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Democrat - October 2006 (Number 98)

EU postal reforms sparks
heated debate and problems

based on article by Lucia Kubosova of EUOBSERVER

Post Offices to be closed

The European Commission is set to propose a full liberalisation of postal services by 2009, which will force member states to stop protecting public operators from national or cross-border competition. Brussels expects the move may spark "quite a polarised political debate" across Europe, according to one official, as a number of jobs in the public sector are at stake in several countries.

Privatisation initiated in 1997

The EU triggered this reform in 1997, introduced some modifications in 2002 while the so-called "third postal services directive" - likely to get a go-ahead by the Commission in early November - will prompt the full opening-up of the sector.

According to a draft proposal seen by EUobserver, the EU executive will suggest a scrapping of the concept of "reservable areas" to which member states can currently restrict access to certain operators. But it will stick to the existing rule of "universal service obligation" where services must be provided to citizens - like delivery of letters and parcels within a certain time.

More expensive letters

The commission believes that the postal reform may boost new technologies of delivery used by European consumers, such as sending an email to be delivered by mail. It may also lead to a different infrastructure - with post offices getting replaced by less costly franchised postal agencies or other service points in shops or petrol stations, already suggested by some German companies.

Still, it will be up to member states and national regulators to ensure that the postal services are well accessible across their territories through post offices, letter boxes or other points. While the prices in business correspondence are likely to fall - with more competition foreseen in this commercially lucrative area - prices of individual letters may shoot by up to 50 percent. This would mean the second class letter rate would be 35p and first class 48p.

Different pace of reforms

EU Member States already differ greatly on the extent to which they have carried out postal services reform and so will also differ strongly in their views on the blueprint. While the UK, Sweden and Finland have opted to drop restrictions on competition, they might call for a bolder initiative by the Commission - with less protectionist regulations - mainly regarding the provision of universal service. Countries which are far behind in restructuring the sector are expected to oppose the proposed 2009 deadline and advocate a later date for full liberalisation.

Several other West European countries and almost all new member states are performing quite poorly and will need to step up reforms - such as Ireland, Greece and Spain. Germany, UK, Sweden, Finland, Denmark, Austria, Belgium are around or above the EU average.


Damn the social consequences

CAEF has for several years pointed out that the privatisation threat to the Post Office network and servies is due in the main to EU Directives.

In Britain the reform of the postal service and closure of Post Offices has been going on since 1997. Over 3,500 post offices have been closed since New Labour came to power in 1997 and 1,500 post offices have been closed since October 2002. The Government has handed business normally carried out by the Post Office to banks and building societies. This includes payment of pensions and benefits.

Even though 4.3 million people use the Post Office Card Account this is to be shut down in three years time.

The BBC has handed TV licensing to a private rival of the PO. Tesco has bought a chain of shops with Post Offices and is now closing these.

Those who will be inconvenienced especially in rural areas, include the disabled, pensioners without cars or buses dr those on or near the bread line.

To show the strength of opposition to what amounts to full scale privatisation of the postal system and Post Offices four million people signed a petition, the biggest ever in Britain.

SubPost Masters, the National Convention of Pensioners, Age Concern, other organisations and Lib-Dem MPs have campaigned to halt the closures. They have made clear there are social consequences - the Government does not care a damn

This whole question needs exposing further, especially the EU factor, and CAEF leaflets will be issued. The subject needs raising sharply in all organisations.

overnments across the European Union are putting austerity policies in place which include: massive cuts to welfare states, pressing down wages and pensions, and raising unemployment. The public sector is to be handed to privatisation with loss of accountability and no regard whatsoever for the social consequences.

The ConDem Government has agreed that national budgets and therefore austerity policies be vetted by the European Commission. The budget must be in line with the EU’s Growth and Stability Pact where Britain has exceeded the limits on government borrowing of 60% of GDP and deficit of 3% of GDP - currently and respectively 71.4% and 11% (Office of National Statistics). EU Member States are to be fined if their budgets are not brought back into line with the Pact.

   The herd of elephants in the room consists of the policies and legislation of the EU enshrined in the European Constitution put in place last December.  This includes the four freedoms – “free movement of capital, services, goods and labour” within the EU super-state and all that entails.

   The simple alternative is to withdraw Britain from the EU and not be subject to the dictats of unelected EU institutions which act on behalf of the transnational corporations and banks against the interests of those who work for their living. The benefits would be economic, political and defence of democracy and accountability.