State aid: €314.6 million capital injection from PostNord to Post Danmark does not constitute State aid; Denmark and Sweden need to recover €66 million of incompatible aid from PostNord
Daily News 13 / 09 / 2021
Source: European Commission Spokesperson's Service
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. 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. 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: (i) with the capital injection by PostNord into Post Danmark, PostNord has operated in the same way as a private investor would have done under the same circumstances; (ii) the capital injections by Denmark and Sweden into PostNord, aiming at keeping PostNord in investment grade territory (for listed companies this means a positive credit rating), were not in line with the conditions that a private investor would have accepted; and (iii) 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.
Executive Vice-President Margrethe Vestager, in charge of competition policy said: In today's increasingly digital reality, ordinary mail has been gradually replaced by digital communications. This puts a strain on the activities of postal operators, which continue to offer a service that is fundamental for citizens. With the decisions taken today, we help restore a level playing field in the Danish and Swedish postal services markets, while ensuring that Post Danmark can transform itself to be ready for an increasingly digital future.
A full press release is available online.