The European Commission adopted its 4 th report on the application of the Postal Directive (Directive 97/67/EC as amended by Directive 2002/39/EC). The report covers the period 2006‑2008 and provides a comprehensive assessment of the overall transposition of the Postal Directive in Member States, including regulatory developments and appropriate information on market developments (in particular on technical, social, employment and quality of service aspects).

A number of decisive developments took place in the short timeframe this Report is covering:

Germany – by far the biggest single (national) postal market in the EU – fully liberalised its postal market on 1 January 2008; an evaluation of the full market opening in the UK, which took place on 1 January 2006, seems now possible; the effects of the reduction of the threshold for the reserved area to 50 grams by 1 January 2006 throughout the EU – which is the last intermediate step before the full market opening – can now be assessed; lastly, the Third Postal Directive (2008/6/EC), adopted in February 2008, sets a deadline for the full market opening by 31 December 2010 for the majority of Member States and by 31 December 2012 for the remaining Member States.

The report’s main observations are as follows:

Market opening : during the reporting period, gradual market opening of the postal sector continued and Germany fully liberalized its postal market. Competition also continued to evolve. However, the development of competition with its benefits for businesses and consumers, although emerging, remains slower than expected. This, on the one hand, is due to the fact that a large part of the postal market is still reserved for the incumbent postal operators. The adoption of the Third Postal Directive must be seen as being the decisive step in this respect as it provides for the abolishment of the last legal monopolies and represents a unique opportunity for the postal sector and for the whole economy. Emerging competition, as already identified in Member States that fully opened their market, leads to higher quality and more customer oriented postal services.

Removing the final barriers : apart from the reserved area, other (legal and strategic) market entry barriers still persist. If the vision of an internal market with sustainable and efficient postal services is to become a reality, these market barriers have to be dealt with efficiently and removed. This is the joint responsibility of the Commission and the Member States as well as all stakeholders. In this context, the Commission recalls that in 2003 it submitted to the Council a proposal removing the VAT postal exemption and providing for taxation of all postal service providers. The Council has however not yet been able to agree on this proposal and it has not been discussed since 2004. The adoption of this proposal is now even more pressing since the Third Postal Directive sets a definitive date for the full liberalisation of the national postal markets.

Definition of the Universal Service Obligation and its future financing could also lead to uncertainties for postal operators, especially if implementing national legislation does not provide a clear legal basis (e.g. in relation to the scope of the Universal Service Obligation). Moreover, authorisation and licensing procedures and related conditions are not always conducive to the development of competition. Lastly, the level of transparency of Universal Service Providers' cost data and accounting is still extremely varied and therefore very inconsistent across Member States.

Role of National Regulatory Authorities (NRAs) : it has also been established that National Regulatory Authorities (NRAs) play an essential role in realising the goal of accomplishing the Internal Market and in a multi-operator environment. The main challenges ahead for the NRAs will be, among others, to arrange interoperability in a multi-operator market, take action against strategic barriers to entry and ensure that tariffs are more geared to costs. In order to allow NRAs to successfully fulfil their tasks, the expertise and staffing of the NRAs should be increased in most of the Member States.

In conclusion, the Commission considers that the focus of the postal sector in the coming years cannot exclusively lie on the transposition process for the Third Postal Directive. Market monitoring and the critically evaluating of the application of the current Postal Directive are of key importance . Member States, especially their NRAs, have to devote their full attention to an efficient transposition of the Third Postal Directive, while at the same time ensuring efficient regulation under the currently applicable Postal Directive. This phase ahead is – as it concerns the transition from several legal regimes to only one – of crucial importance.

The Commission will actively participate in these processes by providing Member States with the opportunity to establish best regulatory practices and, at the same time, continue with active and transparent market monitoring in order to safeguard the objectives of the EU postal reform.

COM(2008)0884
EUR-Lex

The Community framework for EU postal services is set out in Directive 97/67/EC as amended by Directive 2002/39/EC (hereafter referred as “the Postal Directive”). Article 23 of the Postal Directive requires the Commission to report on the application of the Postal Directive to the European Parliament and Council “every two years”. It also requires that this report should include “appropriate information” on market developments including technical, social, employment and quality of service aspects.

Regular market monitoring and reporting is an important element for the full accomplishment of a postal Internal Market in order to identify any shortcomings and problems in due time and to be able to take appropriate (legal) actions when necessary and implement corrective measures. Market monitoring has also been essential to be able to proceed with the EU Postal Reform in a transparent manner and to establish if it has generated the desired effects and benefits.

The Commission provided its first Application Report in November 2002, a second in March 2005 and a third in October 2006. As in the case of previous Application Reports, this Report provides a comprehensive assessment of the overall transposition of the Postal Directive in Member States , including the application of key elements of the Postal Directive and regulatory developments. The Report describes the main developments since the last Application Report adopted in October 2006 and covers the reporting period 2006‑2008 .

