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Charlie McCREEVY

European Commissioner for Internal Market and Services

Postal Services and Internal Market

Annual Austrian Post Event 2006 (“Post.Evolution”)
Brussels, 13 September 2006


Dr. Wais, Ladies and Gentlemen,

It is a pleasure for me to speak to you tonight at this year’s Austrian Post's "Post.Evolution" Event, and this for several reasons.

First this splendid and special event is indeed an excellent showcase demonstrating the achievements and the potential of a medium sized European postal operator. Today, Austrian Post is a successful regional player, investing in growth, expanding into promising markets abroad and embracing competition. This is a striking example that you do not have to be an operator in a big Member State to be successful. At the same time, delivering mail to all parts of Austria – including its beautiful alpine countryside - is of course a major challenge which Austrian Post is meeting: this universal service commitment must remain as a cornerstone of our service to citizens.

Austrian Post is actively engaging in the central European region and meeting the challenges and opportunities offered by competition and the Internal Market. Its position is proactive and we should take inspiration from that.

Ten years ago, who would have thought that any former public postal operator would have such good reasons to celebrate its transition; one that has culminated in the successful initial public offering of Austrian Post this spring.

In addition to congratulating Austrian Post, I also would like to draw on this year's theme – "Post.Evolution" - to focus and elaborate on how I see the future of postal policy in the Internal Market:

We have come a long way

From the outset, European Postal reform has been a gradual and evolutionary process. Just to recall: 15 years ago postal services were widely characterised by low quality of services and high costs for postal users, not to mention the financial losses incurred by public postal operators. The objective of the postal reform process has been, and still is, the creation of a dynamic, customer-oriented postal sector that meets and adapts to the needs of the European Union's citizens and businesses. This objective has been shared by the Council and again very recently by the European Parliament.

Technological development and increased competition have contributed substantially to the development of high quality and affordable postal services. At the same time, the profitability of postal operators has been substantially improved – particularly in recent years. And consumer satisfaction with postal services continues to rank very high as compared with all other services of general economic interest. Markets have been gradually opened up and at the same time the universal service has been fully maintained;

Are there any further opportunities for improvement? In 1899 Charles H. Duell, an official at the US patent office, stated: "Everything that can be invented has been invented." History has proven Mr. Duell wrong. Innovation in the postal sector has already brought about a series of new products and services. As markets are fully open to competition, we can expect increased dynamic efficiency and innovation.

Success however has many fathers and so has the successful postal development in the last decade. Of course, the Postal Directives have had an important role to play. But the Internal Market is a joint venture, it does not belong to the Commission and despite the title of my portfolio, it certainly does not belong to me. The Internal Market belongs to the Member States, the business community, it belongs to consumers, social partners, employees and it belongs to civil society. To put it simply, you are one of the owners and also one of the beneficiaries.

The way forward

Our shared objective must be to make sure that high quality postal services are available throughout the European Union, from the Greek islands to the highlands of Scotland.

In 1490 a standardised postal service, between Innsbruck in Austria and Mechelen in Belgium, was established by order of Emperor Maximilian I – this was a landmark not only in Austrian but in European postal history.

More than five hundred years later, Post still matters a great deal both culturally and economically and I want this to continue. Even if some communications will be delivered increasingly by electronic means, this trend will not affect all forms of postal communication. Moreover, electronic communication will trigger directly growth in mail volumes through e-commerce.

I firmly believe that completing the Internal Market for postal services is now vital for securing further improvements and for sustaining the progress and results achieved to date.

Some think that we should take a break and delay if not abandon altogether further opening of postal markets. They might argue that they need more time to prepare. I would have to disagree with such thoughts.

The Postal Directive's ambition of gradually introducing competition and the setting of the timetable for full market opening are well known, based on wide-spread support and cannot be portrayed as being a surprise to anyone. Common agreement on the date for full market opening is important for many reasons; it provides clarity and security for investors and clear targets for operators. An agreed and set date also offsets the danger of procrastination.

Turning our back on structural changes in the marketplace would be a risky choice for a sector that forms part of a fast growing communications industry. The gains created through reform of the postal sector also need to be compared, as in other such sectors, with the risks of no further change. Does postal reform create a threat to postal employees and a challenge to their jobs and futures? Having worked as a student with the post office in Ireland, I have a certain sympathy for the people making the sector work. Complementing the Single Postal Market is also in their long-term interest.

We have to face up to reality; simply standing still may trigger increased electronic substitution, reduced technological innovation, a weaker focus on consumer needs: in short, a negative market dynamic. Competing means of communication will take over if postal reform stalls. I would advocate that the Community recognises that the process of change must continue and needs to be completed in order to reap the full benefits of postal reform. Competition creates jobs - in the long term only postal reform can guarantee a viable postal sector and sustainable employment.

According to George Bernard Shaw "the perfect love affair is one which is conducted entirely by post". I know, as you do, that Post has much more to offer, and stimulating mail volumes from businesses will remain an important strategy for many countries in the years ahead. Indeed, I believe that it is by satisfying the needs of businesses – who of course generate the majority of mail - that we can continue to keep our commitment to the love letter and the universal service which is so valued by European citizens.

2006 is an important milestone in the creation of the Internal Market for postal services. In the coming weeks, the Commission will be finalising its preparatory work on a new Proposal for a Postal Directive. Our work is based on solid foundations: we have consulted all interested groups, studies have been commissioned and my services have been in extensive contacts with the operators, regulators, Member States, the public and other stakeholders. It will soon be time for the Community to make some fundamental decisions and I want to take this opportunity to make my thoughts on these choices clear:

The Postal Sector provides essential infrastructure for our economy. Its performance and effectiveness are vital for our companies and citizens. Postal reform is required to sustain growth, competitiveness and employment. It also fits with our innovation policy which I believe to be of the utmost importance for the future of the European Union. At the same time, postal services are a Service of General Economic Interest and the assurance of a high quality and affordable universal service is crucial for social and territorial cohesion in the European Union. Citizens must continue to enjoy a high quality of service everywhere and at an affordable price.

Finding the appropriate regulatory balance to meet the policy objectives is not an easy call – and it has to be achieved at the European level and national level. So we will need to share responsibilities.

The Commission has been asked by Parliament and Council to confirm whether retaining the original 2009 timetable was appropriate. If we take an honest look at all the available facts and data I feel that we must admit that we ought to stick to the agreed timetable.

We cannot miss the opportunity to take the final step. I am firmly of the view that the existing Postal Directive has played a significant role in ensuring high quality postal services are accessible to all through the universal service obligation. So, you may rest assured that I will ask my fellow Commissioners to deliver an ambitious, but balanced, proposal that aims at full market opening in 2009 and that preserves the universal services obligation. I trust that I can count on your support in this common endeavour.

Thank you for your attention.

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