• Most Popular
  • Most Shared

UPDATE 3-TNT complains to EU over German minimum wage

Thu Mar 27, 2008 12:08pm EDT

Stocks

   

(Adds Dutch econ ministry spox)

Stocks  |  Global Markets

AMSTERDAM, March 27 (Reuters) - Dutch mail company TNT NV (TNT.AS) has filed a complaint with the European Commission over Germany's introduction of a minimum wage for all postal carriers operating in the country, saying it breaks EU rules.

TNT, which is looking to exploit growth opportunities in Germany -- one of Europe's biggest postal markets -- said the German government's decision to declare the minimum wage generally binding violates the European treaty on competition.

It added that while claiming social reasons for a minimum wage of 9.80 euros ($15.47) per hour, the government actually sought to raise the costs of rivals to Deutsche Post (DPWGn.DE), hinder competition and shield the German operator from market liberalisation.

EU Commission spokesman Oliver Drewes said the Commission would carefully study the complaints and decide whether further action was necessary.

In a letter to the German government dated March 14 and seen by Reuters, EU Internal Markets Commissioner Charlie McCreevy noted the potential barriers to a free postal market in Germany.

"It has been brought to my attention that the introduction of unsuitably high minimum wages and the retention of different sales tax rates for postal carriers could hinder competition in the German market," McCreevy wrote.

"Such measures could limit competition and prevent users from feeling the benefits of an open market. Please share with us how you intend to institute fair competition in the German market under these conditions," he added.

DUTCH GOVERNMENT

Drewes said McCreevy had written a standard letter to all 27 EU states thanking them for reaching an agreement on postal services but urging them not to undermine implementation on the ground.

He said special letters were sent to eight member states in which McCreevy urged ministers "to look into specific issues in those eight specific member states".

TNT Chief Executive Peter Bakker said in a statement: "some member states are taking protectionist measures to circumvent the Postal Directive. European customers deserve more than a cosmetic liberalisation."

Earlier this month the Berlin Administrative Court ruled Germany had failed to consider the economic impact on competitors when introducing the minimum wage.

The German government said it would appeal against the court ruling, and a verdict could take months.

TNT is expected to lose its remaining monopoly in its lucrative Dutch market this year, with competitors already eating into its market share and profitability.

The Dutch government is still hoping to open up the domestic market on July 1, Junior Economy Minister Frank Heemskerk told Parliament during a debate on the issue on Thursday, a ministry spokesman said.

The government had postponed market liberalisation, originally planned for January, because of the German minimum wage issue and labour conditions for postal workers in the Netherlands.

"Heemskerk will send a letter to Parliament by the end of April giving his views on the developments in the German market and social issues in the Netherlands," the spokesman said.

The junior minister will speak to McCreevy about the potential effects of minimum wages in Germany and other issues in a couple of weeks, he said.

(Reporting by Alexandra Hudson; Additional reporting by David Brunnstrom in Brussels and Foo Yun Chee in Amsterdam; Editing by Erica Billingham and Quentin Bryar)



More from Reuters

Joint Terminal Attack Controller SSgt Clinton J. Herbison, a U.S. Airman from the 817 Expeditionary Air Support Operations Squadron (EASOS) takes a break during a night mission near Honaker Miracle camp at the Pesh valley of Kunar Province August 12, 2009. Credit: REUTERS/Carlos Barria

Pictures of the Year

A look at the best photos of 2009.  Slideshow 

    The Dalai Lama jokes with a nasal spray after being asked his opinion on the swine flu during a press conference after his first lecture in Lausanne, Switzerland, August 4, 2009. REUTERS/ Valentin Flauraud

    What a wacky year it's been...

    Um, what's up the Dalai Lama's nose? "Oddly Enough" editor Bob Basler rounds up the goofiest photos of the year.  Full Article 

    A caution sign is seen next to a stock board at the Australian Securities Exchange (ASX) in Sydney September 5, 2008. REUTERS/Daniel Munoz
    Political Risk in 2010:

    Don't say we didn't warn you

    With the financial crisis (mostly) in the past, U.S. investors are eying a fresh start to the coming year. Here's a look at what speedbumps lie ahead.  Full Article