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23.7.2011 Official
Journal
of
the
European
Union L
193/27
COMMISSION DECISION
of 23 February 2011
on the State aid C 48/08 (ex NN 61/08) implemented by Greece in favour of Ellinikos Xrysos SA
(notified under document C(2011) 1006)
(Only the Greek text is authentic)
(Text with EEA relevance)
(2011/452/EU)
THE EUROPEAN COMMISSION,
(3) The
opening
decision
was
published
in
the Official Journal
of the European Union on 10 March 2009 ( 3 ). Comments
were received from four interested parties: from Ellinikos
Xrysos, the beneficiary of the alleged measures, on
Having regard to the Treaty on the Functioning of the European
10 April 2009; from European Goldfields Ltd, the
Union, and in particular the first subparagraph of Article 108(2)
main shareholder of Ellinikos Xrysos, on 10 April
thereof,
2009; from the Cassandra Mines trade unions on
2 April 2009; from the Hellenic Mining Watch, a
Greek society whose purpose is the ‘protection of the
environment and the public against the negative conse
quences of mining and safeguarding of the national
Having regard to the Agreement on the European Economic
wealth’ (
Area, and in particular Article 62(1)(a) thereof,

4 ), on 6 April 2009.
Having regard to the decision by which the Commission
(4) The
comments
were
transmitted
to
Greece
by
letters
of
decided to initiate the procedure laid down in Article 108(2)
6 May 2009 and 7 July 2009. Greece replied to the
TFEU ( 1 ), in respect of the aid C 48/08 (ex NN 61/08) ( 2 ),
interested parties’ comments by letters of 3 June 2009,
20 July 2009 and 23 September 2009.
Having called on interested parties to submit their comments
pursuant to the provisions cited above, and having regard to
(5) The
Commission
requested
further
information
from
the
their comments,
Greek authorities on 19 June 2009, 11 December 2009
and 22 April 2010, to which Greece and Ellinikos Xrysos
replied by letters of 23 July 2009, 29 July 2009,
15 January 2010, 11 February 2010, 12 February
Whereas:
2010, 4 May 2010 and 27 May 2010. Further
informal exchange of information took place by e-mail
in May 2010 between the Commission services and the
Greek authorities. Meetings took place between the
I. PROCEDURE
Commission services and the Greek authorities on
11 February 2009 and 24 June 2010, as well as
(1) On
9
July
2007,
the
Commission
received
a
complaint
between the Commission services and the alleged bene
alleging that Greece had granted two State aid measures
ficiary on 2 February 2009 and 26 June 2009.
in favour of Ellinikos Xrysos SA (hereinafter: ‘Ellinikos
Xrysos’). After exchanges of information, on
10 December 2008 the Commission opened the formal
investigation procedure on the alleged measures.
II. DETAILED DESCRIPTION OF THE AID
II.a. BACKGROUND INFORMATION ON MINING RIGHTS
AND PERMITS
(2) Greece
submitted
its
comments
to
the
Commission’s
opening decision on 23 February 2009.
(6) A
mining
right
is
the
right
to
enter
upon
and
occupy
a
specific piece of ground for the purpose of working it,
( 1 ) With effect from 1 December 2009, Articles 87 and 88 of the EC
either by underground excavations or open workings, to
Treaty have become Articles 107 and 108, respectively, of the TFEU;
obtain the mineral ores which may be deposited therein.
the two sets of provisions are, in substance, identical. For the
It is transferred with the mining property, as an integral
purposes of this Decision, references to Articles 107 and 108 of
part of it.
the TFEU should be understood as references to Articles 87 and 88,
respectively, of the EC Treaty where appropriate.
( 2 ) Commission Decision D(2008) 7853 final of 10 December 2008
( 3 ) See footnote 2.
(OJ C 56, 10.3.2009, p. 45).
( 4 ) As defined in its submission to the Commission.

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L 193/28
EN
Official Journal of the European Union
23.7.2011
(7)
The mining right is distinct to the mining permit, which
(10) Ellinikos
Xrysos
owns
and
operates
the
Cassandra
Mines.
is a permit to execute mining operations. It is granted by
It bought them and their mining rights from the Greek
the competent authorities, after assessment of submitted
State in December 2003. The Cassandra Mines are
feasibility reports and environmental studies. In the case
located in Northern Greece. They include the gold
at hand, at the time of the 2003 sale, mining permits
mining projects of Olympias and Skouries and the
were granted by the Ministry of Development.
copper-zinc mining project of Stratoni.
II.b. THE BENEFICIARY
(8) Ellinikos
Xrysos
is
a
large
Greek
mining
company,
active (11) Before
2003,
the
Cassandra
Mines
were
owned
by
the
in the business of mining gold, copper, lead, silver and
company TVX Hellas SA, which had acquired them in
zinc. In 2009 it had a turnover of EUR 44,7 million
1995 from the Greek State through a public tender for
(with earnings after taxes of EUR 1,7 million) and ca.
DR 11 billion (approximately EUR 39,8 million ( 7 )).
350 employees. At the time of the aid measures in
question (see paragraphs 11 and 15-18 below),
Ellinikos Xrysos was a large company, because it was
linked to a large company. According to the Commission
Recommendation 2003/361/EC of 6 May 2003
concerning the definition of micro, small and medium-
sized enterprises ( 5 ): (a) The category of micro, small and
(12) In 2002, the Greek State Council annulled the mining
medium-sized enterprises (SMEs) is made up of enter
and gold processing permits of the Cassandra Mines, in
prises which employ fewer than 250 persons and
particular of Olympias and Stratoni. The Olympias
which have an annual turnover not exceeding EUR 50
mining and gold processing permits were annulled for
million, and/or an annual balance sheet total not
environmental reasons, which are considered as serious.
exceeding EUR 43 million (Annex, title 1, article 2(1));
On the other hand, the Stratoni mining permit was
(b) to remove from the category of SMEs groups of
annulled because the Greek State had improperly issued
enterprises whose economic power may exceed that of
it, through an incompetent authority.
genuine SMEs, a distinction should be made between
various types of enterprises, depending on whether they
are autonomous (paragraph 9 of introduction); (c) an
‘autonomous enterprise’ is any enterprise which is not
classified as a linked enterprise (Annex, title 1,
article 3(1)); and (d) a linked enterprise is one whose
majority of the shareholders’ or members’ voting rights
(13) Following the above annulment by the Greek State
is held by another enterprise (Annex, title 1,
Council, the competent Ministry of Development issued
article 3(3)(a)). In the case at hand, in December 2003
two acts, regarding Stratoni: 1) on 7 January 2003,
(time of the 2003 sale) Ellinikos Xrysos’ shares belonged
ordering the interruption of operations in Stratoni; and
by 53,3 % (160 000 shares over a total of 300 000) to
2) on 29 January 2003, ordering the adoption of addi
the company ‘Greek Mines SA’, a subsidiary of the
tional security measures in Stratoni. On 18 February
company ‘Aktor SA’. Aktor’s latest two annual turnovers,
2003, the Ministry of Development, in line with the
i.e. of 2001 and 2002, amounted to EUR 120,9 million
above annulment decision of the Greek State Council,
and EUR 302,6 million, respectively. Also, its latest two
issued another act allowing Ellinikos Xrysos to start
annual balance sheet totals amounted to EUR 151,9
operations in Stratoni and annulling its previous acts of
million and EUR 260 million, respectively (
7 and 29 January 2003. This act of 18 February 2003

6 ). These
figures indeed qualify Aktor as a large company. Thus,
was valid at the time of the Mines’ sale to Ellinikos
Ellinikos Xrysos was a large company at the time of the
Xrysos.
aid measures in question.
(9) The
present
shareholders
of
Ellinikos
Xrysos
are (14) Following also the above annulment of the mining and
European Goldfields Greece BV (65 % of shares), Hellas
gold processing permits of the Cassandra Mines, Kinross
Gold BV (30 % of shares) and Aktor SA (5 % of shares), a
(a Canadian mining company), the owner of TVX Hellas,
Greek constructions and energy company. European
stopped financing it in order to preserve shareholder
Goldfields Greece BV and Hellas Gold BV are subsidiaries
value. This action forced TVX Hellas to file for bank
of European Goldfields Ltd, a Canadian company
ruptcy.
involved in the acquisition, exploration and development
of mineral properties in the Balkans.
( 7 ) Adjusted according to the Greek general index of industrial
production prices for the period 1995-2003. The sale in question
( 5 ) OJ L 124, 20.5.2003, p. 36.
concerns industrial (mining) assets, therefore the adjustment has to
( 6 ) As published in the website of Ellaktor SA, parent company of
be representative of the price changes in the industrial sector. Thus,
Aktor SA.
the Commission used the index of industrial production prices.

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EN
23.7.2011 Official
Journal
of
the
European
Union L
193/29
II.c. MEASURE 1: PRICE OF SALE BELOW MARKET VALUE
the sale, and also the ability of those mines to be
operational (see detailed analysis in paragraphs 63-79
(15) On
12
December
2003,
the
Cassandra
Mines
were
trans
below);
ferred from TVX Hellas to the Greek State for EUR 11
million, under an extrajudicial settlement, in the context
of which a clearing of mutual claims took place (the
claim of TVX Hellas against Greece amounted to
EUR 293,5 million). On the same day, the Greek State
(b) the value of the land of the Cassandra Mines, as
sold the Cassandra Mines to Ellinikos Xrysos for EUR 11
attributed by a valuation report (see paragraph 19
million, without any evaluation of the assets or any open
below) and verified against the price paid for most
tender. The sale included: (a) Mines of Stratoni, Skouries
part of this land in a 1995 open tender (see detailed
and Olympias, together with the relevant mining rights;
analysis in paragraphs 80-90 below);
(b) land; (c) stock of minerals; and (d) fixed assets
(mining-processing equipment, houses for workers and
industrial buildings). According to the Greek authorities,
the measure’s objective was to find an owner willing to
operate the mines and thus to protect the employment
(c) the value of the stock of minerals that Ellinikos
and the environment.
Xrysos acquired through the 2003 sale, based also
on the above valuation report (see detailed analysis
in paragraphs 91-97 below);
II.d. MEASURE 2: WAIVER OF TAX AND REDUCTION OF
LEGAL FEES
(d) the amount of the due taxes that Ellinikos Xrysos was
exempted from in the sale contract (see detailed
(16) The
sale
of
the
Cassandra
Mines
from
Greece
to
Ellinikos
analysis in paragraphs 118-125 below).
Xrysos was realised through a contract between the two
parties, which was ratified by Law 3220/2004 ( 8 ).
According to that law, Ellinikos Xrysos was exempted
from any kind of tax. There was also a reduction of
legal and other fees to only 5 % of the actual amount
(19) In
the
opening
decision
of
10 December
2008 the
that should have normally been paid. According to the
Commission questioned whether the Cassandra Mines
Greek authorities, the measure’s objective was to create
were sold by Greece to Ellinikos Xrysos at their market
an incentive for potential buyers, because the value of the
value, since the sale was realised without an open tender
Mines was negative.
or an independent valuation of the assets, and also
whether such a sale below market value was compatible
with TFEU. Reference was made to a valuation report of
the Cassandra Mines assets, issued on behalf of European
Goldfields, shareholder of Ellinikos Xrysos. According to
that report, the fair-market value of the Cassandra Mines
(17) According
to
Greek
law
( 9 ), tax on transfer of real estate
assets was USD 500 million (equal to EUR 411 million
property is 7 % of the value of the transferred property
on 30 June 2004, using that date’s exchange rate of
for the first EUR 15 000 and 9 % for the rest. Also,
1,2155 USD/EUR (
according to Greek Mining Code (

