Opinion of the Economic and Social Committee on "Services of general interest"
Date: 2002-07-17
Institutions: European Economic and Social Committee
Subjects: collective interest, economic policy, provision of services, public service, services contract, social policy, social services

7.10.2002

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5.2.3.
The membership negotiations are thus not only a
question for civil servants and politicians. The social partners
and other representatives of civil society, such as organisations
representing farmers, consumers, environmentalists etc., must
also be involved and informed.

5.2.4.
The EESC is convinced that the early involvement of
the social partners and other NGOs will ensure a better
understanding of the EU rules and proper implementation of
them.

Brussels, 17 July 2002.

The President

of the Economic and Social Committee

Göke FRERICHS

Opinion of the Economic and Social Committee on ‘Services of general interest’

(2002/C 241/23)

On 10 January 2002, in a letter from Mr Prodi, the Commission asked the Economic and Social
Committee to draw up an exploratory opinion, under Article 262 of the Treaty establishing the European
Community, on ‘Services of general interest’.

The Section for Transport, Energy, Infrastructure and the Information Society, which was responsible for
preparing the Committee’s work on the subject, adopted its opinion on 19 June 2002. The rapporteur
was Mr Hernández Bataller.

At its 392nd Plenary Session of 17 and 18 July 2002 (meeting of 17 July), the Economic and Social
Committee adopted the following opinion by 58 votes to 11, with one abstention.

1.

Introduction

1.1.
The concept and characteristics of services of general
interest have been defined in various Community docu-
ments (1), and this definition continues to be essentially valid
today (2). Accordingly:

— service of general interest covers market and non-market
services which the public authorities class as being of
general
to specific public service
obligations;

interest and subject

( 1) Namely Communication from the Commission on Services of
general interest in Europe (OJ C 281/3, 26.9.1996); ESC Opinion
949/99, adopted at the Plenary Session of 20 and 21.10.1999
(Rapporteur: Mr Hernández Bataller).

( 2) See respectively Communication from the Commission of
29.9.2000 (COM(2000) 580 final) and the Commission’s Report
to the Laeken European Council of 17.10.2001 (COM(2001) 598
final).

— service of general economic interest refers to market
services which the Member States subject to specific
public service obligations by virtue of general interest
criteria.

1.1.1.
Services of general interest may also encompass the
following categories, as an integral part of the ‘European social
model’:

— Services that involve the exercise of power by the public

authorities and match the concept of ‘state obligations’.

— Social services provided directly by the public authorities

at local, regional and state level.

— Social services provided by non-profit-making organis-

ations.

— Services of general economic interest, whether provided

by public, private or mixed undertakings.

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The concept of services of general interest is con-
1.1.2.
stantly evolving.
It encompasses those services that are
important in people’s daily lives, such as transport, postal
services, telecommunications, broadcasting, culture and heri-
tage preservation, education, hospitals, health services, social
services, port services, refuse collection, and drinking water
and energy supply, in particular electricity (1) and mains gas.

1.4.
As part of the movement towards ever-closer European
integration, consolidated in the political achievements of the
Treaties of Maastricht and Amsterdam, Article 16 of the TEC
stipulates that ‘the Community and the Member States shall
take care that such services operate on the basis of principles
and conditions which enable them to fulfil their missions’.
There is therefore a need to clarify the Community concept of
services of general interest (6), as well as its objectives and
tasks, and lay these down in supranational legal instruments (7).

The main criteria characterising a service of general
1.1.3.
interest are: equal access, with no discrimination; continuity of
service; and the ability to adapt to necessary changes. These
services are based on the following principles and objectives:
solidarity; universality; safety; fair pricing; quality of service,
the level of which must be specified by the public authority
responsible; efficiency, which must be verified objectively;
democratic control, transparency and public responsibility for
decisions relating to the management of technical and financial
results; and consultation, in particular with workers and their
trade unions, and users/consumers and their representative
associations.

