Opinion of the European Economic and Social Committee on The future of services of general interest
Date: 2006-07-06
Institutions: European Economic and Social Committee
Subjects: company constituted under civil law, economic and social cohesion, public safety, services of general interest, social life, sustainable development

16.12.2006

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Opinion of the European Economic and Social Committee on The future of services of general
interest

(2006/C 309/28)

On 14 July 2005 the European Economic and Social Committee, acting under Rule 29(2) of its Rules of
Procedure, decided to draw up an opinion on: The future of 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 30 May 2006. The rapporteur was
Mr Hencks.

At its 428th plenary session, held on 5 and 6 July 2006 (meeting of 6 July), the European Economic and
Social Committee adopted the following opinion by 46 to nine, with seven abstentions.

1. Conclusions

1.1
Services of general interest defined as such by the public
authorities on the basis of and in reference to social and civic
action, meet basic needs and play a key role in promoting
social and territorial cohesion in the EU and in the success of
the Lisbon Strategy.

1.2
In response to the European Council's call for a period
of reflection on the major issues facing Europe, civil society
must become a resolute and challenging actor, in order to guar-
antee efficient services of general interest and to make them an
essential component of the Union.

1.3
The EESC reiterates its call for the common basic princi-
ples to which all SGIs must adhere to be defined at Community
level. These should be set out in a framework directive and, if
necessary, in individual sector-specific directives.

In accordance with the principle of subsidiarity, each
1.4
Member State must be able to define, by means of an official
instrument to be notified, the types of sovereign service or
services of national, regional or local interest not covered by
SGEI and to which the rules on competition and State aid do
not apply.

1.5 Where other services of general interest are concerned,
both the framework directive and sector-specific laws must
clearly uphold Member States' or local authorities' freedom to
define management and funding methods, the principles and
limits of Community action, evaluation of their performance,
consumers and users' rights and a basic platform for public
service missions and obligations.

1.6
To ensure that the measures adopted are acceptable to
all those affected by services of general economic and non-
economic interest, stakeholders from all
levels — national,
regional and local authorities, the social partners, consumers'
and environmental protection organisations, social economy
bodies and those combating exclusion, etc. — must play their
part alongside regulators and operators at national, regional or
local level in making services of general interest work and be
involved at every stage, in other words in organising, drawing
up, monitoring and implementing quality standards.

At

European

directives
level, wherever
1.7
governing services of general interest have a social impact on
employees' working conditions and terms and conditions of
employment, organisations
representing the two sides of
industry must be consulted via the new sectoral committees for
structured European social dialogue.

sectoral

1.8
The changing nature of services of general interest and
their importance in achieving the Lisbon strategy mean that
regular evaluation is imperative, not only of the services of
general economic interest already covered by Community rules,
but also of services of general
interest in keeping with the
Union's aims. The EESC proposes that a monitoring centre be
set up to evaluate services of economic and non-economic
interest, with a membership consisting of political
general
representatives
and the
Committee of the Regions and representatives of organised civil
society from the European Economic and Social Committee.

from the European Parliament

1.9
The EESC emphasises that the principles set out above
also determine the Union's stance in trade negotiations, in par-
ticular at the WTO and in the GATS process. In the context of
international trade negotiations, it would be unacceptable for
the European Union to give commitments to liberalise sectors
or areas of business that have not been decided in line with
internal market rules specifically governing services of general
interest. The need to maintain Member States' power to regu-
late services of general economic and non-economic interest in
order to achieve the social and development aims that the
Union has set for itself means that services of general interest
must be excluded from the scope of the negotiations referred
to above.

2. Subject of the own-initiative opinion

2.1
Services of general interest are at the heart of the Euro-
pean model of society and play a defining role in promoting
the EU's social and territorial cohesion. They complement and
go beyond the single market, and are an essential component
of the social and economic well-being of citizens and busi-
nesses.

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2.2
Services of general interest, whether economic or non-
economic, meet basic needs, give the public a sense of
belonging to a community and, being such a part of everyone's
daily life, embody one aspect of all European countries' cultural
identity.

The focus of all of these considerations is thus the
2.3
public interest, the pursuit of which requires guaranteed access
to services deemed to be essential and the ability to pursue
priority aims.

2.4
Despite this community of values, services of general
interest are organised differently from one country to another,
from one region to another and from one sector to another.
National authorities may define what are services of general
interest, with reference to a given social or civic activity.

