What will liberalisation deliver?

Two MEPs discuss liberalisation of postal services.

Markus Ferber

The L-word is back: the liberalisation of postal markets in Europe is the key aim of the draft directive put forward by the European Commission last October.

Ahead of the vote in the European Parliament’s transport committee in June, the usual defenders of protectionism are mustering their forces. However, vocal as they might be, their arguments miss the point. There is no inherent contradiction between open markets and consumer interests. Instead, the European Parliament has the unique opportunity to shape an efficient pan-European market serving the interests of all consumers.

For a start, the aim to open up postal markets in Europe is not coming out of the blue. Already in 1991 the European Commission tabled a green paper which contained a preliminary outline. In 1997 and 2002 the Parliament and the Council of Ministers agreed on a first step towards a fully liberalised sector. Since 1 January 2006, the market for letters and parcels weighing 50 grams or more is open to competition in all EU member states.

The UK, Sweden, Estonia and Finland have already opened up their markets for all products. In its October 2006 draft directive, the Commission thus simply proposed to complete what began a long time ago. As the last cornerstone of the project, the draft directive envisages 1 January 2009 as the end date for the full liberalisation of the market for standard letters of less than 50 grams.

The long process which gave traditional postal operators enough time to prepare for the final step is not the only reason why the critics are wrong. Opponents of liberalisation claim such a step would leave consumers worse off than before. This argument however rests on the assumption of a liberalised market with no rules.

The opposite is the case. The Commission’s draft directive contains detailed legal provisions which will guarantee a high standard of operations. Member states will have to ensure that mail is collected and delivered in all parts of their territory at least five days a week (a concept called universal service). Thus, postal operators cannot simply serve profitable urban areas at the expense of the countryside. And let us not forget reality: despite the advent of online-banking and internet shopping, the vast bulk of official mail - bank statements, insurance contracts, or administrative letters - will continue to be sent on paper. Even in the most remote areas, the postman will not disappear.

The final criticism concerns employment conditions in the sector. Post office employees, it is feared, will lose their jobs or have to sign off their benefits. Again, this does not have to be the case. The draft report for the Parliament’s transport committee contains amendments enabling member states to uphold working conditions in the sector. For example, companies new to the market could be granted a licence only if they agreed to take over the same employment conditions offered by the traditional postal operator.

By the way, should there be no agreement now on how to regulate a liberalised postal market, market forces will simply take over. This is due to a sunset clause according to which the current directive 2002/39/EC will expire at the end of 2008. Now is therefore the time to shape the postal market of the future. The European Parliament has enough powers and experience to provide for a regulatory environment which is both efficient and serves the interests of consumers. There is no need to be afraid of the L-word, if we put in place the right rules and regulations.

• German centre-right (EPP-ED) MEP Markus Ferber is a member of the Parliament’s transport and tourism committee and rapporteur on the proposals for a third postal directive.

Brian Simpson

It is often very easy in the closeted world that is the European Parliament to get sucked into ideological debates about liberalisation or de-regulation, about privatisation or nationalisation, and in so doing lose the main purpose of being elected, namely to represent the citizens of the European Union. This is clearly evident when one looks at the postal dossier and the obsessive behaviour over many years of the European Commission to sacrifice service levels, social standards and a good public service on the altar of liberalisation.

Many governments have already taken the step to fully liberalise their postal services and despite assurance that everything in the post box would be rosy the reality has been somewhat different. Take my own country the UK. Since liberalisation, job numbers have dropped, more agency workers on less pay have been introduced, deliveries and collections down to one a day and the government has recently announced the closure of 2,500 post offices in mainly rural areas. More damningly for the Royal Mail is that public perception is that services have got worse and not better.

There is a fear from some in and around the industry that the true aim of the Commission is to attack France and its postal operator, so the private companies from the Netherlands and Germany can move in and ‘cherry pick’ the best services to boost their profits. There is also an argument questioning why successful operations like those in France and Belgium should be forced into liberalisation, as the old adage says ‘if it ain’t broke, don’t fix it’.

Realistically however we know that liberalisation, for good or for bad will arrive in the next few years and that will mean there will be some significant changes ahead for the postal sector. So if liberalisation is a reality then the question we have to ask ourselves is what can we do to ensure that service levels are protected?

For me, the maintenance of a universal service is essential, and this universal service should entail at least one delivery per day at a uniform tariff, irrespective of where you live. The universal service should also include access to postal services via post offices and include quality of service levels and social conditions to ensure that ‘cherry picking’ does not occur and the service-providers deliver on their promises. Central to the provision of a universal service is the question of how much an obligation will be paid for, and here the Commission’s proposals are sadly lacking.

It is also important to remember that since this whole debate on postal services started the EU has expanded to 27 states. Many of these newer states whilst willing to open up their services believe that doing so by 2009 as proposed will be impossible and could lead to drastic cuts in service levels. Hungarian Post for example fears that services such as its mobile post offices, which are essential in reaching rural communities, will have to go.

What the Commission has never appreciated is that the postal sector is unique and different from other service industries and this uniqueness is born out of a personal contact that the industry shares with its consumers. Whilst gas and electricity is about pipelines and wires and telecoms are about machines and telephones, post is about people. The post office has a social role to play, it is a place where people meet, chat and can socialise. It remains to this day the only contact some people have with the outside world. We need more time to ensure that if liberalisation happens then guarantees are given in a number of areas. These must include; a guaranteed universal service, a clear indication from every member state on how they will finance the universal service, a guaranteed service level within the universal service at a uniform tariff and a guarantee that social conditions will not be eroded.

Then and only then should we consider liberalisation in or around 2012.

• UK Labour (PES) MEP Brian Simpson is a member of the Parliament’s transport and tourism committee and shadow rapporteur on the proposals for a third postal directive.

Two MEPs discuss liberalisation of postal services.