UNDER EC PRESSURE, GREEKS DECLARE INTENT TO

UNCLAS SECTION 01 OF 02 ATHENS 001197

SIPDIS

STATE FOR EB/TRA

E.O. 12958: N/A
TAGS: EAIR ECON GR BATA
SUBJECT: UNDER EC PRESSURE, GREEKS DECLARE INTENT TO
ABROGATE 1991 BILATERAL AIR TRANSPORT AGREEMENT



1. This is an action request. Please see paragraph 6.


2. (U) Summary: On April 28, DCM met with MFA Director
General for Economic Affairs Chrysanthopoulos at his request.
Chysanthopoloulos informed DCM that Greece intends to
abrogate its 1991 Bilateral Air Transport Agreement (BATA)
with the U.S. by May 18th, in order to avoid being taken to
the European Court of Justice (ECJ) for violations of EU law.
Chyrsanthopoulos proposed that the US and Greece continue
the substance of the 1991 BATA on a de facto basis, however,
until such time as Washington and Brussels can agree on
language regarding BATAs. Chrysanthopoulos provided a
non-paper, the text of which folliwn in para 7, and sought
U.S. reaction. End Summary.


3. (U) DCM met with MFA Director General for Economic
Affairs Chrysanthopoulos on April 28, to discuss the US-Greek
BATA of 1991. Chrysanthopoulos announced that Greece had
received a Reasoned Opinion from the EC on March 22nd,
informing Greece that its BATA violates Article 43 of the
European Communities Treaty concerning the principle of
non-discrimination, as well as European Regulation 847/2004
on the negotiation and implementation of air service
agreements between Member States and third countries. As a
result, Chrysanthopoulos said Greece intends to abrogate the
BATA before May 18th of this year. (Note: Although the
Agreement will lapse on July 31 unless renewed by the two
side, according to Chrysanthopoulos, Greece must reply to the
Reasoned Opinion by May 18th, and the reply must include the
statement that the BATA has been abrogated. Failure to
reply, or to have abrogated the BATA, will cause the
Commission to initiate the ECJ case. End note.)


4. (U) Chrysanthopoulos proposed, however, that even as
Greece abrogates the BATA, all provisions and annex of the
Agreement should continue to apply on a de facto basis and on
the principle of reciprocity. Also, Greece proposes to
initiate a negotiation of a new Agreement, per EU regulation
847/2004. DCM informed Chrysanthopoulos that he would
transmit the Greek message and proposal to Washington and
seek guidance.


5. (U) Comment: Post understands that this decision was
taken after a GoG interagency meeting on the 25th of April,
during which it was decided that Greece could not risk
irritating the EC further on this issue. (Note: The EC
warned Greece last year not to renew the BATA, which the GoG
chose to ignore in light of the impending Olympic Games and
the desire to avoid any disruption to air services. End
note.) The Greeks were not clear if they were the only
country to receive this Reasoned Opinion at this time, or if
other EU states had also been instructed to abrogate their
BATAs at this time as well. End comment.


6. (U) Action request: Post requests guidance to respond to
the GoG regarding its intention to abrogate the BATA, to
continue to implements its provision on a de facto basis, and
to begin negotiations for a new BATA under EU regulation
847/2004.


7. (U) Begin text of non-paper:

On 31/7/1991 the Hellenic Republic and the USA signed an
Air Transport Agreement with annex ('the Agreement'),which
expired five years after the date of signature, on 31/7/1996.
Since, the Agreement has been extended each year, for one
additional year. The last extension of the Agreement, till
July 31 2005, was done through exchange of Notes on July 19th

2004.

On 5/11/2002 the European Court of Justice ruled in the
cases brought against eight Member States concerning their
bilateral air services agreements with the USA. Greece was
not one of those Member States, nevertheless in the light of
these judgements, the Commisision issued a Communication,
requesting all Members States to activate the provisions of
denunciation contained in their bilateral agreements with the
USA, in order to ensure compliance with Community law. It
also urged the Council to agree a mandate for negotiations to
replace the existing bilateral agreements with the USA with
an agreement at community level. On 5/6/2003 the Transport
Council issued such a mandate, subsequently the Commission
started negotiations, which are not yet concluded.

On 22/3/2005 Greece received a reasoned opinion by the
European Commission, according to which, by extending the
above mentioned Agreement:


1. Greece violated Article 43 of the European Communiteis
Treaty, concerning the principle of non-discrimination,
including the right of establishment. Consequently, where
the bilateral Agreement (Article 3 and Article 4) contains
designation provisions which discriminate between community
carries (sic) on the ground of nationality, they should have
been replaced.


2. Greece violated the European Regulation 847/2004 on
the negotiation and implementation of air service agreements
between Member States and third countries (Article 1.1 and
1.2 concerning the procedure of notification to the
Commission of the intention of the Member state to enter into
negotiation with a third country and Article 4.1 and 4.4
concerning the authorization issued by the Commission on the
application of the bilateral agreement).

Taking into consideration Greece's legal obligation as a
E.U. Member State but also its wish to continue applying the
existing international air transport system between our
respective countries, the U.S. Embassy is kindly requested to
examine the following proposal:


1. The Agreement, would be denounced by the Greek side,
before its expiration.

2. All the provisions and annex of the Agreement would
continue to apply on a de facto basis (number of flights
e.t.c. (sic)) and on the principle of reciprocity.

3. After the denunciation of the Agreement, Greece will
initiate the procedure of negotiation of a new Agreement,
foreseen in Regulation 847/2004.

Since Greece has to reply to the EU before the 18th of
May, views of the U.S.A. would be appreciated as soon as
possible.

Athens, 27th April 2005. End text of non-paper.
Ries