2.5
This variety of situations poses a challenge for European
far from being an insurmountable
integration. Nevertheless,
obstacle, it provides an opportunity to create — by establishing
a set of principles that can be applied to all services of general
interest — a suitable framework for promoting the general
good in a constantly changing economic and social climate.

2.6
Achieving a healthy balance between the single Euro-
pean market on the one hand, with its requirements for
freedom of movement, free competition, efficiency, competi-
tiveness and economic dynamism, and on the other the need to
take account of public interest objectives, has proven to be a
long and complex process. Efforts to this end have met with a
large measure of success, but some problems remain and they
need to be remedied.

3. Background

The only articles in the Treaty of Rome that refer to
3.1
public services are Article 77 (now Article 73 of the current
Treaty), which addresses public service in the transport sector
and Article 90(2) (now Article 86(2) of the current Treaty),
which accepts that services of general interest can be exempt
from the competition rules under certain circumstances.

3.2
Article 86(2) of the EC Treaty allows Member States to
establish legal arrangements that derogate from ordinary law,
in particular the rules on competition, for companies providing
a service of general economic interest:
‘Undertakings entrusted
with the operation of services of general economic interest or having
the character of an income-producing monopoly shall be subject to the
provisions of the Constitution, in particular to the rules on competi-
tion, insofar as the application of such provisions does not obstruct
the performance, in law or in fact, of the particular tasks assigned to
them. The development of trade must not be affected to such an extent
as would be contrary to the Union's interests’ (1).

(1) Article III-166(2) of

the Treaty establishing a Constitution for
Europe, reproduced almost word for word in Article 86(2) of the
EC Treaty.

On the basis of this Article, the Court of Justice of the
3.3
European Communities has (since 1993) recognised that,
in
order to fulfil the particular task entrusted to it, the operator
entrusted with public service missions may take liberties with
the competition rules set out in the Treaty, and can even
exclude all competition, where such restrictions are necessary
to enable the undertaking to perform its task of general
economic interest in economically acceptable conditions (2).

3.4
The Court has furthermore stated that allowing competi-
losses
tive advantages in profit-making activities,
suffered by the undertaking in activities that are non-profit-
making but which are in the general
is compatible
with the Treaty (3).

to offset

interest,

Similarly,

the Court has

3.5
ruled that where a State
measure must be regarded as compensation for the services
provided by the recipient undertakings in order to discharge
public service obligations, such a measure is not caught,
in
certain circumstances, by the Treaty's provisions on State
aid (4). At the same time, the Court states that services of
interest — whether economic or non-economic —
general
must comply with the general principles set out in the Treaty,
i.e. transparency, proportionality, non-discrimination and equal
treatment.

3.6
Following the Single European Act of 1986, which
created a single market, European integration started to have
an impact on services of general economic interest, in particu-
lar by challenging the special rights granted to Member State
service operators (both public and private) and by launching a
far-reaching process of opening up the major public service
networks.

the Union as well as their

3.7
Article 16 of the 1997 Treaty of Amsterdam highlights
the place occupied by services of general economic interest in
the shared values of
role in
promoting social and territorial cohesion. It calls on national
and European institutions to take care that such services
operate ‘on the basis of principles and conditions which enable them
to fulfil their missions’ whilst remaining broadly subject to the
principles of competition.

in March 2000,

3.8
The aforementioned Article 16 has no operational
bearing on the Commission policy on public service operators.
Nonetheless,
the Lisbon European Council
decided to ‘achieve a fully operational internal market’, advocating
that the liberalisation of public network services be speeded up
and that competition be extended in national markets to
encompass railways and postal, energy and telecommunications
services.

(2) See judgments:

‘Poste Italiane’,

‘Corbeau’,

‘Commune d'Almelo’,

‘Glöckner’ and ‘Altmark’.

(3) See the ‘Glöckner’ judgment of 25.10.2001.
(4) ‘Altmark’ judgment of 24.7.2003.

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3.9
The Charter of Fundamental Rights, unveiled in Nice in
2000, for the first time established a link between services of
general interest and fundamental rights. Thus access to SGEI
and the rights relating to the specific components of services of
general
interest (social security and social assistance, health
protection, environmental protection, etc.) are laid down in
Articles II-34 to II-36 of the Charter of Fundamental Rights.

3.10
The Barcelona European Council of 15-16 March
2002 explicitly planned to ‘specify the principles on services of
general economic interest, which underlie Article 16 of the Treaty, in
a proposal for a framework directive, while respecting the specificities
of the different sectors involved and taking into account the provisions
of Article 86 of the Treaty’.

