Commission announces crackdown on mail monopolies

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Speaking at a high-level conference on postal liberalisation on Tuesday (24 June), the EU’s commissioners for competition and the internal market warned countries with lingering postal monopolies to open up or face legal action. 

“We will not hesitate to use all means at our disposal to make a competitive and sustainable postal market a reality,” said EU Internal Market Commissioner Charlie McCreevy, warning governments not to introduce what he called “creative market barriers” under the pretext of safeguarding basic mail services for all.

Such measures will undoubtedly include infringement procedures against member states that are “backtracking” on their pledges to liberalise the postal market fully, said Competition Commissioner Neelie Kroes. “You know me, I will enforce competition rules in the postal sector […] Regulation is not enough,” she said, highlighting the fact that she had already sent a formal notice to Slovakia on 18 June regarding its plans to “re-monopolise certain sectors of its postal market”.

The strong statements come a surprisingly short time – just four months – after the EU pushed through legislation, which only commits member states to full liberalisation of their mail markets by 2011 at the earliest.

They appear as a testimony of Brussels’ commitment to full market opening amid growing apprehension at the national level as to the concrete effects of full liberalisation on employment and the provision of a quality service for all.

Although no names were cited, Germany appears to take the brunt of the Commission’s discontent, with its plans to introduce a minimum hourly wage of €9.80 for postmen operating on its territory in order to prevent social dumping. 

The move has sparked a big dispute with the Netherlands, where Dutch Junior Economy Minister Frank Heemskerk retaliated by delaying his country’s own planned 1 January 2008 liberalisation until a “more level playing field” was established (EURACTIV 07/12/07) – a move also under fire from the Commission.

“While everybody goes along with the idea of a level playing field, there seem to be very different interpretations of what a level playing field actually is […] Paying lip service to free markets and introducing protectionism through the back door is not acceptable,” stressed McCreevy. 

He continued: “I find it particularly unacceptable that member states would try to hide protectionism behind arguments they justify by the general interest. If all member states were to copy this approach then postal markets would become more closed instead of more open. I cannot accept that.”

Both Germany and the Netherlands have received letters from the commissioner in which he voices such concerns. So have Finland, Austria, the Czech Republic, Belgium and Poland – making them all potential targets for legal action. The complaints cover a wide range of practices – from Finland’s charges on new entrants that do not agree to provide nationwide services or Belgian plans to simply force all new operators to deliver across its whole territory to Austria allowing its national operator to install key access to private letter boxes in apartment hallways. 

"I find it particularly unacceptable that member states who were at the forefront in pressing for open markets would now back away from the reforms they have benefited from. No one is fooled by arguments that are advanced in the name of general interest. The fact that these events have been triggered in one of the most important postal markets in the EU has an inevitable headline effect. It closes markets. Protectionism wins. The EU economy loses. If all member states were to copy this approach then postal markets would become more closed instead of more open. I cannot accept that," said EU Internal Market Commissioner Charlie McCreevy

"It would be wrong for member states to abuse collective agreements with social partners for entirely different purposes such as to close markets," agreed Competition Commissioner Neelie Kroes. She thus promised "effective, targeted enforcement of EU competition law," nevertheless highlighting the Commission's objectivity in these matters – pointing to its approval of state aid measures of around €1 billion for ensuring a universal service in both Italy and the UK. 

But trade unions spoke out in anger against the commissioners’ suggestions that the level playing field was being "tilted" in some countries, and notably in Germany. "We can't see, as workers, how a minimum wage that is set at around about 60% of the average wage is tilting the playing field. I'm sorry but we cannot see how any economist can tell us that a wage set so low can be tilting the market," stressed UNI Global Union's head of telecoms Neil Anderson. 

According to him, it is much more a case of the market being “unfairly tilted in favour of social dumping" and, if governments are serious about eliminating social dumping, they will have to set a level playing field for workers as well – especially considering that labour costs represent roughly 60-70% of total postal costs. 

Jean-Paul Forceville, director of external relations for France's La Poste  also stressed the need to ensure a level playing field on the international level. "Liberalisation outside of Europe is not progressing much. In the United States, markets are still desperately closed. The same goes for Canada and China. So, what will happen in 2011, is that foreign operators will be able to operate in the EU and we will not be able to operate there," he warned, calling on the EU to push harder in WTO negotiations on the issue. 

In February 2008, the EU pushed through plans to open up postal markets across the continent by 1 Jaunary 2011, or two years later for most countries that joined the bloc after 2004, as well as for Luxembourg and Greece (EURACTIV 01/02/08). The Commission had originally hoped markets would be opened by 1 January 2009. 

The central element of the new directive is the elimination of the so-called "reserved area", which gives incumbents the right to maintain a lucrative monopoly over the delivery of letters weighing less than 50 grammes (roughly 72% of the postal volume) in return for providing an affordable, five-days-a-week delivery service, even to citizens in the most remote areas – the so-called "Universal Service Obligation". 

The directive however identifies a number of flanking measures – such as state subsidies or the establishment of compensation funds – which countries may adopt in order to ensure the financial viability of providing a universal service. Such measures may however only be applied so long as they do not distort the market.

Up till now, only Sweden, Finland, the UK and most recently Germany on 1 January 2008 have fully liberalised. 

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