The European Commission has announced that Greek measures for Hellenic Defence Systems fall outside the scope of EU state aid control because they protect Greece’s essential security interests.
Greece, nevertheless, has to recover up to 55 million euros of public support for civil activities of Hellenic Defence Systems, which distorted competition in breach of EU State aid rules.
Hellenic Defence Systems S.A. is a Greek company, which is almost fully owned by the Greek State. HDS manufactured both defence-related products (e.g. infantry weapons, ammunition, weapon systems, aircraft fuel tanks) along with civil-use products (e.g. small pistols, explosives for construction works, fireworks).
Batween 2004 and 2011, Greece granted a number of support measures to HDS. These measures included a direct grant by the State of 10 million euros, a capital increase of 158 million euros and several State guarantees for loans of up to 942 million euros.
The EU Treaty fully recognises the right of member-states to take measures they consider necessary to protect their essential security interests in connection with the production of military products (Article 346 of the Treaty on the Functioning of the European Union). Such measures are excluded from assessment under EU state aid rules. At the same time, public support for civil activities of defence companies have to comply with EU state aid rules. The requirements for companies in difficulty are described in the applicable EU Guidelines on state aid for the rescue and restructuring of companies in difficulty.
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Source: ANA-MPA
