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EU starts to deliver on reform of postal market

Thursday, January 31st, 2002

After more than a decade of wrangling, the European Union is edging gradually towards more competition in the postal market.

The European parliament is due, in March, to vote on whether to back an agreement hammered out last October by ministers from the 15 EU member states. This would increase competition in postal services in two stages starting in 2003, before a review as to whether to open the market completely from 2009.

The delicate compromise reflects different philosophies across the EU, where more liberal countries led by the Scandinavians and Dutch have pushed hard for total liberalisation, in the face of resistance from a group of countries led by France. Sweden has a virtually fully liberalised market.

Until now, the UK has erred towards caution in the postal liberalisation debate. “In its market opening, Britain has tended to follow the rhythm of directives coming from Brussels,” said an EU official yesterday.

Under the agreement reached by ministers last autumn, all EU states would have to open up to competition the delivery of letters weighing more than 100 grammes, or costing more than three times the price of a standard letter.

All outgoing cross-border mail deliveries would be liberalised, except in member states that need this market to guarantee provision of universal service obligations, which would have an extra three years to act.

From 2006, the market would have to be opened up for letters weighing more than 50g, or those costing more than 2 1/2 times the price of a standard letter. After this, the European Commission would submit further proposals based on a study on the impact that full liberalisation in 2009 would have in each country on universal service commitments.

Despite the Commission’s satisfaction that its drive for liberalisation has brought some change, industry groups argue the legislation, once finalised, will make little difference. They say the average weight of letters in the EU is just 20g.

Commission officials were optimistic the parliament would back the governments’ agreement, and said industry lobbies broadly accepted the compromise.

Source: FT

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