Bolkestein seeks to rally support for postal liberalisation plans

Date: 30/03/2000

By Peter Chapman

INTERNAL Market Commissioner Frits Bolkestein is battling to win over opponents of greater market-opening in the EU's postal market as he prepares to unveil controversial proposals for the sector.

Sources say the Commissioner has been holding talks with national officials in key member states and representatives of leading companies in the industry as he puts the finishing touches to his plans. They add that although he is still working on the details of the proposals, he could be ready to send them for scrutiny by other Commission departments as early as next week.

They also say Bolkestein has been encouraged by the conclusions of last week's Lisbon summit, which called for the Commission and the Council of Ministers to "speed up" liberalisation in areas such as gas, electricity and post. "This is a crystal clear mandate - the bottom line is that this makes it more difficult for member states to drag their feet," said one.

Bolkestein's plans to slash the letters-market monopoly still enjoyed by many of Europe's state-owned postal operators are nevertheless certain to spark fierce arguments between governments, MEPs and firms in the sector.

The Commissioner's aides have confirmed that he intends to go far beyond the 'compromise' deal sought by state post office lobby group PostEurop, which is fighting to retain a significant proportion of the business currently 'reserved' for its members. It argues that this is essential to ensure they can finance 'universal service' deliveries to remote areas.

The EU's 1997 postal directive allows member states to reserve the delivery of letters weighing up to 350 grammes for state post offices. Former Industry Commissioner Martin Bangemann was poised to call for this to be cut to just 50 grammes before the Santer team resigned last March.

PostEurop members such as the UK's Royal Mail and France's La Poste are urging his successor not to reduce the threshold below 150 grammes. But a Bolkestein aide said this week: "I cannot confirm whether it will be 50 grammes or 75 grammes - but it will certainly be less than 150 grammes."

Sources say the Commissioner has not been convinced by PostEurop's claim that the state-run postal services' letters monopoly is needed to protect universal service. An internal paper prepared by his staff admits that the cost of providing universal service to remote areas swallows 5-14% of state-owned firms' revenues. But it also shows that postal operators still make 62.4% of their total revenues from letters weighing 50 grammes or less and claims universal service is "a commercial asset" which can be used to the advantage of post offices.

The Commissioner's proposals will be closely scrutinised by EU member states - especially France, Belgium, Greece, Italy and Portugal, where state-run post offices are seen as a vital source of employment.

Industry sources fear these countries would oppose a cut in the reserved area to below 150 grammes, and wield enough votes to block the move in the Council. "This is one of the reasons why Commissioner Bolkestein has been visiting member states so often in recent weeks to try to convince them to change their minds," said one.

MEPs are also at loggerheads over the issue. Centre-right European People's Party's spokesman, German Christian Democrat Markus Ferber, argues that far-reaching liberalisation would boost the postal market and improve consumer choice.

But his Socialist Group counterpart Brian Simpson has warned the Commission against radical change. "I am certain that Bolkestein wants 50 grammes for letters," he said. "The present directive says future liberalisation should be 'gradual'. If he goes beyond 150 grammes for letters, he would be abandoning that."

Internal Market Commissioner Frits Bolkestein is battling to win over opponents of greater market-opening in the EU's postal market as he prepares to unveil controversial proposals for the sector.