StateAid Commission opens in-depth investigation into measures for Spanish postal operator Correos

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The European Commission has opened an in-depth investigation to examine whether State measures since 2004 in favour of Correos, the publicly-owned Spanish postal operator, were in line with EU State aid rules.

The Commission will assess in particular, whether the public funding that Spain granted to Correos has overcompensated the company for carrying out its postal public service obligation, as well as whether a number of other measures have given Correos an undue advantage in breach of EU state aid rules. The opening of an in-depth investigation procedure gives the member state and interested parties the opportunity to comment on the measures under scrutiny. It does not prejudge the final outcome of the investigation.

Spain has entrusted Correos with the “universal postal service” which consists of the delivery of basic postal services throughout the country at affordable prices and at certain minimum requirements, for example the number of deliveries per week.

Under EU state aid rules on public service compensation, adopted in 2011, companies can be compensated for the extra cost of providing a public service subject to certain criteria. This enables member states to grant state aid for the provision of public services whilst at the same time making sure that companies entrusted with such services are not overcompensated, which minimizes distortions of competition and guarantees an efficient use of public resources.

The Commission has received two complaints alleging that Correos had benefitted from several illegal and incompatible State aid measures. At this stage, the Commission has concerns that Correos may have been overcompensated between 2004 and 2010 for the delivery of the universal postal service. Indeed, in the Commission’s preliminary view the profitability levels achieved by Correos with the public funding seem to exceed the level of reasonable profit allowed under EU state aid rules on public service compensation, and the levels approved by the Commission in previous comparable decisions regarding postal operators.

The Commission will also investigate further other measures granted by Spain to Correos since 2004, namely tax exemptions, capital increases and compensation for the distribution of electoral material.

This investigation does not concern two other measures granted to Correos. First, the Commission found that the specific social security contributions scheme for civil servants employed by Correos does not involve State aid, because it does not procure the company any financial advantage. Second, as regards the specific pension scheme for civil servants, which does not require any employer contribution from Correos for the financing of pensions, the Commission found that it does give the company a financial advantage compared to its competitors and therefore involves State aid. However, since this measure predates the accession of Spain to the EU, it constitutes existing aid which does not need to be recovered.