11 )). This report was issued by Behre

10 ), the specific tax
Dolbear International Ltd (hereinafter ‘the Behre Dolbear
on transfer of mining rights is 5 % of the value of the
report’), ‘a pre-eminent international minerals industry
transferred right (i.e. value of the mine).
consultant’, according to European Goldfields ( 12 ).
(20) The
Commission
also
questioned
whether
the
waiver
of
(18) For measures 1 and 2, in the present decision the
tax and the reduction of legal fees constituted reliefs
Commission has arrived at a total aid figure of
from financial obligations to the State that were
EUR 15,34 million, having examined:
compatible with TFEU.
( 11 ) In its decision of 10 December 2008 to open the formal investi
gation procedure, the Commission used the exchange rate of
28 September 2004, date when the Behre Dolbear report was
published, and converted the report’s attributed value of USD 500
(a) the value of the three individual mines which
million to EUR 408 million. In the context of the decision at hand,
comprise them (Stratoni, Olympias and Skouries),
the Commission has decided to use the more appropriate exchange
based on economic factors applying at the time of
rate of 30 June 2004, because that was the date for which the
Behre Dolbear report and its attributed values were valid.
( 12 ) Behre Dolbear also appears in various mining valuation reports and
( 8 ) Government’s Gazette of 28 January 2004.
studies (by United Nations, Citibank, the Government of India, also
( 9 ) Law 1521/1950 ratified by Law 1587/1950 in FEK 294 A.
companies like Anglo Asian Mining Plc, Chaarat Holding Holdings
( 10 ) Greek Mining Code of 1973, FEK 277A, 5.10.1973.
Ltd and Central African Mining and Exploration Company Plc).

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L 193/30
EN
Official Journal of the European Union
23.7.2011
III. COMMENTS FROM GREECE AND INTERESTED
in the context of company image and staff satisfaction.
PARTIES
This is supported by the fact that TVX Hellas, a market
economy operator, also took under consideration labour
III.a. COMMENTS FROM GREECE AND THE BENEFICIARY
and environmental issues by paying relevant indemnifi
cations. It is also argued that not selling the Mines would
(21) The
comments
of
Greece
and
the
beneficiary
overlap
to
a
also mean substantial environmental costs to be borne by
large extent, therefore the Commission will expose them
the Greek State, in the area of EUR 15,7 million. At the
together, as follows in paragraphs 22-31 below.
same time, it is submitted that the price paid by Ellinikos
Xrysos is also justified by market economy criteria, as it
was equal to the price asked by TVX Hellas, a private
company. According to Greece and the beneficiary, if
TVX Hellas could, it would have asked for a higher
price. In addition, it is stated that the price paid by
Ellinikos Xrysos was equal to the assets’ book value in
(22) According to the Greek authorities and the beneficiary,
the financial statements of TVX Hellas. Finally, it is
Greece only acted as an intermediary in the 2003 sale,
submitted that the price paid in the 2003 sale repre
because TVX Hellas, being within the bankruptcy
sented the real value of the Mines, meaning the value
procedure, could not directly sell the Mines to Ellinikos
of the Stratoni mine, since it was the only one operating.
Xrysos. It is also claimed that Greece has never been
As regards Skouries, according to Greece and the bene
owner of the Mines and has not received any amount
ficiary no mining activity or investment has ever taken
of money from the 2003 sale, as the EUR 11 million
place there but only mining research, conducted by TVX
were paid directly to TVX Hellas. It is also argued that
Hellas before the 2003 sale. It is also argued that in order
in 1995, the sale transaction took place between TVX
to create a mining facility in Skouries, significant
Hellas and the previous owner, a private company in
investment is needed. For the above reasons, it is
bankruptcy, therefore there are no State resources
claimed that the 2003 sale did not confer an advantage
involved in the 2003 sale.
to Ellinikos Xrysos.
(23) Furthermore,
the
Greek
authorities
and
the
beneficiary
(25) As
regards
the
Behre
Dolbear
report,
neither
Greece
nor
claim that, at the time of the sale, the Cassandra Mines’
the beneficiary argues against the credibility of Behre
market value was reduced or even negative, because of
Dolbear. Instead, they both argue against the report,
the long stop in operations and the annulment of the
claiming that it cannot be taken into account, because
mining permits. The negative market value of the Mines
its purpose was to attract investors’ attention and its
would also be demonstrated by the fact that Kinross, the
point in time (June 2004) was not the same as that of
owner of TVX Hellas and a market economy operator,
the sale (December 2003). Also, it is argued that the
attributed negative value to the Mines when it capitalised
value of the Mines estimated by Behre Dolbear
significant losses from their investment. It is also stated
concerns the assets together with the relevant mining
that the positive price paid by Ellinikos Xrysos, also a
permits, however Ellinikos Xrysos only acquired the
private company, is justified by the contract’s annulling
assets, whereas the mining permits would be granted
clause, which eliminated the buyer’s risk. In addition, it is
later by the Greek state. In addition, it is argued that
submitted that land acquired by a mining company can
the report does not refer to the sold assets but to the
only be used for mining activities and does not have a
value of Ellinikos Xrysos as a going concern, therefore it
market value, because Greek law gives priority to mining
is not indicative of the value of the assets sold by the
activities in such areas. Therefore, it is argued that the
Greek State in December 2003. Finally, it is submitted
reduction of value of the mining rights, due to the long
that in page 37 of the report, table 5.3, Behre Dolbear
stop in operations and the annulment of mining permits,
estimates the net present value of the near-production
affected a reduction of value also to land. Finally,
Cassandra Mines to be negative USD 2,59 million,
regarding the gold mineral stock which was part of the
therefore the price actually paid (EUR 11 million) was
assets sold to Ellinikos Xrysos, it is claimed that in 2003
above the market value of the Mines.
it had negative value because of the relatively low price
of gold and the relatively high related costs such as
transport and processing.
(26) If
however
the
Behre
Dolbear
report
is
used,
Greece
argues that only the Income Approach (out of three
different methods that the report includes) could be
(24) In
addition
to
the
above
and
as
regards
market
economy
accepted, as it is an internationally used main method
criteria to be taken into account in a transaction, the
of valuation, but only for its validation date and with the
Greek authorities and the beneficiary argue that these
prerequisite of mining permits granted and serious
criteria also include environmental and social concerns,
investments realised.

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EN
23.7.2011 Official
Journal
of
the
European
Union L
193/31
(27) On the other hand, the Greek authorities and the bene
(31) Finally, Greece and the beneficiary argue that, even if the
ficiary admit that Greece sold the assets directly to
2003 sale constituted aid in favour of Ellinikos Xrysos,
Ellinikos Xrysos without an open tender or an evaluation,
the latter would be eligible for aid under the 1998
because of time pressure to protect the employment and
Regional aid guidelines and the 2002 Multisectoral
the environment. Also, it is stated that TVX Hellas had
framework for large investment projects, applicable at
claims of EUR 293,5 million against Greece, due to
the time of the sale, as a company located in an
damages from the investments to the mines (which
article 107(3)(a) TFEU area. Also, the beneficiary argues
stopped operations because of the 2002 annulling
that it could be eligible for aid under GBER, the Envi
decisions) and expenses for the protection of the
ronmental aid guidelines of 2008 and Article 107(3)(c)
environment. In addition, it is argued that the sale
TFEU, as the investment in question was related to a
contract did not foresee any clause for minimum work
sector and an area of vital national importance. As
posts, because mining requires a lot of workers and at
regards the tax waiver, according to the beneficiary it
the same time an obligation for jobs cannot be
was equal to EUR 38 000 therefore lower than the de
quantified. Finally, it is stated that in case of a recovery
minimis threshold (EUR 100 000 over any period of 3
order by the Commission, there could be a request for
years) ( 13 ) and did not result in any benefit for Ellinikos
the contract to be annulled, asking the Greek State to
Xrysos.
return EUR 11 million to the company and receive back
the assets.
(28) Furthermore, the Greek authorities state that the value
determined by the 1995 open tender could be taken
into account, and that the value of land could be
considered as unchanged. Also, it is stated that the
III.b. COMMENTS FROM OTHER INTERESTED PARTIES
method used in the Behre Dolbear report (the Income
Approach method) can be accepted, but only in relation
(32) The
Commission
also
received
comments
to
the
opening
to the date of the report (30 June 2004), with mining
decision from the Hellenic Mining Watch (in paragraphs
permits granted and serious investments realised. Finally,
32-34: ‘HMW’) ( 14 ). HMW claims that the Cassandra
it is accepted that at the time of the sale, Stratoni had
Mines assets include also substantial real estate, which
valid mining permits and therefore was operational and
increases their total value considerably but was not
fulfilled the Behre Dolbear report’s clause of a ‘near
taken into account by the Behre Dolbear report. Also,
production facility’.
HMW contradicts the invocation of unemployment
reasons for the transfer of the Mines without compliance
with legal procedures, claiming that the sale contract did
not include any obligation for Ellinikos Xrysos to recruit
a certain or minimum number of workers.
(29) As regards the tax waiver and the reduction of legal fees,
according to the beneficiary the foreseen tax on transfer
of mines was not applicable in the case at hand.
Furthermore, according to Greece, the value of the
Mines was negative, therefore an incentive for potential
buyers was needed. Also, Greece argues that article 173
of Greek Mining Code foresees a tax rate of 5 %, but only
to transactions ‘against consideration’, ‘με επαχθ αιτα’,
which, according to Greece, means transactions caused
by unfortunate incidents, e.g. death of the owner,
therefore it was not applicable in the case at hand.
(33) Furthermore,
HMW
contradicts
the
invocation
of
envi
Furthermore, the beneficiary argues that the sale
ronmental reasons for the transfer of the Mines without
contract is not yet definitive because of an annulling
compliance with legal procedures, claiming that Article 1
clause, therefore the application of any tax would be
of the 2003 sale contract discharges Ellinikos Xrysos
premature. Finally, the beneficiary argues that the
from any liability for damage to the environment,
reduction of legal fees does not involve State resources,
which came about or whose cause came about prior to
because lawyers are private operators, and the fees’ tax
the publication of the Law ratifying the sale contract.
and duties were paid duly.
Finally, HMW alleges that the Mines assets also
included a stock of gold-bearing minerals of significant
value, amounting to EUR 80 million, which was not
mentioned in the contract of the sale to Ellinikos Xrysos.
( 13 ) As set by the Commission Regulation (EC) No 69/2001 of
12 January 2001 on the application of Articles 87 and 88 of the
(30) Greece
acknowledges
that
7
%-9
%
tax
is
indeed
levied
in
EC Treaty to de minimis aid, applicable at the time of the 2003
all cases of land sale, regardless of whether it is a sale of
sale.
company assets or individual ones.
( 14 ) See paragraph 3.

