Opinion of the European Economic and Social Committee on: An independent evaluation of services of general interest
Date: 2008-02-14
Institutions: European Economic and Social Committee
Subjects: EU policy, provision of services, services of general interest

C 162/42

EN

Official Journal of the European Union

25.6.2008

Opinion of the European Economic and Social Committee on: An independent evaluation of
services of general interest

(2008/C 162/10)

On 16 February 2007, the European Economic and Social Committee, under Rule 29(2) of its Rules of
Procedure, decided to draw up an own-initiative opinion on:

An independent evaluation 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 23 January 2008. The rapporteur
was Mr Hencks.

At its 442nd plenary session, held on 13 and 14 February 2008 (meeting of 14 February 2008), the Euro-
pean Economic and Social Committee adopted the following opinion by 162 votes to 24, with
11 abstentions.

1. Conclusions and recommendations

The reform of

the Treaties adopted by the European
1.1
Council on 17 and 18 October 2007 breaks new ground on
interest (SGIs), with the inclusion in the
services of general
provisions on the functioning of
the Union of a clause of
general application on services of general economic interest
(Article 14) which is to be applied to all European
(SGEIs)
Union (EU) policies,
including on the internal market and
competition, and a protocol appended to the two treaties on all
services of general interest, including services of non-economic
general interest (SNEGIs).

1.2
SGIs, SGEIs and SNEGIs all help to ensure the wellbeing
of society as a whole and the effectiveness of citizens' funda-
mental rights. These services, which are provided in the general
interest, are a matter of political choice and accordingly fall
under the remit of the legislator.

It follows that there is not only a stronger obligation for
1.3
the EU and Member States to ensure that services of general
economic interest operate effectively, which implies that the
evaluation of the performance of such services should be an
ongoing process, but also that the decision-making institutions
need to agree on a clear definition of the concepts, objectives
and purposes of the three categories of services. Until this is
done, evaluations of their performance will not provide citizens
with the legal certainty they have a right to expect from both
their national and European institutions.

1.4
The purpose of evaluation will be to enhance the effec-
tiveness and efficiency of services of general economic interest
and their adaptation to the changing needs of citizens and busi-
ness, while providing public authorities with what they need to
make the best choices; in addition, it will have a key role to play
in achieving a balanced trade-off between markets and general
interests, and between economic, social and environmental
objectives.

1.6
At national, regional and local levels in Member States,
evaluation of SGIs (economic and non-economic) will have to
be independent, involve multiple parties and take the differing
points of view into account; based on a full range of criteria, it
will have to cover the three pillars of the Lisbon strategy, and be
conducted in consultation with all stakeholders.

1.7
At Community level the task will be to lay down the
procedures for exchange, collation, comparison and coordina-
tion, and to stimulate the independent evaluation process, while
respecting the subsidiarity principle, by defining a harmonised
evaluation methodology at European level based on common
indicators, through dialogue with the representatives of stake-
holders.

To ensure the relevance and usefulness of this evaluation,
1.8
a Steering Committee should be set up, operating in complete
independence and representing multiple parties, with representa-
tives from the European Commission, the European Parliament,
the permanent representations of the Member States to the EU,
the Committee of the Regions and the European Economic and
Social Committee.

2. Current situation

2.1
The Treaties include services of general economic interest
among the European Union's common values, particularly in
view of their contribution to social and territorial cohesion. The
amended Treaty adopted by the European Council on 17 and
18 October 2007 confirms this by providing for the European
Parliament and the Council of the European Union to lay down
principles and conditions, by means of regulations, enabling
SGEIs to fulfil their missions, without prejudice to the compe-
tence of Member States to provide, to commission and to fund
such services, while emphasising the shared responsibility of the
Member States and the Community.

1.5
In view of the importance of SGIs in combating social
exclusion and promoting justice and social protection, which
are set as objectives of the EU in the Treaty, regular evaluation is
imperative, not only of the services of general economic interest
already covered by Community rules, but also of services of
non-economic general interest (SNEGIs) at Member State level.

2.2
Thus, it is up to the Union and the Member States, each
within their respective powers and within the scope of applica-
tion of the amended Treaty, to ensure and verify that such
services operate effectively on the basis of principles and condi-
tions, in particular economic and financial, which enable them
to fulfil their missions.

