Photographer: Martin Leissl/Bloomberg

Germany Wins EU Court Challenge on Deutsche Post Subsidies

  • EU court rules on German appeal over 2012 EU state aid order
  • Deutsche Post has appeal of European Commission order pending

Germany won a fight with the European Commission over a decision ordering Deutsche Post AG to pay back several hundred million euros of government subsidies that breached European Union state aid rules.

“The commission committed an error of law which entails the annulment of the part of the decision concerning the disputed pensions-related subsidies,” the EU General Court in Luxembourg said in its ruling Thursday.

The European Commission’s 2012 decision has spurred a series of fights at the EU courts. Bonn-based Deutsche Post filed an appeal with the EU court in April of that year, a month after Germany.

The nation has since “repeatedly refused” to recover aid granted to cover pensions from former public sector employees in its business-to-business parcel services, the commission said in November 2013, when it decided to take Germany to court.

Deutsche Post must repay 500 million euros ($555 million) to 1 billion euros in pension subsidies, the European Commission said in its original decision in January 2012. The decision followed an investigation into payments from the German government to cover pension costs at Deutsche Post that may have hampered rivals that paid 10 percent to 15 percent more in contributions.

In May 2012, Deutsche Post said Germany had demanded repayment of 298 million euros in subsidies. The company already paid this amount to a trustee in 2012 and has been paying annual interest since then. The payments add up to 377 million euros, and Deutsche Post spokesman Alexander Edenhofer said the company was “happy” about the ruling and expects the funds to be returned shortly.

The commission had allowed Germany to decide on the exact amount to be recovered from the postal operator, based on a method determined by the EU watchdog. The following year, the commission said Germany had “provisionally recovered an aid amount significantly lower than that estimated by the commission services.”

In Thursday’s appeal, Germany had challenged the commission’s “erroneously excessive” benchmark for the calculation of compensation and social costs, and that the decision was based on an “inadequate assessment of the facts.”

The country also challenged “the unreasonable length of the proceedings and inactivity on the part of the commission” in the case.

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