Deutsche Post Slapped With EU Fine | Business| Economy and finance news from a German perspective | DW | 19.06.2002
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Deutsche Post Slapped With EU Fine

The European Commission decided on Wednesday to force Deutsche Post to pay back a half-billion euro it says the German company used to illegally support its failing package service.


One expensive mistake

It's now official: The EU is forcing Germany's postal service to pay back a half-billion euros to the German government.

But both the Deutsche Post and Berlin are saying the accusations from Brussels are baseless.

The fine, among the highest in the history of the European Union, is meeting stiff resistance from Deutsche Post and the German government, who own a majority of the company's shares.

"The Commission's decision is so clearly disputable that only a judgement in favour of Deutsche Post is conceivable," Post chairman Klaus Zumwinkel said in a statement. He added the company planned to challenge the EU Commission in the union's administrative court.

At issue is 572 million euro the Deutsche Post allegedly shifted from its profitable monopoly on letter delivery service to its suffering package delivery service.

Transactions from sections where a company has a monopoly into the sectors where it faces open competition are not allowed, according to EU law. The money, the commission ruled, came from state subsidies the German government uses to support the national postal carrier.

Both the federal government and Deutsche Post reject the accusations. The government has two months to decide what to do with the decision

Berlin plans to counter the decision by further negotiating an offer by the Deutsche Post to lower the cost of its stamps as a compromise.

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