Spain's Correos faces €600m debt and €400m losses

Correos accumulates €600 million in debt and €400 million in losses

The country's largest public company is on the brink of bankruptcy. Its president, Pedro Saura, stated: "The situation at Correos is critical. I have not seen any public company with these figures." This quote, reported in the press, summarizes a balance sheet mixing over €600 million in bank debt with an estimated loss of around €400 million for the 2024 fiscal year. Paradoxically, this occurs during the e-commerce boom, when package volumes in Spain are at their highest.

The data is puzzling because the postal business should be thriving. Every online purchase generates a shipment. Every public administration communicates with citizens via certified mail. Yet, the company managing this flow loses money at a rate no private firm could withstand. The inevitable question: how did we get here?

€600 million debt and €400 million losses: numbers that don't add up

The official diagnosis points to a public company with a lucrative contract with Amazon, a delivery system handling nearly 90% of the Spanish e-commerce market, and buildings and offices amortized decades ago. With such starting conditions, technical insolvency is hard to explain. Some argue the problem isn't public ownership but management: if shareholders were state entities but executives operated with private sector criteria, the deficit wouldn't exist.

Critics of the official narrative go further, citing quasi-monopoly status as a structural cause. A private company losing €400 million a year would close. A public one survives for decades on taxpayer money, creating a perverse incentive: the worse it performs, the more resources it demands. Remar, in forum jargon, means paying that bill.

Why does Correos lose money despite the e-commerce boom?

Because volume doesn't translate into efficiency. Universal postal service obligations require maintaining offices and deliveries in areas where no private company would operate. That structural cost is manageable if limited to essentials: a rural postal service focused on underserved populations wouldn't exceed a €10 million annual deficit. The problem lies with giants playing big business under quasi-monopoly conditions, ending up generating holes of hundreds of millions.

Competition adds to this. Seur, GLS, DHL, and other private firms have eaten into the express courier market with a more agile model: phone alerts if you're absent, doorstep delivery upon request, extended hours. Correos, however, maintains practices users perceive as rigid: offices closed Saturday mornings, reduced summer hours, and a counter becoming the only pickup point when delivery fails.

The civil servant paradox: exams, staff, and productivity

A detail often lost in the noise: there haven't been civil servants at Correos for decades. The workforce is contractual, not statutory, though collective imagination still associates the company with the civil service corps. This doesn't prevent highly sought-after recruitment exams, with thousands of candidates willing to pass to secure a position. The paradox is evident: while the company bleeds out, the queue to enter doesn't shorten.

Anecdotes about productivity circulate, difficult to verify. One former employee left at eight and returned at eleven, with split shifts and free afternoons, retiring with a pension exceeding €2,000. Official calculations from passive classes place a standard postman in category C2, with a much lower pension. The gap between the story and actual paychecks fuels controversy.

UGT and CC.OO. demand social dialogue without staff cuts

Major unions welcomed Saura's intention to move past the previous era and restore social dialogue but warned that transforming the company cannot happen through abrupt staff adjustments. The union stance clashes with numerical urgency: if the company loses €400 million a year, someone must decide what gets cut and what stays.

Some propose an intermediate path: separating essential public service from competitive business. Maintain a minimal network for rural areas with manageable deficits and let the rest compete on equal footing with private firms. It sounds reasonable. It also sounds like something taking years to negotiate, and creditors rarely have that patience.

Selling Correos to Amazon: the provocative idea circulating

Among proposals appearing in public discourse is one bordering on absurdity: selling Correos to Amazon so it assumes postal services in exchange for using company resources for its logistics. The doubt accompanying the idea is whether Amazon would pay a fee to the State or if, conversely, the State would pay Amazon to take over the service. The formulation, half-joking, reveals the core issue: nobody knows anymore if Correos is an asset or a liability.

Meanwhile, the company continues selling products unrelated to mail. In some offices, perfumes, pens, sweets, and educational toys have been spotted with perfectly aligned labels. The anecdote, repeated by several customers, summarizes the drift: a postal company trying to become a gift shop to balance the books.

Uncertain future for universal postal service in 2025

Uncertainty concentrates on the coming year. The legal framework for universal postal service, outlined in Article 22 of the Postal Law, sets conditions required of the operator designated by the State. If that exclusivity is reviewed or broken, the board changes completely. Some anticipate regulatory turmoil in 2025; others believe nothing will move because no one wants to bear the political cost of dismantling a century-old service.

The end of this story isn't written. Correos has €600 million in debt, €400 million in estimated losses, a contract with Amazon, a workforce that isn't civil service even if it seems so, and an office network that has become the State's sole contact point for many citizens. With those elements, any prediction is risky. The only certainty is that someone will pay the bill. The question is whether it will be the taxpayer, the user, or both.