4. The current situation

4.1
Although some progress has been made, many represen-
tatives of civil society consider this to be insufficient, given the
importance of services of general interest to the lives of the
European public. As part of the process of drawing up the
future European constitution,
forward numerous
initiatives aimed at placing the principles of services of general
interest firmly amongst the common aims of the Union,
in
justice
order to promote and guarantee security and social
through high-quality services founded on the principles of
universality, equal access, neutrality of ownership and afford-
able pricing.

they put

Article III-122 of the draft constitutional Treaty was to
4.2
enact
the bases of secondary law on services of general
economic interest, stating that, without prejudice to the compe-
tence of Member States, European law shall establish the princi-
ples and set the conditions, ‘in particular the economic and finan-
cial conditions, which enable them [SGEI] to fulfil their missions’.

4.3
Article III-122 was also intended to recognise the prin-
ciple of administrative freedom for local authorities and raise to
the level of a constitutional principle the possibility of local
authorities providing services of general economic interest
themselves, thereby giving effect to the subsidiarity principle as
regards the respective competences of
the Union and the
Member States in relation to services of general economic
interest.

4.4
Because the ratification of the constitutional Treaty has
been postponed, the EESC considers that the process of drafting
interest
the

framework directive on services of general

(economic and non-economic), for which it has been calling
for years in its opinions (5), should be started without further
delay, on the basis of the current treaties.

4.5
The only possible legal basis today is the completion of
the internal market, although this basis must be complemented
by taking account of other provisions in the Treaty, specifying
the type of internal market involved — which must be one in
services of general economic interest:

— Article 16, which entrusts the Union with the task of

ensuring that SGEI are able to fulfil their missions;

— Article 36 of the Charter of Fundamental Rights, which
calls on the Union to respect universal access to SGEI;

— Article 86, which states that

in the event of conflict
between the rules on competition and the general interest
of the Community, the latter shall prevail;

— Article 5, concerning respect for the subsidiarity principle;

— Article 295, which states the Union's neutrality with regard

to the ownership of undertakings;

— Title VIII on employment, given the number of jobs directly

or indirectly concerned by SGEI;

— Title XIV on consumer protection, which sets out specific

rules for SGEI;

— Title XV on Trans-European networks, which gives powers

to the Union;

— Title XVI on industrial competitiveness, which requires

SGEI that are modern, efficient and of high quality;

— Title XVII on economic and social cohesion, which calls for

existing imbalances to be redressed;

— Title XIX on environmental protection, which is of particu-

lar importance to SGEI, given their externalities.

4.6
Combining these articles will help to establish a specific
law for SGEI, as an integral part of a framework directive on all
services of general interest, that takes account of the comple-
tion of the internal market and of SGEI's specific characteristics
whilst meeting the aims of the Treaty.

(5) EESC own-initiative opinion on Services of general interest, OJ C
241, 7.10.2002 pp. 119-127; EESC opinion on the Green Paper on
Interest COM(2003) 270 final, OJ C 80,
Services of General
30.3.2004 pp. 66-76; EESC opinion on the White Paper on services
of general interest COM(2004) 374 final, OJ C 221, 8.9.2005 pp.
17-21.

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5. The distinction between services of general

interest

6. Guidelines for the future

and services of general economic interest

Unlike services of general economic interest, services of
interest are not grouped together and referred to as

5.1
general
such in the Treaties.

Services of general

5.2
interest of a non-economic nature
are not governed by specific Community regulations and are
not subject to the rules covering the internal market, competi-
tion or State aid. They do, however, form part of a set of EU
objectives (respect for fundamental rights, promoting people's
well-being, social justice, social cohesion, etc.) that are crucial
to society. The result is that the Union, which has responsibil-
ities for promoting the standard of living and quality of life
throughout Europe, therefore also has some responsibility for
the instruments whereby fundamental rights and social cohe-
sion are implemented,
in other words services of general
interest. It must, therefore, at least ensure that these SGI are
universally accessible, affordable and of high quality.

5.3
The distinction between economic and non-economic
services remains vague and unclear. Almost any service of
general interest, even a service provided on a not-for-profit or
charitable basis, entails some economic value, although this
does not automatically bring it within the scope of competition
law. Furthermore, a service can be both commercial and non-
commercial. Similarly, a service can be commercial without the
market necessarily being in a position to provide that service in
a manner which is consistent with the principles governing
services of general interest.

