EN Official Journal of the European Union C 221/17

Opinion of the European Economic and Social Committee on the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions on the White Paper on services of general interest

(COM(2004) 374 final)

(2005/C 221/04)

On 13 May 2004, the Commission decided to consult the European Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on the abovementioned communication.

The Section for Transport, Energy, Infrastructure and the Information Society, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 17 January 2005. (rapporteur: Mr Hencks — co-rapporteur: Mr Hernández Bataller).

At its 414th plenary session of 9 and 10 February 2005 (meeting of 9 February), the European Economic and Social Committee adopted the following opinion by 131 votes to 5, with 2 abstentions:

1. Introduction

1.1 Services of general interest (SGI) today form an area of society that is closely linked to European integration.

1.2 Services of general economic interest (SGEI) are recognised by the current Treaties as being among the shared values of the Union and contributing to its social and territorial cohesion (Article 16); access to SGEI and the rights relating to the specific components of services of general interest (social security and social assistance, health protection, environmental protection, etc.) are laid down in the Charter of Fundamental Rights (Title IV, Articles II-34 to II-36).

1.3 Not only are SGI central to competitiveness and an important element for contributing to the achievement of the Lisbon objectives, they are also fundamental elements of the European social model. They help to guarantee basic human rights, contribute to the knowledge-based economy and to social, economic and territorial cohesion and form elements of sustainable development.

1.4 Although the EESC's request to have promotion of services of general interest included as an objective in Article 3 of the Constitutional Treaty has not been met, a certain step forward was made with regard to SGI in the finalised Constitutional Treaty: under Article III-122 the EU can legislate on services of general economic interest in a horizontal manner concerning the principles and conditions relating to the provision of such services. The Constitutional Treaty also recognises the principle of administrative freedom for local authorities and raises to the level of a constitutional principle the possibility for local authorities to provide services of general economic interest themselves, thereby giving effect to the subsidiarity principle as regards the respective competences of the Union and the Member States in relation to services of general economic interest.

1.5 Nevertheless, in substance secondary legislation continues to be characterised by a general imbalance between, on the one hand, competition law, which is detailed EU legislation and takes direct effect, and, on the other hand, the general interest objectives that fall under exceptions to competition law.

1.6 The European Union still has difficulty in overcoming the contradictions between building a market based solely on competition and the need to ensure a process of public control that economic mechanisms alone will be unable to provide. Services of general interest are not techniques, or instruments, but embody human rights, social links, inclusion and integration.

1.7 Furthermore, we should not ignore the fact that an attitude of incomprehension, criticism and rejection is emerging among Europe's citizens towards policies which seem to aim at achieving a European integration that appears more and more irrelevant to their concerns, that is exacerbating the social divide, endangering social cohesion and jeopardising the social model.

1.8 The European Union must succeed in delivering a balanced combination of market mechanisms and general service missions in areas in which such complementarity is compatible with the objectives of services of general interest and can offer added value to the user or consumer. This means that, subject to the conditions laid down in Article 86(2) of the EC Treaty, the effective performance of a general interest task prevails, in cases of tension, over the application of competition rules, in accordance with EU case law.

1.9 Services of general interest call for a political will to control the management of collective interests and to meet needs and fundamental rights in the context of a European model of society, a model which offers appropriate social protection to everyone, whatever their age or social status or the region they live in, and also ensures good-quality, affordable and easy access to essential goods such as food, housing, water, travel, communication, etc. Services of general interest are clearly, therefore, part of the social market economy, which should not be provided simply by the interplay of competitive forces. In the absence of adequate public intervention a two-speed Union will develop that will accentuate disparities in development, inequalities and social exclusion.

1.10 In the near future many Europeans will be called upon to express their opinion in a referendum on the ratification of the Constitutional Treaty. Without public support there will be no political Europe. And there will be no public support if the Union is unable to provide guarantees for the protection and development of the European model of society and the European social model.

1.11 In this context the White Paper on services of general interest, insofar as it establishes a basis for ensuring high-quality, accessible and affordable services of general interest, is one of a number of important steps in promoting Europe to its citizens and preventing a ‘No’ vote from disrupting the momentum of European integration.

1.12 The debate launched by the White Paper and the results of that debate are inextricably linked with the debate over public-private partnerships, the services market, especially social services, state aid, the report being prepared on the water sector, the review of the Lisbon strategy and the assessment reports.