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2.3
Thus, when the amended Treaty is applied, the European
Parliament and the Council of the European Union, acting in
accordance with the ordinary legislative procedure, will have to
define such principles and conditions, while complying with the
principles of subsidiarity and proportionality.

2.4
A protocol on SGIs appended to the amended Treaties
emphasises the essential role and the wide discretion of national,
regional and local authorities in providing, commissioning and
organizing services of general economic interest as closely as
possible to the needs of the users and ensuring a high level of
quality, safety and affordability, equal treatment and the promo-
tion of universal access and of user rights.

For the first time in a primary Community legislative
2.5
text,
takes note of non-economic services of
this protocol
general interest. It emphasises that the provision, the commis-
sioning and the organisation of such services are Member State
competences and that the provisions of the Treaties do not
affect these competences in any way, so that non-economic
services of general interest remain excluded in principle from
internal market, competition and State aid rules, bearing in
mind that the general principles of Community law apply to the
implementation of national competences.

Regarding the distinction between economic and non-
2.6
economic services, the amended Treaty does not provide any
definition. This will mean continued reliance on judgements by
the European Court of Justice, resulting in persistence of the
current legal uncertainty. Citizens have high expectations of the
European Union. It ought to improve quality of life, guarantee
respect for fundamental rights and ensure that its decisions are
not retrograde in their impact.

3. The need to evaluate services of general interest

things,

Among other

the obligation to ensure that
3.1
services of general economic interest operate effectively set out
in Article 14 of the amended Treaty implies that the evaluation
of
the performance of such services should be an ongoing
process.

The EESC feels that for an SGEI to be considered as oper-

3.2
ating effectively, it should comply with principles such as:

— equality, universality, affordability, accessibility,

reliability,
continuity, quality and effectiveness, while guaranteeing
users' rights and achieving economic and social viability;

— taking account of the specific needs of certain groups of
and disadvantaged

such as disabled, dependent

users
persons, etc.

ensuring that services are in the interest of all users and meet
with their general satisfaction.

3.5
In order to check whether tasks of general interest are
correctly and effectively performed and that objectives —
depending on whether the services in question are SGEIs or
services of non-economic general
interest, or on the actual
nature of the service — are or will be met, the competent
authority must put in place a system for evaluating perfor-
mance, efficiency and quality which goes beyond mere opinion
polls and surveys.

3.6
Evaluation is therefore the systematic analysis and moni-
toring of the conditions for effective implementation of the par-
ticular general interest mission in the light of its fulfilment and
capacity to meet the needs of consumers, businesses, citizens
and society, and of EU objectives, particularly with regard to
economic, social and territorial cohesion,
the social market
economy, the Lisbon strategy and guaranteeing the exercise of
fundamental rights.

Services of general economic interest typically have to

3.7
try to achieve a series of trade-offs:

— between markets and the general interest,

— between economic, social and environmental objectives,

— between users (individual users,

including disadvantaged
groups, businesses, local authorities, etc.), not all of which
have the same needs and interests,

— between Member State competences and Community inte-

gration.

3.8
These trade-offs can shift as a result of economic and
technological change, and of changing individual and collective
needs and expectations, and also reflect the need for consistency
between diverse situations in each country, specific geographical
circumstances and sectoral characteristics.

3.9
Performance evaluation is a separate activity to regu-
lation, but is also an aspect of it. Regulatory activity can benefit
by basing itself on and stimulating evaluation. At the same time,
evaluation must provide insight into situations in which services
do not
function properly, and into differences in terms of
quality and/or type of service between different countries, thus
highlighting adaptation to changing expectations depending on
users' and consumers' needs and concerns and changes in the
economic, technological and social context.

4. Which services should be evaluated

3.3
Even though the amended Treaty does not mention
evaluation explicitly, it does imply that there is a need for vigi-
lance, and evaluation is a suitable means of exercising such vigi-
lance.

3.4 Member States or the EU will need to define and adapt
the tasks and objectives of services of general economic interest
within their remit
in a transparent and non-discriminatory
manner, while complying with the proportionality principle and

In view of the objectives assigned to services of general
4.1
interest and their importance in the implementation of various
Community policies, regular evaluation is essential not only for
economic services, which are covered by Community rules, but
also for non-economic services. The latter are part of the effec-
tive implementation of fundamental rights, and their operation
is underpinned by the solidarity principle and respect
for
human dignity, with due reference to the common values which
are inherent in the European social model.

