Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions accompanying the Communication on "A single market for 21st century Europe" - Services of general interest, including social services of general interest: a new European commitment {COM(2007) 724 final} {SEC(2007) 1514} {SEC(2007) 1515} {SEC(2007) 1516}
Date: 2007-11-20
Institutions: European Commission
Subjects: competition, economic and social cohesion, provision of services, public service, services of general interest, single market, social services

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 20.11.2007 
COM(2007) 725 final 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

Accompanying the Communication on "A single market for 21st century Europe" 

Services of general interest, including social services of general interest: 
a new European commitment 

{COM(2007) 724 final} 
{SEC(2007) 1514} 
{SEC(2007) 1515} 
{SEC(2007) 1516} 

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TABLE OF CONTENTS 

1. 

2. 

2.1. 

2.2. 

2.3. 

2.4. 

3. 

4. 

4.1. 

4.2. 

4.3. 

5. 

Introduction .................................................................................................................. 3 

The role of the EU: ensuring common rules while respecting diversity...................... 3 

The scope of EU action ................................................................................................ 4 

The approach: meeting public interest objectives in a single market .......................... 6 

The particular situation of social services.................................................................... 7 

The particular situation of health services ................................................................... 8 

The Protocol: a coherent framework for EU action ..................................................... 9 

Moving forward ......................................................................................................... 11 

Providing legal guidance on cross-cutting issues....................................................... 11 

Modernising and developing sector-specific policies ................................................ 12 

Monitoring and evaluation ......................................................................................... 13 

Conclusion.................................................................................................................. 14

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1. 

INTRODUCTION 

The  agreement  by  Heads  of  State  and  Government  of  a  Protocol  on  services  of  general 
interest  to  be  annexed  to  the  Treaty  of  Lisbon  is  a  decisive  step  towards  establishing  a 
transparent and reliable EU framework. The new Treaty on the Functioning of the European 
Union will also include a new Article 141 stressing the joint responsibility of the Union and 
the Member States and establishing a legal basis for the EU to take action. 

These  new  provisions  build  on  a  decade  of  debate  about  the  responsibilities  of  the  EU  and 
about whether or not the EU should adopt an overarching framework for services of general 
interest. This debate has helped to generate converging views on the role and approach of the 
EU with regard to services of general interest, in particular following the 2004 Commission's 
White Paper2 and the 2006 opinion of the Parliament3. A broad agreement has emerged on the 
need  to  ensure  legal  certainty  and  consistency  across  EU  policies,  while  respecting  the 
diversity  of  sectors  and  situations.  There  is  also  broad  recognition  of  the  need  to  improve 
general awareness and understanding of EU rules. By spelling out the role of the Union, the 
Protocol brings the necessary clarity and certainty to EU rules. 

This Communication presents the Commission's views on this debate, in particular in the light 
of  the  Parliament's  resolution  and  the  Treaty  of  Lisbon.  It  also  draws  on  the  public 
consultation on social services of general interest initiated in 2006. 

2. 

THE ROLE OF THE EU: ENSURING COMMON RULES WHILE RESPECTING DIVERSITY 

Services of general interest cover a broad range of activities, from the large network industries 
such as energy, telecommunications, transport, audiovisual broadcasting and postal services, 
to education, water supply, waste management, health and social services. These services are 
essential for the daily life of citizens and enterprises, and reflect Europe's model of society. 
They  play  a  major  role  in  ensuring  social,  economic  and  territorial  cohesion  throughout  the 
Union  and  are  vital  for  the  sustainable  development  of  the  EU  in  terms  of  higher  levels  of 
employment, social inclusion, economic growth and environmental quality. 

Although their scope and organisation vary significantly according to histories and cultures of 
state  intervention,  they  can  be  defined  as  the  services,  both  economic  and  non-economic, 

1 
2 

3 

An amendment to Article 16 TEC. 
The  2004  White  Paper  -  COM(2004)  374,  12.5.2004  -  was  built  on  previous  consultations  and 
Communications, in particular the Commission's 2003 Green Paper - COM(2003) 270, 21.5.2003 -, two 
Communications  in 2001 -  COM(2001) 598,  17.10.2001  and  "Services of  general  interest  in  Europe" 
(OJ  C  17,  19.1.2001)  -  and  the  first  Communication  on  this  subject  of  1996  ("Services  of  general 
interest in Europe" - OJ C 281, 26.9.1996). 
The resolution of the European Parliament (A6-0275/2006 of 26 September 2006) completed the large 
round  of  consultation  of  EU  institutions  and  stakeholders  initiated  by  the  2004  White  Paper.  The 
resolution  supports  the  underlying  principles  and  priority  actions  set  out  in  the  White  Paper.  It  states 
that  it  is  not  possible  to  define  services  of  general  interest  uniformly  and  does  not  call  for  a  single 
horizontal  legislative  framework,  but  calls  on  the  EU  and  the  Commission  in  particular  to  continue 
acting in various domains and sectors so as to achieve greater clarity and consistency of EU rules, while 
fully  respecting  the  principle  of  subsidiarity.  The  European  Economic  and  Social  Committee  and  the 
Committee  of  the  Regions  have  also  given  their  opinions  (CESE/2005/121  of  9  February  2005, 
CESE/2006/223 of 6 July 2006 and CDR/2004/327of 23 February 2005). 

