European Parliament Dilutes Post Liberalisation

15 December 2000

The European Commission’s planned liberalisation of the postal industry took a knock yesterday when the European Parliament diluted its proposals to make them much less far-reaching.

The EC had planned to limit from 2003 the monopoly of public operators to letters weighing up to 50 grams, as opposed to the current maximum of 350g. However, postal services such as the UK’s Royal Mail and France’s La Poste argued that such a move would threaten jobs and harm the important but unprofitable deliveries to rural areas.

The revisions raise the new limit to 150g and delay its implementation until 2005. This means that only some 6% of the $70.19 billion letter delivery market will be opened up to commercial rivals, as opposed to 20% as proposed by the EC.

Frits Bolkestein, the internal market commissioner who drew up the original scheme, remained defiant: “It would be too little too late and bring to a sudden halt the much-needed momentum for further change, gravely harming the incumbent operators' adaptation and threatening long-term employment”.

European Union member states will now try to reach a compromise over the legislation before sending it back to Parliament for a second reading next year.

News source: Wall Street Journal