2003/262/EC: Commission decision of 27 November 2002 on the premium scheme for tour operators in Greece (Text with EEA relevance.) (notified under document number C(2002) 4488)
Date: 2002-11-27
Institutions: European Commission
Subjects: Greece, State aid, control of State aid, infringement of EU law, travel, travel agency

24.4.2003

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Official Journal of the European Union

L 103/63

COMMISSION DECISION

of 27 November 2002

on the premium scheme for tour operators in Greece

(notified under document number C(2002) 4488)

(Only the Greek text is authentic)

(Text with EEA relevance)

(2003/262/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Com-
munity, and in particular the first subparagraph of Article 88(2)
thereof,

Having regard to the Agreement on the European Economic
Area, and in particular Article 62(1)(a) thereof,

Having called on interested parties to submit their comments
pursuant to the provisions cited above (1),

Whereas:

I. PROCEDURE

(1)

(2)

By letter of 26 September 2001, received by the
Commission on 1 October 2001, the German Ministry
of Finance made inquiries regarding what appeared to
be a premium scheme for tour operators applying in
Greece. More specifically, the German authorities asked
the Commission whether the scheme, if any, comprised
a State aid element, and if so whether Greece had
notified it.

By letter D/54388 of 24 October 2001 to the Greek
Permanent Representation, the Commission requested
information on the premium scheme to enable it to
assess its compatibility with the State aid rules. The
Greek authorities responded to that request by letter
dated 21 November 2001 from the Greek Permanent
Representation, received by the Commission on 27 No-
vember 2001, and at a bilateral meeting on 11 February
2002. The information supplied by the Greek authorities

indicated that the scheme had been put into effect before
the Commission had taken any decision on it, and the
scheme was accordingly entered in the register of
unnotified aid measures.

(3)

(4)

(5)

By letter SG(2002) D/229610 of 26 April 2002, the
Commission informed Greece that it had studied the
information supplied by the Greek authorities, and that
in accordance with Articles 87 and 88 of the EC Treaty
and Articles 61 and 62 of the EEA Agreement it
had decided to initiate the procedure laid down in
Article 88(2) of the Treaty. The Commission asked
Greece to submit its comments and to supply any
information that might be relevant to an assessment of
the measure within one month of the date of reception
of the Commission’s letter.

The Commission’s decision to initiate the formal investi-
gation procedure in respect of
the scheme was
announced in the Official Journal of the European Com-
munities (2). The notice asked interested parties to submit
their comments to the Commission within one month
of the date of publication.

By letter of 7 June 2002 from the Greek Permanent
Representation, received by the Commission on 13 June
2002,
the Greek authorities submitted their obser-
vations.

(6)

The Commission did not receive comments from any
other interested parties.

II. DESCRIPTION OF THE MEASURE

(7)

The scheme was put into effect by Decision No 503820/
18-10-01 of the Chairman of the Greek Tourist Office
(EOT); it provides that tour operators bringing foreign
tourists to Greece in the periods from mid-October to

( 1) OJ C 129, 31.5.2002, p. 13.

(2) See footnote 1.

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the end of November and from the beginning of March
to mid-April of each year are to receive a premium of
EUR 40 per tourist. The scheme was announced by
means of calls for expressions of interest on markets
of
relevance to Greek tourism, and applies from
autumn 2001 until spring 2004. It may be extended to
cover the whole of the low season if it is found that that
would be justified by the number of tourists carried in
winter.

gain an indirect advantage as a result of the granting of
the premiums, in the form of an increase in demand.
The Commission accordingly took the initial view that
such premiums might strengthen the financial position
and scope for action of businesses in the tourism
industry in Greece in relation to competitors not benefit-
ing under the measure.

(8)

(9)

The Greek authorities stated that
the scheme was
intended to make up for the seasonal nature of tourist
demand for destinations in Greece, and to increase the
number of tourists arriving in off-peak periods. They
took the view that the scheme would reduce the prices
charged to consumers, and therefore that it did not
comprise aid to tour operators. The Greek authorities
nevertheless stated that no premiums had yet been paid.

In view of the characteristics of the scheme in question,
the Commission in the first place observed that any
advantages to recipient firms could be considered at two
levels: that of the tour operators themselves, and that of
businesses in the tourism industry in Greece.

(10) As far as tour operators were concerned, the Com-
mission noted that there was no guarantee that all tour
operators would be eligible for the premiums, or that
premiums would be granted irrespective of the means
of transport used. The scheme seemed to be addressed
exclusively to package tour operators who offered
organised tours on certain markets which were con-
sidered to present an interest. There was no provision
for agreement between the responsible authorities and
the tour operators concerned, so that there did not seem
to be any guarantee either that the premium would
result in an equivalent reduction in the prices charged to
tourists. But it could not be ruled out that the scheme
would confer direct
financial advantages on certain
firms.