1.2.
Court of Justice (CJEC) case law has also identified a
wide range of economic activities that are covered by this
concept (2), such as, the management of one of the traditional
branches of social security (3) (insurance against accidents at
work and occupational diseases), the organisation of trade
fairs (4) (to guarantee their quality and safety), and the treatment
of non-hazardous building waste (5).

1.5.
The Commission considers these services to be an
essential component of European society and recognises the
need for intervention by the public sector when market supply
is insufficient. Furthermore, to fulfil
these
services require balanced funding. This can be achieved
through compensatory State aid in line with the Treaty.

their missions,

The Commission’s strategy comprises two phases.
1.6.
Firstly, it proposes drawing up a Community framework for
State aid for undertakings entrusted with the management
of services of general
interest. Secondly, having evaluated
experience gained, the Commission may adopt a regulation
exempting certain State aids for services of general interest.
This is known as block exemption.

It must also be pointed out that the Treaties did not
1.3.
initially assign the EU institutions the specific tasks of defining
and safeguarding services of general interest in the process of
European integration. Gradually, however, they took on this
responsibility when they realised that action by the Member
States could conflict with free competition and the fundamen-
tal economic freedoms of the internal market.

2. Sector-specific legislation

( 1) This document examines those services that correspond to the
Section for Transport, Energy, Infrastructure and the Information
Society.

( 2) Namely drinking water supply, maintenance of river navigability,
continuous electricity supply, television emissions, basic postal
services, management of the public telecommunications network,
maintenance of loss-making air routes, etc.

( 3) Judgment of the Court of Justice of 22.1.2002 (Case C-218/00).
Prior to this it passed a similar Judgment on 17 February 1993
concerning the joined cases C-159/91 and C-160/91.

( 4) Conclusions of Advocate General Alber submitted on 29.5.2001
concerning Case C-439/99, points 67-69 and 147-148. Judgment
of the Court of Justice of 15.1.2001 concerning Case C-439/99.
( 5) Judgment of the Court of Justice of 23.5.2000 concerning Case

C-209/98.

In the transport sector, the legislation and initiatives
2.1.
adopted at Community level meet different but complementary
objectives.

(6) Article 16 of the TEC includes services of general interest among
the ‘shared values’ of the Union and establishes their role in
‘promoting social and territorial cohesion’.

(7) If the Community can protect services of general interest with the
same fervour as it does economic freedoms and the efficiency of
the internal market, it will have reached a stage in the process of
political integration which can only enhance its singular nature
compared with other international organisations.

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2.1.1. With regard to transport by rail, road and inland
waterway, Council Regulation (EEC) No 1191/1696 of 26 June
1969 grants authorities in the Member States the right to
conclude public service contracts with transport undertakings
to ensure minimum frequencies, capacity, routes, tariffs and
timetables, and continuity of service.

2.2.1. With regard to air transport, public service obli-
gations imposed on scheduled air services (4) and, in particular,
choice of route, have in general achieved satisfactory results
by granting the service to the operator offering the best
conditions (5). However, despite the fact
that the gradual
opening of the air transport market was finalised on 1 July
1998, a transparent legal and economic regime regarding the
obligation to provide regular services to peripheral, inland and
less favoured regions has yet to be properly defined.

The Commission has proposed a new Framework (1)
2.1.2.
designed to offer consumers better services, keep costs under
control, and ensure the highest level of safety. This proposal
introduces the concept of ‘regulated competition’, based essen-
tially on the regular renewal of exclusive rights in a market
based on free access. The Committee approves (2) the most
important regulatory instruments listed in the proposal,
in
particular, the obligation for the competent authorities to
provide adequate public passenger services; the establishment
of quality criteria; financial compensation that covers expendi-
ture incurred in meeting the public service requirements;
compensation for the cost of public services; the granting of
exclusive rights, for a specified period; and the organisation of
competition through tendering.

It

is hoped that

the proposed
the approval of
2.1.3.
measures will
increase consumer satisfaction regarding all
types of urban transport and revitalise the use of rail, the mode
of transport for which the Commission intends to present the
most ambitious measures.

