which pushed down the earnings of most of the major European airlines in the 1998 to 2002 period. In particular, the entire sector was faced with a drop in European demand from 1998, especially after 11 September 2001.

139. In