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which the public authorities classify as being of general interest and subject to specific public 
service obligations. This means that it is essentially the responsibility of public authorities, at 
the  relevant  level,  to  decide  on  the  nature  and  scope  of  a  service  of  general  interest.  Public 
authorities can decide to carry out the services themselves or they can decide to entrust them 
to other entities, which can be public or private, and can act either for-profit or not for-profit. 

At  the  same  time,  providers  of  these  services  must  respect  the  rules  laid  down  in  the  EC 
Treaty  and  in  secondary  EU  law  where  these  are  applicable.  Moreover,  given  their  EU 
dimension,  a  number  of  network  industries  which  perform  services  of  general  economic 
interest are now subject to sector-specific EU directives. In partnership with national, regional 
and  local  authorities,  the  EU  therefore  has  a  role  to  play  in  framing  the  principles  and 
conditions for the operation of a wide range of services. This shared responsibility is reflected 
in  the  Treaty  and  will  be  underlined  in  the  Protocol  on  services  of  general  interest  to  be 
annexed to the Treaty of Lisbon. 

2.1. 

The scope of EU action 

In accordance with the principles of subsidiarity and proportionality, the EU intervenes within 
the competences entrusted to it by the Treaty and to the extent necessary. Its action respects 
the diversity of situations in the Member States and the roles of national, regional and local 
authorities in ensuring the well-being of their citizens and in promoting social cohesion, while 
guaranteeing democratic choices regarding, among other things, the level of service quality.  

For the first time, the Protocol introduces the notion of services of general interest in primary 
EU law whereas the current EC Treaty only refers to services of general economic interest. As 
things  stand,  two  sets  of  services  of  general  interest  can  be  distinguished  for  illustrative 
purposes, in terms of how they are governed by EU rules: 

•  Services of general economic interest: the provision and organisation of these services are 
subject to internal market and competition rules of the EC Treaty since their activities are 
economic in nature. In the case of large network industries having a clear European-wide 
dimension, such as telecommunications, electricity, gas, transport and postal services, the 
services are regulated by a specific EU legislative framework. Similarly, certain aspects of 
public service broadcasting are covered by specific EU legislation, such as the "television 
without frontier" directive. Other services of general economic interest, such as those in the 
area of waste management, water supply or waste water treatment, are not subject to a self-
standing regulatory regime at EU level. However, specific Community rules such as public 
procurement, environmental and consumer protection legislation apply to certain aspects of 
the service. In addition, a number of services of general economic interest are also subject 
to the regulatory framework established by the Services Directive4. 

•  Non-economic  services:  these  services,  for  instance  traditional  state  prerogatives  such  as 
police,  justice  and  statutory  social  security  schemes  are  not  subject  to  specific  EU 
legislation, nor are they covered by the internal market and competition rules of the Treaty. 
Some  aspects  of  the  organisation  of  these  services  may  be  subject  to  other  rules  of  the 
Treaty, such as the principle of non-discrimination. 

4 

More information can be found in the staff working paper on progress since the 2004 White Paper on 
services of general paper SEC(2007) 1515, which is published alongside this Communication. 

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The question of how to distinguish between economic and non-economic services has often 
been  raised.  The  answer  cannot  be  given  a  priori  and  requires  a  case-by-case  analysis:  the 
reality  of  these  services  is  often  specific  and  differs  widely  from  one  Member  State  to 
another, and indeed from one local authority to another; the ways in which they are provided 
are constantly evolving as a response to new economic, social and institutional developments, 
such  as  shift  in  consumer  demands,  technological  change,  the  modernisation  of  public 
administrations and the devolution of responsibilities to the local level. 

In  the  area  of  competition  law,  according  to  the  Court  of  Justice,  it  is  not  the  sector  or  the 
status  of  an  entity  carrying  out  a  service  (e.g.  whether  the  body  is  a  public  undertaking, 
private undertaking, association of undertakings or part of the administration of the State), nor 
the way in which it is funded, which determines whether its activities are deemed economic or 
non-economic; it is the nature of the activity itself. To make the distinction, the Court relies 
on a set of criteria related to the conditions of functioning of the service under consideration, 
such as the existence of a market, state prerogatives or obligations of solidarity. In practice, 
this  means  that  a  single  entity  may  well  be  engaged  in  both  economic  and  non-economic 
activities  and  therefore  be  subject  to  competition  rules  for  parts  of  its  activities  but  not  for 
others. For example, the Court has ruled that a given entity may be engaged on the one hand 
in  administrative  activities  which  are  not  economic,  such  as  police  tasks,  and  on  the  other 
hand  in  purely  commercial  activities5.  An  entity  can  also  be  engaged  in  non-economic 
activities  where  it  behaves  like  a  charity  fund  and  at  the  same  time  compete  with  other 
operators for another part of its activity by performing financial or real estate operations, even 
on a not-for-profit basis6. According to this functional approach, each activity has therefore to 
be analysed separately7. 

