It's the Directives, stoooopid!
Long and tedious discussions from political hacks have been devoted to Gordon Brown's "controversial" plans to part-privatise the Royal Mail. Not least has been the oft' posed question, "why is he putting himself out on a limb like this, when it is so unpopular?"
The subject is heavily rehearsed in the print media and online, where the likes of The Guardian purport to give us a complete background briefing, while Edward Heathcoat-Amory tells us in The Daily Mail that privatisation is essential for the survival of the service.
But nowhere will you find any mention of the real reason for Brown's "enthusiasm" (at least, not anywhere I can find). What you do see though, is news that the Tories are considering helping out Mr Brown in his endeavours to implement the Postal Services Directives. And he really needs their help. The "full market opening", under EU rules, must be in place by 2010.
It thus comes as no surprise to learn that Kenneth Clarke has promised to vote for the part-privatisation plan. That really tells you all you need to know. But are the Tories really that stupid? Or is it, as Iain Dale suggests, they don't know how to spell o-p-p-o-s-i-t-i-o-n?Tuesday, December 16, 2008
Euro Mail
Spread widely through the media today is the latest development in that long-running saga, the "privatisation" of the Royal Mail.
It is covered in The Timeswhich warns that there might be "50,000 jobs at risk" in break-up of Royal Mail, and by The Daily Telegraphwhich tells us that a "£3billion Royal Mail sell-off could be agreed today." From this we learn that the "state-owned firm that runs Britain's postal network will be sold to a private company." The favourite to secure the stake is TNT, the express delivery service that is part of the Dutch postal company, TPG.
Lord Mandelson, the Prince of Darkness, is heavily involved, and has been "thrashing out the deal in recent days and its culmination will be seen as a part-privatisation on the nation's universal postal service."
Then we also get from The Guardian the intelligence that DHL, part of Deutsche Post, is also "thought to be keen on acquiring the stake."
Thus, we are not only seeing "privatisation" but the sale of a strategic business, uniquely identified with the Crown – hence its title the Royal Mail – to European enterprises, to become part of an amorphous trans-national service. But what is entirely missing from any of the media coverage is any explanation as to why the government – with the enthusiastic engagement of Lord Mandelson – is so keen to push through the highly contentious and unpopular measure.
The answer, of course, is the EU's Postal Services Directive, detailed here, the aim of which is to "get national monopolies to open up to competition", ostensibly in order to make postal services cheaper, faster, more efficient and more innovative – similar to the process in the telecom and energy sectors.
As we pointed out in our May piece, the real objective – as always – is entirely political. The plan is to destroy national services, those with a unique national identity, replacing them with cross-border entities which owe nothing to any particular country. Then, in the fullness of time, when the "service" is partly or mainly "trans-national", the EU steps in with a proposal to regulate on a cross-border basis and creates an EU authority with full powers to dictate the rules.
Thus, we see economic integration followed by political integration in the classic EU mould, happening in front of our very eyes. And there is barely a mention of this process made by the media in its torrent of coverage. The best you will get is a reference in Bloomberg which tells us that "EU governments are phasing in competition for postal deliveries between 2011 and 2013, forcing Britain to drop the monopoly enjoyed by the Royal Mail," but that is about all.
As for any coherent opposition to this EU-inspired plan, Bloomberg also conveys the views of David Cameron, who tells us, "The Royal Mail faces a very much more competitive market." Thus, our David supports "solutions that look at joint public and private sector investment so that the Royal Mail can get investment and get some of the changes in working practices that are needed." Not from him a whisper about the elephant in the room.
So it is that the very fabric of our nation is stripped out, with not the slightest protest as the ring of stars spreads its malign shadow over everything and anything we once held to be central to our national identity. How long before our letter boxes are painted blue?
COMMENT THREAD
Saturday, 28 February 2009
Postal Services; Do they want the truth-of course not !!!!!
Posts
Printable Version
Postal services liberalisation[fr][de]
The EU is entering the final stages of a 15-year process to open up its postal services to competition, having overcome differences of opinion regarding the speed of liberalisation and how to ensure a universal service for consumers. The real test will however come with the implementation phase as of 2009.
