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Greece is liquidating its military industry

27 August 2013 / 17:08:43  GRReporter
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Scenarios that caused great concern among workers in the two state arms companies – the Greek company producing military and civilian special purpose machinery (ELBO) and EAC (Greek defence systems) were discussed at a series of meetings of Finance Minister Yiannis Stournaras which were attended by Deputy Minister of Defence Fofi Genimata, members of the management and government advisers assigned to the restructuring of the companies.

Later, again in the presence of advisers, the Finance Minister discussed relevant factors and the issue of the state-owned enterprise Larko. Workers of the two companies were waiting in front of the Ministry, worried about the future.

According to recent data, the advisers are suggesting a special liquidation mode for the Greek company producing military and civilian special purpose machinery the ultimate objective of which includes a partial or complete sale of the company.

Accordingly, at this stage, for the state enterprise "Greek defence systems" a plan for a separation of civilian firearms is recommended, and subsequently the company's inclusion in the process of cessation, merger and restructuring, similar to the procedure with the state broadcaster ERT.

Decisions will be presented to the supervisory Troika by the end of August. Based on the memorandum and its required actions, plans for the rescue of the three troubled state-owned enterprises must be applied by the end of the year.

The position of the Department of Defence for the continuation of activities of the two companies remains unchanged. It should be borne in mind that casings for the artillery and projectiles and armoured vehicles for the Hellenic Army are produced by the state enterprise "Greek defence systems."

The announcement of Finance Minister Yiannis Stournaras

"The issue of the two state arms companies was discussed in depth at a joint meeting of the Ministries of Finance and Defence, which are looking for a feasible solution. It will be taken by the end of the week.

Also, there was a meeting of the leadership of the Ministry of Finance and the Ministry of Environment with representatives of workers in the mining venture Larko. Company employees were made familiar with the proposal which the government will present to partners in order to ensure the functioning of the company. "

The problems

According to participants in the meetings, the state enterprise "Greek defence systems" is suffering the worst problems. Workers there have not received their salaries for 8 months.

A major problem is the issue with the state aid in the amount of 1.2 billion euro allocated for the period 2004-2012, about which the European Union has recently mentioned that should be returned.

The decision, which will be submitted to the supervisory Troika includes the separation of the arms division (which received 93% - 95% of the state aid) from the civilian division. Thus, on the basis of an article of the European Union Treaty which allows granting of state aid to national defence by way of exception, an attempt will be made so that the return of the aid could include only those 5% -7%, granted for other purposes.

At the same time, an attempt will be made for the restart of the company’s activity, since there is business interest in terms of the production of ammunitions.

The Greek company producing military and civilian special purpose machinery

Workers at the Greek company producing military and civilian special purpose machinery have not been paid for four months.

Yesterday's meeting discussed the possibility of applying Article 14Α of Law 3429/2005 for the special liquidation of state enterprises.

The company's debts amount to 25 million euro (compared to 800 million euro of the company "Greek defence systems", which, however, has significant real estate). Furthermore, the issue with a half of the subsidy for 2013 amounting to 7.5 million euro has not been resolved yet, and as a result the implementation of various programmes cannot mark any progress.

What workers fear are lay-offs without compensation, provided by the relevant article of the law.

The State Mining Company Larko

The third meeting of the day was devoted to the state mining company Larko, which employs 1,000 people, and which has debts exceeding 300 million euro.

In this case, there are concerns that the EU may demand reimbursement of state aid received by the company in the amount of 130 million euro.

According to sources, the government adviser has suggested the company's inclusion in the provisions of the bankruptcy law (Article 99) so that it could be protected from its creditors, mainly the National Electricity Company, which has been seeking 300 million euro through litigation.

At the same time sources have mentioned a separate sale of the plant and the company’s mines.

Tags: state weapons enterprises ELBO EAC debts privatisation
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