POST Online Media Lite Edition


Denmark and Sweden need to recover €66m of incompatible aid from PostNord

Christian Fernsby |
The European Commission has found that an internal capital injection of DKK 2.34 billion (approximately €314.6 million) from PostNord to Post Danmark does not constitute State aid within the meaning of EU rules.

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At the same time, the Commission has found that two capital injections from Denmark and Sweden to PostNord, for a total of SEK 667 million (approximately €66 million) constitute incompatible State aid. Consequently, Denmark and Sweden have to recover respectively SEK 267 million (approximately €26.4 million) and SEK 400 million (approximately €39.6 million) from PostNord.

Post Danmark is the national postal operator in Denmark and a wholly owned subsidiary of PostNord, which is incorporated in Sweden. PostNord is owned by the Danish State (40%) and by the Swedish State (60%).

In October 2017, the Danish and Swedish authorities agreed to carry out capital injections (i) in PostNord and (ii) in Post Danmark via PostNord.

In November 2017, the Commission received a complaint from the Association for the Danish road transport of goods (ITD) alleging that certain Danish and Swedish capital injections to Post Danmark amounted to illegal State aid.

On 14 June 2019, the Commission opened an in-depth investigation to examine whether the following three capital injections carried out in 2018 were in line with EU State aid rules:

A capital injection of DKK 2.34 billion (approximately €314.6 million) by PostNord into Post Danmark;

A capital injection of SEK 267 million (approximately €26.4 million) by Denmark into PostNord;

A capital injection of SEK 400 million (approximately €39.6 million) by Sweden into PostNord.

The Commission examined the capital injections under Article 107(1) Treaty on the Functioning of the European Union (TFEU). The Commission's assessment focused in particular on whether the capital injections were carried out on terms that a private investor operating under market conditions would have accepted (the Market Economy Operator Principle – “MEOP”) and, as a result, whether they conferred a selective advantage on PostNord or Post Danmark with respect to their competitors.

The Commission's assessment showed that:

In Denmark, the volume of letters declined dramatically due to an increase in digital communications. PostNord injected capital into Post Danmark, aiming at helping Post Danmark to implement a new production model in response to this massive e-substitution of letters. The Commission found that this capital injection involves State resources as it concerns funds of a public undertaking.

Furthermore, the decision to inject capital from PostNord into Post Danmark has to be imputed to Denmark and Sweden, as it results from the agreement concluded in October 2017. Considering that the expected return on the capital injection for PostNord outweighs the amount invested, the Commission has found that PostNord has operated in the same way as a private investor would have done under the same circumstances.

The capital injections by Denmark and Sweden into PostNord amount to incompatible State aid, as no compatibility grounds have been proposed by Denmark and Sweden or have been identified by the Commission.

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