For  a  given  service  to  qualify  as  an  economic  activity  under  the  internal  market  rules  (free 
movement of services and freedom of establishment), the essential characteristic of a service 
is that it must be provided for remuneration. The service does not, however, necessarily have 
to be paid by those benefiting from it. The economic nature of a service does not depend on 
the legal status of the service provider (such as a non-profit making body) or on the nature of 
service, but rather on the way a given activity is actually provided, organised and financed. In 
practice, apart from activities in relation to the exercise of public authority, to which internal 
market  rules  do  not  apply  by  virtue  of  Article  45  of  the  EC  Treaty,  it  follows  that  the  vast 
majority  of  services  can  be  considered  as  "economic  activities"  within  the  meaning  of  EC 
Treaty rules on the internal market (Articles 43 and 49). 

Against this background, the situation of social services has been the subject of discussion in 
recent years. Social services can be of an economic or non-economic nature depending on the 
activity  under  consideration.  Although  they  are  not  defined,  the  2006  Communication 
identified  two  broad  types  of  social  services:  firstly,  statutory  and  complementary  social 
security schemes, organised in various ways (mutual or occupational organisations), covering 
the  main  risks  of  life,  such  as  those  linked  to  health,  ageing,  occupational  accidents, 
unemployment,  retirement  and  disability;  secondly,  other  services  provided  directly  to  the 
person such as social assistance services, employment and training services, social housing or 

5 
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7 

Case C-82/01 Aéroports de Paris [2002]. 
Case C-222/04 Cassa di Risparmio di Firenze [2006]. 
Case  C-118/85  Commission  v  Italy  [1987].  Compare  also  Cases  C-205/03  P.  Fenin  [2006]  and  T-
155/04- Selex [2006] for a situation where different activities could not be analysed separately. 

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long-term  care.  These  services  are  typically  organised  at  a  local  level  and  are  heavily 
dependent on public funding. 

2.2. 

The approach: meeting public interest objectives in a single market 

If  a  service  of  general  interest  is  regarded  as  economic,  it  is  subject  to  internal  market  and 
competition rules. This may lead to questions as to whether the full application of these rules 
is  compatible  with  the  pursuit  of  the  specific  missions  of  general  interest  assigned  to  the 
service.  At  the  level  of  the  Treaty,  these  situations  are  addressed  by  Article  86(2)  as 
interpreted  by  the  case  law  of  the  Court  of  Justice8.  This  provides  that  services  of  general 
economic interest are in principle subject to the application of Treaty rules. However, where 
the  application  of  these  rules  obstructs  the  performance,  in  law  or  in  fact,  of  the  particular 
tasks of general interest assigned to them, these services may benefit from a derogation from 
the provisions of the Treaty, provided certain conditions are satisfied, notably as regards the 
proportionality of the compensation provided to undertakings entrusted with the operation of 
those services.  

As  highlighted  in  its  2004  White  Paper,  the  Commission  considers  that  the  objectives  of 
developing high-quality, accessible and affordable services of general economic interest and 
of an open and competitive internal market are compatible and should be mutually supportive. 
Experience,  for  instance  in  the  telecommunications  and  transport  sectors,  or  at  a  local  level 
(e.g  awarding  public  service  contracts),  shows  that  markets  which  are  open  to  competition 
contribute  to  improving  the  efficiency,  affordability  and  choice  of  services  on  offer.  At  the 
same  time,  specific  provisions  can  be  maintained  to  ensure  that  a  balance  is  struck.  For 
instance, the Court accepts the grant of exclusive or special rights for some services, as well 
as  measures  intended  to  regulate  markets,  such  as  authorisation  requirements,  to  the  extent 
they are justified by public interest objectives and proportionate to the objectives pursued9. In 
secondary  law,  the  pursuit  of  public  interest  objectives  by  services  of  general  economic 
interest is also taken into account in the Services Directive10. 

