Moves to privatise French Post Office gather pace

The French postal services company, La Poste, whose status was changed from being part of the civil service to a state-owned company in 1991, has gradually been divided into separate business activities: letters, parcels, financial services and the network of post offices. It is now due to be turned into a limited liability company (Société anonyme, SA) with a view to being able to meet the challenge of the introduction of competition into the letters market in 2011.

Need for greater capital

In August 2008, the President of the French postal services company La Poste, Jean-Paul Bailly, announced that between €2.5 and €3.5 billion would be required to provide La Poste with the financial resources necessary to enable it to adapt to the full liberalisation of the postal services market in 2011 – originally planned for 2009 (FR0502107F). La Poste, whose status was changed from being part of the civil service to a state-owned company in 1991, has gradually been divided into separate business sections: letters, parcels, financial services and the network of post offices.

Mr Bailly argued that the letter mail service should be better equipped in order to meet the increasing needs of businesses, and that the parcel and express services require considerable investment. Furthermore, the Postal Bank (La Banque postale), which was created in 2006, is in the process of losing its control – together with the Savings Banks (Caisses d’Épargne) – over the distribution of the main savings product for ordinary people – the Livret A savings book.

As a result of these developments, La Poste is due to be turned into a limited liability company (Société anonyme, SA) by 2010. Between 20% and 30% of its capital is to be opened up by 2011 either by the company being introduced onto the stock exchange or by being associated with an institutional investor such as the Deposit and Securities Fund (Caisse des Dépôts et Consignations, CDC). Mr Bailly prefers the former solution, as it would make it possible to launch employee share ownership.

Public service obligations

With 290,000 staff members in 2006, La Poste is the largest employer in France (FR0405105F) and has a network of 17,000 points of contact with the public. It is thus, along with the French National Railways (Société nationale des chemins de fer français, SNCF), one of the biggest locally-based public services. La Poste is still officially a public service company closely linked to the state, but almost 70% of its turnover takes place in a competitive context.

Providing a universal postal service – that is, the obligation to distribute letters six days a week at the same rate – and maintaining a high level of accessibility to postal services throughout the country are public service missions set out in French legislation. Likewise, ensuring accessibility to banking, by proposing services to the largest number of people possible, especially through the Livret A savings book, is another legally enshrined public service role. The 2008–2012 agreement (Contrat de Plan) between La Poste and the government, which was signed in July 2008, defines the public service obligations of La Poste and also calculates the costs involved. These obligations cost the company €551 million after taking into account compensation from the state.

Reactions to demand for private capital

Various ideological and practical concerns have been raised in reaction to opening up the capital of the oldest public service in France, including:

  • the challenge to the major public service principles of equality, continuity and transferability, which were defined in France by lawyers in the 19th century – it is difficult to see how private shareholders could guarantee these principles;
  • geographic coverage – local councillors, who defend the presence of La Poste particularly in rural areas, are worried that services will close in their localities;
  • employment – the trade unions fear job losses, post office closures and increasing postal rates, especially as everyone recalls the experience of the transformation of the state-owned telecommunications service provider France Télécom into a limited liability company in 1996. Currently, some 54% of post office workers hold civil service status, while the remaining 46% come under private labour law; La Poste now only recruits on the basis of the latter employment relationship.

Trade union views

Overall, four trade unions at La Poste subscribe to the idea of calling for a national referendum on the future of La Poste; this idea has since also been supported by left-wing political parties. The trade unions comprise: the Federation of Employees in the Sector of Postal and Telecommunications Activities (Fédération des salariés du secteur des activités postales et de télécommunications, FAPT-CGT), affiliated to the General Confederation of Labour (Confédération générale du travail, CGT); the Force ouvrière Communications Federation (Fédération Force ouvrière de la communication, FO-Com), affiliated to the General Confederation of Labour – Force ouvrière (Confédération générale du travail – Force ouvrière, CGT-FO); the Solidarity, Unity, Democracy Post and Telecommunications Federation (Sud PTT), affiliated to the Independent Union – Solidarity, Unity, Democracy (Union syndicale – Solidaires, Unitaires, Démocratiques, SUD); and CFTC Post and Telecommunications (CFTC des Postes et des Télécommunications), affiliated to the French Christian Workers’ Confederation (Confédération française des travailleurs chrétiens, CFTC).

However, the CFDT Federation of Communications, Consulting and Cultural Workers (Fédération Communication, Conseil, Culture CFDT, F3C CFDT), affiliated to the French Democratic Confederation of Labour (Confédération française démocratique du travail, CFDT), is not in favour of the idea of a referendum, given the complexity of the subject. In the opinion of F3C CFDT, ‘it does not suffice to answer just by ‘yes’ or ‘no’.’ In any case, as the framework laws (lois organiques) responsible for setting the rules of such a consultation have not yet been drawn up, it would not be possible to organise a referendum straight away.

On 23 September 2008, a trade union strike call against the move towards privatisation of La Poste was followed by 27% of its employees, according to management, or 40% of the employees, according to the trade unions.

Commission set up to consider options

Following a method which was used in recent years when the capital of French Electricity (Electricité de France, EDF) was opened up in 2005 (FR0406104F), the government has created a commission to investigate the issue. It is worth noting however that the trade unions were not completely convinced by this strategy at the time. Nevertheless, led by the former director general of EDF, François Ailleret, and composed of members of parliament, and representatives of the state, La Poste and staff, as well as experts, the commission has to ‘examine the different options that can be envisaged for developing the company’.

In the context of the global financial crisis (FR0810029I) and mistrust of the stock exchange, the commission – which was due to submit its report on 30 November 2008 – could prefer the solution of the CDC having a stake in the capital of La Poste.

Odile Join-Lambert, Institute for Economic and Social Research (IRES)

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