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Thursday, March 18, 2010

Athens reaches deal in submarine row

ATHENS — Greece on Saturday announced it had reached an agreement with German defence group ThyssenKrupp in a long-running dispute over the supply of four submarines.

The row began when Athens rejected the first submarine supplied by ThyssenKrupp, the Papanikolis, on the grounds that it was defective.

Greek Defence Minister Evangelos Venizelos said a resolution had been found for the deal, which has been blocked since 2006.

"We have reached a solution which should be signed on Thursday and which protects the interests of the Greek navy as it means it will finally receive modern, functional submarines," Venizelos said in a statement released by his ministry.

Media reports in Greece suggest that under the agreement, Athens will acknowledge receipt of the Papanikolis, which will be sold to a third party, and order two further submarines from Hellenic Shipyards.

In return, the defence company will drop a compensation claim for breach of contract, reports said.

ThyssenKrupp bought Hellenic Shipyards, near Athens, from the Greek government in 2005 and Saturday's submarine deal should smooth the way for the conglomerate to shed 75 percent of its stake to the Abu Dhabi Mar group.

The Greek government, struggling with a debt crisis and facing a huge effort to restructure the economy, said on March 1 the sale of the shipyard offered a chance to save the jobs of 1,400 workers.

Source : AFP