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EU backs Germany over Deutsche Post pension contributions

A European Union court ruled on Thursday that the European Commission had failed to prove that Germany’s contribution to Deutsche Post’s pension scheme constituted illegal state aid that had to be repaid.

Deutsche Post, created in 1995 after the privatisation of Germany’s postal services, retained the former Postdienst’s civil service post officials and contributed to their pension scheme. However, the federal government also made contributions.

The European Commission determined in 2012 that this public financing constituted illegal state aid and told Germany to recover the money paid to Deutsche Post from 2003, a figure between 500 million ($555 million) and 1 billion euros. Deutsche Post has since paid back the government 377 million euros.

Germany, which still owns around 21 percent of Deutsche Post via state development bank KfW, challenged the Commission’s decision before the General Court of the European Union, the EU’s second-highest court, saying the Commission needed to show that the funding gave Deutsche Post a benefit over competitors.

The General Court agreed with Germany in its ruling on Thursday in saying that this was something the Commission needed to have shown but that it had failed to do so.

“Germany’s partial contribution to the costs of pension payments for former postal workers does not prove that Deutsche Post was given an advantage over its private sector competitors,” the court said in a statement.

Deutsche Post said it was confident the German government would repay the money it had handed over following the 2012 Commission decision.

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