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Charlie McCREEVY

European Commission for Internal Market and Services

Postal Services and the Internal Market

Annual DPWNight (Deutsche Post World Net) Event 2005
Brussels, 23 November 2005

Dr. Zumwinkel, Ladies and Gentlemen,

It is a special pleasure for me to speak to you tonight at this year’s Deutsche Post World Net’s Annual Event, the “Postfest” – and my special pleasure it is for several reasons.

Because, in a way, the postal world is part of my own personal past: I worked as a student with the Irish postal operator, An Post, to make some money. In those days, it would have been difficult to predict that, one day, I would be in charge of postal policy as Commissioner for Internal Market and Services; but it certainly did prepare me, and when – more than 20 years later down the road, I took on my tasks as Commissioner in 2004, I was impressed to see how much has happened since in the postal world.

But, more important: the facts and figures that we have just heard from Mr. Zumwinkel speak for themselves. Who would have thought little more than 10 years ago that any former public postal operator would have such good reasons to celebrate its success on a national, European and international scale.

The Deutsche Post Group is a leading European and international business Group and a striking example of how a traditional postal operator has evolved into a modern European-based multinational and multi-sector organisation with strong activities in the postal express, logistics and financial sectors, and that generates more than half of its revenues outside of its home country. It is also a Group that is exporting the European way of doing business and creating jobs – some 340,000 worldwide - both inside Europe and in many other countries around the world. It is equally remarkable to hear that, apparently, the Deutsche Post Group employs more than 10,000 people in China.

I know, Deutsche Post World Net is about much more than just postal services. Allow me, nevertheless, to focus and elaborate tonight on the future of postal policy in the Internal Market.

At the crossroads between communications, advertising and transport, postal services are, side by side with other transport, logistics and communication services, a key industry that holds the Internal Market and its citizens together. Without postal services, the Internal Market would not work.

Already in 1994, the European Council entrusted the Commission with pursuing an ambitious postal policy. Since 1994 we have progressed cautiously but steadily, allowing more than sufficient time for all Member States and all operators to come on board.

The year 2006 will mark an important stepping stone for fully accomplishing the Internal Market for postal services in 2009: in January, the permitted postal monopolies will be further reduced, and before the end of 2006, the Commission will present its proposals on the further steps.

Let me assure you from the outset that I fully share the vision of what postal services in the European Union should be: we want sustainable and open postal markets with high quality postal services that contribute effectively to growth, employment and competitiveness in the EU for the benefit of consumers, workers and business. Our shared objective must be to make sure that high quality postal services are available throughout the European Union, from the remotest Greek islands to the remotest corner of Scotland and beyond.

It is evident that the Internal Market and competition are proven tools for creating jobs and achieving better deals for consumers. This is also true for postal services. But we already knew back in 1994 that competition in the postal sector could not occur over night. Rather, the Council, the European Parliament and the Commission agreed to gradually phase in competition into the postal markets.

It is encouraging that EU postal policy has delivered positive results in the recent years, with improved service quality, innovation, a more modern and efficient infrastructure, more choice and, on the whole, a better quality of the universal service. This surely confirms that we are on the right track.

In fact, the companies that have been more successful in this on-going modernisation process and that are delivering an improved quality universal service are either those that have been more exposed to the forces of competition or those that have been subject to a management overhaul - usually a consequence of the transfer of public property into private hands.

Indeed, some Member States have already fully embraced the objective of competition and are intending to proceed faster as compared with the timeframe outlined in the EU Postal Directive. I will certainly encourage those States to continue along this path, as this can only stimulate others.

I also hear voices warning me that, as a consequence of the Internet and communications revolution, mail is a “dying media” and the postal sector is therefore dying with it.

The communications revolution presents challenges as well as new opportunities for postal companies. For a start, the delivery of goods, a core postal activity, is no doubt fostered by electronic commerce. This provides new opportunities for postal operators. Effective and cost-efficient parcel delivery will make the internal market more of a reality for consumers. Often, the cost of delivery still cancels the advantage for consumers to purchase across borders. But, as the market develops, postal operators could assist a great deal in making the Single Market also a consumer reality.

Surveys also show that even if some communications will increasingly be delivered electronically, this trend will not affect all forms of postal communication. Furthermore, and from a social point of view as well, completely isolating ourselves from the non electronically connected world, within the EU or abroad, is something we cannot afford to do without contradicting our most fundamental values.

With more than 90 billion letters sent in EU Member States per year and more than 5 million people directly or indirectly making their living from postal services, this sector is alive and kicking. I am therefore confident that postal services will still constitute a key vehicle for ensuring civil and commercial activities as well as social cohesion for some time to come. It is in this spirit that the Commission will prepare its postal policy suggestions for 2006.

I am aware that the debate in, and after, 2006 will imply a certain degree of emotions, due to the social relevance of postal services and the number of people involved in their provision.

Under these conditions, finding the appropriate regulatory balance to meet the policy objectives in all Member States will not be an easy call. There is no clear “one size fits all” formula yet in sight, either in Europe or elsewhere, for the postal sector. This makes the Commission’s proposals, due to be submitted by the end of 2006, an important challenge.

It is for these reasons that, more than in other areas, I intend to pay particular attention to the individual situation of every Member State, so as to be able to reach common ground already at the stage of presenting the proposals. I want to make sure that not only all Member States and stakeholders are in a position to join the bandwagon, but that they all do it in good shape and “good spirit”.

But please do not misunderstand my intentions. Being careful does not mean withholding one’s own responsibilities and ambitions. We have all invested a lot in this policy over the years; giving up half way - or even delaying it - is a price the EU economy cannot afford. Not moving ahead would put the achievements to date at risk and miss the opportunities. I believe that, with all necessary safeguards, opening up postal markets to competition by 2009 is a realistic objective for all Member States.

In order to meet these challenges we are currently engaged in a number of preparatory activities. One is a public online consultation in which we invite all stakeholders and citizens to convey their views on the situation in the postal markets and on postal policy. The consultation started a couple of weeks ago and will last until the end of January. In parallel, we have started the work on our Prospective Study, which will look at the impact that full market opening in every Member State will have on the provision of universal service. As you can see, we are committed to a prudent and fact-based preparation of our 2006 proposal.

Postal services cross borders, also outside the European Union. They are a truly international business and are a significant factor of international trade. The international proportions are very impressive indeed. Our postal markets will be gradually open to competition, from players from outside the EU as well. Therefore, it is all the more important to convince all our trading partners to show the same degree of openness so as to build a level playing field of international postal trade. The Commission will do its part and contribute actively in the framework of regulatory dialogue, the WTO/GATS discussions and the Universal Postal Union.

High quality and competitive postal services make for a thriving industry, as this evening so clearly demonstrates. It is our joint responsibility to pave the way for the sector's prospering future. I am looking forward to working with you in the coming year, and beyond, to deliver balanced and ambitious initiatives on postal services, which ensure that this crucial business remains central to the Internal Market.

Thank you for your attention.

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