5.4
It is thus to be expected that there are ambiguities and
contradictions between competition and SGI, the economic or
non-economic nature of which remains subject to the legal
interpretations and re-interpretations of the Court of Justice of
the European Communities. This:

— weakens the position of many public service operators, in
particular those working in the social sphere or in non-
commercial sectors or which operate at local level;

— exposes operators to the risk of sanction by the Commis-

sion or the European Court of Justice;

— is a source of concern to citizens/consumers, who fear that

public services will disappear.

5.5
There are also ambiguities in the terminology used by
the different European institutions. The Commission takes the
view that the concept of services of general interest covers all
services of general interest, whether commercial or otherwise,
whereas the European Parliament only considers non-economic
services to be services of general interest. The EESC therefore
calls
to work on finding a
institutions
common language.

the different

for

In response to the European Council's call, following the
6.1
referendums on the Constitutional Treaty, for a period of reflec-
tion on the major issues facing Europe, civil society must
become a resolute and challenging actor, in order to guarantee
efficient services of general interest and to make them an essen-
tial component of the Union.

6.2
In this connection, the question must be asked as to
what initiatives should be taken in Europe in order to achieve a
balanced combination of market mechanisms and public
service missions in areas in which such complementarity a) is
compatible with the objectives of services of general interest
and b) can offer added value for improving the quality of life of
Europe's citizens, as part of a European social model approach
based on economic growth, job creation and sustainable well-
being.

6.3
One of the most striking features of the social model is
social dialogue. Informing, consulting and involving the social
partners and civil society stakeholders are prerequisites for
upholding and successfully modernising the European social
model. The aim is to achieve a social Europe, founded on
constructive interaction between regulation and social dialogue.

Stakeholders from all

6.4
levels — national, regional and
local authorities, the social partners, consumers' and environ-
mental protection organisations, social economy bodies and
those combating exclusion, etc. — have a place alongside regu-
lators and operators in making services of general
interest
work.

6.5
It should thus be guaranteed that when it comes to
regulating services of general interest at the national, regional
and local level, the stakeholders referred to above are involved
at every stage, in other words in organising, drawing up, moni-
toring and implementing quality standards and also in ensuring
that they are cost-effective.

6.6
At European level, wherever sectoral directives have a
social impact on employees' working conditions and terms and
conditions of employment, structured European social dialogue
must take place before the European Commission draws up its
legislative initiatives.

6.7
In other words, the approach of Article 139 of the EC
Treaty, giving the Commission the task of ensuring that
workers' and employers' organisations are consulted on the
social dimension of the policies it puts forward, must also be
implemented at sectoral
level, wherever services of general
economic interest are regulated.

6.8
Structured sectoral social dialogue committees will thus
be responsible for ensuring that sectoral or inter-sectoral social
dialogue takes place, leading to the conclusion of the European
collective bargaining agreements which can be applied in order
to protect employees' rights and their
jobs against social
dumping and the use of unskilled labour.

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This should not exempt the Commission from having to
6.9
carry out an impact study of
the workings of services of
general economic interest for each of its proposals aimed at
amending an instrument of Community law concerning a par-
ticular sector or at establishing a new instrument for services of
general economic interest.

9.2
Given the difficulties in providing an exhaustive defini-
tion of this concept on the one hand, and the danger entailed
by a restrictive approach on the other, this definition must
focus on the specific mission of the services in question and on
the requirements (public service obligations) imposed on them
in order to achieve their purpose, and which must be clearly
set out.

7. Establishing a European concept of services of general

interest

7.1
The Europe that the citizens wish to see is a common
living space, committed to a high quality of life, solidarity,
employment and the creation of wealth that is not merely
material. SGIs are a crucial means of achieving this.

7.2
There is now a need for the common basic principles to
which all SGIs must adhere to be defined at Community level.
These should be set out in a framework directive and, if neces-
sary, in individual sector-specific directives.

7.3
It is crucial that a horizontal framework directive be
adopted in order to give all the necessary legal certainty to
undertakings entrusted with the operation of services of general
economic and non-economic interest and to the public authori-
ties, and also to provide the necessary guarantees for users and
consumers.

8. Objectives for services of general interest

8.1
In keeping with their role as a pillar of the European
social model and of a social market economy, SGIs should,
through the interaction and integration of economic and social
progress:

— guarantee the right of every individual to basic goods or
services, such as education, health, security, employment,
energy and water, transport, communications, etc.);

— ensure economic, social and cultural cohesion;

— ensure justice and social inclusion, build up solidarity and

promote the general interest of the community;

— create conditions for sustainable development.

