The European Commission announced on Thursday that Greek defense industry LARKO must return an estimated 136 million euros it received in state subsidies (including interest).
The Commission held that the subsidies granted to the ailing defense industry gave LARKO an unfair advantage against its competitors and in contradiction of EU legislation. As such, the company must return the funds it received in order to mitigate the distortions to competition.
Additionally, the Commission noted that the potential buyers of assets belonging to LARKO will not be held liable. At present, certain assets of the defense industry are being privatized.
An investigation in the state subsidies LARKO received between 2008and 2010 was initiated in March 2013. According to the investigation, the Greek state had not informed the European Commission of the measures it took to support LARKO, as per European legislation. Furthermore, the Commission found that no private party would invest in LARKO under these circumstances.
The future of LARKO will be discussed next week, when the Minister of Finances Yannis Stournaras will meet with the European Commission’s Deputy Director-General for State Aid Gert Jan Koopman.