It should also be recalled that in February 2008 the Council and the European Parliament adopted Directive 2008/6/EC further amending the Postal Directive (hereafter referred to as "the Third Postal Directive"). The Third Postal Directive sets a deadline for the full market opening by 31st December 2010 for the majority of Member States and by 31st December 2012 for the remaining Member States. This Directive thus provides the legal basis for the accomplishment of the internal market for postal services.

During the reporting period, gradual market opening of the postal sector continued and Germany fully liberalized its postal market. Competition also continued to evolve. However, the development of competition with its benefits for businesses and consumers, although emerging, remains slower than expected . This, on the one hand, is due to the fact that a large part of the postal market is still reserved for the incumbent postal operators. The adoption of the Third Postal Directive must be seen as being the decisive step in this respect as it provides for the abolishment of the last legal monopolies and represents a unique opportunity for the postal sector and for the whole economy. Emerging competition, as already identified in Member States that fully opened their market, leads to higher quality and more customer oriented postal services.

Apart from the reserved area, other (legal and strategic) market entry barriers still persist . If the vision of an internal market with sustainable and efficient postal services is to become a reality, these market barriers have to be dealt with efficiently and removed. This is the joint responsibility of the Commission and the Member States as well as all stakeholders. It is essential that a system of efficient regulation is put in place in all Member States and that national postal legislation does not provide a burden for the emergence of competition and its positive impact on customers' needs.

In this context, it should be recalled that in 2003 the Commission submitted to the Council a proposal removing the VAT postal exemption and providing for taxation of all postal service providers. The Council has however not yet been able to agree on this proposal and it has not been discussed since 2004. The adoption of this proposal is now even more pressing since the Third Postal Directive sets a definitive date for the full liberalisation of the national postal markets. It might be of interest to add that a referral for a preliminary ruling regarding the scope of the VAT exemption for postal services is currently pending before the ECJ.

It has also been established that National Regulatory Authorities (NRAs) play an essential role in realising the goal of accomplishing the Internal Market and in a multi-operator environment. The main challenges ahead for the NRAs will be, among others, to arrange interoperability in a multi-operator market, take action against strategic barriers to entry and ensure that tariffs are more geared to costs. In order to allow NRAs to successfully fulfil their tasks, the expertise and staffing of the NRAs should be increased in most of the Member States.

The focus of the postal sector in the coming years is very clear. It cannot exclusively lie on the transposition process for the Third Postal Directive. Market monitoring and the critically evaluating of the application of the current Postal Directive are of key importance. Member States, especially their NRAs, have to devote their full attention to an efficient transposition of the Third Postal Directive, while at the same time ensuring efficient regulation under the currently applicable Postal Directive. This phase ahead is – as it concerns the transition from several legal regimes to only one – of crucial importance.

On the basis of the commitments by the Community legislator and its obligations, the Commission will actively participate in these processes by providing Member States with the opportunity to establish best regulatory practices and at the same time continue with active and transparent market monitoring in order to safeguard the objectives of the EU postal reform.

SEC(2008)3076
EUR-Lex

SEC(2006)1293
EUR-Lex

As is the case with the 2005 Application Report, this Report provides a comprehensive assessment of the overall transposition of the Postal Directive in the Member States. The Report also assesses the application of key elements and trends related to the postal services sector such as: economic, technical, social, employment and quality of services trends. The Report summarises and pulls together the main elements and findings of the Commission Staff Working Paper SEC(2006)1293.

The Report finds that in 2004 EU postal services earned around EUR 90 billion - equivalent to 0.9% of the Community’s GDP. As such it plays a significant role in the EU economy. Postal services are labour intensive and account for a large proportion of the EU’s overall employment. In 2004 postal services employed around 1.71 million people with a further 5 million jobs related to postal activities.

At the same time however, postal services are changing. The sector deals with three key EU economic activities namely communications, advertising and transportation/logistics. The Report warns that sector boundaries are beginning to blur and competition must be taken into account when assessing the future of the postal services sector.

Main conclusions

1) Confirmation of the Postal Directive’s timetable: All the intermediate policy results of the Postal Directive have been achieved to date.

- Firstly, the monopolies have been progressively reduced, either by gradually implementing the market opening enshrined in the Postal Directive, or by opening up important segments (such as direct mail) or by fully opening up the postal market as was the case in the UK, for example.

- Secondly, competition has grown. In the most advanced Member States the market share of incumbents has been reduced to around 90%. Competition has not, however, grown as much as was originally hoped.

- Thirdly, universal service providers have restructured and successfully adapted to regulatory and market developments. This development is underpinned by the positive trend towards overall revenue and profitability.

- Fourthly, the quality of service has improved considerably with consumer satisfaction ratings high.

Developments to date provide no evidence supporting the need for changing the 2009 deadline as set out in the Postal Directive.

2) Main focus: High level of universal service and consumer needs:

- The present Postal Directive is based on the principle of minimum harmonisation. This has allowed the Member States to adapt universal services to the specific need of their own country.

