Strasbourg, 23/02/2005 (Agence Europe) - The European Parliament adopted the report by Dutch liberal Sophia in't Veld on state aid in the form of public service compensation on Wednesday by 478 votes for, 155 against and 10 abstentions. A majority of the socialist group approved the own initiative report, but according to some members of the group, notably from France and Belgium, it sends the wrong signal to the Commission for future discussions, particularly on local public services. In rejecting several amendments, the Plenary thought that hospitals and social housing should not be exempt from notification by rights (see EUROPE of 9 February, p.13), whereas the Commission, in its draft decision on the application of the provisions of article 86 of the Treaty to state aid in the form of public service compensation granted to some businesses responsible for managing services of general economic interest, envisaged excluded as of rights those small businesses and sectors from Community competition rules. The report as adopted does not, however, preclude such an exemption. It provides that Member States should provide the Commission with a detailed description of the organisation of financing for hospitals and social housing if they wish these sectors to be exempt from notification. It is “an excess of bureaucracy which will paralyse essential services”, said a communication from the Belgian socialists, for whom “this text attests to a shift in the Parliament”. The French socialists voted against the report.
Another aspect which is crystallising the differences between MEPs is the definition of a public enterprise in the context of this “mini” state ad. The report defines entities which can claim to benefit from the regulations on public service compensation as those exercising a public service mission. On this point, a PPE-DE amendment toned down the original version of the report, which said that “to profit from this (Commission) decision, it should be possible to attribute the public service mission through the terms of a fair and transparent call to tender”. The report ultimately proposes that the public service mission be “given either through a fair adjudication procedure or through an official act” and therefore leaves a wide choice up to the public authorities.
In Plenary, the MEPs confirmed the thresholds below which public service compensation should be exempt from notification. This would apply to any entity with an annual turnover of less than 50 million euros which receives annual compensation of less than 15 million euros. Compared to the Commission text, the Parliament has extended the scope of entities which can benefit from exemption in the transport sector to “air links with islands and air and road links with distant and isolated communities” (see below). It extended the threshold for public services which could benefit to 300 000 passengers and wanted to see an impact assessment on the whole framework, based on broad consultation, within four years after its entry into force.
On Monday evening, the debates confirmed the differences in opinion. British conservative john Purvis said that he would prefer “to keep the transparent adjudication procedure”, although admitting that “of local authorities, in their wisdom, consider that they can do better than their citizens”, they could not “notify the Commission, as long as they respect the rules guaranteeing that potential competitors are not affected”. Confused, Ian Hudghton (Green-ALE, UK) explained that even if “the rapporteur seems to be suggesting that there was misunderstanding” of her intentions, the liberal message had gone by the wayside. The French socialist Gilles Savary appealed for account to be taken of “self-production services in local communities, which other texts are starting to recognise”. Following the debate, the Commissioner for Competition Neelie Kroes indicated that the framework “should be applied for six years and then be renewed”. Having consulted my colleague Jacques Barrot, she said, the suggestion to extend the scope of the Commission decision to the transport sector seems “difficult” to bring about, in particular because it would clash with the various sectoral regulations. “Your comments on road and air links are an interesting contribution” to the revision of other packages, she told MEPs.