(12) On that basis, and in view of the fact that the aid would
be continuing and would result in a reduction in the
current expenditure of firms, the Commission took the
initial view that the aid had to be regarded as operating
aid. The Guidelines on national regional aid (‘the Guide-
lines’) state that ‘Regional aid aimed at reducing firms’
current expenses (operating aid) is normally prohibited.
Exceptionally, however, such aid may be granted in
regions eligible under the derogation in Article 87(3)(a)
of the Treaty provided that it is justified in terms of its
contribution to regional development and its nature and
its level
is proportional to the handicaps it seeks to
alleviate. It is for the Member State to demonstrate the
existence of any handicaps and gauge their importance.
Operating aid must be limited in time and progressively
reduced’ (point 4.15 of the Guidelines) (4).

(13) The Commission took the view that the Greek auth-
orities had not supplied any information that would
allow it to conclude that the premiums for tour operators
were justified in terms of their contribution to regional
development and their nature, or that the level of the aid
was proportional to the handicaps it sought to alleviate.
Similarly,
it appeared difficult to conclude that the
scheme complied with the requirement that operating
aid be gradually reduced. The Commission also noted
that, in the event that part of the premiums granted
were to be retained by tour operators, and some of those
tour operators were outside Greece, the effect might be
that aid was being granted in regions not eligible for
exemption under Article 87(3)(a) of the Treaty. The
Commission was therefore unable at
that stage to
conclude that the premium scheme for tour operators
was compatible with the relevant provisions of the
Guidelines; the Commission consequently had to doubt
whether the scheme was compatible with the Treaty.

(11) Turning to businesses in the tourism industry in Greece,
the Commission noted that, as it had emphasised in
Decision 1999/99/EC concerning Sicilian Regional Law
No 25/93 on measures to promote employment (3),
businesses in the tourism industry would in any event

(14) The Commission also questioned the compatibility of
the scheme with the general ban on export aid, which
the
was spelt out and repeated in point 4.17 of

( 3) OJ L 32, 5.2.1999, p. 18.

(4) OJ C 74, 10.3.1998, p. 9; amendments OJ C 258, 9.9.2000, p. 5.

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Guidelines. The premiums were granted to tour oper-
ators who directly or indirectly, depending on the
type of package, offered products supplied by tourist
enterprises in Greece, chiefly hotels and restaurants, on
the international market. The measure was expected to
increase the number of tourists, and hence the income
of businesses in the tourism industry, and it therefore
could not be ruled out at that stage that its implemen-
tation might involve aid to intermediaries operating in
distribution, in this case tour operators, in proportion to
their results in the export of a particular product, in this
case tourism products.

III. OBSERVATIONS SUBMITTED BY THE GREEK
AUTHORITIES

(15)

tourist demand, and that

In the observations they have submitted in the formal
inquiry procedure, the Greek authorities begin by stress-
ing that Greece, although it is highly developed in terms
of tourism, has not yet succeeded in diluting the entirely
seasonal character of
its
dependence on tour operators is greater than that of
other European competitors, especially because of the
distance that separates Greece from its main markets.
According to the Greek authorities, this explains why
steps to attract demand outside the tourist period were
included in the Operational Programme for Competi-
tiveness which was approved by the Commission for the
period 2000 to 2006.

(16) The Greek authorities say that they did not believe that
the premium scheme for tour operators could comprise
a State aid component, which is why they did not notify
it to the Commission.

The adoption of a system of this kind was absolutely
necessary in response to the competition from non-
Community countries in the Mediterranean area, which
were financing European tour operators to enable them
to offer tourist packages at more advantageous prices.

of the means of transport used (on this point the Greek
authorities also take the view that the reduction in the
prices of tourist packages would be to the benefit of
consumers, because they could be guided to new
destinations only by offering very low prices).

(17) Although they are convinced that a scheme of this kind
is the only solution that would allow them to achieve
their objectives, the Greek authorities in any event state
that no premiums have yet been paid over: the debts
towards tour operators that have been incurred in
the meantime will be paid in accordance with the
requirements of Commission Regulation (EC) No 69/
2001 of 12 January 2001 on the application of
Articles 87 and 88 of the EC Treaty to de minimis aid (5).

IV. ASSESSMENT

(18) As required by the formal inquiry procedure, the Com-
mission has examined the observations submitted by the
Greek authorities.

(19) As regards the nature of the scheme under consideration,
the Commission takes the view that the premiums
constitute State aid for purposes of Article 87(1) of the
EC Treaty and Article 61(1) of the EEA Agreement. They
are granted out of State resources, are available only in a
particular industry, and confer a selective advantage on
firms in the tourism industry by reducing the expenses
they would otherwise have to bear themselves; and, as
the tourism industry is open to international compe-
tition, they may affect trade between Member States and
threaten to distort competition by favouring certain
undertakings.

(20) The Commission would point out that all the decisions
approving Community intervention under the Structural
Funds contain a saving clause referring to State aid. The
approval of an operational programme does not release
Member States from their obligations in this respect. In
addition, the Commission, by letter of 16 July 2001,
expressly drew the attention of the Greek authorities to
the need to ensure compliance with the competition
rules when approving and applying measures to reduce
the seasonal character of tourism (measure 5.3 in the
Operational Programme for Competitiveness).

