Ruling strengthens bid for postal liberalisation

Liberalisers seeking to open the Union's postal sector to competition have hailed as a major victory last week's ruling by the European Court of Justice that aid paid by Paris to the state-owned post office Chronopost was illegal.

The judgement, which will be sent to the relevant French national court, followed a complaint by private courier company SFEI, which claimed that the government had given unfair aid to its rival.

Chronopost, a joint venture between the post office and the French regional airline TAT, may now be forced to repay 331,627,900 ecu in handouts made between 1986 and 1991.

'The Court's ruling on this issue is a vindication for industry,' said Anton van der Lande, secretary-general of the private European Express Organisation.

The judges ruled that the logistical and commercial backup which was given to Chronopost by the post office at cut rates amounted to state aid. They added that it should have been cleared by DGIV, the EU's anti-trust authority.

SFEI took its complaint to the Court along with five of its members - Federal Express, DHL International, Service Crie-LFAL, May Courier International and Express Transports Communications.

The ruling represents a victory not only for SFEI but for all those who have been struggling to liberalise postal services throughout the Union.

Legal experts predict that it is likely to put pressure on EU governments to speed up what has so far been an agonisingly slow liberalisation process.

With more than 1.8 million people employed by post offices, which generate 1.3% of the Union's GDP, member states have tackled postal liberalisation with kid gloves.

After a telecoms ministers' debate on the issue last November, Competition Commissioner Karel Van Miert announced a delay in plans to adopt a notice clarifying how competition rules apply to postal services.

The notice forms part of a two-track approach to liberalisation of the sector. It spells out the Commission's approach to anti-trust behaviour in 'non-reserved' areas (those open to competition), while a directive currently making its way through the legislative process sets out a timetable for liberalisation of postal services 'reserved' for monopolies.

Unveiled last July, the draft directive adopts a softly softly approach, seeking to limit the reach of monopolies. Under the proposal, post offices would maintain control over most domestic letter post, only facing competition for mail weighing more than 350g or costing more than five times the postal price of a standard letter. Incoming cross-border mail and direct mail would not be liberalised until 2001.

The Commission now plans to adopt the notice only after MEPs and ministers reach agreement on the directive, which they are expected to do before the end of the year.