The capacity to combine the provision of services of general interest with the development of 
a  European  single  market  is  particularly  well  illustrated  by  the  series  of  sector-specific 
policies developed since the early 1990s for network industries such as telecommunications, 
energy,  transport  and  postal  services,  which  today  represent  more  than  7%  of  the  GDP  and 
5%  of  total  employment  in  the  EU.  The  gradual  opening up of these sectors to competition 
went  hand  in  hand  with  the  definition  of  a  number  of  public  service  obligations  for  each 
sector,  covering  aspects  such  as  universal  service,  consumer  and  user  rights  and  health  and 
safety  concerns.  These  sectoral  frameworks  also  specify  the  scope  of  public  policy 
intervention  in  regulating  these  networks,  with  particular  reference  to  the  role  of  national 
regulatory  authorities.  These  sector-specific  frameworks  are  in  the  process  of  being 
modernised in the light of technological developments or global challenges, such as climate 
change,  and  because  of  successive  enlargements  which  have  created  more  diversity  in  the 
Member States' approach to services of general interest. 

8 

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10 

Case C-320/91, Corbeau, [1993], ECR I-2533, case C-393/92, Almelo [1994] ECR I-1477, joined cases 
C-157/94 - C-160/94, Commission v. Netherlands, [1997], ECR I-5699 , Commission v. Italy [1997], 
ECR I-5789, Commission v. France [1997], ECR I-5815, Commission v. Spain [1997], ECR I-5851. 
For  instance  case  C-70/95,  Sodemare  [1997]  ECR  I-3395,  Joined  cases  C-282/04  and  C-283/04, 
Commission v. Netherlands [2006]. 
More information can be found in the document SEC(2007) 1515. 

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2.3. 

The particular situation of social services 

The Commission initiated in April 2006 a broad consultation with the Member States, service 
providers and users to better understand the nature of these services across the EU and assess 
stakeholders' experience with the application of Community rules11. 

Although the functions and organisation of social services vary a great deal, the consultation 
highlighted their importance for the fulfilment of basic EU objectives such as the achievement 
of social, economic and territorial cohesion, a high level of employment, social inclusion and 
economic growth, as well as their close interconnection with local realities. 

Objectives and principles of organisation of social services 

Social services are often meant to achieve a number of specific aims:  

–  they are person-oriented services, designed to respond to vital human needs, in particular 
the needs of users in vulnerable position; they provide protection from general as well as 
specific risks of life and assist in personal challenges or crises; they are also provided to 
families  in  a  context  of  changing  family  patterns,  support  their  role  in  caring  for  both 
young  and  old  family  members,  as  well  as  for  people  with  disabilities,  and  compensate 
possible  failings  within  the  families;  they  are  key  instruments  for  the  safeguard  of 
fundamental human rights and human dignity; 

–  they  play  a  preventive  and  socially  cohesive  role,  which  is  addressed  to  the  whole 

population, independently of wealth or income;  

–  they  contribute  to  non-discrimination,  to  gender  equality,  to  human  health  protection,  to 
improving  living  standards  and  quality  of  life  and  to  ensuring  the  creation  of  equal 
opportunities for all, therefore enhancing the capacity of individuals to fully participate in 
the society. 

These aims are reflected in the ways in which these services are organised, delivered and financed:  

–  in  order  to  address  the  multiple  needs  of  people  as  individuals,  social  services  must  be 
comprehensive  and  personalised,  conceived  and  delivered  in  an  integrated  manner;  they 
often involve a personal relationship between the recipient and the service provider; 

–  the definition and delivery of a service must take into account the diversity of users;  

–  when responding to the needs of vulnerable users, social services are often characterised 
by an asymmetric relationship between providers and beneficiaries which is different from 
a commercial supplier / consumer relationship;  

–  as  these  services  are  often  rooted  in  (local)  cultural  traditions,  tailor-made  solutions 
taking  into  account  the  particularities  of  the  local  situation  are  chosen,  guaranteeing 
proximity  between  the  service  provider  and  the  user  while  ensuring  equal  access  to 
services across the territory; 

11 

COM(2006)  177,  26.4.2006.  The  consultation  process  included  the  launch  of  a  questionnaire  by  the 
Social Protection Committee, the preparation of a consultant study on social services of general interest 
and a report by a group of legal experts. 

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–  service  providers  often  need  a  large  autonomy  to  address  the  variety  and  the  evolving 

nature of social needs; 

–  these services are generally driven by the principle of solidarity and are highly dependent 
on public financing, so as to ensure equality of access, independent of wealth or income;  

–  non-profit  providers  as  well  as  voluntary  workers  often  play  an  important  role  in  the 
delivery  of  social  services,,  thereby  expressing  citizenship  capacity  and  contributing  to 
social  inclusion,  the  social  cohesion  of  local  communities  and  to  intergenerational 
solidarity. 

The  consultation  has  also  highlighted  the  fact  that  these  services  are  all  engaged  in  an 
important modernisation process to better respond to new challenges such as changing needs 
of  European  citizens  and  the  impact  of  ageing,  while  at  the  same  time  facing  financial 
constraints.  This  process  has  often  resulted  in  profound  changes  in  the  way  in  which  these 
services  are  organised,  provided  and  financed,  including  the  emergence  of  new  areas  of 
action,  the  recourse  to  outsourcing  of  services  previously  provided  directly  by  public 
authorities and an increasing devolution of competences to the local level.  

