REPUBLIC OF PORTUGAL. MINISTRY OF PUBLIC WORKS, TRANSPORT AND COMMUNICATIONS The Minister's Office

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1 ADDRESS GIVEN BY THE MINISTER FOR PUBLIC WORKS,TRANSPORT AND COMMUNICATIONS Mr Mário Lino at the Conference on The EU Internal Market for Postal Services Creating it Together Brussels, 24 June 2008, a.m. (Check against delivery) i

2 Mr McCreevy, Ms Kroes, Ladies and Gentlemen, First of all, I would like to thank Commissioner McCreevy for inviting me to address this audience on the subject of a new challenge to Europe's economy - making the full liberalisation of all postal services a reality. My address is entitled The Council's view. But I would like to stress from the outset that we now have at our disposal a piece of legislation adopted by all three Institutions - the Council, Parliament and the European Commission: the recent Postal Services Directive (Directive No 2008/06/EC of 20 February 2008). I shall begin by briefly recalling the circumstances in which the Directive was adopted and will then go on to discuss those aspects of it which I consider vital, and, above all, the steps which I believe need to be taken to prepare for the future. The postal services are an important component of the Lisbon Strategy, given their contribution to growth (they represent 0.4% of European GDP) and job creation (they employ 1.7 million people directly and another 3.5 million indirectly). Moreover, the postal services are rightly seen as being indispensable to social and territorial cohesion and for promoting competitiveness. They are thus vitally important for our society in both economic and social terms. The adoption of this Directive was vital to complete the process of creating an internal market in postal services and to respond to the changes which have taken place in the sector over the last few years, particularly changes in consumers' needs, the rapid growth and falling costs of other means of communication (such as ), and the emergence of new technologies.

3 The adoption of this Directive was made possible by our productive cooperation, and it was an honour for me to take part in this project together with Commissioner McCreevy and Markus Ferber, MEP. Working each in his own sphere and in perfect harmony, we have achieved an agreement that has met with a broad consensus among the 27 Member States. When the Commission presented the draft Directive in October 2006, there was talk of the impossibility of reaching an agreement. The European Parliament, at its first reading of July 2007, opened the way for an agreement in the Council in early October, during the Portuguese Presidency. Few legislative proposals of this degree of complexity have been adopted as rapidly as this agreement. We sometimes speak of historic decisions. This one may well fit the definition, as it concerns the liberalisation of a sector which has been based on state monopolies from its very inception. We have altered this paradigm now, in line with the desire to provide a better service to citizens and give stakeholders new opportunities for business and job creation objectives that are consistent with the Lisbon Strategy and the creation of the EU's internal market. And we have achieved this while giving due consideration to the concerns manifested by a number of EU Member States, such as maintaining and funding a universal service and adopting temporary derogation periods for states with particular characteristics though these do not go beyond

4 Apart from this, it is important to remember that what is at stake is not liberalisation for liberalisation's sake. We want this process to result not only in consumers' enjoying greater opportunities for choice, but also in an environment which allows the postal sector to operate with greater efficiency, while at the same time maintaining a universal, balanced high-quality service at reasonable prices and funded by the sector itself. The guaranteed provision of a universal service to all users, irrespective of their location in the European Union, has been achieved. Another positive aspect has been the inclusion of guidelines for the calculation of the net cost of the universal service. A second shared concern which has also been taken up was incorporating as essential preconditions for postal operators the employment and social security conditions provided for by the law and/or by collective agreements negotiated between the two sides of industry. And a third element taken into account was, as I have already mentioned, the need to recognise that the national markets were not all equally prepared for full liberalisation, so that it was advisable to allow some countries more time to adapt their markets to the new paradigm. In short, the recent Postal Services Directive covers not only the liberalisation of the postal services market, but also full provision of a universal service, transparent market access for postal services and social protection for workers. Under this new Directive the postal services will continue to fulfil the vital role which they have always played as agents of communication and the exchange of information, and as a major player in the fight against exclusion from information, even in the most disadvantaged environments and the most isolated rural areas and now they will play that role in a more consolidated and more efficient way. 4