2.1.4.
Therefore, while the package of directives on infra-
structures is likely to improve users’ satisfaction in the medium
term, the European ESC (3) agrees that there is a need for
Community action: for institutional, social, economic and
transport policy reasons, the whole system needs a high level
of interconnection and integration.

( 1) Proposal for a Regulation of the European Parliament and of the
Council on action by Member States concerning public service
requirements and the award of public service contracts in
passenger
road and inland waterway.
COM(2000) 7 final.

transport by rail,

( 2) ESC Opinion on the Proposal for a Regulation of the European
the Council on action by Member States
Parliament and of
concerning public service requirements and the award of public
service contracts in passenger transport by rail, road and inland
waterway. COM(2000) 7 final. OJ C 221, 7.8.2001.

( 3) ESC Opinion on the Proposal for a Directive of the European
Parliament and of the Council on the interoperability of the trans-
European conventional rail system. COM(1999) 617 final. OJ
C 204, 18.7.2000.

2.2.2.
Furthermore, in its White Paper on transport pol-
icy (6), the Commission calls for a high-quality public service.
It has also presented a proposal concerning the reinforcement
of passenger rights, including compensation where travellers
are delayed or denied boarding due to overbooking by
airlines (7), as is already envisaged for certain rail routes.

2.3.1. With regard to maritime cabotage, the CJEC ruled
that authorities are allowed to impose public service obli-
gations on some shipping companies and, at the same time, to
conclude so-called ‘public service contracts’ with others (8).
With regard to the amendment of Regulation (EC) No. 3577/
92, the European ESC (9) pointed out that in some Member
States, island cabotage operators are bound by public service
obligations which impose conditions of regularity, routing and
frequency of stops, making it impossible for their ships to be
used for other purposes.

(4) Minimum frequency, timetables, types of equipment used and
capacity offered: Council Regulation (EEC) No 2408/92,
23.7.1992.

(5) COM(1999) 182 final, 20.5.1999.
(6) White Paper on European transport policy for 2010: time to

decide. COM(2001) 370 final.

(7) Proposal for a Regulation of the European Parliament and of
the Council establishing common rules on compensation and
assistance to air passengers in the event of denied boarding and
of cancellation or long delay of flights. COM(2001) 784 final.
(8) Judgment of 20 February 2001, Analir and others, C- 205/99.
(9) ESC Opinion on the Proposal for a Council Regulation (EC)
amending Council Regulation (EEC) No 3577/92 applying the
principle of freedom to provide services to maritime transport
within Member States (maritime cabotage) and the Proposal for a
Council Directive on manning conditions for regular passenger
and
States.
COM(1998) 251 final. OJ C 40, 15.2.1999.

between Member

operating

services

ferry

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2.3.2. With regard to the regulation of market access to
port services and the public financing of seaports as proposed
by the Commission (1),
supports
extending the obligation of transparency and separate accounts
to all ports in the Trans-European Network, although it does
have some reservations about other aspects of the proposal.

the European ESC (2)

the market opening process,
in particular relating to the
unbundling of activities, public service obligations, territorial
and social cohesion, and the effects on the environment and
employment (7).

2.3.3.
The Commission plans to develop the infrastructures
needed to achieve genuine ‘motorways of the sea’, by linking
the various modes of transport and ensuring connections
between sea, inland waterways and rail, and developing single
ticket systems.

2.4.1.
The directives concerning the completion of the
single energy market, i.e. Directives 96/92/EC on electricity
and 98/30/EC on gas, allowed different operators to use the
transmission network and gave certain consumers the right to
choose a supplier (3). An important step in the right direction
was the Court of Justice’s Judgment of 23 October 1997 (4).

2.4.2.
However, incumbent operators still enjoy consider-
able market shares and third party access to the transmission
network continues to be hindered by inadequately justified
refusals or shortcomings in infrastructures, namely lack of
means of interconnection. As a result, while there is a high
degree of satisfaction as regards quality of service, prices are
sometimes excessive (except for industrial consumers) and
always vary between Member States (5).