The  combined  effect  of  these  changes  is  that  an  increasing  number  of  activities  performed 
daily  by  social  services  are  now  falling  under  the  scope  of  EC  law  to  the  extent  they  are 
considered  as  economic  in  nature.  This  new  situation  has  raised  a  number  of  practical 
questions, with the consultation showing that a number of stakeholders from the sector have 
difficulty  in  understanding  and  applying  the  rules,  in  particular  state  aid  and  public 
procurement rules. Local authorities and small providers in particular may lack awareness and 
information about EU rules, which can lead to misunderstandings and misapplication of rules 
on  the  ground.  In  particular,  public  authorities  and  service  providers  in  the  social  field  are 
sometimes  less  aware  than  in  other  sectors  of  the  specific  provisions  of  Article  86(2) 
presented above. The application of Article 86(2) requires from Member States the respect of 
certain basic conditions which have been developed in the case law of the Court and described 
by  the  Commission,  notably  in  the  texts  on  state  aid  adopted  following  the  Altmark  ruling 
which  in  practice  exempt  the  vast  majority  of  services  performed  at  the  local  level  from 
notification.  Among  these  conditions,  a  clear  mandate  must  be  assigned  by  the  competent 
public  authority  to  the  service  provider  regarding  the  operation  of  the  service  at  stake.  It  is 
therefore  important  that  Member  States  ensure  that  such  adoption  of  acts  of  entrustment  is 
effectively  made  for  all  services  of  general  economic  interest,  including  the  provision  of 
social services, in order to provide adequate legal certainty and transparency towards citizens. 

As  outlined  below,  the  Commission  is  committed  to  providing  explanations  about  the  rules 
applicable  and  to  assisting  the  modernisation  process  in  which  social  services  are  engaged, 
whilst  fully  respecting  the  principle  of  subsidiarity  and  the  responsibilities  of  national, 
regional and local authorities.  

2.4. 

The particular situation of health services 

Health services are also part of the wider framework on services of general interest. Article 
152  of  the  Treaty  makes  clear  that  Community  action  in  the  field  of  health  services  must 
respect the responsibilities of the Member States for the organisation, financing and delivery 
of health services and medical care. In parallel to the work on social services, the Commission 

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has recently held an open consultation regarding Community action and possible difficulties 
with the application of EC law12. It plans to bring forward proposals setting out a framework 
for safe, high-quality, and efficient cross-border healthcare services, also taking due account 
of  the  Council  conclusions  on  "Common  values  and  principles  in  European  Union  Health 
Systems" adopted in June 2006. 

3. 

THE PROTOCOL: A COHERENT FRAMEWORK FOR EU ACTION 

The Protocol annexed to the Treaty of Lisbon provides a coherent framework that will guide 
EU action and serves as a reference for all levels of governance. By clarifying the principles 
and setting out the common values underpinning EU policies, it gives visibility, transparency 
and clarity to the EU approach applicable to services of general interest. 

Protocol on services of general interest 

The Inter-governmental conference meeting in Lisbon in October 2007 agreed to annex the following 
Protocol to the Treaty of Lisbon13: 

"The High Contracting Parties, 

Wishing to emphasise the importance of services of general interest, 

Have  agreed  upon  the  following  interpretative  provisions,  which  shall  be  annexed  to  the  Treaty  on 
European Union and to the Treaty on the Functioning of the Union: 

Article 1 

The shared values of the Union in respect of services of general economic interest within the meaning 
of Article 14 Treaty on the Functioning of the European Union include in particular: 

-  the  essential  role  and  the  wide  discretion  of  national,  regional  and  local  authorities  in  providing, 
commissioning  and  organising  services  of  general  economic  interest  as  closely  as  possible  to  the 
needs of the users; 

- the diversity between various services of general economic interest and the differences in the needs 
and preferences of users that may result from different geographical, social or cultural situations; 

-  a  high  level  of  quality,  safety  and  affordability,  equal  treatment  and  the  promotion  of  universal 
access and of user rights. 

Article 2 

The provisions of the Treaties do not affect in any way the competence of Member States to provide, 
commission and organise non-economic services of general interest". 

The  Protocol  builds  on,  and  re-asserts,  a  number  of  more  operational  principles  guiding  the 
work of EU institutions, and in particular that of the Commission, such as: 

•  The  role  and  the  wide  discretion  of  national,  regional  and  local  authorities  in  operating 
services  of  general  economic  interest  as  closely  as  possible  to  the  needs  of  the  users: 
Services  of  general  economic  interest  should  be  responsive  and  delivered  as  closely  as 
possible to citizens and businesses. The action of the EU should respect the principles of 
subsidiarity and proportionality. The competent authorities of the Member States are free 

12 
13 

SEC(2006) 1195, 26.9.2006.  
The following quotation is without prejudice to the final version of the Treaty about to be signed and to 
its translation into the official languages of the EU. 

