BRUSSELS – The European Commission ordered Spain on Tuesday to recover 167 million euros ($196 million) in state aid granted to Correos, the country’s postal service, after determining that the public service company had benefited from undue compensation between 2004-2010 and also from inappropriate tax exemptions.
The commission investigated the state aid Spain gave to compensate Correos for the extra cost it incurred in providing a public service, a statement said.
“The European Commission has found that Correos, the publicly-owned Spanish postal operator, was overcompensated for the delivery of its universal postal service obligation between 2004 and 2010, and also benefited from incompatible tax exemptions,” a commission statement said.
Correos, a wholly state-owned company, is Spain’s largest provider of postal services, including universal, courier and other services related to post and money transfer operations.
The commission concluded that Correos was overcompensated between 2004-2010 by approximately 166 million euros for providing universal postal service and that tax exemptions granted since 2004 gave Correos an undue advantage amounting to approximately 900,000 euros.
“Avoidance of overcompensation minimizes distortions of competition and guarantees an efficient use of public resources,” the commission said.
The decision is the result of an in-depth investigation initiated by the EC in Feb. 2016 following two complaints alleging that Correos had benefited from several unlawful and incompatible state aid measures, the commission said.