2. White Paper on services of general interest

2.1 The White Paper adopted by the European Commission on 12 May 2004 provides an overview of the important European debate following on from the publication of the Green Paper in 2003 and the many contributions it gave rise to, in particular from the European institutions and civil society. It proposes strategic orientations for the years ahead.

2.2 The debate on the Green Paper has revealed differences of views and perspectives. Nevertheless, a consensus has emerged on the need to ensure a harmonious combination between market mechanisms and public service missions.

2.3 While the provision of services of general interest can be organised in cooperation with the private sector or be entrusted to private or public sector commercial or non-commercial firms, the definition of public service obligations and missions remains a task for the public authorities at the appropriate level. The relevant public authorities are also responsible for market regulation and for ensuring that public or private sector operators accomplish the public service missions entrusted to them.

2.4 The Commission's approach is based on nine principles:

2.4.1 Enabling public authorities to operate close to the citizens: services of general interest should be organised and regulated as closely as possible to the citizens and the principle of subsidiarity must be strictly respected.

2.4.2 Achieving public service objectives within competitive open markets: the Commission remains of the view that the objectives of an open and competitive internal market and of developing high-quality, accessible and affordable services of general interest are compatible. Under the EC Treaty and subject to the conditions set out in Article 86(2), the effective performance of a general interest task prevails, in case of tension, over the application of Treaty rules.

2.4.3 Ensuring cohesion and universal access: the access of all citizens and enterprises to affordable high-quality services of general interest throughout the territory of the Member States is essential for the promotion of social and territorial cohesion in the European Union. In this context, universal service is a key concept the Community has developed in order to ensure effective accessibility of essential services.

2.4.4 Maintaining a high level of quality, security and safety: furthermore, the security of service provision, and in particular the security of supply, constitutes an essential requirement which needs to be reflected when defining public service missions. The conditions under which services are supplied also have to provide operators with sufficient incentives to maintain adequate levels of long-term investment.

2.4.5 Ensuring consumer and user rights: these include in particular the access to services, including to cross-border services, throughout the territory of the Union and for all groups of the population, affordability of services, including special schemes for persons with low incomes, physical safety, security and reliability, continuity, high quality, choice, transparency and access to information from providers and regulators. The implementation of these principles generally requires the existence of independent regulators with clearly defined powers and duties. These include powers of sanction (means to monitor the transposition and enforcement of universal service provisions) and should include provisions for the representation and active participation of consumers and users in the definition and the evaluation of services, the availability of appropriate redress and compensation mechanisms and the existence of an evolutionary clause allowing requirements to be adapted in accordance with changing user and consumer needs and concerns, and with changes in the economic and technological environment.

2.4.6 Monitoring and evaluating performance: in line with the prevailing view expressed in the public consultation, the Commission considers that any evaluation should be multi-dimensional and cover all relevant legal, economic, social and environmental aspects.

2.4.7 Respecting the diversity of services and situations: any Community policy in the area of services of general interest must take due account of the diversity that characterises different services of general interest and the situations in which they are provided. However, this does not mean that it is not necessary to ensure the consistency of the Community's approach across different sectors or that the development of common concepts that can be applied in several sectors cannot be useful.

2.4.8 Increasing transparency: this principle should apply to all aspects of the delivery process and cover the definition of public service missions, the organisation, financing and regulation of services, as well as their production and evaluation, including complaint-handling mechanisms.

2.4.9 Providing legal security: the Commission is aware that the application of Community law to services of general interest might raise complex issues. It will therefore make a continuous effort to improve legal certainty regarding the application of Community law to the provision of services of general interest, without prejudice to the case law of the European Court of Justice and the Court of First Instance.

2.5 Based on these principles the White Paper proposes eight new orientations:

2.5.1 Respecting diversity in a coherent framework: the Commission will re-examine the feasibility of and the need for a framework law for services of general interest on the entry into force of the Constitutional Treaty; it will launch a review of the situation of services of general interest and submit a report before the end of 2005.

2.5.2 Clarifying and simplifying the legal framework for the compensation of public service obligations: the Commission will adopt a Decision on the application of Article 86 of the Treaty to state aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest by July 2005; it will adopt a Community framework for state aid in the form of public service compensation by July 2005; it will adopt an amendment of Directive 80/723/EEC on the transparency of financial relations between Member States and public undertakings by July 2005; it will further clarify under which conditions public service compensations may constitute state aid within the meaning of Article 87(1) by July 2005.

