Opinion of the Committee of the Regions on the "Communication from the European Commission: Services of General Interest in Europe"
Date: 2001-09-20
Institutions: European Committee of the Regions
Subjects: EU regional policy, competition law, economic and social cohesion, principle of subsidiarity, provision of services

C 19/8

EN

Official Journal of the European Communities

22.1.2002

2.6.
The CoR believes that the availability of such infor-
mation throughout the Union will be facilitated by coherent
information-technology practices in the Member States, and
calls on the Commission to take account of the requirements
for such information-technology practices in Member States.

2.7.
The Committee believes that specific funds should be
made available to applicant countries to ensure that any
in rapidly achieving
particular difficulties that may exist
compliance with the provisions of the proposed directive are
identified and resolved.

Brussels, 20 September 2001.

The President

of the Committee of the Regions

Jos CHABERT

Opinion of the Committee of the Regions on the ‘Communication from the European
Commission: Services of General Interest in Europe’

(2002/C 19/04)

THE COMMITTEE OF THE REGIONS,

having regard to the communication from the European Commission: Services of General Interest in
Europe (COM(2000) 580 final);

having regard to the decision of its Bureau on 12 December 2000, in accordance with Article 265(5) of
the Treaty establishing the European Community, to draw up an opinion on this matter and to instruct
Commission 6 for Employment, Economic Policy, Single Market, Industry and SMEs to undertake the
preparatory work;

having regard to the communication from the European Commission: Services of General Interest in
Europe (COM(1996) 443 fin);

having regard to the resolution of the European Parliament of 17 December 1997 (R4-0357/1997) on
the said communication;

having regard to the opinion of the Economic and Social Committee of 22 September 1997 (CES
0605/1997);

having regard to the opinion of the Committee of the Regions of 16 January 1997 (CdR 148/96 final) (1);

having regard to the Lisbon European Council;

having regard to the Charter of Fundamental Rights;

having regard to the Nice European Council;

having regard to the conclusions of the Stockholm summit;

having regard to the draft opinion (CdR 470/2000 rev. 2) adopted by a majority by Commission 6 on
2 July 2001 (rapporteur: Mr Joseph (F/PSE); mayor of Bastidonne, vice-president of the Provence-Alpes-
Côte d’Azur region);

(1) OJ C 116, 14.4.1997, p. 52.

22.1.2002

EN

Official Journal of the European Communities

C 19/9

whereas services of general interest have a key role to play for society as a whole;

whereas modern, global society can only be viable if it is based on a European model of social organisation
that balances its three supporting pillars: a democratic political system with fundamental freedoms and
human rights, a market economy and social cohesion;

whereas the concept of service of general interest exists in all countries, even in different forms and is
underpinned by shared values on which European integration is based;

whereas the Europe that is being built, looking ahead to the IGC in 2004, must become a true Europe of
citizens,

adopted the following opinion at its 40th plenary session on 19 and 20 September 2001 (meeting of
20 September).

The Committee of the Regions

1. The mission of Services of General Interest in the

European Union

welcomes the European Commission’s communication on
Services of General Interest in Europe which sets out to clarify
the respective roles of the various levels of public authority
and the competition and internal market measures that apply
interest (SGIs) and its intention to
to services of general
develop a European framework for the proper functioning of
services of general interest in which national, local and regional
authorities, together with the Community, have their role to
play in accordance with Article 16 of the EC Treaty;

welcomes the respect for the principle of subsidiarity with
regard to the freedom that the Member States have to define
what constitutes a service of general interest and decide how it
should be used as specified in the Commission communication;

considers, however, that the European Commission’s contri-
bution falls short of the legitimate expectations of the various
actors concerned, both in terms of the role and mission of
SGIs and the proposals set out in the European Commission’s
communication;

notes, moreover, that the European Commission’s communi-
cation contributes to a clearer understanding of the true
importance of SGIs in the European Union, but that it has no
legal value in the hierarchy of Community law and can only
be considered as a position paper, which does not bind the
European Commission in its decisions;

The Committee of

1.1.
the Regions (CoR) notes with
interest that in its definition of the mission of SGIs the
European Commission recognises their specific nature and
social and economic role, in particular by referring to a broad
concept of the needs of users who must be covered by SGIs.
In this respect, the Committee welcomes the explicit reference
to the specific needs of certain population groups (e.g. the
disabled or those on low incomes) and the obligation to
provide complete territorial coverage of essential services, not
always governed by profitability criteria, including remote or
inaccessible areas, whose economic development will be
boosted and whose social and territorial cohesion will be
improved.

