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EU gives green light to UK state aid to keep open its network of Post Offices

Wednesday, 23 March 2011
Minions Post Office and village shop in Cornwall, UK (Photo: European Commission has today given the green light, under EU state aid rules, for the UK government to allocate £180 million (€212 million) of public assistance to continue funding the network of post offices and keep open loss-making post offices such as those in rural areas across the country.

The aid will be valid for one year starting from 1st April 2011, and the Commission has also cleared the British government to continue loan facilities to fund the provision of cash services at post office counters.

In a statement concluding their investigation, the Commission concluded that the aid is compatible with EU rules because it does not overcompensate the net costs of the important public service tasks entrusted to Post Office Ltd. and so does not give the Post Office Ltd any unfair competitive advantage over competitors.

Joaquín Almunia, a Vice-President of the European Commission and the Commissioner responsible for competition policy, said: "the aid will enable the UK post office network to continue performing its fundamental social and economic role and important public service tasks, without unduly distorting competition".

Post Office Ltd is a wholly owned subsidiary of Royal Mail Group Ltd and currently operates a nationwide network of around 12,500 post office branches.

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