2.5.3 Providing a clear and transparent framework for the selection of undertakings entrusted with a service of general interest: the Commission will conduct a public consultation on the Green Paper on the procurement aspects of public-private partnerships; where appropriate, it will submit proposals on the basis of the results of the public consultation.

2.5.4 Recognising fully the general interest in social and health services: the Commission will submit a Communication on social and health services of general interest in the course of 2005; it will facilitate cooperation among Member States on health services and medical care in order to contribute to ensuring a high level of health protection throughout the Union.

2.5.5 Assessing the results and evaluating performance: the Commission submitted its first horizontal evaluation on services of general interest on the basis of its evaluation methodology in 2004; it will review its evaluation mechanisms in 2006.

2.5.6 Reviewing sectoral policies: the Commission will encourage the cooperation of national regulatory authorities on the basis of networks of regulators; it will take into account the results of the public consultation on the Green Paper in the reviews already foreseen for the different sectors: the review of the scope of universal service in electronic communications by July 2005; the review of the electronic communications package by July 2006; the review of the postal services directive by the end of 2006; the review of the internal markets for electricity and gas by 1 January 2006; the review of the ‘Television without frontiers’ directive at the beginning of 2005; the assessment of the water sector is ongoing.

2.5.7 Reflecting our internal policies in our international trade policy: the Commission will continue to ensure that the positions taken by the Community in international trade negotiations are fully consistent with the EU's internal regulatory framework regarding services of general interest.

2.5.8 Promoting services of general interest in development cooperation: the Commission will assist developing countries in creating a sound regulatory and institutional framework as a key prerequisite for the promotion of investment in and access to finance for basic services of general interest.

3. General comments

3.1 The EESC welcomes the publication of the White Paper. It notes the nine principles and eight new orientations proposed in the White Paper for reinforcing the existence of services of general interest. It regrets, however, that its repeated requests in recent years (1) for a framework directive or a framework law to guarantee the existence of SGI, the Member States' freedom to define, organise and choose management methods for SGI, the long-term financing and performance evaluation of SGI, consumers' rights etc. have not yet been taken up, even if the Commission has undertaken to produce a report on this matter by the end of 2005.

3.2 The EESC welcomes in particular the fact that the White Paper sets out a precise timetable of proposals and measures which the European Commission intends to take in order to apply these principles and orientations over the coming years.

3.3 The EESC will follow closely the implementation of these commitments and is prepared to contribute towards ensuring their effectiveness.

4. Specific comments

4.1 The first principle — enabling public authorities to operate close to the citizens — implies that services of general interest are organised and regulated as closely as possible to the citizens and that ‘the principle of subsidiarity must be strictly respected’. However, footnote 30 refers to the draft regulation on local inland transport, which ‘would require Member States to use public service concessions’ and thus systematic invitations to tender. There can be no subsidiarity unless each authority is free to choose how it manages the services of general interest within its responsibility.

4.2 The third principle — ensuring cohesion and universal access — led the Commission to stress, ‘universal service is a key concept the Community has developed in order to ensure effective accessibility of essential services’. This means allowing ‘requirements to be adapted in accordance with changing user and consumer needs and concerns, and with changes in the economic and technological environment’. In line with this thinking and as part of the e-Europe plan, which recommends general broadband use for electronic communications, the EESC would point out that 20 % of the population of the EU of Fifteen are currently denied access to such services. Now, broadband is a service of general interest that improves living conditions by reducing distances and facilitating access to health care, education and public services, both for geographically isolates citizens and for the worst-off. It therefore follows that unless universal telecommunications service at an affordable price is extended to broadband and mobile telephony, the European Union's delay in setting up and using the new information and communication technologies and the technologies of a knowledge society will grow, while the digital divide will become more pronounced, particularly in the new Member States.

4.3 The sixth principle — monitoring and evaluating performance — is also in line with the focus of the EESC, and of many other actors, on developing a progressive evaluation of the performance of services of general interest in order to improve their effectiveness, make access to them more equal and help them adapt to the changing needs of consumers, citizens and society, as well as to changes in rules. The White Paper rightly emphasises that evaluation must be ‘multi-dimensional and cover all relevant legal, economic, social and environmental aspects’; the EESC would like evaluation to include employment issues. The EESC stresses that the role of the European Union is to establish a common methodology and common criteria, in particular with regard to quality, and to stimulate a process of objective and independent evaluation, which must be conducted in accordance with the principle of subsidiarity. In the EESC's view, the White Paper's proposals to review sectoral policies (see point 2.5.6) must be accompanied by reports assessing the effects of previous measures. Given that it brings together all the interested parties, the EESC reiterates its proposal to help steer the evaluation. In this context, the EESC will examine the possibility of setting up a permanent study group on SGI.

