Athens News Agency: News in English, 05-09-14

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From: The Athens News Agency at <http://www.ana.gr/>

CONTENTS

[01] First protest rally by OA staff greets Commission ruling over illegal subsidies

[02] EU fails to finalise counter-declaration to Turkey

[03] Govt to discuss Olympic Airways' future on Thursday

[04] UN must strengthen its role as peacekeeper, PM says

[05] Commission says Greece granted illegal aid to Olympic Airways

[06] Greek FinMin presents National Reform Programme for 2005-08

[07] Mikis Theodorakis to receive int'l music prize

[01] First protest rally by OA staff greets Commission ruling over illegal subsidies

Around 2,500 employees took part in the protest accompanied by Communist Party leader Aleka Papariga, GSEE - Greece's largest trade union umbrella - president Christos Polyzogopoulos and representatives of the Coalition of the Left party.

OA, in a press announcement, publicly thanked passengers for their "massive support" of the company, saying that after an initial reluctance and some reservation cancellations in the previous days, an astonishing number of reservations throughout its sales network, particularly abroad, has emerged.

Olympic Air Services SA said it was continuing normal operations in ground services, cargo and technical maintenance of aircraft.

EU Commissioner Jacques Barrot, speaking to reporters in Brussels, said the Commission's decision on Olympic Airways and Olympic Airlines "was clearing the landscape of air transport in the Greek market".

The Commissioner sounded optimistic over future developments saying "there is room for one or more airline companies in the Greek skies" adding that Greece was one of the significant spots in international air transport.

He expressed his belief that the Greek government has the will to deal with long-term problems, saying that Prime Minister Costas Karamanlis recently referred to the need of reforming Olympic Airways' operations.

The Commissioner stressed that the final amount, to be repaid by Olympic Airways to the Greek State would be determined after consultations between Greek and community agencies.

"What I can say is that there is an amount of some several hundred million euros and nothing more," Barrot told reporters.

He was adamant that the Commission would not allow the Greek state to continue offering financial aid to Olympic Airways in a way contrary to community legislation. Replying to questions over whether a new state airline company could begin operating in Greece, the Commissioner said it was a matter for the European Commission. The EU' executive's responsibility was to ensure that healthy competition rules were followed in member-states, both by state or private enterprises in the airline sector.

[02] EU fails to finalise counter-declaration to Turkey

The next COREPER meeting will most likely be held on September 21, he said, at which time negotiations regarding the counter-statement will resume.

The counter-statement will be made in response to Ankara's unilateral declaration on July 29 that it refuses to recognise the Cyprus Republic, an EU member-state, and that its ports and airports will remain closed to Cypriot ships and planes.

The European Commission found that Olympic Airlines is the successor company to Olympic Airways and has therefore received substantial state aid. Olympic Airlines was created in December 2003 as part of a restructuring programme for the national carrier and took over all flight operations that were previously carried out within the Olympic Airways Group by Olympic Airways, Olympic Aviation and Olympic Macedonian, as well as taking over the slots, traffic rights and public service obligations of Olympic Airways. All other activities - principally groundhandling, maintenance and engineering - remained within Olympic Airways (which has been renamed Olympic Air Services). The latter retained ownership of a number of majority shareholdings in other aviation-related companies in Greece, such as catering, information technology and fuel services.

[03] Govt to discuss Olympic Airways' future on Thursday

The government spokesman noted that the government faced the problem as soon as it took over in March 2004 but it decided to smoothly complete the Athens 2004 Olympic Games before taking any drastic moves to deal with the situation.

[04] UN must strengthen its role as peacekeeper, PM says

According to Karamanlis, virtuous governance, a just state, solid democratic institutions, respect of human rights, development aid, reform and democratisation of the security sector are the key elements in addressing existing conflicts.

As for the fight against terrorism, the premier said that human rights and basic civil liberties cannot be undermined in the process.

Karamanlis stressed that poverty, epidemics, environmental pollution, weapons of mass destruction, and organised crime are emerging as the new threat to world peace and security. These, he said, demand a stronger UN and comprehensive strategies.

He called on regional organisations to operate effectively and emphasised the need for international treaties to be respected.

The premier had the opportunity to attend the meeting since Greece is a non-permanent Security Council member for the period 2005-2006.

