Tag: European Commission

Deutsche Post confirms 1 bln eur payment by govt earmarked for shareholders

Posted by | Aug 28, 2008 | |

A spokeswoman for Deutsche Post World Net AG. reiterated the company is earmarking for shareholders the some 1 billion euros it has received from the German government as a payment related to a ruling on state aid.
The European Union’s second highest court July 1 said Deutsche Post did not have to repay 572 million euros in state aid received by the German government, as ruled by the European Commission in 2002.
The EU Commission had ruled that Deutsche Post had used the money to subsidise its parcel operations instead of using it to provide the universal service it is obliged to offer to ensure mail is delivered to remote regions.
Adding interest, Deutsche Post could claim back 1 billion euros and has now received the payment.
Deutsche Post at the time said it will preferably pay out the payment to shareholders ‘pending clarity on other cash-relevant issues’.

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Poste Italiane Interest Ruled Anti-Competitive

Posted by | Jul 17, 2008 | |

Under EU rules that prohibit state aid to postal operators that would give that operator an unfair commercial advantage, Poste Italiane has been ordered to repay an undisclosed sum.

The European Commission found that interest rates paid by the Italian Treasury to Poste Italiane from 2005 to 2007 on Poste Italiane current accounts, was higher than if they had been obtained commercially, giving Poste Italiane an unfair advantage over its competitors and that Italy did not notify the EC of its intentions.

Neelie Kroes, European Commissioner for Competition said that it was essential that there remained a level playing field among competitors and that the illegal aid given to Poste Italiane must be recovered under EC rules.

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State aid: Commission endorses EUR 1.6 million training aid for DHL in Leipzig-Halle and rejects EUR 6.1 million operating aid

Posted by | Jul 3, 2008 | |

The European Commission has endorsed EUR 1.6 million of training aid at DHL’s new site in Leipzig-Halle, Germany but rejected a further EUR 6.1 of aid which would have acted as an illegal operating aid. The Commission’s decision follows an in-depth investigation under EC Treaty state aid rules launched in June 2007. The Commission concluded that the EUR 1.6 million would genuinely lead to additional training which goes beyond legal requirements and operational needs, and therefore complied with the EU state aid rules on training aid.

However, the Commission rejected as incompatible a further EUR 6.1 million of funding that would have served to finance training activities that DHL would have carried out anyway, even without aid, and concluded that the aid would be used finance ordinary operating costs of DHL. Such operating aid would have given DHL an unfair advantage over its competitors, who don’t receive such aid, and so seriously distorted competition.

Germany notified its intention to grant subsidies of EUR 7.7 million to DHL for a training project concerning certain jobs such as ground handling of airfreight, security agents, pre-flight and ramp mechanics. Following its relocation to Leipzig-Halle, DHL, with the support of regional aid approved by the Commission in April 2004,, built a new delivery and airfreight centre, where it employs around 1500 new staff, of which 480 are concerned by the training project.

The Commission is in favour of supporting training activities, because they benefit the European economy by broadening the pool of skilled workers. However, it is necessary to ensure that such aid actually motivates companies to carry out additional training activities and is not simply used to subsidise the cost of training that the company would in any case have to undertake. This is particularly necessary in a globalised economy, where companies decide to relocate to new sites and where unjustified aid can give rise to considerable distortions of competition.

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Deutsche Post to receive 1 bln euro repayment after court ruling

Posted by | Jul 1, 2008 | |

Deutsche Post World Net will receive a repayment of around 1 billion euros after the European Court of the First Instance in Luxembourg today overturned a 2002 decision by the European Commission.
The European Commission in 2002 ordered Deutsche Post to repay 907 million euros in purported state aid and interest. Deutsche Post in 2002 appealed the decision and will now receive a repayment.
Responding to the decision, Deutsche Post said the court had confirmed the company’s legal position.
The company expects to receive the cash inflow in several weeks’ time and would prefer to earmark the amount for returning to shareholders, pending clarity regarding other cash-relevant issues.
In June 2002, the Commission determined that Deutsche Post from 1994 to 1998 covered a cost deficit in the competitive business parcel segment through improper cross-subsidization with State aid funds earmarked for the financing of the universal service. Deutsche Post has always disputed this claim.
Furthermore, no cross-subsidization was found in Commission antitrust proceedings completed a few months earlier. In September 2002, Deutsche Post brought an action for annulment of the Commission’s state-aid decision before the European Court of the First Instance.
As a result of the Commission’s decision, however, Deutsche Post had to repay 572 million euros that was determined to be state aid plus 335 million euros in interest to the Federal Republic of Germany at the beginning of 2003. Germany will now repay this amount with interest to Deutsche Post.

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Brussels gets tough on postal markets

Posted by | Jun 23, 2008 | |

Brussels will on Tuesday attempt to prevent backsliding by EU countries over reform of domestic postal markets, warning that practical barriers to competition as well as legal monopolies need to be removed.

European Commission officials are expected to tell a high-level conference – involving two commissioners and several ministers – that countries need to be proactive about changing practices in their postal markets or risk facing infringement actions.

Unusually, the move comes only four months after the 2008 postal directive took effect, requiring most EU countries to open fully their postal markets by the end of 2010.

However, the EU internal markets commissioner has already written to eight states – including Germany, Holland and Belgium – warning that “reforms at national level must be pursued rigorously”, and Tuesday’s event reflects worries that there could be some backsliding from the directive’s aims by member states.

EU officials are concerned, in particular, that practical obstacles may be used to prevent the opening up of postal markets, even if the required legal changes are made.
Another potential restriction is the extent to which countries are demanding that competitors provide universal service, covering a country’s entire geographical area.

Slovakia, meanwhile, has already come under fire from the Commission’s competition arm over a new law which Brussels claims extends the monopoly held by Slovenska Posta to so-called ”hybrid mail” services, used by banks, insurers, utilities and the like for mass mailings.

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