EN   EN 
 
 
 EUROPEAN  
COMMISSION   
Brussels, 1.12.2022  
SWD(2022) 388 final  
 
COMMISSION STAFF WORKING DOCUMENT  
 
EVALUATION  
 
Evaluation of the  
State subsidy rules for health and social services of general economic interest (“SGEIs”) 
and of the SGEI de minimis Regulation.  
 
{SWD(2022)  389 final}   
 
1 
 Table of contents  
1. INTRODUCTION  ................................ ................................ ................................ ....... 4 
1.1. The 2012 SGEI Package  ................................ ................................ ......................  4 
1.2. Purpose of the evaluation  ................................ ................................ .....................  5 
1.3. Scope of the evaluation  ................................ ................................ ........................  5 
1.3.1.  Sectors covered  ................................ ................................ .............................  5 
1.3.2.  Timeframe and geographical scope  ................................ ..............................  6 
1.4. Data sources used for the evaluation  ................................ ................................ ... 6 
2. WHAT WAS THE EXPECTE D OUTCOME OF THE INT ERVENTION?  .............  7 
2.1. Description of the intervention and its objectives  ................................ ...............  7 
2.1.1.  Notion of State aid  ................................ ................................ ........................  7 
2.1.2.  Procedural  aspects  ................................ ................................ ........................  9 
2.1.3.  Notion of Services of General Economic Interest  ................................ ...... 11 
2.1.4.  The 2011 review  ................................ ................................ .........................  14 
2.1.5.  Objectives of the 2012 SGEI Package ................................ ........................  14 
2.1.6.  Main changes between the 2005 SGEI Package and the 2012 SGEI Package
 15 
The SGEI Communication  ................................ ................................ ....................  15 
The SGEI Decision  ................................ ................................ ................................  16 
The SGEI Framework ................................ ................................ ............................  17 
The SGEI de minimis Regulation ................................ ................................ ..........  17 
2.1.7.  Points of comparison  ................................ ................................ ..................  18 
3. HOW HAS THE SITUATIO N EVOLVED OVER THE E VALUATION 
PERIOD?  ................................ ................................ ................................ ...................  19 
3.1. Health sector  ................................ ................................ ................................ ...... 19 
3.1.1.  Importance, organisation and development of the health sector  ................  19 
3.1.2.  Key figures and State aid expenditure related to the health sector .............  21 
3.1.3.  Case practice of the Commission and relevant case law  ............................  23 
3.2. Social services ................................ ................................ ................................ .... 24 
3.2.1.  Key figures and State aid expenditure  ................................ ........................  24 
3.2.2.  Case practice of the Commission and  relevant case law  ............................  26 
3.3. Recent events: the COVID -19 pandemic and the Russian war of aggression 
against Ukraine  ................................ ................................ ................................ .............  27 
3.3.1.  COVID -19 pandemic ................................ ................................ ..................  27 
 
2 
 3.3.2.  Russian war of aggression against Ukraine  ................................ ................  28 
4. EVALUATION FINDINGS  ................................ ................................ .....................  28 
4.1. To what extent was the intervention successful and why?  ................................  28 
4.1.1.  Effectiveness ................................ ................................ ...............................  29 
SGEI Decision  ................................ ................................ ................................ ....... 30 
SGEI Framework  ................................ ................................ ................................ ... 34 
SGEI Communication  ................................ ................................ ...........................  34 
SGEI de minimis Regulation  ................................ ................................ .................  39 
Conclusion  ................................ ................................ ................................ .............  41 
4.1.2.  Efficiency  ................................ ................................ ................................ ... 41 
Findings of the analysis  ................................ ................................ .........................  41 
Conclusion  ................................ ................................ ................................ .............  43 
4.1.3.  Coherence  ................................ ................................ ................................ ... 43 
Findings of the analysis  ................................ ................................ .........................  44 
Conclusion  ................................ ................................ ................................ .............  46 
4.2. How did the EU intervention make a difference?  ................................ ..............  46 
4.2.1.  Findings of the evaluation  ................................ ................................ ..........  47 
4.2.2.  Conclusion  ................................ ................................ ................................ .. 49 
4.3. Is the EU intervention still relevant?  ................................ ................................ . 49 
4.3.1.  Findings of the analysis  ................................ ................................ ..............  49 
4.3.2.  Conclusion  ................................ ................................ ................................ .. 52 
5. WHAT ARE THE CONCLUSIONS AND LESSONS LEARNED?  .......................  52 
5.1. Conclusions  ................................ ................................ ................................ ........  52 
5.2. Lessons learned  ................................ ................................ ................................ .. 53 
ANNEX I.   PROCEDURA L INFORMATION  ................................ ...............................  54 
ANNEX II. METHODOLOG Y AND ANALYTICAL MOD ELS USED  .......................  56 
ANNEX III. EVALUATIO N MATRIX  ................................ ................................ ...........  61 
ANNEX IV. OVERVIEW OF BENEFITS  AND COSTS  ................................ ................  63 
ANNEX V. STAKEHOLDER S CONSULTATION  ................................ ........................  67 
ANNEX VI. OVERVIEW O F THE STATE AID RULE S SUBJECT TO THE 
SGEI EVALUATION  ................................ ................................ ...............................  80 
ANNEX VII. RELEVANT LEGAL PROVISIONS IN THE TFEU  ................................  81 
 
  
 
3 
 Glossary  
Term or acronym  Meaning or definition  
COVID -19 The COVID -19 outbreak / pandemic  
DG Directorate -General  
EU European Union  
GBER  General Block Exemption Regulation: Commission Regulation 
(EU) No 651/2014 of 17 June 2014 declaring certain categories of 
aid compatible with the internal market in application of 
Articles  107 and 108 of the Treaty, OJ L 187, 26.6.2014, p. 1, as 
amended  
GDP  Gross Domestic Product  
OECD  Organisation for Economic Co -operation and Development  
RSB  Regulatory Scrutiny Board  
SGEI  Services of General Economic Interest  
SWD  Staff Working Document  
TFEU  Treaty on the Functioning of the European Union  
 
 
 4  1. INTRODUCTION  
This Staff Working Document (“SWD”) summarizes the results of the evaluation of the 
State subsidy rules for health and social services of general economic interest (“SGEI”) 
as well as the SGEI de minimis  Regulation1, launched in June 2019.  
1.1. The 2012 SGEI Package  
The 2012 SGEI Package, which entered into force in 2012, consists of:  
 The SGEI Communication2, which clarifies basic concepts of State aid 
relevant to SGEIs (e.g. notions of aid, SGEI, economic activity, the 
relation between public procurement and S tate aid rules, etc.);  
 The SGEI Decision3, which provides the conditions under which the 
Member States are exempted from the obligation to notify public service 
compensation to the Commission;  
 The SGEI Framework4, which sets out the rules for assessing SGE I 
compensations that constitute State aid and are not exempted from 
notification by the SGEI Decision; and  
 The SGEI de minimis  Regulation , which provides that SGEI 
compensation not exceeding EUR 500 000 over any period of three fiscal 
years does not fall under State aid scrutiny.  
The overall objective of the 2012 SGEI Package was to support Member States in 
funding SGEIs that are of key importance to citizens and the society as a whole, while 
preserving the key aspects of State aid control.  
The 2012 SGEI P ackage, as regards health and social services, aimed at simplifying the 
compatibility criteria and reducing the administrative burden for Member States which 
compensate undertakings entrusted to provide SGEI to the (vulnerable part of the) 
population at af fordable conditions. In this context, the 2012 SGEI Decision 
acknowledged that health and social services have specific characteristics that need to be 
taken into consideration and it did not necessarily consider that a larger compensation for 
these servic es produced a greater risk of distortions of competition. Accordingly, under 
certain conditions, such compensation was exempted from the notification obligation 
under Article 108(3) TFEU, irrespective of the amounts.  
1.2. Purpose of the evaluation  
The goal of t he evaluation is to verify to which extent the rules applicable to health and 
social services reached these objectives and whether the rules are still appropriate, also in 
                                                           
1  Commission Regulation (EU) No  360/2012 of 25  April 2012 on the application of Articles 107 and 108 of the 
Treaty on the Functioning of the European Union to de minimis aid granted to undertakings providing services of 
general economic interest (OJ L 114, 2 6.4.2012, p. 8 ). 
2  Communication from the Commission on the application of the European Union State aid rules to compensation 
granted for the provision of services of general economic interest  (OJ C 8, 11.1.2012, p. 4 ). 
3  Commission Decision of 20  Decemb er 2011 on the application of Article 106(2) of the Treaty on the Functioning 
of the European Union to State aid in the form of public service compensation granted to certain undertakings 
entrusted with the operation of services of general economic interes t (notified under document C(2011) 9380) (OJ 
L 7, 11.1.2012, p. 3 ). 
4  Communication from the Commission – European Union framework for State aid in the form of public service 
compensation (2011)  (OJ C 8, 11.1.2012, p. 15 ). 
 
 5  view of the latest jurisprudence of the Union Courts and sectoral developments in th e 
internal and global markets. It seeks to analyse the relevance, effectiveness, efficiency, 
coherence and EU -added value of SGEI rules applicable to health and social services. 
The evaluation also seeks to assess how the SGEI de minimis  Regulation has bee n 
applied.  
Indeed, the current rules applicable to health and social SGEIs have been in place for 
more than 10 years but have not been evaluated so far. The objective of the evaluation is 
to get a detailed understanding of the potential issues that Member States may have had 
in implementing the SGEI rules applicable to health and social services and whether, 
why and to what extent the current rules have encouraged and/or deterred Member States 
from designing new or adapting existing SGEI compensation measur es for health and 
social services in line with the currently applicable SGEI rules.  
In addition, the evaluation should provide a better understanding of the application of the 
SGEI de minimis  Regulation and possible difficulties encountered by stakeholders , also 
in the light of possible amendments of the SGEI de minimis  Regulation after its current 
expiry date of 31 December 2023.  
The evaluation informs the Commission on the need or not to revise the SGEI rules 
applicable to health and social services and/o r whether there is need to prolong or revise 
the SGEI de minimis  Regulation.  
1.3. Scope of the evaluation  
1.3.1.  Sectors covered  
The evaluation concentrates on the health and social services sectors. For the purposes of 
the present evaluation, the health and social services sectors are to be understood as 
hospitals providing medical care (including, where applicable, emergency services) as 
well as services meeting social needs as regards health and long term care, childcare, 
access to and reintegration into the labou r market, social housing and the care and social 
inclusion of vulnerable groups5. 
Several reasons underpinned the need to concentrate the evaluation on these health and 
social services sectors. First, they are of crucial importance for citizens and form an  
essential part of the welfare system of each Member State.  
Second, it results from the SGEI Reports6 that the SGEI rules applicable to health and 
social services have been frequently used, but that Member States are facing conceptual 
and methodological challenges in their implementation (see section 4).  
Third, challenges in relation to health and social  SGEI have recently increased in light of 
several judgments of the Union Courts and the overall legal uncertainty around the 
existence of State aid in certain cases.7  
                                                           
5  See Article 2(1) of the SGEI Decision.  Other social services, such as for instance social security schemes, would 
also be considered for the purposes of this evaluation where applicable.  
6  Pursuant to Ar ticle 9 of the SGEI Decision and paragraph 62 of the SGEI Framework, Member State s shall submit a report on 
their compliance with the SGEI rules every two years. The reports are available online: 
https://ec.europa.eu/competition -policy/state -aid/legis lation/sgei_en .  
7  For instance, as regards the criterion of economic activity, the Court of Justice clarified in which circumstances a 
scheme may be considered to be applying the principle of solidarity. See Judgment of the Court of 11 June 2020 , 
Commission  and Slovak Republic v Dôvera zdravotná poistʼovňa, a.s. , Joined Cases  C-262/18  P and C -271/18 P , 
EU:C:2020:450) where the Court of Justice noted that th e existence of a certain amount of competition as regards 
 
 6  Finally, both sectors have evolved significantly over the years and it appeared necessar y 
to consider the impact of those changes in the use and application of SGEI rules.  
Therefore, the evaluation covers the SGEI Communication and the SGEI Decision 
insofar as they are applicable to health and social services. It also covers the SGEI 
Framework, although to a lesser extent since it is rarely applied to the sectors concerned. 
In additi on, the evaluation covers the SGEI de minimis  Regulation, regardless of the 
sectors covered.  
1.3.2.  Timeframe and geographical scope  
The evaluation covers the pe riod from the entry into force of the 2012 SGEI Package (i.e. 
31 January 2012) until the present, to the extent that the relevant information and data are 
available8. The consequences of the COVID -19 pandemic and the Russian war of 
aggression against Ukrai ne on the 2012 SGEI Package are not analysed in this SWD9, but 
they are taken into account where relevant (see also section 3.3). 
Geographically, the evaluation covers all Member  States.  
1.4. Data sources used for the evaluation  
The evaluation was launched in June 2019 with a roadmap, informing citizens and 
stakeholders about the exercise, and involved a public consultation, a targeted 
consultation, an expert  study prepared by an external consultant (“the expert study”)  and 
intern al analyses by the Commission services.  
The public and targeted consultation were conducted between 31 July 2019 and 4 
December 2019. The expert study was carried out between June 2020 and May 2021. 
The expert study, covering 10 Member States, focused on h ealthcare (and in particular on 
hospitals) and social housing in the period 31 January 2012 to 31 December 2019.  
In addition, one of the important data sources used in the evaluation are the Member 
States’ biennial SGEI reports, monitoring results and inte rpretation questions by Member 
States. DG Competition’s case practice is also a major source of insight.  
Court judgments, desk research, literature review and internal statistics have in addition 
played a role in data gathering. DG Competition used as wel l several other publicly 
available reports and data such as data from EUROSTAT and the OECD. Finally, 
bilateral meetings were held with stakeholders at their request.  
                                                                                                                                                                            
the quality and scope of services provided in the Slovak compulsory health insurance scheme, such as the ability of 
insurers to offer insured persons additional services on a free of charge basis an d the freedom of the insured to 
choose their insurer and to switch once a year, is not such as to call into question the social and solidarity -based 
nature of the activity carried out by the insurance bodies in the context of a scheme applying the principl e of 
solidarity under State supervision. See also Judgment of the General Court of 2 June 2021 , Casa Regina 
Apostolorum della Pia Società delle Figlie di San Paolo v Commission, T-223/18 , EU:T:2021:315 (currently under 
appeal in case  C-492/21 P - Casa Regi na Apostolorum della Pia Società delle Figlie di San Paolo v Commission) 
where the General Court considered that the fact that, following certain reforms, also private healthcare providers 
operated within the public healthcare system and patients had - to some extent - a free choice between public and 
private providers, did not alter the principle of solidarity and the  principle of universality.  
8  For example , due to the fact that all SGEI reports for 2020 and 2021 were only submitted in Q3 2022 and that 
translation and analysis of those reports could only be finished in Q4 2022, most  data available for this staff 
working document only relate t o SGEI compensation granted until 2019.  
9  As indicated in Annex II, section 2 , the public and targeted consultatio ns were conducted between 31 July 2019 
and 4 December 2019 , i.e. before the COVID -19 crisis and the Russian war of  aggression against Ukraine. As for 
the expert study, it was carried out between June 2020 and May 2021. However, the study was backward looking 
and focused on the period 31 January 2012 to 31 December 2019 . Both the consultations and the external study di d 
not relate to the COVID -19 crisis and the Russian war of aggression against Ukraine . 
 
 7  Annex 2 provides a detailed explanation of the process and the method of the evaluation.  
2. WHAT WAS THE EXPECTED  OUTCOME OF THE INTE RVENTION ? 
2.1. Description of the intervention and its objectives  
2.1.1.  Notion of State aid  
Competition is a major driver of growth. It incentivises enterprises, including new ones, 
to enter markets and innovate, improving pro ductivity and competitiveness in a global 
context.  
State aid  control is part of competition policy enshrined in the Treaty and its basic 
rationale is to avoid undue market distortions and subsidy races, as well as to safeguard 
the internal market and creat e a competitive landscape with a level playing field.  
Box 1 
Article 107(1) TFEU – Definition of State aid  
“…[a]ny aid granted by a Member state or through State resources in any form 
whatsoever which distorts or threatens to distort competition by favouring certain 
undertakings or the production of certain goods shall, insofar as it affects trade between 
Member States, be incompatible within the internal market”.  
Consequently, the cumulative requirements that have to be met in order f or a measure to 
be considered as State aid and to fall under the State aid general prohibition are the 
following: (i) the aid must be granted by a Member State or through State resources; (ii) 
there must be a selective advantage to an undertaking; (iii) th ere must be a (threat of) 
distortion of competition; and (iv) there must be affectation of trade between Member 
States.  
State aid is a form of support given by a Member State that provides an undertaking or 
specific undertakings with an advantage over its /their competitors. State aid can be 
granted in a variety of ways, such as through the allocation of subsidies, the provision of 
interest and tax relief, state guarantees, the purchasing of goods and services on 
preferential terms, etc.  
In its Notice on the notion of State aid from 201610, the Commission provided 
clarifications on the key concepts relating to the notion of State aid as referred to in 
Article 107(1) TFEU, with a view to contributing to an easier, more transparent and more 
consistent application of this notion across the Union. It clarifies the Commission's 
understanding of Article 107(1) TFEU, as interpreted by the Court of Justice and the 
General Court (‘the Union Courts’). In addition, the Commission clarified the key 
concep ts underlying the application of the State aid rules to public service compensation 
in its SGEI Communication, which clarifies the basic concepts of State aid relevant to 
SGEIs (e.g. notions of advantage, notion of aid, SGEI, economic activity, the relatio n 
between public procurement and State aid rules, etc.).  
While Article  107(1) TFEU lays down a general prohibition of State aid granted by 
Member States to undertakings, other Treaty provisions allow for a number of 
exceptions:  
                                                           
10  Commission  Notice on the notion of State aid as referred to in Article 107(1) of the Treaty on the Functioning of 
the European Union  (OJ C 262, 19.7.2016, p. 1 ).  
 
 8   Article 107(2) TFEU lists a number of categories of State aids that are 
automatically compatible with the internal market, without discretion of the 
Commission.  
 Article 107(3) TFEU allows State aids that can be considered compatible with the 
internal market, under the discretion of the Commission.  
 Article 106(2) TFEU allows State aid in the form of compensations for services 
of general economic interest that can be deemed compatible with the internal 
market, under the discretion of the Commission.  
To ensure predictability and legal c ertainty for Member States and stakeholders on how 
the Commission applies its margin of discretion in interpreting the compatibility 
provisions in Article 107(3) and Article 106(2) TFEU, the Commission has adopted rules 
in the form of “soft law” such as guidelines and frameworks. The adopted rules aim at 
laying down the compatibility conditions of aid measures and help Member States to 
notify their mesures accordingly.  
As an example, the SGEI Framework lays down th e conditions under which certain types  
of public service compensation are deemed compatible with the internal market pursuant 
to Article 106(2) TFEU, while being subject to the requirement of prior notification 
under Article 108(3) TFEU.  
The Commission has  no legal obligation to adopt guidelines and frameworks – their 
adoption is an instance of the exercise of the Commission’s discretion. They are not and 
must not necessarily be exhaustive – the Commission cannot be regarded as having 
deprived itself of the  power to recognise State aid as compatible with the internal market 
directly on the basis of Articles 107(3) or 106(2) TFEU if it has not explicitly adopted a 
position on the question at issue in the relevant communication , guidelines or framework. 
Where the relevant rules do not expressly prohibit a certain type of State aid to be 
granted, the Commission can assess the measure directly on the basis of Article 107(3) 
TFEU. However, the Commission will make sure that the common compatibility 
principles are applied to the extent possible when aid is directly assessed under the 
TFEU.  
It results from the above that State aid control thus does not prevent Member States from 
supporting businesses. State aid control ensures that any detriment arising from 
distort ions of competition is outweighed by the public purpose pursued by the aid.  
While the abovementioned  rules set out how the Commission will assess aid measures 
and allow  Member States to grant support, they do not oblige  Member States to grant aid; 
this re mains in their discretion. Indeed, Member States are free to choose other policy 
instruments to reach a certain goal.  Member States, on the basis of their policy 
considerations, are (to a certain extent) also free to decide which undertakings or sectors 
they choose to support with State aid.  
The purpose of State aid control is not to ensure that Member States grant proportionally 
equal amount of aid, but rather to ensure that a level playing field is maintained when aid 
is granted.  
The role of State aid co ntrol is to define what types of State aid can be accepted, but it is 
up to the Member States, and taking into account their budget priorities, whether and to 
what extent they use those possibilities for granting State aid.  
 
 9  Furthermore, Article 107 TFEU confers power on the Commission to control State aid 
measures. It is outside the remit of State aid control to assess or compare the overall 
spending levels of individual Member States. There are other tools of economic 
govern ance looking into possible investment or reform needs and the broad 
developments of public finances.  
2.1.2.  Procedural aspects  
Member States can grant State aid either in the form of a “scheme” or as “individual aid”. 
An aid scheme  is a measure which defines ben eficiaries in a general and abstract manner; 
the authorities in charge of applying that scheme do not have any margin of discretion in 
its application.11 On the contrary, individual aid means (i) aid that is either not awarded 
on the basis of an aid scheme or (ii) notifiable individual awards on the basis of an aid 
scheme . 
The Commission  has exclusive ex ante  control power: under Article 108(3) TFEU, 
Member States are obliged to notify their intentions to grant State aid and cannot 
implement the measure befo re the Commission's approval. The Commission’s approval 
takes the form of a Commission decision. Such decisions can be challenged and are 
subject to scrutiny before the Union Courts. Any aid put into effect in contravention of 
Article 108(3) TFEU constitut es “unlawful  aid”.12 
In State aid procedures, the counterpart of the Commission is the Member State. The 
beneficiary or beneficiaries are third parties. Once a measure is approved by way of a 
Commission Decision (or block -exempted, see below), the Member St ate is authorised to 
grant the aid to the beneficiary or beneficiaries. This may be done according to its 
national administrative set -up (at national or regional level for instance, or through 
specific aid granting bodies) and depending on the type of the aid measure.  
For small amounts of aid and/or less distortive aid measures however, the Commission 
can issue block exemption regulations or decisions of exemption, laying down the 
conditions13 that have to be fulfilled in order to deem the State aid measure compatible 
with the internal market without the necessity of an ex ante  notification and approval. As 
an example, the Commission has adopted the the General Block Exemption Regulation14 
(“GBER”) and the SGEI Decision. Member States thus may implement under certain 
conditions  measures without prior Commission scrutiny. On the other hand, the fact that 
a State aid measure is not covered by block exemption regulations/decisions of 
exemption  does not imply that it is incompatible and cannot be granted; it merely means 
that the measure needs to be notified to the Commission, which will then assess it under 
the relevant compatibility rules (i.e. guidelines or frameworks or even directly under o ne 
of the Treaty provisions) before it is actually granted. Figure 1 depicts how State aid 
control works.  
 
 
                                                           
11  See Article 1(d) of the Procedural Regulation.  
12  See Article 1(f) of the Procedural Regulation. Lawfulness (or “legality ”) of an aid measure is thus a different 
concept than “compatibility ”. 
13  The criteria of the GBER determine, in particular, eligible beneficiaries, maximum aid intensities (i.e. the 
maximum proportion of the eligible costs of a project that can benefit from State aid) and eligible expenses.  
14    Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the 
internal market in application of Articles  107 and 108 of the Treaty  (OJ L 187, 26.6.2014, p. 1 ), as amended . 
 
 10   
Figure 1 – The State aid universe  
Article 107(1) TFEU: Definition of State aid
De minimis Regulations: Measures not captured by Article 
107(1)
No obligation to notify
Obligation to Notify
Soft law rules based on Article 107(3)
eg: Regional Aid Guidelines, Research, Development and 
Innovation Framework, Important Projects of Common 
European Interest Communication, Risk Finance Guidelines, 
Aviation Guidelines, Energy and Environmental Aid 
Guidelines, Rescue and Restructuring Guidelines, 
Broadband Guidelines, STEC, Railway Guidelines.
Soft law rules based on Article 106(2)
SGEI FrameworkNo obligation to notify 
(exempted rules)
Automatic compatibility
e.g: GBER based on 107(3)
SGEI Decision based on 106(2)Article 108 TFEU
Procedural Regulation
Implementing RegulationCase law of the 
Union CourtsCase law of the 
Union Courts
Notice on the 
Notion of State aid
+ SGEI 
Communication
“Soft” law
Secondary 
law
Primary law
 
In addition, the Commission, in the so -called de minimis  Regulations, provides ceilings 
below which measures are deemed not to constitute State aid within the meaning of 
Article 107(1) TFEU, and are exempted from the notification procedure, because they are 
considered not to have any effect on trade between Mem ber States and not to distort or 
threaten to distort competition. As a result, there is no compatibility assessment by the 
Commission. Among the different de minimis  Regulations adopted15 is the SGEI de 
minimis  Regulation. This Regulation recognises the imp ortance of the SGEI activities by 
setting a higher ceiling for providers of SGEIs than for providers of other services 16. 
  
