Athens News Agency: News in English, 05-12-08

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

CONTENTS

[01] PPC barred from power station tender, minister confirms

[02] EU Commission to probe state aid to ELBO

[01] PPC barred from power station tender, minister confirms

Speaking at the 10th National Energy Conference "Energy and Development 2005" organised by Southeast Europe Energy Institute, Sioufas pointed out that the ban had also been imposed by the previous government and was necessary, otherwise Greece faced legal action from the EU.

He denied that the PPC was barred from the construction of new power units in general, saying that there was nothing preventing the power utility from building new lignite plants in Drama or Elassona where there were lignite deposits, provided it met the legal requirements.

Sioufas said that the terms of the tender for 900MW power stations will be made public and that a draft bill setting up a National Council for Energy Strategy will be tabled in Parliament next week.

The minister stressed that the priorities in energy policy were to deregulate the markets and build infrastructure that will make Greece an energy junction, while reducing dependence on oil and enhancing energy savings.

The conference was also addressed by main opposition PASOK MP Yiannos Papantoniou, a former finance minister, who stressed that he was a "fanatical supporter" of deregulating markets. He criticised the government's handling of the PPC, however, noting that under the previous PASOK government it had been highly profitable and was now caught up in a storm of scandal-mongering and disputes among its top management.

[02] EU Commission to probe state aid to ELBO

The investigation will examine the impact of a government decision in 1999 to write off the company's debts to the public sector, which came to 3.5 million end had accumulated between 1988 and 1998.

According to Greece, this assistance only favoured ELBO's military production and thus falls under articles in EC treaties that allow derogations from the general ban on state aid for reasons that are directly linked with essential interests of national security.

This claim is disputed by the Commission, however, which questions whether the debt write-off can have exclusively favoured the company's activities on behalf of the military and asserts that the civilian production also benefited as a result.

?The EC Treaty ensures that Member States can protect their legitimate national security interests. But this safeguard cannot be used as a pretext for granting illegal state aid to civilian activities. We have to examine such cases with care in order to prevent distortions of competition on markets for civilian products? Competition Commissioner Neelie Kroes said.

ELBO is the main supplier of motor vehicles to the Greek army, with around 750 employees and an annual turnover of about â¬150 million. In addition to military vehicles, such as tanks and armoured vehicles, ELBO produces civilian vehicles and products that can be used for military as well as civilian purposes, such as jeeps and spare parts. In 1999, when the aid measure was adopted, ELVOâs civilian production constituted a substantial part of its total turnover.

The Commission claims that Greece has failed to provide arguments supporting its claim that the aid favoured military production only and the Commission has therefore concluded that only part of the aid falls under the scope of national security articles, while the rest has to be examined under state aid rules.

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