Greece breached EU state aid rules with Larco General Mining and Metallurgical Company

The European Union‘s executive is referring Greece to the bloc‘s top court for failing to recoup millions of euros in support granted to a mining company earmarked for privatization as part of the country‘s bailout programmes.

Monday‘s decision comes amid drawn-out negotiations between Athens and its international creditors on the way forward for its latest rescue package. It has been four months since the cash-strapped country received its last aid disbursement.

In March 2014, the European Commission found that capital injections and guarantees from the state had given the Larco General Mining and Metallurgical Company an undue advantage over its competitors, in breach of EU state aid rules.

Larco should pay back the support – valued at 136 million euros (152,6 million dollars) – plus interest, the commission said at the time. The normal deadline to do so is four months.

But more than two years later, the decision has not yet been implemented, the commission said Monday. It said it was referring the matter to the European Court of Justice, along with another case in which Athens had failed to recoup illegal state aid.

The second case relates to United Textiles, one of Greece‘s largest textile producers, the commission said.

In February 2012, it had found that state guarantees and help with social insurance obligations had given United Textiles an “undue advantage without restoring its long-term viability,” thus going against EU state aid rules.

Greece was ordered at the time to recover around 37 million euros from the company.

Months later, United Textiles went into bankruptcy procedures. But in December, Athens decided it would seek to reactivate the company‘s activities, without having recovered the illegal state aid, the commission found.

Source: Europeonline magazine