Royal Mail’s Pension Aid From U.K. Government Faces EU Probe
Royal Mail Group Ltd.’s pension aid from the U.K. government is under investigation by European Union regulators.
“We must ensure that the state measures do not provide undue advantages to Royal Mail as this would distort the conditions of competition among postal operators,” said EU Competition Commissioner Joaquin Almunia in a statement today.
The British government plans to take responsibility for Royal Mail’s 8.4 billion-pound ($13.7 billion) pension liability from March 2012 ahead of a sale of the state-owned postal service. EU regulators can block payments that would give one company an unfair advantage over rivals. The EU is also investigating German subsidies for Deutsche Post AG and Belgian aid to La Poste.
The Royal Mail may not be making a “sufficient own contribution” to restructuring costs and may not be planning “adequate measures” to compensate for the harm to competition caused by the state subsidy, the Brussels-based European Commission said today.
Royal Mail in London declined to immediately comment.
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