                                                           
15  See Commission Regulation (EU) No  1407/2013 of 18  December 2013 on the application of Articles 107 and 108 
of the Treaty on  the Functioning of the European Union to de minimis aid (OJ L 352, 24.12.2013, p. 1), 
Commission Regulation (EU) No 1408/2013 of 18 December 2013 on the application of Articles 107 and 108 of 
the Treaty on the Functioning of the European Union to de minim is aid in the agriculture sector (OJ L 352, 
24.12.2013 p. 9), Commission Regulation (EU) No 717/2014 of 27 June 2014 on the application of Articles 107 
and 108 of the Treaty on the Functioning of the European Union to de minimis aid in the fishery and aqua culture 
sector (OJ L 190, 28.6.2014, p. 45), Commission Regulation (EU) No  360/2012 of 25  April 2012 on the 
application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid  
granted to undertakings providing servi ces of general economic interest (OJ L 114, 26.4.2012, p. 8).  
16  The SGEI de minimis  Regulation provides that SGEI compensation not exceeding EUR 500 000 over any period of 
three fiscal years does not fall under State aid scrutiny.  
 
 11  2.1.3.  Notion of Services of General Economic Interest  
Services of general interest, Services of general economic interest, and Social services of 
general interest  
Article 14 TFEU, Article 106 TFEU, Protocol nº 26 on services of general interest and 
Article 36 of the Charter of Fundamental Rights refer to Ser vices of general interest 
(SGIs) and to Services of general economic interest (SGEIs). However, none of those 
texts define what SGIs or SGEIs are.  
The Commission has clarified these concepts in its Quality Framework  for Services of 
General interest in Eur ope17. SGIs are defined in the Quality framework as “ services that 
public authorities of the Member States classify as being of general interest and, 
therefore, subject to specific public service obligations (PSO). The term covers both 
economic activities ( see the definition of SGEI below) and non -economic services. The 
latter are not subject to specific EU legislation and are not covered by the internal 
market and competition rules of the Treaty […] ”. 
The Quality Framework defines SGEIs as “ economic activit ies which deliver outcomes in 
the overall public good that would not be supplied (or would be supplied under different 
conditions in terms of quality, safety, affordability, equal treatment or universal access) 
by the market without public intervention ”.  
The Quality Framework defines  social services of general interest (SSGIs) as services 
which “ include social security schemes covering the main risks of life and a range of 
other essential services provided directly to the person that play a preventive and 
socially cohesive/inclusive role […] ”. The SSGI definition is developed in the SSGI 
Communication18. According to this Communication, SSGIs include in addition to health 
services:  
- statutory and complementary social security schemes, organised in various ways 
(mutual or occupational organisations), covering the main risks of life, such as 
those linked to health, ageing, occupational accidents, unemployment, retirement 
and disability;   
- other essential services provided directly to the person. These services that play a 
prevention and social cohesion role consist of customised assistance to facilitate 
social inclusion and safeguard fundamental rights. In the first place, they offer 
assistance to persons faced by personal challenges or crises (such as debt, 
unemployment, drug addiction or family breakdown). Secondly, they include 
activities to ensure that the people concerned are able to completely reintegrate 
into society (rehabilitation , language training for immigrants) and, in particular, 
return to the labour market (occupational training and reintegration). These 
services complement and support the role of families in caring for the youngest 
and oldest members of society in particular . Thirdly, these services include 
activities to integrate into the society people with long -term health or disability 
problems. Fourthly, they also include social housing, which provides housing for 
                                                           
17  Communication from th e Commission to the European Parliament, the Council, the European Economic and Social 
Committee and the Committee of the Regions – A Quality Framework for Services of General interest in Europe, 
https://ec.europa.eu/archives/commission_2010 -2014/president/news/speeches -statements/pdf/20111220_1_en.pdf .  
18  Implementing the Community Lisbon programme: Social services of general interest in the European Union, 
COM(2006) 177 final, 26 April 2006.  
 
 12  disadvantaged citizens or socially less advantaged groups . Certain services can 
obviously include all four of these dimensions.  
As the Quality Framework and the SSGI Communication make clear, SSGIs may be of 
an economic or non -economic nature, depending on the activity involved. Indeed, the 
jurisprudence makes clear that the social nature of a service is not sufficient in itself to 
classify it as non -economic19. As a result, the fact that an activity is termed ‘social’ is not 
of itself enough for it to avoid being regarded as an ‘economic activity’ within the 
meaning of the Court’s case law. SSGIs that are economic in nature are SGEIs. Figure 2 
shows the relationships between SGIs, SGEIs and SSGIs.  
Figure 2 – SGI, SGEI and SSGI  
 
As the State aid rules, and more generally, the internal market and competition rules of 
the Treaty, only apply to economic activities, the distinction between non -economic SGI 
and economic SGI (SGEI, including economic SSGI) is of key importance.  
To clar ify the distinction between economic and non -economic activities, the Court of 
Justice has consistently held that any activity consisting in offering goods and services on 
a market is an economic activity20. The question whether a market exists for certain 
services may depend on the way those services are organised in the Member State 
concerned21 and may thus vary from one Member State to another. Moreover, due to 
political choice or economic developments, the classification of a given activity can 
change ove r time. What is not an economic activity today may become one in the future, 
and vice versa. Since the distinction between economic and non -economic activities 
depends to some extent on political choices and economic developments in a given 
Member State, i t is not possible to draw up an exhaustive list of activities that a priori 
would never be economic. Such a list would not provide genuine legal certainty and 
would thus be of little use. However, the Commission clarified the distinction between 
SGEI and n on-economic SGI with respect to a number of important areas, in particular 
for (i) social security schemes; (ii) healthcare systems; and (iii) education22. 
 
                                                           
19  Judgment of the Court of Justice of 12 September 2000, Pavlov and Others, Joined Cases C -180/98 to C -184/98, 
EU:C:2000:428, paragraph 118; Judgment of the Court of Justice of 22 January  2002 INAIL , C-218/00 ,  
EU:C:200 2:36, paragraph 37; and Judgment of the Court of Justice of 22 May 2003, Freskot , C-355/00 , EU:C: 
2003:298.  
20  See Judgment of the Court of Justice of 16 June 1987, Commission v Italy, 118/85, EU:C:1987:283, paragraph 7; 
Judgment of the Court of Justice of 18 June 1998, Commission v Italy, C -35/96, EU:C:1998:303, paragraph 36; 
Judgment of the Court of Justice of 12 September 2000, Pavlov and Others, Joined Cases C -180/98 to C -184/98, 
EU:C:2000:428, paragraph 75.  
21  Judgment of the Court of Justice of 17 February 1993, Poucet and Pistre, Joined Cases C -159/91 and C -160/91, 
EU:C:1993:63, paragraphs 16 to 20.  
22  Communication from the Commission on the application of the European Union State aid rules to compensation 
granted for  the provision of services of general economic interest (OJ C 8, 11.1.2012, p. 4 ) 

 
 13  Large discretion in defining SGEI  
The Union Courts have established that SGEIs exhibit special characteristics as 
compared with those of other economic activities23. The SGEI concept may apply to 
different situations and terms, depending on the Member State, and EU law does not 
create any obligation to designate formally a task or a service as being of general 
economic interest, except when such obligation is laid down in Union legislation.  
Therefore, in the absence of specific EU rules, Member States have a wide margin of 
discretion in defining a given service as SGEI and in granting compensation to the 
service provider. The Commission’s competence in this respect is limited to checking 
whether the Member State has made a manifest error when defining the service as an 
SGEI24. The Commission may identify a manifest error, for example, in the following 
circumstances25: 
- When a sector is harmonized at Union level and Member States’ discretion 
contradicts the rules governing such harmonization26 (however, where EU 
harmonization rules refer only to certain specific services, Member States have 
considerable disc retion in defining additional services as SGEIs);  
- If the public service obligation is already provided or can be provided 
satisfactorily and under conditions, such as price, objective quality characteristics, 
continuity and access to the service, consistent with the public interest, as defined 
by the Member State, by undertakings operating under normal market conditions; 
and 
- When the service is  not addressed to citizens or in the interest of society as a 
whole.  
If a service is considered as being a n SGEI, it can benefit from a specific treatment under 
State aid rules. The 2012 SGEI Package provides for this specific treatment and lays 
down the State aid rules applicable to SGEIs (see Chapter 1):27 
- The SGEI Communication brings clarity by explaining k ey principles for the 
application of State aid rules to SGEIs. The main purpose of this Communication 
is to determine which compensation is subject to State aid rules and which 
compensation does not fall under State aid rules. In particular, the SGEI 
Commu nication explains  that a compensation granted according to the so -called 
Altmark28 criteria should not be considered as a State aid due to the absence of an 
advantage.  
                                                           
23  See point 45 of the SGEI Communication and Cases C -179/90 Merci convenzionali porto di Genova , 
EU:C:1991:464 , paragraph 27; Case C -242/95 GT -Link A/S , EU:C:1997:376 , paragraph 53; and Case C -266/96, 
Corsica Ferries France SA , EU:C:1998:306 , paragraph 45.  
24  See point 46 of the SGEI Communication  and Judgement of the General Court of 12 February 2008, BUPA and 
Others v Commission , T-289/03 , EU:T:2008:29 , paragraphs 166 -169 and 172; Judgement of the General Court of  
15 June 2005, Fred Olsen , T-17/02 EU:T:2005:208,  paragraph 216.  
25  See SGEI Communication.  
26  That limitation applies in sectors which have been harmonised at Union level, such as the postal, 
telecommunications and energy sectors.  
27  For an overview of the legislative framework, see http://ec.europa.eu/competition/state_aid/legislation/sgei.html .  
28  SGEI Communicat ion, paragraph 43.  
 
 14  - The SGEI  de minimis  Regulation provides that compensation which does not 
exceed EUR 500  000 over any period of three  fiscal years does not fall under 
State aid scrutiny.  
- The SGEI Decision  exempts Member States from the obligation to notify to the 
Commission public service compensation if the compatibility conditions laid 
down in the Decision a re fulfilled. In particular, the exemption applies to 
compensations not exceeding an annual amount of EUR 15 million for the 
provision of SGEIs in areas other than transport and transport infrastructure, to 
compensation for hospitals, services meeting soci als needs and SGEI as regards 
air or maritime links to islands, if certain conditions are met. Compensations in 
line with the SGEI Decision are considered to be compatible with the internal 
market under Article 106(2) TFEU.  
- The SGEI Framework  sets the cond itions for assessing compensation for SGEIs 
that does not fall under the scope of the SGEI Decision. Those cases must be 
notified to the Commission and may be declared compatible with Article 106(2) 
TFEU if they meet the criteria of the SGEI Framework.  
2.1.4.  The 2011 review  
In 2005, a first SGEI Package was adopted. It consisted of a Decision29 (the “2005 SGEI 
Decision”) and a Framework30 (the “2005 SGEI Framework”).  
At the end of 2011 and the beginning 2012, following extensive consultation of 
stakeholders, the C ommission adopted the 2012 SGEI Package. There were several 
reasons that led to the adoption of the 2012 SGEI Package. First, the 2005 SGEI 
Framework was about to expire and in addition, the consultation of stakeholders had 
shown that the application of th e 2005 SGEI Package more broadly raised certain 
difficulties. In particular, the following issues were identified:  
- An incorrect / insufficient application of the rules;  
- An administrative burden too heavy for small SGEIs and for social services;  
- Distortions  of competition in the market;  
- An inefficient delivery of SGEIs.  
These issues are detailed in the 2011 impact assessment related to the reform of the EU 
rules applicable to State aid in the form of public service compensation.31  
2.1.5.  Objectives of the 2012 SGEI  Package  
The overall objective of the 2012 SGEI Package was to address the issue identified in the 
evaluation of the 2005 Package and to support Member States in funding SGEIs that are 
of key importance to citizens and society as a whole while preserving t he key aspects of 
State aid control. To that end, the 2012 SGEI Package aimed at:  
                                                           
29  Commission Decision of 28 November 2005 on the application of Article 86(2) of the EC 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 (OJ L  312, 29.11.2005, p. 67 ). 
30  Community Framework for State aid in the form of public service compensation (OJ C 397, 29.11.2005 ). 
31  Impact assessment of the Commission related to the Reform of the EU rules applicable to State aid in the form of 
public ser vice compensation, 20 December 2011 , available at https://ec.europa.eu/smart -
regulation/impact/ia_carried_out/docs/ia_2011/sec_2011_1581_en.pdf . 
 
 15  1) clarifying basic concepts relevant for the application of the State aid rules to 
SGEIs; and  
2) a more diversified and proportionate approach for a large variety of SGEIs, taking 
into account their nature and scope and the extent to which they posed a serious 
risk of competition distortions in the internal market. In this regard, the 2012 
SGEI Packag e sought to simplify the rules for small SGEIs of a local nature and 
for social services; enlarge and deepen the competition scrutiny for large 
commercial SGEI;  and give incentives to improve efficiency to large scale SGEIs.  
The graph  below provides an overview of how the objectives of the 2012 SGEI Package 
were linked to the problems and the drivers identified in the evaluation of the 2005 
Package.  
PROBLEMS OF THE 
2005 PACKAGEOBJECTIVES OF 
THE 2011 PACKAGEPROBLEM DRIVERS
Incorrect / insuficiente 
application oftherules
Administrative burden too 
heavy for small SGEIs and
for social services
Distortions ofcompetition
onthemarket
Inefficient delivery of
Services ofGeneral 
Economic InterstDifficulty in understanding therules
Insufficient knowledge oftherules
Therules were too uniform : too 
complex for small SGEIs andfor 
social services
A large number ofrelatively sizeable
compensation measures didnot
undergo State aidscrutiny
Therules were too uniform : checking
theabsence ofovercompensation in 
certain cases wasnotsufficient to 
ensure fair competition
Therules didnotprovide incentives 
for efficiencyClarify keyconcepts
relevant for the
application ofState aid
rules to SGEIs
Simplify therules 
for small SGEIs of
a local nature for 
social services
Enlarge the
competition
scrutiny for large
comercial SGEIs
Give incentives to 
improve efficiency
to large scale
SGEIsDeepen the
competition
scrutiny for large
comercial SGEIs
Diversified andproportionate approach
 
More specifically, as regards health and social services, the 2012 SGEI Pac kage aimed at 
simplifying the compatibility criteria and reducing the administrative burden for Member 
States which compensate undertakings entrusted with the provision of SGEIs to the 
(vulnerable part of the) population under affordable conditions.  
In th is context, the 2012 SGEI Package acknowledged that health and social services 
have specific characteristics that need to be taken into consideration. As a result, these 
services are fully exempted from notification, as they are not considered to produce a  
greater risk of distortions of competition.  
2.1.6.  Main changes between the 2005 SGEI Package and the 2012 SGEI 
Package  
The SGEI Communication  
As a novel feature of the 2012 SGEI Package, the SGEI Communication aimed at 
clarifying basic concepts of State aid. On the basis of the rulings of the Union Courts and 
of the Commission’s decisional practice, the SGEI Communication explains relevant 
State  aid concepts, such as ‘undertaking’ and ‘economic activity’, ‘State resources’ and 
‘effect on trade’. Moreover, the Commission also clarifies key concepts of SGEI and 
provides guidance on the four Altmark  criteria.  
 
 16  The SGEI Decision  
The SGEI Decision sets  out the conditions under which public service compensation for 
the provision of certain SGEIs constitutes State aid, which is however compatible with 
the internal market and needs not be notified to the Commission.  
This is the component of the 2012 SGEI Package which brought the most significant 
simplification for the providers of social services.  Under the 2005 SGEI Decision, the 
only services exempted from prior notification regardless of the level of financing were 
social housing and hospitals. The 201 2 SGEI Decision extends the scope of this 
exemption to all services ‘ meeting social needs as regards health and long term care, 
childcare, access to and reintegration into the labour market, social housing and the 
care and social inclusion of vulnerable gr oups’  (see Article 2(1)(c)). For the remaining 
SGEIs, the notification threshold was lowered from EUR 30 million in the 2005 SGEI 
Decision to EUR 15 million of annual compensation per SGEI in the 2012 SGEI 
Decision. Moreover, the 2012 SGEI Decision elimina ted the requirement of a threshold 
for the turnover of the service provider.32  
Another adjustment brought about by the 2012 SGEI Decision applied to the entrustment 
act. While in the 2005 SGEI Decision the entrustment act was not limited in time, since 
the revision in 2011, the entrustment act has been limited to a maximum of 10 years, 
unless the provision of the SGEI requires significant investments which need to be 
amortised over a longer period.  
As regards other compatibility criteria, the 2012 SGEI Dec ision introduced only a few 
changes mainly aimed at simplifying the application of the rules and at increasing 
transparency. Indeed, in order to simplify the application of the rules, the 2012 SGEI 
Decision allowed for an overcompensation test over a longe r time span. The 
overcompensation tests must be carried out every three years under the 2012 SGEI 
Decision33 where they had to be carried out annually under the 2005 SGEI Decision. It 
also introduced a ‘safe harbour’ for reasonable profit, which also consti tutes a limit to the 
reasonable profit when the provision of the SGEI is not connected with a substantial risk.  
As regards transparency, the 2012 SGEI Decision introduced an obligation to make a 
reference to it in the entrustment act and to publish the en trustment act and the amount of 
aid granted for compensation above EUR 15 million.  
  
                                                           
32  The 2005 SGEI Decision set a public service compensation threshold of EUR 30 million per year.  This threshold, 
applicable to social services other than social housing , was complemented by a threshold of EUR 100 million for 
the service provider’s average annual turnover before tax. Public financing which exceeded EUR 30 million per 
year, or which was granted to a provider having a turnover higher than EUR 100 million, had to be notified to the 
Commission. Such a large amount was considered likely to affect  trade and competition to such an extent that a 
specific analysis by the Commission services was deemed to be necessary . 
33  It should be noted that Article 6(1) of the 2012 SGEI Decision provides that the overcompensation test must be 
carried out “ at least  every 3 years during the period of entrustment and at the end of that period ”. 
 
 17  The SGEI Framework  
The 2012 SGEI Framework introduced a proportionate approach by subjecting to closer 
scrutiny large aid cases with more significant cross -border effects.  
As a result, the 2012 SGEI Framework introduced a number of changes compared to the 
2005 SGEI Framewor k. The 2012 SGEI Framework introduced inter alia  the need to 
give proper consideration to the public service needs supported by way of a public 
consultation or other appropriate instrument; to justify the duration of the entrustment 
period by reference to objective criteria such as the need to amortise non -transferable 
fixed assets; to comply with Union public procurement rules and with the Transparency 
Directive34; to check the absence of discrimination, and to introduce an obligation to 
make public informa tion on the amounts of aid granted to the undertaking on a yearly 
basis.  
In addition, the method of calculating the amount of compensation was modified. The 
principle remained the same as with the 2005 SGEI Framework but the 2012 SGEI 
Framework introduced the need to provide incentives for the efficient provision of SGEI 
of high standard in devising the method of compensation, unless Member States can 
justify that it is not feasible or appropriate to do so. In addition, the objective of 
preserving the effic iency incentives of the public service providers led the Commission 
to switch from an ex post  approach where, on the basis of the annual accounts, the public 
authorities checked the absence of overcompensation every year (with only limited 
possibilities to  carry over the possible overcompensation) to an ex ante  multi -annual 
approach based on expected profits rather than on realised profits. In the same vein, the 
2012 SGEI Framework contains a novel method for calculating the compensation. This 
method aimed at better calculating the economic costs of the SGEI by requiring the use 
of the net avoided cost (“NAC”) methodology to calculate the net cost necessary or 
expected to be necessary to discharge the SGEI and therefore the maximum 
compensation which can be granted (the 2005 SGEI Framework was based on the cost 
allocation methodology).  
The SGEI de minimis Regulation  
The SGEI de minimis  Regulation was a novelty introduced by the 2012 SGEI package. It 
sets out that compensation for a broad range of SGEIs which does not exceed EUR 500 
000 over any period of three fiscal years is deemed no aid. Before adopting a special de 
minimis  Regulation concerning only SGEIs, the general de minimis  Regulation of 200635 
(with a threshold of EUR 200 000 over any period of three fiscal years) also applied to 
SGEIs. The higher threshold of the SGEI de minimis  Regulation is justified on the 
consideration that an SGEI provider incurs costs which are directly associated with its 
public service obligation under the entrustment act. The  aid element in the compensation 
is therefore presumably lower than the amount actually granted, and the Commission 
assumes that a EUR 500 000 compensation does not affect trade in the internal market.  
                                                           
34  The importance of this provision is limited, considering that the separation of accounts is any event required by the 
SGEI Framework for undertakings having activities falli ng both inside and outside the SGEI.  
35  Commission Regulation (EC) No 1998/2006 of 15 December 2006 on the application of Articles 87 and 88 of the 
Treaty to de minimis  aid (OJ L 379, 28.12.2006, p. 5) 
 
 18  2.1.7.  Points of comparison  
An evaluation needs an appropriate point of comparison to be able to assess the change 
that the EU action has brought over time. In general, the main baseline (or 
counterfactual) is a situation in the absence of EU intervention.36 
In the current situation, the EU intervention is the adoption of the 2012 SGEI Package. 
The present evaluation assesses the reform of the SGEI rules introduced by the 2012 
SGEI Package as regards health and social services. Therefore, the baseline scenario is 
one in which the 2005 SGEI Package (2005 SGEI  Decision and the 2005 SGEI 
Framework) would have continued to apply.37 
The current evaluation does not assess the unlikely scenario that the rules in force prior to 
2012 SGEI Package would have expired (in particular the 2005 SGEI Framework). The 
consequen ce of the absence of substantive rules would be the direct application of the 
TFEU, i.e. the notification of each and every measure constituting State aid in the 
meaning of Article 107(1) TFEU and its compatibility assessment by the Commission 
directly und er Article 106(2) TFEU without any substantive guidance by the relevant soft 
law. 
The current evaluation also does not assess the existence/absence of State aid control as 
such, as the general prohibition of State aid is enshrined in the Treaty since 1957.  
Regarding the evolution of the situation under the baseline scenario, it is likely that the 
problems that were identified before 2012 would have persisted, or even aggravated. 
None of the problems identified would be resolved under the baseline scenario a nd 
comments of stakeholders would not be considered.  
Under the baseline scenario, a number of State aid concepts relevant for SGEIs would 
continue to be unclear, potentially leading to an incorrect application of the rules and as a 
result, reduced legal ce rtainty. In addition, distortions of competition, lack of efficiency 
and certain specificities of different sectors (e.g. social services or large commercial 
services) would not have been taken into account. For example, small and local SGEIs 
would not ben efit from simplified compatibility conditions. Indeed, under the baseline 
scenario, only hospitals and social housing would be covered by the notification 
exemption of the SGEI Decision regardless of the compensation amount. Compensation 
for other social s ervices would be covered by the notification exemption of the SGEI 
Decision only if the compensation is lower than EUR 30 million and provided that the 
beneficiary had an annual turnover of less than EUR 100 million. In addition, only SGEI 
compensation amo unts of up to EUR 200 000 over a three -year period per undertaking 
would be considered as de minimis , which in turns means that more cases would have to 
be notified to the Commission for prior approval, even if the competition distortions 
brought about by the SGEI would be limited. Also, under the baseline scenario, the 
Commission would not have had the possibility to impose conditions or commitments on 
Member States to remedy serious distortions of competition when assessing large 
commercial services under  the SGEI Framework. Similarly, under the baseline scenario, 
the rules (namely the SGEI Framework) did not provide incentives to improve efficiency, 
meaning that aid could be declared compatible for any amount of the net costs, 
                                                           
36  It has to be noted that the construction of a baseline scenario for State aid is very complex and may be specific to 
the facts of the case. See also Section 2.1.7 . 
37  For the 2005  SGEI  Decision, it would have remained unchanged and continued to apply. For the 2005 SGEI 
Framework, it would have been prolonged beyond its expiry date, which was in November 2011.  
 
