The German government yesterday announced it will, subject to parliamentary approval, extend state-owned postal service Deutsche Post’s monopoly on letter delivery until 2007.

Deutsche Post currently has an exclusive license to deliver letters weighing up to 200 grams, a sector from which in 1999 it derived one billion euros of its net income of 1.1bn euros.

The Economics Ministry attributed the decision to snail-like postal liberalisation talks between European Union countries, adding that a complete move in this direction is unlikely before 2009.

In addition, the ministry did not rule out a reduction of the 200g limit on the carrier’s monopoly or a cut in the current stamp price of DM1.10 for Deutsche-delivered letters.

However, the extension of the monopoly is not yet guaranteed. Depending on how the legislation is drafted, it may have to be passed by the German legislature’s upper house – where the government does not have a majority – as well as its lower chamber.

News Source: Handelsblatt (Germany)