It's the Directives, stoooopid!

Wednesday, February 25, 2009

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?

COMMENT THREAD

EU Postal Legislation

• Introduction
• Objectives of Community Postal Policy Framework
• Directive 97/67/EC
• Directive 2002/39/EC
• Directive 2008/06/EC
• Legislative and regulatory timetable for market opening process

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Introduction

The purpose of Community policy in the postal sector is to complete the internal market for postal services and to ensure, through an appropriate regulatory framework, that efficient, reliable and good-quality postal services are available throughout the European Union to all its citizens at affordable prices. The importance of postal services both for the economic prosperity and social well-being and cohesion of the EU make this a priority area for Community action.

Objectives of Community Postal Policy Framework 

To achieve this broad purpose a number of specific objectives for action at Community level have been identified:

• To define at Community level a universal postal service, conceived as a right of access to postal services for users, encompassing a minimum range of services of specified quality which must be provided in all Member States at affordable prices for the benefit of all users, irrespective of their geographical location
• To set a common maximum limit to the extent of the postal reserved areas which each Member State may grant to its provider(s) of the universal service, in order to ensure the economic and financial viability of the provision of the universal service
• To develop a process of gradual and controlled market opening to competition while giving the Member States means to ensure that the provision of universal service is guaranteed on a lasting basis
• To improve the quality of postal services by setting at Community level common quality of service standards for intra-Community cross-border mail and ensuring that standards for national mail are set and publicised (in line with those intra-Community standards), and that performance results are published
• To establish the principle that tariffs should be related to costs and to ensure that the financing of the provision of universal service is carried out in a transparent manner compatible with Community law
• To encourage harmonisation of technical standards, taking users' interests into account
• To ensure that fair conditions of competition exist outside the reserved sector
• To encourage and assist the postal sector to adapt rapidly and effectively to technological progress and changes in demand
• To ensure that the needs of users, the interests of employees and the general importance of the postal sector for the economic, cultural and social development and cohesion of the Community (including the special difficulties encountered by remote regions) are taken into account when regulating the sector
• To co-ordinate the development of postal policy with other Community policies and to ensure a consistent approach to overlapping issues
• To adopt an approach to international postal traffic (in particular in relation to the EFTA countries and the countries of Central and Eastern Europe, particularly in the light of the EU enlargement) which is consistent with the above objectives and reflects the same priorities, in co-operation with third countries and international bodies

 

Directive 97/67/EC 

The above mentioned Community objectives for postal services have been implemented in Community law through a Framework Postal Directive which established a complete regulatory framework for European postal services.

Directive 97/67/EC of the European Parliament and of the Council of 15 December 1997 on common rules for the development of the internal market of Community postal services and the improvement of quality of service.

Inter alia, the Postal Directive:

• defines the minimum characteristics of the universal service to be guaranteed by each Member State (on its territory);
• sets common limits for reserved services which may be reserved for the universal service provider(s) in each Member States and a timetable for further gradual and controlled liberalisation; lays down the principles to govern the authorisation/licensing of non-reserved services;
• defines the tariff principles applicable to the universal service as well as the transparency of the accounts of the universal service providers;
• governs the setting of quality of service standards for national and intra-Community cross-border services and envisages that Member States will do the same at national level;
• confirms the mechanisms to encourage technical harmonisation in the postal sector (see CEN activities described below);
• deals with the consultation of interested parties;
• requires the creation of national regulatory authorities independent of the postal operators.

 

Directive 2002/39/EC 

On 10 June 2002, the European Parliament and the Council formally adopted the Postal Directive2002/39/EC, which amends the initial Postal Directive (97/67/EC) by defining further steps in the process of gradual and controlled market opening and further limiting the service sectors that can be reserved.

According to the Directive, Member States must exempt from competition items of correspondence: 

weighing less than 100 gr and costing less than three times the basic tariff as from 1 January 2003
(i.e. an estimated 9 % market opening to competition);

weighing less than 50 gr and costing less than two-and-a-half times the basic tariff as from 1 January 2006
(i.e. an estimated additional 7 % market opening to competition).

Furthermore, all outgoing cross-border mail is open to competition since 1 January 2003 (i.e. an additional estimated 3 % market opening to competition), although exceptions will be possible where these are necessary to maintain the universal service - for example if revenue from cross-border mail is necessary to finance the domestic universal service - or where the national postal service in a given Member State has particular characteristics. 

Finally, the Directive sets 1 January 2009 as a possible date for the full accomplishment of the Internal Market for postal services, to be confirmed (or changed) by co-decision procedure: in other words with the agreement of both the European Parliament and the Council. The Directive envisages that the Commission will present a proposal based on a study assessing, for each Member State, the impact on universal service of further opening up of the postal market. 

In the meantime, the Commission will keep the European Parliament and the Council informed about the development of the Internal Market for postal services. In practical terms, the new Directive requires the Commission to submit regularly, (every two years), a report on the application of the Postal Directive including the appropriate information about developments in the sector - particularly economic, social, employment and technological aspects - as well as about the quality of service.

Directive 2008/6/EC

On 20 February, the European Parliament and the Council formally adopted the Directive 2008/06/EC, which amends the initial Postal Directive (97/67/EC) as amended by Directive 2002/39/EC by defining 2010, and for some Member States 2012, as a final step in the process of gradual market opening. 

According to the Directive, Member States must abolish any remaining reserved areas by 2010, with the possibility for some Member States to postpone full market opening by two further years as a maximum. A temporary reciprocity may apply to those Member States that make use of the transitional period. 

In the meantime, the Commission will actively assist Member States in transposing the new Postal Directive, while at the same time closely monitoring the market and regulatory developments in the postal sector in order to safeguard the objectives of the EU postal policy. To this end, the Commission will also prepare its 4th Application Report by the end of 2008 to keep the European Parliament and the Council informed about the latest developments in the sector.

Legislative and regulatory timetable for market opening process 

1992		Green Paper on the development of the single market for postal services (COM/91/476). This document is not available in electronic format.
1994		Council Resolution of 7 February 1994 on the development of Community postal services (COM/93/247).
1997		1st Postal Directive (97/67/EC).
1998		Notice from the Commission on the application of the competition rules the postal sector and on the assessment of certain State measures relating to postal services (98/C39/02).
1999		1st reduction of the "reserved area".
2002		2nd Postal Directive (2002/39/EC). 1st Commission Report to the European Parliament and the Council on the application of the Postal Directive (COM/2002/632)
2003		2nd reduction of the "reserved area".
2004		2nd Commission Report to the European Parliament and the Council on the application of the Postal Directive (COM/2005/102).
2006		3rd reduction of the "reserved area".
2006		Commission Prospective study on the impact on universal service of the full accomplishment of the postal internal market in 2009.
2006		3rd Commission Report to the European Parliament and the Council on the application of the Postal Directive.
2006		Proposal of the 3rd Postal Directive (COM/2006/594 final). This proposal is accompanied by the Commission's prospective study in the impact of full market opening (COM/2006/596 final), an Impact assessment  and the third Report on the Application of the postal Directive (COM/2006/595 final).
2008		3rd Postal Directive (2008/06/EC)
2008		4th Commission Report to the European Parliament and the Council on the application of the Postal Directive.
2010		Full market opening for 16 Member States, which represent 95% of the internal postal market.
2012		Full market opening for remaining Member States that may use the possibility of transitional period.