NCPA - National Center for Policy Analysis


October 4, 2006

Brussels will have a chance this fall to finish the job with the postal sector, an industry that has fought market liberalization all too successfully, says the Wall Street Journal.  The European Commission's soon-to-be-released postal directive will call for ending lingering national monopolies by 2009.

The idea has been gestating for a while:

  • Postal deregulation was launched in 1997, as part of the European Union's (EU) aim to create a competitive common market for services.
  • But while telephone companies, utilities and other state-owned businesses have been largely privatized and opened to competition, postal carriers have hung on to lucrative exclusivity -- if their governments let them -- in delivering letters, defined as mail that weigh less than 50 grams.

On this score, Europe is already far ahead of the United States, where no one talks seriously about ending the U.S. Postal Service's monopoly.  There's no logic to keeping postal monopolies in place, says the Journal:

  • For one thing, business now accounts for some 80 percent of all letters delivered in Europe.
  • Subsidizing postal operators, while defended as a service to ordinary citizens, amounts to a taxpayer subsidy of business.

More important, though, the private sector delivers the mail more efficiently than the old state-owned companies, says the Journal:

  • In Britain, where full postal competition came into effect at the beginning of this year, business mailers are already seeing cheaper and better service.
  • A study published last year by Ecorys Research and Consulting found that with postal liberalization in Europe, the price for delivering bulk mail in urban areas could drop by as much as 20 percent to 25 percent.

Source: Editorial, "Free Mail," Wall Street Journal, October 4, 2006.

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