WRITTEN QUESTION E-1048/96 by Alexandros Alavanos (GUE/NGL) to the Commission (13 May 1996)

Subject: Restructuring of Olympic Airways

The general provisions of the law governing the restructuring of Olympic Airways agreed on between that airline and the European Union oblige Olympic Airways to issue within a short period of time a new establishment plan reducing the hierarchial levels to four (4), thus changing the relationship between management and workers, and to submit a new labour regulation, as indispensable preconditions for an effective modernization programme to improve labour relations and to increase productivity.

Will the Commission say whether, apart from the financial controls regularly carried out to monitor compliance with the financial agreements regarding the restructuring of the company, controls are being carried out regarding the agreements on institutional matters, such as those referred to above?

Answer given by Mr Kinnock on behalf of the Commission (10 June 1996)

In its decision of 7 October 1994 authorizing state aid measures for Olympic Airways, the Commission included several conditions which relate not only to the economic and financial aspects of the restructuring plan of the airline, but also to many other items such as the liberalisation process in Greece, the absence of new aid, the relation between Olympic Airways and the state, and the statute of the airline.

Prior to the payment of the second instalment of the capital injection, the Commission has checked whether the conditions laid down in its 1994 decision are met. Whilst the company's restructuring plan is on target, the Commission is concerned that certain other conditions have not, as yet, been entirely fulfilled. This relates, in particular, to the degree of apparent involvement by the state in the management of the airline beyond its obligations as a shareholder, and the granting of further aids.

The Commission, therefore, decided on 30 April 1996 to reopen the case on the basis of the relevant procedures.