Brussels, 01/08/2014 (Agence Europe) - On Friday 1 August, the European Commission gave the go-ahead to direct subsidies totalling €52 million granted by Greece to its public postal operator, ELTA, for providing a universal postal service for the transition period from 2013 to 2015, because these subsidies only compensate ELTA for the extra costs of carrying out public service obligations.
The Commission has, however, opened an in-depth investigation into the 2016-2020 period, fearing that the five-year compensation fund mechanism to be introduced for this period would provide ELTA with an unfair advantage on its competitors. The transition mechanism could indeed mean that the compensation granted through the fund could exceed the threshold of €15 million a year, the upper limit laid down in the European Commission's decision of 2012 on public subsidies for companies providing services of general interest to cover the cost of public service provision. The Commission says that 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 does not excessively distort competition in the postal market in Greece. (FG)