(BRUSSELS) - The European Commission cleared on Wednesday 1.1 billion euros (1.7 billion dollars) in state aid for Poste Italiane, judging the post operator needed the support to meet its public service obligations.

Europe's top competition watchdog said that the state aid was in line with EU rules covering compensation for performing a public service.

"I am satisfied that the compensation for Poste Italiane is sufficient to allow it to fulfil its public service obligations without unduly distorting competition," EU Competition Commissioner Neelie Kroes said in a statement.

Poste Italiane received the money over the 2006-2008 period for providing public services such as delivering mail to far-flung places where a private operator would not do business.

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