* EU says Germany made only partial recovery of illegal aid
* Deutsche Post says surprised by EU's move
* Initial demand was for repayment of 500 mln - 1 bln euros
* Deutsche Post has paid back 298 mln euros to Germany
* Case to be heard at European Court of Justice
(Adds company and govt comment, background)
BRUSSELS/FRANKFURT, Nov 20 Deutsche Post
may have to make additional repayments of state aid
after the European Commission said it is taking legal action
against Germany for failing to recover the full amount demanded
in a regulatory ruling last year.
The Commission, tasked with ensuring a level playing field
in the 28-country bloc, said in January 2012 that the high
regulated prices and pension subsidies granted by Germany gave
Deutsche Post an unfair advantage over rivals and that the mail
and logistics company would have to repay between 500 million
euros ($649 million) and 1 billion euros to German authorities.
Deutsche Post has since paid back 298 million euros and
filed an appeal against the aid ruling with the European Court
of Justice (ECJ), but the Commission said on Wednesday that
Germany recovered aid only for commercial post, such as the sale
of stamps and envelopes or direct advertising mailings, but not
business-to-business parcel services.
"The Commission therefore asked Germany to recover the aid
corresponding to these services. Germany repeatedly refused to
do so," it said.
The case will be heard at the Luxembourg-based ECJ, Europe's
A spokesman for Deutsche Post said the company was surprised
by the Commission's move because it believed that the German
government had already complied with the original ruling.
He said that Deutsche Post is not obligated to make a
further payment, while the Commission said that appeals against
its ruling would not suspend the recovery of aid.
A German government spokeswoman said on Wednesday that it
had filed a complaint against the EU state aid decision of
January 2012 and that no agreement has yet been reached with the
EU over the exact amount that needed to be paid.
Deutsche Post won a small legal victory last month after the
ECJ said it was asking the EU's second-highest court to review
its 2011 rejection of a challenge by the company against the
reopening of a state aid investigation.
(Reporting by Foo Yun Chee in Brussels and Marilyn Gerlach in
Frankfurt; Editing by David Goodman)