MORE ON THIS TOPIC:
MILESTONES:
Policy Summary Links
The postal sector is of major economic importance, affecting the competitiveness of other sectors, generating an annual turnover of approximately 1% of EU GDP, and providing employment to around 1.7 million people.
Efforts towards reforming the postal market began in the early 1990s, as part of the push to create a European single market. The aim was to:
The first Postal Services Directive, adopted in 1997 (97/67/EC
), and a second one, adopted in 2002 (2002/39/EC
), succeeded in opening up a number of postal services, including the delivery of parcels and express services, but stopped short of imposing competition for the delivery of letters weighing less than 50 grammes.
Incumbent operators were entitled to hold onto this so-called “reserved area” – which represents more than 70% of all letter post in the EU and around 60% of all revenues from postal services – in order to keep up their role of “universal service provider” (USP).
But, on 18 October 2006, Internal Market Commissioner Charlie McCreevy confirmed, in his proposal for a third Postal Services Directive
, the Commission’s intention to eliminate all remaining obstacles to a single postal market and to abolish this reserved area as of 2009 – a date already suggested in the previous Directives.
ISSUES:
While the goal of liberalisation was more or less accepted all around, the speed of doing so was worrisome to some.
Commissioner McCreevy had originally insisted that 2009 be the final deadline for all member states to open up. He was supported by the so-called ‘Northern countries’ or ‘group of front-runners’, including Sweden, Finland and the UK – which are already fully liberalised – as well as Germany and the Netherlands – where full market opening is expected in 2008. They insisted the process had already gone on too long and wanted to open up new market opportunities for their national operators in other EU countries.
However, countries such as France, Italy, Spain, Greece, Belgium, Hungary and Poland (the so-called ‘Southern group’) were afraid that rapid liberalisation could destroy their public operators, resulting in a weaker customer service and huge job losses.
In a final compromise, MEPs and member states agreed to delay full liberalisation for all countries until 1st January 2011, or even until 2013 for:
In order to prevent distortions of competition, Parliament and Council also agreed on the introduction of a 'reciprocity clause', that forbids postal operators in countries that maintain a reserved area from entering markets that have already been fully opened (EurActiv 18/06/07).
The USO means that, under EU law, all citizens must have their mail collected and delivered at least once a day, five days a week. But, universal service providers are concerned that it will be impossible to do this under full competition.
Providing such a frequent and ubiquitous service to all citizens – whether they live in the city centre, up a mountain or on a small island – is expensive and, up till now, the “reserved area” was the main mechanism that allowed incumbent operators to finance the cost.
Indeed, the reserved area enabled incumbents to maintain a lucrative monopoly over the delivery of letters weighing less than 50 grammes, thereby allowing them to offset losses made on high-cost customers with profits made on low-cost ones.
Once this monopoly is abolished, the fear is that new market entrants will grab hold of the most profitable activities – such as business-to-business deliveries in cities – while neglecting more isolated customers. This would cause incumbent operators to lose the necessary resources for servicing the more vulnerable.
The final directive however identifyies a number of flanking measures that countries can use in order to ensure that the provision of universal service remains financially viable in a competitive market.
Such measures could include funding mechanisms, such as direct state subsidies, cross-subsidisation from profit-making to loss-making activities or the creation of a compensation fund through the introduction of fees on new service providers or users.
The new Directive would allow governments to finance the cost of providing a universal service in the way that best suits their particular situation, so long as it does not distort the market. The Commission is even open to allowing state aid.
But traditional operators are wary of this option because, in the long term, national budgets are always under pressure. Instead, they favour a “competitor-pays” system, where market entrants would be charged fees, in exchange for market or infrastructure access. Such a ‘compensation fund’ is not endorsed by private companies.
Following a request from Parliament, the Directive includes an amendment requiring the Commission to issue 'detailed guidance' on how to calculate the net cost of the universal service in order to create legal certainty, ensure a level playing field among operators and avoid violations of competition law.