 19  irrespective of whether thes e costs could be avoided by increasing efficiency in the way 
the services were provided.  
Moreover, since in the baseline scenario it would be necessary to notify to the 
Commission for approval those cases not covered by the SGEI Decision or the SGEI de 
minimis Regulation, the administrative burden would also be higher and inappropriate, in 
particular for small, local and social SGEIs. In addition, under the baseline scenario, 
Member States (including local authorities) would have continued to use detailed 
monitoring systems which – in particular for small, local SGEIs – would have been 
cumbersome and costly when compared to the value of the service rendered. Moreover, 
the lack of clarity of certain SGEI -related concepts would have led Member States to 
have r ecourse, at instances, to external accounting and legal advice, thereby increasing 
costs. Finally, certain administrative requirements would not be correctly and fully 
applied, leading to an incorrect application of State aid rules and principles, thereby 
putting at risk the continuation of the relevant SGEI.  
3. HOW HAS THE SITUATION  EVOLVED OVER THE EV ALUATION PERIOD ? 
Health and social services form an essential part of the welfare system of each Member 
State and are of crucial importance for citizens. They i nclude medical care provided by 
healthcare providers, long -term care, childcare, access to and reintegration into the labour 
market, social housing and the care and social inclusion of vulnerable groups. The 
adoption in 2017 of the European Pillar of Socia l Rights38 is an evidence that these 
services are necessary for the society.  
The importance of the health and social services sectors justified the need to concentrate 
on them the evaluation started in June 2019.  
3.1. Health sector  
3.1.1.  Importance, organisation and development of the health sector  
Health is one of the main components of a good life. In addition to having value in itself, 
good health also translates into a better chance of succeeding in education and in the 
labour market – ultimately contributing to e nhance opportunities for people to improve 
their standing in life.39  
The health sector plays a central role in modern societies: it helps people maintain and 
improve their health, and is therefore essential for social welfare.  
Substantial differences exist  in the way Member States ensure access and organise their 
healthcare systems. The organisation of healthcare regimes depends on the specific 
context of the Member States, their approaches and orientation. In particular, the health 
sector varies from one M ember State to another with regard to the exact role of 
healthcare providers or the financing schemes.40 In certain Member States , insurers are 
funding healthcare while in other Member States, it is the government that purchases 
care. As detailed in the exp ert study, Member States adopt the following types of models : 
                                                           
38  Interinstitutional Proclamation on the European Pillar of Social Rights  (OJ C 428, 13.12.2017, p. 10 ). 
39  OECD (2019), Health for Everyone?: Social  Inequalities in Health and Health Systems, OECD Health Policy 
Studies, OECD Publishing, Paris, https://doi.org/10.1787/3c8385d0 -en. 
40  One of the major differences relates to the purchaser of healthcare:  in certain Member States, the purchasing of 
healthcare is allocated to insurers, while in other Member states, it is the government or a health fund controlled by 
the government that purchases care, and in others the government own s the healthcare service s. 
 
 20  - A so -called Beveridge model or “national health service” under which the health 
system is financed through public taxes, the State directly finances organisations 
providing healthcare and univer sal health coverage is provided;  
- A Bismarck system or “social insurance system” where healthcare is financed 
through compulsory contributions (insurance contributions and contributions 
funding the healthcare activities provided by public or private providers) from 
employers and employees and the State provides healthcare coverage to people 
who are not contributing through their income.  
- Or a mixed system, where private funding from voluntary insurance schemes also 
plays an important role.  
The margin of discretion of the EU is limited when it comes to health. Article 6 TFEU  
provides that the competence of the Union is limited to suppo rt, coordinate, and 
supplement the actions of Member States in the protection and improvement of human 
health. In addition, Article 168(7) TFEU  provides a “sector -specific subsidiarity 
clause”.41 Moreover, the primary role of Member States in healthcare regulation has been 
confirmed by  the Charter of Fundamental Rights , which provides the right of everyone 
to access medical treatment  “under the conditions established by national laws and 
practices .”  
However, despite organisational and financial differences, healthcare systems are built on 
common values, as recognised by the Council of Health Ministers in 200642: universality, 
access to good quality care, equity43 and solidarity.  
To respect these principles of universality, access to good quality care, equity and 
solidarity, the intervention of the State in the health sector plays a central role.  
As stressed by the study on the financing models for public services in the EU and their 
impact on comp etition44, public  authorities need to intervene due to a large number of 
market failures related to (asymmetric) information problems, externalities, public goods 
and market power. Governments therefore respond to these market failures in different 
ways, wh ich generally take four main forms: (i) regulation (e.g. determination of the 
form of the healthcare system and its organisation, enactment of healthcare policies, etc.); 
(ii) public financing; (iii) public production (public ownership); and (iv) income tr ansfers 
to users of services.  
However, the national funding of the health sector, although critical for social welfare, 
can also have important competition implications. Certain public/publicly financed 
providers now compete with private operators. Indeed,  if in the past Member States often 
relied on public operators to provide health services, changing needs, societal challenges, 
and financial constraints have led to structural changes, resulting in gradual opening in 
some Member States for private operato rs to compete with the public providers.  
                                                           
41  According to Article 168(7) TFEU: “ Union action shall respect the responsibilities of the Member States for the 
definition of their health policy and for the organisation and delivery of health services and medical care. The 
responsibilities of the M ember States shall include th e management of health services and medical care and the 
allocation of the resources assigned to them ”. 
42  Council Conclusions on Common values and principles in European Union Health Systems (OJ C 146, 22.06.2006 , 
p.1). 
43  Equity relates to equal access according to need, regardless of ethnicity, gender, age, social status or ability to pay.  
44  European Commission, Study on the financing models for public services in the EU and their impact on 
competition, 2016.  
 
 21  In addition, the provision of medical services and the acquisition and subsequent use of 
complex medical devices and equipment are market activities that can have important 
spill-over effects on upstream and downst ream markets.  
State aid control plays a significant role in creating a level playing field between the 
healthcare providers.  
3.1.2.  Key figures and State aid expenditure related to the health sector  
The level of health spending in a country is dependent on a wide range of demographic, 
social and economic factors, as well as the financing arrangements and organisational 
structure of the health system itself45. In 2019, the government expenditure in the EU 
amounted to EUR 983 billion or 7  % of GDP46, to which shou ld be added direct 
payments by the patients and private insurance companies.  
These figures are more or less stable since 2012.47 However, with the COVID -19 crisis 
that severely restricted economic activity, and that increased  health spending, the ratio of 
health expenditure to GDP changed significantly. In 2020, government expenditure in the 
EU amounted to EUR 1 073 billion or 8.0  % of GDP48. This reflects both the extra health 
spending needed to combat COVID -19 and reductions in GDP caused by restrictions o n 
economic activity.  
In addition, it should be noted that according to the Member States’ biennial SGEI 
reports49, the total spending on SGEIs under Article 2(1)(b) of the SGEI Decision (i.e. 
notably hospital s providing medical care and emergency services) is only a fraction of 
the spending on health presented above, but has likewise increased signficiantly over the 
years and even more than inflation (see figure 3 below). Relative  to GDP however there 
is a smal l decrease in SGEI spending for hospitals providing medical care and emergency 
services since 2012. In 2012, Member States granted approximately EUR 86  billion in 
absolute terms, i.e. 0.0075  % of GDP, whereas in 2019, they spent approximately EUR 
95.3 bill ion in absolute terms, i.e. 0.0068  % of GDP . The evolution of SGEI spending for 
hospital SGEIs as percentage of GDP can be seen in figure 4.  
                                                           
45  OECD/Europe an Union (2020), Health at a Glance: Europe 2020: State of Health in the EU Cycle, OECD 
Publishing, Paris, https://doi.org/10.1787/82129230 -en.  
46  Eurostat, government expenditure on health: https://ec.europa.eu/eurostat/statistics -
explained/index.php?title=Government_expenditure_on_health .  
47  7.1 % of GDP from 2012 to 2015, 7.0% in 2016, a nd 6.9% in 2017 and 2018 (Eurostat, government expenditure on 
health: https://ec.europa.eu/eurostat/statistics -explained/index.php?title=Gov ernment_expenditure_on_health ). 
48  See https://ec.europa.eu/eurostat/statistics -explained/index.php?title=Government_expenditure_on_health .  
49  Pursuant to Article 9 of the SGEI Decision and paragraph 62 of the SGEI Framework, Member States shall submit 
a report on their compliance with the SGEI rules every two years. The reports are available online: 
https://ec.europa.eu/competition -policy/state -aid/legislation/sgei_en . 
 
 22  Figure 3 – Hospital spending in EUR million (Article 2(1)(b) SGEI Decision)  
 
Figure 4 – SGEI  spending under Artic le 2(1)(b) SGEI Decision as % of GDP50 
 
It follows from the above that the health sector constitutes a significant part of the 
expenditure of Member States and therefore makes a significant contribution to the EU’s 
economy. The financing of the EU’s healthcare is predominately provided by public 
funds. Indeed, the vast majority of funding for healthcare comes from general 
government revenues (such as taxation and levies)  together with mandatory social 
security contributions , which are then channelled to the health sector via the applicable 
procedures in the relevant Member State. Besides health as such, governments might also 
contribute with public funds to (social) health insurance, for example, by covering the 
contributions of particular population g roups or providing general budget support to 
insurance funds.51 Some Member States also have so -called risk equalisation schemes in 
place, whereby the different providers of (private) health insurance pay into a fund 
depending on the number of customers. Th e proceeds of the fund will then be 
redistributed to the same providers; however the insurance company or companies with a 
high risk customer base, or higher than the market average, will receive more from the 
fund than they had contributed52. 
                                                           
50  Unlabeled  lines concern Member States where the percentage was too low to visualise.  
51  OECD (2021 ), Health at a Glance 2021: OECD Indicators, OECD Publishing, Paris, 
https://doi.org/10.1787/ae3016b9 -en.  
52  Such a scheme for example exists in Ireland: Commission Decision SA.64337  (2022/N) of 31 March  2022, Risk 
Equalisation Scheme 2022 – Ireland  (OJ C 196, 20.5.2022 , p. 4 ).  80000850009000095000100000
2012 2013 2014 2015 2016 2017 2018 2019
Spending Article 2(1)(b) Inflation
BEFR
LVLT
LU
NLSKEU
0,000%0,500%1,000%1,500%2,000%2,500%3,000%3,500%4,000%
2012 2013 2014 2015 2016 2017 2018 2019
 
 23  3.1.3.  Case practice  of the Commission and relevant case law  
Between 2012 and June 2022, the Commission has adopted at least 23 decisions in the 
health and related sector. Among these decisions, 5 decisions were adopted under the 
2012 SGEI Package (based on the SGEI Decision53 or on the SGEI Framework54), 1 
decision55 was adopted under the Guidelines on State aid for rescuing and restructuring 
non-financial undertakings in difficulty56, 2 decisions were adopted directly under Article 
107(3)(c) TFEU57, 3 decisions concluded that the  measures were existing aids58 and 12 
decisions concluded that the measures do not constitute State aid within the meaning of 
Article 107(1) TFEU, either because the beneficiaries (for example public hospitals) do 
not exercise an economic activity and thus do not act as undertakings within the meaning 
of Article 107(1) TFEU59, either because the measure conferred no advantage to the 
beneficiaries60; either because the measure had a purely local impact and consequently 
had no effect on trade between Member Stat es61. 
In addition to the above -mentioned decisions, a number of decisions were adopted under 
the Temporary Framework  for State aid measures to support the economy in the current 
                                                           
53  See Commission decision of 5 July 2016 on State aid  SA.19864 - 2014/C (ex 2009/NN54) implemented by 
Belgium Public financing of Brussels public IRIS hospitals (OJ  L 351 , 22.12.2016 , p. 68 ) 
54  See Commission decision of 20 February 2013 on State aid SA.34515 (2013/NN) – Ireland Risk equalisation 
scheme for 2013 (OJ C 204, 18.7.2013 , p. 2 ); Commission decision of 29 January 2016 on State aid  SA.41702 
(2016/NN) – Ireland Ris k Equalisation Scheme (OJ C 104 , 18.3.2016 , p. 1 ), prolonged by Commission Decision of 
14 December 2020 on State aid  SA.58851 – Ireland Prolongation of the Risk Equalisation Scheme (OJ C 17 , 
15.1.2021 , p. 1 ); and Commission decision of 31 March 2022 on Sta te aid SA.64337 – Ireland Risk Equalisation 
Scheme 2022 (OJ C 196, 20.5.2022 , p. 4 ). 
55  See Commission decision 10 December 2014 on State aid SA.39426 (2014/N) Rescue aid to PICFIC in A.S., 
healthcare services operator in the Region of Lazio (OJ C 44, 6.2.2015 , p. 13  ) 
56  Communication from the Commission – Guidelines on State aid for rescuing and restructuring non -financial 
undertakings in difficulty, OJ C249, 31.7 .2014, p.  1. 
57  See Commission decision of 4 December 2013 on State aid SA.35679 (2012/N) – Germany Telemedicine 
Infrastructure in Saxony (OJ C10 , 14.1.2014 , p. 4 ); Commission decision of 14 April 2021 on State aid  SA.59176 
(2020/N) – Denmark Aid for the establishment of a notified body in Denmark (OJ C 177 , 7.5.2021 , p. 12 ).  
58  See Commission decision of 23 November 2017  on State aid SA.42268 (2017/E) – Germany State aid for the 
promotion of public welfare service s (OJ C 61, 16.2.2018, p. 4); Commission decision of 23 November 2017  on 
State aid SA .42877 (2017/E) – Germany CarePool Hannover GmbH  (OJ C 61, 16.2.2018, p. 4 ); See Commission 
decision of  on State aid SA. ; Commission decision of  on State aid SA.18879 – E 6/2006 – Ireland Unlimited 
guarantee in favour of the Voluntary Health Insurance Board (VHI)  (OJ C 363, 23.11.2012, p. 5).  
59  See Commission decision of 12 November 2020 on State aid  SA.39324 (2018/NN) – Estonia - Alleged aid to 
public hospitals listed in  the Estonian Hospital Network Development Plan (OJ C 421 , 4.12.2020 , p. 3 ), 
Commission decision of 4 December 2017 on State aid  SA.39913 (2017/NN) – Italy Alleged compensation of 
public hospitals in Lazio (OJ C 102 , 16.3.2018 , p. 3 ); Commission decision of 15 October 2014 on State aid 
SA.23008 - 2013/C (ex 2013/NN) implemented by Slovak Republic for Spoločná zdravotná poisťovňa, a.s (SZP) 
and Všeobecná zdravotná poisťovňa, a.s (VZP) (OJ L 41, 17.2.2015 , p. 25 ). 
60  See Commission decision of 15 October 2015 on State aid SA. 37624 – Slovakia Alleged illegal State aid  to Imuna 
Pharm (OJ C 44 , 6.2.2015 , p. 8 ) ; Commission decision of 18 August 20 16 on State aid  SA.43092 (2016/FC) – 
United Kingdom Complaint of Nurse Prescribers Ltd against the UK department of health (OJ C 425 , 18.11.2016 , 
p. 9); Commission decision of 23 October 2017 on State aid  SA.42028 (2017/NN) – Finland Alleged illegal State 
aid awarded to Yliopiston Apteekki Oy (UHP) (OJ C 422 , 8.12.2017 , p. 1 ); Commission decision of 24 March 
2020 on State aid SA.43546 (2016/FC) – Slovenia Alleged State aid to Lekarna Ljubljana (OJ C 144 , 30.4.2020 , p. 
3); See Commission decision of 21 Octob er 2016 on State aid SA.36798 (2016/NN) – Germany Alleged unlawful 
State aid scheme "Cash pooling of the undertakings owned by the City of Osnabrück (including Klinikum 
Osnabrück GmbH)" (OJ C 110, 7.4.2017, p. 4 ).  
61  See Commission decision of 29 march 20 15 on State aid SA.38035 (2015/NN) –Germany –Alleged aid to a 
specialised rehabilitation clinic for orthopaedic medicine and trauma surgery ( OJ C 188 , 5.6.2015 , p. 5); 
Commission decision of 29 April 2015 on State aid SA.37904 – Germany – Alleged State aid to medical center in 
Durmersheim (OJ C 188, 5.6.2015, p. 2); Commission decision of 29 April 2015 on State aid SA.37432 — Czech 
Republic –Funding to public hospit als in the Hradec Králové Region (OJ C 203, 19.6.2015, p. 2); Commission 
decision of 7 November 2012 on State aid SA.34576 Portugal –Jean Piaget North -east Continuing Care Unit (OJ C 
73, 13.3.2013, p. 1) . 
 
 24  COVID -19 outbreak (“the Temporary Framework”)62 in order to support undertakings  
active inter alia  in the health sector.63  
Among the Commission’s  decisions adopted in the health sector, 3 were challenged 
before the Union Courts  between 2012 and June 2022: a decision related to the Slovak 
health insurance64, a decision related to public  hospitals in Lazio65, and a decision related 
to the public pharmacy “Lekarna Ljubljana”66. The issues raised  in these cases  mainly 
relate to the distinction between economic and non -economic activities for healthcare 
providers.   
3.2. Social services  
Social services are of particular importance, as they are central to creating a caring, 
inclusive, and productive society. This has been recognised by the Council when stating 
that social services  “contribute directly to reinforcing social protection of ev ery citizen 
and they contribute to economic, social and territorial cohesion at local, regional, 
national and European levels while playing a fundamental role in job creation  […]” and 
that social services of general interest  “are person -oriented services, designed to respond 
to human vital needs, generally driven by the principle of solidarity and often rooted in 
(local) cultural traditions and contribute to the safeguard of fundamental rights and 
human dignity, to non -discrimination and to ensuring the cre ation of equal opportunities 
for all, therefore enabling individuals to play a significant part in the economic and 
social life of the society ”67.  
3.2.1.  Key figures and State aid expenditure  
In 2019, the general government expenditure in the EU -27 on ly on  social  protection68 
stood at EUR 2  699 billion, which is 19.3  % of GDP69. These figures were more or less 
stable between 2012 and 2019.70  
                                                           
62  C(2020) 1863 final (OJ C 091 I, 20. 3.2020 , p. 1) . 
63  See as an example Commission decision of 16 July 2020 on State aid  SA.57897 (2020/N) – the Netherlands 
COVID -19: Direct grant scheme for e -Health services at home under the Temporary Framework for State aid 
measures to support the economy in the curre nt COVID -19 outbreak (OJ C 260, 7.8.2020, p. 14).  
64  Commission decision of 15 October 2014 on State aid SA.23008 - 2013/C (ex 2013/NN) implemented by Slovak 
Republic for Spoločná zdravotná poisťovňa, a.s (SZP) and Všeobecná zdravotná poisťovňa, a.s (VZP) (OJ L 41, 
17.02.2015 , p. 25) . Judgment of the General Court of 5 February 2018 Dôvera zdravotná poistʼovňa, a.s. v 
Commission EU:T:2018:64. This case has been appealed ( See Judgment of the Court of 11 June 2020 , 
Commission  and Slovak Republic v Dôvera zdra votná poistʼovňa, a.s. , Joined Cases  C-262/18  P and C -271/18 P , 
EU:C:2020:450 ). 
65  Commission decision of 4 December 2017 on State aid  SA.39913 (2017/NN) – Italy A lleged compensation of 
public hospitals in Lazio (OJ  C 102 , 16.3.2018 , p. 3 ). See Judgment of the General Court of 2 June 2021Casa 
Regina Apostolorum della Pia Soc ietà delle Figlie di San Paolo v Commission EU:T:2021:315. This case is at the 
moment under appeal under the number C -492/21 P - Casa Regina Apostolorum della Pia Società delle Figlie di 
San Paolo v Commission. 
66  Commission decision of 24 March 2020 on St ate aid SA.43546 (2016/FC) – Slovenia Alleged State aid to Lekarna 
Ljubljana (OJ C 144 , 30.4.2020 , p. 3);  See Judgment of the General Court of 27 April 2022 Petra Flašker v 
Commission  Case T -392/20 EU:T:2022:245. This case is at the moment under appeal bef ore the Court of Justice in 
case C-447/22 P - Slovenia v Flašker and Commission . 
67  See Council conclusions of 6 December 2010, “social Services of General Interest: at the heart of the European 
social model ”, available at  https://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/lsa/118297.pdf .  
68  Defined as “Sickness and disability; old age; survivors; family and childre n; unemployment; housing; R&D; social 
protection and social exclusion n.e.c.” according to the classification of the functions of government (COFOG), 
developed in 1999 by the OECD (see: https://ec.europa.eu/eurostat/statistics -
explained/index.php?title=Glossary:Classification_of_the_functions_of_government_(COFOG)) .  
69  Eurostat, government expenditure on social protection, https://ec.europa.eu/eurostat/statistics -
explained/index.php?title=Governm ent_expenditure_on_social_protection .  
 
 25  However, in 2020, the government expenditure in the EU on social protection increased 
by 2.7 percentage points and amounted to  EUR 2 942 billion or 22  % of GDP. This is the 
strongest annual increase of the ratio since 1995. This was a consequence of decreases in 
the GDP in 2020 as well as increases in total expenditure on 'social protection' to mitigate 
the effects of the COVID -19 pandemic.71 
This amount can be split into several groups72: “old age” (11.3  % of GDP), “survivors” 
(1.6% of GPD), “sickness and disability” (3  % of GDP, mostly social insurance 
schemes), “family and children” (2  % of GDP), “unemployment” (2.2  % of GDP) and  
“housing” (0.3 % of GDP, mostly social protection payments to households to help with 
the cost of housing as well as the operation of social housing schemes).  
Social protection represented the largest area of general government expenditure in 2020 
in all EU Member States. The ratio of government social protection expenditure to GDP 
varied across EU Member States from 10.2  % of GDP in Ireland to 27.3  % in France.  
In addition , it should be noted that according to the  Member States’ biennial SGEI 
reports73, the total spending on SGEI under Article 2(1)(c) of the SGEI Decision (i.e. 
SGEIs meeting social needs) is only a fraction of the spending on social protection 
presented above. The reported spending on SGEIs meeting social needs made a sizeable 
jump between 2013 and 2014 (notably Belgium, Czechia, Finland, France, Ireland and 
the Netherlands reported significantly more spending than in 2012). For this reason, the 
spending is much more than what would be expected looking at inflation since 2012. 
Relative  to GD P SGEI spending for SGEIs meeting social needs has also increased since 
2012. In 2012, Member States granted approximately EUR 3.9 billion in absolute terms, 
i.e. 0.0003  % of GDP, whereas in 2019, they spent approximately EUR20.3 billion in 
absolute terms,  i.e. 0.002  % of GDP . The evolution of SGEI spending for SGEIs meeting 
social needs as percentage of GDP can be seen in figure 6.  
Figure 5 – Social services spending in EUR million (Article 2(1)( c) SGEI Decision)  
 
                                                                                                                                                                            
70  19.8 % of GDP in 2019, 20% of GPD in 2013, 19.9 of GPD in 2014, 19.7% of GPD in 2015 and 2016, 19.4% of 
GPD in 2017, 19.2% of GPD in 201, 19.3% of GPD in 2019 (Eurostat, government expenditure on health: 
https://ec.europa.eu/eurostat/statistics -explained/index.php?title=Government_expenditure_on_health ). 
71  Eurostat, government expenditure on social pr otection, https://ec.europa.eu/eurostat/statistics -
explained/index.php?title=Government_expenditure_on_social_protection .  
72  For the definition of the different groups, s ee Eurostat, Manual on sources and methods for the compilation of 
COFOG statistics, Classification of the Functions of Government (COFOG), 2019 edition, page s 226 -228, 
available at https://ec.europa.eu/eurostat/documents/3859598/10142242/KS -GQ-19-010-EN-N.pdf/ed64a194 -
81db -112b -074b -b7a9eb946c32?t=1569418084000 .  
73  Pursuant to Article 9 of the SGEI Decision and paragraph 62  of the SGEI Framework, Member States shall submit 
a report on their compliance with the SGEI rules every two years. The reports are available online: 
https://ec.europa.eu/competition -policy/state -aid/legislation/sgei_en . 0500010000150002000025000
2012 2013 2014 2015 2016 2017 2018 2019
Article 2(1)(c ) spending Inflation
 
 26  Figure 6 – SGEI spending under Article 2(1)(c) SGEI Decision as % of GDP74  
 
It follows from the above that social services (going beyond what is reported as SGEI) 
contribute significantly to the EU’s economy. The financing of the social services is 
provided predominately by public funds. Indeed, on average in the EU, social 
contributions financed over half (55%) of total expenditure on social protection in 2016. 
The general government contribution, coming from general taxation, accounted for 40% 
of funding, while other sources (such as int erest payments from financial investments) 
accounted for 5% of the total.75  
3.2.2.  Case practice of the Commission and relevant case law  
Between 2012 (adoption of the 2012 SGEI Package) and June 2022, the Commission has 
adopted a number of decisions concerning so cial services (notably services meeting 
social needs as regards childcare, access to and reintegration into the labour market, 
social housing and the care and social inclusion of vulnerable groups). Considering the 
wide scope and diversity of social servic es it is not possible to be exhaustive. Certain 
decisions concluded that the measure(s) at issue did not constitute State aid within the 
meaning of Article 107(1) TFEU76. Other measures were declared compatible with the 
internal market as they fulfilled the  conditions of the SGEI Decision77 or Article 
107(3)(c) TFEU78. 
In addition to the above -mentioned decisions, a number of measures for social services 
were approved under the Temporary Framework (see Section 3.3.1 )79 in order to support 
undertakings providing social services.  
                                                           
