The European Commission, the EU's executive body, has called on Deutsche Post to repay to the state up to one billion euros for subsidies the former postal monopolist received as of 1995.

"It's our aim to prevent competitive distortion so that citizens and companies can profit from open markets in the bloc," European Competition Commissioner Joaquin Almunia said in Brussels on Wednesday.

The Commission determined that the subsidies Deutsche Post received boiled down to unfair competition.

The company benefited unduly from the combination of high regulated prices for its services and pension relief payments that were granted to it by German authorities, the Commission said in a statement. As a result, the company had to pay lower social insurance contributions in comparison to its competitors, it added.

Protracted fact-finding

Brussels initiated a probe into Deutsche Post state subsidies as early as 1999 and extended investigations in 2007 and 2011. The EU executive said it would not oblige the company to give back 5.6 million euros it received from 1990 to 1995, because it viewed the subsidies in question as adequate compensation for infrastructure measures aimed at providing a universal postal service.

Deutsche Post responded by rejecting all repayment demands and announcing it would appeal to the European Court of Justice.

"The ruling is incomprehensible and has no basis in fact," the company's CEO, Frank Appel, said in a statement.

He called the decision inappropriate and said the Commission had applied double standards in dealing with postal companies elsewhere in Europe. He conceded that payments would have to be made over the next couple of months, but was confident that the company would get back the money in the long run.

Author: Hardy Graupner (Reuters, dpa)
Editor: Nancy Isenson