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EU ministers mull plans to scrap national monopolies

EU ministers were yesterday to examine plans to scrap the vestiges of national monopolies for postal services, including a proposal for total liberalization for mail delivery by 2011.

The European Commission has pushed for a full opening of the delivery of letters under 50g -- the last category where national postal companies face no rivals -- by 2009, but faced opposition from a number of countries who feared national monopolies holding on to the lucrative part of the sector would lose out as rivals move in.

A key problem is how companies in a free market can operate viable daily postal services to the public, not just in big cities but also in remote outlying areas, ensuring they get at least one delivery and collection a day, five days a week.

The 27 EU governments were expected to allow countries to subsidize loss-making operators to guarantee a universal service, or let them create a fund into which all postal operators active in the country contribute, diplomats said.

A transitional period of up to two years -- to 2013 -- is expected to be granted to the EU's 12 newest members, and countries with a scattered population or islands, to fully liberalize their postal services.

However, only eight countries -- Poland, Hungary, Slovakia, Lithuania, Latvia, Cyprus, Greece and Luxembourg -- have so far expressed interest in the grace period, diplomats said.

The Portuguese EU presidency aimed to draw up a complete list of countries to get the extra two years yesterday.

The current EU legislation governing the 88 billion euro (US$125 billion) EU postal industry expires at the end of next year. Full liberalization of the sector should lead to more reliable and better quality mail deliveries, the EU's executive arm has said.

Many countries have been slow to open their postal market to competition, and some have been reluctant to move forward with a reform first considered nearly 15 years ago.
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