This article adopts a
socio-legal approach to investigate how Article 260(2) TFEU fines work in
practice in State aid recovery. It focuses on the case of Larco, a prominent
Greek metallurgical company. In 2014 the European Commission ordered the
recovery of EUR 135.8 million of illegal State aid from Larco, but Greece has
defied this decision, resulting in financial penalties being imposed by the
CJEU against Greece per Article 260(2) TFEU. This study aims to trace the
process that led Greece to defiance. The analysis indicates that Greece’s
defiance in the Larco case is multifactorial. It is shown that it is
attributable, among other factors, to Larco being too big to fail, the
employees’ fierce reactions, the political implications of laying off 850 employees,
the strategic importance of Larco, and the manageable amount of the penalties
imposed. These findings are used to assess the effectiveness of Article 260(2)
TFEU penalties: it is argued that penalties should not be understood as a
decisive blow but rather as an additional layer of pressure on the Member State
that gives politicians both incentive and coverage to act.