Received: 2020-04-09  |  Accepted: 2021-01-31  |  Published: 2021-03-30

Title

Direct subsidies and compensation funds in financing of universal postal services


Abstract

Member States of the European Union are obliged to ensure access to universal postal services for all citizens. The aim of the study is to assess the effectiveness of direct subsidies and compensation funds as basic methods of financing universal postal services in the scope of incurred net cost on the example of selected postal operators in Europe and to indicate the results of application of such solutions. The scope of the study includes an evaluation of the direct subsidy mechanism applicable in Europe on the example of Belgium. A characterization of the legal framework of operation of the compensation fund and an analysis of the impact of the adopted financing mechanisms on the achieved level of profitability of the entity obliged to provide universal postal services in Poland were made. The thesis of the current study is that the mechanism of compensation for provision of universal postal services by means of a compensation fund on the Polish example is defective and ineffective from the point of view of market regulation and the designated postal operator. The study concludes by stating that the preferred form of net cost financing should be a full budget subsidy and that it is unjustified to charge the full value of the net cost as additional commitment to the operator. The research methods used include analysis of scientific literature, collection, comparison, classification and generalization of data and expert evaluation.


Keywords

postal sector, net cost of universal service, loss on universal service, direct subsidies, compensation fund, unfair financial burden


JEL classifications

G38 , D43 , L51


URI

http://jssidoi.org/jesi/article/798


DOI


Pages

545-564


Funding

According to point 12 of the 2012 SGEI framework agreements, subsidies may be granted for an actual and correctly defined service of general economic interest (EU Treaty 2002, art. 106).

This is an open access issue and all published articles are licensed under a
Creative Commons Attribution 4.0 International License

Authors

Borowiec, Leszek
University of Economics and Human Sciences in Warsaw, Warsaw, Poland http://ufm.vizja.pl
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Journal title

Entrepreneurship and Sustainability Issues

Volume

8


Number

3


Issue date

March 2021


Issue DOI


ISSN

ISSN 2345-0282 (online)


Publisher

VšĮ Entrepreneurship and Sustainability Center, Vilnius, Lithuania

Cited

Google Scholar

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References