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Charlie McCreevy

European Commissioner for Internal Market and Services

Completing the last mile of the Single Market for Postal Services

Conference – Delivering Postal Liberalisation on Time
Brussels, 17 October 2006


Ladies and Gentlemen,

This conference is taking place at the right moment.

When I accepted the invitation to set out our views on taking the final step towards full market opening, I could not know that I would be speaking to you on the eve of the Commission meeting that would be so decisive in this process.

Tomorrow morning, I will present to the College of Commissioners some important proposals that mark the road to the future of the European postal sector. We will be discussing the Report on the Application of the current Postal Directive, the Prospective Study evaluating the impact of full market opening on the universal service, and a proposal for a revised Postal Directive.

With tomorrow's Commission meeting we move to a new phase. In the coming months, the European Parliament and the Council will evaluate our proposals and together we will take the final steps in this 15 year process of reform.

Our proposal is based on sound preparation, and has benefited from the active participation by you and many other stakeholders.

I am not proposing to my fellow Commissioners the implementation of abstract theories dreamed up in an ivory tower. Far from it: we took a realistic look at the sector, the incumbents, new market entrants, customers (large and small), consumers and the people that work in the sector and that make it all happen. The people that ensure that each day we receive our mail. For me, market opening is not an end in itself. It is the means through which we pursue the broader objective of a high quality, highly efficient and sustainable postal sector adapted to the needs of the 21st century. This requires change.

An evolutionary process – no big bang

There will be no big bang, no revolution. You know better than me, what postal services looked like in earlier times, and how some things needed to change. Market opening to date has been overwhelmingly positive. Efficiency, quality and performance have substantially increased and so has the profitability of the sector. We must continue on this road. But you will also know how some things continue to be relevant to us all, and should therefore be maintained. Therefore, I want to assure the citizens, the individual and small customers that our commitment to the universal service is uncompromising.

The minimum harmonisation provided by Community postal legislation has become – as in other fields – an appreciated standard. At the same time, it respects so fundamental principles as subsidiarity and allows flexible adaptation to national and regional needs.

Not all elements could and should be regulated at European level. The future of the postal sector will be determined at least as much by national decisions as by decisions taken by the European institutions. The most important decisions will, however, have to be taken by you; by the postal operators, customers and users and how you will make the most of what the new environment will have to offer.

Tonight's hosts can be considered front-runners. In fact, the 350 years monopoly of Royal Mail ended at the turn of this year. In Sweden market opening has happened already 13 years ago. Finland, Germany and the Netherlands are also at the forefront of postal reform. These are very different countries in size, geography, letter volume or prices to name but a few indicators used in the sector. But all have shown not only that market opening is feasible, but that those who opened more and started early have gained the most. There is no reward for sitting on the fence.

Reform is possible – in all Member States

But success stories should not blind us to the reality that there are companies and countries that have serious doubts. Full market opening is not a foregone conclusion.

Your position should give a strong encouragement to those who still have doubts about the compatibility of gradually increased competition and a high quality affordable universal service. You have seen for yourselves that it is not a choice between one thing or the other.

The available facts and data indicate that full market opening is feasible for all Member States in 2009 and suggest we ought to stick to the agreed timetable.

Much has been said already about the advantages of a common agreement on the date for full market opening. It provides clarity and security for all involved in the sector. It sets a clear target and avoids procrastination. The 1st of January 2009 is barely over two years away from now. A lot has still to be done. But I think we can all agree that the reforms that have already taken place are truly remarkable. They are the best evidence that the remaining part can be completed on time.

Some might say that we are disrupting our comfort zone unnecessarily. But we have to face up to reality; simply standing still may trigger increased electronic substitution, reduce innovation and also trigger a weaker focus on consumer needs: in short, a negative market dynamic. I ask all who may have doubts to compare the challenges of the changes that lie ahead not with the status quo, but with the risk of standing still.

When Inuit people encounter a difficult issue they build an igloo, sleep over night and think about it. We have not spent any time I an igloo, but we have reflected very carefully and thoroughly on the difficult issues. Our proposal thus will address the much debated issue of financing the universal service in the absence of a reserved area.

I should say at the outset that the financing issue is certainly important. However there may sometimes be a temptation to over-emphasise it. Many of us tend also to forget that the universal service may in several respects be judged more an asset than a burden. So what should we make of alternatives to a monopoly? For sure, all of the alternatives are probably less comforting to an operator than a monopoly, but that does not stop them from being more proportionate and genuine alternatives. Indeed there are already financing instruments mentioned in the Postal Directive itself and possibilities under other Community law. We want to give the broadest possible flexibility to share out any unfair burden or organise compensation mechanisms. The diversity of national situations makes this imperative. But we must guard against the application and accumulation of disproportionate safeguards, that simply substitute one form of a monopoly for another.

Let us go ahead together in 2009

Postal reform and the opening of the postal market has been a consensual and forward looking project that has been endorsed by Parliament and Council. It is being called for by many parties. I firmly believe that we can seek a broad agreement and bring all interested groups on board.

Completing the Internal Market for postal services in 2009 is vital for securing further improvements and for sustaining the progress and results achieved to date: It is vital for the postal sector. For its customers who shall continue to benefit from a high quality universal service at affordable prices. For its operators who shall continue to improve in efficiency, and thus profitability. And for its employees who will be able to share in the success of postal reform, because in the long term it is only this that can guarantee a viable postal sector and sustainable employment.

Your discussions today will address important questions. Tonight's host will, I guess, not agree with all the points I made – and this is fair enough. If this were the case I would doubt that my proposals are truly balanced.

Over the last years, my door as Commissioner for the Internal Market and Services has been open to all parties that wanted to discuss Postal reform. I have shown an open mind and we have reflected this in the proposals I am presenting to the College. I hope that all parties will recognise our efforts to complete market opening in a balanced way and treat our proposal that way in the forthcoming co-decision process with Council and the European Parliament.

Thank you for your attention.

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