9. Definition of the general interest

9.1
The first task will be to establish an institutional frame-
work forming a solid base for creating legal stability as to the
distinction, in line with the Treaty, between services of general
economic interest and non-economic services of general
interest, it being understood that the Charter does not require
that the rules on competition and State aid be applied to the
latter.

9.3
In line with Article 86(2) of the EC Treaty, in cases of
conflict, the duty to serve the general interest will prevail over
in accordance with Com-
applying the rules of competition,
munity case-law.

10. The role of national public authorities

10.1
In accordance with the principle of subsidiarity, each
Member State must remain free to make its own distinction
interest and non-
between economic services of general
economic services of general interest. Where there has clearly
been a misinterpretation, the Commission must nevertheless be
able to take action.

10.2 Member States must therefore be able to define by
means of an official instrument, to be notified to the European
institutions, the types of sovereign service covered by over-
riding public interest requirements, and services of national,
regional or local interest which are not SGEI and to which the
rules on competition and State aid do not apply.

the EESC considers that

10.3 Without prejudice to national authorities' freedom of
choice,
these services of national,
regional or local
interest should include services relating to
mandatory education, health and social protection systems,
cultural activities and charitable work, whether this be of a
social nature or operating on the basis of solidarity or dona-
tions, as well as audiovisual services and water supply and
sewage disposal services.

10.4 Where other services are concerned, both the frame-
work directive on services of general interest and sector-specific
laws must clearly define the principles and arrangements for
regulation, which will supplement ordinary competition law;
this definition in law should help to bring requirements into
line with users and consumers' changing needs and concerns
and with changes in the economic and technological climate.

10.5
The EESC considers that the special status of water, the
continuity and sustainability of the services linked to its supply,
along with pricing and investment policy, mean that the water
sector is covered by the general interest and does not lend itself
to being systematically liberalised in Europe.

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10.6
This regulatory framework must therefore safeguard
the existence of services of general interest, Member States' or
local authorities' freedom to define and organise, the freedom
to choose management and funding methods (6), the principles
and limits of Community action, evaluation of their perfor-
mance, consumers and users' rights and a basic platform for
public service missions and obligations.

10.7
These public service obligations, which are the obliga-
tions that Member States impose on themselves or on provi-
ders, consist mainly of equal and universal access, the absence
of any discrimination, continuity of service, quality, transpar-
ency, security and the ability to adapt to necessary changes.

10.8 Whilst wishing to ensure compliance with Article 295
of the Treaty, which makes no prior judgment as to the public
or private nature of the management of services of general
economic interest and does not encourage Member States to
liberalise services, the EESC wishes to promote the broadest
range of forms of management and partnership between the
public authorities, the operators running these services, the
social partners and users and consumers.

11. Regulation

11.1
with developments in the market and industrial change.

Regulation is a dynamic process, which evolves in line

11.2
The way in which competition should work in a liber-
alised market depends on the particular characteristics of the
sector; it can take the form of tenders, public/private partner-
ships, price controls, preventing discriminatory treatment in
access
to networks or of creating competition between
networks.

11.3
A comparison of the different regulatory systems oper-
ating in the Member States demonstrates that no model can be
used as a blueprint, because it is always tied to a country's
history, institutions and traditions, to a particular sectoral or
geographical situation and to technological developments in a
specific sector.

11.4 What is needed, therefore,
is to combine respect for
the diversity of regulatory methods tied to history, traditions,
institutions and types of service, with clear Community-wide
aims and limited common rules, designed to elicit differentiated
responses in order to promote maximum effectiveness at the
trans-European, cross-border, national, regional or local levels.

neutrality,
management method for a particular service.

regarding the public or private nature of

the

12. Evaluation

12.1
The changing nature of services of general interest, the
aims assigned to them and their importance in achieving the
Lisbon strategy mean that regular evaluation is imperative, not
the services of general economic interest already
only of
covered by Community rules, but also of services of general
interest in keeping with the Union's aims (respect for funda-
mental rights, promoting public wellbeing, social justice, social
cohesion, etc.).

12.2
The EESC does not, therefore, share the Commission's
opinion (7) to the effect that services of non-economic general
interest must remain outside the scope of the horizontal evalua-
tion of SGI performances.