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L 193/32
EN
Official Journal of the European Union
23.7.2011
(34) In
its
reaction
to
HMW’s
comments,
Greece
dismisses
constitute State aid. Conversely, an asset is sold at market
them and reiterates that Ellinikos Xrysos did not
value (and hence State aid is excluded) where that price is
benefit from State aid. In particular, Greece argues that
determined by an independent valuator and matches the
it was nor the owner neither the vendor of the Mines but
sale price or where the sale is performed through a
merely an intermediary in a transaction between two
competitive, open, transparent and unconditional tender
private parties. Furthermore, Greece claims that HMW’s
and the highest bid is picked ( 16 ).
allegations are vague, inaccurate and contradictory.
Finally, Greece supports that HMW seeks the return of
the Cassandra Mines to the State because its ultimate goal
is the protection of the environment.
(40) In
the
case
at
hand,
the
Cassandra
Mines
were
sold
without an open tender or a valuation of any kind.
However, in order to avoid State aid, the State has to
(35) Finally,
the
Commission
also
received
comments
to
the
act as a rational, profit-maximising private owner, i.e. a
opening decision from the Cassandra Mines trade
‘market economy vendor’, and seek the best financial
unions ( 15 ), contesting that the measures would entail
outcome from a sale. Thus, in the case at hand the
illegal State aid and referring to the contribution of the
Commission made an assessment of the behaviour of
Mines to the economy and employment.
the Greek State as a market economy vendor.
IV. ASSESSMENT OF THE AID
(41) The
Greek
authorities
and
the
beneficiary
argue
that
envi
(36) On the basis of the above facts and also of the arguments
ronmental and social issues should also count as market
of Greece and other third parties, the Commission will
economy criteria, because they concern company image
assess the measures in question in what follows in this
and staff satisfaction. According to them, their argument
section. First, the Commission will assess the presence of
is supported by the fact that TVX Hellas, a market
aid in the measures under scrutiny, in order to conclude
economy operator, also took under consideration
if there is aid or not (sub-section IV.a). Secondly, where a
labour and environmental issues by paying indemnifi
measure indeed involves aid, the Commission will assess
cations for its employees as well as for past environ
its compatibility with the internal market (sub-section
mental liabilities (liabilities for the time before the
IV.b).
2003 sale). They claim that, in the same manner, a
market economy vendor would agree to a reduced
price, in order to satisfy environmental and social
concerns.
IV.a. PRESENCE OF AID IN THE MEANING OF
ARTICLE 107(1) TFEU
(37) In
order
to
ascertain
whether
a
measure
constitutes
an
aid, the Commission has to assess whether the contested
measure fulfils the conditions of Article 107(1) TFEU.
(42) The
Commission
cannot
accept
the
above
argument.
This provision states that ‘Save as otherwise provided
Environmental and social concerns are, by their very
in the Treaties, any aid granted by Member State or
nature, public policy concerns pursued by public
through State resources in any form whatsoever which
authorities. A market economy vendor could take into
distorts or threatens to distort competition by favouring
account unemployment and environmental issues, at
certain undertakings or the production of certain goods
most, to a limited extent, to protect or to create a
shall, in so far as it affects trade between Member States,
business reputation as a socially or environmentally
be incompatible with the internal market’.
responsible agent, and not to the substantial detriment
of its financial interests. At any rate, a rational market
economy vendor, in the context of a sale, would evaluate
and quantify any payments or costs deriving from those
issues, in order to decide how these could influence the
(38) In
the
light
of
this
provision,
the
Commission
will
assess
hereunder whether the contested measures in favour of
acceptable price. In the case at hand, the Commission
Ellinikos Xrysos constitute State aid.
notes that the contract does not include any such

financial specification, and Greece has not shown that
at the time of the sale it made any evaluation of such
financial costs.
MEASURE 1: PRICE OF SALE BELOW MARKET VALUE
a. Advantage
(39) Where
the
State
sells
an
asset
at
a
price
below
market
(43) The
Greek
authorities
and
the
beneficiary
also
claim
that
value, this entails an advantage to the buyer (who
the Mines had negative market value, which is demon
receives an asset at a subsidised price) which may
strated by the fact that Kinross, the owner of TVX Hellas
( 15 ) See paragraph 3.
( 16 ) Competition Policy Report, 1993, p. 256.

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EN
23.7.2011 Official
Journal
of
the
European
Union L
193/33
and a market economy operator, attributed negative
Commission cannot accept that the buyer was burdened
value to the Mines when it capitalised significant losses
with an obligation to maintain more jobs than eco
from their investment.
nomically needed, since the sale contract did not have
any obligation for the maintenance of specific number of
jobs. Thus, the Commission considers that, from the
perspective of a private vendor, no reason related to
the number of jobs and the protection of employment
can explain a sale price lower than the market value of
(44) The
Commission
cannot
accept
the
above
argument.
the mines.
Indeed, the Commission notes that TVX Hellas stopped
its business in the Cassandra Mines because of the
annulment of the mines’ permits by the State Council.
However, Stratoni had a valid mining permit at the time
of its sale by TVX Hellas to Greece (see paragraph 13
above), whereas the permit of Olympias remained
(48) Thus,
on the
basis
of paragraphs
46-47 above,
the
annulled. Therefore the Commission considers that the
Commission cannot accept the arguments of Greece
decision of TVX Hellas to sell the Cassandra Mines was
and the beneficiary in paragraph 45 above.
related to the failure of its substantial investment in
Olympias. Therefore, the behaviour of TVX Hellas was
related to the value of the Olympias investment and not
to the value of Stratoni.
(49) On
the
above
matter
of
employment
and
environmental
protection (see paragraph 45), the Hellenic Mining Watch
contradicts the invocation of unemployment reasons for
the transfer of the Mines without compliance with legal
(45) The
Greek
authorities
and
the
beneficiary
admit
that
procedures, claiming that the sale contract did not
Greece sold the assets directly to Ellinikos Xrysos
include any obligation for Ellinikos Xrysos to recruit a
without an open tender or a valuation, because of time
certain or minimum number of workers. The Hellenic
pressure to protect the employment and the
Mining Watch also claims that Ellinikos Xrysos received
environment. As regards the latter, they argue that not
an advantage, because Article 1 of the 2003 sale contract
selling the Mines would mean substantial environmental
discharges Ellinikos Xrysos from any liability for damage
costs to be borne by the Greek State, in the area of
to the environment, in case that such a damage came
EUR 15,7 million. As regards employment, the Greek
about or its cause came about prior to the publication of
authorities and the beneficiary accept that the sale
the Law ratifying the sale contract.
contract did not foresee any clause for minimum work
posts, but argue that an obligation for jobs cannot be
quantified and that mining requires a lot of workers.
(50) As regards the second argument of the Hellenic Mining
Watch above, the Commission notes that indeed the
2003 sale contract discharges Ellinikos Xrysos from
(46) The
Commission
notes
on
the
above
that
indeed
the
sold
any liability for damage to the environment in case
assets’ value was not assessed in any way prior to the sale
that such a damage came about or its cause came
and the sale was not conducted through an open process
about prior to the publication of the Law ratifying the
but through direct contacts with the buyer. As regards
sale contract. The Commission considers that the above
the environmental costs allegedly to be borne by Greece,
provision of the contract does not grant an autonomous,
the Commission notes that there is no trace of those
specific advantage to Ellinikos Xrysos that would be
costs in the contract or in any contemporaneous
different from the sales price. Clauses about apportioning
document. The Commission also notes that no additional
various financial liabilities for the past between vendor
environmental obligations, beyond the legislation
and buyer are not infrequent in private contracts.
applicable, were imposed to the buyer. The Commission
Ultimately, the parties to a sale take such clauses into
considers that, if environmental cost is to be considered
account, as factors in determining the sale price.
as a factor for the determination of the price of a sale, a
Therefore, the ultimate question in the present case is
private vendor would carefully evaluate and quantify
whether the sale, taking into account the conditions,
these costs before determining the sale price. Greece
reflected the market value of the mines.
has not shown that, at the time of the sale, it made
any such evaluation and quantification or otherwise
took into consideration any such environmental costs.
(51) Furthermore, the Greek authorities and the beneficiary
argue that the 2003 sale did not grant an advantage to
Ellinikos Xrysos, because the price paid by Ellinikos
(47) The
Commission
also
notes
that
the
2003
sale
contract
Xrysos was equal to the assets’ book value in the
indeed did not foresee any clause requiring the buyer to
financial statements of TVX Hellas, the owner of
keep or create any minimum work posts. Therefore, the
Cassandra Mines before the Greek State.

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L 193/34
EN
Official Journal of the European Union
23.7.2011
(52) The
Commission
cannot
accept
the
above
argument.
not to the value of Stratoni. Ellinikos Xrysos had not
Indeed, the Commission considers that the book value
realised any such investments, therefore was not
of TVX Hellas cannot be taken into account for the
affected by the failure of that investment. Thus, the
assessment of the assets’ value, since it takes into
Commission considers that the price of EUR 11 million
account depreciation in the company’s books for
for the sale of the Cassandra Mines to Greece was a price
taxation reasons ( 17 ), therefore it represents the assets’
representing only the commercial relationship between
accounting value. According to well-established case
TVX Hellas and Greece and also the specific situation
law ( 18 ), accounting value is not always the same as
of TVX Hellas at the time of the sale. Therefore it
market value, when the aim is to evaluate assets for
could not be representative of a separate commercial
the purpose of establishing their price in a sale. Also,
agreement, such as the one between Greece and
the assets in question were transferred on a stand alone
Ellinikos Xrysos.
basis, therefore the depreciation affected by the previous
owner only concerned its own bookkeeping and
taxation.
(57) On the basis of the above (see paragraphs 54-56), the
Commission concludes that there was no connection of
(53) The
Greek
authorities
and
the
beneficiary
also
claim
that
the clearing of claims between Greece and TVX Hellas to
the price paid by Ellinikos Xrysos is justified by market
the value of the assets.
economy criteria, as it was equal to the price asked by
TVX Hellas, a private company. If the latter could, it
would have asked for a higher price.
(58) On the basis of the above, and in order to establish
whether the sale price reflected well the assets’ market
value, the Commission separated the assets in three
(54) The
Commission
cannot
accept
the
above
argument.
categories: (a) mines; (b) land; and (c) stock of
Indeed, the Commission notes that the price paid by
minerals. For the calculation of the assets’ market value,
Greece to TVX Hellas was the result of a clearing of
the Commission relied on the Behre Dolbear report (see
the two parties’ claims against each other. The
paragraph 19 above). As regards land, the Commission
Commission also notes that the claim of TVX Hellas
has verified this report’s value by using the price paid for
against Greece amounted to EUR 293,5 million (see
the land in question in a previous tender in 1995 (see
paragraph 15 above). In this sense, in case that the
paragraph 11 above).
two parties had claims of different amounts, the final
outcome of their clearing could be different, however it
would be linked to the sale of the same assets. Therefore,
the Commission considers that the above clearing of
claims was not representative of the value of the sold
assets.
(59) On
the
use
of
the
Behre
Dolbear
report,
Greece
and
the

beneficiary argue that it cannot be taken into account,
because its purpose was to attract investors’ attention.
The Commission cannot accept this argument, because
the attraction of investors’ attention is a principal and
(55) At the same time, the Commission notes that the above
legitimate purpose of any valuation report, issued on
claims were indemnifications requested by the two
behalf of market economy operators who seek funds in
parties. In particular, Greece’s claim concerned environ
the financial markets. The validity of any valuation has to
mental damages allegedly caused by TVX Hellas. TVX
be verified, however the mere fact that valuation reports
Hellas’ claim concerned environmental expenses and
are intended to attract investors is not enough to
losses from investments that the company suffered
discredit any valuation report.
allegedly due to the mining permits’ annulment in
2002. The Commission also notes that the value of the
assets was not assessed in any way at the time of the
above clearing. Therefore, the price of EUR 11 million for
the sale of the Cassandra Mines to Greece was linked to
(60) Also, Greece and the beneficiary argue that the report
the two parties’ alleged responsibilities and not to the
cannot be taken into account because its point in time
value of the assets.
(June 2004) was not the same as that of the sale
(December 2003).
(56) Finally, the Commission notes that the decision of TVX
Hellas to sell the Cassandra Mines was related to the
failure of its substantial investment in Olympias,
(61) The
Commission
cannot
accept
the
above
argument.
The
therefore to the value of the Olympias investment and
Commission notes that the Behre Dolbear reports’ date is
indeed 30 June 2004, however its content can be
considered as contemporary to the sale of December
( 17 ) Depreciation affected with the use of rates set by the tax authorities.
( 18 ) See Case T-415/05, Hellenic Republic vs European Commission,
2003, because it derives from historical metal prices of
paragraphs 307-308.
the period 1993-2003.