74  Unlabeled  lines concern Member States where the percentage was too low to visualise.  
75  Social protection expenditure and its financing in Europe: A study of national policies available at: 
https://ec.europa.eu/social/main.jsp?catId=738&langId= en&pubId=8253&furtherPubs=yes . 
76  See as an example Commission decision of 27 March 2017 on State aid  SA.38825 (2016/NN ) Alleged State aid to 
private providers of socio -sanitary services  (OJ C 219, 7.7.2017, p. 2). See as well Commission decision of 9 
Augu st 2016 on State aid  SA.38920 (2016/NN ) Alleged grant support to Santa Casa da Misericordia de Tomar 
(SCMT) (OJ C 406, 4.11.2016 , p. 6) . 
77  See as examples Commission decision of 4 April 2018 on State aid  SA.38469  - Sheltered employment in Sweden 
(OJ C 198,  7.7.2017 , p. 4) ; Commission decision of 17 March 2022 on State aid  SA.49313 Alleged illegal State aid 
to ENS (Ente Nazionale Sordi) (OJ C  204, 8.6.2018, p. 3 ). 
78  See as an example Commission decision of 23 July 2018 on State aid  SA.44664 (2016/FC) Alleged aid to 
HelpLink South (OJ C 360, 5.10.2018 , p. 3 ). 
79  See as an example Commission decision of 9 July 2020 on State aid  SA.57797 (2020/N ) COVID -19: Support to 
the social tourism sector (OJ  245, 5.10.2018, p. 3 ); Commission decis ion of 9 November 2021 SA.100306 COVID -
19: Extension of SA.61360 with increased budget (special transport in the Netherlands) (OJ C  469); Commission BECZFI
FRLVLT
LU
NLSL
EU0,000%0,500%1,000%1,500%2,000%2,500%3,000%3,500%
2012 2013 2014 2015 2016 2017 2018 2019
 
 27  3.3. Recent events: the COVID -19 pandemic and the Russian war of 
aggression against Ukraine  
3.3.1.  COVID -19 pandemic  
The COVID -19 pandemic impacted the entire economy and in parti cular  the health sector 
and social services.  
Recogni sing the COVID -19 pandemic as a major shock to the global and Union’s 
economies and the need to mitigate those negative repercussions on the EU economy, on 
19 March 2020, the Commission adopted the Temporary Framework, amended several  
times afterwards .80  
The aim of the Temporary Framework was to tackle the severe liquidity needs of 
undertakings due to the exceptional circumstances created by the COVID -19 pandemic. 
Unlike the 2012 SGEI Package, the  Temporary Framework was mostly based o n the 
second limb of Article 107(3)(b) TFEU, which constitutes an exceptional legal basis for 
compatibility with the internal market, according to which “ aid to remedy a serious 
disturbance in the economy of a Member State ” may be declared compatible. Havi ng 
recognised the COVID -19 pandemic as such a serious disturbance, in line with case law, 
the Temporary Framework laid down the conditions under which certain COVID -19-
realted measures would be compatible with the internal market. As such, the Temporary 
Framework has been developed to cater for an emergency situation and led to 
extraordinary financial commitments. The Temporary Framework expired on 30 June 
202281, with some exceptions82. 
Healthcare providers and social services providers could benefit from th e Temporary 
Framework. However, if those providers had already benefited from a compensation 
under the 2012 SGEI Package, the aid granted under the Temporary Framework could 
not lead to an overcompensation of the services provided under the SGEI rules.  
                                                                                                                                                                            
decision of 9 July 2020 on State aid  SA.57797 (2020/N ) COVID -19: Support to the social tourism sector (OJ C  
245, 24.7.2020, p. 12 ). 
80  Communication from the Commission C(2020) 2215 final of 3 April 2020 on the Amendment of the Temporary 
Framework for State aid measures to support the economy in the current COVID -19 outbreak (OJ C 112I, 
4.4.2020, p. 1 ), Communi cation from the Commission C(2020) 3156 final of 8 May 2020 on the Amendment of 
the Temporary Framework for State aid measures to support the economy in the current COVID -19 outbreak (OJ C 
164, 13.5.2020, p. 3 ), Communication from the Commission C(2020) 45 09 final of 29 June 2020 on the Third 
Amendment of the Temporary Framework for State aid measures to support the economy in the current COVID -19 
outbreak (OJ C 218 of 2 July 2020, p. 3 ), Communication from the Commission C(2020) 7127 final of 13 October 
2020 on the Fourth Amendment of the Temporary Framework for State aid measures to support the economy in the 
current COVID -19 outbreak and amendment to the Annex to the Communication from the Commission to the 
Member States on the application of Articles 107  and 108 of the Treaty on the Functioning of the European Union 
to short -term export -credit insurance (OJ C 340 I, 13.10.2020, p. 1 ), Communication from the Commission 
C(2021) 564 final of 28 January 2021 on the Fifth Amendment to the Temporary Framework f or State aid 
measures to support the economy in the current COVID -19 outbreak and amendment to the Annex to the 
Communication from the Commission to the Member States on the application of Articles 107 and 108 of the 
Treaty on the Functioning of the Europe an Union to short -term export -credit insurance (OJ C 34, 1.2.2021, p. 6 ), 
and Communication from the Commission C(2021) 8442 final of 18 November 2021 on the Sixth Amendment to 
the Temporary Framework for State aid measures to support the economy in the cu rrent COVID -19 outbreak and 
amendment to the Annex to the Communication from the Commission to the Member States on the application of 
Articles 107 and 108 of the Treaty on the Functioning of the European Union to short  term export -credit insurance, 
(OJ C 473, 24.11.2021, p. 1)  
81  Initially, the Temporary Framework was set to expire on 31 December 2020.  
82 In particular, investment and solvency support measures may still be put in place until 31 December 
2023.   Investment support was originally possible unti l 31 December 2022 but has now been extended to coincide 
with the expiry date of solvency support.   In addition, the Temporary Framework already provides for a flexible 
transition, under clear safeguards, in particular for the conversion and restructuring  options of debt instruments, 
such as loans and guarantees, into other forms of aid, such as direct grants, until 30 June 2023 . 
 
 28  In addition to the Temporary Framework, the Commission also adopted the Regulation 
(EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 
establishing the Recovery and Resilience Facility. This Regulation establishes the 
Recovery and Resilience Facility (RRF)83. The aim of the RRF is to mitigate the 
economic and social impact of the coronavirus pandemic and make European economies 
and societies more sustainable, resilient and better prepared for the challenges and 
opportunities of the g reen and digital transitions. The health sector and social services 
could  benefit from the RRF  in many cases . 
3.3.2.  Russian war of aggression against Ukraine  
On 24 February 2022, Russia launched an unprovoked and unjustified military 
aggression against Ukraine.  The EU and international partners immediately reacted to the 
serious violation of the territorial integrity, sovereignty and independence of Ukraine by 
imposing restrictive measures (for example, sanctions) against Russia and Belarus84.  
As a result, on 23  March 2022, the Commission adopted a Temporary Crisis 
Framework  to enable Member States to use the flexibility foreseen under  State aid rules 
to supp ort the economy in the context of Russia's invasion of Ukraine85. This Temporary 
Crisis Framework aims to mitigate the immediate social and economic negative 
repercussions in the EU, to preserve economic activities and jobs, and to facilitate the 
structural  adjustments needed in response to the new economic situation created by the 
Russian military aggression against Ukraine.  
Healthcare providers and social services providers can benefit from the Temporary Crisis 
Framework. However, if those providers have a lready benefited from a compensation 
under the 2012 SGEI Package, the aid granted under the Temporary Crisis Framework 
cannot lead to an overcompensation of the services provided under the SGEI rules.  
4. EVALUATION FINDINGS  
4.1. To what extent was the intervention successful and why?  
As noted in section 2.1.5  above, the 2012 SGEI Package aimed at clarifying basic 
concepts relevant for the application of the State aid rules to SGEIs. At the same time, it 
sought to simplify the rules for small SGEIs of a local nature and for social services; 
enlarge and deepen the competition scrutiny for large commercial SGEI; and give 
incentives to improve efficiency to large scale SGEIs.  
The objective of the present evaluation is to assess whether those objectives were  
successfully achieved and why. However, due to the scope of the evaluation (limited to 
healthcare and social services), the present evaluation does not assess, or does so only to 
a limited extent, whether the 2012 SGEI Package actually enlarged and deepen ed the 
competition scrutiny for large commercial SGEI, and whether it gave incentives to 
improve efficiency to large scale SGEIs. This is so because these objectives are 
inextricably linked to the application of the SGEI Framework, which applies to SGEIs 
with large compensation amounts. Healthcare and social services are by their very nature 
                                                           
83  https://ec.europa.eu/info/live -work -travel -eu/health/coronavirus -response/recovery -plan-europe_en#documents  
“Europe's moment: Repair and Prepare for the Next Generation” COM(2020) 456 final.  
84  Due to its role in facilitating Russia’s military aggressi on. 
85  Communication from the Commission Temporary Crisis Framework for State aid  measures to support the 
economy following the aggression against Ukraine by Russia  (OJ C 131I, 24.3.2022, p. 1 ). 
 
 29  covered for the most part by the SGEI Decision, reason why the abovementioned 
objectives are not assessed in the present evaluation.  
This evaluation focuses on assessin g whether the 2012 SGEI Package was successful in 
clarifying basic concepts relevant for the application of the State aid rules to SGEIs, and 
whether it managed to simplify the rules for small SGEIs of a local nature and for social 
services . It also analys es to what extent each of these objectives was achieved 
(effectiveness), how they were achieved (efficiency) and whether this was coherent with 
other EU polices (coherence) . 
4.1.1.  Effectiveness  
This section evaluates the extent to which the objectives of the 2012 SGEI Package have 
been achieved and also identifies the areas where effectiveness could be improved.  
The findings of the analysis on effectiveness are subject to the limitations stemming from 
the stakeholder consultation86.  
As described in detail in Section 2.1.5 , the overall objective of the 2012 SGEI Package 
was to support  Member States in funding SGEIs that are of key importance to citizens 
and society as a whole while preserving the key aspects of State aid control.  
In particular and as regard health and social services, the 2012 SGEI Package aimed to 
clarify certain concepts,  simplify  compatibility criteria and reduc e the administrative 
burden for Member States .  
In order to simplif y certain requirements, the scope of the sectors subject to the 
notification exemption was broadened and the threshold below which public 
compensation is not considered as State aid was increased to EUR 500 000 per 
undertaking and per three fiscal years (compared to  the general de minimis  ceiling of 
EUR 200 000  per three fiscal years).  
In order to  clarify certain State aid concepts,  the Commission in particular adopted the 
SGEI Communication which explains  inter alia , on the basis of the rulings of the Union 
Courts a nd of the Commission’s decisional practice, the concepts of  ‘undertaking’ , 
‘economic activity’, ‘State resources’ , and ‘effect on trade’. Moreover, the SGEI 
Communication  also clarifies key concepts of SGEI and provides guidance on the four 
Altmark  criteria . 
Overall, stakeholders are of the view that compared to the baseline scenario, the 2012 
SGEI Package met its objective. However, they are of the opinion that the rules could be 
clarified and simplified further.  
In the following, the extent to whi ch the 2012 SGEI Package clarified  and simplified  
certain concepts will be analysed.  
  
                                                           
86  That limitation is taken into account when analysing the results of the public consultation and, where possible, its 
impact has been mitigated by triangulating with o ther data sources . 
 
 30  SGEI Decision  
With the modification of the SGEI Decision, t he scope of the sectors subject to the 
notification exemption was broadened . Indeed, the scope of the  SGEI  Decision was 
extended as regards its application without any compensation threshold to certain social 
services. That meant that a large set of social services was as of the adoption of the 2012 
SGEI Package exempted from prior notification regardless of t he amount of the 
compensation, while aid directed towards other public service providers had to be 
notified if it exceed ed a threshold of EUR 15 million87.  
As a result, cases where the competition distortions brought about by the SGEI are 
limited, do not h ave to be notified to the Commission for prior approval, while the 
scrutiny for large commercial SGEIs was enlarged and deepened.  
Overall, stakeholders are of the view that the enlargement of the notification exemption 
for certain social services has facil itated the provision of health and social SGEIs as it has 
simplified the implementation of the rules88. Stakeholders agree  that it helped to reduce 
the administrative burden and the workload of public authorities. However, certain 
stakeholders also highlighted that the lack of clarity of certain concepts  could, to a certain 
extent, undermine the overall efforts of simplificat ion89. Those concepts are detailed 
below.  
Social housing  
The concept of “social housing” is not new and was already included in the 2005 SGEI 
Decision : 
Recital 16 of the 2005 SGEI Decision  Recital 11 of the 2012 SGEI Decision  
“[…] undertakings in charge of  social housing 
providing housing for disadvantaged citizens 
or socially less advantaged groups, which due 
to solvability constraints are unable to obtain 
housing at market conditions, should benefit 
from the exemption from notification provided 
for in thi s Decision […] ” “[…] undertakings in charge of social services, 
including the provision of social housing for 
disadvantaged citizens or socially less 
advantaged groups, who due to solvency 
constraints are unable to obtain housing at 
market conditions, should also benefit from the 
exemption from notification provided for in this 
Decision […] ” 
 
However, in recent year s the attention for and focus on the definition of social housing 
and the closely related term “affordable housing” has increased. This fol lows for example 
from the number of written questions on this issue that Members of the European 
Parliament  have asked the Commission . While during the 1999 -2004 Commission 
mandate only one written question concerned this topic, in the following terms the 
number of written questions increased significantly to seven or more. In the current 
ongoing term 2019 -2024 , already six questions on this topic have been asked.  
                                                           
87  Under the 2005  SGEI  Decision, only hospitals and social housing benefitted from the notification exemption 
regardless of the amount of compensation. For other services, including socials services, a threshold of EUR 30 
million applied. The 2012 SGEI Decision extended the notification exemption without threshold to social  services.   
88  To the question  in the public consultation : “Based on your experience, have the SGEI rules applicable to health and 
social services achieved the objectives listed below while maintaining a competitive internal market?: To simplify 
the State aid rules applicable to health and social services/SGEIs co mpared to the 2005 Package by exempting 
them from notification to the Commission? ”, 30% of the respondents have answered to a large extent and 42.50% 
to some extent.  
89  This point has been highlighted in particular by several public authorities’ representa tives.  
 
 31  Moreover, several stakeholders over the past few years have published written opinions, 
studie s and/or analyse s on the topic of social  and affordable housing90, which will be 
referenced below to the extent relevant  for the present evaluation. The focus  of 
stakeholders was largely on whether the definition of social housing as defined in recital 
11 of the SGEI Decision is too wide or too narrow. Those two very diverse views on 
complete opposite sides of the spectrum were also reflected in the replies to the public 
consultation carried out end 2019.  
To the question whether the definition of social housing (as laid down in recital 11 of the 
SGEI Decision) facilitated compliance with the SGEI rules applicable to health and 
social services, 24 respondents fu lly or partially agreed, while 10 respondents fully or 
partially disagreed. The other respondents did not know, had no opinion or were neutral.  
It appears from the replies received that respondents working for or caring about societal 
groups that are truly  vulnerable (i.e. homeless people) and respondents representing the 
private rental market agree with the current definition. For example, FEANTSA91 stated 
that it “considers that the scope of social services and the definition of social housing are 
sufficie ntly clear and leave significant discretion to [Member States] ” when asked  to 
elaborate on the question above. The International Union of Property Owners92 took the 
view that the definition of social housing is among “ the most effective provisions of the 
former Monti -Kroes package ”.  
Still, there is also a group that considers the definition of social housing laid down in 
recital 11 of the SGEI Decision as too strict and narrow. According to this group, there is 
a growing segment of citizens that do not have  the financial means to rent or buy housing 
on market terms, but are not considered disadvantaged citizens or socially less 
advantaged groups  and are therefore not entitled to social housing funded under the SGEI 
rules. These stakeholders explained notably  that: 
 “the definition for social housing is to o tight, "affordable housing" would be more 
useful ”.93 
 “The definition of social housing residents as necessarily being "disadvantaged 
citizens or socially less advantaged groups" limits public authorities' ability to 
ensure social diversity and avoid ghettoization. ”94 
 “The SGEI Decision  helped clarify the regulatory context in which social housing 
providers operate. There is, however, room for improvement regarding recital 11.  
This recital […] leads to confu sion as the group that is 'unable to obtain housing 
at market conditions' moved beyond 'disadvantaged citizens or socially less 
advantaged groups'.  
Today's market situation with regards to housing, is characterized by steep 
increases in housing costs, as is assessed by several studies […]  
This changed reality on housing markets should be taken in consideration when 
revising the SGEI Decision. ”95 
                                                           
90  See for example UN Habitat, Financing Affordable Social Housing in Europe, 2009.  
91   Fédération Européenne d'Associations Nationales Travaillant avec les Sans -Abri. 
92   A pan -European non -profit association.  
93  Public authority , national ministry . 
94  Public authority . 
 
 32  Reasonable profit  
As regards the concept of reasonable profit, which comes back both in the SGEI Decision 
and th e SGEI Framework, 20 stakeholders (39.2  %) that replied to the public consultation 
and that  have experience with the concept indicated that they face difficulties and that the 
concept is not always clear96. Three stakeholders  (5.9 %) indicated that they do not face 
any difficulties with the concept and a majority of 28 respondents (54.9  %) indicated that 
they do not know or that it is not relevant for them  (see figure 7) . The expert study 
confirmed this97. 
Figure 7 – Have you experienced difficulties in applying the “reasonable profit” 
requirement as explained in Article 5 of the 2012 SGEI Decision?  
 
The European Economic and Social Committee (“EESC”) published a report on the 
matter. In this report98, the EESC highlights the apparent complexity of the reasonable 
profit calculations, notably for local SGEIs. Currently, the SGEI Decision provides 
flexibility and allows different ways of calculating a reasonable profit99, if the relevant 
authorities want to add a re asonable profit to the compensation amount. According to the 
EESC, reasonable profit calculations involve hiring “costly consultancy services” that are 
out of reach for most SGEIs100. A report from the Commission for Economic Policy of 
the European Committee  of the Regions confirms this as it considers that local and 
regional authorities are insufficiently equipped to determine the reference points for a 
                                                                                                                                                                            
95  Association representing social housing sector . 
96  As example a general matter, stakeholders consider that the concept is not appropriate to the current market in 
particular for health and social services and for services provided at local level. Certain Stakeholders indicate that 
for health and social ser vices it is difficult to calculate the reasonable return on capital as these services are 
provided in certain Member States by non -profit organisations and these organisations do not have capital in the 
legal sense. Others indicated that the concept of “co mmercial risk” is inappropriate/or that the limitation to an 
upper limit of 100 basis points above the swap rate as reasonable profit for services that do not involve commercial 
risk is inappropriate. Indeed, stakeholders indicate that SGEIs are as a resul t not attractive. In addition, acquiring 
information to determine a reasonable profit can be challenging especially for activities with a social character. 
Public authorities also faced challenges to calculate the net costs and consequently Member States a pplied different 
approaches.  Applying the concept is considered, by many stakeholders are being too burdensome.  
97 Footnote Error! Bookmark not defined. , page 105 -106.  
98  Opinion of the European Economic and Social Comm ittee on the ‘Application of State aid rules for compensating 
the provision of services of general economic interest (Decision 2012/21/UE and Community Framework)’ , Own -
initiative op inion (OJ C 345, 13.10.2017, p. 45 ).  
99  The SGEI Framework is clearer and a dvocated IRR, while at the same time it leaves the door open also for other 
methods. The EESC calls upon the Commission to be more flexible and allow the use of different method (p oint 
4.9).  
100  Opinion of the European Economic and Social Committee on the ‘Application of State aid rules for compensating 
the provision of services of general economic interest (Decision 2012/21/UE and Community Framework)’ , Own -
initiative opinion (OJ C  345, 13.10.2017, p. 45, point 3.6 ).  

 
 33  reasonable profit101. The same report also provides an overview of which authorities and 
other stakeholders reported difficulties (either in the biennial SGEI report, the public 
consultation or in interviews) with complying with the reasonable profit requirements. 
Those that reported difficulties are geographically widespread, i.e. authorities in Czechia, 
Sweden , Poland, Latvia, Hungary, Germany, Belgium and Italy reported difficulties of 
some form.  
Several public authorities requested more guidance on the concept to facilitate the 
calculation of the reasonable profit and to adapt it to the market need. Certain Member 
States indicated that they do not allow SGEI providers to get a reasonable profit as part 
of the compensation due to the complexity of the concept102. For those stakeholders it 
appears that the existing guidance is not sufficient.  
A similar pattern a rises from an external study commissioned by the EESC that reviewed 
the Member States’ biennial SGEI reports103. This study shows that additional guidance is 
requested by the Member States104. The study recognises the flexibility that the 
Commission has shown in its case practice, despite the SGEI rules preferring the method 
to assess a reasonable profit using the internal rate of return105. The EESC external study 
also observes that some Member States do not allow a reasonable profit at all due to the 
difficulti es they have in calculating it.  
The EESC came back on the reasonable profit concept in an own initiative opinion from 
2022, essentially requesting further guidance and notably how to deal with undertakings 
that “ [keep] p loughing the profits back into [their] own activities  and [describe 
themselves] as a social economy entity or enterprise ”.106 
The European Committee of the Regions has also expressed its views on the concept of 
reasonable profit in a report from 2016. It calls upon the Commission to revise th e 
definition of reasonable profit, notably because an SGEI provider’s profit is often 
reinvested in SGEIs107.  
At the same time, there are also stakeholders that take the view that the reasonable profit 
calculations should not raise any significant diffic ulty108.  
Based on the above, the Commission services notice that a number of public authorities 
experience difficulties with the concept  and that some Member States are not using the 
                                                           
101  Alessandrini, Michele; Tarantino Salv atore; Zillmer, Sabine; Derszniak -Noirjean, Martyna, Commission for 
Economic Policy – European Committee of the Regions, Regions and cities providing SGEIs: identifying 
difficult ies resulting from the State aid framework, 2020, page 14 -15, 17 . 
102  Two nation al authoriti es and one regional authority . 
103  ESTAT Ltd, Review of Member States' reports on the implementation of the Commission  Decision on the 
provision of State aid to the provision of services of general economic interest, 2017.  
104  Footnote 103.  
105  The Commission has a pplied both capital -based (such as ROCE) as well as sales -based (such as ROS) profitability 
indicators, even though the 2012 SGEI Decision and 2012 SGEI Framework show a preference for assessing the 
profit on the basis of internal rate of return (IRR) on c apital employed in the provision of the SGEI in question.  
106  Opinion European Economic and Social Committee, State aid / health and social services - State aid rules 
applicable to health and social services – SGEI in a post -pandemic scenario. Thoughts and proposals on the 
Commission evaluation to amend the 2012 legislative package (own -initiative opinion), INT/981, adopted in the 
EESC plenary session on 19 May 2022, points 4.6 and 4.7, available at: https://www.eesc.europa.eu/en/our -
work/opinions -information -reports/opinions/state -aid-rules -applicable -health -and-social -services -sgei-post-
pandemic -scenario -thoughts -and-proposals -commission .  
107  European Committee of the Regions opinion, 119th plenary 10 -12 October 2016, ECON -VI/013, para graph  37.  
108  Cruz, Yábar, Pedro, Japsers Knowledge Economy and Energy Division, S taff Working Papers, The Application of 
State aid rules to the public financing of health care infrastructures, October 2013, page 18. In the targeted 
consultation four national authority  reported no or few difficulties.  
 
 34  possibility to grant compensation up to the reasonable profit for fear of bei ng in breach 
due to the complexity of calculating this profit. The Commission services acknowledge 
that acquiring information to determine a reasonable profit can be challenging, especially 
for activities with a social character  and that acquiring comparat ive data to determine the 
reasonable profit can be burdensome.  
SGEI Framework  
With the 2012 SGEI Framework, the  Commission enlarged and deepened the 
competition scrutiny for large SGEIs and gave incentives to improve efficiency to large 
scale SGEIs, in order to address the difficulties encountered in the application of the 
2005 SGEI package.  
The present evaluation  will not detail to which extent the objectives of the 2012 SGEI 
Framework  have been achieved . Indeed, as mentioned in the introduction to section 4.1, 
the present evaluation focuses on health and social services, which are generally assessed 
under the SGE I Decision . However, such measures could also be assessed under the 
SGEI Framework if they are for example considered to “meet social needs”, but not as 
regards health and long term care, childcare, access to and reintegration into the labour 
market, socia l housing and the care and social inclusion of vulnerable groups and exceed 
EUR 15 million per year (otherwise they could qualify as a general SGEI subject to an 
annual financing ceiling of EUR 15 million under Article 2(1)(a) of the SGEI Decision).  
Such  situations in which aid for social services should be assessed under the SGEI 
Framework are theoretical , as the Commission services have not encountered such a 
situation  yet.  
In any event, the considerations as regards reasonable profit in the previous se ction also 
apply to the SGEI Framework  as it refers to this concept as well109. 
SGEI Communication  
To address the difficulties encountered in the application of the 2005 SGEI package, the 
Commission adopted the SGEI Communication , aiming at clarify ing the key concepts 
underlying the application of the State aid rules to public service compensation . 
The SGEI Communication gives a comprehensive and practical overview of the EU State 
aid concepts relevant to SGEIs and provides explanations of key issues i n a single 
document. It summarises the most relevant case law of the EU Courts and the 
Commission’s decision -making practice. As a result, it aimed at facilitating the 
application of State aid rules for national, regional and local authorities as well as p ublic 
service providers.  
  