For more information on the various funding alternatives, see our LinksDossier on Financing Universal Service.
MEPs strongly underlined the fact that increased competition could put downward pressure on the quality of employment and increase the risk of social dumping through the exploitation of low-cost labour. Parliament therefore requested that basic working conditions applicable in a member state, such as minimum pay and the right to strike, remain unaffected by the Directive - a demand that was taken up by Council.
The clause was originally intented to avoid competition taking place purely on the basis of salary dumping. However, there are already concerns that the establishment of minimum social standards is being used to shield incumbents from competition, notably in countries where liberalisation has already gone ahead, such as Germany (EurActiv 1/02/08).
POSITIONS:
MEP Markus Ferber (EPP-ED), who is rapporteur in Parliament welcomed the compromise reached between Parliament and Council on postal liberalisation. He explained that, while the two-stage approach "ensures that we take into account the interests of all member states", the reciprocity clause will help to avoid a situation where protected monopolists are able to "act as cannibals in liberalised markets". (For a full interview with the MEP, click here ).
Francis Mary, director of France's La Poste Brussels office welcomed the inclusion of social provisions in the directive, adding that the final text, "compared to the Commission's initial proposal, is a very positive compromise". "Earlier, people were still talking about reducing the scope of the Universal Service Obligation or of not having any mechanisms in place for financing it […] These risks have been laid aside by the current text," he said.
Poczta Polska, the Polish postal operator, however warned that abolishing the reserved area could lead to a “decline in quality service [regarding] on-time delivery and frequency as well as in frequency of emptying collection boxes and office hours of postal outlets”.
But, Viveca Bergstedt Sten, senior vice-president of Sweden’s Posten AB, pointed out that despite her country’s large area and sparse population, 13 years of liberalisation had proved that it was “perfectly possible” to operate the USO without any additional financing mechanisms.
Jukka Alho, Head of Finland Post Corporation, added that restructuring measures resulting in jobs losses in the postal sector have been taking place for years as a result of electronic substitution and that flexible liberalisation is the only way to create sustainable jobs.
Adam Crozier, CEO of the UK’s Royal Mail, said that despite his original reluctance to liberalise postal markets, he now strongly believed that competition is both good for the company and the consumer. “In three years, Royal Mail went from being a loss-making operator to a profit-making one,” he said, adding that, despite a loss of 55,000 workers, Royal Mail’s workforce was now “happier, better paid and more efficient”. The British state-owned company wants competitors to be able to choose between building alternative networks or accessing existing ones on a non-discriminatory basis, at a price related to costs. “This needs to be enshrined in any new postal services Directive,” it stated.
Public Postal Services Providers of Sweden, Norway, Iceland, Finland and Denmark, on the other hand, do not want downstream access to be imposed by EU law. They say that imposed access will only allow for “partial and administratively-determined – rather than market-driven – opening up”, adding that only an increase in the provision of end-to-end services will ensure a viable universal service.
For Deutsche Post Chief Executive Klaus Zumwinkel, the provisions on the universal service obligation are the real weak point of the new proposal, because they could lead to hurdles so high - such as making new market entrants choose between ‘pay or play’ - that liberalisation will remain purely theoretical.
UNI Europa Postal, which represents Europe’s trade unions in the postal sector, says that full market opening will worsen the already downward employment trend in the sector, saying: “We have difficulties in finding any positive social impact which could result from a full market opening.”
The Free & Fair Post Initiative (FFPI), which represents users and competitors of the public postal operators, said the directive would improve choice and quality of service for users and consumers, and will encourage innovation and dynamism in the sector. However, FFPI President Philippe Bodson warned of "backstage protectionist manoeuvres", saying: "Today's vote is historical, but is not the end of the story. The success of postal liberalisation will in fact depend on how member states will implement the Directive. Backstage manoeuvres to introduce barriers and protectionist rules that risk hampering access to new entrants in the market have to be avoided." The FFPI added that it would continue to work to ensure that "potential cases of delayed or partial market opening and regulatory requirements set up by member states that create significant barriers to entry are exposed".
