=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2002/03/06/f= inancial1555EST0230.DTL ---------------------------------------------------------------------- Wednesday, March 6, 2002 (AP) EU to probe state aid for Olympic Airways (03-06) 12:55 PST BRUSSELS, Belgium (AP) -- The European Commission opened an investigation Wednesday into the legality of a loan of 19.5 million euros ($17 million) by a state-controlled bank in Greece for Olympic Airways, the country's struggling national air carrier. The agency also said it will investigate past state aid for Olympic, citing concern about "potential misuse of aid granted in 1994 and 1998." The 19.5 million euro loan -- issued last month by state-controlled Commercial Bank of Greece -- was "apparently aimed at redressing operational difficulties" from last November until February, the Commission said in a statement. The Greek government is looking for up to 150 million euros ($130.5 million) from private investors to rescue Olympic Airways. The Commission said that since Olympic was being privatized, it would investigate "conditions under which the air carrier is currently conducting its business." The airline's debt in 2001 was estimated at 120 million euros ($104 million). This is believed to have widened since, but an exact amount cannot be established as Olympic Airways has not published a balance sheet since 1999. The probe into Olympic's business practices is based on two complaints from unnamed rival carriers. Under EU rules, loans and investments from state backers are only allowed where they would have been granted by a private company operating under market conditions. If the Greek carrier is found to have benefitted from illegal state aid, it must repay the money. Olympic Airways was once the pride of Greece. It was founded in 1957 by late shipping tycoon Aristotle Onassis who sold it to the Greek state in 1975. Olympic slipped into debt in the 1980s and has been repeatedly bailed out. =20 ---------------------------------------------------------------------- Copyright 2002 AP