Brussels, 23/07/2008 (Agence Europe) - On Wednesday 23 July, the European Commission decided to prohibit some of the guarantees granted to the express cargo provider DHL, a subsidiary of Deutsche Post, with a view to installing its European sorting hub in Leipzig (eastern Germany). The company had obtained guarantees worth in the region of 500 million euros in case Leipzig airport proved incapable of fulfilling the conditions of a framework agreement over 30 years concerning the creation of its hub.
The European Commission opened an investigation at the end of 2006, as it suspected that the Land of Saxony had granted DHL particularly favourable financial conditions. It concluded that the guarantee given to cover the commercial risks of DHL was "incompatible with the single market", as it allowed DHL to hedge business risks on terms which a private investigator would not have accepted. Deutsche Post reacted by pledging that this prohibition would not change DHL's decision to locate its European hub in Leipzig. However, the Commission has also decided that some 350 million euros of public investment for a new southern runway at Leipzig Halle airport is compatible State aid. (L.C.)