The European Postal Users Group (PUG), which represents related companies such as publishers, distance sellers, advertisers, envelope manufacturers and paper producers, agreed the directive would bring benefits to users in terms of choice and prices. Chairman Per Mortensen nevertheless cautioned: "The challenge for the 27 member states is to ensure they successfully adopt the directive's legal framework to local conditions in ways that truly benefit postal users thereby ensuring letter post's future. Therefore, PUG will follow the transposition of the directive into national law very closely".
Links Policy Summary
Commission documents:
Presidency Documents:
Council Documents:
Parliament Documents:
- Parliament: Postal services: open to competition by 2011, but subject to safeguards
[FR]
[DE]
(11 July 2007) - Parliament: Draft Report on the Proposal for a directive concerning the full accomplishment of the internal market of community postal services
[FR]
[DE]
(12 March 2007)
Political Groups- EPP-ED: Postal Services: EU liberalisation until 2011 at the latest. Markus Ferber MEP
[DE]
(11 July 2007) - EPP-ED: Christine de Veyrac: 'Libéralisation postale: le Parlement et le Conseil doivent reporter la date d'ouverture'
- The Socialist Group in Parliament (PSE): Willi Piecyk: “Postal services must be safeguarded for even the most far-flung customers”
[DE]
(18 October 2006) - ALDE: Postal services to be fully open to competition without prejudice to daily deliveries
(11 July 2007) - Greens-EFA: The Postal Directive: A Greens/EFA Approach
[FR]
(24 April 2007) - GUE-NGL: Postal services: dogmatic liberalisation detrimental to customers and staff
(10 July 2007)
Governments- France's Permanent Representation to the EU: Response to the Public Consultation on Postal Services
(January 2006) - Belgium Ministry for Public Enterprises: Response to the Public Consultation on Postal Services
(January 2006) - Ministry of Economic Affairs of the Netherlands: Response to the Public Consultation on Postal Services
(January 2006)
Industry federations and trade unions- UNI Global Union: 10 postal operators express their concern
[FR]
- La Poste (France): Jean-Paul BAILLY, Président de la Poste: "Dire qu'il faut financer le service universel postal par plus de productivité est hors sujet" (le Monde)
(19 Octobre 2006) - La Poste (France): Response to the Public Consultation on Postal Services
(November 2005) - Deutsche Post, TNT, Royal Mail, Posten AB and Suomen Posti Oyj: Momentum grows for major postal operators backing EU liberalisation plan
(17 October 2006) - Deutsche Post: Statement by Dr. Hans-Dieter Petram: “A Single Market for Postal Services”
(23 May 2007) - Le Groupe de la Poste (Belgium): Uncertainties about the financing of the universal postal service must be removed
(27 February 2007) - Poczta Polska (Poland): Response to the Public Consultation on Postal Services
(January 2006) - Federation of German Industries (BDI) Jürgen Thumann: "Liberalisation for the benefit of postal users and industry"
(17 October 2006) - UNI Europa Postal: Response to the Public Consultation on Postal Services
(January 2006) - Confédération Européenne des Syndicats Indépendants (CESI): Liberalisation of postal services: CESI urges caution
(3 April 2007) [FR]
[DE]
- Confédération Européenne des Syndicats Indépendants (CESI): CESI opinion to the Commission on the proposal for a directive concerning the full accomplishment of the internal market of community postal services
(3 April 2007) - The Free & Fair Post Initiative (FFPI): Postal users welcome the Commission proposal for a Third Postal Directive
(18 October 2006) - Postal Users' Group (PUG): Business mailers manifesto for Europe's postal sector
(4 July 2006) - Postal Users' Group (PUG): Contribution to Public Consultation
- European Envelope Manufacturers Association (FEPE): The blessings of liberalisation and quality of service
- The European Consumers’ Organisation (BEUC): Postal Services - Public consultation
(February 2006) - European Trade Union Confederation (ETUC): Full postal liberalisation by 2011 fails to guarantee universal service, warns ETUC
[FR]
(2 October 2007)
Think tanks & Academia