Hefty fines from EU Court in LARCO case

The Court of Justice of the European Union (WEU) weighed in heavily for the LARCO case. According to today's decision, Greece is obliged to pay a lump sum of 5.5 million euros and a fine of more than 4 million euros per half-year of delay, because it did not recover the state aid of 160 million euros granted to the nickel industry.

The history

The Court had found the violation of Greece at first through a decision issued in 2017.

In March 2013, the Commission launched a formal inquiry into various aid granted by Greece to LARCO, including, inter alia, state guarantees for the years 2008, 2010 and 2011 as well as a capital increase in 2009.

In March 2014, a decision was issued by the European Commission declaring that this aid, as illegal and incompatible with the internal market, should be recovered.

Greece, meanwhile, had notified the Commission of its intention to sell certain LARCO assets through two separate tenders. After the completion of the two tenders and regardless of their results, the nickel industry would be declared bankrupt in accordance with national law and the remaining assets would be transferred as part of the liquidation process.

The Commission considered, on the one hand, that the transfer did not constitute State aid and, on the other, that the question of recovery of the aid in question would not concern the purchasers of the assets.

In 2016, the Commission, considering that Greece had not complied with its obligations under the 2014 decision, brought the first action for infringement against that Member State before the Court. By decision of 9 November 2017, the Court ruled that Greece had breached its obligations regarding the recovery of illegal and incompatible with the internal market aid.