EU demands return of OSE's loans

The European Commission is putting Greece on the spot over the return of state subsidies granted to Hellenic Railways Organization (OSE).

The EC's Directorate General for Competition (DG Comp) last week sent Greek authorities a document referring to the loans received by the organization with Greek state guarantees.

Up until end-2011 OSE collected bank loans amounting to 8 billion euros, using Greek state collateral. European authorities argue that no commercial bank would have loaned this money to OSE without the state's guarantees and that, as a result, all loans issued in this manner should be returned.

Sources suggested the government was taken aback by the document, as it had underestimated the magnitude of the issue. It believed that after the agreed privatization of railway service subsidiary Trainose and carriage maintenance subsidiary Rosco, the OSE case...