EC hints that it can deliver for An Post
THE European Commission has given a big hint it would approve any special State aid requested by the Government to support loss-making An Post. The signal from Brussels does not follow any request from the Government, but comes in response to a question from an Opposition MEP.
The Commission’s positive reaction will strengthen union demands for greater Government support for the loss-making postal service. Fine Gael’s Gay Mitchell was told by the Competition Commissioner, Neelie Kroes, that she would be sympathetic to any request from Ireland for assistance to help offset the cost of a full national delivery service.
The Commission’s reaction comes just weeks after the row over Intel, when Ms Kroes rejected efforts by the Government to secure 170m in State aid for its new microchip factory. “It goes to show you that if there’s a government will, there’s a way with the EU,” said Mr Mitchell.
“In the case of Intel, we were arguing for a private company to get State aid and the Commission said no – and yet here, they’re prepared to give permission,” he said.
Mr Mitchell insisted he was no fan of subsidies, but felt it only fair that An Post be compensated for the cost of providing a valuable social service, which couldn’t be done at normal market rates.
In his query, Mr Mitchell warned that State-owned An Post is currently in financial crisis and has been unable to pay national deals for three years. He asked if the Government would be allowed, under EU State aid rules, to provide a small subvention for up to five years, so the company could return to profitability.
Responding, Ms Kroes makes it clear that normal competition rules would not apply to the provision of a universal postal service, but that any aid would have to be ring-fenced from other activities carried out by An Post, and could only be used to support loss-making deliveries of post right around the country.
“Provided that the measure in question is dedicated only to compensate An Post for the provision of public/universal service obligations, its compatibility will be dealt by the Commission under Article 86(2) of the EC Treaty.”
Conor SweeneyEuropean Editor
