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EU governments agree to fully open postal sector in 2011

The European Union governments reached a political agreement on Monday to open their domestic postal sectors to full competition in 2011, two years later than originally planned.

The compromise deal, reached by EU telecommunications ministers in Luxembourg, paved the way for the final phase in the liberalization of the bloc's internal postal market, under which the lucrative market for delivery of letters under 50 grams will no longer be reserved for national monopolies after the end of 2010. Eleven nations, including nine EU newcomers who joined the bloc in 2004 plus Greece and Luxembourg, were allowed to have two-year delay in implementing the new rules, which still need formal approval from the European Parliament and member states.

The EU postal sector has undergone a gradual liberalization for 10 years after it was first opened to competition for the delivery of packages weighing more than 350 grams. The measure was extended in 2003 to items of more than 100 grams and in 2006 to letters weighing more than 50 grams. The European Commission originally proposed for full opening of the postal sector in 2009. The plan was backed by Britain and Germany, but met strong opposition from several other member states, such as France and Italy. Britain, as well as Sweden and Finland, has already fully liberalized their postal service markets, including items weighing below 50 grams, while Germany and the Netherlands are set to open up their markets before the 2011 deadline.

Monday’s agreement also contained a reciprocity clause, enabling countries which opened up their postal markets earlier to block postal operators whose home country still maintains the reserved area during the two-year grace period. On another controversial issue of “universal service obligation,” the agreement allowed each country to choose their way to support delivery to all homes at the same price, within a certain time, with a certain frequency and standard, either through state aid, compensation funds or other means. (