Deutsche Post Scores Win as Court Overturns Subsidy Repayment Order -- Update
July 14 2016 - 9:07AM
Dow Jones News
By Laurence Norman and Ulrike Dauer
BRUSSELS--The European Union's second-highest court on Thursday
overturned a 2012 decision by the European Commission ordering
Germany to recover hundreds of millions of euros from Deutsche Post
AG in subsidies it paid for postal workers' pensions.
The court overturned a 2012 decision by the European
Commission--the EU's executive arm--that the public financing of
pensions at Deutsche Post was in breach of EU law since it
constituted state aid.
The court's ruling means that Deutsche Post will be able to
secure the EUR377 million ($417.6 million) set aside for the
matter, which is currently kept on an escrow account, a Deutsche
Post spokesman said.
The European Commission had initially estimated the amount to be
between EUR500 million and EUR1 billion, but the German government
had in 2012 calculated that the amount in question was EUR298
million, plus interest added, according to the Deutsche Post
spokesman.
The Luxembourg-based EU General Court said in Thursday's
decision that the Commission failed to show that the subsidies
presented a real economic advantage for Deutsche Post over its
competitors.
"By today's judgment, the Court allows Germany's action and thus
annuls the Commission's decision insofar as it relates to the
pension-related subsidies," the court said in a press release.
Deutsche Post is Germany's main mail and parcel company.
The decision of the General Court can be appealed. A spokesman
for the commission said they hadn't yet decided whether to do
that.
"The Commission takes note of the judgment by the General Court
today annulling the 2012 Commission decision concerning Deutsche
Post. The Commission will carefully analyze the judgment before
deciding on its future course of action," said the Commission's
competition spokesman, Ricardo Cardoso.
Write to Laurence Norman at laurence.norman@wsj.com and Ulrike
Dauer at ulrike.dauer@wsj.com
(END) Dow Jones Newswires
July 14, 2016 08:52 ET (12:52 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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