WRITTEN QUESTION E-1893/00

by Elisa Damião (PSE) to the Council

(19 June 2000)

Subject: Public services

Under the Portuguese Presidency, the Council decided to speed up the liberalisation of public services, a decision which was undoubtedly taken on the basis of studies of the impact of such liberalisation on employment and social cohesion.

Given that not all Member States have even set up regulatory bodies in the various sectors,

can the Council tell me whether the Union is in a position to guarantee:

- that no one will be deprived of public services;

- that there will not be undue amalgamation, to the detriment of consumers and certain Member States;

- that jobs will not be sacrificed in the name of investors' interests?

Reply

(23 October 2000)

It is recalled that Article 16 of the ECT states that given the place occupied by services of general economic interest in the shared values of the Union as well a their role in promoting social and territorial cohesion, the Community and the Member States, each within their respective powers and within the scope of application of the Treaty, shall take care that such services operate on the basis of principles and conditions which enable them to fulfil their missions.

The Council has repeatedly emphasised the importance of ensuring that liberalisation takes due account of public service obligations in the relevant sectors. The recent European Council in Santa Maria da Feira emphasised that the concerns and significance of public services of general interest must be taken into consideration in a dynamic single market.

This commitment is further reflected in the recent proposal, adopted by the Commission on 30 May 2000, for an amendment to the postal services Directive, which stresses the need to maintain the provision of universal services and points out that, even with the prospect of full market opening in 2007, projections suggest that a positive level of growth in the global activities of the universal service providers will continue to occur. A similar concern is highlighted in the Commission's Communication of 23 May 2000 concerning recent progress

with building the internal electricity market. This Communication states that, as a precondition for full liberalisation, it is necessary to maintain and raise standards of public service and to take into account the implications in terms of jobs in the industry.

Safeguards against undue amalgamation with detrimental effects are provided by Treaty Articles 81 and 82 and further Community legislation deriving therefrom. In addition, Article 153(2) guarantees that consumer protection requirements shall be taken into account in defining and implementing other Community policies and activities.

It should be emphasised that Treaty Article 127(2) ensures that liberalisation will take into consideration the objective of a high level of employment, and that the realisation of the untapped economic potential of a fully integrated and operational internal market in these areas would have a significant impact on job creation.

The key aim of liberalisation, which considers the specific characteristics of each of the sectors concerned, including relevant geographical factors, is to ensure the effective functioning of the internal market so as to ensure consumer wellbeing, and generate sustainable economic growth through which a higher level of employment can then be supported. The call to speed up the liberalisation of public services reflects the fact that progress made in the opening up of some public utilities to competition has already produced significant economic and social dividends, in terms of lower prices, innovative services and, in certain cases, new jobs.