WRITTEN QUESTION E-1750/01

by José García-Margallo y Marfil (PPE-DE) to the Commission

(15 June 2001)

Subject: Intra-Community investment

In 1997 the Commission adopted an interpretative communication(1) on intra-Community investment which it did not submit to either Parliament or the Council. According to Commissioner Bolkestein, the objective of the communication was to indicate, to national authorities (), how the Commission interprets the provisions of () the Treaty on capital movements and the right of establishment.

The Presidency conclusions of the Stockholm European Council state that the Commission will also ensure that those enterprises which still benefit from a monopoly situation on their national market will not unduly benefit from that situation.

Will the Commission act on the Stockholm mandate and use it as an interpretative criterion to resolve the cases now pending in the energy sector (Hidrocantábrico and Montedison)?

(1) OJ C 220, 19.7.1997, p. 15.

Joint answerto Written Questions E-1749/01 and E-1750/01given by Mr Bolkestein on behalf of the Commission

(13 November 2001)

1. As regards the question of intra-Community investment in general, the Commission would refer the Honourable Member to its answer to Written Question P-1615/01 by Mr W.G. Van Velzen(1).

The answer to the two more specific questions raised by the Honourable Member draw on the conclusions reached by the Commission at its meeting on 20 June 2001.

2. As regards Parliament's Resolution calling on it to replace its 1997 communication with a proposal for a directive, the Commission noted that the matter concerned fundamental and directly applicable freedoms established by the Treaty, namely the free movement of capital and freedom of establishment.

As the Court of Justice has frequently held, this type of provision does not require any implementing measures as it is specific and unconditional. At the most, implementing measures might be useful to facilitate exercise of the rights attaching to the freedoms concerned in cases where differences in national laws could create awkward obstacles. Directives which, as suggested in the Resolution, limited rather than facilitated the exercise of those rights would be contrary to Community law. Furthermore, the Court has consistently held that even Community institutions themselves are not entitled to restrict the fundamental freedoms guaranteed by the Treaty.

On the other hand, in its institutional role (Article 211 of the EC Treaty), the Commission not only proceeds against Member States that infringe the rules but often decides, as a preventive measure, to inform national authorities and economic operators of the way it interprets provisions of the Treaty (naturally, under the control of the Court of Justice), in order to reduce the risk of divergent legal interpretations and thus prevent infringements.

The 1997 communication was adopted in accordance with the Commission's specific competences and respects the directly applicable nature of the provisions on free movement of capital and freedom of establishment.

In the circumstances, since directly applicable provisions do not require any implementing measure, the Commission, in order to explain its position, has decided to initiate a dialogue with Parliament in response to the latter's Resolution calling on it to put forward a directive on restrictions on intra-Community investment.

3. As regards the Presidency conclusions of the Stockholm European Council in March 2001, the Commission concluded at its meeting that progress in opening up energy markets had in most Member States been more rapid than provided for in the directives and that this had led to distortions of competition between firms.

The Commission considered that this situation called for: strict application of the competition rules and the state aid rules, including those on nuclear energy; more rapid adoption by the Council and Parliament of the second liberalisation package; the possible application of Article 86, and particularly paragraph 3, in the event of any delay in adopting the package, with directives or decisions being addressed to Member States with a view to eliminating any distortions of competition, while preserving service obligations of general economic interest; and, lastly, a speedy solution to problems linked to tarification in intra-Community trade and to the development of infrastructures which impeded the effective opening-up of markets.

On the other hand, the Commission concluded that the concerns expressed at the Stockholm European Council must not give rise to unilateral action by Member States in breach of the fundamental freedoms of the EC Treaty.

(1) See page 5.