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EN
23.7.2011 Official
Journal
of
the
European
Union L
193/35
(62) The
Greek
State
and
Ellinikos
Xrysos
argue
that
the
report, Behre Dolbear states its belief that these costs are
report does not refer to the sold assets but to the
‘reasonable’. Therefore the Commission considers that
value of Ellinikos Xrysos as a going concern, therefore
there were no administrative or economic obstacles to
it is not indicative of the value of the assets sold by the
the granting of mining permits or to the construction of
Greek State in December 2003. The Commission cannot
a mining infrastructure and the realisation of operations
accept this argument, because the report provides an
in Skouries.
analytical assessment of the value of the sold assets on
an individual basis, in order to calculate the overall value
of the company.
(67) On
the basis of the above (paragraphs
63-66), the
Commission considers that, at the time of the sale, the
market value of Olympias was indeed jeopardized by the
a.a. Estimation of mines value
2002 annulling decisions, however the market value of
Stratoni and Skouries was not. Therefore, at the time of
a.a.1. Argumentation on the value of the mines
the 2003 sale a market value for the Cassandra Mines
could be estimated.
(63) The
Greek
authorities
and
the
beneficiary
claim
that,
at
the time of the sale, the Cassandra Mines’ market value
was reduced or even negative, because of the long stop in
operations and the annulment of the mining permits.
They also argue that the price paid in the 2003 sale
a.a.2. Calculation of mines value
represented the value of the Stratoni mine, since it was

the only operational one. In particular, Greece accepts
(68) In order to calculate the value of the Cassandra Mines,
that, at the time of the sale, Stratoni had valid mining
the Commission examined for each of the three indi
permits and therefore was operational and fulfilled the
vidual mines which comprise them (Stratoni, Olympias
Behre Dolbear report’s clause of a ‘near production
and Skouries) the same two issues: (a) the value of the
facility’.
mine, which should be based on economic factors
applying at the time of the sale; and (b) the mine’s
ability to be operational, in order to realise the above
mentioned value. On the basis of these two issues, the
Commission comes to the conclusion that Stratoni and
Skouries had a certain value which was able to be
(64) The
Commission
notes
that
the
2002
annulling
decisions
only affected the value of Olympias, because indeed at
realised and that Olympias had a value that was
the time of the sale Stratoni had valid mining permits,
difficult to be established at the time of the 2003 sale.
therefore it had a value. At the same time, TVX Hellas
stopped business because of the failure of its investment
in the process of gold extraction, when the Olympias
permits were annulled, therefore its behaviour was
related only to the value of the Olympias investment
(69) In order to estimate the value of the mines, the
and not to the value of Stratoni.
Commission used the Behre Dolbear report. The latter
report uses three methods to set the fair market value
of the Cassandra Mines: (a) the Income Approach
valuation ( 19 ); (b) the Related Transactions (comparable
sales) valuation; and (c) the Market Capitalisation
approach ( 20 ). The attributed values of the three
(65) As
regards
Skouries,
the
Greek
authorities
and
the
bene
methods are, respectively: (a) USD 130,3-402,5 million
ficiary claim that no mining activity or investment has
or EUR 107,2-331,1 million; (b) USD 504,7 million or
ever taken place there but only mining research,
EUR 415,2 million; and (c) USD 614,9 million or
conducted by TVX Hellas before the 2003 sale, and
EUR 505,9 million. The range of the Income Approach
significant investment is needed in order to create a
valuation is due to the different pricing scenarios used
mining facility there.
therein (see paragraph 72 below). From these three
methods, the Commission used the Income Approach.
Motivation for this is presented in the Table below:
( 19 ) The time periods considered in the cash flow analysis of the Income
Approach for the three mines are: (a) 2004-2035 for Olympias; (b)
(66) The
Commission
notes
that
indeed
Skouries
did
not
have
2004-2015 for Stratoni; and (c) 2004-2034 for Skouries.
mining permits or an established mining infrastructure.
( 20 ) The Income Approach valuation determines fair market value by
However, the Greek authorities and the beneficiary have
discounting the cumulative benefits generated by an asset, which
not submitted any information or substantial argument
converts the benefits over the lifetime into a present value. The
demonstrating that Skouries was not administratively
Related Transactions valuation determines fair market value based
allowed or economically feasible to be operated. Also,
on present day transactional values for gold properties where fair
according to the Behre Dolbear report, the capital costs
market value can be determined. Finally, the Market Capitalisation
approach is based on the present day value accorded on public
for mine development and construction in Skouries were
stock markets for gold companies in relation to those companies’
USD 268 million in 2004, i.e. EUR 220 million. In its
proven and probable reserves.

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L 193/36
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Official Journal of the European Union
23.7.2011
Table
Motivation for the use of the Income Approach
Income Approach Related
Transactions Market
Capitalisation
The Income Approach provides The base of the Related Transactions The Behre Dolbear report also includes
analytical values for each of the three valuation is questionable, because two a comment for the Market Capitali
mining projects and based on metal different mines cannot be the same. sation method, by American
prices that were known at the time According to Behre Dolbear, related Appraisal Associates. According to
of the sale of the Mines. When esti transactions are controversial, due to that comment, the Market Capitali
mating the value of an asset in a trans the fact that every mineral deposit, sation is recommended as a
action, one can take into account only even of the same commodity, is secondary valuation method or as a
factors standing at the time of the different to some extent from other rule of thumb, suitable to check
transaction.
deposits, as regards mineralogy, valuation determinations by primary
mining conditions, metallurgy, envi methods.
ronmental aspects, social issues
Behre Dolbear appears to put more present, ore grades etc.
The Income Approach is a primary
trust in the value deriving from the
valuation method. Therefore, the
Income Approach, since it states that
Income Approach is the one to rely
‘Historically, Behre Dolbear would have
on. In addition, in the case at hand
placed significant weight on the value
the Market Capitalisation method
derived by the Income Approach’
verifies only the value resulting from
(summary of values in p. 43 of the
market capitalisations of first half of
Behre Dolbear report).
2004, which are not accepted as this
information is ex posteriori. Therefore,
the Market Capitalisation method
cannot be used even as a secondary
valuation method.
(70) Greece accepts that, if the Behre Dolbear report is used,
half of 2004 are not representative of the value of the
only the Income Approach can be accepted, as it is an
mines, because they are only a snapshot and therefore do
internationally used main method of evaluation, but only
not take into account fluctuation. The latter’s
for its validation date (30 June 2004) and with the
consideration is critical, in order to minimize the effect
prerequisite of mining permits granted and serious
of any possible extraordinary changes or random events
investments realised.
and to have a reliable picture of the mines’ value.
(71) Based on the Income Approach, the Commission
(73) Greece
and
the
beneficiary
argue
that
Behre
Dolbear
estimates the value of the mines at the time of the
estimates the net present value of the near-production
2003 sale, as follows (see paragraphs 72-79 below):
Cassandra Mines to be negative USD 2,59 million
(page 37, table 5.3 of the report), therefore the price
actually paid (EUR 11 million) was above the market
value of the Mines.
(72) The
Income
Approach
estimates
the
fair
market
value
of
the Cassandra Mines at a near-production level ( 21 ), as the
result of the mines’ operations, with well defined costs
and proven and probable reserves ( 22 ). The report uses
three different pricing scenarios with prices of:
(74) The
Commission
notes
that,
on
a
stand
alone
basis,
the
(a) 1993-2003 average; (b) first half of 2004 only; and
net present values (at near-production level) attributed by
(c) 1993-2003 average plus first half of 2004 (divided by
the Income Approach to the three mining projects are:
2). The Commission considers that it can take into
(a) to Olympias, negative USD 28,79 million, i.e. negative
account only the 1993-2003 average scenario, instead
EUR 23,7 million; (b) to Stratoni, USD 10,48 million,
of the other two, because it is based on prices and
i.e. EUR 8,6 million; and (c) to Skouries, USD 15,72
costs that were known at the time of the sale, which
million, i.e. EUR 12,9 million. The above three values
took place in December 2003. In addition, the 1993-
indeed sum up to negative USD 2,59 million.
2003 historic prices used by Behre Dolbear do not
show any specific trend throughout the whole 1993-
2003 period, i.e. they fluctuate between different years,
and therefore the Commission considers that the 1993-
(75) However, the Commission does not accept the above
2003 average incorporates better the historic devel
argument of Greece and the beneficiary. From the
opments in the metal market. Also, the prices of first
above values, the Commission notes that indeed the
net present value (at near-production level) of Olympias
at the time of the sale was negative. Nevertheless, the
( 21 ) In operation, under development or at a final feasibility study stage.
( 22 ) Mineral reserves are resources known to be economically feasible
Commission considers that the negative net present
for extraction. Reserves are either probable or proven.
value of Olympias means that, at the time of the sale,

