Mr President, I wish to begin by apologising for failing to present a consistent report. This report might be my last in this Parliament and, Commissioner, I am not proud of the result. (SV) Mr President, the postal market is in the process of being liberalised at European level and also at national level. As Commissioner Bolkestein has said, the current situation has led to an uneven playing field. Public operators have a competitive advantage over those customers who are not able to claim back VAT, such as private individuals, charities and banks. Private operators are more attractive to VAT-registered companies, although the overall price may be higher, as the customer can reclaim the VAT, which generally results in a lower net cost to the business. A further disadvantage of the VAT exemption for public operators is that it favours self-supply. It is therefore more cost-effective for the operator to carry out a service itself than to use subcontractors. It is against this background that the Commission proposes that the exemption should be removed and that VAT should be charged at the standard rate for all items of mail over two kilos in weight. At the same time, the Member States must be given the option of applying a reduced rate of VAT to items of addressed mail weighing less than two kilos. I agree with the Commission’s assessment. As rapporteur, I also proposed only minor changes in the committee reading. All my proposals were voted down by the committee. In practice, the committee’s proposal means that the European Parliament must reject the Commission’s proposal in its entirety. I think that this would be unfortunate and, together with my colleague Mrs Lulling and the Group of the European People’s Party , I have therefore tabled a series of compromise proposals. Personally, I am not entirely delighted with all these amendments, but I can live with them. I also hope that Commissioner Bolkestein is able to live with them. The amendments are along the right lines and will mean the start of a more properly functioning market. The big changes we are now proposing are aimed, for example, at removing the two-kilo limit for the reduced rate of VAT. It also means clearer demands for a harmonised five to ten per cent VAT band. Allow me, in the first place, to address those fellow MEPs of mine, in particular the British ones, who have been concerned about price rises. As is well known, VAT can be applied and removed. The Commission estimates that the price of a first-class letter in the UK would, for example, increase by 0.3 euro cents in the case of VAT being applied at a reduced rate of 5% and by five euro cents in the case of VAT being applied at the standard rate of 17.5 per cent. It is worth noting that the UK mail regulator, Postcomm, has arrived at the same conclusion. Talk of price rises is seriously exaggerated. Certainly, postal services fulfil an important social function, but postage and related costs do, in spite of everything, represent only 0.1 to 0.2 per cent of the average household budget in the EU. The postal operator in my own country, Sweden, has noted that the annual average cost per household for letters and Christmas cards is SEK 190, or EUR 21. In the case of the UK, figures for 1996-1997 indicate that the average annual spend for a UK household was £ 29.40, or EUR 42. On the assumption that this was all spent on sending standard letters costing 28 pence, the impact on the household would be that the annual cost would increase by £ 1.05 to £ 30.45 if the national operator were to increase the postage by one penny. I think that this should be borne in mind during the vote tomorrow. Another sensitive subject is the impact on charities. Just like Commissioner Bolkestein, I think that this impact should be countered by the option of being able to claim back the VAT or by special tax rates. Finally, all those of you in this House who believe in a better, efficient market without obstacles and injustices cannot reject this proposal. I wish, in particular, to address Mrs Lulling and thank her. I wish to thank Mr Radwan, Mr Brunetta and Mr Karas. You have, in any case, helped to obtain some form of unity. Mrs Randzio-Plath and Mr Goebbels, who have such good judgment on so many other issues, I am relying upon your judgment tomorrow too. If nothing else, you could all listen to your own postal operators, or those that support the proposal.

Political group: ELDR