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to  define  what  they  consider  to  be  services  of  general  economic  interest  and  have  broad 
discretion  to  decide  how  to  organise,  regulate  and  finance  these  services,  in  accordance 
with EU law and within the limits of manifest error. In particular, the competition rules and 
the internal market rules do not apply to non-economic activities. 

•  Respecting  the  diversity  of  services,  situations,  and  needs  and  preferences  of  users: 
Differences between various services of general economic interest and the different needs 
and preferences of citizens, users and consumers resulting from different economic, social, 
geographical, cultural and physical situations should be respected. Due account should be 
taken  of  the  diversity  that  characterises  such  services,  the  situations  in  which  they  are 
provided,  the  characteristics  of  service  providers  and  the  need  for  flexibility  to  adapt 
services  to  various  needs:  this  is  particularly  relevant  in  the  case  of  social  services. 
Relevant  regulation  should  be  regularly  updated  to  cover  new  developments  over  time, 
such as technological innovation. 

•  Achieving a high level of quality, safety and affordability: Promoting the development of 
high-quality,  safe  and  affordable  services  of  general  economic  interest  is  an  essential 
objective  of  the  action  of  the  EU.  This  encompasses  access  to  services,  including  cross-
border  services;  the  value  for  money  and  financial  affordability  of  services,  including 
special  schemes  for  people  on  low  incomes  and  with  special needs, which is  particularly 
important  in  the  case  of  social  services;  physical  safety,  reliability  and  continuity;  high 
quality and choice; transparency and access to information from providers and regulators. 
Where it is appropriate for the EU to act, EU sector-specific instruments should establish 
rules ensuring the quality, security and safety of products and services for consumers and 
users in general, as well as all persons involved in their production. 

•  Ensuring  equal  treatment  and  promoting  universal  access:  Access  to  services  of  general 
economic interest is recognised as a right in the EU Charter on Fundamental Rights. This 
includes  ensuring  equal  treatment  between  women  and  men  and  combating  all  forms  of 
discrimination  in  accessing  services  of  general  economic  interest.  Where  an  EU  sector-
specific  rule  is  based  on  the  concept  of  universal  service,  it  should  establish  the  right  of 
everyone  to  access  certain  services  considered  as  essential  and  impose  obligations  on 
service  providers  to  offer  defined  services  according  to  specified  conditions,  including 
complete  territorial  coverage  and  at  an  affordable  price.  Universal  service  provides  for  a 
minimum set of rights and obligations, which as a general rule can be further developed at 
national  level.  It  is  a  dynamic  concept,  which  needs  to  be  updated  regularly  sector  by 
sector.  Promoting  access  throughout  the  territory  of  the  Union  is  essential  for  the 
promotion  of  territorial  cohesion  in  the  EU,  as  mentioned  above  in  the  case  of  social 
services.  Territories  with  a  geographical  or  natural  handicap  such  as  outermost  regions, 
islands, mountains, sparsely populated areas and external borders, often face challenges in 
terms of access to services of general interest, due to the remoteness from major markets or 
the increased cost for connection. These specific needs must be taken into account. 

•  Upholding  user  rights:  Citizens,  consumer  and  user  rights  should  be  specified,  promoted 
and  upheld.  The  capacity  of  consumers  and  users,  including  vulnerable  or  disabled 
persons; to take up their rights, especially their right of access, often requires the existence 
of  independent  regulators  with  appropriate  staff  and  clearly  defined  powers  and  duties. 
These include powers of sanction, in particular the ability to monitor the transposition and 
enforcement  of  universal  service  provisions.  These  also  require  provisions  for  the 
representation  and  active  participation  of  consumers  and  users  in  the  definition  and 

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evaluation  of  services,  the  availability  of  appropriate  redress  and  compensation 
mechanisms,  and  the  existence  of  a  review  clause  allowing  requirements  to  be  adapted 
over  time  to  reflect  new  social,  technological  and  economic  developments.  Regulators 
should also monitor market developments and provide data for evaluation purposes. 

•  Non-economic  services:  As  mentioned  above,  these  services  are  not  subject  to  a  specific 
EU  legislation,  nor  are  they  covered  by  the  internal  market  and  competition  rules  of  the 
Treaty. 

Pending  the  entry  into  force  of  the  new  Treaty,  which  will  give  legal  effect  to  the  new 
provisions,  the  Commission  intends  to  use  the  Protocol  and  principles  as  a  benchmark  to 
check the consistency and proportionality of EU policies and initiatives.  

4. 