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EN
23.7.2011 Official
Journal
of
the
European
Union L
193/37
the expected profits resulting from operating the mine at
(78) Greece and the beneficiary argue that the value of the
the price level observed over the past 11 years would be
Mines estimated by Behre Dolbear cannot be taken into
negative. At such a gold price level, any owner of
account, because it concerns the assets together with the
Olympias would choose not to operate the mine and
relevant mining permits, but Ellinikos Xrysos only
would seek to avoid the losses to the greatest extent
acquired the assets, whereas the mining permits would
possible. As it turns out, by not operating the mine,
be granted later by the Greek State. The Commission
the buyer could limit the losses to EUR 5,5 million,
does not accept this argument, because, as demonstrated
costs that the buyer had contractually to bear for envi
above, Stratoni indeed had a valid mining permit at the
ronmental protection and maintenance purposes. From
time of the sale. As regards Skouries, as also demon
this alone, one cannot infer however that therefore the
strated above, there were no administrative obstacles to
value of Olympias should be evaluated at EUR 5,5
the granting of its mining permit. Also, the cost of
million negative. This is because, in principle, owning a
applying for and obtaining a mining permit for
mine also confers an option value: the owner can operate
Skouries was limited to the fees of geologists and other
the mine when times are good (gold prices are high
experts, for the preparation of the studies required for the
enough) and choose not to operate when times are bad
permit, as well as the fee for a Letter of Guarantee
(gold prices are not high enough). Accordingly, Ellinikos
required by the competent Ministry. According to the
Xrysos may have chosen to take over the mine as part of
submission of the Greek authorities, the above costs
the package of Cassandra Mines or in view of later being
equal (respectively) to approximately EUR 5 000 on an
able to undertake necessary investments into the
ad hoc basis plus EUR 600 000 per year, at maximum.
Olympias mine to profitably restart exploitation in case
The Commission considers these amounts to be at a low
gold prices were to rise to levels (substantially) above the
level, comparing to the overall capital costs for mine
level observed over the past period of 1993-2003.
development and construction in Skouries, equal to
USD 268 million in 2004, i.e. EUR 220 million (see
paragraph 66 above). Thus, the Commission considers
that the above mining permit costs were not an
obstacle for a company willing to invest in Skouries.
(76) Obtaining
a
reliable
estimate
of
this
option
value
is
fairly
The Commission also notes that the Behre Dolbear
complicated, however. More importantly, any such value
report also includes ‘administration’ costs in the calcu
would have to be adjusted for the (possibly high) like
lation of the mine’s net present value, therefore the
lihood that, even though gold prices would be high
Commission considers the above costs (of applying for
enough to allow profitable operation, no permit would
and obtaining a mining permit for Skouries) to have
be obtained for this mine. As indicated above (see
been taken into account by the Behre Dolbear report.
paragraph 12), the Olympias mining and gold processing
permits were annulled for environmental reasons, which
are considered as serious. Therefore it would appear
appropriate to regard Olympias as having an option
value which can conservatively be put to zero. The net
value of Olympias would accordingly be estimated at
(79) From the above, the value of the mines can be estimated
EUR 5,5 million negative.
at EUR 16 million for the three mines (EUR 21,5 million
– EUR 5,5 million).
(77) By contrast, the Commission considers that the indi
vidual values attributed to Stratoni and Skouries reach
a value of EUR 21,5 million, as the sum of the two
mines’ values according to the Behre Dolbear report
a.b. Calculation of land value
(EUR 8,6 million plus EUR 12,9 million, respectively,
(80) The
Greek
authorities
and
the
beneficiary
argue
that
land,
see paragraph 74 above), because:
in cases where it is acquired by a mining company, can
only be used for mining activities and does not have a
market value, because Greek law gives priority to mining
activities in such areas. Therefore, the reduction of value
(a) Stratoni had a valid mining permit, an established
of the mining rights, due to the long stop in operations
mining infrastructure and a positive value to derive
and the annulment of mining permits, affected a
from its operations (positive net present value),
reduction of value also to land.
therefore it was operational at the time of the sale;
(b) As regards Skouries, the Commission considers that
(81) On the above issue, the Commission considers the land
there were no administrative or economic obstacles
in question as an asset of a mining undertaking and not
to the granting of mining permits or to the
as ‘real estate’, in the broad sense of the term, due to the
construction of a mining infrastructure and the real
particular characteristics of mining operations (pollution,
isation of operations. At the same time, Skouries also
disturbance of environment etc.), which would make the
had a positive value to derive from its operations
possibility of trading those assets separately from the
(positive net present value).
mines questionable.

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L 193/38
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Official Journal of the European Union
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(82) However, the Commission also considers that any
The Commission notes that the acquisition value of those
business asset has a value, because it contributes or can
70 additional land plots is EUR 1,1 million, as presented
contribute to operations and to the realisation of
in the financial statements of TVX Hellas. The
earnings. The Cassandra Mines was an undertaking oper
Commission considers that acquisition value to be
ational at the time of the sale, therefore the Commission
market oriented, since it was obtained in the market.
considers that the land could be used for the operations
Adding together the above two values (EUR 3,5 million
of the Mines and thus indeed had a value. Therefore, the
plus EUR 1,1 million), the total land’s fair market value
Commission cannot accept the above argument of
can be established at EUR 4,6 million.
Greece and Ellinikos Xrysos.
(83) The
Hellenic
Mining
Watch
claims
that
the
Cassandra
(89) The above amount of EUR 4,6 million is the nominal
Mines assets include also substantial real estate, which
value of land in 2003, based on prices of 1995 and
increases their total value considerably but was not
1997-2000. The Commission considers that this value
taken into account by the Behre Dolbear report.
would need to be adjusted according to the Greek
general index of industrial production prices, for the
periods 1995-2003 and 1998-2003. The index of
industrial production prices is used because the land in
(84) However, the Commission notes that the Behre Dolbear
report indeed takes into account land, other than the
question is an asset of an industrial company, therefore
mines. In particular, the Behre Dolbear report considers
the adjustment has to be representative of the price
land as a non-mineral asset of the Cassandra Mines and
changes in the industrial sector. This adjustment of the
1995 and 1997-2000 sales prices leads to a final result
gives it a value of EUR 6 million ( 23 ), separately to the
of EUR 5,9 million in December 2003.
Income Approach method.


(85) Behre Dolbear states in the report that the value provided
(90) The
Commission
notes
that
the
above
value
of
EUR
5,9
for land is the one reported by Ellinikos Xrysos, and has
million closely matches the value of EUR 6 million,
not been estimated by Behre Dolbear. Thus, the
reported by Behre Dolbear in the valuation report (see
Commission needs to verify this value.
paragraph 84 above). The Commission considers that
this close match confirms the soundness of the
valuation of the land by Ellinikos Xrysos used by the
(86) For the above verification, the Commission uses the price
Behre Dolbear report, and therefore justifies taking the
paid for land in the 1995 open tender for the sale of the
figure of EUR 6 million as representing the fair market
Cassandra Mines to TVX Hellas (see paragraph 6 above).
value in December 2003.
This is not a primary calculation but a secondary one,
intended to test the validity of the Behre Dolbear report’s
value (EUR 6 million).
a.c. Calculation of stock of minerals value
(91) The
2003
sale
also
included
a
quantity
of
stock
of
(87) The
Greek
authorities
accept
that
the
value
determined
minerals with concentrates (
by the 1995 open tender could be taken into account,

24 ) of gold. The Greek
authorities and the beneficiary argue that in 2003 the
and that the value of land can be considered as
above stock had negative value because of the relatively
unchanged. The Commission notes that, in the context
low price of gold and the relatively high related costs.
of the 1995 sale of the Cassandra Mines to TVX Hellas,

land was assigned a price of DR 1,2 billion. The
Commission notes the absence of valid price references
or price indexes for the particular land of the Cassandra
(92) In
particular,
the
Greek
authorities
have
provided
a
calcu
Mines, which is considered as an asset of a mining under
lation of the ‘break even’ price point, for which the trade
taking and not as ‘real estate’ in the broad sense of the
of the above stock would be gainful. Taking into account
term (see paragraph 81 above). Such valid price
the concentration of gold in the mineral, i.e. 0,7 ounces
references or price indexes, if available, would allow the
of gold per tonne, and the price of gold on 12 December
calculation of an updated reference value. In their
2003, i.e. USD 407 per ounce, the value of gold concen
absence, the Commission considers the 1995 price as
trated in the stock of mineral was USD 284,9 per tonne.
the best available estimate in the case at hand. Therefore,
Also, the Greek authorities have provided the costs
the Commission takes as a starting point a fair market
related to the trade of the above stock: treatment
value for the land of DR 1,2 billion or EUR 3,5 million
charges of USD 245 per ounce and USD 171,5 per
(using the exchange rate of 340,75 DR/EUR at which
tonne; transport costs of USD 50 per tonne; cleansing
Greece entered the Eurozone in 2001).
penalties of USD 270 per tonne; and refining charges
of USD 5 per ounce and USD 4,1 per tonne. The calcu
lation of the above results in a negative sale price of
(88) Also,
after
1995,
TVX
Hellas
acquired
70
additional
land
USD 210,7 per tonne.
plots (in period 1997-2000, most part in 1998-1999).
( 24 ) A concentrate is the residue valuable metal, from which most of the
( 23 ) See page 42 of the Behre Dolbear report, ‘Non-mineral assets and
waste rock has been removed. The residue metal becomes the raw
liabilities’.
material for smelting, i.e. extractive metallurgy.

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EN
23.7.2011 Official
Journal
of
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European
Union L
193/39
(93) The
Commission
has
indeed
verified
the
above
calcu
method for the mineral quantities and the metal prices of
lation. The Commission considers that, for the above
December 2003 as well as the specific smelter pay
reasons of price and cost, at the time of the sale the
schedule conditions of Ellinikos Xrysos, the Commission
trade of this stock was loss-making. Perhaps the trade
concludes that the market value of the mineral deposits
of the stock of gold minerals would be gainful, if
which Ellinikos Xrysos bought in December 2003
transport cost changed/was expected to change, but this
amounted to USD 3,7 million or EUR 3 million (using
was an uncertain event. Also, the Behre Dolbear report
the exchange rate of 1,2254 USD/EUR of the date of the
does not provide the value of stock of gold minerals.
minerals’ sale to Ellinikos Xrysos, 12 December 2003).
Therefore, the Commission considers that the value of
this stock cannot be calculated.
(97) The
Commission
notes
that,
according
to
the
submission
of the beneficiary, the mineral deposits of lead and zinc,
(94) The
Hellenic
Mining
Watch
alleges
that
the
stock
of
gold-
acquired in December 2003, were sold in December
bearing minerals had significant value, amounting to
2004 (1 December 2004 and 31 December 2004),
EUR 80 million. The Commission notes that this value
therefore post to the date of the Behre Dolbear report.
of EUR 80 million was not supported by any data or
Thus, the Commission considers that the specific
evidence by the Hellenic Mining Watch. On this basis
conditions of the above method (value calculation for
as well as on the basis of the above calculation,
deposits of June 2004, see paragraph 95 above) are
resulting that the value of this stock cannot be calculated,
valid also for the value calculation of the mineral
the Commission does not accept this argument of the
deposits of December 2003, since there was no other
Hellenic Mining Watch.
sale of minerals between December 2003 and June
2004 that could have set different conditions.
(95) The
Commission
notes
that
the
assets
sold
in
December
2003 also included two mineral deposits of lead and
a.d. Conclusion on advantage
zinc. The Behre Dolbear report includes an estimation
of the value of existing concentrates of lead and zinc
(98) The above calculation yields a total value for the
of 30 June 2004 ( 25 ). This estimation is separate to the
Cassandra mines of EUR 25 million, as the sum of the
calculation of the mines’ Net Present Value and does not
value of mines (EUR 16 million), land (EUR 6 million)
form part of the valuation under the Income Approach.
and stock of minerals (EUR 3 million).
It provides the net smelter return ( 26 ) for the owner of
the mine: firstly, the value of the contained metals (lead,
silver and zinc) is calculated, on the basis of the current
prices and the available quantities; secondly, the ‘smelter
(99) This
total
value
is
significantly
lower
than
the
value
pay schedule’ (the cost of further processing, charged by
presented by the Behre Dolbear report as fair-market
the buyer of the minerals to their producer) is applied,
value of the Cassandra Mines assets (USD 500 million
taking into account specific conditions for the deduction
or EUR 411 million, see paragraph 19 above). The
of that cost (specific depreciation percentages, treatment
value presented by the Behre Dolbear report was
and refining charges and freight costs); finally, the smelter
mentioned in the Commission’s decision of
pay schedule is deducted from the above value of the
10 December 2008 to initiate the formal investigation
contained metals ( 27 ).
procedure, as an indication that the sale price was below
market value of the Mines.
(96) The
Commission
notes
that
the
above
method
is
the
standard method for calculating metal payments.
(100) The reason to depart from the above value of the Behre
Therefore the Commission will use the above method
Dolbear report (USD 500 million) is that it derives from
in order to estimate the market value of the mineral
two valuation methods which are not adequate in the
deposits that Ellinikos Xrysos bought in December
case at hand (see Table 1 above). In particular, it
2003, using the mineral deposits’ quantities and metal
derives from two evaluation methods, namely the
prices of December 2003 ( 28 ). By applying the above
‘Related Transactions’ and the ‘Market Capitalisation’
methods, which cannot be accepted because: (a) The
( 25 ) See Appendix 11, ‘Stratoni concentrates cash flow’.
base of the Related Transactions valuation is ques
( 26 ) The net smelter return is the amount of money which the smelter
tionable, as two different mines cannot be the same:
or refinery pays the mining operator for the mineral product and is
every mineral deposit, even of the same commodity, is
usually based on a spot, or current price of the mineral, with
deductions for the costs associated with further processing.
different to some extent from other deposits; (b) the
( 27 ) For information purposes, the Commission notes that the result of
Market Capitalisation is recommended as a secondary
this calculation for 30 June 2004, as provided in the Behre Dolbear
valuation method or as a rule of thumb, suitable to
report, is a value of USD 3,5 million, i.e. EUR 2,9 million (using the
check valuation determinations by primary methods
exchange rate of 1,2155 USD/EUR of 30 June 2004).
like the Income Approach. In the case at hand, the
( 28 ) Quantities of mineral deposits (as submitted by the beneficiary):
Market Capitalisation method cannot be used even as a
3 050 tonnes of lead and 2 350 tonnes of zinc; Metal prices
(sources: www.kitco.com and www.lme.com): USD 684/tonne for
secondary valuation method, because it verifies only the
lead, USD 5,6/ounce for silver and USD 973/tonne for zinc.
value of the Income Approach resulting from market

