Hopes fade for agreement on postal services

The odds are widening on communications ministers being able to reach agreement on how to liberalise postal services when they meet in Brussels at the end of the month.

Pessimism about the chances of a deal has been fuelled by a meeting of member states' experts last week which showed no change in long-held positions since the June gathering of ministers failed once again to strike an accord.

'There was no movement at all,' said one. 'It is difficult to see why the presidency allowed the discussion to continue all day. The prospects for the Telecoms Council are not good'.

Sweden, Finland, Germany, the Netherlands and Spain tend to favour market-opening and insist that a firm timetable for liberalisation should be drawn up, while the French and Belgians, in particular, oppose this.

The positions of the antagonists could even be hardening.

The European Commission, for one, refused last week to accept a raft of amendments which would have watered down what is already a compromise proposal for the liberalisation of postal services.

The proposed directive already allows national post offices to keep their monopoly on basic letter services (the collection, sorting and delivery of letters weighing up to 350 grams). Moreover, they would control incoming cross-border mail and direct mail until 2001 and only then - if a Commission review of the market deemed it necessary - would liberalisation of this sector begin.

To prevent cross-subsidy, the post offices would have to keep accounts for these 'reserved' businesses separate from those where they faced competition, such as in the areas of parcel delivery and express mail.

In May, MEPs called for the monopoly on cross-border mail and direct mail to be extended. In its rejection of the amendments, the Commission said that keeping these services in the 'reserved domain' for an indefinite period would cause a 'general slow-down in the liberalisation process'.

The Commission is also adamant that its decision to leave it up to member states to decide how to maintain a universal postal service, rather than mandating operators to charge a uniform rate, is a sufficient safeguard.

'While uniform rates might often be useful, the decision is up to the member states, in accordance with the subsidiarity principle,' said the Commission, insisting that the requirement for services to be available everywhere at an 'affordable price' offered adequate protection.

The European Express Organisation (EEO), which represents leading express delivery companies such as Federal Express and United Parcel Service, reacted positively to the Commission's tough stand against the Parliament.

At last week's official-level meeting, however, the French government maintained its opposition to liberalisation, as foreseen in the Commission's proposal.

'They are still lobbying very hard against opening up direct mail in 2001,' said an official.

Since the final decision will be taken by a qualified majority vote, the French could be defeated unless they can muster enough support from other member states to form a blocking minority.

For this reason, observers are watching anxiously for clues as to how Spain will line up at the 27 September meeting of telecoms ministers. Although Madrid has tended to side with the liberalisers, it is unhappy with the proposal in the draft directive to compensate post offices for delivering international mail.

Almost all the European operators recently signed a treaty laying down how they should pay these 'terminal dues' to each other, so as to make the system more efficient and fair. But the Spanish operator, which stands to lose money under the new system, refused to sign.