Compromise tempts Spain to join postal framework

Europe's post offices appear to be close to a deal which would allow Spain to participate in a new joint framework for sharing out the costs and revenues from handling cross-border mail.

National postal officials say concessions have been offered to Spain which should overcome its fears that it would be a big loser under the proposed regime, although the deal has not yet been finalised.

European Commission competition officials are following the post offices' painful search for agreement closely and must give a final verdict on the deal.

Consumer organisations are also shadowing developments since one controversial part of the framework would set out the rules for linking price increases of post delivery to efficiency and quality improvements.

Spain, which refused to take part in the new regime at the end of last year, is being tempted to change its stance with a more generous intra-post settlements system.

Payments between post offices were originally due to be based on the level of local postal charges. But Spain complained that it would lose out because its domestic tariffs were considerably below the European average. This formula has now been altered in Spain's favour.

It has also been offered a better deal on payments for handling the millions of tourist postcards sent out of the country every summer. Officials say Greece and Portugal would also benefit, although to a lesser extent, from the changes.

The new payments deal on so-called terminal dues should cover all 15 EU countries as well as Switzerland, Norway and Iceland.

The proposed charging formula is largely a result of Commission pressure on European post offices to shake up their practices and match their charges to actual costs. The growing number of private and express postal companies have attacked national post offices for cross-subsidising operations and aiding those areas where they are exposed to competition.

Consumer organisations have cautioned that the new framework being put together by the post offices gives them wide leeway to increase prices, but fails to tie them down on promised efficiency improvements.

European consumers' organisation BEUC has written to Competition Commissioner Karel van Miert complaining that scant details have been given about the plans of the post offices.

It adds that the proposals on quality improvements are unsatisfactory, with post offices only giving commitments on delivery times for mail once it has arrived in their country.