The European Court on Tuesday imposed a two million euros fine on Greece and a daily penalty of 16,000 euros over the country's failure to conform with a previous Court ruling calling for the return of state subsidies paid to the now-privatised national carrier Olympic Airways (OA) that were ruled illegal in 2005 by the Court.

In 2002, the European Commission ruled that certain sums allocated by the Greek state to OA were incompatible with respect to the common market because they did not comply with specific conditions initially set out and therefore must be recovered. The Commission took Greece to the European Court over the issue in 2003, and the Court ruling issued in 2005 found Greece to be in violation of EU legislation.

The Commission took Greece to the European Court again for failure to comply with the ruling, asking that a lump-sum fine be paid and daily penalties be imposed. The Court ruled on Tuesday for a 2 million euros lump-sum fine, and a daily penalty of 16,000 euros for each day of delay in carrying out the 2005 ruling, with the penalty entering into effect one month from the publication of the new ruling, so as to give Greece the ability to prove termination of the violation.

In its recourse, the Commission said the Greek State should recover the sum of 41 million euros paid for restructuring assistance in the form of capital inflows, 2.5 million euros for rentals due to certain airports, and 61 million euros for the duty paid by passengers departing from all Greek airports.

Greece argued at the time that certain OA debts to the State had been offset with compensation adjudged to OA by a 2006 arbitration ruling for losses suffered by OA due to its early eviction from the old airport at Hellinikon, its relocation to the new Athens International Airport (AIA) in Spata, additional operational costs of the AIA and delays in the construction of the AIA facilities.