France set to agree La Poste sell-of
It is crunch time for La Poste as the French parliament today prepares to give its final vote of approval to an ambitious modernisation of France’s state-owned post office, designed to prepare it for liberalisation of Europe’s postal markets.
While the law on La Poste is likely to be approved without difficulty, the government has been forced to tread carefully to avoid making it into a politically divisive issue only weeks before the hotly contested French referendum on Europe’s new constitution.
The law, which is already two years late by European Union standards, will open up the French postal market to competition over the next five years.
It includes a variety of measures to protect the quality of service at the former monopoly and to help it survive in a more competitive market, such as setting up an independent postal regulator and, more controversially, allowing it to establish a postal bank.
In a sign of how politically sensitive La Poste has become, senators in the upper house of parliament this week added last-minute modifications to the law, making it more restrictive in terms of the minimum number of branches the group must maintain. Not satisfied with forcing La Poste to ensure that no more than 10 per cent of the population in any of France’s 95 departments is more than 5km from a post office branch, the senators added that they must also be within 20 minutes drive of a postal outlet.
Rumours of plans to close some of its 17,000 branches provoked uproar last year. Protests by thousands of local politicians this year underlined their attachment to rural post offices.
Under EU regulations, the legal limit for the monopoly over the delivery letters was cut from 350g to 100g in 2003 and will drop to 50g next year. Parcels are already open to competition. Letters are due to be fully liberalised by 2009.
Banks are worried about the potentially damaging impact of a state-owned rival competing with them to sell lucrative consumer credit and insurance products.
The banks most affected by the creation of a postal bank are likely to be those competing head-on with its strong rural presence, particularly Credit Agricole and Caisses d’Epargne.
The French banking federation (FBF) this week submitted a white paper to French and European banking authorities and competition regulators, raising questions about the potential dangers to free competition posed by a state-owned postal bank.
Ariane Obolensky, head of the FBF, said: “If all our questions are not answered in a way that satisfies us that this postal bank will not affect free competition then we intend to launch an appeal against it with French and European competition authorities.”
Mrs Obolensky said the postal bank created “total confusion between a public establishment of the state and a bank competing in the commercial sector”.
The new bank is expected to be created by the end of this year. It is essential to La Poste’s plan for becoming the leading mail delivery company in Europe. Two-thirds of its 300,000 staff are civil servants with generous benefits and job security.
