French parliamentary committee urges national post office to reform

A parliamentary committee urged the French government on Tuesday to introduce sweeping reforms at the country’s powerful national postal service.

In a report, the committee said possible reforms could include La Poste spinning off its banking activities, which now provide 20 percent of its revenue, into a special subsidiary.

Without reform, the committee said the postal service risks being “marginalized” by the recent tie-up between state-run finance house Caisse des depots et consignations and Caisse d’Epargne, France’s biggest savings bank.

Speaking at a briefing in Paris Tuesday, the committee’s chairman, Dominique Baert, said failure to reform would mean the post office’s banking activities could “wither”.

That, in turn, would weaken La Poste’s traditional postal services, he said.

The service’s chairman, Martin Vial, recently warned that hundreds of smaller post offices in France would close without income from financial services.

“The best safeguard is to look for ways that will shore up the future of La Poste’s financial activities,” Baert said.

Support for La Poste spinning off its banking activities has been gaining ground in recent months. But the idea is still opposed by leading French trade unions and by some politicians on the left.

However, the committee’s findings are likely to carry weight with the French government.

The government itself set up the panel last year to look into the future of France’s publicly owned banking sector. The panel includes a mix of representatives from France’s main political parties, trade union officials and banking sector experts.

La Poste is already a powerful force in French banking, with a 10 percent slice of the retail market and 15 percent of all checking accounts.

Under its current setup, however, it has no right to a banking license and, without one, cannot lend money except in very tightly-controlled circumstances.

As a result, younger people have traditionally switched their accounts away from the post office to other commercial banks, leaving La Poste as the “bank for the poor and the old,” Baert said.

Spinning off La Poste’s banking activities would effectively remove this handicap and enable the national post office to compete directly with private banks in France.
AP Worldstream