Brussels, 30/05/2000 (Agence Europe) - The Commission proposed on Wednesday measures to open up 20% of the Union's postal services market, over and above the 3% already liberalised by the existing postal services directive. It announced at the same time that it would be coming forward with additional proposals before the end of 2004 for further opening of postal services to competition in 2007.
The current proposal would impose on Member States the obligation, by 1 January 2003: i) to reduce weight/price limits, for letters and direct mailings (publicity) open to competition, from 350 grammes/5 times the basic standard tariff to 50 grammes/2.5 times the basic standard tariff; ii) for outward cross-border mail and all express mail services, full opening to competition.
The Commission notes in a press release that it came forward with these proposals at the request of the Lisbon European Council, which invited it to speed up liberalisation of postal services within the framework of efforts to ensure a complete and fully operational internal market for postal services and to develop "the most competitive, dynamic and knowledge-based economy in the world". Commissioner Frits Bolkenstein, responsible for the single market, said at a press conference that "fast, efficient and competitive postal services are vital to ensure the competitiveness of EU industry and to make the internal market a reality for consumers. They are particularly vital if business and consumers are to reap the full potential of electronic commerce, because people will not want to order goods over the internet unless they can depend on speedy, affordable and efficient delivery. Efficient postal services are also crucial for advertising, communications and rapid, cost-effective delivery of both components and finished products." He added that this gradual approach would guarantee universal service, in particular in rural areas. The challenges to be met by the postal sector mean that "maintaining the status quo is simply not an option". For Commissioner Bolkenstein, "we have to leave the ideological debate behind us", given that everyone agrees on the importance of preserving the special role of postal services in society. "We must instead concentrate on implementing the balanced step-by-step approach to opening up the postal market to further competition."
Mr Bolkestein then outlined the guarantees for leaving universal service intact: i) the strong competitive position of the public services, often maintained at around 80% of business; ii) conditions for the grant of a licence to a private operator (for example, covering the entire territory, including islands); iii) creation of a compensation fund. By way of example, he mentioned the 100% opening of the Swedish postal services market, which is the "best in Europe". According to the Commission, its proposal is designed to ensure that the liberalisation of the market proposed for 2003 is sufficient to generate competition without damaging universal service or the financial stability of service providers. To do so, opening of the market will affect all segments of the postal market, through the reduction of weight and price limits, but particularly concerns the segments already opened to competition, i.e. outward cross-border mail. Further, on the basis of this proposal, Member States could maintain a reserved area, averaging 50% of the earnings that suppliers of universal service draw from postal services (currently, an average of 60% of their earnings come from reserved services). The Commission added that its proposal also seeks to provide further clarity and legal certainty to the existing regulatory framework, by clearly defining special services, which cannot be reserved, and by applying the principles of non-discrimination and transparency to postal rates.
At the press conference, Commissioner Bolkestein pointed out that the Commission's proposal strikes a balance among the different positions. Sources close to the Commissioner had announced on several occasions a proposal for liberalisation of up to 30% of the market, but in the end, the Community Executive decided on a proposal taking liberalisation to 20% (this lower level is allegedly due to the maintenance of a weight limit on direct mailings open to competition). Mr Bolkestein also insisted on the limited impact this measure would have on employment. In his view, job losses in the public sector would be compensated for by new posts in the private sector (the public postal sector currently has 1.3 million workers, while the private sector has 400,000). He added that the "postal sector is losing around 0.7% of its workforce every year, primarily for reasons of technological modernisation". Regarding the impact of the measure on prices, he recalled that prices were the competence of local authorities. He noted that of the 15 European postal service providers, 14 (the Italian provider being the exception) are currently making profits. For the future, Frits Bolkestein said he hoped the postal market would move towards full liberalisation.
Some flexibility from initial draft, guarantees for operators providing universal service
The European Commission did not have to hold a vote on the revised Bolkestein proposal, because the President observed that there was a large majority in favour (only one Commissioner maintained firm opposition and two Commissioners certain reservations). It was observed that a large majority favoured the proposal after a debate on the fundamental problems at hand, which will no doubt be useful for future deliberations on other issues related to public services.
The changes Mr Bolkestein made to the initial proposal to take into account the different positions expressed, essentially concern two points:
a) maintenance of direct mailings (publicity sent via the postal service) of up to 50 grammes in the area reserved for universal service providers. It is this measure that reduced the rate of liberalisation from 30% to 23%;
b) the explicit possibility, for universal service providers, of providing "cross subsidisation" between services open to competition and reserved services.
The Member States will be able to establish compensation funds to which all operators will contribute, in order to compensate for any loss of earnings that could prevent the operator concerned from complying with the universal service obligation.
For France, "the neo-liberal colour of the Commission's proposal is still too obvious"
Expressing his view on the fringe of the Energy Council, French State Secretary for Industry Christian Pierret was very critical of the European Commission's proposal. "The limits of 50 gr. and 2.5 times the standard tariff [for reserved services] are unacceptable", he told the press, also rejecting the figure of 50 gr. for reserved direct mailing services. "A doubling [of the share of the liberalised postal market] to 6% would already be considerable", he commented. He also voiced disagreement with too vague a definition of the reserved services. "The reserved services must be defined very clearly on the basis of simple criteria, so they will not be circumvented", he announced.
"The determination I have shown on behalf of the Government of France for the past weeks has produced results, since the Commission's proposal does not make provision for full liberalisation of postal services or of direct mailing", he continued. "Our objective now is to reach a compromise and I am very optimistic about the chances of doing so, particularly because I will be holding the Council Presidency for six months." Mr Pierret added that he had the support of the "postal services of around 10 Member States" and "the very strong backing" of all political groups in the European Parliament.