| The romantic image of the trusty
postman, delivering letters to the farthest-flung corners of the land, makes the
reform of postal services a sensitive subject. This is especially true when the
impetus for reform comes from the European Union. This month the European
Parliament starts work on a directive, drawn up by the European Commission, to
remove the last monopolies in postal markets by 2009--the final stage in a slow
and laborious liberalisation that began in 1992. Directives in 1997 and 2002
chipped away at the centuries-old monopolies enjoyed by national operators, and
the proposed new law will open the whole market to competition by abolishing the
"reserved area" on mail weighing less than 50 grams. But although the
legislative wheels are in motion, some countries are as sceptical as
ever. The commission says it has deliberately pursued postal liberalisation at a slower pace than other market openings. This is partly due to its technical complexity. Unlike in telecoms, post has no physical network to share. Many countries had to create independent regulators from scratch in order to monitor mar ket access and prices. The size of the heavily unionised postal industry also prompted caution. It employs some 5m people directly and indirectly, and its turnover is roughly 1% of Europe's combined GDP. But arguably the biggest drag on liberalisation is old-fashioned resistance to open markets, plus a dash of reverence for letter writing. One opponent of the 2009 deadline talks of "a noble industry that we want to protect" and lauds the virtues of pen and paper. All postal operators recognise, however, that the epistolary habit has taken a hit from the Internet. With deadening pragmatism, the commission says liberalisation will improve quality and choice and reduce state subsidies. Countries that have already opened their markets, such as Sweden and Britain, agree. Since Sweden's Posten AB was privatised in 1993, prices for business customers have fallen by 30%, though they have risen for consumers. The postal network has been extended, with new outlets in supermarkets and longer opening hours. Proponents of reform argue that Sweden, which has one of the lowest population densities in the EU, disproves the argument that rural countries cannot both have open markets and provide a standard service for everyone. But France, Spain, Italy and other countries worry that abolishing the "reserved area" will damage this universal-service obligation. Last month Francois Loos, France's industry minister, said 2009 was "an indicative date" for competition rather than a firm deadline. A spokesman for PostEurop, a lobby group representing European postal operators, says several countries would prefer a deadline of 2012 at the earliest, with the wholly implausible argument that more time is needed to research the impact of liberalisation. The commission knows a delaying tactic when it sees one. Operators have had years to prepare for liberalisation. But some countries, such as Greece and Luxembourg, seem to want to protect their national monopolies at any cost. The attitudes of central European countries are more difficult to predict. Their governments supported the liberal services directive, which favoured their mobile, comparatively cheap workforces, but have expressed doubts about opening protected home markets to competition. Incumbents may have less to fear from competition than they think, however. In countries with open markets, the former monopolists have remained dominant. In Britain the Royal Mail has 96.5% of the market; in Sweden Posten AB has 91.5%. Regulators do not expect big changes in either country. Indeed, some advocates of liberalisation worry that open postal markets will fail to attract new entrants and that eliminating the reserved area will not guarantee competition. The debate over market opening is an opportunity to find out what people really want from their postal services and a chance to rethink how they work, says Michael Critelli, the boss of Pitney Bowes, a company that makes postal equipment and software. Some people might, for example, choose to have domestic mail delivered to their offices on weekdays, he suggests. But such innovations will happen only if national governments can be discouraged from stamping the commission's proposals "return to sender". |