1.2.
The Committee therefore considers that SGIs are part
of the European social model and that they contribute to the
essential values of solidarity and cohesion. In this respect, they
also play an important role in achieving the primary goals of
the European Union.

has the following remarks and recommendations to make on
the European Commission’s communication.

1.3.
The Committee notes that the European Commission’s
definition of SGIs is not very clear and that it maintains
confusion as to the nature of their general-interest function
and the legal scope of their mission in Community law.

C 19/10

EN

Official Journal of the European Communities

22.1.2002

1.4.
The Committee also draws attention to the definition
of SGEIs as envisaged in Article 16 of the Treaty which is also
‘SGEIs operate on the basis of principles and
too vague:
conditions which enable them to fulfil
their missions.’
Although this wording recognises the specific nature of the
missions of SGEIs, it is open to interpretation given the lack of
a general framework to define the criteria for assessing their
missions and the conditions of their application. However, the
Committee feels that the substance of Article 16 should be
heeded when the Commission frames regulations for the
individual supply areas.

transitional system ‘during the process of passing from mon-
opoly provision to openly competitive markets’.

The Committee therefore intends to strengthen the
2.4.
reference to the following guiding principles taken from the
European Commission’s communication for the establishment
of SGIs:

1.5.
The Committee recommends that joint values and
principles be laid down in the Treaty to guide the application
of SGIs in the European Union in order to provide a reference
framework on this issue at Community level.

— the right of public authorities to consider that certain
services are in the general interest when market forces
may not result in a satisfactory provision, and that they
take the form of general interest obligations;

2. The role of SGIs in the economic, social and territorial

cohesion of the European Union

2.1.
The Committee supports the European Commission’s
explicit reference to the leading role played by SGIs in
strengthening economic, social and territorial cohesion and
believes that the requirements of economic, social and terri-
torial cohesion should be given priority in making provisions
for services of general interest and regulations to govern them.
Furthermore, the Committee insists on the fundamental role
played by local and regional authorities in defining and
developing SGIs.

2.2.
The Committee wishes to stress, on this issue, that the
principle of economic and social cohesion under Article 2 of
the Treaty takes precedence over competition policy and that
the introduction of indirect management arrangements in SGIs
must be geared to achieving higher levels of prosperity for
citizens. Fulfilling the mission of SGIs must, therefore, be
entirely subject to Community policy and that the mission
itself should be clearly defined in Article 3 of the Treaty, with
the two aims of general interest and competition serving the
same purpose,
to
universal service.

i.e. citizens’ satisfaction and the right

The Committee supports the right to universal service
2.3.
guaranteed over time and therefore wonders why the European
Commission’s communication describes universal service as a

— the guarantee of universal access, which is the obligation
to provide a given service throughout the territory of a
country at an affordable price and to a similar standard;

— complete territorial coverage of essential services in
remote or inaccessible areas and in ‘problem’ inner-city
areas;

— the need to view essential natural elements and rare
resources (such as air, water) as ‘common property’ which
can be managed by public authorities, agencies or
companies.

in particular,

In this respect

2.5.
The Committee also wishes to point out the import-
ance of applying the principle of ‘equity’ in financing services
of general interest for outlying, upland and sparsely populated
regions in order to promote not only economic and social
cohesion, but also sustainable development (regional and local)
and job creation. This implies reviewing arrangements for
financing SGIs,
truly allowing for financial
solidarity compensation to be made insofar as this would
comply with the actual achievement of general-interest mis-
sions.
the Committee does not share the
European Commission’s opinion of the central issue of State
aid, notably ‘de minimis’ aid which might be applied to SGIs.
Although the European Commission recognises the need to
fund extra costs arising from public services of general
interest, it has limited State aid to these. The Commission’s
communication precludes methods of financing based particu-
larly on compensation. The Commission should specify that
this limitation to extra costs should not prevent individual
Member States, in the light of their situations and needs, from
framing different compensation systems aimed at creating
equivalent conditions throughout their territory for the pro-
vision of services in the general interest.

22.1.2002

EN

Official Journal of the European Communities

C 19/11

2.6.
The Committee wishes to point out that the concept
of territorial cohesion, which is as fundamental to economic
and social cohesion as it is to fulfilling the missions of SGIs, is
recognised in Article 16 of the Treaty on SGEIs but not in the
Treaty’s basic principles, and considers that this reference
should be included in the Treaty article on economic and
social cohesion.

