The long road. I consider the European Commission's White Paper on services of general interest (see our bulletin of 13 May, page 10), the result of in-depth consultation with all circles concerned, represents further and substantial progress towards a definition of what Europe understands by such services. Some reactions are less positive, it being considered that the Commission has not made its position clear on a number of aspects, including in particular how appropriate it is to have horizontal European rules covering the sector as a whole. It is my view that any assessment of this document should, however, take two essential factors into consideration:
a) The point of departure. Traditions, mentality, legal systems and economic situations differed greatly from one Member State to the next. In France, the availability of these services for all citizens was one of the essential tasks of the State, and the bodies providing them were considered as national heritage. In some northern countries, the very notion of "public service" was unknown except in the sense of public assistance (hence the change in terminology, with the notion of "services of general interest" replacing "public services"). It had taken years for dialogue to be initiated and for the different sides to understand each other and get down to discussion.
b) Progressiveness. The establishment of European rules is necessarily progressive because it is necessary to reconcile different stances. Some place emphasis on the universal nature of essential services, while others insist on the need for competition so that these services are of good quality at competitive prices. Both theses contained a certain amount of truth as services such as electricity supply, telecommunications, rail services, etc. are not only essential to citizens but also represent an essential element in company competitiveness, and hence the economic health of the country. Their quality and their effectiveness are as important as their universal character, and it was necessary to strike a reasonable balance between the two requirements. The progressive definition of uniform criteria, indispensable for European cohesion, is an exciting intellectual adventure that allows for the gradual clarification and definition of an essential element of the European model of society. Clarification and conciliation of the different positions were indispensable.
What has been achieved. There were many significant principles adopted over the years thanks to the initiatives and decisions of the Commission itself, to discussions between Member States and to the legislative texts arising from such discussion, to debates at the European Parliament (which has played an increasingly active role in forming the Community concept and in its gradual implementation) and to the rulings of the Court of Justice, which have clarified a number of essential aspects (especially the illegal nature of State financial compensation when the universal nature of services, made compulsorily available to all citizens even in the outlying or remote regions, means service providers have extra charges to pay). The White Paper is an extra step from a dual point of view:
- It reaffirms and consolidates the doctrine of general interest services as it results from the work cited, by summarising and clarifying the results achieved; and
- It sets out guidelines for the future and announces a tight timetable of initiatives that will be taken up over the next two years.
The general fundamental principles are, moreover, already included in the draft Constitution currently on the table, and they represent the basis for development of the White Paper. I shall try to give a summary of what the Commission, from its point of view, considers as already achieved:
1. A pillar of the European model of society. Effective services of general interest accessible to all are essential for the quality of life of European citizens, for the environment, for corporate competitiveness and for the Union's social and territorial cohesion. They are a "pillar of the European model of society", "an essential component of European citizenship", necessary to allow citizens to fully enjoy their fundamental rights. For companies, the availability of quality services of general interest is an essential precondition for an environment that promotes their competitiveness. The achievement of the Lisbon goals largely depends on the quality of such services.
2. The general interest mission prevails over application of the Treaty's rules. Pursuant to Article III-6 of the draft Constitution, services of general interest must work in mainly economic and financial conditions that "allow them to accomplish their missions". The result is that, according to the
the Commission, the effective accomplishment of a general service mission prevails over application of the rules of the treaty, and services of general economic interest are not submitted to application of the rules of the treaty to the extent required to allow them to fulfil their general interest mission. It is evident that, by establishing these principles, the Commission mainly had competition rules in mind.
3. "Universal service" is a key idea. This notion establishes the right of each and every one of us to have access to services considered essential, and makes service providers subject to certain conditions, including full territorial coverage and affordability. The notion of universal service is "dynamic and flexible" and may be redefined from time to time to "adjust to the social, economic and technological context". The EU contributes to preventing the risk that social groups or vulnerable regions could be excluded from access to essential services by providing for the possibility that, under certain conditions, the Structural Funds should co-fund investment in networking infrastructure.
4. Principle of subsidiarity and assessment criteria. The principle of subsidiarity is strictly applicable to public services as it essentially belongs to the relevant authorities at national, regional and local level to define, organise, finance and control services of general interest. The States and the regional and local authorities are therefore responsible for applying common principles. The Commission nonetheless plans to assess the way services work (a first report will be presented by the end of the year), and it indicates that its assessment will be based not only on economic efficiency criteria but also on social, economic and environmental criteria.
5. Specific nature of social and health services. Recognising the specific nature and role of social services (including social security and social housing) and health services, the Commission announces for next year a specific communication in this connection, but already states that such services will benefit from a special financing regime (State aid assessment) as well as an ad hoc framework for their operation and upgrading, bearing in mind solidarity, inclusion of vulnerable groups and other goals proper to these areas.
6. Financing, compensation and State aid. The Commission announces for July 2005 a series of texts defining the rules applicable to State funding aimed at compensating for public service obligations. It already sets out, however, the principles that will be proposed or applied, bearing in mind last year's rulings of the Court of Justice. Thus: a) aid of a limited amount paid to local suppliers is considered as compatible with the common market and will be exempt from the obligation of prior notification. Ceilings will be fixed. b) It will be the same for aid to hospitals and social housing, whatever their amount. Aid exceeding the ceilings set will remain subject to compulsory notification and Commission scrutiny, but a directive will fix the criteria for evaluation in order to improve legal security.
Rules across the board, water, pluralism in the media. To these principles and guidelines must be added rules recognised from the outset, mainly that which leaves Member States free to choose between the direct management of services of general interest (by public companies) or to entrust them to private bodies.
In this context, the fact of leaving open the question of how appropriate it is to have a "horizontal" European directive almost seems to me to be an act of wisdom, because its usefulness is still challenged and opinions differ even within the Commission (as well as within the European Parliament and Council). With caution, the Commission affirms that consultaion has not demonstrated the added value of a horizontal framework compared to the sector-specific approach followed to date. It will review the matter once the constitutional treaty is in force (which means it will not be giving its stance immediately …) and it will, in the meantime, "pursue and develop its sectoral approach" by proposing rules that respond to the specific needs and situations of the various sectors. It stresses, moreover, the need for a clear and transparent framework for the choice of enterprise entrusted with services of general interst, a complicated and yet fundamental question, linked to regulation of public procurement. The new public procurement directives will be applicable in all Member States in January 2006. The Commission considers they already provide the means to respect transparency obligations, but reserves the right to assess how timely an ad hoc European legislation is in the light of consultaiton that it is to launch on the Green Paper of 30 April on public-private partnerships. It only remains to add that:
- The Commission will be publishing the results of its assessment of the very sensitive water sector (for which the system differs from one Member State to the next) by the end of the year.
- It considers it inappropriate for now to present a Community initiative concerning pluralism of the media, but it will continue to closely follow the matter through.
Finding it hard to digest such a summary? Tomorrow, I shall try to complete it with a few thoughts of a less specific and explanatory kind (from myself and others). (F.R.)