2.4.3.
The Commission has presented some new proposals
for the sector (6). The Committee supported these proposals in
general, but highlighted certain problems that may arise in

2.5.1.
The telecommunications sector has adopted a precise
definition of universal service, which operators are obliged to
respect, but which does not necessarily grant exclusive rights.
This definition must be revised regularly, so it can be adapted
in the light of
the rapid evolution of technology in the
sector (8). The current definition does not, however, cover
broadband access to the Internet or mobile telephony, which
for substantial numbers of low-income consumers constitutes
an acceptable alternative to fixed telephony (9).

The Commission has presented a number of new
2.5.2.
proposals for the telecommunications sector,
relating in
particular to universal service and users’ rights (10). The Com-
mittee, however, considers (11) that rapid public access to the
Internet should be included in the universal service, as it is
essential
if people on low incomes, voluntary sectors, non
profit-making organisations and users from less populated
regions are to have access to advanced services and if
an information society that meets the European Union’s
democratic and social objectives is to be created.

2.6.1. With regard to the postal service, the current regulat-
ory framework (12) establishing the universal service and, more
specifically, defining the ‘minimum universal service’ has
improved the efficiency of operators and the quality of service,
by increasing the range of services in general and speeding up
the delivery of cross-border post in particular.

( 1) Proposal for a Directive of the European Parliament and of the
Council on market access to port services. COM(2001) 35 final.
( 2) ESC Opinion on the Proposal for a Directive of the European
Parliament and of the Council on market access to port services.
COM(2001) 35 final. OJ C 48, 21.2.2002.

( 3) The Directives establish market opening, access to the network,
unbundling of accounts, calculation of tariffs, supply obligation,
and the possibility for Member States to define public service
obligations, in five specific areas: environmental protection, safety,
regularity and quality of supply, and pricing policy.
( 4) Cases C-158/94, C-159/94 and C-160/94, respectively.
( 5) SEC(2001) 1998, p. 4, 7 and 34.
( 6) Proposal for a Directive of the European Parliament and of the
Council amending Directives 96/92/EC and 98/30/EC concerning
common rules for the internal market in electricity and natural
gas and the Proposal for a Regulation of the European Parliament
and of the Council on conditions for access to the network for
cross-border exchanges in electricity. COM(2001) 125 final.

(7) ESC Opinion on the Proposal for a Directive of the European
Parliament and of the Council amending Directives 96/92/EC and
98/30/EC concerning common rules for the internal market in
electricity and natural gas and the Proposal for a Regulation of
the European Parliament and of the Council on conditions for
access to the network for cross-border exchanges in electricity.
COM(2001) 125 final. OJ C 36, 8.2.2002.
(8) Directives 97/33/EC, 97/13/EC and 98/10/EC.
(9) COM(2000) 580 final, pp. 19-20.
(10) Proposal for a Directive of the European Parliament and of the
Council on universal service and users’ rights relating to electronic
communications networks and services. COM(2000) 392 final.

(11) ESC Opinion on the Proposal for a Directive of the European
Parliament and of the Council on universal service and users’
rights relating to electronic communications networks and
services. COM(2000) 392 final. OJ C 139, 11.5.2001.

(12) Directive 97/67/CE.

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On 30 May 2000, the Commission adopted a new
2.6.2.
proposal for a Directive (1),
in which it called for further
market opening and more extensive consumer rights, by
ensuring that complaints and out-of-court settlement pro-
cedures apply to all users of postal services. While the ESC
recognised the inevitability of further liberalisation of these
services (2),
it was concerned that the process should be
managed on a controlled basis with full regard for the interests
of the various stakeholders, in particular the co-lateral social
impacts of the process.

2.6.3.
It is likely that medium-term changes in the sector as
a result of new technologies, e.g. electronic mail, will enable
all users to access these services.

cohesion and cultural and linguistic diversity.
It therefore
regrets that it was not consulted prior to the Communication
from the Commission on the application of State aid rules to
public service broadcasting (7).

The Committee has set out its standpoint (8) on the
2.8.
role of private not-for-profit social services in the context of
services of general interest in Europe, highlighting their key
role in tackling social exclusion and promoting social cohesion,
while recognising how hard it is to reconcile respect for
competition with the specific characteristics of the economic
activities of social services.

