Horst Reichenbach can save Greece almost a billion

21/04/2013 - 10:13am

• inShare

The Greek government is desperately trying to collect  the last cent from starving Greeks and it is managing pretty well, so far, despite the high political cost for the sitting prime minister and his ruling coalition.

There is an amount of over €700 million in VAT taxes, withheld by the Athens International Airport (AIA S.A.), a privately managed profit making company. The airport company refuses to pay this amount to the state on the excuse that law 2338/95 which ratified the concession agreement for the construction and operation of the Athens airport, provides that the Greek government undertakes the obligation to refund to the company any VAT that the company pays. 

The aim of this provision was however, to refund the VAT that AIA SA would pay to the constructors since the airport is the property of the State and given by concession to AIA SA for a period of 30 years. 

Under these circumstances, the fiscal authorities from 2001 onwards, when the airport started its operations (under a private company) asked AIA SA to pay the VAT, which was refused. The matter was dealt with by the Council of State, which ruled that AIA SA must pay VAT. In an effort to avoid payments, the airport company took the issue to the Arbitrary Court of London, which refrained from taking a clear position as VAT issues are exclusively under EU jurisdiction.

Indeed EU law provides, with Directive 2006/112/EC, that all EU based companies are subject to VAT payments (part of VAT ends up in the Community budget). 

EU law is above any and all national laws and constitutions, and it goes without saying that the only way to avoid VAT payment is to get a exception or a temporary derogation by amending the Directive. This implies unanimity of 27 Ministers of Economy of the Member States (EcoFin). 

Our legal counselor examined all 414 articles of the codified text of Directive 2006/112/EC and all its annexes and found no VAT exception or derogation for AIA S.A. Thus, AIA S.A. must pay to the Greek State the long overdue VAT, end of file.

If for any reason, however, AIA S.A. thinks otherwise, the good company has the right to appeal to the European Court of Justice in Luxembourg, only.

Under the circumstances, as head of the Commission’s Task Force in Greece Horst Reichenbach, can explain to the Greeks what exactly is the situation about the obligations of AIA S.A. regarding VAT payments. 

The Head of the Task Force in Greece is the right person to explain it, since when law 2338/95 was passed in Greece, he was at the time the Head of Cabinet of then Regional Policy Commissioner, Monika Wulf-Mathies and provided for a cohesion fund co-financing for the construction of the airport to AIA S.A. Thus he is well aware that such an exception for AIA S.A. from VAT does not exist.

Horst Reichenbach, who subsequently served in the European Commission as Director General for Administration knows also very well how to read a Directive and thus can easily explain to the Greek government their obligation to collect at once the VAT owed by AIA S.A. 

The government has the means to collect the money immediately (arrest of the CEO, confiscation of assets, etc.). 

The airport, a private law monopoly company with the highest charges in continental Europe, must have the cash flow to pay. Indeed, with less than 500 employees and no other expenses with accumulated revenues of over €4 billion since 2001, the company is able to pay its VAT obligations and much more.    new europe