Brussels, 20/10/2011 (Agence Europe) - The European Parliament (EP) economic and financial affairs committee, meeting on Monday 17 October, adopted the report by Peter Simon (S&D, Germany) on reform of state aid rules on services of general economic interest (SGEI) by 27 votes to eight, with one abstention. The report, to be put to the vote in plenary session in November, is critical of the reform, often referred to as the “Almunia package”, presented by the Commission on 16 September (see EUROPE 10454) to take over at the start of 2012 from the Monti-Kroes package that has been in force since 2005.
The new package comprises a decision on exemption from notification of state aid, a regulation on de minimis compensation, and two communications - one on an EU framework for compensation for SGEI that are more commercial in nature and the other, more general, clarifying the rules on SGEI compensation. According to the Commission's stated objective, the reform seeks to clarify and simplify the rules in force focusing on the potential impact on the market of public funding of the various types of SGEI. Almunia says that there has to be simplification for services which do not have a significant impact on the internal market and, at the same time, closer monitoring of commercial operations which could distort competition.
MEPs are pleased that attempts are being made to clarify and simplify, but are concerned at certain grey areas and fear that the Commission is seeking to strengthen its control over SGEI funding, impinging on member states' responsibilities in this area. The Simon report: - stresses the place of SGEI in the EU and their role in achieving the objectives of economic, social and territorial cohesion; - notes that SGEI could not be provided without state intervention; - places emphasis on Article 14 and protocol 26 and member states' discretionary role in financing, organising and delivering SGEI; - calls on the Commission to bring forward a horizontal legislative framework for SGEI before the end of the year, reform of the Monti-Kroes package being only the beginning; - calls for universal access to SGEI.
As for the reform as such, the amended report: - makes clear MEPs' agreement with the Commission proposal to exempt small, local SGEI from notification and to increase the thresholds from which notification is necessary, but feels that the €150,000 per year threshold should be raised and that, to ensure greater flexibility, the threshold should be calculated over a period of three tax years (for this, it suggests, as a possible reference, the combined indices of size of municipality, amount of compensation paid and the level of turnover of the company operating the service); - calls on the Commission to include investment costs for infrastructure needed for the SGEI to function properly in the costs that compensatory payments may cover; - calls for greater flexibility in the monitoring of over-compensation.
With regard to Social Services of General Interest (SSGI), the report calls for special exoneration rules for local services with higher thresholds in terms of compensation levels, taking the view that the remit and character of SSGI should be protected and clearly defined under sector-specific rules. MEPs call for subsidies to hospitals and social housing bodies, and also for all SGEI that meet basic needs as defined by member states (rest or care homes, child minding, lifelong learning, social action and social integration services) not to be considered as state aid. They also call for it to be ascertained whether there should be special rules for SGEI in the fields of culture or education.
Finally, with regard to SGEI which exercise economic activities, MEPs state that the Commission does not have the power to determine the quality or efficiency criteria for these services. The only basis for this is Article 14 of the TFEU, with full observance of the subsidiarity principle.
More generally, the criticism levelled by MEPs was similar to that contained in the Committee of the Regions opinion delivered on 12 October. According to Françoise Castex (S&D, France), who chairs the public services intergroup: - the Commission approach to SGEI is “very limiting” and “confined to market failure”; - the legal basis selected, restricted to monitoring state aid and competition (Articles 106 and 107 of the TFEU) and failing to take account of innovations brought in by the Lisbon Treaty (Article 17, Protocol 26) on public services, “deprives Parliament of co-decision powers on these issues”. She argues that, from a legislative point of view, “a distinction has to be drawn … between state aid and public service compensation, competition rules and general interest. While the former (Article 106) fall fully within the remit of DG Competition, defining the scope and outcomes of SGEI and the conditions, including economic and financial, for achieving their objectives cannot be part of DG Competition's area of responsibility!” Sophie Auconie (EPP, France) stated that “European monitoring must be allowed to become a brake to the implementation of services which are essential to our fellow citizens”. (F.G./transl.rt)