In the amended proposal (3), although the terms of
2.6.4.
the Commission’s proposal are essentially unchanged, it is
in the
to define the concept of ‘special services’
difficult
supranational regulatory framework.

3. The situation following the Nice European Council
(7-11 December 2000) and the Barcelona European
Council (15-16 March 2002)

2.7.1. With regard to the audiovisual sector, the Com-
mission has identified its principles and guidelines for the new
digital age (4). The European ESC (5) is of the view, however,
that the digital age must not be accompanied by a failure to
apply public interest objectives such as freedom of expression
and opinion, pluralism, cultural and linguistic diversity, safe-
guarding of minors and human dignity and consumer protec-
tion, since it is convinced that their protection and reinforce-
ment fulfils a key function for democracy.

The Committee (6) also considers that public service
2.7.2.
broadcasting fulfils a number of cultural, social and democratic
functions from which all benefit, and is therefore of crucial
importance in guaranteeing democracy, pluralism, social

3.1.
The Committee’s comments on the situation of services
of general interest (9) following the Treaty of Amsterdam gain
in significance in the light of the official proclamation by the
European Council of Nice of the Charter of Fundamental
Rights of the EU (10), Article 36 of which recognises access to
services of general economic interest (11).

3.2.
Although provisionally the Charter has a non-binding
status — despite which it has already been mentioned in the
Conclusions of several Advocates General of the CJEC and in
judgments of the Court of First Instance — it nonetheless
provides a strong enough legal basis to justify the actions of
the political authorities at national and supranational level (12).

3.3.
Likewise, the European Council of Nice’s Statement of
11 December on services of general economic interest stresses
their ‘important’ place and ‘irreplaceable’ part in increasing

( 1) Proposal

for a European Parliament and Council Directive
amending Directive 97/67/EC with regard to the further opening
to competition of Community postal services. COM(2000) 319
final.

( 2) ESC Opinion on the Proposal for a European Parliament and
Council Directive amending Directive 97/67/EC with regard to
the further opening to competition of Community postal services.
COM(2000) 319 final. OJ C 116, 20.4.2001.

( 3) Amended proposal of 21.3.2001 COM(2001) 109 final

(OJ

(7) OJ C 320, 15.11.2001, p. 5.
(8) ESC Opinion on Private not-for-profit social services in the
context of services of general interest in Europe. OJ C 311,
7.11.2001.

(9) ESC Opinion on Services of general

interest. OJ C 368,

C 180, 26.6.2001).

20.12.1999.

( 4) Communication from the Commission to the Council, the Euro-
pean Parliament, the Economic and Social Committee and the
Committee of the Regions — Principles and guidelines for the
age.
Community’s
COM(1999) 657 final.

audiovisual

digital

policy

the

in

( 5) ESC Opinion on the Communication from the Commission to
the Council, the European Parliament, the Economic and Social
Committee and the Committee of the Regions — Principles and
guidelines for the community’s audiovisual policy in the digital
age. COM(1999) 657 final. OJ C 14, 16.1.2001.

( 6) See footnote 35.

(10) OJ C 364, 18.12.2000.
(11) Article 36 of the Charter of Fundamental Rights stipulates the
following: ‘ The Union recognises and respects access to services
of general economic interest as provided for in national laws and
practices, in accordance with the Treaty establishing the European
Community,
in order to promote the social and territorial
cohesion of the Union.’

(12) Moreiro González, C: ‘La optimización de la acción institucional
a favor de los DF y del Estatuto de Ciudadanía de la Unión’ in
Tratado de Niza (análisis y comentarios), Ed. Colex, 2002, pp.113-
133.

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European competitiveness. With this in mind, the Statement
lays down various purposes served by services of general
interest in Europe, such as protection of consumer interests,
user safety, social cohesion and regional planning and, sus-
tainable development.

network infrastructure operators who, as a result of the system
of decentralised regulation encouraged by the Directives
on market opening, have increased the authorisation and
monitoring procedures, thus hindering the exchange of goods
and services between the Member States (2).

