WRITTEN QUESTION E-2338/99

by Ioannis Marínos (PPE-DE) to the Commission

(13 December 1999)

Subject: Free movement of capital in the health sector

With the advent of the new century, the provision of health services has assumed great importance in its own right. While no common health policy yet exists within the EU, I am confident that, despite all difficulties, this will be achieved at some stage.

Can the Commission say:

- Can any form of restriction be imposed on the free movement of capital in the EU health services sector? Within the framework of health programmes, is it possible for Member States to impose quantitative restrictions or encourage preferential arrangements for the equipping of hospitals or the possibility for any EU Member State national to work in the health services sector?

- Do arrangements for the free movement of capital and persons include non-governmental, non profit-making organisations, for example religious bodies? Is it possible for any religious denomination to set up one or more clinics in any Member State of its choice?

Answer given by Mr Bolkestein on behalf of the Commission

(2 February 2000)

The Honourable Member's question concerns different internal market freedoms, such as free movement of capital (Article 56) (ex Article 73B) of the EC Treaty, right of establishment (Article 43) (ex Article 52), free movement of services (Article 49) (ex Article 59), and free movement of workers (Article 39) (ex Article 48).

As far as health services are concerned, free movement of capital is an EC Treaty freedom which applies essentially to all types of investments that can be made in companies active in this particular sector (i.e. direct and portfolio investments in such companies). While some discriminatory measures could possibly be imposed on the above investments in pursuance of EC Treaty exceptions (like public order, public security, or public health), their compatibility with Treaty provisions could only be assessed after a thorough analysis of the measures. Furthermore, non-discriminatory measures could also limit investments in companies active in the health services sector provided these measures fulfil four basic conditions. They must be applied in a non-discriminatory manner, they must be justified by imperative requirements in the general interest, they must be suitable for securing the attainment of the objective that they pursue, and they must not go beyond what is necessary in order to attain it. Once again, the compatibility of such measures could only be assessed on the basis of a detailed analysis of the measures involved.

The above provisions and principles equally apply to non-governmental, non-profit-making organisations, for example religious bodies. As far as religious bodies are concerned, they benefit also from the freedom of capital movement as enshrined in the EC Treaty, but only insofar as such freedom is not restricted by national measures which could be justified on grounds of public security, public order, public health, or more generally general interest considerations as expressed above.

As for the right of establishment and free movement of services, Member States are entitled to retain restrictions in their national rules, provided that the national measures can be justified by the reasons set out in Article 46 (ex Article 56) of the EC Treaty (public policy, public security, and public health) or overriding reasons relating to a public interest, and are not disproportionate to the objective pursued by the Member State in this context. The right of establishment is conferred upon any profit-making economic operator established in the Union who wishes to establish in another Member State. Free provision of services applies both to those economic operators established in a Member State who wish to

provide a cross border service without being required to establish, and to the recipients of services (such as patients receiving health services).

National requirements that hospitals should be non-profit making are compatible with the EC Treaty. The Court of justice confirmed this principle already enshrined in Article 48 (2) (ex Article 58) of EC Treaty in the case Sodemare (case C-70/95, judgement of 17.6.1997, ECR I 3395). Other restrictions need to be examined in the light of the jurisprudence of the Court in the Kohll case (C-158/96, judgement of 28.4.1998, ECR I 1931) which refers to public health considerations, and more particularly, the need to maintain a balanced medical and hospital service open to all as well as to a specific overriding public interest linked to the need to avoid seriously undermining the financial viability of the social security system concerned. Quantitative restrictions or preferential arrangements must be compatible with these requirements. In any event, they may not lead, in law or de facto, to discrimination between citizens of the Union.

As for the possibility for citizens of the Union to exercise economic activities in the health services sector under Article 39 (ex Article 48) of the EC Treaty, as regards employed activities in hospitals the conditions for employment are laid down by the Member States. However, domestic rules must comply with Community law, in particular Council Directives 89/48/EEC(1) and 92/51/EEC(2) on the general system for the recognition of professional qualifications and Council Directives 77/452/EEC(3), 78/686/EEC(4), 80/154/EEC(5), 85/433/EEC(6) and 93/16/EEC(7) concerning the mutual recognition of diplomas of respectively nurse responsible for general care, dental practitioner, midwife, pharmacist and doctor.

(1) OJ L 19, 24.1.1989.

(2) OJ L 209, 24.7.1992.

(3) OJ L 176, 15.7.1977.

(4) OJ L 233, 24.8.1978.

(5) OJ L 33, 11.2.1980.

(6) OJ L 253, 24.9.1985.

(7) OJ L 165, 7.7.1993.