The Committee considers, given forthcoming EU
2.7.
that SGIs should play an essential role for
enlargement,
territorial cohesion and the implementation of the acquis
communautaire in these countries, whose levels of development
are considerably lower than the current Community average.

3. The application of the principle of subsidiarity in
establishing and providing general interest services

The Committee shares the European Commission’s
3.1.
explicit reference to the principle of subsidiarity which must
guide the choice of what constitutes an SGI and how it is to be
provided, and mentions that
‘action at appropriate level,
Community, national, regional or local level needs to be taken
to establish criteria for services of general interest’.

The Committee shares the European Commission’s
3.2.
view in considering that responsibility for deciding whether a
service is to be regarded as a service of general interest and
how it should be operated are issues that are first and foremost
decided locally or regionally and that this should be done in
such a way as to respect the Constitutions of the Member
States.

3.3.
The Committee believes, given that local and regional
levels are closest to the citizens concerned, that they are best
placed to judge what services of general interest should be
implemented, how they are to be managed and their quality,
taking into consideration the type of population involved.

4.2.
The Committee notes, in this respect, the three prin-
ciples underlying the application of Article 86 of the Treaty on
competition and wishes to include the following in respect of
their application to SGEIs:

— Neutrality as regards the public or private ownership of
companies implies that there is not necessarily a corre-
lation between the privatisation of public companies for
the sake of competition policy and fulfilling the mission
of SGIs, as the latter can be achieved by both private and
public companies; in addition the indirect management of
SGIs must be governed by the principles of effectiveness,
efficiency and proximity to citizens.

— Member States’ freedom to define means that Member
States are primarily responsible for defining what they
regard as services of general economic interest on the
basis of the specific features of the activities, the only
limitation being a check to make sure that there has been
no apparent error. This principle should apply from local
or regional level by virtue of the principle of subsidiarity
and considering the socio-economic specificity of the
regions concerned.

— Proportionality which results from Article 86(2) implies
that consideration be given to the means required to fulfil
the general-interest mission and that these can, contrary
to the European Commission’s opinion, create trade
distortions arising from factors such as remoteness (both
geographical and terrain-related), social exclusion and
sustainable development, etc. so that everyone has proper
access to essential services.

4. The application of competition principles to the

mission of SGIs

4.1.
The Committee considers that the clarifications given
by the European Commission on the relationship between
interest and the single market are not
services of general
entirely satisfactory, largely because it does not give equal
consideration to EU competition policy and SGIs.

4.3.
In order to provide more legal and planning certainty
for municipalities and regions when providing services of
general
interest, the Committee feels that it is absolutely
essential for so-called secondary legislation (directives, regu-
lations, communications) to lay down the guidelines followed
by the Commission as to the scope and application of
European competition law in particular. In this context the
Committee welcomes the efforts of the Commission to clarify
its practice, especially as regards the law on aid, by providing
lists of examples and data bases. However, the Committee
thinks it would be desirable to have some general, abstract
regulations, whose content went beyond being simply a
collection of individual case decisions.

C 19/12

EN

Official Journal of the European Communities

22.1.2002

5. The application of the ‘efficiency’ principle in the

6. Boosting the idea of a public interest obligation

provision and management of SGIs

5.1.
The Committee considers it imperative for the mission
of services of general interest to meet adequately the identified
needs of users and to subscribe to the requirements of
efficiency and quality for services offered to users.

6.1.

The Committee of the Regions points out that:

The Committee advocates that all the relevant auth-
5.2.
orities within the EU focus on services of general interest in
order to ensure better quality, more efficient management and
the guarantee that users will be protected, and recommends
framing common guidelines for:

— Article 16 of the Treaty only applies to services of general
economic interest and not to all SGIs, and that the
European Commission’s communication implicitly con-
firms this, as it only refers to services of general economic
interest when the question of competition policy arises
and thus adds to the confusion over the legal status of
the mission of SGIs in Community law;

— the quality of service provision;

— funding service activities;

— management and financial transparency;

— the evaluation of services and user review.

Given the legal uncertainty surrounding SGIs, and insofar as it
is large public or private bodies which take on this type of
service (SGIs and SGEIs), the Committee believes it is important
for the protection of users to be effective, since they are unable
to defend themselves against potential failure on the part of
the large organisations concerned to meet quality and/or price
obligations, as these organisations are in a much stronger
position than consumers.