3.4.
The Conclusions of the European Council of Barcelona
coincide with the statement in calling for public services and
network companies to be opened up to competition, ‘taking
into account the requirement to satisfy user needs and the
need for transparency in the market through appropriate
regulatory instruments’
to increase
(point 17),
efficiency, ensure a high level of quality, and enhance sustaina-
bility (point 36).

in order

4. General comments

4.1.1.
Services of general interest play a vital role in the
daily lives of citizens and are one of the values underlying the
European social model, as is generally recognised in the
constitutional traditions of the Member States. Social protec-
tion systems, health systems and the many initiatives by not-
for-profit associations in the health and social sector, for
example, still therefore constitute the backbone of the Euro-
pean social model.

Accordingly, if the process of political and economic
4.1.2.
integration within the European Union is to move forward, a
series of measures is needed. Now would be a good time to
present these measures against the background of the revision
of the Treaties by 2004. To this end, the Committee believes
that Article 3 of the EC Treaty should include a reference to
the provision of services of general
interest in the list of
activities to be undertaken by the Community to achieve its
objectives.

4.2.
One option would be the legal definition of services of
general interest, including a non-exhaustive list of the social
values that underpin these services, for whose promotion and
protection the public authorities and supranational powers
must be equally responsible. At the same time the link between
access to such services and European citizenship must be
acknowledged.

4.3.
As well as common principles, the future Community
framework should establish a mechanism allowing subsidiarity
to be applied according to functional (1) as well as territorial
criteria. This would affect, in particular, the role played by

4.4.
The Committee believes there is a need for the
Commission to present a proposal for a framework Directive
consolidating the political principles governing services of
general economic interest and giving Member States the
flexibility they need in this area. This legal instrument should
highlight the importance placed by the European Union on
services of general
interest and European citizens’ inherent
right to access these services, and — in order to provide greater
legal security — should clarify some concepts relating to
Community law, while fully respecting the principle of subsidi-
arity.

4.5. With regard to the legal basis of the aforementioned
framework Directive, the Commission should take account of
various provisions of
the EC Treaty, such as Article 2,
according to which the Community’s task is to promote, inter
alia, a high level of employment and of social protection,
equality between men and women, sustainable growth, the
raising of the standard of living and quality of life, and
economic and social cohesion and solidarity; Article 3, which
lists the various objectives of the Community; Article 16 of
the Treaty; the principles of subsidiarity, proportionality and
neutrality; Article 36 of the EU Charter of Fundamental Rights;
and Articles 86 and 87 of the Treaty.

The proposal

4.6.
for a Directive should consider the
reasons for setting up a service of general interest, which can
be both economic and social. Economic reasons include: the
excessive cost of essential investment; shortages of goods or
components needed to produce the service; and sustainable
development. Social reasons include: social cohesion to reduce
regional imbalances, and social and economic inequality, to
ensure that everyone can participate fully in society; equality
for all as regards access to these services and the fulfilment of
their fundamental rights; combating social discrimination;
economic equity by adjusting tariffs or applying social tariffs;
maintaining citizens’ demand, in particular through the intro-
duction of tax measures; and defining rules allowing citizens
to be involved through their organisations in assessing the
accessibility and quality of services managed through the
award of contracts or concessions.

( 1) Put forward by the Commission in its White Paper on European

Governance. COM(2001) 428 final.

(2) A recent example of the legal uncertainty caused by the current
system can be found in the Judgment of the CJEC of 13.12.2001
in Case C-79/00.

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The Committee is in favour of achieving a balance
4.7.
between the general
interest and competition. Public auth-
orities at all levels are responsible for finding the best possible
balance between optimising short- and long-term cost-effec-
tiveness, and the general
interest objectives of the service
concerned and of other services that may be affected, to ensure
that priority is given to criteria based on sustainable economic,
social and environmental development.