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4.2
Given that the Protocol appended to the amended Trea-
ties confirms that services of non-economic general interest are
the exclusive responsibility of the Member States, SNEGIs will
levels
have to be evaluated at the national, regional or local
only.

4.3
Given that services of non-economic general interest, just
like SGEIs, relate to a range of EU objectives (respect for funda-
mental
justice,
rights, promoting citizens' well-being, social
social cohesion, etc.) and that the European Union is partly
responsible for the achievement of these objectives, it must at
least ensure that Member States carry out regular evaluations of
the operation of such services of non-economic general interest.

5.6
In its White Paper the Commission recognised the par-
ticular responsibility of the Community institutions, with the
help of data provided at national
in the evaluation of
services that are subject to a sector-specific regulatory frame-
work established by the Community.
It did not exclude the
possibility of an evaluation at Community level also being
considered in other areas if it could be established in specific
cases that such an evaluation would create added value.

level,

5.7
Finally, the Commission ordered an in-depth assessment
report on evaluation methods from an external consultant, the
main conclusions of which will be summarised in a new
communication scheduled for 2008.

5. The approach followed by the EU institutions

5.1
At the Nice (2000) and Laeken (2001) European Coun-
cils, agreement was reached on the need for effective and
the competition
dynamic evaluation at Community level of
effects and performance of services of general
interest, while
taking due account of national, regional and local specificities
and competences.

5.2
It was also considered that this evaluation should be
carried out within existing structures, in particular through hori-
zontal and sectoral reporting and the Commission's Cardiff
report on economic reform, and should cover market structure
and performance, including employment aspects, an economic
and social assessment of public service obligations, and citizens'
and consumers' opinions on the performance of services of
general interest and the impact of liberalisation on them.

5.3
Since 2001, a horizontal evaluation — confined to
network industries (electricity, gas, electronic communications,
postal services, air and rail transport) — has been conducted
annually (except in 2003) by the European Commission, based
on a method defined in a Commission communication (1);
however, not all stakeholders are in agreement on this evalua-
tion, which according to some is more an evaluation of Com-
munity policies on network industries than of how such indus-
tries perform.

5.4
In 2003, in connection with the Green Paper on services
of general interest, the European Commission launched a public
consultation to establish how the evaluation should be orga-
nised, what criteria should be used, how citizens could be
encouraged to participate, and how the quality of date could be
improved. The main conclusions of this consultation were the
need for a multi-dimensional evaluation and a review of evalua-
tion mechanisms; however, according to the Commission, there
was a lack of consensus on who should conduct the evaluation.

The White Paper on services of general

interest (2)
5.5
emphasised the evaluation process which in the future would
have to precede any adjustment to the Community legislative
framework, particularly concerning the liberalisation of services.

5.8
The Commission claims that this external audit will have
to assess the need for a performance evaluation of SGEI provi-
sion at EU level by network industries, put forward recommen-
dations on improving horizontal evaluations, and evaluate the
significance of Commission involvement as a producer of hori-
zontal evaluations.

In its Communication on SGIs (3),

5.9
the Commission
‘considers it important, for the quality and transparency of the
decision-making process, to regularly conduct in-depth evalua-
tion and to disclose its methodology and results, so that they
are open to scrutiny’.

6. Principles and criteria of evaluation

In its Communication COM(2002) 331, the Commission
6.1
to involving civil society in the horizontal
committed itself
evaluation of SGI performance,
in particular by setting up ‘a
permanent mechanism for the monitoring of citizens' opinion and their
evolution “and ensuring that” Stakeholders, including the social part-
ners, will also be consulted on an ad-hoc basis for specific issues’.

6.2
The way in which society is evolving is reflected in the
growing expectations of the public — in this case, users and
consumers — not only that their rights will be acknowledged
but also that their specific circumstances will be taken into
account. There is a close correlation between how services of
general interest are carried out and the societies in which they
are provided.

6.3
The variety of structures and statutes (public or private
operators, public-private partnerships) used by national, regional
and local public authorities to provide services of general
interest mean that multi-dimensional evaluation is needed.

