There is no question that a country’s postal service is a valuable national asset. On one hand, it is a functional asset that supports commerce and binds the nation together. On the other, postal operations are capital assets, with distribution networks, vehicles, machinery, and labor resources that have some sort of value.
While the value of binding the nation together is difficult to put into monetary terms, the value of capital assets is easier to assess. In fact, some cash-strapped governments around the world are trying to raise money by selling parts of their postal operations. The most prominent example is Greece, who announced in June that it plans to sell 39 percent of the national postal service, Hellenic Post.
Greece’s troubled financial condition sent shockwaves through world markets in February. Greece plans to sell off part of Hellenic Post as a condition of the financial rescue package provided by other European Union (EU) members and the International Monetary Fund totaling €110 billion ($142 billion). The plan calls for Greece to raise at least €1 billion ($1.29 billion) per year for the next three years by selling off state-owned services including the national rail line and various utilities.
Despite this partial privatization, the Greek government will still control 51 percent of Hellenic Post. Hellenic Postbank holds the remaining 10 percent. It will also remain the dominant company in the Greek postal market as EU regulators put off fully opening Greece to postal competition until 2013. This special regulation is because Hellenic Post must serve a large number of Greek islands in the Aegean Sea, making its universal service obligation far more expensive than most other areas of Europe. This also makes the Greek situation unique.
As the financial crisis that began in 2007 drags on into its third year, governments are trying to find ways to finance or pay off mounting deficits. One solution embraced by some, currently including Greece, UK, and Russia, is to leverage the value of national assets, particularly postal services. The question that remains is whether accepting money in the short term will harm the long-term value of national posts when it comes to promoting commerce and national unity.
This topic is hosted by the OIG’s Risk Analysis Research Center (RARC).