French wary over German postal push

After taking office in 2004 as European commissioner for the internal market, Irishman Charlie McCreevy managed to differentiate himself from his predecessor, Frits Bolkestein. For all that he too is a free-market liberal, McCreevy, who was previously Ireland’s finance minister, has shown a greater reluctance than Bolkestein did to fight battles that he cannot win.

The Dutchman, a sometime trade and defence minister in The Hague, had provoked the wrath of trade unions across the EU with his plans to free up closed national markets for services by proposing a services directive. He was credited with contributing at least a few percentage points to the ‘No’ vote in France against the EU constitution. Left-of-centre French voters saw ‘the Bolkenstein directive’, as it was later dubbed, as proof that the EU was intent on eroding workers’ rights.

McCreevy declined to show his predecessor’s zeal for an ambitious opening of the services market, calculating instead that the compromise subsequently worked out between national governments and the European Parliament was the best deal on offer.

Yet with the campaigns for the French presidential elections now in full swing, there are growing signs that McCreevy’s name might become as infamous in French political debate as Bolkestein’s was in 2005.

In October, McCreevy confirmed that the final remaining monopoly of the deliveries market maintained by national postal companies, for letters weighing less than 50 grammes, should end by 2009. This is an issue on which McCreevy has chosen to stick to the path previously mapped out by Bolkestein.

The backlash in France has shown a familiar degree of hostility.

French President Jacques Chirac said in a speech to rural constituents last weekend that France would "oppose any initiative which would lead to undermining the quality of the public postal service".

French Socialist MEP Gilles Savary, who is advising Ségolène Royal, the Parti Socialiste’s presidential candidate, condemned the Commission’s bid to stick to the 2009 deadline as proof of the "contradictions of its cult of competition".

With around 330,000 staff, La Poste is the second biggest employer in France after the French state itself. But unlike other large national monopolies it has not restructured itself to deal with new competitive challenges.

So La Poste would like to see another campaign against the Commission. But there are differences this time round. On the services directive, France could rely on strong support from Germany to mitigate the effects of liberalisation. But Berlin has made getting progress on postal liberalisation one of its priorities for the internal market during its presidency. Germany has reformed its own postal service and will end Deutsche Post’s monopoly for items under 50 grammes at the end of 2007. German Chancellor Angela Merkel said in a recent interview that unless other EU countries were to follow suit it would put Germany at an "unacceptable competitive disadvantage".

To emphasise the importance that Germany attaches to the proposal, the European Parliament has appointed German CSU MEP Markus Ferber, a long-standing advocate of liberalisation, to draft its opinion on the proposal. Ferber wants to complete the European Parliament’s first reading by June. The German presidency is planning to start discussions on the proposal in a working group of the Council of Ministers this month. It has put the proposal on the agenda of the council of telecoms ministers on 7-8 June.

Privately German officials admit that progress on the proposal will depend on the appetite of member states to move ahead. French Industry Minister François Loos said at a meeting of ministers responsible for postal issues in December that the 2009 target should be treated as "an indicative date and under no circumstances a firm deadline". Italy is also opposed to liberalisation by 2009. But EU officials point out that there were some encouraging signals from ministers in December with the Polish minister indicating that Warsaw could accept full market liberalisation with some flexibility on the target date, hinting that an extra two years could be acceptable.

Postal liberalisation has the potential to become a major campaign issue in France, depending on how far and fast the German presidency chooses to push the proposals. But the forces lined up to protect La Poste will not find it easy to demonise France’s traditional ally in Europe, Germany, in the way that they once demonised Bolkestein. McCreevy, for one, has reason to be grateful for that.

After taking office in 2004 as European commissioner for the internal market, Irishman Charlie McCreevy managed to differentiate himself from his predecessor, Frits Bolkestein. For all that he too is a free-market liberal, McCreevy, who was previously Ireland’s finance minister, has shown a greater reluctance than Bolkestein did to fight battles that he cannot win.