                                                           
109  See recital 33 and following of the SGEI Framework . 
 
 35  Economic and non -economic activities (concept of undertaking)  
In the SGEI Communication, the Commission clarified the distinction between economic 
and non -economic activities. Indeed, the Commission listed criteria relevant for this 
distinction in particular as regards social security schemes, healthcare services and 
education.  
The distinction between economic and non -economic activities is a core question for the 
application of the State aid rules to an activity, as SGEI rules o nly apply to economic 
activities because without economic activities there is no undertaking in State aid terms 
and hence no State aid.  
Although guidance on the distinction between economic and non -economic activities is 
provided through the SGEI Communic ation, the evaluation demonstrates that  the 
distinction is not always clear -cut.  
In the context of the external study, the notion of undertaking was consider ed “blurry” to 
a certain extent by certain stakeholders . They notably stressed that : 
- “The definition of an economic activity is not always clear -cut in the field of 
health and social services. A slightly simplified definition to be used in the context 
of the SGEI Framework  would be very welcome. In the same way, it would be 
appreciated if t he slightly simplified definition of an undertaking, used in article 
2, 2 of the regular de minimis  regulation (no 1407/2013) could also be used in the 
successor to the de minimis  regulation for aid to SGEI's (no 360/2012). ”110 
- “[…] nombre  d'actions réalisées par des associations à but non lucratif [sont 
assimilées]  à des [activités]  économiques comme le transport volontaire de 
malades, l'organisation de vacances sociales ou l'hébergement de personnes en 
perte d'autonomie. […] Il est import ant que le dispositif européen reconnaisse la 
voie médiane entre économique et services publics : le non marchand. ”111 
It should be stressed that the SGEI Communication does not take into account the recent 
jurisprudence of the European Courts in the healthc are sector. Indeed, the Court has 
recently clarified the distinction between economic and non -economic activities for this 
sector112. 
As part of the targeted consultation, some Member States113 indicated that the obligation 
under the SGEI rules to keep separate accounts is difficult to implement for entities 
carrying out economic and non -economic activities. Two other respondents to the 
targeted consultation114 considered that more guidance is nee ded in this respect, for 
example for services related to access and reintegration into the labour market.  
 
                                                           
110  Regional authority . 
111  An association repr esenting the rights of elderly.  
112 Judgment  of the General Court (Second Chamber) of 5 February 2018 Dôvera zdravotná poistʼovňa, a.s. v 
Commission ECLI:EU:T:2018:64. This case has been appealed ( see Judgment of the Court of 11 June 2020 , 
Commission  and Slovak Republic v Dôvera zdravotná poistʼovňa , a.s. , Joined Cases  C-262/18  P and C -271/18 P , 
EU:C:2020:450 ) and See Judgment of the General Court (Seventh Chamber) of 2 June 2021Casa Regina 
Apostolorum della Pia Società delle Figlie di San Paolo v Commission ECLI:EU:T:2021:315. This case is at the 
moment under appeal under the number C -492/21 P - Casa Regina Apostolorum della Pia Società delle Figlie di 
San Paolo v Commission. 
113  National authorities.  
114  National authorities.  
 
 36  Effect on trade  
With the SGEI Communication, the Commission clarified its understanding of Article 
107(1) TFEU  as interpreted by the Union Courts  and in particular the notion of effect on 
trade. This notion is particularly relevant as if  there is no effect on trade, then there is 
also no State aid and the SGEI rules would not come into play.  
The Commission clarified that where markets have been opened up to competition either 
by Union or by national legislation or de facto  by economic development, there is an 
effect on trade and State aid rules thus apply. It clarified as well that aid measure s can 
also have an effect on trade where the recipient undertaking does not itself participate in 
cross -border activities . 
Finally, the Commission recalled in the SGEI Communication that a ccording to the case 
law of the Court of Justice, there is no thresh old or percentage below which trade 
between Member States can be regarded as not having been affected115. The relatively 
small amount of aid or the relatively small size of the recipient undertaking does not a 
priori  mean that trade between Member States may  not be affected116. 
Regarding this last point, s everal stakeholders have pointed in the context of the 
evaluation  that in their view, there is a very low risk of distortion of competition and 
affectation of trade in the health and social services sector117: 
- “We take a very positive view of the latest decisions and resolutions of the 
Commission on investment measures in the health sector, in which it was stated 
that trade between the Member States was not affected. This includes the 
following State aid decision s: SA.37432 Czech Republic - Financing of public 
hospitals in the Hradec Králové region, SA.37904 Germany - Alleged State aid to 
a medical centre in Durmersheim, SA.38035 Germany - Alleged aid to a 
rehabilitation clinic specialising in orthopaedics and tra uma surgery ”118. 
- “Against  this background, we would welcome it if the Commission could update 
its SGEI Communication  from 2011 and highlight recent decision -making 
practice. It should be pointed out here that in the health sector the promotion of 
investments  and educational measures that are invested in the national health 
system are to be assessed as free of aid as they do not meet the criteria of 
affecting trade between the Member States. ”119 
- “[…] There is limited cross -border competition in [the health] sect or and the 
light touch approach is not unduly burdensome. Greater flexibility in the ability 
to make direct grants for purely local services would not distort the "market" as 
                                                           
115  Judgment of the Court of 24 July 2003 , Altmark Trans GmbH and Regierungspräsidium Magdeburg v 
Nahverkehrsgesellschaft Altmark GmbH, and Oberbundesanwalt beim Bundesverwaltungsgericht , C-280/00 , 
EU:C:2003:415 , paragraph 81.  
116  SGEI Communication, paragraph 39.  
117  Depending on the sector, 15 (access and reintegration into the labour market) to 25 (social housing) of the 
respondents expressed the view that the risk of distortion of competition is still lower than in other sectors.  
118  The Committee of the Regions in its opinion adopted during its 119th plenary session on 10, 11 and 12 October 
2016 (ECON -VI/013), also refers to the following decisions  where the Commission concluded on the absence of an 
effect on trade: Germany/Städtische  Projektgesellschaft "Wirtschaftsbüro Gaarden - Kiel" (SA.33149), 
Netherlands/Investment aid for Lauwersoog port (SA.39403), United Kingdom/Glenmore Lodge (SA. 37963), and 
United Kingdom/Member -owned golf clubs (SA.38208).  
119  European association represen ting public financial institutions. Almost identical comments were received from a 
similar association ac tive at national level.  
 
 37  these are not commercially driven, for profit activities but are intended to achi eve 
public interest objectives. ”120 
- “As things stand, there remains too much emphasis on avoiding the distortion of 
competition rather than effective delivery of SGEI. One reason for this is the legal 
uncertainty over what can constitute a distortion of comp etition. For example, the 
"effect on trade between member states" is often given as a restriction without 
any clear indication that that will be the case, and even if the recipient is not 
participating in cross -border trade at all. ”121 
One respondent also ma kes a link with the SGEI de minimis  Regulation. It indicates that 
authorities often require a “ de minimis  declaration”, while in reality this might not be 
needed as the funded activity does not have an effect on trade. Such a de minimis  
declaration also means that funding cannot exceed the EUR 500 000 cap122. 
The EESC in an opinion from 2022 shows that it is aware of the strict interpretation of 
the concept of no effect on trade; however, at the same time it explains that even when 
health and social services are provided in a market context, they “ have an essentially 
local dimension with no real demand -side cross -border relevance. The local dimension is 
even more evident when social and health services are managed by social economy 
entities  with the involvement of local communities, with a view to social cohesion and in 
the public interest .”123 
There are also stakeholders who indicated that the SGEI rules acknowledge the local 
nature of health and social services: “[The SGEI rules have] provid ed a clearer  
framework for public investment in the field of health and social SGEIs. In fact this has 
considered the local, cross -border and community dimension of public services and their 
difference in the management system. ”124 
Among the public authorities it was indicated that it is a priori  difficult to exclude an 
effect on trade for aid schemes and that ex-post assessing for example the nature of the 
projects and the aid amounts is administratively burdensome125. Another authori ty126 
explained that difficulties exist as regards healthcare at the regional level, in particular as 
regards services offered only in municipal districts. As regards social services, this 
authority considers it difficult to establish no effect on trade in b order regions. Moreover, 
it is of the opinion that the Commission does not consistently apply the criteria laid down 
in the Commission’s notice on the notion of aid127, which leads to insecurity. Six 
authorities128 have indicated that they experience no or only few difficulties with 
establishing whether an effect on trade is present.  
In case of complaints, the European Committee of the Regions takes the view that it is 
for the complainant and/or the Commission to pro ve that there is actually an effect on 
                                                           
120  Association active in the  health sector.  
121  Network of NGOs.  
122  Association of organisations active in the welfare sector.  
123  Footnote 106, point 3.6 and 3.7.  
124  Network of organization active in the reintegration of disadvantag ed workers on the labo r market.  
125  National Ministry.  
126  National authority.  
127  Footnote 10.  
128  Four national authorities and two regional authorities . 
 
 38  trade in relation to the measure complained about and not for the Member State 
concerned129. 
The Commission services note that due to the sectors concerned the services provided 
often have local dimension. However, the Commission services are of the view that i t is a 
priori  difficult to exclude an effect on trade  for all health and social service. In addition, 
they note that as regard this condition, the Commission is bound by judgements of the 
Union Courts130. Indeed, the Union Courts have consistently considered  that t he relatively 
small amount of aid or the relatively small size of the recipient undertaking does not a 
priori  mean that trade between Member States may not be affected . However, the 
Commission services also note that t he Commission has  considered,  in a number of 
decisions, in view of the specific circumstances of the cases, that measure s could have a 
purely local impact and consequently no effect on trade between Member States. As an 
example, the Commission concluded that funding of hospitals and o ther health care 
facilities providing the usual range of medical services aimed at a local population and 
unlikely to attract customers or investment from other Member States could not affect 
trade between Member States131. It should be stressed that in cert ain rare cases, despite its 
cross -border impact , a measure can be considered not to affect trade  if the impact of the 
measure is limited to local areas132. Indeed, certain activities have a purely local impact 
and consequently no effect on trade if (i) the b eneficiary supplies goods or services to a 
limited area within a Member State and is unlikely to attract customers from other 
Member States; (ii) it cannot be foreseen, with a sufficient degree of  probability, that the 
measure will have more than a margina l effect on the conditions of cross -border 
investments or establishment . 
Market failure  
In the SGEI Communication, the Commission clarified the Member States’ discretion in 
defining an SGEI and the Commission’s check for manifest errors of assessment.  
In particular, the SGEI Communication clarified that d espite Member States having a 
wide margin of discretion in defining an SGEI, not every service linked to health or 
social services can be an SGEI. The SGEI Communication provides indeed that an SGEI 
entrus ted to a provider needs to be a “particular task”133 that, if the provider would 
consider its own commercial interests it would not assume or would not assume to the 
same extent or under the same conditions134. In other words, the SGEI Communication 
provides t hat there is a need  to have a  market failure. This market failure is also relevant 
                                                           
129  Committee of the Regions, Opinion - State aid  and Services of General Economic Interest, 119th plenary session 
on 10, 11 and 12 October 2016 (ECON -VI/013), paragraph 15.  
130  For example, judgment of the Court of Justice of 14 January 2015, Eventech v The P arking Adjudicator, C -518/13, 
ECLI:EU:C:2015:9, paragraph 68.  
131  See, for instance, Commission Decisions in State aid cases N 543/2001 Ireland – Capital allowances for hospitals 
(OJ C 154, 28.6.2002, p. 4); SA.34576 Portugal – Jean Piaget North -east Conti nuing Care Unit (OJ C 73, 
13.3.2013, p. 1); SA.37432 – Czech Republic – Funding to public hospitals in the Hradec Králové Region (OJ C 
203, 19.6.2015, p. 2) ; SA.37904 – Germany – Alleged State aid to medical center in Durmersheim (OJ C 188, 
5.6.2015, p. 2) ; SA.38035 – Germany – Allege d aid to a specialised rehabili tation clinic for orthopaedic medicine 
and trauma surgery (OJ C 188, 5.6.2015, p. 3)  
132 See, for instance, Commission Decisions in State aid cases N 257/2007 Subsidies for theatre productions in the 
Basque country (OJ C 173, 26.7.2007, p. 1)  where the considered that the measure does have an effect on trade, 
despite the fact that that the Ba sque language is spoken both in France and in Spain. Indeed, th e Commission 
considered that the use of the Basque language is confined to a rather limited linguistic and geographical area.  
133  Article 106(2) TFEU.  
134  SGEI Communication, point 47.  
 
 39  when assessing whether State aid is present in the first place, namely in the context of 
assessing whether a measure confers an advantage upon the beneficiary135. 
A large numb er of  stakeholders considered that the clarification of the notion of market 
failure facilitate d the compliance with the SGEI rules applicable to health and social 
services , at least partially136. 
However, two Member States considered it difficult identifying a market failure.137 It 
should be recalled that markets constantly change and therefore the presence or absence 
of a market failure can change over time. In addition, there could be a market failure for a 
service in one Member State and not in an other Member State. The expert study has 
identified two market trends in the health sector that can affect the application of the 
2012 SGEI Package. For example, the liberalisation of the health sector (both healthcare 
provision and insurance) and the intr oduction of a health insurance risk equalisation 
scheme138. As regards the differences between Member States it should be noted that 
while in Latvia 72 % of the hospitals were public in 2017, in the Netherlands there were 
no public hospitals and 75 % were pr ivate for profit (the remaining 25 % were private not 
for profit)139. Also for social housing the approaches differ depending on the Member 
State, leading to different treatment of the (social) housing sector under the SGEI rules in 
different Member States140. 
Conclusion  
Overall, the Commission services observe that the evaluation demonstrates that the SGEI 
Communication contributed to the clarification and the simplification of the SGEI rules. 
However, some stakeholders indicated that they continue to experien ce difficulties with 
certain concepts.  
SGEI de minimis  Regulation  
One of the key problem s identified with the 2005 SGEI package concerned the 
excessively high administrative burden for small SGEIs.  The rules contained in the 2005 
SGEI package were deemed too complex and not adapted for small SGEIs . Small SGEIs 
could only fall outside the scope of State aid rules if the compensation did not exceed 
EUR 200 000 over any period of three fiscal years , which was the ceiling corresponding 
to the general de minimi s Regulation .  
To address this issue , the Commission adopted in 2012 t he SGEI de minimis  Regulation. 
With this Regulation, undertakings providing a SGEI can receive compensation of 
maximum EUR 500 000 over any period of three fiscal years , without it be co nsidered 
State aid as it is deemed not to affect trade between Member States and/or not to distort 
or threaten to distort competition .  
The evaluation found that the revised ceiling for the de minimis ceiling from EUR 200  
000 to EUR 500  000 for SGEIs (with the new SGEI de minimis  Regulation) is welcome  
                                                           
135  Judg ment of the General Court of 16 September 2013, Colt Télécommunications France v Commission, T -79/10, 
EU:T:2013:463, paragraph 154.  
136 To the question in the public consultation «  Did the factors below facilitate the compliance with the SGEI rules 
applicable to health and social services?” as regard market failure : 28 respondents agree at least partially, 7 
disagree at least partially and 16 don’t know or have a neutral view.  
137  National authorities.  
138  Footnote 77, page 45.  
139  Footnote  77, page 48.  
140  Footnote 77Error! Bookmark not defined. , page 64 -66.  
 
 40  as one of the greatest improvements of the 2012 SGEI Package141. The most notable 
simplification compared to the baseline scenario is that, with the introduction of the 
SGEI de minimis  Regula tion, Member States ha ve the possibility to grant up to EUR 500 
000 per three fiscal years,  instead of EUR 200 000 before ( under the general de minimis  
Regulation of 2006 in force at the time142). Indeed, the Commission considered that some 
of the advantages  granted to beneficiaries providing SGEIs are likely to constitute 
compensation for additional costs linked to the provision of SGEIs. Moreover, it 
considered that many activities qualifying as the provision of SGEIs have a limited 
territorial scope.  
The a doption of the SGEI de minimis  Regulation therefore clarified and simplified 
significantly the granting of SGEIs for providers which receive public se rvice 
compensations between EUR 200 000 and EUR 500 000. In addition, it reduced the 
administrative burden  for Member States as they no longer need to check compliance 
with the Altmark  criteria or fulfil the conditions of the SGEI Decision.  
However, certain stakeholders consider that there is a need to clarify the de minimis  rules 
further. It appears that certain concepts introduced in the modified general de minimis  
Regulation of 2013 differ from the SGEI de minimis  Regulation. The comments received 
both in the context of the present evaluation, but also in the context of the two 
prolongations of the SGEI de minimis  Regulation in 2018 and 2020, refer mainly  to those 
differences . These differences relate in  particular to the concepts of undertakings in 
difficulty , mergers and acquisitions and the concept of “ any one undertaking ” (see 
section 4.1.3 ). 
In addit ion, certain stakeholders consider that the ceiling of EUR 500 000 is not adapted 
to the current financing needs required for the operation of a n SGEI. Indeed, the de 
minimis  ceiling appears to be easily reached, with the average amount of State support 
increasing on average since 2012.   
33 of 67 respondents to the public and targeted consultations  expressed a wish to increase 
the threshold (e.g. to EUR 500 000 per social serv ices, EUR 750 000, EUR 800 000, or 
even EUR 1 million). This was confirmed during interviews carried out in light of the 
external study commissioned by the Commission.  
In 2016, the European Committee of the Regions also called for an increase to EUR 1 
million due to the often local context of SGEIs and because of this the lack of cross -
border distortion of trade or competition that would harm the internal market143. The 
European Committee of the Regions repeated its request for an increase in 2021, without 
however mentioning a desired ceiling144. 
Also, the EESC, in its recent own -initiative opinion considered the ceiling too low for 
health and social services145. 
As part of the result of the public consultation, o nly one stakeholder considered the 
threshold as bei ng too high and three considered the ceiling to be appropriate (4.5 % of 
the respondents) . 
                                                           
141  This result from the public consultation, the targeted consultation and the expert study.  
142  Commission Regulation  (EU) No 1407/2013 of 18 December 2013 on the application of  Articles 107 and 108 of 
the Treaty on the Functioning of the European Union to de minimis  aid (OJ 24.12.2013 L 352).  
143  European Committee of the Regions  opinion, 119th plenary 10 -12 October 2016, ECON -VI/013, para 38.  
144  European Committee of the Regions  opinion, 147th plenary 1 -2 December 2021, ECON -VII/015, para 52.  
145  Footnote  98, point 4.8.  
 
 41  The rest of the respondents (44%) don’t know whether the current threshold is 
appropriate, have a neutral view, have not apply the SGEI de minimis  or have not replie d 
to the question.  
Conclusion  
Based on the above, it appears  that overall the change to the SGEI rules introduced in 
2012 (i.e. the 2012 SGEI Package) facilitated the provision of health and social SGEIs. 
As an example, a majority of the stakeholders consider that  the introduction of the SGEI 
de minimis  Regulation did simplify the SGEI rules by allowing M ember States to grant 
up to EUR 500 000 as de minimis  aid compensation  (compared to EUR 200 000 before 
the introduction of the SGEI Package), even if they consider that the ceiling could be 
further increased.  
However, it also demonstrates  a call for further clarification of certain concepts, either 
related to the notion of State aid (i.e. economic/non -economic activity, effect on trade) or 
concepts use d in the SGEI rules (e.g. reasonable profit, market failure, etc.). The 
concepts were partly already included in the 2005 SGEI rules. It can therefore be 
concluded that despite the review of the SGEI Decision and the SGEI Framework in 
2011, the introductio n of the SGEI Communication and the SGEI de minimis  Regulation 
in 2012 and the publication of the SGEI frequently asked questions document in 2013, 
more clarity is still needed. Certain concepts, such as social housing, do not appear as 
such unclear but are considered as an obstacle in providing the SGEI a dapted to the 
population’s need.  
4.1.2.  Efficiency  
This section evaluates the efficiency of the rules applicable to health and social SGEIs 
and will focus mainly on the SGEI Decision, which is the act under which State aid for 
health and social services are usua lly assessed. The aim is to evaluate what the costs and 
benefits associated with the application of the requirements set by the rules for health and 
social SGEIs are. As part of this, the present section assesses whether the 2012 SGEI 
Package prevented competition distortions on the internal market and whether it clarified 
and simplified the rules to ensure that the  administrative burden for public authorities is  
not disproportionate.  
Findings of the analysis  
The analysis on efficiency is subject to the li mitations stemming from the stakeholder 
consultation.  
The lack of quantifiable costs and savings data has hampered analysis of the costs of the 
measures evaluated. Annual costs incurred by the national administrations are often 
difficult to estimate precis ely146. No stakeholder or known studies have been able to 
provide an estimation. Indications of the administrative burden were all qualitative.  
Out of the 51 respondents of the public consultation, 33 respondents did not have an 
opinion on whether the amount  of resources (for example money and personnel) spent on 
administrative activities with regard to health and social services changed, compared to 
                                                           
146  Similar to the conclusions in the Commission Staff Working Document on the fitness check, SWD(2020) 257 final 
of 30 October 2020, page 101.  
   
 
 42  the period 2005 -2012 when the 2005 SGEI package was still in force. However, 10 
respond ents have indicated tha t the resources spent on administrative activities have 
slightly increased or strongly increased, 1 that they have decreased and 7 that it remained 
unchanged compare to the period 2005 -2012 (see figure 13 below).  
Figure 13 – To what extent did the amount of resources (for example money and personnel) 
you spent on administrative activities with regard to health and social services change, 
compared to the period 2005 -2012 when the 2005 SGEI package was still in force?  
 
As an example of the additional costs,  one Member State indicated that the SGEI rules 
prompted the relevant department to recruit more specialised staff, participate in 
specialised seminars and train executives of managing authorities. Other stakeholders 
indicated that sometimes (expensive) ex ternal advice had to be hired.  
As regard the administrative burden, out of the 51 respondents of the public consultation, 
34 had no opinion on whether it has been reduced for public authorities or beneficiaries 
compared to the rules in force under the 200 5 SGEI package, 12 respondents agreed, at 
least partially, that the 2012 SGEI package reduced the administrative burden with regard 
to health and social services and 20 disagreed at least partially (see figure 14 below).  
Figure 14 – Question 29: Did the 20 12 SGEI package reduce the administrative burden 
with regard to health and social services compared to the rules in force under the 2005 
package?  
 
As examples of the administrative burden  for public authorities , the biennial reporting 
exercise was considered by one stakeholder as too burdensome (instead of every 2 years, 
this stakeholder considered a reporting exercise every 5 years to be more appropriate). 
Several stakeholders based in Germany referred to the apparent request from German 
authoritie s to provide a “ de minimis  declaration” in which the beneficiary confirms that 
the funding need will be limited to EUR 500 000 per three fiscal years so as to avoid the, 
in their view, more complicated and burdensome requirements associated with an 
entrust ment under the SGEI Decision.  

 
 43  Some stakeholders have however indicated that compared to the 2005 SGEI Package , the 
administrative burden both for public authorities and beneficiaries has decreased due to 
the notification exemption for health and social se rvices147, irrespective of the 
compensation amount and due to the adoption of the SGEI de minimis  Regulation . The 
enlargement of the scope of the notification exemption and the adoption of the SGEI de 
minimis  Regulation have therefore, in their view, signifi cantly simplified the rules .  
The expert study confirmed the above. It shows that t he 2012 SGEI Package has to a 
certain extent helped to reduce costs especially due to the notification exemption and the 
introduction of the SGEI de minimis  ceiling. However, a meaningful reduction of the 
administrative costs for public authorities has not been perceived, particularly due to the 
complexity of certain terms such as the definition of social housing and the distinction 
between an economic and no n-economic activity. The refore, the expert study concludes 
that the  time saved by the simplification and facilitation brought by the 2012 SGEI 
Package have not necessary led to a striking reduction in the administrative costs148.  
Conclusion  
The stakeholder s perceive the introduction of the SGEI de minimis  Regulation and the 
notification exemption for health and social services under the SGEI Decision 
(irrespective of the amount) as positive aspects of the 2012 SGEI Package , which 
simplified the application of the rules .  
However, it appears that  despite the positive elements, the administrative burden for 
public authorities and the amount of resources spent on administrative activities with 
regard to health and social services appear not to have necessarily decreased compared to 
the period 2005 -2012 , when the 2005 SGEI package was in force . While none of the 
respondents to the consultations provided precise costs and benefits associated with the 
application of the rules for health and social SGEIs, the evalua tion suggests that the costs 
associated with the application of the requirements set by the SGEI rules and the 
administrative burden for public authorities could be further reduced , in particular with 
regard to the monitoring of the SGEI de minimis  Regulat ion and transparency  
requirements.  
4.1.3.  Coherence  
In order to assess the coherence of the 2012 SGEI Package, the questions asked aimed at 
understanding notably whether the SGEI rules were externally (i.e. with other EU rules) 
and internally (within the 2012 SG EI Package) coherent.  
  
