The European Commission has launched an in-depth investigation to assess whether certain Greek support measures in favor of ELTA comply with EU state aid rules.
ELTA is the largest provider of postal services in Greece and the postal operator to which the obligation to provide universal service (YPKY) has been assigned, which is a public service mission.
The Commission investigation
In May 2020, the Commission received a complaint alleging that several measures in favor of ELTA constitute irreconcilable state aid in favor of the company. These measures include:
-the payment by the Greek State of EUR 149 million to ELTA in December 2020 as additional compensation of the Ministry of Culture for the period 2013-2018;
-contribution of capital from Greece amounting to EUR 100 million in the share capital of ELTA, which took place in December 2020; and
-the granting of value added tax (“VAT”) on the basis of the Greek VAT exemption code to all postal services of ELTA since 2000.
At this stage, based on its preliminary assessment, the Commission has doubts as to whether certain measures in favor of ELTA are in line with EU state aid rules. For this reason it decided to launch a thorough investigation into:
-Doubts as to whether ELTA was legally entitled to additional YPKY compensation for the period 2013-2018, given that they had already received an annual compensation of EUR 15 million for the same period;
– doubts as to whether the capital injection in favor of ELTA has been granted on market terms or whether it has given the company an unfair advantage over its competitors;
-concerns that, to the extent that the VAT exemption applies to all postal services provided by ELTA, the measure could be classified as aid. While the measure could be considered as existing aid for the period before August 2010, it would constitute new aid for the period from August 2010. The Commission has doubts as to the compatibility of such new aid.
The Commission is currently investigating further whether its initial concerns are confirmed. The initiation of a thorough investigation provides Greece, the complainant and other interested third parties with the opportunity to submit comments. It does not prejudge the outcome of the investigation.
Record
Under the EU State Aid Compensation Rules adopted in 2011, companies can be reimbursed for additional public service costs subject to certain criteria. This allows Member States to grant state aid for the provision of public services, while ensuring that the undertakings entrusted with these services do not receive overcompensation. This measure minimizes distortions of competition and guarantees the efficient use of public resources.
In addition, under EU State aid rules, public intervention in favor of companies can be considered as non-State aid if it is carried out under conditions acceptable to a private investor under market conditions [” αρχή του ιδιώτη επενδυτή σε οικονομία της αγοράς – ΙΕΟΑ”]. Failure to comply with this principle, public intervention constitutes State aid within the meaning of Article 107 of the Treaty on the Functioning of the European Union, as it provides the beneficiary with an economic advantage which his competitors do not have.
Source: Capital

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