[05] Commission says Greece granted illegal aid to Olympic Airways

Illegal aid includes:

â¬40 million from the Greek State and Olympic Airways to cover part of the costs to Olympic Airlines of leasing aircraft;

an unjustified payment of some â¬90 million from the Greek State to Olympic Airways when Olympic Airlines was set up and transferred to the State, achieved by overvaluing the assets transferred to the State;

the Greek Stateâs toleration of Olympic Airwaysâ failure to pay more than â¬350 million in tax and social security liabilities due between December 2002 and December 2004;

the assumption by the Greek State of a number of Olympic Airwaysâ financial obligations, e.g. in connection with aircraft leasing contracts and the repayment of a bank loan, amounting to up to â¬60 million.

The exact amount to be recovered by the Greek state will be defined during the execution of today's decision.

By granting this aid, Greece has given Olympic Airways and Olympic Airlines an advantage not available to their competitors. The Commission therefore asked Greece to recover the illegal aid payments. Greece has two months in which to inform the Commission of the measures it intends to take to comply with the decision.

On 11 December 2002 the Commission took a final decision ruling that aid granted to Olympic Airways was illegal, and asked Greece to recover â¬160 million. At the end of 2003 Greece adopted a specific law setting up a new company, Olympic Airlines, which took over the flight operations and most of the assets of Olympic Airways, leaving behind almost all of its debts. The creation of this new company, contrary to standard economic and accounting practice, would have had the effect of circumventing the obligation to recover the aid, as the Court found in its judgment of 12 May 2005.

When it opened its investigation in March 2004, the Commission expressed doubts about the compatibility with the Treaty of the continuing non-payment by Olympic Airways of tax and social security liabilities and about the way in which Olympic Airlines was established in late 2003.

In effect, what appears to have happened in December 2003 is that all flight operations that were previously carried out within the Olympic Airways Group by Olympic Airways, Olympic Aviation and Olympic Macedonian were concentrated in a new entity renamed Olympic Airlines. Olympic Airlines also took over the slots, traffic rights and public service obligations of Olympic Airways. All other activities - principally groundhandling, maintenance and engineering - remained within Olympic Airways (which has been renamed Olympic Air Services). The latter retained ownership of a number of majority shareholdings in other aviation-related companies in Greece such as catering, information technology and fuel services.

The Commission has therefore found that Olympic Airlines is a successor company to Olympic Airways and that since its creation it has received substantial State aid. Olympic Airlines leases aircraft either from Olympic Airways or directly from the Greek State and pays significantly less than the head-lease payments, the resultant losses being borne by the State or by Olympic Airways at the Stateâs behest. The Commission has also found that by overvaluing the assets transferred to Olympic Airlines and by using this valuation as the basis of a âcash pre-paymentâ to Olympic Airways, Greece has granted illegal and incompatible aid.

The Commission has found that the Greek State has also granted State aid to Olympic Airways. The most important part of this aid has been its continued forbearance in relation to the companyâs tax and social security liabilities.

These new aid payments constitute a violation of the ?one time, last time? principle, as the company had already benefited from restructuring aid in the past, the EU Commission said.

[06] Greek FinMin presents National Reform Programme for 2005-08

The draft plan was presented to the public so that all interested parties would express their reaction and after a debate in parliament to be submitted by October 15 with the European Commission.

The programme includes all actions needed to achieve Lisbon targets, aimed to transform the EU into the most competitive economy in the world.

Analytically, the draft plan envisages the deregulation of energy markets, improving the country's business environment, telecommunications market, transportation, deepening of internal market, knowledge society, investing in human capital, protecting the environment and others.

The draft plan of a National Reform Programme is the compass to the future, Alogoskoufis said. "It guarantees that Greek economy is changing course and efficiently uses opportunities lying ahead," the Greek minister said.

[07] Mikis Theodorakis to receive int'l music prize

"His constant struggles for freedom, social justice and human dignity rise above national boundaries and become a legacy for all humanity," Karamanlis concluded.

Theodorakis, who turned 80 this year, will receive his prize during a special ceremony on November 4, in Aachen, Germany.

The prize includes a diploma, a cash award and a UNESCO medal.

Past recipients of the IMC Music Prize inlcude Dimitri Shostakovich, Leonard Bernstein, Yehudi Menuhin, Herbert von Karajan, Cesaria Evora, Benny Goodman and Mercedes Sosa, among others.

The IMC UNESCO International Music Prize was initiated in 1975 by Menuhin. It honours musicians or musical institutions whose activities have contributed to the enrichment and development of music and have served peace, understanding between peoples, international cooperation and other purposes proclaimed by the United Nations Charter and UNESCO's Constitution.

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