EU to vote on mail monopolies

The European Parliament is expected to approve a plan Thursday to dismantle remaining national monopolies for postal delivery by 2011, allowing cross-border competition in a sector that has until now been closely guarded by national operators.
A group of nine new EU member states, Greece and Luxembourg will get the option of an additional two-year grace period to prepare for a full opening of the delivery of letters under 50 grams (1.75 ounces) – the last category where national postal companies face no rivals – under the plan to be voted on by European Union lawmakers.
A universal public service ensuring every European – not just in big cities but also in remote areas – gets at least one delivery and collection a day, five days a week, even after rival companies move into the market, will be guaranteed and can be subsidized by governments if it is loss-making.
The issue of outside competition for domestic mail-carriers is a heated one in many EU countries. While parcel and package deliveries have already been liberalized across the 27-nation bloc, national governments may still reserve the market for delivering letters under 50 grams (1.75 ounces) for national carriers.
As a result, a simple registered letter sent from Belgium – where the national La Poste/De Post mail operator faces no competition – to neighboring France costs a whopping 6.70 euros (USD 9.90).
The postal reform – first considered more than 15 years ago – is part of a drive to liberalize the EU services market. The plan could lead to job losses in the 88 billion euro sector that employs more than 5 million people.
Full liberalization of the sector should lead to more reliable and better-quality mail deliveries, according to EU officials.
Many countries have been slow to open up their postal market to competition. Only Sweden, Britain, Finland have scrapped all legal monopolies. Germany has also allowed cross-border competition, but the government has set a minimum wage for postal workers.
Ninety percent of European mail is sent by businesses, and this is where most new entrants are likely to target new, lower-priced services – ignoring unprofitable consumer services in remote or rural areas.