- On the other hand the need to fully assure universal service rights for consumers and small businesses is generally uncontested. Individual consumers (including SMEs) and citizens have the right to enjoy the same quality of service – if not better – following the full opening up of the postal market. Their needs must act as a benchmark. This requires that their rights should be strengthened – such as extending the appeal procedures to all operators.

- Greater attention should be given to enhancing co-operation between the National Regulatory Authorities. Such a move could include, for example, information exchange and benchmarking exercises.

COM(2006)0595
EUR-Lex

This Report is a follow-up to the first Commission Report on the Application of Postal Directive 97/67 which was submitted at the end of 2002. The Report presents the summary of the main conclusions drawn from the analysis provided in the Commission Staff Working Paper (SEC(2005) 388) which assesses in details the overall transposition of the Postal Directive in Member States, the application of key elements of the Directive as well as general market trends (including economic, technical, social, employment and quality of services aspects). In addition, it provides an outline of the perspective and recommendations for future policy development.

The Report confirms that, in sum, the reform of the postal sector in the EU is well on track. Though not yet completed, it has already resulted in a number of significant improvements notably as regards quality of services, improved business efficiency, and the separation of regulators from operators. The role of postal services remains vital in delivering the benefits of the Internal Market to citizens, consumers and business.

This reinforces the need to consider how to move towards more effective and better regulation and an Internal Market for postal services in order to ensure better services for all consumers, including commercial customers and end consumers (greater choice, access, innovation, quality, price options.).

The postal market is at a crucial stage in its development. The Report discusses the further steps needed to promote actual competition in the market, while addressing the end-consumer concerns. It also makes a series of recommendations.

Facilitate the conditions for further modernisation: The postal market is evolving quickly. The clear challenge for regulators and operators is to seize the opportunities. Postal organisations are becoming increasingly flexible in the provision of tailored services to clients. Some of the public postal operators have taken advantage of the gradual opening of the market provided by the Directive to reorganise and modernise. Those who did not seize the opportunities of the last few years and commit themselves to reforms are now coming under market pressure to do so. Further regulatory initiatives may be needed to secure the benefits of a postal internal market for all customers.

Respect the timetable set in the Directive: It is essential to maintain (in parallel) the pace of regulatory reform and respect the timetable set in the Directive for accomplishing the Internal Market for postal services. Developments to date provide no evidence supporting the need for a change of the deadlines set out in the Postal Directive.

Monitor carefully regulatory developments: On critical issues, such as market opening, universal service (quality of services, prices, accessibility from the perspective of the various stakeholders categories) the Commission will carefully monitor developments, and where appropriate take the necessary steps to ensure that Member States meet the requirements set out in the Postal Directive.

Intensify cooperation on regulatory issues: In order to tackle the more complex technical issues (such as licensing, access, regulatory accounting, or market data), the Commission intends to assist NRAs by working on bilateral co-operation between the services of the Commission and the NRA, and technical cooperation at the European level within the framework of the Postal Directive Committee.

Promote an in depth debate on the future postal policy: In light of the rapid evolution of the global communication market, and in the view of the 2006 deadline, it is necessary to open as soon as possible the debate on the future of postal policies to a wide audience, including all stakeholders (public and private operators, customers, consumer associations, social partners, NRAs, Ministries, experts, academics, and industry) at national level as well as at EU level.

In addition to analysing the merits of retaining or removing the reserved area, the debate will need to address key issues such as how to best promote the postal sector, how to ensure the financing of the universal service, and what kind of postal universal service is needed in the future. It will also be necessary to assess the situation in the Member States where the reserved services have been removed, including from an end-consumer perspective. With this in mind, the Commission is launching two studies, on the development of competition and the evolution of the regulatory model for European postal services.

EUR-Lex
COM(2005)0102

Directive 2002/39
OJ L 176 05.07.2002, p. 0021

COM(2002)0217
EUR-Lex

T5-0100/2002
OJ C 047 27.02.2003, p. 0087-0217 E

T5-0100/2002

Debate in Parliament

A5-0058/2002

A5-0058/2002

EUR-Lex
SEC(2001)1961

14091/1/2001
OJ C 110 07.05.2002, p. 0037 E

14091/1/2001

2364

2340

EUR-Lex
OJ C 180 26.06.2001, p. 0291 E
COM(2001)0109

EUR-Lex
COM(2001)0109

2325

T5-0571/2000
OJ C 232 17.08.2001, p. 0202-0287

T5-0571/2000

CDR0309/2000
OJ C 144 16.05.2001, p. 0020

Debate in Parliament

CES1447/2000
OJ C 116 20.04.2001, p. 0099

A5-0361/2000
OJ C 232 17.08.2001, p. 0008

A5-0361/2000

2293

EUR-Lex
OJ C 337 28.11.2000, p. 0220 E
COM(2000)0319

EUR-Lex
COM(2000)0319