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Where an EC member state grants state aid which is found to be incompatible with the aims of the EC Treaty, the Commission can order the state to recover the money, and if it fails to do so, the Commission can bring infraction proceedings under Article 88(2). One defence to a Commission order is impossibility, but this is hard to make out, as Alison Jones observes in her book Restitution and EC Law at 132, and as is now further confirmed by the ECJ decision in Commission v Greece Case C-415/03.

The Greek Government was ordered to recover EUR 41 million worth of illegal state aid to Olympic Airways, and issued a demand for payment, but then sat back and permitted the transfer of the company's personnel and assets, free of the company's debts, to a new company named 'Olympic Airlines', an entity which is not liable to repay the state aid under national law. Not good enough, holds the ECJ:

34 [The transfer of assets to Olympic Airlines] ... created an obstacle to the effective implementation of Decision 2003/372 and to the recovery of the aid by means of which the Greek State had supported the commercial activities of that company. The purpose of that decision, which aims to restore undistorted competition in the civil aviation sector, was thus seriously compromised.

35 It must be added that the action taken by the Greek authorities, that is to say, the adoption of a decision to proceed with recovery of Olympic Airways’ debt of EUR 41 million, had no real effect with regard to the actual reimbursement of that sum by the company. Furthermore, the Greek Government did not provide any explanation as to why it might be absolutely impossible to proceed with the recovery of that debt. According to settled case-law, the only defence available to a Member State in opposing an application by the Commission under Article 88(2) EC for a declaration that it has failed to fulfil its Treaty obligations is to plead that it was absolutely impossible for it properly to implement the decision ordering recovery (see, in particular, Case C-280/95 Commission v Italy [1998] ECR I-259, paragraph 13, and Case C-378/98 Commission v Belgium [2001] ECR I-5107, paragraph 30).

36 In those circumstances, it must be declared that the Hellenic Republic has failed to fulfil its obligation to recover the amount referred to in Article 3(1) of Decision 2003/372.