EU Aims to Open Up Postal Services

The European Commission adopts a plan for full liberalization by 2009, eliminating national monopolies, which some countries have vowed to fight

The EU has embarked on a rocky road towards full-scale liberalisation of postal services, with the European Commission suggesting the bloc should open up the €90 billion sector by 2009 — but with countries such as France, Italy and Spain likely to press for much slower reforms.

Under a proposal adopted by the commission on Wednesday (18 October), national postal operators will no longer have a monopoly over the distribution of any type of mail, including letters below the weight of 50 grammes.

While Britain and Sweden have already completed the liberalisation of their postal markets and Germany, the Netherlands and Finland are proceeding quickly with it, several other member states are expected to oppose the commission's blueprint.

France, Spain and Italy are particularly likely to fight against the plan, arguing it could damage their main postal operators and lead to job losses. Employees of the French La Poste have already signalled they are ready to strike against any such moves.

EU internal market commissioner Charlie McCreevy said that he hopes the arguments in favour of his proposal, as well the positive development in countries that have pioneered liberalisation, will convince the opponents.

"I am well aware of the kind of storm that will be caused in this area," he noted.

But he warned against a scenario where the postal package would become "hostage" in a similar lengthy debate as recently the EU's services directive. This would mean the EU would be "going backwards."

"It would be a clear indication that member states don't want open markets... I don't think it will happen," said the commissioner, adding that his current proposal is "no surprise" and not a big but rather a small final step on a path in which the EU already set out 15 years ago with its first postal laws.

"Some people see open markets as a threat, others see it as an opportunity," he said, adding that it is "smart" to see the opportunity.

Mr McCreevy pointed out he is also aware of concerns by the pro-free market camp — saying the commission has left too much leeway for countries to set out their own rules, possibly creating new forms of protectionism.

But he added that a stronger free market version of the law would be even more difficult to get through.

Blueprint in detail

Under the new proposal, member states would still need to respect the so-called universal service obligation, stating that mail delivery should be provided across a country for the same price, with at least one delivery and one collection five days a week.

To achieve this, member states will be allowed to choose their own model for financing these services — either through state aid, compensation funds, cost sharing or other means.

The commission believes that the reform could boost new technologies of delivery, such as consumers sending an email to an operator, delivered on paper by mail.

It may also lead to a different infrastructure — with post offices getting replaced by less costly franchised postal agencies or other service points in shops or petrol stations.

Still, it will be up to member states and national regulators to ensure that the postal services are well accessible across their territories – through post offices, letter boxes or other points.

While the prices in business correspondence are likely to fall — with more competition foreseen in this commercially lucrative area — prices of individual letters may shoot up by up to 50 percent.

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