Deutsche Post Aid Appeal Must Be Reviewed, EU Court Says

A European Union court was ordered to re-examine Deutsche Post AG’s appeal against a state aid probe that forced the bloc’s biggest postal company to repay 298 million euros ($411 million) in subsidies.

The EU’s General Court’s initial ruling rejecting an appeal against the EU probe included mistakes and “has to be annulled,” the EU Court of Justice in Luxembourg ruled today. It sent the case back to the lower court to be reassessed.

Deutsche Post in 2007 sought to ban a decision by the European Commission, the EU’s executive agency, to investigate “all public measures, such as transfers of public money and tariff income” granted to the Bonn-based company and its predecessor Postdienst since 1989. It lost an appeal against the probe two years ago.

“This decision strengthens our legal position, but it’s only one step on the way,” said Dirk Klasen, a spokesman for the Bonn-based company. Deutsche Post has paid back to Germany some 298 million euros in subsidies that the EU said violated the bloc’s state aid rules, Klasen said.

The expanded EU probe followed a commission decision in June 2002 that Germany must recover 572 million euros of illegal aid to Deutsche Post because the postal service had improperly used the money to cover losses in its parcel-delivery business.

Deutsche Post in 2008 won a lower EU court ruling to overturn the 2002 decision. That ruling was upheld by the EU’s top court in 2010, by which time the original amount had increased to 1.15 billion euros with the addition of interest.

The case is: C-77/12 P, Deutsche Post v. Commission.

(Updates with company comment in fourth paragraph.)
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