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Court of Justice: Greece failed to fulfil its obligations in a judgment delivered in 2017

Christian Fernsby |
Greece is ordered to make a lump sum payment of €5 500 000 and periodic penalty payments of over €4 000 000 for every six months’ delay for failure to recover State aid granted to Larco.

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Topics: GREECE   

Larco General Mining & Metallurgical Company SA is a Greek mining and metallurgical undertaking specialising in the extraction and processing of laterite ore, the extraction of lignite and the production of ferronickel.

In March 2013, the Commission initiated a formal investigation procedure in respect of various amounts of aid granted by Greece to Larco, in particular State guarantees granted for the years 2008, 2010 and 2011, as well as a capital increase in 2009. In March 2014, the Commission decided that that aid was unlawful and incompatible with the internal market, and was to

e recovered.

In the interim, Greece had informed the Commission of its intention to sell certain assets of Larco through two separate calls for tender. Following the two tendering procedures and irrespective of their outcomes, Larco would be put in bankruptcy in accordance with national legislation, and its remaining assets would be sold as part of the liquidation procedure.

The Commission considered, first, that that sale did not constitute State aid and, second, that the recovery of the State aid in question would not be transferred to the new owners of those assets.

Taking the view that Greece had failed to comply with its obligations pursuant to the 2014 Decision, in 2016 the Commission brought an initial action before the Court of Justice against that Member State for failure to fulfil obligations. By judgment of 9 November 2017, 2 the Court declared that Greece had failed to fulfil its obligations to recover unlawful and incompatible State aid.

Considering that Greece had still not complied with that judgment, the Commission brought the present action for failure to fulfil obligations on 29 January 2020. In this second action, it requested that the Court order that Member State to pay a lump sum and a periodic penalty payment.

In the present case, the Court points out that Greece adopted measures for the recovery of the State aid in question only after 29 January 2020, the date on which the present action was brought. Larco was put under special administration in February 2020, that is, almost a year after the expiry of the time limit prescribed by the Commission.

Accordingly, the Court orders Greece to pay to the European Union budget a lump sum of €5 500 000 and a penalty payment of €4 368 000 per six months’ delay in applying the measures necessary to comply with the 2017 judgment, as from January 20, 2022.


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