The European Union (EU) Friday approved Italy's provision of 2.39 billion euros (2.61 billion U.S. dollars) in compensation to Poste Italiane for fulfilling its public service mission during the periods 2012-2015 and 2016-2019.
The EU's executive body, the European Commission, said the compensation granted by Italy to Poste Italiane was in line with EU state aid rules.
In October 2015, Italy notified the EU of plans to compensate Poste Italiane in order to carry out its universal postal service obligation during the period 2016-2019. This includes basic postal services delivered throughout the country at affordable prices and at certain minimum quality requirements.
Under a contract concluded between Italy and Poste Italiane, Poste Italiane would receive a maximum of 1.05 billion euros for the years 2016-2019 (262 million euros per year).
Moreover, Italy also informed the EU of compensations already approved but not yet paid over the period 2012 to 2015 following the prolongation of a previous contract.
The compensation for the period 2012-2015 would amount to a maximum of 1.34 billion euros (335 million euros per year).
Under EU state aid rules on public service compensation, adopted in 2011, companies can be compensated for the extra cost of providing a public service subject to certain criteria.
Poste Italiane is the largest provider of postal services in Italy. Since 1999, it has been designated as the universal postal service provider for the entire national territory of Italy. Until Oct. 12, 2015, Poste Italiane was entirely owned by the Italian state. On that date, an initial public offering was started to sell part of the shares to private investors. On Oct. 27, 38.2 percent of Poste Italiane's shares were put on the Milan stock exchange with the state retaining the rest of the shares of 61.8 percent. Enditem