5.3.
The Committee adheres to the basic principles set out
in the Commission communication intended to guide the
provision of SGIs, i.e.:

— clear definition of basic obligations to ensure good quality

service provision;

— full transparency e.g. on financing services (tariffs, terms
and conditions, choice and financing of providers);

— a guarantee of universal access for users;

— choice of service and, where appropriate, of supplier and

effective competition between suppliers;

— independent review and control of service provision.

— SGIs are only included in the Community’s legal panoply
in the concepts of universal service, service of general
economic interest and public service, which are embodied
in Court of Justice judgements;

— the jurisprudence of the Court of Justice recognises that
SGIs’ general-interest missions do by nature vary, as they
apply to individual cases. They cannot therefore provide
legal certainty to providers of SGIs in their own right.

6.2.
The Committee notes the legal uncertainty in the
Treaty on the missions of services of general interest and
considers that the European Commission’s communication
approaches services of general interest as an exception to a
common legal system (free competition), which is contrary
not only to the spirit but also the letter of Article 16, included
as EC ‘principles’, instead of taking positive steps to promote
their role in developing social and territorial cohesion.

6.3.
The Committee believes that the mission of services of
general interest should be included in the fundamental objec-
tives of the European Union on a par with the accomplishment
of the single market, while respecting the principle of subsidiar-
ity. In this manner, creating the single market and pursuing
the general interest are complementary goals in the European
endeavour and would enhance economic, social and territorial
cohesion in the European Union. The regulation, arrangement
and organisation of the tasks of services of general interest is
the job, above all, of the regions and municipalities. In the
Committee’s view it is urgently necessary in this context to
guarantee at European level, more clearly than hitherto, that
public interest obligations will be respected whilst competition

22.1.2002

EN

Official Journal of the European Communities

C 19/13

is being promoted. The guarantee of equal access, security of
supply and continuity of service, quality of service as well as
democratic control and public responsibility for providing the
service are basic criteria for providing services in the general
economic interest.

The Committee recommends legal recognition of SGIs
6.4.
in the Treaty and suggests inserting the mission of services of
general interest in a suitable form in Article 3 of the Treaty, in
order to back up the exercising of powers by the Member
States in the area of services of general interest.

7. A common European framework of reference for the

missions and operations of SGIs

7.1.
The Committee notes with interest the guidelines put
forward by the European Commission on the European
approach and role of SGIs in Community policy, i.e.:

— the prime role of SGIs in supporting the competitiveness
of the European economy, the quality of services provided
and consumer protection;

— the prime role of SGIs in enhancing economic, social and
territorial cohesion: SGI networks are an essential aspect
of cohesion, especially in rural and deprived urban areas;

— respect for the principle of subsidiarity in Member States’
freedom to decide what constitutes a service of general
interest;

— reference to the promotion of social and territorial

cohesion under Article 16 of the Treaty;

— the need to adopt a pro-active attitude with respect to
SGIs and to encourage a European vision of SGIs in
partnership with the national, regional and local levels.

Brussels, 20 September 2001.

7.2.
The Committee considers that these principles meet
some of its concerns about services of general interest, but
they are very vague and fall short of its objectives. Furthermore,
the European Commission’s position is contradictory in that
the communication gives priority to accelerating public sector
liberalisation as the immediate response to these guidelines.

The Committee recommends, in addition to specific
7.3.
legal recognition for the mission of services of general interest
in the Treaty,
the drafting of a common framework of
references which would guide SGIs within the EU.

7.4.
The Committee notes with interest the reference in the
European Commission’s communication to other Community
actions which have the same goals of consumer protection
and economic, social and territorial cohesion as SGIs and
which could help the latter to fulfil their mission and, in
particular, to two initiatives directly connected with European
spatial development policy:

— the adoption of a European Spatial Development Perspec-
tive setting out the policy options for the development of
the European territory;

— the creation of a European Research Area including
aspects on the ‘territorialisation’ of research and electronic
networks.

7.5.
The CoR believes that these Community initiatives are
important to a future approach to regional policy and the
Structural Funds, in particular, in terms of the development of
transnational and interregional co-operation underpinned by
polycentrism and the constitution of trans-European networks
of SGIs.

7.6.
In order to complement its work and with a view to
drawing up a new opinion in anticipation of the IGC in 2004,
the Committee intends to undertake a study on the definition
and development of SGIs in the different Member States.

The President

of the Committee of the Regions

Jos CHABERT