State aid: Commission approves Greek financing of ELTA for transitory period (2013-2015) for universal postal service; opens in-depth investigation for 2016-2020
The European Commission has found direct subsidies granted by Greece to the state-owned postal incumbent Hellenic Post (ELTA) for the delivery of the universal service during a two-year or three-year transitory period (from 2013 until 2014 or 2015) to be in line with EU state aid rules. The Commission has concluded in particular that the grants only compensate ELTA for the extra costs of carrying out public service obligations. However, the Commission has concerns that the compensation fund mechanism to be established for the following five-year period may unduly favour ELTA over competitors and has therefore opened an in-depth investigation. The opening of an in-depth investigation gives Member States and interested parties an opportunity to submit comments and does not prejudge the result.
ELTA is entrusted until 2028 with the universal postal service which consists in offering a baseline level of postal services to all residents in Greece with uniform tariffs. To compensate ELTA for the net cost incurred in fulfilling its obligations as universal postal service provider, the Greek authorities have established a five-year compensation fund mechanism, requiring other providers of postal services active on the Greek market to contribute to the financing of the universal service. The possibility to establish such a mechanism is provided for by the 3rd Postal Directive (see IP/08/163). Given the novelty of such a mechanism and the recent liberalisation of the postal services market in Greece, the Greek authorities have decided to implement a two-year or three-year transitory State-funded compensation regime.
The Commission found that the transitory regime complies with EU rules on Services of General Economic Interest (SGEI). ELTA will only receive compensation for the extra costs of delivering the universal service, in line with the Commission's 2012 Decision on Services of General Economic Interest (SGEI) (see IP/05/937).
The Commission then assessed the 5-year compensation fund mechanism under the provisions of the 2012 SGEI Framework (see IP/05/937), which applies to public service compensations of higher amounts than those covered by the provisions of the Decision. Indeed the compensation amounts granted through the fund could exceed the relevant threshold of 15 million euros per year.
Following this preliminary assessment, the Commission considers that although most of the conditions of the Framework are fulfilled, the level of contributions requested from ELTA's competitors raises serious competition issues since they might prevent competitors from entering or remaining active in the services where the universal service obligations apply. While ELTA's fixed contribution to the fund would reach 0.5% of its turnover generated by the universal service provision, the contribution of competitors could reach up to 10% of their turnover in the same services, depending on their ratio of urban distribution. The Commission has opened an in-depth investigation to examine whether these concerns are confirmed and to ensure that the compensation fund mechanism to be put in place by the Greek authorities will not excessively distort competition in the postal market in Greece.
ELTA is a Greek state-owned postal operator entrusted with the universal postal service and additional SGEI, such as basic banking services (receipts, payments of social benefits and pensions, payment of bills, cash payments) or the issuing of licences, certifications and certificates sent by the State to citizens. ELTA operates on a market which has been fully liberalised since 1st January 2013 by the Greek Postal Law (4053/2012) transposing the first postal directive.
ELTA has not received, so far, compensation for the delivery of the universal postal services. It received however, on several occasions, direct grants for modernising its infrastructure and improving the quality of the universal postal service and other SGEIs. In this respect, on 25 January 2012, the Commission approved a €52 million state subsidy (see MEMO/12/39) to ELTA.
The Commission's 2012 SGEI Framework ensures that companies can receive public support to cover all costs incurred, including a reasonable profit, in carrying out public service tasks as defined and entrusted to them by public authorities, whilst ensuring that competition is not excessively distorted. (see IP/05/937 and MEMO/05/258).
The non-confidential version of the decision will be made available under case number SA.35608 in the State Aid Register on the competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.