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L 193/40
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Official Journal of the European Union
23.7.2011
capitalisations of first half of 2004, which cannot be
beneficiary argue that the 1995 sale transaction took
accepted because this information is ex posteriori to
place between TVX Hellas and the previous owner, a
the date of the sale; and (c) Behre Dolbear states its
private company in bankruptcy.
trust in the value deriving from the Income Approach.
(106) The Commission notes that Greece was an active party of
(101) Furthermore, the total value at which the Commission
the two transactions, realised through two different
concludes (EUR 25 million) is much lower than the value
contracts. In the second contract, Greece assumed the
range provided by the Income Approach (EUR 107,2
obligations of a vendor but also was entitled to the
million-EUR 331,1 million, see paragraph 69 above).
revenue of the sale. The latter was paid directly to TVX
The reason for this is that the latter concerns: (a) values
Hellas in order to cover a certain obligation of the Greek
of assets that were not transferred in December 2003,
State, therefore the latter’s role as a vendor and not as
e.g. receivables, cash and stock of minerals (the one of
just an intermediary is again verified. As regards the
June 2004, different than the one of December 2003, see
argument that the 1995 sale took place between TVX
calculation in paragraphs 91-97); and (b)
mineral
Hellas and a private company, the Commission considers
resources characterised in the Behre Dolbear report as
that it is irrelevant to the criterion of State resources in
speculative and uncertain ( 29 ), (mineable material or
the case at hand, because this criterion is examined only
exploration potential). The latter are not included in
for the 2003 sale.
the cash flows for the determination of the net present
value under the Income Approach (see paragraph 72
above), which derives only from proven and probable
reserves, excluding all other resources. In addition, the
(107) Thus, the Commission does not accept the arguments
above value range also includes different values of
put forward by the Greek authorities and the beneficiary
Olympias under different pricing scenarios, however the
and considers that the criterion of State resources is
Commission does not accept those values (see paragraphs
fulfilled.
72-76 above). Finally, the above value range is influenced
by the above mentioned different pricing scenarios, of
which the Commission accepts only one (see paragraph
72 above).
c. Selectivity
(108) The Cassandra Mines were sold to Ellinikos Xrysos,
therefore the latter benefitted selectively from the
difference between the sale price and the sold assets’
(102) Therefore, the Commission concludes that the market
value of the Cassandra Mines assets amounted to
market value. Thus, the Commission considers that the
EUR 25 million at the time of their sale to Ellinikos
measure is selective as it favours only this specific
Xrysos.
company.

(109) Neither Greece nor the beneficiary contested this point.
(103) The Commission considers that the advantage amount,
from which Ellinikos Xrysos benefitted, equals EUR 14
million, as the difference between the total fair market
value of the Cassandra Mines assets (EUR 25 million) and
d. Distortion of competition and affectation of trade
the price paid in the sale (EUR 11 million).
between Member States
(110) Ellinikos Xrysos is active in a sector whose products are
widely traded among Member States. In particular, there
(104) On the basis of the above analysis of the arguments put
is zinc, copper, lead, gold and silver mining in eleven
forward by Greece and the beneficiary as well as the
Member States, apart from Greece, i.e. in United
calculation of the sold assets’ market value and the
Kingdom, Italy, Finland, Poland, Slovakia, Romania,
latter’s comparison to the price actually paid by
Bulgaria, Spain, Ireland, Portugal and Sweden ( 30 ). As
Ellinikos Xrysos, the Commission considers that the
regards the trade of zinc, copper, lead, gold and silver,
criterion of advantage is fulfilled.
those are traded in all Member States ( 31 ). Also, the aid
measure in question granted Ellinikos Xrysos an
advantage over its competitors (see paragraphs 39-104
above). When State aid strengthens the position of an
b. State resources
undertaking compared with other undertakings
competing in trade between Member States, those other
(105) The Greek authorities and the beneficiary argue that
undertakings must be regarded as affected by that aid.
Greece only acted as an intermediary in the 2003 sale
Thus, the criterion of distortion of competition and affec
and has never been owner of the Mines. They also argue
tation of trade between Member States is indeed fulfilled.
that Greece has not received any amount of money from
the 2003 sale, as the EUR 11 million were paid directly
to TVX Hellas. Finally, the Greek authorities and the
( 30 ) Source: European Association of Mining Industries, http://www.
euromines.org.
( 31 ) Source: European Mineral Statistics 2004-2008, British Geological
( 29 ) See pages 10, 16 and 20.
Survey, http://www.bgs.ac.uk/.

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EN
23.7.2011 Official
Journal
of
the
European
Union L
193/41
(111) Neither Greece nor the beneficiary contested this point.
(119) Ellinikos Xrysos argues that the application of any tax in
the 2003 sale would be premature, as the sale contract
was not definitive, because of an annulling clause. The
e. Conclusion on the existence of aid in measure 1
Commission does not accept this argument, because the
specific annulling clause only foresees undoing the sale in
(112) On the basis of the above, the Commission concludes
case of the two parties not respecting certain obligations,
that the 2003 sale of the Cassandra Mines to Ellinikos
in order to safeguard its effect, which is a usual clause for
Xrysos constitutes State aid in favour of Ellinikos Xrysos
the majority of contracts and does not make them not
in the meaning of Article 107(1) TFEU. The amount of
definitive. In addition, the contract indeed stipulates its
aid equals to EUR 14 million, as the difference between
validation, in particular in its Article 9, where validation
the price paid in the 2003 sale, i.e. EUR 11 million, and
is set for the date of publication of the contract’s
the market value of the sold assets at the time of the sale,
ratifying law in the Government’s Gazette. Finally, the
i.e. EUR 25 million.
contract makes no reference to any kind of non-
definitive status. Thus, the Commission considers that
the contract was indeed definitive and the appropriate
MEASURE 2: WAIVER OF TAX AND REDUCTION OF LEGAL
taxes should have been applied.
FEES
a. State resources
(113) According to Greece and the beneficiary, the reduction of
(120) The Greek authorities and the beneficiary also argue that
legal fees does not involve State resources, because
the value of the Mines was negative, therefore an
lawyers are private operators and not public employees,
incentive for potential buyers was needed. On this
and the fees’ tax and duties were paid duly. Also,
argument, the Commission notes that the value of the
according to Greece, the buyer’s legal fees were not
Mines at the time of the sale was not negative but
paid by the State. At the same time, the reduction of
positive and amounted to EUR 16 million (as calculated
legal fees is stipulated in the sale’s contract, Article 5,
in paragraphs 68-79 above).
where it is stated that the legal rights and fees ‘are
reduced to 5 % of the minimum fee level, as foreseen
by the relevant laws’.
(121) The Commission notes that according to the Greek
Mining Code, transfers of mines are taxed at a rate of
(114) The Commission agrees that lawyers are not public
5 % on the basis of their value, applicable to transactions
employees. On the other hand, the Commission notes
against consideration, ‘με επαχθ αιτα’. The Greek
that notaries are indeed public servants. However,
authorities argue that transactions ‘against consideration’
notaries do not receive a salary; their income comes
are those caused by unfavourable incidents, e.g. death of
exclusively from their clients and not from the State
the owner, therefore the 5 % tax stands only for such
budget.
transactions and was not applicable in the case at hand.
The Commission cannot accept this argument, because,
according to its investigation, transactions ‘against
(115) The Commission also notes that, in sale contracts, legal
consideration’ are those where the person who acquires
fees are borne by both parties. In the case at hand, the
an asset gives as compensation a return and in general
Commission accepts the Greek authorities’ submission
when there is a consideration for the acquisition. This is
that the State did not pay the above fees in the place
also the well-established and accepted interpretation of
of the buyer.
the issue ( 32 ).
(116) Thus, the Commission considers that the reduction of
legal fees does not involve State resources and
therefore does not constitute State aid in the sense of
(122) The market value of the mines in 2003 was EUR 16
Article 107(1) of TFEU.
million (as calculated in paragraphs 68-79 above).

Thus, the Commission considers that the appropriate
tax for the mines sold in 2003 would equal to
EUR 0,8 million.
(117) As regards the waiver of tax, taxes are aimed to finance
the budget of the State. Therefore the non-collection of
taxes deprives the State of resources. Thus, the
Commission considers that the waiver of tax indeed
involves State resources.
(123) In addition, Greece acknowledges that 7 %-9 % tax is
indeed levied in all cases of land sale, regardless of
whether it is a sale of company assets or individual
b. Advantage
ones. On this issue, the Commission received two
different letters, one from the Ministry of Finance and
(118) The Commission notes that two taxes were due in the
one from the Ministry of Environment and Climate
case of the sale of the Cassandra Mines: 1) a tax on the
transfer of the mines, equal to a rate of 5 %; and 2) a tax
( 32 ) See e.g. ‘Interpretation and case law of Civil Law’, Vasilios Vath
on the transfer of the land, equal to a rate of 7 %-9 %.
rakokoilis, Judge of the Supreme Court, vol. 2, 2003, p. 636.

