News from Europe

28 July 2016

State aid: Commission refers Greece to Court for failure to recover incompatible state aid from Hellenic Shipyards

The Commission has decided to refer Greece to the European Court of Justice because it failed to comply with a 2008 Commission decision ordering the recovery of unlawful aid to Hellenic Shipyards. This follows a 2012 ruling by the Court condemning Greece for its failure to implement the decision.

More than seven years after its adoption, Greece still has not implemented the Commission decision of June 2008, ordering the recovery of over €250 million of unlawful state aid to Hellenic Shipyards. The Commission has now requested the Court of Justice to impose on Greece a lump sum penalty of about €6 million. The Commission has also requested that the Court impose a daily penalty of €34,974 from the day of its judgment until the date Greece brings the infringement to an end. The implementation of the 2008 decision will remove the unfair advantage received by Hellenic Shipyards, in breach of EU state aid rules, and aims to restore the level playing field in the market. In its 28 June 2012 ruling (case C-485/10) the Court confirmed that Greece had failed to implement the Commission's 2008 decision. The Court further concluded that a letter the Commission sent to Greece on 1 December 2010 has also not been implemented. This letter accepted a number of commitments from Greece as a way to implement the Commission's 2008 decision.


The Court of Justice had dismissed, upon appeal, the actions for annulment brought by Hellenic Shipyards against the Commission's 2008 decision and the letter of 1 December 2010 (cases C-246/12 P and C-616/12 P).

Article 107 allows certain categories of aid that further an objective of common interest without unduly distorting competition in the Single Market. Aid that does not fulfil these conditions is incompatible. Where Member States have already granted incompatible aid, they need to recover it swiftly from the beneficiaries. This is essential because delays in the recovery of unlawful subsidies perpetuate the distortion of competition created by the aid and undermine the functioning of the Single Market. For this reason Article 16(3) of Regulation 2015/1589 and the Commission's recovery notice (see IP/07/1609) provide that Member States should immediately and effectively recover the aid from the beneficiary.

Should a Member State fail to implement a recovery decision, the Commission may first seek a declaratory judgment by the Court of Justice on the basis of Article 108(2) TFEU for failure to implement the decision. In case the Member State concerned still does not fulfil its obligations, Article 260(2) TFEU allows the Commission to refer Member States to Court a second time and ask the Court to impose penalty payments.

For more information:

Ricardo Cardoso 
t: +32 2 298 01 00