12.3
This type of evaluation should help to make services of
general interest more efficient, to enable them to adapt to the
changing needs of individuals and businesses and to provide
the public authorities with the information they need to make
the best choices.

the debate within the various

The European Parliament asked the Commission (8) to
12.4
organise
existing forums
(Economic and Social Committee, Committee of the Regions,
consultative bodies, associations involved in services of general
interest initiatives and consumer associations). The results of
this debate should be taken into account and provide guidance
for the annual horizontal evaluation, and the evaluation should
itself be the subject of debate.

that

This means

12.5
the commitment given by the
Commission in its communication COM(2002) 331 to involve
civil society in the horizontal evaluation of the performance of
SIG by establishing a ‘permanent mechanism for the monitoring of
citizens' opinion and their evolution’ must now be put into practice
and that — still
‘Stakeholders,
including the social partners, will also be consulted on an ad-hoc
basis for specific issues’.

in the Commission's words,

12.6
The Union will then have the task of boosting the
evaluation's dynamic, in keeping with the principle of subsi-
diarity by drawing up, in dialogue with the representatives of
the stakeholders concerned, an evaluation method that
is
harmonised at EU level on the basis of common indicators.

11.5 Whilst attaching priority to trade and coordination at
Community level, no one solution should be imposed at Euro-
pean level and it is up to Member States to define the most
suitable method for regulating services of general economic
in keeping with the principles of subsidiarity and
interest

12.7
This method of evaluation must take account not only
of purely economic results but also of the social and environ-
mental impact and must seek to uphold the general interest in
the long term.

(6) Article 295 TEC enshrines the principle of neutrality as regards
public or private ownership of an undertaking (COM(2004) 374 final
of 12.5.2004.

(7) COM(2002) 331 point 3.2.
(8) EP report A5/0361/2001: rapporteur, Werner Langen; 17 October

2001.

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12.8
The users for whom services of general economic and
non-economic interest are intended will thus have the means to
express their needs and aspirations,
in particular by partici-
pating, through their representatives, in drawing up evaluation
methods and in assessing the results.

12.9
Against this background, the EESC proposes that a
monitoring centre be set up to evaluate services of general
economic and non-economic interest, with a membership
consisting of political representatives from the European Parlia-
ment, the Committee of the Regions and representatives of
organised civil society from the European Economic and Social
Committee.

a

should have

The monitoring centre

12.10
steering
committee, which will define the aims and the terms of refer-
ence of the evaluations, select the bodies entrusted with the
task of carrying out the studies and examine and deliver an
opinion on the reports. The committee will be able to call on
the services of a scientific advisory group, which will study the
methodology used and make recommendations on the matter,
as and when required. The steering committee will ensure that
presentations are given and public discussions held on the
evaluation reports in all Member States, with the involvement
of all stakeholders. The evaluation reports must consequently
be available in all of the Union's working languages.

13. Funding

Long-term funding security for investments and public
13.1
service obligations
remains key to guaranteeing universal
access, throughout the Union, to high-quality and affordable
services of general interest.

The general

13.2
interest and public service obligations
imposed by public authorities on one or more providers of
services of general economic interest, with set conditions and
specifications, require appropriate methods of funding.

Brussels, 6 July 2006.

It is therefore up to the Member States to guarantee
13.3
the investment needed to
the long-term funding of
ensure the continuity and sustainability of
services, and
secondly, the appropriate compensation for public service or
universal service obligations; Community rules must facilitate
rather than restrict such security of funding.

firstly,

13.4
The lack of a European directive on the definition,
organisation and funding of public service obligations gives
Member States total discretion in choosing their methods of
funding, in accordance with the principles of subsidiarity and
proportionality.

social or

13.5 Member States must be able to use a wide variety of
methods for funding public service missions and obligations,
such as direct compensation from the national, regional or
local budget,
territorial donation-based funding
between uses or users, contributions from operators and users,
tax credits and exclusive rights, etc. Member States can also use
combined public and private financing initiatives
(public/
private partnerships), especially for income-generating public
infrastructures.

Given that methods of

funding vary considerably
13.6
according to the State or sector concerned and that
these
change continually in line with technological developments, the
EESC considers that it would not be appropriate at Community
level to restrict potential sources of funding or to favour any
one source over another. Instead, Member States should be
given the flexibility, at national, regional or local
to
decide, on the basis of their own political priorities and of their
assessment of the economic returns, how to fund the services
for which they are responsible.

level,

13.7
In the light of the limited funding capacity of some of
the new Member States, however, the Union should provide
them with the means necessary to promote the development of
efficient
services of general economic and non-economic
interest.

The President

of the European Economic and Social Committee

Anne-Marie SIGMUND