EU to examine all German subsidies to Deutsche Post in new state aid probe
EU regulators will investigate the German state subsidies of Deutsche Post, once the state-owned postal service, to determine if it bolstered commercial operations with public money, the European Union said Wednesday.
The EU’s executive arm said rivals had complained that Deutsche Post AG used government money to undercut the private sector by selling services “too cheaply” to banking arm Postbank and parcel service DHL – one of the world’s three biggest delivery companies.
Deutsche Post immediately denied any illegal subsidies, calling the investigation “surprising and completely incomprehensible.” Deutsche Post said regulators have reviewed company accounts numerous times.
In Berlin, Finance Ministry spokesman Torsten Albig said the investigation had been expected and expressed confidence the Commission would clear the company in end.
The new investigation comes on top of the EU’s 2002 order for Deutsche Post to repay the German government 572 million euros (USD 791 million) in public money that the company had used to finance a rebate pricing policy for its door-to-door parcel business.
Governments usually pay postal operators to run the costly mail delivery service for the country, but they are forbidden from using the money for other services.
The EU’s push for stricter separation of postal operators’ public and private sector operations comes as letter and parcel delivery services are thrown open to competition.
The EU is currently examining whether Britain’s Royal Mail got government loans on favorable terms and whether France’s La Poste has an unfair advantage because it does not have to contribute to employee pensions. Other probes are under way in Italy and Poland.
However, many former and current state mail monopolies claim the EU has gone to fare by pressing ahead with a deadline – previously agreed to by all EU nations – to scrap exclusive rights to deliver all mail under 1.76 ounces, and end a uniform price for bulk mail.
Only Sweden, Britain and Finland have scrapped all legal monopolies for the postal service. Germany plans to do so next year. Other countries will have to do so by 2009 but there is growing pressure to push this deadline back.
Ninety percent of European mail is from businesses, and this is where most new rivals are likely to target new lower-priced services.
