Deutsche Post wins review of EU state aid probe decision

Reuters

* ECJ passes Deutsche Post state aid case back to GeneralCourt

* Deutsche Post had requested lifting 2011 EU court decision

* Deutsche Post welcomes latest court decision

FRANKFURT, Oct 24 (Reuters) - Deutsche Post DHL won a small legal victory on Thursday in a years-long battlewith the European Union over state aid allegedly received fromthe German government.

The European Court of Justice (ECJ) said it was asking theEU's second-highest court to review its 2011 rejection of achallenge by the company against the reopening of a probe intopossible state aid.

Deutsche Post, Europe's biggest mail and express deliverycompany, welcomed the ECJ's decision.

"It's a small step towards a victory. Now the next step isfor the lower court to decide if our challenge has a legalsubstance," a spokesman for the company said. He added that theruling had no immediate impact on any demands to repay aid.

Since Deutsche Post's privatisation in the 1990s, Europeanregulators have waged legal battles with the German governmentover whether the company got preferential treatment comparedwith competitors.

In 2002, the Commission ordered Deutsche Post to repay 572million euros ($788.36 million)of state aid that the companyused to subsidise its loss-making parcels business in the 1990s.The ruling was annulled later that year.

The Commission launched a fresh push in 2007 to investigatepossible aid beyond that sum following complaints by U.S.-basedUnited Parcel Service and other rivals.

Deutsche Post tried to have that investigation shut down,arguing at that the matter had already been concluded with the2002 decision.

But the General Court in December 2011 threw out DeutschePost's challenge. The following month, the Commission saidDeutsche Post would have to repay German authorities between 500million euros and 1 billion euros in aid that it found breachedstate aid rules. [ID :nL5E8CP1XF]

The ECJ said on Thursday, however, that there was a legalerror in the General Court's reasoning in 2011 and that DeutschePost should have been able to challenge the widened probe.

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