Germany’s volte-face threatens postal deal

A German policy U-turn is threatening to wreck a long overdue deal to open one-fifth of Europe's postal services to free competition.

Bonn's erstwhile allies in the campaign to liberalise direct and cross-border mail markets are incensed by the German government's decision to side with the French in seeking to postpone market-opening moves until at least 2003.

Industry Commissioner Martin Bangemann is even considering taking his proposal for a new directive off the table altogether if enough communications ministers support the Franco-German plan at their 28 November meeting to allow it to go through.

Given how strongly the French government feels about exposing its post office to free competition, officials in both the Commission and the Council of Ministers acknowledge that this month's meeting could be the last chance for a liberalisation deal before the French legislative elections due in the spring of 1998.

Rumours abound that Bonn has switched sides in return for a commitment from France to ignore the introduction of new German tax breaks for lower-pollution cars - a measure which stands to harm the French auto industry. 'It has to be a deal', said a diplomat. 'There is no other explanation since it is not in the interests of the German postal operator'.

Bonn is to end Die Post's national monopoly rights for mail weighing more than 350 grammes and some bulk post from January 1998, and intends to extend this freedom to letters of less than 100 grammes from 2001.

No such commitments have been made by the French government.

Despite this, Germany's Post Minister Wolfgang Bötsch and his French counterpart François Fillon announced earlier this month that they had reached a common position on postal liberalisation.

In stark contradiction to the Commission's proposal to open the markets for direct and cross-border mail to competition from 2001, they will instead recommend that ministers decide in June 2000 whether to liberalise these services from July 2003.

Express delivery organisations, which were prepared to accept - albeit reluctantly - the partial opening of the market proposed by the Commission, are furious.

'It is a complete joke,' said a spokesman for the European Express Organisation. 'It is the two major players colluding to keep the market shut.'

The reaction from liberal member states has been equally fierce. When the common position was presented to diplomats last week, Sweden, the Netherlands, Denmark and Finland were implacably opposed.

'The Germans are going completely against everything they said they believed,' said a diplomat. 'The French are sitting back and letting the Germans do all the talking. It is one thing to promise not to let them down, but actually to take the lead in defending their position is bizarre.'

With Belgium, Greece, Luxembourg and Portugal supporting them, the French and Germans could win a qualified majority for their common position on 28 November unless one of the 'non-aligned' countries - Italy, the UK, Spain or Austria - can be persuaded to swing behind the liberals.

Bangemann is relying on this, as well as on the reluctance of the Irish presidency to push such a sensitive issue to a vote at all, so as to avoid having to choose between a compromise which would keep the market shut for eight years or withdrawing his proposal altogether.

Waiting in the wings is Competition Commissioner Karel van Miert. He has already criticised the Franco-German deal as a delaying tactic, and has threatened to publish a notice detailing how the EU's competition rules apply to the postal sector if no directive is agreed by the end of this year.

His officials are sitting on six complaints against post offices for alleged abuses of their dominant positions and, once the notice is published, Van Miert could use his powers under Article 90 of the Treaty of Rome to deal with them.