The European Commission appears to be fed up with the Greek government's attitude toward its flag carrier and a European Court of Justice ruling regarding the recovery of illegal state aid to Olympic Airways.

The EC announced yesterday that it has decided to refer Greece to the ECJ for failure to comply with its September 2005 decision, which required the country to quantify and recover all unlawfully granted aid to Olympic Airways and its successor Olympic Airlines since December 2002. According to the EC's calculations, the aid in question amounted to approximately ?540 million ($669.2 million).

The court also required Greece immediately to suspend all further aid to Olympic and gave it two months to inform the EC of the steps taken to comply. "Nevertheless, at this stage, the exact amount to be recovered has not been determined yet. No recovery has taken place, and Greece has not demonstrated that it is has suspended all payments of new illegal aid," the Brussels-based Commission said in a statement.

The dispute goes all the way back to December 2002, when the EC asked Greece to recover an initial ?161 million of illegal aid. The ECJ ruled in May 2005 that Greece was not compliant, forcing the Commission to send a "reasoned opinion" three weeks ago warning the government that it had two months to comply or the EC would refer the case back to the court and seek financial penalties (ATWOnline, April 5).

In a separate decision, the EC ordered Greece to recover ?2.8 million of aid granted to Olympic that compensated the carrier for the cancellation of flights to the US, Canada and Israel after Sept. 14, 2001. In line with established precedent, the Commission allowed compensation of ?2 million for losses resulting from airspace closures in those countries between Sept. 11 and Sept. 14. It also told Greece to recover around ?140,000 paid to Aegean Airlines, since the government did not supply documents detailing the reason for the aid.