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EU Lawmakers Back Liberalization of Mail Services Proposal

Mail delivery across the European Union should be liberalized by 2011, a panel of EU lawmakers recommended, backing countries such as France and Luxembourg seeking a postponement of the 2009 deadline proposed by the EU's executive arm.

The European Parliament's transport committee voted late Monday to push the market opening back by two years, arguing that more time was needed to ensure mail will continue to be delivered EU-wide at an affordable cost and for national postal operators to adapt to more competition.

The full 785-seat assembly will vote on the proposed postal reform in July and is likely to back the committee's recommendation.

"It's a satisfactory compromise," said British Labour deputy Brian Simpson.

EU governments failed to agree earlier this month on when to end national monopolies for delivering mail under 50 grams, as a group of countries led by France called for guarantees that national postal companies won't lose out as rivals move into the lucrative parts of the sector. Delivery of heavier mail has already been liberalized.

The European Commission, backed by Germany, Britain and others, has proposed that mail delivery across the 27-nation bloc be liberalized by 2009, promising it would lead to a more reliable and better quality postal service. The current EU legislation governing the postal market expires at the end of 2008.

The EU's executive office has said it was unfair that some countries had liberalized the market while others had done nothing. It is demanding that all EU nations open up the postal services and put independent regulators in charge of the sector.

But it also wants postal operators to guarantee public service and ensure that every European -- not just in big cities but also in remote areas -- gets at least one postal delivery and collection a day, five days a week.

Finances of Public Services

Governments argue it is essential to establish how public services would be financed once rival companies move into markets before a date for liberalization can be set.

EU Internal Market Commissioner Charlie McCreevy, who pushed for the parliamentarians to agree to the 2009 deadline, accused those seeking a delay of using scare tactics to convince Europeans that removing national monopolies will bring "chaos and tragedy."

Many countries have been slow to open their postal market to competition, and some are reluctant to move forward with a reform first considered nearly 15 years ago. The postal industry is worth 88 billion euros ($119 billion).

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.

France, Belgium, Greece, Cyprus, Luxembourg, Slovakia, Poland, Hungary and Italy are lagging behind on liberalization, although they are not opposed to the idea in principle. Germany, the Netherlands, Finland, Sweden and Denmark are pushing hard for a more open market.

Only Sweden, Britain and Finland have so far scrapped all legal monopolies for the postal service, although Germany and the Netherlands are nearly there.

As a compromise, Germany, which holds the rotating EU presidency until the end of June, proposed every EU nation is allowed to open their postal markets at their own speed by a certain date and transitional periods are put in place for countries that are not ready to liberalize their market by 2009.

The parliamentary committee wants the EU's 12 new member states and those with difficult topography or numerous islands be given until 2103 to liberalize their mail delivery.

Countries that have already fully liberalized their postal sector could bar rival companies from EU states that will not open their own markets until 2011 or later, under the committee's proposal.

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