6.4
In addition, evaluation at Member State level has to be
pluralist, with the involvement of all stakeholders: the authori-
ties in charge of defining and implementing services of general
interest, regulators, operators/providers responsible for carrying
out services, representatives of consumers, trade unions and
civil society, etc.

(1) COM (2002)331 final, 18.6.2002. Communication from the Commis-
sion: A Methodological Note for the Horizontal Evaluation of Services
of General Economic Interest.

(2) COM(2004) 374 final, 12.15.2004. Commission Communication:

White Paper on services of general interest.

(3) COM (2007)725 final, 20.11.2007. Communication from the
Commission 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.

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7. Implementing evaluation

7.1
The evaluation system will have to be based on periodic
reports drawn up at national or local levels by evaluating bodies
set up by the Member States in line with the above principles.

7.2
At Community level the task will be to lay down the
procedures for exchange, collation, comparison and coordina-
tion. It will therefore be up to the European Union to stimulate
the process of
independent evaluation, while respecting the
subsidiarity principle and the principles set out in the Protocol
appended to the amended Treaties, by defining a harmonised
evaluation methodology at European level based on common
indicators and the means whereby SGIs operate,
through
dialogue with the representatives of stakeholders.

regulators,

7.3
To ensure the relevance and usefulness of the evaluation,
a Steering Committee should be set up representing the diverse
interests of all stakeholders (public authorities, social partners,
operators,
trade
unions); at Community level, it could comprise representatives
from the European Commission, the European Parliament, the
permanent representations of the Member States to the EU, the
Committee of the Regions and the European Economic and
Social Committee.

individual and business users,

7.4

This Steering Committee would be responsible for:

— evaluation methods,

— defining the indicators,

— specifications for the requisite studies,

— commissioning such studies on the basis of multiple expert

opinions,

— a critical review of reports,

— recommendations,

— disseminating findings.

Discussions with all stakeholders on assessment reports
7.5
could take the form of an annual conference on SGEI perfor-
mance on the lines of the existing conferences on network
industries held over the last few years at the European Economic
and Social Committee, or they could be held in conjunction
with the spring social summit.

The President

of the European Economic and Social Committee

Dimitris DIMITRIADIS

6.5
Apart from involving multiple parties, this evaluation
will have to be independent and take the differing points of
view into account given that not all stakeholders have the same
interests, and that in some cases they may even clash, with
inconsistencies between information and appraisals provided by
them.

6.6
The economic and social effectiveness of services of
interest together with their activity and performance
general
cannot be assessed on the basis of a single criterion, in this case
competition rules; a full range of criteria must be used.

6.7
As the CIRIEC and the CEEP emphasise in a report
drawn up in 2000 (4) at the request of the European Commis-
sion, evaluation is ‘only meaningful if taken in connection with
the designated objectives and tasks, which in their definition
derive from three sources — the consumer, the citizen, and the
society — and have three components — guarantee of the exer-
cise of people's fundamental rights, social and territorial cohe-
sion and the definition and conduct of public policy’.

6.8
Evaluation will need to cover the three pillars of the
Lisbon strategy (economic, social and environmental) and simul-
taneously to involve internal market, competition, consumer
protection and employment policies as well as all relevant
sectoral policies.

The evaluation therefore needs to refer

6.9
criteria, with particular reference to:

to multiple

— the definition of the conditions governing the public service
obligations and the relevant authorisation to provide the
service,

— the effective implementation by operator(s) of specifications
or obligations linked to a universal service or the authorisa-
tion to provide the service,

— the price and quality of

the service,

its accessibility for

people with disabilities, and user satisfaction,

— positive and negative external factors,

— the attainment of public policy objectives,

— the adaptation of provisions to reflect legal constraints.

6.10
This process will therefore involve providing informa-
tion and evaluation of actual practices and the impact of actions
on different types of users, enabling the structural imbalance in
information which is inherent in relations between operators/
providers, regulators and consumers to be overcome.

Brussels, 14 February 2008.

(4) CIRIEC/CEEP study:

‘Services of General Economic Interest

in
Europe: Regulation-Financing-Evaluation Good Practices’ http://www.
ulg.ac.be/ciriec/intl_en/research/publications/index.htm.
CIRIEC: International Centre of Research and Information on the
Public and Co-operative Economy.
CEEP: European Centre of Enterprises with Public Participation and of
Enterprises of General Economic Interest.