                                                           
147 To the quest ion in the public consultation “ Did the 2012 SGEI package reduce the administrative burden with 
regard to health and social services compared to the rules in force under the 2005 package? ”, 6 respondents 
agreed, at least partially , as regards the administrative burden for public authorities and 6 respondents agreed, at 
least partially , as regards the administrative burden for public authorities.  
148 The expert study stresses that the majority of respondents (8 respondents out of the 1 5) to the targeted consultation 
launched by DG Competition indicated that the new level of administrative burden is rather stable in comparison to 
the situation existing with the previous package.  
 
 44  Findings of the analysis  
This section aims at answering to the following questions (i): How well do the 2012 
State aid rules for health and social SGEIs correspond to the wider EU policy applicable 
to health and social SGEIs - such as Article s 14 and 168 TFEU and Protocol 26 to the 
TFEU – and to other State aid instruments? and (ii) How do th e 2012 State aid rules for 
health and social SGEIs compare to, complement and interact with other State aid 
instruments? This section also aims at answering the query of whether (iii) the 2012 
SGEI Package as applicable to health and social SGEIs is intern ally consistent and 
coherent, and whether there are any overlaps, contradictions or missing links between the 
Decision, the Framework and  the Communication , which would run counter to the 
objective of simplification and clarification  of the 2012 SGEI Packa ge. 
Respondents were asked whether the SGEI rules, insofar as they are applicable to health 
and social services, are coherent with each other. Approximately 35% of respondents 
said they are (fully or partly) coherent, 20% replied that they are (fully or partly)  
incoherent, 20% were neutral and 25% did not know (see figure 17).  
Figure 17 – Are the SGEI rules (the SGEI Decision, SGEI Framework, SGEI 
Communication, SGEI de minimis  Regulation) insofar as they are applicable to health and 
social services coherent wi th each other ? 
 
Coherence with S tate aid rules  
Although there appears to be a general consensus on the existence of coherence, s ome 
submissions pointed out to some potential differe nces with other State aid rules  and 
provided suggestions for changes to clarify the articulation between the 2012 SGEI 
Package and other EU rules.  
On the coherence of SGEI rules with new EU legislation / initiatives, authorit ies 
explained that services to ensure access to and reintegration into the labour market are 
covered both by the SGEI Decision and GBER, where different conditions are attached 
to funding such services. Others proposed that, in order to improve the 2012 SGE I 
Package it would be good to consider how the interaction of the Package with other rules 
could be optimized, for example how the SGEI rules regarding the health sector are 
coherent with several categories in the GBER, in particular the RDI (Research 
deve loppement and innovation) rules.  

 
 45  In addition, it appears that there are certain misalignments between the general and the 
SGEI -specific de minimis  Regu lations. Misalignments  could also be observed with the 
SGEI Decision.  
Concept of a ny one undertaking  
In the SGEI de minimis  Regulation, the EUR 500 000 ceiling per three fiscal years 
applies to “any one undertaking” as opposed to “single undertaking” in the g eneral de 
minimis  Regulation.  The Commission services note that the concept of “any one 
undertaking” under the SGEI de minimis  Regulation could be interpreted in a  more 
lenient way than the concept of “single undertaking” under the general de minimis  
Regulation, which is strictly defi ned in  its Article 2(2) . As part of the Advisory 
Committees held in the context of the two prolongations of the SGEI de minimis  
Regulation, certain Member States suggested to include the concept of “single 
undertaking” also in the SGEI de minimis  Regulatio n149.  
Concept of u ndertakings in difficulty  
Two public authorities and one stakeholder in the field of healthcare explained that the 
SGEI de minimis  Regulation excludes undertakings in difficulty and should be 
harmonised with general de minimis  Regulation, which does not exclude undertakings in 
difficulty, but also the SGEI Decision where no reference to undertakings in difficulty is 
made.  
In the context of the two prolongations in 2018 and 2020, 13 Member States considered 
that the exclusion o f undertakings in difficulty in the SGEI de minimis  Regulation posed 
implementation problems150. Those considerations should be seen in light of the general 
de minimis  Regulation, which does not contain such an exclusion151. The Commission 
had already temporarily removed the exclusion of undertakings in difficulty from the 
SGEI de minimis  Regulation in the context of the COVID pandemic152. This exclusion 
expired on 30 June 2021 and was not prolonged; hence, undertakings in dif ficulty are 
currently excluded from SGEI de minimis  compensation.  
Inclusion of provisions on mergers and acquisitions  
Two Member States153 have noted a different treatment of mergers and acquisitions when 
granting de minimis  aid depending on the applicable de minimis  Regulation. In this 
respect, Article 3(8) of the general de minimis  Regulation states that “ In the case of 
mergers or acquisitions, all prior de minimis aid granted to any of the merging 
undertakings shall be taken into account in determining whether any new de minimis aid 
to the new or the acquiring undertaking exceeds the relevant ceiling. De minimis aid 
lawfully granted before the merger or acquisition shall remain lawful. ” Those Member 
States consider that a similar provision should also be  included in the SGEI de minimis  
Regulation.  
 Entrustment act  
                                                           
149  11 M ember States.  
150  13 Member States.  
151  See also: Sinnaeve, Adinda, The Complexity of Simplification: The Commission’s review of the de minimis 
Regulation, EStAL 2, 2014, p. 275.  
152  Commission Regulation (EU) 2020/1474 of 13 October 2020 amending Regulation (EU) No 360/20 12 as regards 
the prolo ngation of its period of application and a time -bound derogation for undertakings in difficulty to take into 
account the impact of the COVID -19 pandemic  (OJ L 337, 14.10.2020, p.1 ).  
153  Two Member States.  
 
 46  One respondent explained that the entrustment requirement under the SGEI Decision  
could  be confus ed with the entrustment required by the  SGEI de minimis  Regulation. 
Apparently, o ften stakeholde rs do not realise  that also for SGEI de minimis  Regulation  
some form of entrustment is needed.   
Coherence with o ther EU rules  
A respondent pointed out that the  SGEI rules are internally coherent, but should be  
align ed with the Services Directive154 and the Public procurement Directive155, and with 
the case law of the Court of Justice156.  
Two stakeholders believe that the SGEI rules are not coherent with Protocol 26 , Article 
14 of the TFEU  (see Annex 7) , the Charter of Fundamental Rights and the EU Pill ar of 
Social Rights, which, in their view, provide the relevant frameworks for EU policies 
relating to pub lic services, including EU State aid rules for SGEI .  
Finally, respondents also expressed themselves with regard to coherence of SGEI rules 
with the T reaties and EU sectoral legislation (Article 3  of the  SGEI Decision). One 
national health ministry put forward that in order to ensure that projects comply with the 
relevant conditions, the public administration spends huge administrative resources on 
setting up an SGEI compensation scheme and the beneficiaries equally spend a lot of 
resources on ensuring implementation and follow -up of the SGEI projects.  
Conclusion  
Based on the above , it appears that overall the SGEI rules are coherent within the 2012 
SGEI package; however, there is a need to clarify/simplify further the rules to ensure  
stronger coherence between the general and the SGEI de minimis  Regulations as regards 
the notion of “single undertaking ”, the provisions on mergers and acquisitions , and the 
application of the de minimis  rules to undertakings in difficulty , which should be 
addressed to simplify further the enforcement of both Regulations. In addition, there is a 
call for better coherence between the SGEI rules and Protocol 26 annexed  to the TEU 
and TFEU on services of general interest ; Article 14 TFEU ; the Charter of Fundamental 
Rights ; and the European Pillar of Social Rights , to ensure clarity within EU rules and to 
simplify their enforcement .  
4.2. How did the EU intervention make a dif ference?  
This question seeks to assess whether the 2012 SGEI Package allowed for a better task 
allocation between the Commission and Member States and whether the rules helped in 
ensuring legal certainty.  
4.2.1.  Findings of the evaluation  
Respondents were asked whether the 2012 SGEI Package allowed for a better allocation 
of tasks between the Commission and the Member States; while 21.6  % did not know 
and 15.7  % had a neutral view, the remaining replies were equally divided between 
                                                           
154 Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the 
internal market  (OJ L 376, 27.12.2006, p. 36 ). 
155 Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement  
(OJ L 94, 28.3.2014, p. 65 ). 
156 This resp ondent attaches particular importance to the judgement of the Court of Justice of 8 S eptember 2011, Paint 
Graphos  e.a , Joined Cases C -78/08 to C -80/08, EU:C:2011:550 . 
 
 47  opposite  views with 33.3  % (partially or fully) agreeing and 29.4% (partially or fully) 
disagreeing (see figure 18).  
Figure 18 – Has the 2012 SGEI Package allowed for a better allocation of tasks between the 
Commission and Member States?  
 
 
Some respondents are u nder the impression that Member States cannot define themselves 
what a public need is and that the Commission should take into account the specific 
characteristics of every Member State. In the same vein, an association expressed the 
view that the inclusio n of additional quality and efficiency considerations is not 
something for the Commission to decide, but rather something that must be left to local 
authorities. Another stakeholder in the field of social housing considers that the same 
applies to housing and that policies in this area should be left to Member States. This 
stakeholder also considers the current definition of social housing in the 2012 SGEI 
Decision questionable from a subsidiarity and proportionality perspective in the context 
of the wide m argin in which Member States and local authorities have to organise their 
SGEIs.  
Other voices also expressed the view that the funding and provision of health and social 
services to the (vulnerable part of the) population at affordable conditions should b e left 
to Member States alone and not be subject to State aid rules.  
In the targeted consultation, the public authorities that replied generally consider that the 
2012 SGEI Package brought about a better division of tasks, but they would at the same 
time w elcome more methodological guidance. In addition, remarks were made as to the 
lack of reflection in the SGEI rules of the different kinds of subsidised housing, which at 
times could lead to different approaches to the management of social housing across th e 
different Member States.  
A national health ministry and a ministry in charge of education explained that the 
distinction between SGEIs and other services is a complex process and that limited 
guidance on making this distinction is available.  
A national authority explained that the reporting obligation laid down in Article 9 of the 
SGEI Decision is very burdensome and should be relaxed or simplified. The same 
authority considers social housing a purely national competence and not at all an EU one. 
Another  national authority explains that different kinds of subsidised housing exist in all 
Member States, and that this should be reflected in the 2012 SGEI Decision.  

 
 48  The expert study explains that according to the stakeholders, the competencies of those  
responsible to define social housing should be clarified. Currently, the EU is not 
competent for social housing as such, though it is competent for controlling State aid 
provided to social housing. In the framework of State aid control, the SGEI Decision 
provides a definition of social housing at EU level which Member States must comply 
with in order to benefit from the notification exemption.  
In addition, the expert study explains that certain public authorities and EU associations 
questioned the perimete r of the social housing target group from a subsidiarity 
perspective. According to those authorities and associations, the provision of social 
housing is a Member State competence; hence, the EU, which is not competent for social 
housing, should not interf ere with Member States’ social housing policies. The expert 
study also notes that public authorities are more aware of their national contexts than the 
Commission is. In this light, it followed from interviews with public authorities that it 
should therefo re be up to national and local authorities to determine which categories of 
the population should be eligible for social housing and under what circumstances. In 
addition, the need to safeguard competition in the social housing market is minimal since 
the risk of distortion of competition in the internal market is low. Hence, there would be 
no need for the Commission to intervene and define a target group for social housing.  
The expert study highlights though that other stakeholders advocate the contrary by  being 
in favour of a more detailed target group and clearer delineation of the competencies 
between Member States and the Commission157. In other words, they question the 
discretion that Member States have in framing social housing at national level  and tar get 
groups without a Commission intervention. They thus advocate for a clearer social 
housing definition at EU level, leaving less discretion to Member States.  
In addition, the 2012 SGEI Package also led to the clarification of the rules on the 
provision o f State aid to ensure that the trajectory of State aid expenditure is clearer at 
national level. The added value of the 2012 SGEI Package lies in ensuring that the rules 
on State aid are maintained. However, this added value varies according to the nationa l 
context and the way in which Member States consider healthcare and/or social housing as 
services of general economic interest.  
According to the expert study, the 2012 SGEI Package is a continuation of the 2005 
SGEI Package, with certain adaptations. Seve ral s takeholders considered that this 
continuity has improved legal certainty and has provided a stable legal environment for 
Member States, SGEI providers and other stakeholders. This legal certainty has been 
developed with stakeholders maturing their kno wledge since the 2005 SGEI Package. 
Certain stakeholders158 from Member States that do not consider hospitals and/or social 
housing as an SGEI underlined that considering these sectors as a SGEI in their Member 
State would be welcomed since it would (i) pave  the way for a clearer set of rules and (ii) 
facilitate the provisions of State aid. Again, this point echoes the view of certain 
stakeholders for which the 2012 SGEI Package contributes to the establishment of legal 
certainty to the environment in which h ospital and/or social housing providers operate. 
This legal certainty and transparency are essential for providers to gain access to 
predictable sources of financing.  
As explained in the same expert study, when considering the added value of the 2012 
SGEI  Package, it is necessary to consider the situation should the Package not be in 
                                                           
157  Several EU and national association active in the social housing sector and few publi c authorities . 
158  National stakeholders consulted in the course of the external study . 
 
 49  place. Under such circumstances, the legal framework would be general EU competition 
law and Member States would have to notify all State aid provided which would lead to a 
greater administrative and financial burden for all parties involved. Moreover, in the 
absence of the 2012 SGEI Package, a lack of clarity would exist, with a lack of guidance 
in place on key concepts and methods such as the estimation of net cost and the 
avoidance of overcompensation. The guidance provided in conjunction with the 2012 
SGEI Package was identified by stakeholders consulted through the study as of 
considerable added value, including the Commission’s guide to the application of EU 
rules on State  aid through frequently asked questions.  
4.2.2.  Conclusion  
Respondents broadly agree that  the 2012 SGEI Package brought a better division of tasks 
between Member States and the Commission, but more methodological guidance from 
the Commission would be welcomed. In  addition, certain stakeholders consider  that 
Member States should be able to define themselves what public need means in the 
national context and that the Commission should take into account the specific 
characteristics of each Member State.  
As regards th e legal certainty ensured by the 2012 SGEI Package , many respondents to 
the expert study consider that the 2012 SGEI Package did manage to provide  a stable 
legal environment for Member States, SGEI providers and other stakeholders and has 
provided an added value in this sense.   
4.3. Is the EU intervention still relevant?  
This section assesses  whether the objectives of the SGEI rules applicable to health and 
social services still correspond to the needs within the EU. In a first step, it examines 
whether the SGEI rules are adapted to the developments of society, markets and social 
policy. In other words, whether the distortion of competition with regard to  health and 
social SGEIs is (still) less compared to other sectors. In a second step, it examines how 
well the rules are understood by Member States.  
4.3.1.  Findings of the analysis  
The analysis on relevance is subject to the limitations stemming from the stakeh older 
consultation.  
As indicated in Section  1.4, the public consultation as well as the targeted consultations 
took place before the COVID -19 crisis and the Russian war of aggression against 
Ukraine. Hence, possible misalignments with new general policy goals were perhaps not 
fully visible to stakeholders.  
31 out of 51 stakeholders consider that the SGEI objectives for health and social services 
correspond at least to some extent to today’s (EU internal) market situation and are thus 
relevant.  
 
 
 
 
 
 50  Figure 15 – How well do the objectives of the 2012 SGEI Package as applied to health and 
social services still correspond to today’s (EU internal) market situation?  
 
7 respondents to the public consultation stated that the SGEI objectives for health and 
social services do not at all correspond to the current EU priorities.  
While many respondents consider the SGEI rules to be relevant, only a limited number of 
respondents elaborated o n their answer, referring to specific parts of the SGEI rules that 
they do not consider to be relevant.  
It follows from figure 16 that the highest percentage for the parts of the SGEI rules no 
longer to be considered relevant are the obligation to avoid o vercompensation and, in 
case of overcompensation, to recover it (both 6 out of 51 or 11.8  %). However, 16 out of 
51 respondants  do consider those two parts relevant to a large or some extent.  

 
 51  Figure 16 – To what extent does each separate element of the 201 2 SGEI Decision 
correspond to the (EU internal) market developments in the field of health and social 
services that have occurred since 2012? In other words, do these elements still serve a 
purpose? (in number of respondents)  
 
In the (qualitative) comment s in response to the questions in the public consultation 
related to relevance, a respondent advocated for the specific recognition in the SGEI 
rules of operators active in the so -called “social economy” (i.e. where profits can be 
made but they will not be  distributed to shareholders)159. In the respondent’s view, this 
would make the SGEI rules even more relevant. This is in line with the call from the 
EESC160 and other organisations161 to recognise the special position of social economy 
enterprises.  
Another comment was that the SGEI rules should aim at ensuring quality public services 
for all citizens and not just for the most vulnerable ones and that ensuring quality services 
should take precedence over internal market and competition rules162. 
The external st udy concludes as well that certain  provisions of the SGEI rules could be 
further adapted to respond to evolving needs at national level , namely the definition of 
social housing, the SGEI de minimis  ceiling and certain provisions related to healthcare.  
                                                           
159  Two organisations active in mutual insurance.  
160  See footnote 98, paragraph 4.7, 4.9 and 4.11.  
161  For example: Social Economy Europe, White Paper – Social Economy... Taking back the initiative, Proposals to 
make the social economy into a pillar of the European Union (201 5), available at: 
https://www.socialeconomy. eu.org/wp -content/uploads/2020/02/White -Paper -SEE.pdf , page 20.   
162  Association of organisations active in the welfare sector.  

 
 52  4.3.2.  Conc lusion  
Based on the above, it appears  that the objectives of the 2012 SGEI package are, to a 
large extent, appropriate for meeting the needs within the EU  as regards health and social 
services . However, the potential impact and the uncertainties brought by the COVID -19 
crisis and the Russian war of aggression against Ukraine cannot be fully evaluated yet.  
The analysis suggests that further adaptation may be considered to fully meet the needs 
of statkholders such as the recognition in the SGEI rules of operators active in the so -
called “social economy” or the recognition of quality services.  
5. WHAT ARE THE CONCLUSI ONS AND LESSONS LEAR NED? 
5.1. Conclusions  
The present evaluation aims at assessing the State subsidy rules for health and social 
services of general economic interest as well as the SGEI de minimis  Regulation..  
The findings of the analysis are subject to the limitations stemming from the stakeholder 
consultation. The results of the evaluation also need to be interpreted in the light of the 
COVID -19 crisis and the Russian war against Ukraine because future policy -making 
cannot disregard the imbalances created in the Member States’ economies due to them . 
The fact -finding and assessment were done before the COVID -19 pandemi c and before 
the Russian war against Ukraine.  
The evaluation  suggests that the 2012 SGEI Package is effective  regarding the objective 
of clarification and simplification . Indeed, the 2012 SGEI Package did simplify the 2005 
SGEI package with, for instance, the introduction of an SGEI -specific de minimis  
Regulation. It also clarif ied certain basic concepts relevant for the application of the 
SGEI rules. However, the evaluation indicates that there is still room for improvement , in 
particular to clarify certain concepts such as economic/non -economic activity, effect on 
trade, reasonable profit, mar ket failure  and social housing . Moreover, from the evaluation 
it appears that there could be a need to increase the SGEI de minimis  ceiling and to align 
the SGEI de minimis  Regulation  with the general de minimis  Regulation.   
With regard to efficiency , the evaluation suggest s that the SGEI de minimis  Regulation 
and the modification of the SGEI Decision  have had a positive impact on the reduction of 
the administrative burden  of public authorities . However, there still seems to be room for 
improvement to decre ase this burden , in particular with regard to the monitoring of the 
SGEI de minimis  Regulation and transparency  requirements. The evaluation  also 
suggests that costs associated with the application of the requirements set by the SGEI 
rules should be reduced.  
With regard to coherence , the evaluation suggests that the State aid rules that make up 
the 2012 SGEI P ackage  are internally  coherent. It  appears however that there is a need 
for stronger coherence between the 2012 SGEI Package and Protocol 26  on services of 
general interest  annexed to the TEU and TFEU, Article 14 TFEU, the Charter of 
Fundamental Rights and the European Pillar of Social Rig hts. In addition, there appear to 
be certain misalignments between the general and the SGEI -specific de minimis  
Regulations as regards the notion of “single undertaking ”, the provisions on mergers and 
acquisitions , and the application of the de minimis  rules to undertakings in difficulty . 
Overall , the existence of the SGEI rules subject to the evaluation has an EU added value  
that is acknowledged by stakeholders . Indeed, there appears to be  a broad agreement that 
 
 53  the 2012 SGEI Package brought a better division of tasks between Member States and 
the Commission, although  more methodological guidance from the Commission would 
be welcomed . Also, there is consensus that  that the 2012 SGEI Package  did manage to 
provide  a stable legal environment for Member States . 
As to the relevance  of the rules, the evaluation indicated that the objectives of the 2012 
SGEI Package are, to a large extent, appropriate to meet the needs within the EU. 
However, the p otential impact and the uncertainties brought by the COVID -19 crisis and 
the Russian war of aggression against Ukraine cannot be fully evaluated yet. The 
evaluation also suggests that further adaptation s may be considered to fully meet the 
needs of sta keholders such as the recognition in the SGEI rules of operators active in the 
so-called “social economy” or the recognition of quality services.  
5.2. Lessons learned  
The evaluation indicates that the 2012 SGEI Package as regards health and social 
services is broadly fit for purpose. It therefore  appears to the Commission  services that 
the 2012 SGEI Package (as regards health and social services) was  largely successful  in 
achieving two of its main objectives, as it  significantly clarified and simplified the rules 
applicable to SGEI providers which had a positive impact on citizens, undertakings, and 
public administrations.  
However, it also results from the evaluation a call for further clarification of certain 
concepts, either related to the notion of State aid (i.e. economic/non -economic activity, 
effect on trade) or concepts linked the SGEI rules (e.g. reasonable profit, market failure, 
etc.). The review of certain rul es and/or the update of certain concept s therefore appears 
to be necessary to further clarify and simplify the 2012 SGEI Package  in order for the 
rules to be exploited to their full potential and to make sure inter alia  that undertakings 
and public adminis trations get the legal certainly they look for .  
The EUR 500 000 ceiling of the SGEI de minimis  Regulation in particular seems to have 
significantly clarified and simplified the granting of SGEIs for providers which receive 
public service compensations below that amount . In addition, it reduced the 
administrative burden for Member States as they no longer need to check compliance 
with the Altmark  criteria or fulfil the conditions of the SGEI Decision for compensations 
below EUR 500 000.  
Nevertheless, it seems that there would be a need to assess whether the current EUR 500 
000 ceiling is still appropriate in the current situation. Similarly, coherence between 
certain concepts of the SGEI de minimis  Regulation (single undertaking, undertakings in 
difficulty and inclusion of the requirement to take into account mergers and acquisitions)  
with the general de minimis  Regulation appears to need further thinking, in order to 
further facilitate the application of the SGEI de minimis Regulation.   
  
