France and Germany clash on mail liberalisation

A Commission proposal to open Europe’s postal markets to full competition provoked a rift between member states as France, with the support of trade unions across Europe, opposed the 2009 deadline upheld by EU Presidency-holder Germany.


Slow progress
 

Member states made little progress towards a compromise when debating the Commission’s proposal in the Transport and Telecoms Council on 7 June. 

Indeed, no real public advance was expected, with elections scheduled on 10 and 17 June in the two countries that have been spearheading the opposition to the proposal – France and Belgium. 

Neither countries are likely to commit to any kind of compromise before then, and the real debate will likely take place at the end of the month, when heads of state and government meet at the European Summit or during the competitiveness ministers’ meeting. 

The issues of contention remain: 

  • The final date for full liberalisation: Germany, which has committed to opening up its postal market to full competition by 1 January 2008, is pressuring its counterparts to keep to the January 2009 deadline proposed by the Commission, to avoid a situation in which Deutsche Post must compete with operators that continue to have protected home markets. 
  • How to calculate the net cost of the universal service obligation (the main concern is to ensure a level playing field among operators and avoid violations of competition law) and which financing mechanisms should be allowed to cover these costs. 


Parliament rapprochement
 

Although MEPs in the Transport committee were unable to reach any sort of compromise on these issues during a debate on 4 June, an informal meeting on 5 June between the rapporteur on the proposal, Markus Ferber (EPP-ED), and the five other MEPs acting as co-rapporteurs (three Socialists and two Liberals) delivered a few elements of common ground, including: 

  • 31 December 2010 as the final deadline for complete market opening; 
  • the obligation for the Commission to issue detailed guidance on how to calculate the net cost of the universal service by January 2009, and; 
  • the obligation for member states to present national financing plans by January 2010. 

The deal must yet be approved by political groups ahead of a first-reading vote in plenary in July. 

Opening the domestic mail-delivery markets is in the interest of all member states, said German Economy Minister Michael Glos, confirming his intention to end the virtual monopoly that Deutsche Post holds over mail delivery in Germany in 2008 and insisting on a 2009 deadline at EU level. 

Nevertheless, he suggested that transitional periods could be put in place for countries that are not ready to liberalise their market by 2009. 

"I am very confident that a positive decision will be taken in the near future. Unless such agreement is reached, the current Directive will expire without replacement at the end of 2008… which means that general competition rules will apply. This will certainly spur on the member states concerned to reach a decision," said Glos. 

Although he stressed that he is in favour of the liberalisation of the letter mail market in the EU, French Finance Minister Jean-Louis Borloo dismissed the 2009 date as unrealistic. He said that more detailed proposals on how to guarantee delivery to all homes were needed before going any further. "We want universal service and for it to be solidly financed…It's an important question of social and territorial justice," he said, adding that the different funding mechanisms needed to be "defined in readable and sustainable terms" and calling on the Commission to provide "indications of the different financing means as soon as possible, if possible by September". 

In an interview with EURACTIV.fr, Jean-Paul Forceville, director of external relations of France’s La Poste Group said he thought that Parliament was showing signs of "great wisdom" by refusing the 2009 deadline. "Parliament is sending a clear signal: before any opening, we must obtain guaranties, notably as regards the financing of the universal service obligation." 

"We don't think that state aid is the best way to go about it. On the contrary, it's the newcomers – which is to say our competitors – which should participate in financing the universal service. There should be mechanisms that don't impede entry or competition, but which do provide for this," he added in a separate interview. 

Rolf Büttner, president of UNI Postal, which represents trade unions in the postal sector, accused the Commission of "lying" in claiming that the moves will create new jobs, pointing out that up to 80% of postal costs are the workers and that liberalisation will automatically result in the loss of thousands of jobs as well as in more precarious work and wage dumping as operators try to undercut each other. "There will be fewer postal services, fewer post offices, fewer letter boxes - and a worse service for those living outside the major conurbations," he said.

In October 2006, the Commission presented plans to abolish remaining restrictions on mail deliveries under 50 grammes and open up Europe's €88 billion postal sector to full competition by the end of 2008. 

National postal monopolies, which have traditionally relied on maintaining a "reserved area" in order to finance the cost of providing a universal service, are adamant that it would be impossible to maintain a quality service to all citizens under the current proposal and warn of thousands of job losses should the plan be accepted. 

This position has received backing from France, Belgium, Luxembourg, Italy, Spain, Greece, Poland and Hungary, as well as a number of new member states. 

Also, postal workers across Europe demonstrated their opposition to the plans with a mass strike action on 6 June, calling for a three-year postponement to liberalisation.

However, the Commission's proposal has received staunch support from the few countries in which liberalisation has already begun or been finalised, including the UK, Sweden, the Netherlands and Germany, the current holder of the EU Presidency. They say that the nearly 20-year liberalisation process has already dragged on far too long, and want their postal-service providers, such as Deutsche Post, to have the right to challenge incumbents such as France's La Poste. 

Debates are currently under way within the European Parliament and the Council. 

  • 18 June 2007: First-reading vote in the EP's Transport Committee. 
  • 9-12 July 2007: EP first reading vote in plenary. 
  • 21-22 June 2007: German Economy Minister Michael Glos said that he intends to bring up the debate when heads of state and government convene for the European Council.

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