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EU Warns Greek Gov On Support To Textile Industry

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The European Commission has given the Greek government a deadline until the end of the month to demonstrate that the support of United Textile does not constitute an illegal state aid.

The Greek government has up to now failed in its attempt to convince the EU. The bill which for the support of the textile sector was withdrawn from parliament yesterday.

The European Commission may ask for the revocation of the bill which offers state guarantees for loans to trouble-ridden textile industries. This will happen in case the bill proves to be contrary to be competition.

Sources said that the EU has sent a letter to the Greek finance ministry, stating that EU bodies have to give their conform opinion before the government guarantees loans to ailing companies.

On October 9, a bill was submitted to parliament for the support of the textile sector through state guarantees of 100% to banks, so that they may grant loans of up to 20 million euro to companies. This sum is increased to 35 million euro for groups of companies or companies resulting from the merger of at least two smaller companies. The bill was withdrawn yesterday and the finance ministry now tries to draft a new bill that will conform to EU legislation.

Stelios Kraloglou

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