 
 54  ANNEX I.   PROCEDURAL INFORMATION  
1. LEAD DG,  DECIDE PLANNING /CWP  REFERENCES  
Commission Directorate -General for Competition (DG Competition).  
2. ORGANISATION AND TIMI NG 
In the second half of 2019 , the Commission  services  launched an evaluation exercise the 
purpose of wh ich was to check if the rules on health and social services of general 
economic interest (‘the services’) meet their objectives under the 2012 services package.  
The Roadmap was published on 17 June 2019 and set out the context, purpose and scope 
of the eva luation exercise. Stakeholders had until 15 July 2019 to comment on the 
Roadmap.  
The first Inter -Service Steering Group (ISSG) was set up on 24 June 2019 and gathered 
representatives from the Commission's Secretariat General, and Directorates -General: 
REGI O, GROW, SANTE, EMPL, and the LEGAL SERVICE. The ISSG was consulted 
on the scope SGEI rules and the evaluation to be carried out.  
The ISSG was consulted by e -mail on the factual summary report of the public 
consultation on 25 March 2020 and on the draft expert study on 13 April 2021.  
A public consultation was open from 31 July 2019 to 4 December 2019 on the Better 
Regulation Portal. DG Competition launched targeted consultations in the form of online 
questionnaires (EU Survey tool) addressed to the main s takeholders and interested parties 
on specific issues related to the evaluated rules.  
The Evaluation was also supported by a study carried out on specific aspects of the 
evaluated rules across ten Member States, i.e. France, Ireland, Germany, the Czech 
Republic, Latvia, Portugal, Romania, Croatia, Sweden  and the Netherlands . The selection 
of the Member States was inspired by case practice. The objective of that study was to 
receive an independent evidence -based assessment on how the rules worked. The Study  
provides: an overview of sector and market trends since 2012 (Task 1); an analysis of 
how competition on the market has evolved since 2012 (Task 2); an analysis of the extent 
to which Member States are aware of possible State aid implications of policy an d 
market trends (Task 3); and an assessment of the effectiveness, efficiency, relevance and 
EU added value of the 2012 SGEI Package in so far as healthcare and social housing are 
concerned. The Study is ‘backward -looking’, focusing on the period following the entry 
into force of the 2012 SGEI Package until 2020, although the period prior to 2012 was 
also considered to undertake a counterfactual analysis.  
The expert who carried out the above -mentioned study completed the data provided by 
the consultation wit h an online survey. The survey was launched in two stages:  
i. First stage: from 13  October 2020 to 7  December 2020 for nine Member States.  
ii. Second stage: from 16  February 2021 to 26  February 2021. The survey was re -
opened to include additional respondents from  Romania.  
A targeted consultation was also carried out inviting the national authorities to express 
themselves.  
 
 55  The ISG met for a third time on 10 November 2022 to discuss the draft version of the 
present SWD.  
Agenda planning – Timing  
Date  Description  
17 June 2019 - 15 July 2019  Roadmap  
24 June 2019  1st ISSG meeting  
31 July 2019 - 4 December 2019  Public consultations  
25 March 2020 and 13 April 2021  2nd ISSG consultation by e -mail 
10 November 2022  3rd ISSG meeting  
  
3. EXCEPTIONS TO THE BETTER REGULATION GUIDELINES  
No exceptions were made to the Better Regulation Guidelines163 during this Evaluation.  
4. CONSULTATION OF THE RSB  (IF APPLICABLE ) 
N/A 
5. EVIDENCE , SOURCES AND QUALITY  
The Evaluation was supported by an external study. The study was procured in the 
framework of a tender under the reference number No COP/2019/006164 of 24 December 
2019.  
Data sources included the State aid Scoreboard165, which comprises aid expenditure made 
by Member States falling under the scope of Article 107(1) TFEU. Internal 
Commission/DG Competition data used for the internal assessment include for instance 
interpretation questions by Member States. DG Competition's case practice was a major 
source of insight. Court judgements, desk research, literature review and internal 
statistics have also played a role in data gathering. The Commission  services  also used 
several other external reports and several bilateral meetings were organised with 
stakeholders at their request. The Commission services also used several other reports.  
 
 
                                                           
163  https://ec.europa.eu/info/better -regulation -guidelines -and-toolbox_en . 
164  https://etendering.ted.europa.eu/cft/cft -display.html?cftId=5308 .  
165  https://ec.europa.eu/competition/state_aid/scoreboard/index_en.html#what .  
 
 56  ANNEX II. METHODOLOGY AND ANALYTICAL MODELS USE D 
The current Evaluation was based on a wide range of data sources/inputs.  
Indeed, as mentioned in this SWD , the evaluation involved both internal analyses by the 
Commission  services  and an expert study prepared by an e xternal consultant.  
As regards its own analysis, the Commission services used, in addition to the results of 
the public consultation and  the targeted stakeholder consultation, existing studies, 
experience from its case practice, internal statistics and dat a from the SGEI reports 
submitted by the Member States every two years.  
1. DATA SOURCES  
1.1. Consultation activities  
1.1.1.  Roadmap consultation  
Stakeholders had the opportunity to provide their feedback on the Roadmap on the 
website166 from 17 June 2019 to 15 July 2019.  
1.1.2.  A public consultation  
The open public consultation on the evaluation of SGEI rules applicable to health and 
social services and the SGEI de minimis  Regulation ran between 31 July 2019 and 4 
December 2019.  
The objective of this public consultation was to o btain the views of citizens, public 
authorities and other relevant stakeholders on the effectiveness, efficiency, coherence, 
relevance and EU added value of the 2012 Service of general Interest (SGEI) package 
with regard to health and social services, as w ell as to other services in the specific case 
of the SGEI de minimis  Regulation.  
The public consultation took the form of an online survey, with a mix of closed and open 
questions. Participants were able to reply in any of the EU’s official languages.  
This public consultation was also promoted through Twitter, DG Competition’s State aid 
Newsletter and DG Competition’s website. The statistics computed in this summary are 
based only on contributions to the public consultation submitted through the online 
questionnaire. The input has been analysed using a data analysis tool, complemented by 
manual analysis.  
The factual summary of the answers is available in Annex 5.  
1.1.3.  A targeted consultation  
At the same time of the public consultation, (also between the 31 July 2019 and 4 
December 2019), the Commission launched a targeted consultation, addressed to 
Member States directly impacted by State aid rules applicable to health and social 
services. The targeted online survey was similar to the su rvey of the public consultation. 
However, it included additional questions specifically targeted to the experience of 
Member States with the 2012 SGEI Package. Given that it is the Member States and 
                                                           
166 https://ec.europa.eu/info/law/better -regulation/have -your-say/initiatives/11835 -State -subsidy -rules -for-health -and-
social -services -of-general -economic -interest -evaluation -_en.  
 
 57  other public authorities (for instance regional and local  authorities) who design public 
policies and apply the State aid rules, their responses are of particular relevance to the 
analysis.  
1.2. Expert study  
The Commission commissioned an external study with the objective to develop a better 
understanding of sector developments and the functioning of competition in the sectors 
concerned.  
It was conducted by Ernst and Young Advisory SAS and published on 2 September 
2021167. It was carried out in the course of 2020, also making use of the results of the 
public and targeted consultation mentioned above. The expert study is ‘backward -
looking’, focusing on the period following the entry into force of the 2012 SGEI Package 
until 2 020, although the period prior to 2012 was also considered to undertake a 
counterfactual analysis.  
The expert study focused on healthcare (and in particular on hospitals) and social housing 
It focuses on the following Member States: France, Ireland, German y, Czech Republic, 
Latvia, Portugal, Romania, Croatia, Sweden and the Netherlands.  
The expert study provides an overview of sector and market trends since 2012; an 
analysis of how competition on the market has evolved since 2012; an analysis of the 
extent  to which Member States are aware of possible State aid implications of policy and 
market trends; and an assessment of the effectiveness, efficiency, relevance and EU 
added value of the 2012 SGEI Package in so far as healthcare and social housing are 
conce rned.  
The Study focused on a number of data collection tools . 
A core tool of the methodology was documentary review  to gather both quantitative and 
qualitative data on market trends in relation to the application of the 2012 SGEI Package. 
It aimed at prov iding a strong understanding of the main changes brought by the 2012 
SGEI Package, the issues at stake but also the developments in terms of market, policies 
or national reforms. For the Study legislative documents, documents from international 
institution s, reports from NGOs and think tanks, national reports and sources and written 
contributions sent by interviewees that answered questionnaires deployed for the Study 
were consulted.  
In-depth statistical research  was also needed to collect the necessary qu antitative data 
for the Study. The Member States’ biennial SGEI reports, which they need to submit 
under Article 9 of the SGEI Decision, provided an overview of the expenditure related to 
SGEIs in the Member States covered by the Study, with the OECD and E urostat 
databases providing an overview of the Member State expenditure related to healthcare 
and housing as well as the European trends. The national statistical databases 
complement this data and provide details on certain sectoral trends.  
Interviews  were undertaken with stakeholders from: national/local authorities in charge 
of the healthcare or/and social housing sectors; national/local authorities in charge of 
implementing and monitoring SGEIs; providers (healthcare and social housing); national 
indust ry and consumer associations; and EU NGOs and associations (89 in total). The 
                                                           
167  Commission , Directorate General for Competition, final report prepared by EY France (Jessica Chamba, Emilie 
Balbirnie, Timothé Peroz, Soumia Benaich), Study on market trends in healthcare and social housing and EU state 
aid impl ications, 2021 (published on 3 September 2021 and available here: https://op.europa.eu/s/wIXK ). 
 
 58  interviews aimed to provide qualitative data relating to the overall effectiveness, 
efficiency, relevance and EU added value of the 2012 SGEI Package. An Online Survey  
was sent t o the above -mentioned stakeholder groups at national level. 53 stakeholders 
replied, covering all Member States falling under the scope of the Study. The analysis of 
the Online Survey was supplemented by analysis of responses to the Commission’s Open 
Publi c Consultation and targeted consultation disseminated prior to the launch of the 
Study.  
Finally, 10 Member State fiches  were prepared for the Member States covered by the 
Study in order to provide  an overview of: the market situation in the healthcare and social 
housing sectors; the reforms that have impacted the legislative landscape and the 
regulatory framework in the Member States; and the government expenditure for 
healthcare and social housing  as well as the evolution in the number and type of 
providers and competition.  
1.3. Other data sources  
One of the important data sources used by the Commission in its evaluation are the 
Member States’ biennial SGEI reports. These reports are submitted by Membe r States 
under Article 9 of the SGEI Decision and under paragraph 62 of the SGEI Framework, 
and provide an overview of the SGEI expenditure and entrustments in each Member 
State.168 
DG Competition has also conducted its own internal assessment of the applica tion of the 
2012 SGEI Package, the sectors governed by those rules and its market developments. 
Internal Commission data used for the internal assessment include for instance 
monitoring results and interpretation questions by Member States. DG Competition' s 
case practice is also a major source of insight.  
Court judgments, desk research, literature review and internal statistics have in addition 
played a role in data gathering. DG Competition used as well several other publicly 
available reports and data su ch as data from EUROSTAT and the OECD.  
Finally, bilateral meetings were held with stakeholders at their request. Over the years, 
the Commission services met with organisations in the field of (social) housing, welfare 
services and other social services.169 Commission staff also participated to a number of 
forums and conferences on the matter.170 
2. LIMITATIONS AND CHALL ENGES  OF THE EVALUATION  
One limitation of the evaluation stems from the fact that for certain services the impact of 
the rules is not fully tangible yet. The effects of State aid measures often only materialise 
with a certain delay and not sufficient time has elapsed in order to fully capture the 
impact since the 2012 SGEI Package entered into force.  
                                                           
168  The reports are available online: https://ec.europa.eu/competition -policy/state -aid/legislation/sgei_en . 
169  As exemples, the Commission services met with Build Europe, the Union Nationale des Fédérations d’Organismes 
HLM, the Fédéra tion Française des Entreprises de Crèches and the Fédération Française des services à la personne 
et de proximité, Aedes, Bundesarbeitsgemeinschaft der Freien Wohlfahrtspflege e.V. (BAGFW), Housing Europe, 
etc. 
170  As exemples webinar on SGEI organised by the Cercle Europe et Economie Sociale (CEES), Confe rence «  Europe 
et Services Publics Locaux  » organised by the Association Française du Conseil des Communes et Régions 
d’Europe.  
 
 59  This limitation is increased by: (i) the ti me gap due to the set -up of the Member States’ 
reporting obligations; and (ii) the fact that the obligation of reporting is every two years, 
which makes the evaluation of the 2012 SGEI Package particularly difficult.  
In some areas, the data are not availab le due to the lack of an obligation for the Member 
States to gather and report such data (for example SGEIs falling under the SGEI 
Communication or the SGEI de minimis Regulation). In other areas, the available data 
are not sufficiently granular in order t o enable a full analysis of all types of aid. It also 
has to be recalled that with regard to exempted measures – which are not notified to the 
Commission – limited ex ante  information is available. Ex post  there is basic information 
available for all measu res as reported by the Member States in their biennial SGEI 
reports. More detailed information is available but only for a sample of SGEI exempted 
measures (monitoring, transparency for measure above the threshold and, if applicable, 
complaints).  
To this o ne needs to add the difficulty of gathering data in State aid control as opposed to 
other competition instruments, such as mergers and antitrust, which partially stems from 
the fact that the counterpart of the Commission in the proceedings is the Member St ates 
and information gathering tools are limited (and many of them relatively recent) under 
the State aid Procedural Regulation.  
Further, and considering the scope of the evaluation (limited to health and social 
services), there have been only a limited nu mber of decisions adopted/schemes put in 
place in these sectors, limiting thus the practical experience of the Commission.  
Furthermore, despite DG Competition’s efforts to make stakeholders aware of the public 
consultation, the total number of replies was limited. The public consultation generated 
51 replies, which is a very small number compared to the reference population of 
citizens, companies and public authorities potentially affected by the SGEI rules.  
Finally, this SWD  does not take into account the impact of the COVID -19 crisis and 
Russian war of aggression against Ukraine ( which are unprecedented situations) and 
possible future policy measures which might be adopted by the Commission. Indeed, the 
public and targeted consultation were closed before the COVID -19 crisis and the Russian 
war of aggression against Ukraine171. As for the expert study, it was carried out during the 
COVID -19 crisis172. However, the study was backward -looking and focused on the period 
31 January 2012 to 31 December 2019.  As a res ult, it did not took into account the 
COVID -19 crisis and the Russian war of aggression against Ukraine. It should be 
stressed that C OVID -specific issues were addressed under that temporary Framework 
(see section 3.3.1 ) and issues related to the Russian wa r of aggression against Ukraine 
were addressed under the Temporary Crisis Framework (see section 3.3.2 ). 
2.1. Method of the evaluation  
An evaluation needs an appropriate point of comparison to be able to assess the change 
that the EU action has brought over time. In general, the main baseline (or 
counterfactual) is a situation in the absence of EU intervention.173 
                                                           
171 The consultations  were conducted between 31 July 2019 and 4 December 2019 . 
172 The expert study was conducted between June 2020 and May 2021 . 
173  It has to be noted that the construction of a baseline scenario for  State aid is very complex and may be specific to 
the facts of the case. See also Section 2.1.7  
 
 60  In the current situation, the EU intervention is the adoption of the 2012 SGEI Package. 
The present evaluation assesses the reform of the SGEI rules introduces by the 2012 
SGEI Package as regards health and social services. Therefore, the baseline scenario is 
one in which the 2005 SGEI Package ( 2005 SGEI Decision and the 2005 SGEI 
Framework) would have continued to apply.174 
The current evaluation does n ot assess the unlikely scenario that the rules in force prior to 
2012 SGEI Package would have expired (in particular the 2005 SGEI Framework). The 
consequence of the absence of substantive rules would be the direct application of the 
TFEU, i.e. the notific ation of each and every measure constituting State aid in the 
meaning of Article 107(1) TFEU and its compatibility assessment by the Commission 
directly under Article 106(2) TFEU without any substantive guidance by the relevant soft 
law. 
The current evaluation also does not assess the existence/absence of State aid control as 
such, as the general prohibition of State aid is enshrined in the Treaty since 1957.  
The evaluation questions and criteria are presented in Annex 3 below .  
 
 
 
                                                           
174  For the 2005 SGEI Decision, it would have remained unchanged and continue d to apply. For the 2005 SGEI 
Framework, it would have been p rolonged beyond its expiry date, which was in November 2011.  
 
 61  ANNEX III. EVALUATION MATRIX  
Effectiveness  
 
1. To what extent have the updated state aid rules for SGEIs facilitated the provision 
of health and social SGEIs adapted to the population’s needs ?  
a. To what extent has the simplification of the rules enabled Member States  to 
pursue aid measures for health and social  SGEIs?  
b. If there are significant differences between Member States/sub -sectors what 
caused them? How do these differences link to the clari fication of health 
and social SGEIs concepts?  
c. Which specific requirements have contributed to or stood in the way of 
achieving the provision of health and social SGEIs?  
 
Efficiency  
 
2. What are the costs and benefits (both monetary and non -monetary) associated 
with the application of the requirements set by the rules for health and social 
SGEIs for the different stakeholders?  
a. To what extent have the specific rules for health and social SGEIs enabled 
the provision of social services without distorting competition 
disproportionately?  
b. To what extent have the specific rules for health and social SGEIs enabled 
the provision  of social services without causing disproportionate 
administrative burden for M ember States ?  
 
Relevance  
 
3. How well adapted are the SGEI rules for health and social services to the 
development of the society, markets and social policy?  
a. Is there evidence for the statements made in recital 11 of the SGEI Decision 
that the risk of distortion of competition in health and social SGEIs is still 
lower than in other sectors?  
b. To what extent is the approach for health and social SGEIs introduced in the 
2012 SGEI Decision still justified (allowing unlimited compensation and no 
notification as long as the conditions of the 2012 SGEI Decision are met)?  
 
4. To what extent are the Member States aware of the (relevance of the) rules 
applicable to health and social SGEIs?  
a. To what extent do Member States  understand the applicability of (some of) 
the rules to each of their health and social SGEIs?  
 
Coherence  
 
5. How well do the 2012 State aid rules for health and social SGEIs correspond to 
the wider EU policy applicable to health and social SGEIs - such as article 14 and 
168 TFEU and Protocol 26 to the TFEU – and to other State aid i nstruments?  
a. How do the 2012 State aid rules for health and social SGEIs compare to, 
complement and interact with other State aid instruments (such as the SGEI 
de minimis  Regulation, R&R guidelines or the GBER)?  
 
6. Is the 2012 SGEI Package applicable to health and social SGEIs internally 
 
 62  consistent and coherent? Are there any overlaps, contradictions or missing links 
between the Decision, Framework and Communication?  
 
EU added value  
 
7. Has the 2012 SGEI Package allowed for a better task allocation between the 
Commission and Member States?  
 
8. Have the rules helped in ensuring legal certainty?  
 
63 ANNEX IV. OVERVIEW OF BENEFITS AND COSTS  
Table 1. Overview of costs and benefits identified in the evaluation  
                        Citizens/Consumers  Businesses  Administrations  Other s 
Quantitative  Comment  Quantitative  Comment  Quantitative  Comment   Quantitative  Comment  
[Cost or Benefit description]:  
Costs: . 
 
Direct compliance costs  
(adjustment costs, administrative costs, 
regulatory charges)  
Enforcement costs:  (costs 
associated with activities linked to the 
implementation of an initiative such as 
monitoring, inspections and 
adjudication/litigation)  
Indirect costs  (indirect compliance 
costs or other indirect costs such as 
transaction costs)  
 
   
Recurrent  0 
 
The evaluation has 
not identified any 
quantifiable costs   The evaluation has 
not identified direct 
compliance costs, 
enforcement costs or 
indirect costs  
 
 0 
 
The evaluation has 
not identified any 
quantifiable costs   The evaluation has 
not identified direct 
compliance costs, 
enforcement costs or 
indirect costs for 
businesses.  
 0 
 
The evaluation 
has no t 
identified any 
quantifiable 
costs   The evaluation has 
not identified any 
direct compliance 
costs.  However, it 
had identified 
enforcement and 
indirect costs. 
Indeed, the 
complexity of 
certain concepts 
may require 
technical expertise, 
which at times 
might lead to an 
increase in terms of 
time spent for 
interpretation and 
implementation of 
those concepts as 
well as a need for 
additional staff 
members or 
external experts 
(legal advisers, 
consultants). .e 
SGEI rules with, 
for instance, the 
introduction of an 
SGEI -specific de 
minimis Regulation 
or the enlargement 
of the notification 
exemption s. N/A N/A 
 
64 Benefits:  
 
Direct benefits  (such as improved 
well being: changes  in pollution levels, 
safety, health, employment; market 
efficiency)  
Indirect benefits  (such as wider 
economic benefits, macroeconomic 
benefits, social impacts, environmental 
impacts)  Recurrent  0 
 
The evaluation has 
not identified any 
quantifiable 
benefits   For citizens and 
consumers, the 
adoption of the SGEI 
rules implied an 
easier access to 
certain SGEIs  
 0 
 
The evaluation has 
not identified any 
quantifiable benefits   The 2012 SGEI 
Package simplified 
the SGEI rules with, 
for instance, the 
introduction of an 
SGEI -specific de 
minimis  Regulation or 
the enlargement of the 
notification 
exemptions.  
It also clarified 
certain basic concepts 
relevant for the 
application of the 
SGEI rules. As a 
result, there is a 
simpler legal 
framework for SGEI 
provision.  0 
 
The evaluation 
has no t 
identified any 
quantifiable 
benefits   The 2012 SGEI 
Package simplified 
the SGEI rules 
with, for instance, 
the introduction of 
an SGEI -specific 
de minimis  
Regulation or the 
enlargement of the 
notification 
exemptions.  
It also clarified 
certain basic 
concepts relevant 
for the application 
of the SGEI rules. 
As a result, there is 
a simpler legal 
framework for 
SGEI provision.  
 
Overall, the 
evaluation 
concludes that  the 
benefits of the 
2012 SGEI 
Package are higher 
than the costs and 
that the novelties 
introduced by the 
2012 SGEI 
Package facilitated 
to a certain extent 
the provision of 
SGEIs.  N/A N/A 
 
65 TABLE 2:   Simplification and burden reduction (savings already achieved)   
               Citizens/Consumers /Workers  Businesses  Administrations  Others  
Quantitative  Comment  Quantitative  Comment  Quantitative  Comment  Quantitative  Comment  
Includes direct compliance cost savings; enforcement cost savings; and indirect cost savings.  
 
Recurrent  
 0 Citizens/consumers are not 
directly concerned by the 
administrative burden   0 Overall, the 
evaluation suggests 
that businesses 
consider that the level 
of administrative 
burden after adoption 
of the 2012 SGEI 
Package is rather 
stable in comparison 
to the situation 
existing with the 
previous 2005 SGEI 
package.  
 
 0 The enlargement of 
the notification 
exemption for 
certain social 
services and the 
adoption of the 
SGEI de minimis  
Regulation 
simplified the 
implementation of  
the rules. Due to 
the absence of prior 
notification for 
these SGEIs, it 
helped to reduce 
the administrative 
burden and the 
workload of public 
authorities. 
However, the 
complexity of the 
method for cost 
calculation and the 
interpretations of 
legal terms, t he 
monitoring of the 
absence of 
compensation itself 
can be burdensome 
for the authorities.  
 
The evaluation 
suggests that the 
administrative 
burden after the 
2012 SGEI 
package is stable or 
has slightly 
decreased.  N/A N/A 
 
66  PART II: Potential  simplification and burden reduction ( savings ) 
 Citizens/Consumers /Workers  Businesses  Administrations  Others  
Quantitative  Comment  Quantitative  Comment  Quantitative  Comment   Quantitative  Comment  
Includes direct compliance cost savings; enforcement cost savings; and indirect cost savings.  
 
Recurrent  0 Citizens/consumers are not 
directly concerned by the 
administrative burden   0 Additional  
simplification and 
clarification of the 
applicable SGEI r ules 
could be necessary to 
reduce further the 
administrative burden. 
As an example, the 
SGEI de minimis  ceiling 
could be increased and 
certain concepts could 
be clarified (e .g. 
concepts of 
economic/non -economic 
activities, reasonable 
profit, etc.)  0 Addit ional  
simplification and 
clarification of the 
applicable SGEI 
rules could be 
necessary to reduce 
further the 
administrative 
burden. As an 
example, the SGEI 
de minimis  ceiling 
could be increased 
and certain 
concepts could be 
clarified (e.g . 
concepts of 
econ omic/non -
economic activities, 
reasonable profit, 
etc.) N/A N/A 
 
 67  ANNEX V. STAKEHOLDERS CONSULTATION  
1. INTRODUCTION  
This report covers feedback and input from public authorities, associations, companies 
and other organisations (“stakeholders”) as well as citizens as regards the Evaluation on 
the SGEI rules.   
The objec tive of the consultations was to gather evidence from  stakeholders on the five 
evaluation criteria including for the purpose of verifying to which extent the SGEI rules 
reached the envisaged objectives under the 2012 SGEI Package. A separate question was 
asked as regards the SGEI de minimis  Regulation inquir ing whether the amount of aid 
that can be granted under the SGEI de minimis  Regulation, i.e. up to EUR 500 000 over 
any period of three fiscal years, is still appropriate.  
The Commission carried out an open public consultation  in order to gather inputs from 
a broad range of stakeholders. The public consultation aimed at reaching out to all 
relevant stakeholders and gave unlimited access to everybody who wanted to contribute. 
It took the form of an extensive questionnaire coveri ng certain provisions of the SGEI 
rules.  
In addition, DG Competition made use of targeted consultations  in the form of online 
questionnaires addressed to the main stakeholders beyond the general public on specific 
issues related to the SGEI rules. The sta keholders for the targeted questionnaires and 
included those who are directly impacted by those rules, such as Member States, regional 
and local authorities, and other granting authorities.  
2. FEEDBACK ON THE COMMI SSION ROADMAP  
Stakeholders  had the opportunit y to provide their feedback on a Commission roadmap on 
the the SGEI Rules175 from 17 June 2019 to 15 July 2019.  
 