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L 193/42
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Official Journal of the European Union
23.7.2011
Change (competent for mining issues), contradicting each
million in favour of Ellinikos Xrysos in the meaning of
other. The Commission pointed this contradiction to the
Article 107(1) TFEU. On the other hand, the Commission
Greek authorities but did not receive any letter with a
considers that the reduction of legal fees does not
final opinion. Thus, the Commission accepts the
constitute State aid in the meaning of Article 107(1)
information submitted by the Ministry of Finance, as
TFEU.
the competent service for taxation issues.
IV.b. COMPATIBILITY OF THE AID WITH THE INTERNAL
MARKET
(124) The market value of land in 2003 was EUR 6 million (as
calculated in paragraphs 80-90 above). Thus, the
GENERAL
Commission considers that the 2003 land sale should
have resulted in a tax of EUR 0,54 million ( 33 ).
(130) Inasmuch as the measures constitute State aid within the
meaning of Article 107(1) TFEU, their compatibility must
be assessed in the light of the exceptions laid down in
paragraphs 2 and 3 of that Article.
(125) As the 2003 sale contract foresees zero tax for the
transfer, the Commission considers the above amounts
(totalling EUR 1,34 million) as the advantage from which
(131) Articles 107(2) and 107(3) TFEU provide for exemptions
Ellinikos Xrysos benefitted.
to the general rule that State aid is incompatible with the
internal market as stated in Article 107(1).
(126) Greece and the beneficiary claim that the tax waiver was
equal to EUR 38 000 and therefore was lower than the de
(132) In the following the Commission will assess the compati
minimis threshold ( 34 ) and did not benefit the buyer. The
bility of the measures under those exceptions.
Commission cannot accept this argument, because the de
minimis threshold, equal to EUR 100 000 at the time of
the 2003 sale, applies irrespective of the form of the aid
EXEMPTIONS UNDER ARTICLE 107(2) TFEU
or the objective pursued. Therefore one cannot
distinguish the different aid measures at hand, i.e.
(133) The exemptions in Article 107(2) TFEU do not apply in
measures 1 and 2, and only take into account part of
the present case because this measure does not have a
measure 2, i.e. the tax waiver. Thus, the Commission,
social character, has not been awarded to individual
taking under consideration both of the aid measures of
consumers, is not designed to make good damage
the case at hand and finding that they involve aid
caused by natural disasters or exceptional occurrences
amounts of over the de minimis threshold of
and has not been awarded to the economy of certain
EUR 100 000, considers that aid granted fails to satisfy
areas of the Federal Republic of Germany affected by
the conditions for aid to be considered de minimis. On
the division of that country.
the basis of the above, the Commission maintains its
conclusion of paragraph 125 above.
EXEMPTIONS UNDER ARTICLE 107(3) TFEU
(134) Further exemptions are laid out in Article 107(3) TFEU.
c. Selectivity
The exceptions laid down in Article 107(3)(b), (d) and (e)
are clearly not applicable and have not been invoked by
(127) The criterion of selectivity is fulfilled in the same way as
the Greek authorities. In the following, the Commission
in paragraph 108 above.
will assess the measures’ potential compatibility under
Article 107(3)(a) and (c).
d. Distortion of competition and affectation of trade
between Member States
(135) Article 107(3)(a) states that ‘aid to promote the economic
development of areas where the standard of living is
(128) Finally, criterion of distortion of competition and effect
abnormally low or where there is serious under
on trade between Member States is fulfilled in the same
employment’ may be declared compatible with the
way as in paragraph 110 above.
internal market. The Cassandra Mines are located in an
assisted area under Article 107(3)(a) TFEU, therefore
Ellinikos Xrysos could potentially be eligible for
regional aid.
e. Conclusion on the existence of aid in measure 2
(129) On the basis of the above, the Commission concludes
that the waiver of tax constitutes State aid of EUR 1,34
(136) The Guidelines on national regional aid applicable at the
time of the 2003 sale (‘the 1998 Regional aid
guidelines’ ( 35 )) set out the conditions for the approval
( 33 ) Calculation applying the 7 %-9 % tax: EUR 15 000 * 0,07 +
of regional investment aid.
EUR 5 990 000 * 0,09 = EUR 1 050 + EUR 539 100 =
EUR 540 150.
( 34 ) See footnote 15 above.
( 35 ) OJ C 74, 10.3.1998, p. 9.

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23.7.2011 Official
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of
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European
Union L
193/43
(137) According to the 1998 Regional aid guidelines, the
(143) However, according to the 1998 Regional aid guidelines,
object of regional investment aid is to secure either
an investment in fixed capital undertaken in the form of
productive investment (initial investment) or job
the purchase of an establishment which has closed or
creation which is linked to investment.
which would have closed had it not been purchased
may also be regarded as initial investment.
(138) As regards the possibility to consider aid for job creation,
it shall be stressed that under regional aid, job creation
(144) At this regard, the Commission notes that Greece has
means a net increase in the number of jobs in a
indeed demonstrated that the mines were closed or
particular establishment compared with the average
would have been closed had they not been purchased
over a period of time and that any jobs lost during
by Ellinikos Xrysos ( 38 ). Thus, such investment could be
that period must therefore be deducted from the
considered as initial investment.
apparent number of jobs created during the same
period. Furthermore, the amount of aid shall be
calculated on the basis of the wage cost, in particular it
must not exceed a certain percentage of the wage cost of
the person hired, calculated over a period of 2 years.
(145) Nevertheless, the fact that the sale of the Cassandra mines
is to be considered as initial investment doesn’t mean
that this investment is compatible on the basis of the
1998 Regional aid guidelines. Indeed, two conditions set
by these guidelines are not fulfilled, as follows in
(139) In comparison to these requirements, the Commission
paragraphs 146-152:
observes that the sale contract only included a vague
clause allowing Ellinikos Xrysos the discretion to recruit
any number of employees, according to its needs;
secondly the above mentioned conditions are not
fulfilled. The Commission therefore is on the view that
(146) Firstly, the sale of the Cassandra mines is an ad hoc
job creation in the sense of the Guidelines was not
measure. On this aspect, the 1998 Regional aid
secured.
guidelines explicitly mention the following: ‘A derogation
from the incompatibility principle established by Article
[107(1)] of the Treaty may be granted in respect of
regional aid only if the equilibrium between the
(140) As regards the definition of an initial investment, the
resulting distortions of competition and the advantages
1998 Regional aid guidelines define it as an investment
of the aid in terms of the development of a less favoured
in fixed capital relating to the setting-up of a new estab
region can be guaranteed […] An individual ad hoc aid
lishment, the extension of an existing establishment, or
payment made to a single firm, or aid confined to one
the starting-up of an activity involving a fundamental
area of activity, may have a major impact on competition
change in the product or production process of an
in the relevant market, and its effects on regional devel
existing establishment (through rationalisation, diversifi
opment are likely to be too limited. Such aid generally
cation or modernisation) (
comes within the ambit of specific or sectoral industrial

36 ).
policies and is often not in keeping with the spirit of
regional aid policy as such. The latter must remain
neutral towards the allocation of productive resources
between the various economic sectors and activities.
(141) The Commission accepts that the acquisition of Skouries
The Commission considers that, unless it can be shown
qualifies as an initial investment, on the basis of the
otherwise, such aid does not fulfil the requirements set
above definition of the Guidelines. Indeed, at the time
out in the preceding paragraph’.
of the 2003 sale there was no established mining infra
structure in Skouries, therefore an investment in fixed
capital was in order, relating to the setting-up of the
new mine’s construction (see paragraph 66 above).
(147) Despite the fact that Greece was requested to argue on
the compatibility of the aid on the basis of
Article 107(3)(a) TFEU and the 1998 regional aid
guidelines, in the context of the Commission’s opening
(142) Regarding Stratoni, the Commission considers it is
doubtful that the sale of Stratoni can be considered as
decision of 10 December 2008, the Commission notes
an initial investment in the meaning of the
that Greece did not to demonstrate at all that the sale of
Guidelines (
the Cassandra mines was founded on an equilibrium

37 ).
between the resulting distortions of competition and
the advantages of the aid in terms of the development
( 36 ) Point 4.4 of the Guidelines.
of a the less favoured region in question.
( 37 ) Indeed, Stratoni had a valid mining permit and an established
mining infrastructure, therefore it was operational at the time of
the sale (see paragraph 77a). Thus, it does not seem that the sale of
( 38 ) The Commission considers that admittedly the State as the owner
Stratoni was related to the setting-up of a new establishment, the
of the mines would not have exploited them economically itself.
extension of an existing establishment, or the starting-up of an
Therefore, the purchase by Ellinikos Xrysos of the mines could be
activity involving a fundamental change in the product or
considered as indispensable to prevent disappearance of these assets
production process of an existing establishment.
from the assisted region in question.

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L 193/44
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(148) Secondly, regional aid must have an incentive effect, i.e.
(151) Finally, Greece did not demonstrate in any way the
it must provide a real incentive to undertake investments
incentive effect of the aid in question.
which would not otherwise be made in the assisted areas.
In that sense, the Guidelines mention that ‘aid schemes
must lay down that an application for aid must be
submitted before work is started on the projects’ ( 39 ).
This condition is also valid for ad hoc aid measures ( 40 ).
Greece did not demonstrate that the beneficiary complied
(152) On the basis of the above, the Commission considers
with the above requirement and submitted an aid appli
that the sale of the Cassandra Mines does not fulfil the
cation before starting the project.
conditions of the 1998 Regional aid guidelines for
declaring the aid compatible as initial investment aid.
(149) Also as regards the incentive effect of the aid, the
Commission notes that Greece did not realise any open
and unconditional tender, in order to sell the Cassandra
Mines. The Commission considers that such an open and
(153) It could also be explored whether the aid can be declared
unconditional tender would have been the test to verify if
compatible as operating aid under the same guidelines.
there were or not any willing investors in the market for
The 1998 Regional aid guidelines define operating aid as
the mines. Since no such tender took place, the
aid aimed at reducing a firm’s current expenses. In
Commission is of the view that Greece did not verify
accordance with the Guidelines, operating aid may be
the level of willingness of the market to invest in the
granted on an exceptional basis in regions eligible
Cassandra Mines, and thus did not verify the need for an
under the derogation in Article 107(3)(a) TFEU.
aid with incentive effect.
(150) In addition, the Commission notes that the acquisition of
the Cassandra Mines was an investment in the mining
(154) However, according to the Guidelines, operating aid is
sector. The latter is a capital-intensive sector where
aid ‘aimed at reducing a firm’s current expenses’
usually significant amounts of investments are required
(point 4.15). The Commission notes that current
for business development and operations. Indeed, in the
expenses are non-capital and usually recurrent expen
case at hand, according to the Behre Dolbear report, the
ditures necessary for the operation of a business. The
capital costs for mine development and construction in
Commission notes that the aid in question did not
Skouries were EUR 220 million (see paragraph 66
finance current expenses in the above sense but an
above). The Commission notes this amount to be
investment in fixed capital (acquisition of mines and
considerably higher than the aid amount in question,
land) and a waiver of the due taxes for the above
i.e. EUR 15,34 million (see combined amounts in
investment (acquisition taxes). Therefore, the aid in
paragraphs 111 and 124 above). In particular, the
question did not finance current expenses. Thus, the
above aid amount represents only 7 % of the investment
Commission considers that the aid in question cannot
required in one of the mines. Furthermore, the
be found to fulfill the definition of operating aid in the
Commission did not receive any evidence demonstrating
sense of the Guidelines.
that Ellinikos Xrysos could not realise the investment
without aid. To the contrary, the Commission notes
that the Greece and Ellinikos Xrysos agreed that the
latter would indeed realise capital investments for the
development of the mines ( 41 ). Thus, the Commission
considers that the aid in question did not have an
(155) Also according to the Guidelines, operating aid may be
incentive effect and was not necessary for investors
granted in eligible regions, provided that its level is
willing to acquire the Cassandra Mines.
proportional to the handicaps it seeks to alleviate, and
it is for the Member State to demonstrate the existence of
any handicaps and gauge their importance. In the case at
( 39 ) Point 4.2 of the Guidelines.
hand, Greece did not provide any kind of measurement
( 40 ) See case T-162/06 Kronoply v Commission [2009] ECR II-1,
paragraphs 80 and 81. In this judgment, the Court of First
or calculation of the handicaps of the region and of the
instance doesn’t determine whether the aid concerned has an
level of the aid, in order to demonstrate that the latter is
incentive effect but clearly states that the incentive effect is a
proportional to the former.
condition for the compatibility of regional aid and that point 4.2
of the 1998 regional aid guidelines ‘refers to a circumstance of a
chronological nature and therefore points to an examination ratione
temporis, which is perfectly suitable for determining whether an
incentive effect exists’. For a negative decision based on the lack
of incentive effect of an aid to a direct foreign investment by a large
enterprise, see also Commission Decision of 14 October 1998 on a
(156) Finally, according to the Guidelines, operating aid must
proposal by Austria to grant aid to LiftgmbH (case C(1998) 3212).
be both limited in time and progressively reduced. The
( 41 ) As stipulated in articles 3(2)-3(5) of the 2003 sale contract,
Commission notes that the sale in question did not have
Ellinikos Xrysos was obliged to prepare an investment plan
any kind of time limitation or progressive reduction.
within 24 months from the publication of the Law ratifying the
Indeed, both the sale price and the tax waiver, as fixed
sale contract, to submit it for the necessary administrative approvals
and to realise the approved plan within the administratively set
in the sale contract, were determined and validated with
deadline.
no reference to any kind of time limit or reduction.

