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Brussels, 27th June 2007

State aid: Commission opens formal investigation into €7.7 million training aid for DHL in Leipzig-Halle

The European Commission has opened a formal investigation under EC Treaty state aid rules regarding over €7 million of training aid which Germany intends to grant to a new DHL site. Following its move to Leipzig-Halle, Germany, DHL envisages a significant training project for its employees, around 60% of the costs of which would be covered by state aid. At this stage, the Commission has doubts as to the compatibility of the aid with the EC Treaty rules on state aid which may distort competition within the Single Market (Article 87) as much of the training seems to be required by law or be otherwise necessary to operate in the new location. The opening of the investigation will give interested parties an opportunity to submit their views, and does not prejudge the outcome of the procedure.

EU Competition Commissioner Neelie Kroes said: “I am always happy to approve training aid which has positive external effects for the society as a whole. However, in this case, I have concerns that DHL would have carried out this training project in any event, and therefore does not need the aid. "

DHL is a worldwide service provider in the parcel delivery and airfreight sector, wholly owned by Deutsche Post AG. Following its move to Leipzig-Halle, Germany, DHL is currently building a new delivery and airfreight centre which is expected to become operational by the end of October 2007. To this end, DHL is planning to employ around 1500 people and to provide training to 480 employees.

The training project concerns certain jobs such as ground handling of airfreight, security agents, and pre-flight and ramp mechanics. Germany plans to grant subsidies of €7.7 million and claims that the training goes beyond what is necessary for the operation.

The Commission has concerns that the beneficiary would anyway provide the training to its employees even absent the aid as it seems that DHL must employ new workers in order to start operating. These workers need sophisticated training which seems to a large extent required by law and necessary to properly operate the hub. Moreover, it seems difficult to find employees who are already fully trained for air transport services in the European market while subcontracting services to other service providers does not seem a cost efficient option.

The Commission has opened the formal investigation to look at this issue in more detail and in order to obtain information from interested parties as regards the general situation of the national and European labour market for airfreight services, and all legal qualifications, safety requirements and usual standards for the handling of freight and aircraft.

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