MOVING FORWARD 

On  the  basis  of  the  Protocol,  and  in  line  with  Parliament's  approach,  the  Commission  will 
continue to consolidate the EU framework applicable to services of general interest, including 
for social and health services, providing concrete solutions for concrete problems where they 
exist. With progress made, attention should increasingly concentrate on the good transposition 
and application of EU rules, with greater emphasis on monitoring outcomes for the users and 
consumers,  dissemination  of  information  and  exchange  of  practices,  monitoring  of 
enforcement  and  evaluation  of  performance.  The  Commission  envisages  a  mix  of  sector-
specific and issue-specific actions along the following three axes: 

4.1. 

Providing legal guidance on cross-cutting issues 

The  Commission  is  aware  that  the  application  of  Community  law  to  services  of  general 
economic interest may raise questions and that a number of legal clarifications or explanations 
about EU rules are regularly sought in the various areas. In this context, the Commission is 
committed to enable users and practitioners to obtain quickly answers to practical questions, 
explanations  and  interpretations.  Answers  to  questions  raised  will  be  published  and 
appropriate  update  reflecting  the  position  of  the  Commission  will  be  provided  on  a  regular 
basis  through  a  dedicated  website.  As  a  first  illustration,  a  set  of  answers  is  published 
alongside  this  Communication  to  address  questions  concerning  the  application  of  public 
procurement and state aid rules, notably on social services of general interest14. 

An interactive information service 

A  dedicated  and  interactive  on-line  service  will  be  shortly  put  in  place  at  the  disposal  of  citizens, 
service  providers,  public  authorities  and  all  stakeholders  to  provide  information  and  allow  them  to 
raise questions concerning the application of EU law. Answers to frequently asked questions, starting 
with  questions  raised  in  the  context  of  the  consultation  on  social  services,  will  be  placed  on  the 
Commission's website. The Commission expects that this tool could assist actors at local and regional 
levels, in particular in the field of social services, to develop a good understanding of the position of 
the  Commission  on  the  relevant  EU  provisions  and  that  over  time  all  relevant  questions  arising  in 
practice will be covered in a hands-on, user-friendly way. 

14 

See SEC(2007) 1514 and SEC(2007) 1516 respectively. 

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In  the  field  of  state  aid,  the  decision  and  the  framework  on  state  aid  in  the  form  of  public 
service  compensation  adopted  in  2005  (often  referred  to  as  the  "Altmark  package"15)  has 
already made a significant contribution to the simplification of rules applicable, in accordance 
with better regulation principles. These texts fully respect the wide freedom of Member States 
to define tasks of services of general economic interest. They enable Member States to secure 
these missions through an act of entrustment, and to compensate all net costs incurred by the 
companies  charged  with  such  services.  In  this  context,  separation  of  accounts  enables  to 
achieve transparency and avoid any overcompensation. Moreover, compensations for services 
that  fulfil  these  conditions  are  fully  exempted  from  notification,  as  long  as  their  amount  is 
lower than EUR 30 million per year, or even without limits in the field of social housing and 
hospitals. This in practice exempt from notification the vast majority of services performed at 
the local level. The Commission will evaluate and report on the application of the package on 
state aid by the end of 2009 and consider whether to update it in this context. 

In  the  field  of  public-private  partnerships  and  concessions,  a  number  of  issues  are  pending 
and/or  emerging.  The  Commission  will  present  shortly  an  interpretative  Communication  on 
institutionalised  public-private  partnerships  with  a  view  to  clarifying  the  rules  applicable. 
Based  on  the  results  of  an  impact  assessment,  the  Commission  is  also  considering  further 
steps  to  clarify  the  rules  applicable  to  concessions.  Requests  have  also  been  made  to  better 
explain the rules applicable to public procurement following the entry into force of the new 
directives in January 2006. The toolbox presented above should provide greater clarity. 

These efforts will complement the wider on-going initiatives to improve access to information 
and  develop  communication  tools  following  the  review  of  the  single  market,  such  as  the 
creation of a EU "single market assistance service". 

4.2.  Modernising and developing sector-specific policies 

The Commission is committed to pursuing and developing its sectoral approach by proposing, 
where appropriate, sector-specific initiatives which take account of the specific requirements 
and  situations  of  each  sector,  and  reflect  the  principles  set  out  in  the  envisaged  Protocol.  A 
number of sector-specific frameworks applicable to network industries are already in place at 
EU  level.  However,  in  a  dynamic  and  constantly  evolving  single  market,  they  may  require 
updating in the years to come.  

In particular, the Commission will: 

•  in the field of energy: follow up on the measures to ensure the completion of the internal 
energy market proposed in September 2007, as well as on the draft European Charter on 
the rights of energy consumers;  

•  in the field of transport: follow up its proposal of July 2006 to modernise the single market 
legislation for aviation; monitor the implementation of the "third railway package" and the 
revised regulation on public passenger transport services now agreement has been reached; 

•  in  the  field  of  e-communications:  follow  up  its  proposals  on  the  review  of  the  regulatory 
framework for electronic communications (including fixed phones, mobile and broadband 

15 

More information on the "Altmark package" can be found in SEC(2007) 1515. 

