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EC approves compensation granted by Denmark to Post Danmark

Staff Writer |
The European Commission has concluded that the compensation granted by Denmark to Post Danmark to fulfil its public service mission during the period 2017-2019 is in line with EU State aid rules.

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In February 2018, Denmark notified plans to compensate Post Danmark for carrying out its universal postal service obligation during the period 2017-2019.

This includes the provision of basic postal services throughout Denmark at affordable prices and at certain minimum quality requirements.

Post Danmark will, through its parent company, the PostNord Group (jointly-owned by Denmark and Sweden), receive a maximum of in total DKK 1.192 billion (SEK 1.683 billion or approx. 160 million) for the period 2017-2019.

This compensation is foreseen in a bilateral agreement between Sweden and Denmark signed in October 2017.

The Commission examined the measure under EU State aid rules on public service compensation adopted in 2011.

According to these rules, Member States can grant State aid to companies to compensate them for the extra cost of providing a public service mission, subject to certain criteria.

In particular, this requires that companies entrusted with such services are not overcompensated. Avoidance of overcompensation minimises distortions of competition and guarantees an efficient use of public resources.

The Commission's assessment showed that the compensation granted by Denmark to Post Danmark will not exceed the net cost of the public service mission, meaning there is no overcompensation.

On this basis, the Commission concluded that the measure is in line with EU State aid rules.

The Commission also received a complaint from the Association for the Danish road transport of goods (ITD) in November 2017 on a number of measures relating to Post Danmark, including the universal service obligation.

As part of this decision, the Commission rejected this complaint in part.

The Commission continues to assess a separate issue raised in the complaint, regarding certain capital injections foreseen in the bilateral agreement between Sweden and Denmark of October 2017.

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