4.4 The seventh principle — respecting diversity of services and situations — ‘does not mean, however, that it is not necessary to ensure the consistency of the Community's approach across different sectors or that the development of common concepts that can be applied in several sectors cannot be useful’. Under the proposed orientation the Commission will re-examine the feasibility of and the need for a framework law for services of general interest on the entry into force of the Constitutional Treaty and submit a report before the end of 2005. The White Paper does not therefore take up the call by the EESC and many other European actors for a framework directive (see the EESC opinion on the Green Paper on Services of General Interest — OJ C 80 of 30 March 2004). However, there is a clear need to consolidate SGI as a whole, including social and health services of general interest, bearing in mind their specific features, as far as they relate to competition law, financing, the implementation of the subsidiarity principle and their role in European integration.

4.5 The ninth principle — providing legal certainty — will lead the Commission to ‘make a continuous effort’, without prejudice to the case law of the European Court of Justice and the Court of First Instance. This principle gives rise to two proposed orientations:

4.5.1 ‘to clarify and simplify the legal framework for the compensation of public service obligations by July 2005’, which should help to ensure the security of long-term financing both for the investment needed to provide continuity and sustainability of services as well as for compensation of public service or universal service obligations, without infringing the principles of transparency, non-discrimination and proportionality; to recognise that this compensation may take very different forms and that these forms must be able to adapt to objectives: public subsidies, internal adjustments enabling costs to be financed from profits on commercial activities, whether or not accompanied by exclusive rights, a compensation fund among operators, tax or other exemptions, public-private partnerships, aid for the provision of services to users, etc.

4.5.2 ‘providing a clear and transparent framework for the selection of undertakings entrusted with a service of general interest’, based on a public consultation on the Green Paper on public-private partnerships. For the EESC this means recognising that there needs to be scope for diversity in the way services of general interest are managed and freedom of choice for each authority concerned: either direct operation of the SGI by the public authority itself (as a public service or a public corporation), or the handing-over of management tasks to a public undertaking or a joint undertaking over which the public authority exercises a degree of supervision equivalent to that over its own departments or operating in the non-profit, social, cooperative or associative economy, or delegation to an undertaking for a fixed period (concession with a prior competition), without forgetting the possibility of reversibility from one form of management to another.

5. Conclusions

5.1 The White Paper on services of general interest marks a step forward in the consideration of these services in the Union. It represents a solid basis on which to develop the conceptual elements of a European policy on services of general interest capable of enabling European enterprises and all of Europe's citizens to benefit from accessible, affordable and effective public services using leading technologies.

5.2 Services of general interest are not only central to economic competitiveness but also a key element in the social and environmental fields. They are a major asset in the three-pronged approach of the Lisbon Strategy (economic, social and environmental aspects) and are vital to making the EU the most competitive and dynamic knowledge-based society, founded on sustainable economic growth, the provision of more and better jobs, and improved social cohesion. Services of general interest, bearing in mind their specific features, transcend the single market and are an essential prerequisite for the economic and social well-being of individuals and enterprises.

5.3 The task facing the European Union is to achieve a balanced combination of market mechanisms and public service missions in areas in which such complementarity is compatible with the objectives of services of general interest and can offer added value in terms of improvements in the quality of life of Europe's citizens, bearing in mind economic growth, job creation and sustainable well-being.

5.4 ‘The rights of citizens to benefit from services of general interest that are accessible, affordable and efficient must be safeguarded and affirmed in the name of solidarity and economic and social cohesion, which are recognised as basic principles of the Treaty. Any liberalisation of services of general interest decided by a Member State must be carried out while respecting the above-mentioned criteria. Consequently, there is a need to establish a body of universal principles for different services that are delivered in different ways from one Member State to another, while fully respecting the principle of subsidiarity.’

Brussels, 9 February 2005. The President of the European Economic and Social Committee Anne-Marie SIGMUND

(1) EESC opinions on Services of general interest, OJ C 241 of 7.10.2002, and on the Green Paper on Services of General Interest, OJ C 80 of 30.3.2004.