Trade unions fight to keep monopolies

Date: 07/10/1999

By Tim Jones

SOME pundits suggest that Europe's labour unions are dead. Try telling that to the EU's transport ministers or Commission Vice-President Neil Kinnock, whose endless wake-up calls to the rail industry while he was in charge of the dossier fell on deaf French ears.

"We are not masochistic," said French Premier Lionel Jospin recently. "When you go from Britain to Germany, you pass through France. If we open our space, it is a much more important concession than if the British opened their space."

Dire warnings of the impending death of rail-freight have done no good. Rail's share of the EU's freight market has collapsed from 32% in 1970 to less than 14% today, while road haulage's share has soared to 70%. Lucrative contracts for moving containers across the continent are haemorrhaging to river barges.

Jospin is suitably scared but, in the short-term, he fears the transport unions more. The Socialist government well remembers the punishment delivered by the rail unions to its Gaullist predecessor. Hence Jospin's decision to hand over the transport ministry to Communist former rail-worker Jean-Claude Gayssot.

The market-oriented British government cannot smirk at this. At this year's Labour Party conference, ministers sat with communications workers' representatives and watered down a plan to open up the UK postal market to competition from express-delivery companies.

Telecommunications, civil aviation and energy may have seen their historic shackles removed over the past ten years, but monopoly-protecting legislation will continue to bind the EU's mail and rail markets well into the next decade. Yet, as so often, the story on the ground will be quite different. If legislation does not do the job, the market-place will - but in a lopsided and discriminatory fashion.

Despairing of getting even a minimalist deal to free up a quarter of the Union's rail network over ten years, the Finnish presidency has proposed allowing individual member states to request exemptions from competition for limited periods.

However, ministers will not repeat the mistake they made over energy liberalisation and allow protected companies like Electricité de France to dive into other markets while keeping all-comers out of theirs. Under the Finnish plan, rail firms in countries which remained protected would be barred from open-market tracks.

Helsinki hopes a time-limited exemption would give Jospin a time to win over the unions and deploy the power of French shippers and ports, who argue that SNCF's rail monopoly is driving business into neighbouring countries.

From January, the first pan-European cross-border rail freight firm opens for business. Rail Cargo Europe, a joint venture between Germany's DB Cargo and the Netherlands' NS Cargo, will offer seamless freight-moving services to manufacturers and shippers.

DB Cargo means business. The company recently placed a €260-million order for 100 multi-system freight locomotives which can be used right across Europe. Until now, these trains, which can cope with the different voltages and safety and signalling systems, have been used for passenger services only.

The story is almost identical in the mail market, where the British and French champion protectionism while the Dutch and Germans benefit from the fact that EU law still guarantees them a monopoly on dealing with mail weighing less than 350 grams.

Using their monopoly to sort and deliver letters, post offices are leapfrogging into the prodigiously growing express-delivery market at the expense of the established players.

Legislation to level the field will not come soon if Internal Market Commissioner Frits Bolkestein's testimony to the MEPs last month is to be believed. "It is our intention to limit the reserved service to a small area so that more of the postal system is liberated and therefore open to competition," he said. But he added that a new directive would not enter into force until 2003 at the earliest and would be phased in over "five, ten or 15 years" .

Part of a survey 'Challenges for industry', p13-20.