5 MINISTRY OF PUBLIC WORKS, TRANSPORT AND COMMUICATIONS. How must and can we implement this Directive? The title of Commissioner McCreevy's initiative is a direct reference to the action we need to take and shows the Commission's genuine wish to create an internal market in postal services together. In this context I would like to address a number of elements which, in my view, will equip us better to apply the Directive before and after its transposal into the national law of each of the Member States. This is a dual challenge for the public authorities and the operators. I shall begin by considering the responsibilities of the public authorities. There is, no doubt, a pathway to harmonisation in the Directive's application which must be jointly exploited. However, on a par with the Commission's proposal in the field of electronic communication - which goes too far in Portugal's view I see no need for a new "authority" or "European super-regulator" in the postal services field to ensure harmonised application of the Directive. We can meet this objective using existing structures. The Postal Committee, which has an informal structure, can monitor the application of the Directive. The Member States already have independent regulatory authorities which fulfil their role satisfactorily. In this way we can create a stable business environment that is predictable for operators and promotes a genuine internal market in postal services. The other dimension of the challenge is the operators' responsibility. 5

6 I am glad to see that some of the major operators of postal services in Europe are present here. The public authorities have created the preconditions for a liberalised market. Now it is up to the operators to take advantage of this liberalised environment. The experience of liberalisation in the countries which have advanced through their own initiative shows positive outcomes. I am sure that the operators will be able to meet the challenges facing them in terms of prices, quality of service, diversification of supply, fair competition, innovation and research. The advantages are clear both for consumers and companies. A strong postal sector in Europe will be better able to take on the global market. I would just like to refer briefly to the situation in my country. The Portuguese operators, and in particular the traditional operator CTT, are ready for the challenge presented by the full liberalisation of the postal market. I am sure that this opening-up will have a generally positive impact on the Portuguese market, particularly as regards prices and the diversification of supply, as it will encourage operators to invest in efficient organisation. Increasingly, the postal services are keeping up with the times and with technological developments, and they have to focus on supply, consumers, products and advanced and innovative solutions on the market. I can testify to the fact that, in Portugal, CTT has been taking very significant steps in this direction and has been taking the necessary action to meet the challenges posed by the liberalisation of this sector. 6

7 MINISTRY FOR PUBLIC WORKS, TRANSPORT AND COMMUNICATIONS For example, CTT has increasingly developed new and improved services such as ViaCTT, which provides free electronic mailboxes for all citizens, and its Courier and Express services, in which CTT is now a leader on the national market. So Portugal is ready for the liberalisation of this sector. My remit within the Portuguese Government includes the transport sector, which is essential for the activities of the postal sector. Innovation in this sector is vital too. Given the context of continual rises in the prices of fossil fuels and road congestion, there is a great deal at stake when it comes to aiming at energy efficiency in transporting goods by post and I have no doubt that partnerships between operators to optimise resource use are both a sound idea and the way to enhanced profitability. Finally, on the topic of congestion, I would like to draw attention to the fact that Portugal can offer first-rate conditions for the logistical activities of postal operators, particularly courier companies. Our national airports particularly Beja have sufficient capacity to function as hubs both for Europe and for emerging markets in the Mediterranean region and Latin America. At a time when central Europe is facing problems of congestion, both in the air and on land routes, and given that globalisation is a fact of life, while the fossil fuels crisis seems to be a structural problem, the companies operating in this sector also have the challenge of approaching their market and their operations in a broader perspective and investing in the Portuguese market. In conclusion, I would like to say that cooperation between the Community institutions the Commission, the Council and Parliament which has proved so fruitful in the past, and with operators in the postal sector, must be the formula which will enable us to face the future with confidence. As the name of this conference Creating it together suggests, cooperation between all the parties concerned 7

8 must continue. I am certain that we shall manage to take the necessary measures at both European and national level to promote a sustainable and dynamic postal sector able fully to meet the needs of European consumers. Thank you for your attention. 8