Pursuant to the principles of subsidiarity and pro-
4.8.
portionality, the public authorities must establish public service
obligations to ensure that undertakings entrusted with the
operation of
these services perform the particular tasks
assigned to them, providing that the development of trade is
not affected to such an extent as would be contrary to the
interests of the Community.

4.8.1.
The Committee is in favour of maintaining the
financial and economic balance in service provision and
believes that public authority funding to compensate undertak-
ings entrusted with the operation of these services for costs
incurred under public service obligations must be compatible
with Community legislation in the proposal for a framework
Directive. It must also include the establishment of special
funding mechanisms for additional public service obligations.
Finally, it must stress the difference between the principle of
public funding, according to which citizens bear the cost of
the obligations imposed, and the principle of granting exclusive
rights to undertakings that provide general interest services,
whereby the desired balance is achieved by adjusting tariffs to
offset the cost of deficit activities. In the second scenario, it is
the user of the service who finances solidarity, not the taxpayer.
Other methods also exist, such as cross-subsidisation and
social support.

Services of general interest must be defined at the
4.8.2.
most appropriate level and with due respect for the various
European, national and territorial levels. Furthermore, it is the
responsibility of public authorities to take account of new
social needs and technological changes, in particular those in
in order to define the aims and
the information society,
obligations of public service.

4.9. With regard to the operation of these services, con-
sideration must also be given to the following principles, while
allowing for the specific characteristics of each service:

— continuity of service,

i.e. service provision must be
continuous, regular and uninterrupted, without prejudice
to possible instances of force majeur and possible exemp-
tions under sector-specific regulations;

— universality of service, even when, for commercial or
profit-related reasons, this is not advisable, e.g. in rural
areas, island or outermost regions, or regions lagging
behind in development;

— quality, i.e. service provision must meet the quantitative
and qualitative criteria laid down in its basic regulations,
and be assessed on a regular basis. The public authority
responsible in each sector must safeguard the quality of
these services;

— adaptability,

i.e. the provision of these services must
regularly adapt to the political priorities of the Com-
munity, the current needs of society and local and
regional authorities, technical and economic progress,
and essential general interest requirements;

— these general principles will be complemented by the
specific principles found in each sector and — in some
cases — there will be a need for sector-specific Directives
in addition to the framework Directive.

A protection system must be established to safeguard
4.10.
consumers’ rights and give effect to their rights quickly and
effectively. There is a particular need to establish simple,
transparent, quick and impartial complaints procedures. In
some services, there is a need for a general system of automatic
and limited compensation and refunds for some eventualities,
as is already the case for overbooking by airlines.

4.11.
The system for regulating the various services must
be defined. Regulators — which may be an individual authority
or a group of authorities — will perform the following tasks:

— assessment, i.e. assess the service provided for users;

— equal access, based on the elimination of discrimination
and special consideration of the most vulnerable con-
sumers to prevent social exclusion. Services must be
provided at an affordable, fair, justified and transparent
price;

— monitoring, i.e. the organising authority may monitor
the operator chosen to provide the service, in particular to
carry out inspections and impose penalties for improper
conduct in the provision of public service obligations;

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— regulation, i.e. the competent authorities may intervene,
in accordance with clear legal limits, when the general
interest would not be met by the market alone.

In particular, when a service is provided by various
4.11.1.
operators, the regulator is responsible for monitoring the
activity of these operators and safeguarding respect for general
interest objectives, competition rules, tariffs, quality of service
and consumer protection. Where necessary, it must also ensure
that undertakings are given public funding to help them meet
general
interest objectives, in accordance with Community
legislation, in particular that relating to the functioning of the
single market, which must be supervised and monitored by
the Commission.

Users,

consumer

trade unions,
4.11.2.
environmental associations and all relevant social groups must
be granted the right to information. This must also be laid
down in the regulations governing the regulators.

associations,

have been imposed on undertakings for the purposes of
the general interest, and for which they must therefore
receive fair compensation. In accordance with the prin-
ciple of transparency, separate accounts must be drawn
up for costs relating to activities of general interest, which
must be clearly distinguished from other activities.