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access and transmission of broadcast content) and publish a Communication on long term 
issues in the field of universal service in electronic communications; 

•  in the field of postal services: assist Member States in the transposition of the directive for 

the completion of the EU postal internal market; 

•  in the field of health services: plans to bring forward proposals setting out a framework for 

safe, high-quality, and efficient healthcare services; 

•  in the field of social services: develop the actions outlined in the box. 

A strategy for supporting the quality of social services across the EU 

The consultation on social services has highlighted the need to support the promotion of the quality of 
social  services  in  a  more  systematic  manner.  The  European  Social  Fund  and  the  ERDF  already 
provide direct financial support to a number of services. The open method of coordination for social 
protection and social inclusion sets a policy framework for the pursuit of reforms and the exchange of 
good  practices.  Based  on  this  experience,  the  Commission  will  support  the  development,  within  the 
Social  Protection  Committee,  of  a  voluntary  EU  quality  framework  providing  guidelines  on  the 
methodology  to  set,  monitor  and  evaluate  quality  standard.  Moreover,  via  the  PROGRESS 
programme,  the  Commission  will  support  cross-European  bottom-up  initiatives  aimed  at  developing 
voluntary  quality  standards  and  exchange  of  experience  and  will  promote  training  of  public 
authorities in the field of public procurement. 

4.3.  Monitoring and evaluation  

The  Commission  considers  it  important,  for  the  quality  and  transparency  of  the  decision-
making process, to regularly conduct in-depth evaluation and to disclose its methodology and 
results, so that they are open to scrutiny. This is usually done on a sector-by-sector basis.  

The  new  market  monitoring  tools  presented  in  the  final  report  on  the  single  market  review, 
such as the establishment of a consumer scoreboard, are a step forward in the evaluation of 
performances.  Since  the  publication  of  the  2004  White  Paper,  progress  has  been  made  in 
developing a cross-sectoral evaluation of network industries at EU level. This methodology is 
being reviewed and the Commission will present its proposals for improvement in 2008.  

A  specific  request  has  been  made  to  the  Commission  to  present  to  Parliament  a 
comprehensive  analysis  of  the  effects  of  "liberalisation"  to  date.  The  Commission  will  take 
this request into account in the revision of its methodology and perform this analysis in the 
context of its regular evaluation report of network services. 

The Commission will also review progress with the application of the Protocol, once the new 
Treaty  has  entered  into  force.  In  addition,  it  will  issue  a  dedicated  report  on  social  services 
every two years to serve as an exchange tool with stakeholders. 

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5. 

CONCLUSION 

At  this  important  stage  in  the  development  of  the  EU,  pending  the  entry  into  force  of  the 
Treaty  of  Lisbon,  it  is  crucial  to  ensure  that  there  is  a  shared  vision  of  the  initiatives  to  be 
pursued  to  achieve  concrete  results  for  Europeans.  This  is  the  approach  underpinning  the 
Citizens’ Agenda16 put forward by the Commission. 

The approach of the EU with regard to services of general interest, including social and health 
services, is essentially pragmatic. It reflects the division of competences between the different 
levels  of  governance  in  the  EU.  It  respects  the  diversity  and  specificities  of  these  services. 
Where  sector-specific  frameworks  are  established,  it  is  because  there  is  a  clear  European 
added  value.  These  frameworks  are  regularly  revised  to  reflect  new  economic,  social  and 
technological developments. The application of EU law is monitored in accordance with the 
EC Treaty and regularly  reviewed to take account of new realities. In areas which could be 
perceived  as  problematic,  active  consultation  has  taken  place  or  is  ongoing  to  identify  and 
solve pending or emerging issues.  

The discussions triggered by the 2004 White Paper have been particularly helpful in bringing 
about a clearer understanding of the role and approach of the EU with regard to services of 
general interest. The debate which followed and the views of the other European institutions 
have shown that,  despite differences of  opinion, there is a broad agreement on a number of 
principles guiding EU action. The experience of sector-specific frameworks has also provided 
a  practical  basis  for  identifying  key  principles  that  can  be  applied  to  services  of  general 
interest throughout Europe. 

The  Protocol  and  revised  provisions  in  the  new  the  Treaty  build  on  this  discussion  and 
experience, and mark a new European commitment. Ten years after the first Communication 
at EU level, three years after the White Paper, they reflect the broad consensus across the EU 
about  the  role  and  responsibilities  of  the  EU.  Now  that  the  EU  framework  has  been 
consolidated  by  the  Protocol,  it  is  time  to  focus  on  implementation.  On  this  basis,  together 
with action at national, regional and local level, the Commission is determined to help ensure 
clarity, coherence and publicity of EU rules, so that services of general interest can fulfil their 
missions and contribute to a better quality of life for European citizens. 

16 

COM(2006) 211, 10.5.2006. 

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