 
                                                           
175  https://ec.europa.eu/info/law/better -regulati on/have -your-say/initiatives/11835 -State -subsidy -rules -for-health -and-
social -services -of-general -economic -interest -evaluation -/feedback_en?p_id=5544255 .  

 
 68  A total of 11 stakeholders submitted their feedback on the Commission roadmap. These 
were from Business associations (5), Non -gouvernmental or ganisations (4), Public 
auhtorities (1) and companies / business organisations (1). As regards the geographical 
repartition, most answers stemmed from Belgium (5) followed by Germany and France 
(2 replies each) and Netherlands and Italy (1 each).  
The subm issions largely supported the Commission’s intention to evaluate the SGEI 
State aid rules under the Evluation.  
Many submissions received by the Commission concerned the housing sector and tackled 
the increasing price levels of locative spaces in EU cities which are often no longer 
affordable for average -income families and drew the attention on the necessity of the  
public hand to intervene on the housing market.  
3. OPEN PUBLIC CONSULTAT ION  
3.1. Introduction  
An open public consultation, meeting the Commission’s minimum standards, was open 
from 31 July 2019 to 4 December 2019.176  
The objective of this public consultation was to obtain the views of citizens, public 
authorities and other relevant stakeholders on the effectiveness, efficiency, coherence, 
relevance and EU added value of the 2012 Service of general Interest (SGEI) packa ge 
with regard to health and social services, as well as to other services in the specific case 
of the SGEI de minimis  Regulation.  
The public consultation, targeting citizens and stakeholders, took the form of an online 
survey177 published on the Commission’ s Better Regulation Portal , which included open 
and closed questions . The questionnaire was published in 23 EU official languages178. 
Participants to the questionnaires could reply in any of those languages.  
This public consultation was also promoted through  Twitter, DG Competition’s State aid 
Newsletter, and DG Competition’s website. In addition, the European Parliament’s 
ECON committee was informed about the public consultation.  
The input has been analysed using a data analysis tool, complemented by manual 
analysis. The tool used is Doris Public Consultation Dashboard, an internal Commission 
tool for analysing and visualising replies to public consultations.  
3.2. Factual summary of the contributions received in the context of the 
public consultation on the SGEI Rules179 
The factual summary below only takes into account the replies to the closed questions. 
                                                           
176  https://ec.europa.eu/info/law/better -regulation/have -your-say/initiatives/11835 -State -subsidy -rules -for-health -and-
social -services -of-general -economic -interest -evaluation -/public -consultation_en .  
177  EUSurvey tool . 
178 With the exception of Irish.   
179 This section should be regarded solely as a summary of the contributions made by stakeholder during the public 
consultation on the State aid rules. It cannot in any circumstances be regarded  as the official position of the European 
Commission or its services. This section only provides a factual summary. This factual summary was published on the 
Commission’s Better Regulation Portal on 3 April 2020.  
 
 
 69  Questions not presented in this document constitute open questions.  
3.2.1.  Overview of the respondents  
In total, the public consultation received 51 replies: 31 from org anisations such as 
business associations, company/business organisations, consumer organisations, NGOs 
and trade unions), 10 from public authorities at different levels, 5 from individuals and 5 
from other respondents (see figure 1 for details). “Other res pondents” include for 
example European umbrella organisations and health/welfare organisations.  
Figure 1:  Profile of the respondents  
 
The most common languages of contribution were English and French (17 each) and 
German (7). All the replies came from EU countries, mainly from Belgium (18), France 
(11) and Germany (6). The origin of the respondents is represented in Figure 2.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 70  Figure 2:  Country of origin  
 
The questionnaire contained a total of 46 questions (including sub questions), with a mix 
of closed and open questions, which were devised around the five evaluation criteria 
effectiveness, efficiency, coherence, relevance and EU added value. In addition, it 
contains a specific section on the SGEI de minimis  Regulation.  All closed questions were 
obligatory, but the respondents had the choice of “I Do not know” and “Not relevant for 
me” options.  
The public consultation covered all four documents part of the 2012 SGEI Package and 
subject of the Evaluation. However, for some respondents only part of the 2012 SGEI 
Package might have been relevant. This could be one of the reasons why the percentage 
of “I Do not know” and “not relevant for me” responses was fairl y high.  
3.2.2.   Effectiveness (Have the objectives been met?)  
In order to evaluate whether the SGEI rules for health and social services met their 
objectives, stakeholders were asked to answer a set of twelve questions.  
Question 18 inquired whether some specific factors facilitated compliance with the SGEI 
rules applicable to health and social services.  
 
 
 
 
 
 
 

 
 71  Figure 3 : Question  18 - Did the factors below facilitate the compliance with the SGEI rules 
applicable to health and social services?  
 
Question 21  inquired whether the four main objectives of the SGEI rules applicable to 
health and social services were achieved while maintaining a competitive internal 
market.  
Figure 4:  Question  21 - Were the objectives of the SGEI rules applicable to health and soci al 
services achieved while maintaining a competitive internal market?  
 
Question 23 inquired whether the 2012 SGEI Package  with regard to health and social 
services had any positive impacts that were not expected or not intended. 31 out of 51 
respondents did not express a view. 13 respondents who expressed a view were of the 
opinion that the 2012 SGEI rules had positive impac ts that were not expected or not 
intended. 6 of them identified themselves as a “company/business organisations”. Other 
type of respondents include public authorities (2), NGOs (3), trade unions (1) and other 
(1). 

 
 72  Figure 5 : Unexpected or unintended positiv e impacts of the 2012 SGEI Package . 
 
Question 25 inquired whether the 2012 SGEI Package  with regard to health and social 
services had any negative impacts that were not expected or not intended. 24 respondents 
who expressed a view were of the opinion that the 2012 SGEI rules had negative impacts 
that were not expected or not intended.  
Figure  5: Unexpected or unintended negative impacts of the 2012 SGEI Package . 
 
Question 27 inquired whether the publication on the internet or by other means of SGEI 
compensation for health and social services above EUR 15 million made it easier to 
check the en trustment acts, possibly to challenge them and whether it made aid 
transparent for stakeholders, companies and the general public. 22 (increasing 
transparency towards stakeholders), respectively 23 (enable companies and other 
interested parties to check wh ether aid was granted in line with the rules) respondents did 
not have an opinion on this. 16 respondents who expressed a view were of the opinion 
that the publication obligation increased, at least partially, the transparency of SGEI 
compensation. 17 resp ondents were of the opinion that it enabled, at least partially, 
interested parties to check whether aid is granted in line with SGEI rules.  
 
 

 
 73  Figure 4 : Question 27 - Did the publication on the internet or by other means of SGEI 
compensation for health and social services above EUR 15 million make it easier to check the 
entrustment acts, possibly to challenge them and did it make aid transparent for you, (other) 
stakeholders and companies and the general public?  
 
3.2.3.  Efficiency (Were the costs involved proportionate to the benefits?)  
In order to evaluate whether the costs involved in complying with the SGEI rules for 
health and social services were proportionate to the benefits of having such rules, 
stakeholders were asked to answer a set of five questions.  
Question 29 inquired whether the 2012 SGEI Package  reduced the administrative burden 
with regard to health and social services compared to the rules in force under the 2005 
SGEI Package . 25 (as regards the administrative burden for public authorities) and 19 (as 
regards the administrative burden for the b eneficiaries) respondents did not have an 
opinion on this. 9 respondents disagreed, at least partially as regards the administrative 
burden for public authorities and 11 respondents disagreed, at least partially as regards 
the administrative burden for pub lic authorities.  
Figure 5  - Question 29: Did the 2012 SGEI Package  reduce the administrative burden with regard 
to health and social services compared to the rules in force under the 2005 package?  
 
Question 31 inquired to what extent the amount of resourc es (for example money and 
personnel) spent on administrative activities with regard to health and social services 
changed, compared to the period 2005 -2012 when the 2005 SGEI Package  was still in 
force. 33 respondents did not have an opinion on this. 11 respondents who expressed a 
view was of the opinion that the amount of resources spent did not change or increased.  
 
 

 
 74   
 
Figure 6  - Question 31: To what extent did the amount of resourc es (for example money and 
personnel) you spent on administrative activities with regard to health and social services 
change, compared to the period 2005 -2012 when the 2005 SGEI Package  was still in force?  
 
3.2.4.  Relevance (Is EU action still necessary?)  
In ord er to understand if the SGEI rules for health and social services are still relevant 
considering the market developments, stakeholders were asked to answer a set of eight 
questions.  
Question 34 inquired how well the objectives of the 2012 SGEI Package  as applied to 
health and social services still correspond to today’s (EU internal) market situation. In 
particular, the question referred to the objective of simplifying the compatibility criteria 
and reducing the administrative burden for Member States t hat compensate undertakings 
entrusted to provide such services to the (vulnerable part of the) population at affordable 
conditions. 31 respondents expressed the view that the mentioned objectives still 
correspond, at least partially, to the current market situation.  
Figure 7  - Question 34: how well do the objectives of the 2012 SGEI Package  as applied to health 
and social services still correspond to today's (EU internal) market situation?  
 
Question 36 inquired to what extent some specific elements of the 2012 SGEI Decision 
correspond to the (EU internal) market developments in the field of health and social 
services that have occurred since 2012. With regard to each of the elements presented, 21 

 
 75  (the requirement to refer to the 2012 SGEI Decision in the en trustment act) to 30 (the 
requirement to define the nature, duration and territory concerned) respondents expressed 
the view that the SGEI rules are still relevant, at least to some extent.  
Figure 8 - Question 36: To what extent does each separate element of the 2012 SGEI Decision 
correspond to the (EU internal) market developments in the field of health and social services 
that have occurred since 2012? In other words, do these elements still serve a purpose?  
 
Question 38 inquired whether  the respondents experienced difficulties in applying the 
“reasonable profit” requirement as explained in Article 5 of the 2012 SGEI Decision.180 
20 respondents who expressed a view declared that they exp erienced difficulties (either a 
lot or few difficulties).  
                                                           
180  The question clarified that ‘reasonable  profit’ means the rate of return on capital that would be required by a typical 
undertaking considering whether or not to provide the service of general economic interest for the whole period of 
entrustment, taking i nto account the level of risk.  

 
 76  Figure 9  - Question 38: Have you experienced difficulties in applying the “reasonable profit" 
requirement as explained in Article 5 of the 2012 SGEI Decision?  
 
Question 40 inquired, for each of the  sectors covered by the 2012 SGEI rules, if the 
assumption on which the 2012 SGEI rules were adopted, i.e. that the risk of distortion of 
competition for health and social services is lower than in other sectors, is still valid. 
Depending on the sector, 15  (access and reintegration into the labour market) to 25 
(social housing) of the respondents expressed the view that the risk of distortion of 
competition is still lower than in other sectors.  
Figure 10  - Question 40: compared to 2012, when the SGEI Packag e entered into force, do you 
consider that the risk of distortion of competition in the health and social services sector is still 
lower than in other sectors?  
 
3.2.5.  Coherence (Does the policy complement other actions or are there 
contradictions?)  
In order to understand the extent to which the SGEI rules are coherent with each other 
and with other EU rules, stakeholders were asked to answer the following question . 

 
 77  Question 42 inquired whether the SGEI rules as applicable to health and social services 
are coherent with each other. 18 respondents who expressed a view stated that the SGEI 
rules are coherent with each other, fully or partially.  
Figure 11:  Question 42 - Are the SGEI rules (the SGEI Decision, SGEI Framework, the SGEI 
Communication and the SGEI de minimis  Regulation) insofar as they are applicable to health and 
social services coherent with each other?  
 
3.2.6.  EU added value (Did EU action provide clear added value?)  
In order to evaluate the EU added value of the SGEI rules for health and social services, 
stakeholders were asked to answer two questions.  
Question 44 inquired whether the SGEI Package, with regard to health and social 
services, allowed for a better task allocation between the Commission and the member 
States. The respondents expresse d very different views. Around half of the respondents 
who expressed a view were of the opinion that the SGEI rules allowed, at least partially, 
a better allocation of tasks between the Commission and the Member States, while the 
other half took the opposi te view.  
  

 
 78  Figure 1 2: Question 44 - Has the 2012 SGEI Package  allowed for a better allocation of tasks 
between the Commission and the Member States?  
 
3.2.7.  SGEI de minimis  Regulation  
Question 46 inquired whether the amount of aid that can be granted under the SGEI de 
minimis  Regulation, i.e. up to EUR 500 000 over any period of three fiscal years, is still 
appropriate. 28 respondents took the view that the amount of aid that can be granted 
under the SGEI de minimis  Regulation is too low.  
Figure 1 3: Question 46 – Is the amount  of de minimis  aid that can be granted under the SGEI de 
minimis  Regulation, i.e. up to EUR 500 000 over any period of three fiscal years, still 
appropriate?  
 
4. TARGETED CONSULTATION  
As described above in section 1  of the present annex , in addition to the public 
consultation, DG Competition carried out a targeted consultation in the form of an online 
questionnaire addressed to public authorities. The targeted consultation allowed public 
authorities to elaborate more on their answers and /or to flag issues not addressed in the 
open questionnaire. The results of the targeted consultations were not published.  

 
 79  In total, 21 replies were received. Out of these, 13 were received from the national level 
(e.g. ministries), two were submitted by r egional entities, and one reply was submitted by 
a municipality.  
The questionnaire was almost identical with the one sent for public consultations, with a 
mix of closed and open questions, which were devised around the five evaluation criteria 
effectivene ss, efficiency, coherence, relevance and EU added value. All closed questions 
were obligatory, but the respondents had the choice of “I Do not know” and “Not 
relevant for me” options.  
The targeted consultation covered all four documents part of the 2012 SG EI Package and 
subject of the Evaluation. However, for some respondents only part of the 2012 SGEI 
Package might have been relevant. This could be one of the reasons why the percentage 
of “I Do not know” and “not relevant for me” responses was fairly high.   
  
 
80 ANNEX VI. OVERVIEW OF THE STATE AID RULES SUBJE CT TO THE SGEI  EVALUATION  
 
State aid rules under the SGEI 
Evaluation  Entry into 
force  Expiry/Review 
clause  Part 
of 
SAM  OJ reference  Preceded by  Objective  
SGEI Decision 2012/21/EU  31 January 
2012  N/A No OJ L 7, 11.1.2012, p. 3 –10, 
Special edition in Croatian: 
Chapter 08 Volume 003 P. 289 - 
296  Decision 2005/842/EC OJ L 312, 29.11.2005, p. 67 –
73; OJ L 327M , 5.12.2008, p. 488 –498 (MT)  
Special edition in Bulgarian: Chapter 08 Volume 
002 P. 186 - 192 
Special edition in Romanian: Chapter 08 Volume 
002 P. 186 – 192 To declare certain compensation granted to u ndertakings 
entrusted with the operation of services of general 
economic interest as referred to in Article 106(2) of the 
Treaty (see Art. 2 thereof) compatible with the internal 
market and exempt them from the requirement of prior 
notification and Commiss ion approval.  
 
Communication from the 
Commission — European Union 
framework for State aid in the form 
of public service compensation  31 January 
2012  EC intended to 
review by 31 
January 2017  No OJ C 8, 11.1.2012, p. 15 –22 Community framework for State aid in the form of 
public service compensation OJ C 297, 29.11.2005, 
p. 4–7 (ES, CS, DA, DE, ET, EL, EN, FR, IT, LV, 
LT, HU, NL, PL, PT, SK, SL, FI, SV)  
Special edition in Bulgarian: Chapter 08 Volume 
004 P. 216 - 219 
Special edition in Romanian: Chapter 08 Volume 
004 P. 216 - 219 
Special edition in Croatian: Chapter 08 Volume 005 
P. 146 – 149 The principles set out in this Communication apply to 
public service compensation only in so far as it 
constitutes State aid not covered by Decision 
2012/21/EU. Such compensation is subject to the prior 
notification requirement under Article 108(3) of the 
Treaty. This Communication spells out the conditions 
under wh ich such State aid can be found compatible with 
the internal market pursuant to Article 106(2) of the 
Treaty.  
SGEI de minimis  Regulation No 
360/2012   26 April 
2012  31 December 
2023  No OJ L 114, 26.4.2012, p. 8 –13 
(BG, ES, CS, DA, DE, ET, EL, 
EN, FR, IT, LV, LT, HU, MT, 
NL, PL, PT, RO, SK, SL, FI, SV)  
Special edition in Croatian: 
Chapter 08 Volume 003 P. 297 - 
302 
 Commission Regulation (EC) No 1998/2006; OJ L 
379, 28.12.2006, p. 5 –10 (ES, CS, DA, DE, ET, EL, 
EN, FR, IT, LV, LT, HU, NL, PL, PT, SK, SL, FI, 
SV) 
OJ L 314M , 1.12.2007, p. 654 –659 (MT)  
Special edition in Bulgarian: Chapter 08 Volume 
005 P. 96 - 101 
Special edition in Romanian: Chapter 08 Volume 
005 P. 96  - 101 
Special edition in Croatian: Chapter 08 Volume 003 
P. 197 - 202. To provide a ceiling below which aid measures to 
undertakings for the provision of a service of general 
economic interest are deemed not to constitute State aid 
within the meaning of A rticle 107 TFEU, and are 
exempted from the notification procedure, because they 
are considered not to any effect on cross -border 
competition among Member States.  
Communication from the 
Commission on the application of the 
European Union State aid rules to 
compensation granted for the 
provision of services of general 
economic interest   31 January 
2012   
 No OJ C 8, 11.1.2012, p. 4 –14 (BG, 
ES, CS, DA, DE, ET, EL, EN, 
FR, IT, LV, LT, HU, MT, NL, 
PL, PT, RO, SK, SL, FI, SV)  N/A  To clarify  basic concepts of State aid, which are relevant 
for SGEI s, in particular the notion of aid, SGEI, 
economic activity etc   
 
 
 81   ANNEX VII.  RELEVANT LEGAL PROVIS IONS IN THE TFEU  
1. ARTICLE 14 TFEU  
Without prejudice to Article 4 of the Treaty on European Union or to Articles 93, 106 
and 107 of this Treaty, and given the place occupied by services of general economic 
interest in the shared values of the Union as well as their role in promoting social and 
territorial cohesion, the Union and the Member States, each within their respective 
powers and within the scope of application  of the Treaties, shall take care that such 
services operate on the basis of principles and conditions, particularly economic and 
financial conditions, which enable them to fulfil their missions. The European 
Parliament and the Council, acting by means of regulations in accordance with the 
ordinary legislative procedure, shall establish these principles and set these conditions 
without prejudice to the competence of Member States, in compliance with the Treaties, 
to provide, to commission and to fund such s ervices.  
2. ARTICLE 106  TFEU  
1. In the case of public undertakings and undertakings to which Member States grant 
special or exclusive rights, Member States shall neither enact nor maintain in force any 
measure contrary to the rules contained in the Treaties, in particular to those rules 
provided for in Article 18 and Articles 101 to 109.  
2. Undertakings entrusted with the operation of services of general economic interest or 
having the character of a revenue -producing monopoly shall be subject to the rules 
contained in the Treaties, in particular to the rules on competition, in so far as the 
application of such rules does not obstruct the performance, in law or in fact, of the 
particular tasks assigned to them. The development of trade must not be affected to s uch 
an extent as would be contrary to the interests of the Union.  
3. The Commission shall ensure the application of the provisions of this Article and shall, 
where necessary, address appropriate directives or decisions to Member States.  
Article 106 TFEU ch iefly concerns undertakings for which MS must take special 
responsibility by reason of the particular influence that they may exert over their actions. 
The Treaty provision is part of the system of undistorted competition that the TFEU 
provides by securing  equality of opportunity between the various economic operators.  
3. ARTICLE 107(1)  TFEU:  NOTION OF AID AND G ENERAL PROHIBITION  
Article 107(1) TFEU states that: “any aid granted by a Member state or through State  
resources in any form whatsoever which distorts or threatens to distort competition by 
favouring certain undertakings or the production of certain goods shall, insofar as it 
affects trade between Member States, be incompatible within the internal market”.  
Consequently, the cumulative requirements that have to be met in order for a measure to 
be considered as State aid and to fall under the State aid general prohibition are the 
following:  
a. the aid must be granted by a Member State or through State resources;  
b. there must be a selective advantage;  
c. there must be a -threat of - distortion of competition; and  
 
 82   d. there must be affectation of trade between Member States.  
I. Ex lege  derogations provided by Article 107(2) TFEU  
Once defined if the measure constitute State aid, Article 107(2) TFEU provides a list of 
State measures that are ex lege  deemed to be compatible with the internal market, 
provided that the conditions therein are met : 
a. Aid having a social character, granted to individual consumers, provided that 
such aid is granted without discrimination related to the origin of the products 
concerned;  
b. Aid to make good the damage caused by natural disasters or exceptional 
occurrences;  
c. Aid granted to the economy of certain areas of the Federal Republic of 
Germany affected by the division of Germany, in so far as such aid is required 
in order to compensate for the economic disadvantages caused by that 
division.  
II. Discretionary derogations provided by Article 107(3) TFEU  
Once defined if the measure constitute State aid, Article 107(3) TFEU provides a list of 
State measures that maybe considered compatible  with the internal market. The 
measures are the following:  
a. aid to the economic development of most d isadvantaged regions within the 
European Union;  
b. aid to promote the execution of an important project of common European 
interest or to remedy a serious disturbance in the economy of a Member State;  
c. aid to facilitate the development of certain economic acti vities or of certain 
economic areas, where such aid does not adversely affect trading conditions to 
an extent contrary to the common interest;  
d. other categories as may be specified by a decision of the Council.  
4. ARTICLE 108  TFEU  
1. The Commission shall, in cooperation with Member States, keep under constant 
review all systems of aid existing in those States. It shall propose to the latter any 
appropriate measures required by the progressive development or by the functioning of 
the internal market.  
2. If, after giving notice to the parties concerned to submit their comments, the 
Commission finds that aid granted by a State or through State resources is not 
compatible with the internal market having regard to Article 107, or that such aid is 
being misused, i t shall decide that the State concerned shall abolish or alter such aid 
within a period of time to be determined by the Commission.  
If the State concerned does not comply with this decision within the prescribed time, the 
Commission or any other interested  State may, in derogation from the provisions of 
Articles 258 and 259, refer the matter to the Court of Justice of the European Union 
direct.  
 
 83   On application by a Member State, the Council may, acting unanimously, decide that aid 
which that State is grantin g or intends to grant shall be considered to be compatible with 
the internal market, in derogation from the provisions of Article 107 or from the 
regulations provided for in Article 109, if such a decision is justified by exceptional 
circumstances. If, as regards the aid in question, the Commission has already initiated 
the procedure provided for in the first subparagraph of this paragraph, the fact that the 
State concerned has made its application to the Council shall have the effect of 
suspending that pro cedure until the Council has made its attitude known.  
If, however, the Council has not made its attitude known within three months of the said 
application being made, the Commission shall give its decision on the case.  
3. The Commission shall be informed, in sufficient time to enable it to submit its 
comments, of any plans to grant or alter aid. If it considers that any such plan is not 
compatible with the internal market having regard to Article 107, it shall without delay 
initiate the procedure provided f or in paragraph 2. The Member State concerned shall 
not put its proposed measures into effect until this procedure has resulted in a final 
decision.  
4. The Commission may adopt regulations relating to the categories of State aid that the 
Council has, pursu ant to Article 109, determined may be exempted from the procedure 
provided for by paragraph 3 of this Article.  
5. ARTICLE 109  TFEU  
The Council, on a proposal from the Commission and after consulting the European 
Parliament, may make any appropriate regulation s for the application of Articles 107 
and 108 and may in particular determine the conditions in which Article 108(3) shall 
apply and the categories  of aid exempted from this procedure.  
6. PROTOCOL 26 ON SERVICES OF GENERAL INTEREST ANNEXED  TO THE TFEU  
Article  1 
The shared values of the Union in respect of services of general economic interest within 
the meaning of Article 14 of the Treaty on the Functioning of the European Union 
include in particular:  
— the essential role and the wide discretion of national, regional and local authorities in 
providing, commissioning and organising services of general economic interest as 
closely as possible to the needs of the users;  
— the diversity between various services of general economic interest and the differences 
in the needs and preferences of users that may result from different geographical, social 
or cultural situations;  
— a high level of quality, safety and affordability, equal treatment and the promotion of 
universal access and of user rights.  
Article 2  
The provi sions of the Treaties do not affect in any way the competence of Member States 
to provide, commission and organise non -economic services of general interest.