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23.7.2011 Official
Journal
of
the
European
Union L
193/45
(157) Thus, the Commission is of the view that the aid cannot
rescuing and restructuring firms in difficulty, applicable
be declared compatible as operating aid under the
at the time of the 2003 sale ( 43 ), ‘[…] a newly created
Guidelines.
firm is not eligible for rescue or restructuring aid, even if
its initial financial position is insecure. This is the case,
for instance, where a new firm emerges from the liqui
(158) Therefore, the Commission concludes that the aid can
dation of a previous firm or merely takes over such
not be declared compatible on the basis of the 1998
firm’s assets’. Ellinikos Xrysos is a company which was
Regional aid guidelines.
established 3 days before the acquisition of the Cassandra
Mines. Also, restructuring aid is conditional on the
existence of a sound restructuring plan. Greece did not
(159) As regards compatibility under the general block
provide such a restructuring plan. In conclusion, the aid
exemption Regulation, declaring certain categories of
granted to Ellinikos Xrysos is not compatible under
aid compatible with the common market in application
rescue and/or restructuring aid rules.
of Articles 107 and 108 TFEU ( 42 ), the Commission
considers that on the basis of the financial figures
submitted by the Greek authorities, Ellinikos Xrysos is
(165) Finally, and as regards environmental aid, Ellinikos
a large enterprise, as demonstrated in paragraph 12
Xrysos was obliged to meet the applicable environmental
above. According to the general block exemption Regu
standards. In particular, it was obliged to realise
lation, Article 1(5), ad hoc aid to large companies is
investments for the protection of the environment and
excluded from the scope of its application.
keep its mining operations in accordance with Greek and
Community environmental laws. Since the above were
compulsory by law, it was not necessary to provide
(160) Also according to the general block exemption Regu
Ellinikos Xrysos with aid in order to obey the law.
lation, Article 8(3)), in case that any aid covered by it
is granted to a large enterprise, the Member State should
confirm the material incentive effect of the aid, on the
basis of a document that analyses the viability of the
CONCLUSION ON COMPATIBILITY
aided project or activity, with and without aid. The
Commission has not been provided with such evidence.
(166) In the view of the above, the Commission concludes that
the aid measures in question are incompatible with TFEU.
(161) Finally, according to the general block exemption Regu
lation, the acquisition of the capital assets directly linked
(167) In particular, the Commission considers that the
to an establishment, where the establishment has closed
difference between the market value of the Cassandra
or would have closed had it not been purchased, is
Mines assets and the price at which they were sold to
considered an eligible cost provided that the transaction
Ellinikos Xrysos is incompatible aid in favour of Ellinikos
has taken place under market conditions. The Greek
Xrysos; also, the Commission considers that the amount
authorities admitted that the transaction took place
of taxes which should have been paid by Ellinikos Xrysos
without an open, unconditional and transparent
for the acquisition of the mines and the land is incom
competition or an independent valuation of the market
patible aid in favour of Ellinikos Xrysos.
value of the Cassandra Mines assets. Thus, the
Commission considers that the sale in question did not
take place under market conditions.
V. CONCLUSION
(162) In conclusion, the aid granted to Ellinikos Xrysos is not
(168) On the basis of the foregoing, the Commission concludes
compatible under the general block exemption Regu
that the measures at hand constitute State aid in favour
lation.
of Ellinikos Xrysos in the meaning of Article 107(1)
TFEU. In particular, the Commission considers that the
difference between the market value of the Cassandra
Mines assets and the price at which they were sold to
(163) Article 107(3)(c) TFEU states that ‘aid to facilitate the
Ellinikos Xrysos constitutes aid in favour of Ellinikos
development of certain economic activities or of certain
Xrysos; also, the Commission considers that the
economic areas, where such aid does not adversely affect
amount of taxes which should have been paid by
trading conditions to an extent contrary to the common
Ellinikos Xrysos for the acquisition of the mines and
interest’ may be declared compatible with the internal
land constitutes aid in favour of Ellinikos Xrysos.
market.


(164) The Commission considers that the derogation under
(169) In addition, the Commission concludes that the aid
Article 107(3)(c) does not apply in the case at hand
measures at hand are incompatible with the internal
and that Ellinikos Xrysos is not eligible for rescue
market. In particular, the Commission considers that
and/or restructuring aid. Indeed, according to point 7
the difference between the market value of the
of the 1999 Community Guidelines on State aid for
Cassandra Mines assets and the price at which they
( 42 ) OJ L 214, 9.8.2008, p. 3.
( 43 ) OJ C 288, 9.10.1999, p. 2.

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L 193/46
EN
Official Journal of the European Union
23.7.2011
were sold to Ellinikos Xrysos is incompatible aid in
two annulment provisions, in its Article 4. According to
favour of Ellinikos Xrysos; also, the Commission
those provisions, Ellinikos Xrysos is allowed to annul the
considers that the amount of taxes which should have
sale, in case of: (a) an administrative or legal act by the
been paid by Ellinikos Xrysos for the acquisition of the
Greek authorities to change the mining permits’ status; or
mines and land is incompatible aid in favour of Ellinikos
(b) a judiciary decision (related to the mining permits’
Xrysos.
status) to stop the operations or the realization of the
investment plan. In both cases, Ellinikos Xrysos would
return the assets to the Greek State and would be
refunded the total EUR 11 million, with a possible addi
(170) According to the TFEU and the Court of Justice’s estab
tional remuneration.
lished case law, the Commission is competent to decide
that the State concerned must abolish or alter aid ( 44 )
when it has found that it is incompatible with the
internal market. The Court has also consistently held
(175) The Greek authorities have submitted that the above two
that the obligation on a State to abolish aid regarded
provisions could be activated by a decision of the
by the Commission as being incompatible with the
Commission for the recovery of incompatible aid.
internal market is designed to re-establish the previously
Whether this is the case is a question of contract inter
existing situation ( 45 ). In this context, the Court has estab
pretation and national law. If however the provisions are
lished that that objective is attained once the recipient
activated, such activation should have no effect on the
has repaid the amounts granted by way of unlawful aid,
obligation of Greece to recover the aid amount indicated
thus forfeiting the advantage which it had enjoyed over
in this decision.
its competitors on the market, and the situation prior to
the payment of the aid is restored ( 46 ).
HAS ADOPTED THIS DECISION:
(171) Following that case-law, Article 14 of Council Regulation
(EC) No 659/99 ( 47 ) laid down that ‘where negative
decisions are taken in respect of unlawful aid, the
Article 1
Commission shall decide that the Member State
concerned shall take all necessary measures to recover
The State aid amounting to EUR 15,34 million unlawfully
the aid from the beneficiary.’
granted by Greece in breach of Article 108(3) of the Treaty
on the Functioning of the European Union, in favour of
Ellinikos Xrysos S.A. by way of a sale of assets and land
below its value and a waiver of the associated taxes, with the
(172) Thus, given that the measures at hand are to be
aim of protecting the employment and the environment and
considered as unlawful and incompatible aid, the
also of creating an incentive for potential buyers of the
amounts of aid must be recovered in order to re-
Cassandra Mines, is incompatible with the internal market.
establish the situation that existed on the market prior
to the granting of the aid. Recovery shall be hence
affected from the time when the advantage occurred to
the beneficiary, i.e. when the aid was put at the disposal
Article 2
of the beneficiary and shall bear recovery interest until
effective recovery.
1. Greece
shall
recover
the
aid
referred
to
in
Article
1
from

the beneficiary.
(173) The incompatible aid element of the measures is
2. The sums to be recovered shall bear interest from the date
calculated as the sum of (a) the difference between the
on which they were put at the disposal of the beneficiary until
market value of the Cassandra Mines assets and the price
their actual recovery.
at which they were sold to Ellinikos Xrysos (EUR 14
million); and (b) the amount of tax which should have
been paid by Ellinikos Xrysos for the acquisition of the
assets, i.e. mines and land (EUR 1,34 million). The above
3. The
interest
shall
be
calculated
on
a
compound
basis
in
are equal to EUR 15,34 million.
accordance with Chapter V of Commission Regulation (EC)
No 794/2004 ( 48 ) and to Commission Regulation (EC)
No 271/2008 ( 49 ) amending Regulation (EC) No 794/2004.
(174) In addition to the above and as regards recovery, the
Commission notes that the 2003 sale contract included
4. Greece
shall
cancel
all
outstanding
payments
of
the
aid
( 44 ) Case C-70/72 Commission v Germany [1973] ECR 813, point 13.
referred to in Article 1 with effect from the date of adoption of
( 45 ) Joined Cases C-278/92, C-279/92 and C-280/92 Spain v
this decision.
Commission [1994] ECR I-4103, point 75.
( 46 ) Case C-75/97 Belgium v Commission [1999] ECR I-3671, points
64-65.
( 48 ) OJ L 140, 30.4.2004, p. 1.
( 47 ) OJ L 83, 27.3.1999, p. 1.
( 49 ) OJ L 82, 25.3.2008, p. 1.

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23.7.2011 Official
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Union L
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Article 3
2. Greece
shall
keep
the
Commission
informed
of
the
progress of the national measures taken to implement this
1. Recovery
of
the
aid
referred
to
in
Article
1
shall
be Decision until recovery of the aid referred to in Article 1 has
immediate and effective.
been completed. It shall immediately submit, on simple request
by the Commission, information on the measures already taken
and planned to comply with this Decision. It shall also provide
2. Greece
shall
ensure
that
this
decision
is
implemented detailed information concerning the amounts of aid and
within 4 months following the date of notification of this
recovery interest already recovered from the beneficiary.
Decision.
Article 4
Article 5
1. Within
2
months
following
notification
of
this
Decision,
Greece shall submit the following information to the
This Decision is addressed to Greece.
Commission:
(a) the total amount (principal and recovery interests) to be
Done at Brussels, 23 February 2011.
recovered from the beneficiary;
(b) a detailed description of the measures already taken and
planned to comply with this Decision;
For the Commission
(c) documents demonstrating that the beneficiary has been
Joaquín ALMUNIA
ordered to repay the aid.
Vice-President

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