WRITTEN QUESTION E-0363/03

by Roberta Angelilli (UEN) to the Commission

(12 February 2003)

Subject: Holding company called Newco belonging to Rome City Council doubts as to whether it complies with legislation on public services

Rome City Council recently presented a draft decision setting up a limited company to be responsible for the unified management of all the companies in which the Council has shares, many of which currently carry out activities defined as services of general interest.

The Council's share in these companies is substantial, even if it does not constitute total control, and together they would form a group called the Rome City Council Group. It is supposed to ensure the pursuit of public interests and justify the granting of special or exclusive rights for the execution of the duties deriving from them.

However, the transaction envisaged by the Council would involve turning over all the shares held by the Council to a new company which, although 97 % of it would be owned by the Council, envisages a decision-making mechanism for fundamental issues which would not fully involve the Council. In actual fact, the member representing the Council would be appointed by the Mayor and, contrary to the provisions

of Article 42(e) and (l) of the Unified Text governing local authorities (Legislative Decree No 267/2000), according to which decisions concerning fundamental acts relating to public services must be adopted by the City Council, the Mayor would therefore be the only element of public control in the management company.

In view of all this and the Commission's increasing interest in improving the quality of general services in Europe (cf. report COM(2001) 598, Communication COM(2000) 580 and a number of decisions on the subject, including C(2001) 1684) can the Commission answer the following questions:

1. Does the transaction described meet the criteria and obligations laid down for the quality of general services?

2. Is the requirement of transparency, a priority in this sector, being respected by the statutes of the new company, in particular as regards the decision-making structure?

3. Does the transaction not constitute an infringement of Article 16 of the EC Treaty on the principles and conditions for carrying public service tasks?

Answer given by Mr Prodi on behalf of the Commission

(21 March 2003)

In its Communication on services of general interest in Europe(1) to which the Honourable Member is referring, the Commission highlighted that the Member States have a wide margin to define what they regard as a service of general economic interest and how this service should be operated. In the absence of specific Community rules, these issues are first and foremost decided by the competent national, regional or local authorities. This also implies that Community law does not question whether undertakings in charge of providing general interest services should be public or private.

The case described by the Honourable Member appears to be covered by this principle which is also underlying Article 16 of the EC Treaty. In particular, the Transparency Directive, Commission Directive 80/723/EEC of 25 June 1980 on the transparency of financial relations between Member States and public undertakings(2), only addresses the financial relations between public undertakings and public authorities and the accounting of certain undertakings but does not cover the internal decision-making process within an undertaking.

(1) COM(2000) 580 final.

(2) OJ L 195, 29.7.1980, as last amended by Commission Directive 2000/52/EEC of 26 July 2000, OJ L 193, 29.7.2000.