Manipulating Rules, Contesting Solutions: Europeanization and the Politics of Restructuring Olympic Airways

Abstract

AbstractIn recent years much debate has been generated over the reshaping of the European airline industry and the restructuring of many of the heavily indebted national flag-carriers across the European Union. The European Commission has sought to orchestrate this reform process by the gradual break up of monopolies in air travel and its associated services and a much tighter policing of state aid practices. The EU's liberalizing agenda in air transport, however, has met with strong domestic opposition in the member states. Nowhere else has the resistance to reform been stronger than in Greece, where for a decade successive attempts to restructure or privatize Olympic Airways have yielded very limited success. By focusing, in particular, on the initiative of the Greek government in 2003 to create a new ‘Olympic Airlines’, the article examines how domestic pressures prompted the Greek government to shift away from cooperation with the Commission and invite conflict. The Greek government lost an ECJ case and both Athens and the Commission were left with a sub-optimal outcome. By linking the narrative to the conceptual literature on Europeanization and compliance, the article addresses a number of themes including: the contestation of European competition rules and the ability of national governments to manipulate them, policy entrepreneurship and complex problem-solving, as well as the Commission's role as a stimulus, but potentially also an obstacle to domestic reform.