In order to improve democratic participation and the
4.14.
participation of citizens, general
interest service operators
must consult users, in particular consumer associations, and
involve them in assessing the performance of services. These
associations, which are part of organised civil society, must be
involved in defining and assessing services in the manner most
appropriate to the sector concerned and the nature of the
services. This is vital to safeguarding the cooperation of service
providers and the protection of citizens’ rights in the proper
provision of these services, so that such associations can be
represented on the regulatory bodies.

4.12.
In accordance with the principle of the freedom to
choose the method of management, each public authority will
choose the type of operator for the various services of general
interest for which it is responsible. Of course, operators may
elect to manage services in different ways: either directly
through their own administration, or indirectly through a
public, private, social economy or semi-public undertaking.

4.12.1. When special and/or exclusive rights are granted to
private undertakings, the management of these services must
be entrusted with due respect for Community tendering rules
and the principles of publicity, competition and transparency.

4.13.
The relationship between the operators of these
services and the authorities responsible must be laid down in
a contract defining, in particular:

— the aims, pricing principles and main methods of finan-

cing the undertaking concerned;

4.15.
The access to information, consultation and partici-
pation of workers and their representatives is essential to a
negotiated modernisation of the way in which these services
are organised. In this context, the promotion of social dialogue,
and of the involvement of workers’ representatives and their
trade unions, must help to ensure that arrangements for
representation or equivalent bodies are set up. For the Com-
mittee, the concept of general
interest must go hand in
hand with a system of exemplary industrial relations, as is
characteristic of the EU’s social model.

The Committee believes it is a good idea to set up an
4.16.
observatory for services of general
to assess the
conditions under which services are provided in the Member
States. It could also gather information on these services,
promote the exchange of information between the various
Member States, and encourage inter-institutional discussions
on how these services work at Community level.

interest

— special or, where appropriate, exclusive rights that may
be granted to these operators to help them meet the
objective of the service;

— the costs relating to the exercise of deficit activities, which
cannot be rewarded on a normal commercial basis but

The European ESC believes that,

4.17.
in order to dis-
tinguish between economic and non-economic activities, ser-
vices associated with national education systems and the
mandatory membership of a basic social security scheme, and
services provided by not-for-profit social, charitable and
cultural entities, must be exempt from competition rules and
provisions relating to the internal market.

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C 241/127

4.17.1.
citizens’ cultural
namely:

Public authorities must promote the protection of
interest,
interests as a service of general

ment of services in the information society, from an
intellectual, aesthetic, moral as well as economic point of
view.

— a right to constant and protected access to certain cultural

goods, such as books and the audiovisual sector;

— a right to high-quality access to the public broadcasting

service; and

— a right to the general protection of the cultural environ-

4.18.
The Committee believes that a specific focus needs to
be given to the provision and financing of public broadcasting
services in order to safeguard the protection of fundamental
rights (in particular the right to receive and communicate
information), democratic principles and pluralism, which may
be affected by certain processes of concentration.

Brussels, 17 July 2002.

The President

of the Economic and Social Committee

Göke FRERICHS

APPENDIX

to the opinion of the Economic and Social Committee

The following amendment, which was supported by at least a quarter of the votes cast, was rejected when put to the
vote.

Point 4.4

Add the following sentence to the end of the paragraph:

‘The Directive should also include effective safeguards against distortions of the internal market. The framework
Directive states the principles, but does not infringe with the implementation of sector specific Directives, present or
future, which regulate public or universal service obligations in the sector, like telecommunications and energy.’

Reason

Respecting the principle of subsidiarity is important and necessary, and probably there would mostly be little effect
on the functioning of the internal market. However, it should be clearly stated that possible distortions must be
avoided while respecting citizens’ right to services. In service areas with obvious internal market and cross border
effects, like telecommunications and energy, this has already been taken into account by including provisions for
universal or public service obligations in the present and draft Directives regulating these sectors, following largely
the same principles that should be included in a future framework Directive. These Sectoral Directives should
naturally be fully implemented and respected as such.

Result of the vote

For: 22, against: 43, abstentions: 1.