Deutsche Post World Net will receive a repayment of around €1 billion from the German governmentafter the European Court in Luxembourg today overturned a 2002 decision by the European Commission
over alleged improper use of state aid.In June 2002, the European Commission ordered Deutsche Post to repay €907 million inpurported state aid and interest. The EU executive body ruled that from 1994 to 1998 the Germanpostal operator had improperly used state aid funds earmarked for the financing of the universalpostal service to cross-subsidise losses in its competitive business parcel operations.
Deutsche Post disputed the claim and in September 2002 appealed against the EuropeanCommission’s decision to the European Court of the First Instance. No cross-subsidisation had beenfound in Commission anti-trust proceedings completed a few months earlier, it pointed out.
As a result of the Commission’s decision, however, Deutsche Post had to repay €572 millionthat was determined to be state aid plus €335 million in interest to the Federal Republic ofGermany at the beginning of 2003. Germany will now repay this amount with interest to DeutschePost.
DPWN said that it expects to receive the cash inflow in several weeks’ time and would preferto earmark the amount for returning to shareholders, pending clarity regarding other cash-relevantissues.
