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EU Official Wants Greece Fined 13M Euros Over Shipyard Subsidies

May 17, 2018

The European Court of Justice’s Advocate General, Melchior Wathelet, has recommended that Greece be fined 13 million euros ($15.3) million over the troubled Skaramangas Shipyards (ENAE) for failing to comply with a previous court order to get back 670 million euros ($791.28 million) in unlawful subsidies from the state.

The Belgian judge has also called for an additional fine of 9.5 million euros ($11.22 million) if the state does not complete the reclaim within six months of the new decision, with 2 million euros ($2.36 million) charged for each additional six-month period of non-compliance, said Kathimerini.
That’s no guarantee it would be enforced or paid as Greece regularly ignores court orders it doesn’t like and with which it doesn’t want to comply with no further penalties.

The European Union has been charged itself with giving unlawful subsidies to airplane manufacturer Airbus with no reports whether it would have to fine itself or ignore any order it doesn’t like either.

China’s Cosco, already in control of the Piraeus port, reportedly wants to add the bankrupt Skaramangas shipyards to its portfolio as Chinese companies are trying to build stakes in Greece as a doorway to the EU.

An Athens court in March approved an appeal by the Greek state and Piraeus Bank to prepare the shipyards for liquidations, which could proceed as long as there are no objections from the key shareholder Privinvest, which is far from certain, the paper said.

If the obstacle is removed, the ruling Radical Left SYRIZA-led coalition of Prime Minister Alexis Tsipras, who promised to halt privatizations but has accelerated them on orders of international lenders even though elements in his party are trying to block foreign investors, could start auctioning the shipyard’s assets via an international competition, with Cosco said to already be lining up.

The state and Piraeus bank had appealed for Skaramangas to be prepared for liquidation in 2014, aiming to free the shipyards from operational problems caused by problems with shareholders and from a European Commission demand for Greece to return shipyard subsidies to state coffers.

The shipyards could be broken into two units, one commercial and the other for military shipbuilding.
The government a year ago tried to sound out Cosco’s interest with the newspaper reporting that the company would be interested in being involved in ship construction and repair activity in Greece but not get between Greece and the European Commission, which wants the return of 540 million euros ($670.52 million) in state subsidies.

At that time, Seatrade Maritime News reported that the big stumbling block to the sale of shipyard assets was litigation between the government and Iskandar Safa, co-owner the Privinvest Group which took control of HSY in late 2010.

Safa said Privinvest invested in HSY because it believed in the future of the shipyard. He “wanted to build on the shipbuilding tradition of Greece, its existing relationship with the Greek Navy and on HSY’s skilled and experienced workforce for the benefit of its wide international customer base,”the site said.

He said: “All of the ingredients needed to turn around the struggling shipyard and to make Privinvest’s investment a success for my group and Greece were there.”

Skaramangas Shipyards’ receivership was an objective that the state and creditor bank Piraeus achieved under pressure exerted on Greece by the European Commission, which pushed hard for the return of past state subsidies.

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