EU Agrees on Postal Competition Starting in 2011
European Union governments agreed to start local mail competition in 2011, two years later than Deutsche Post AG, TNT NV and other providers were seeking to expand into new countries.
Countries must open their markets to foreign competitors for delivering standard letters, in the compromise reached today at a meeting of national ministers in Luxembourg. Still, 11 of the 27 EU countries get two extra years, until 2013, to prepare their current providers.
The compromise won over France and other nations that opposed an earlier plan for competition in 2009. The initiative will end monopolies such as that of France's La Poste in standard letters, which are two-thirds of the region's 88 billion-euro (USD 125 billion) postal market, according to the EU executive agency.
“The overall agreement is fair to all because, in particular, it sets an unconditional end date for full market opening,'' Charlie McCreevy, the EU internal market commissioner who proposed the 2009 start date a year ago, said in the session with national ministers. “It results in a real market opening without market entry barriers.''
Deutsche Post will continue to examine postal markets in Europe and elsewhere, Uwe Bensien, a spokesman in Bonn, said by telephone.
50 Grams
Letters up to 50 grams (1.8 ounces) are the final piece of the mail industry being opened, after a decade of phased-in deregulation. That business is more profitability than package or express delivery, according to the European Commission, the EU agency where McCreevy oversees internal market policy.
EU countries that allowed postal competition before the 2011 deadline include the U.K., Finland and Sweden. Germany and the Netherlands plan to follow suit Jan. 1.
Countries eligible for the extra two-year delay include Luxembourg, the country of half a million people whose service would be dwarfed by neighboring rivals, and Greece, with territory spread over hundreds of islands. Nine of the 12 countries that joined the EU since 2004 also gained the extra time. Estonia, Bulgaria and Slovenia will adhere to the 2011 deadline.
Under a reciprocity clause, countries that open earlier can bar operators whose home markets remain closed to competition.
Portuguese Plan
Portugal, holder of the EU's rotating presidency, drafted the compromise in line with a European Parliament vote in July. The initiative still needs final approval by majorities in both the Parliament and the national governments, whose votes are weighted by country population, to become law.
“We have a very considerable majority'' in favor of the delayed opening, Portuguese Communications Minister Mario Lino said in the portion of the session broadcast to reporters.
The Free and Fair Post Initiative, a trade group for customers such as publishers and providers including United Parcel Service Inc. backed the agreement, after expressing disappointment about the postponement from 2009.
“EU ministers have demonstrated they understand that competition is on the side of postal users,'' Philippe Bodson, the group's president, said in a statement today. “The myth of the incompatibility between open markets and the guarantee of a universal service has finally been refuted.''
The measure leaves it to each country to decide how to guarantee delivery to all homes at the same price, no matter how hard to reach or unprofitable. Governments can subsidize the service or require competitors to pay into a compensation fund for universal service.
