EU to open up postal market from 2009

Europe’s market for postal services will be thrown open to unfettered competition from 2009, according to proposals to be presented by the European Commission as early as next month.
Brussels is keen to sweep away the last remnants of an era in which postal services were dominated by state-owned monopolies, and complete the market’s transformation into a competitive service sector. The Commission also hopes that full postal liberalisation will lead to lower costs for consumers and businesses.
However, the plan could face severe resistance from trade unions worried about job losses, and member states such as France, which are traditionally keen to defend public services against private-sector competition.
The European Union postal services sector is estimated to be worth more than euro90bn (GBP61bn) a year, and employs some 5m people. The market has already seen deep changes in recent years, not least thanks to a landmark EU law from 1997 that allowed competition in an ever-growing number of postal services.
But the 1997 law stopped short of allowing competition in one of the biggest and most lucrative markets – the delivery of mail weighing less than 50 grammes. This type of service, which in many member states accounts for half of all letters delivered, is still dominated by former incumbents such as La Poste in France and Deutsche Post in Germany.
The German and Dutch postal groups in July said they were ready to abolish this last “reserved area”, but insisted that their rivals in other EU member states follow suit. Their call was immediately rejected by incumbent operators from nine countries, including France, Italy, Spain, Belgium, Greece and Poland, which said they were opposed to further market opening.
Britain, Sweden and Finland have already introduced open competition in all postal markets, but are keen to see similar market opening in other countries.
The Commission’s new proposals would force all member states to allow competition in every area of the postal services market by 2009. The plan will require approval from both EU member states and the European parliament, and officials say they expect a tough fight ahead.
The union was already sharply divided over an earlier plan by the Commission to liberalise the region’s services market, and Brussels was forced to dilute its proposals considerably to win the approvals of parliament and national governments.