WRITTEN QUESTION E-0690/00

by Antonio Di Pietro (ELDR) to the Commission

(9 March 2000)

Subject: Establishment of a safe-driving centre in the Grand-Duchy of Luxembourg

The principle of freedom of establishment, sanctioned in Article 43 of the EC Treaty, which bans all restrictions on the freedom of a citizen of one Member States to set up business in the territory of another, is one of the cornerstones of the European Union.

On the basis of this right there can be no restrictions on the opening of agencies, branches or subsidiaries by citizens of one Member State in the territory of another Member State. Consequently, they can set up and manage businesses and companies under the conditions laid down by the legislation of the country of establishment for its own citizens.

Is Luxembourg entitled to deny the principle of freedom of establishment to a Union citizen of non-Luxembourg nationality, on the basis that the business which he wants to set up would allegedly not be economically viable? Is the Commission aware that this has happened to an Italian national who, on the basis of the Ministry of Transport's regulation of 19 June 1995, wanted to set up a safe-driving centre in the Grand Duchy and was refused permission on the grounds that on the basis of economic assessments a single centre amply caters for the country's needs?

Does this discretionary refusal not, in effect, distort the rules of free competition and the market, to the detriment of Luxembourg citizens' freedom of choice?

Is the Commission also aware that the Luxembourg Ministry of Transport issued a second regulation on 8 May 1999, revising the earlier regulation of 19 June 1995, also dealing with the establishment of a safe-driving centre on Luxembourg territory, but laying down new technical criteria, which in effect maintain a monopoly for the only existing safe-driving centre on Luxembourg territory, belonging to Goodyear and situated at Colmar-Berg?

Answer given by Mr Bolkestein on behalf of the Commission

(17 April 2000)

As the Honourable Member points out, the principle of freedom of establishment, sanctioned by Article 43 (ex Article 52) of the EC Treaty, may be exercised by natural or legal persons. In the case of legal persons, therefore, it is permitted to open agencies, branches or subsidiaries in Member States other than that in which the principal place of business is based.

However, the Commission would like to clarify that restrictions to exercising this freedom may nevertheless be recognised as being compatible with the principle of Article 43 of the EC Treaty if they are justified by an overriding reason relating to the public interest and if they are not disproportionate to the objective being pursued. Such reasons may not include interests of an economic nature.

The specific situation mentioned by the Honourable Member has been brought to the Commission's attention and, according to the information it has been given, it seems that the decision taken by the Luxembourg authorities to deny permission for economic reasons is not compatible with the principle sanctioned by Article 43 of the EC Treaty. This decision, based on a regulation which was no longer in

force in Luxembourg at the time the Commission received its information, is not grounds for an action for failure to fulfil obligations under Article 226 (ex Article 169) of the EC Treaty but may be appealed by the interested party at national level.

The Commission has also been informed that the Ministry of Transport's regulation of 19 June 1995 was repealed and replaced by a regulation of 8 May 1999. Upon examination it contains detailed criteria for accrediting structures required for training and also training organisation procedures. In this regard, the Commission does not have any information which demonstrates and proves that these criteria in effect maintain a monopoly for the Colmar-Berg centre.