Again according to the Greek authorities, the scheme
does not favour certain undertakings in particular, as all
tour operators that meet the requirements for eligibility
laid down by the scheme are entitled to the premiums
automatically, and the premiums are granted irrespective

(5) OJ L 10, 13.1.2001, p. 30.

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Even if, as the Greek authorities contend, there is a
danger that
tourist preferences may be channelled
towards non-Community countries if no countervailing
measures are taken by the Member States most affected
by international competition, the fact remains that any
aid granted by a Member State in the tourism industry
may affect trade between Member States. The premiums
at issue here would have the effect of influencing the
choices made by tourists, encouraging them to favour
Greece as a holiday destination, so that Community
tourist flows would be altered.

(23)

The lack of any distinction between different types of
tour operator does not prevent the measure from being
directed at a particular industry, or deprive it of its
selective character. In addition, as there is no provision
for agreement on this point between the responsible
authorities and the tour operators concerned, there can
be no guarantee that the granting of premiums will in
fact lead to a corresponding reduction in the prices
tourists are asked to pay.
It cannot be ruled out,
therefore, that the scheme may confer direct financial
advantages on certain undertakings.

is compatible with the common market under the
exemption provision in Article 87(3)(a) of the Treaty.

to

granted

individual

Similarly, the Commission cannot consider the aid as
qualifying for any other exemption provided for in the
Treaty. As the premiums constitute operating aid, they
cannot be considered aid to facilitate the development
of certain economic activities or of certain economic
areas which does not adversely affect trading conditions
to an extent that is contrary to the common interest
(Article 87(3)(c)). The aid is not aid having a social
character,
consumers
(Article 87(2)(a)); it is not aid to make good the damage
caused by natural disasters or exceptional occurrences
(Article 87(2)(b)); it is not aid granted to the economy of
certain areas of the Federal Republic of Germany affected
by the division of Germany (Article 87(2)(c)); it is not
aid to promote the execution of an important project of
common European interest or to remedy a serious
disturbance in the economy of a Member State
(Article 87(3)(b)); it is not aid to promote culture and
heritage conservation (Article 87(3)(d)); and it does not
fall
into any other category of aid specified by the
Council (Article 87(3)(e)).

(21)

that

the premiums

In these circumstances, and taking account of the fact
that the aid would be continuing and would result in a
reduction in the current expenses of firms, the Com-
constitute
mission considers
operating aid; and even if it is granted in a region which
until the end of 2006 is eligible in its entirety for the
exemption in Article 87(3)(a) of the Treaty, operating
aid nevertheless cannot be authorised unless the tests
laid down in the Guidelines are satisfied. Specifically, it
must be justified in terms of its contribution to regional
development and its nature and its level must be
proportional to the handicaps it seeks to alleviate. It
must also be limited in time and must be progressively
reduced.

(22) The Greek authorities have not supplied the Commission
with fresh information relevant to an assessment of the
appropriateness of the aid in terms of its contribution to
regional development, especially in order to show that
the aid is proportional to the defined handicaps, and
that it will be progressively reduced, and they have not
commented on the doubts expressed by the Com-
mission, when it initiated the procedure, regarding the
effects of the premium scheme on businesses in the
tourism industry, and regarding the possibility that aid
might be granted to regions not eligible for exemption
under Article 87(3)(a) of the Treaty; the Commission is
therefore still unable to conclude that the aid satisfies
the tests of point 4.15 of the Guidelines. Consequently,
the Commission cannot take the view that the aid

(24)

the Commission nevertheless notes that no
Lastly,
premiums have yet been paid out, and that the Greek
authorities have undertaken to grant the aid in accord-
ance with the requirements of Regulation (EC) No 69/
2001. In addition, the aid scheme can have only indirect
effects spread over the whole of the Greek tourism
industry, so that it can be concluded that is not directly
linked to quantities exported; and in these circumstances
the Commission takes the view that there are no grounds
to apply Article 14 of Council Regulation (EC) No 659/
1999 of 22 March 1999 laying down detailed rules for
the application of Article 93 of the EC Treaty, which
provides that aid unlawfully granted may be recovered
from the recipient (6).

V. CONCLUSION

(25) The Commission finds that Greece has put the premium
scheme for tour operators into effect unlawfully, in
breach of Article 88(3) of the Treaty. On the basis of the
assessment set out above, and having considered the aid
in the light of the Guidelines on national regional aid,
the Commission considers that the aid does not meet
the requirements for compatibility with the common
market,

(6) OJ L 83, 27.3.1999, p. 1.

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HAS ADOPTED THIS DECISION:

Article 3

Article 1

The premium scheme for tour operators put into effect by
Decision No 503820 of 18 October 2001 of the Chairman of
the Greek Tourist Office (EOT)
is incompatible with the
common market.

Article 2

Greece shall inform the Commission, within two months of
notification of this Decision, of the measures taken to comply
with it.

Article 4

Greece shall withdraw the scheme referred to in Article 1.

This Decision is addressed to the Hellenic Republic.

Done at Brussels, 27 November 2002.

For the Commission

Mario MONTI

Member of the Commission