Social services of general interest in the internal market of the 21st century : the Reform Treaty : the new state of affairs.
Date: 2008-12-11
Institutions: European Committee of the Regions, European Economic and Social Committee
Subjects: Treaty of Lisbon, domestic market, provision of services, services of general interest, social services

Social Services of General Interest 
in the internal market 
of the 21st century 

The Reform Treaty: the new state of affairs

COMMITTEE OF THE REGIONS (cid:129) EUROPEAN ECONOMIC AND SOCIAL COMMITTEE
rue Belliard 99-101 B-1040 Brussels

COLLECTIF SSIG

Social Services of General Interest  
in the internal market  
of the 21st century  

The Reform Treaty: the new state of affairs 

COLLECTIF 

SSIG 

January 2008 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
- 2 - 

Social services of general interest 

Main Community texts and references 

•  Services of general interest in Europe, OJ C281, 26 October 1996 

•  Services of general interest in Europe, COM 2001 598, 17 October 2001 

•  Green Paper on services of general interest, COM 2003 270, 21 May 2003 

•  White Paper on services of general interest, COM 2004 374, 12 May 2004 

•  Decision  on  the  application  of  Article  86(2)  of  the  EC  Treaty  to  State  aid  in  the  form  of  public 
service  compensation  granted  to  certain  undertakings  entrusted  with  the  operation  of  services  of 
general economic interest, COM 2005 267, 28 November 2005, OJ L312, 29 November 2005 

•  Implementing  the  Community  Lisbon  programme:  social  services  of  general  interest  in  the 

European Union, COM 2006 177, 26 April 2006 

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

commitment, COM 2007 725, 20 November 2007 

•  Frequently  asked  questions  concerning  the  application  of  public  procurement  rules  to  social 

services of general interest, SEC 2007 1514, 20 November 2007 

•  Frequently  asked  questions  in  relation  to  the  Commission  Decision  of  28  November  2005  on  the 
application of Article 86(2) of the EC Treaty to State aid in the form of public service compensation 
granted  to  certain  undertakings  entrusted  with  the  operation  of  services  of  general  economic 
interest, and of the Community framework for State aid in the form of public service compensation, 
SEC 2007 1516, 20 November 2007 

•  Progress since the 2004 White Paper on services of general interest, SEC 2007 1515, 20 November 

2007 

 
 
 
 
 
 
 
 
 
 
 
 
 
- 3 - 

Social services of general interest  
in the internal market 
of the 21st century 

The Reform Treaty: the new state of affairs 

Study by the SSGI Collective1 

coordinated by 
Marie-Laure Onnée-Abbruciati2 and Laurent Ghékiere3 

1

2

3

Think  tank  comprising  social  and  health  services  providers,  set  up  to  make  an  active  contribution  to  Community  discussions 
about  the  Services  Directive  services  and  the  Communication  on  social  services  of  general  interest.  See,  in  particular,  its 
publication Les services sociaux et de santé d’intérêt général: droits fondamentaux versus marché intérieur? une contribution au 
débat  communautaire,  with  a  preface  by  Commissioner  Vladimir  Spidla, Bruylant,  Brussels  2006  (ISBN  8027-2340-5),  and  its 
website at http://www.ssig-fr.org. 

Founder member of the SSGI Collective, Head of the ‘Europe Observatory’ at the Mutualité de la Fonction Publique (MFP), and 
Chair  of  the  Services  of  General  Interest  Committee  of  the  European  Standing  Conference  of  Cooperatives,  Mutual  Societies, 
Associations and Foundations (CEP-CMAF). 

Founder member of the SSGI Collective, Representative of the Union sociale pour l’habitat at the EU, Chair of the Services of 
General  Interest  Committee  of  the  European  Centre  of  Enterprises  with  Public  Participation  and  of  Enterprises  of  General 
Economic  Interest  (CEEP),  rapporteur  for  the  Internal  Market  Group  of  the  European  Liaison  Committee  for  Social  Housing 
(CECODHAS) and for the Europe Working Group of the Conseil National de l’Habitat (France). 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                      
  
  
  
- 4 - 

"The European Parliament […] calls on the Commission to create 
more legal certainty in the area of social and health care SGIs and 
to come forward with a proposal for a sector-specific directive of 
the  Council  and  the  Parliament  in  those  fields  where  it  is 
appropriate" 

Extract  from  the  European  Parliament  report  on  the  White  Paper 
on services of general interest (Rapkay report) 

Strasbourg, 14 September 2006 

* * *  

"Today’s debate is entirely in keeping with the gradual approach 
that we are taking.  

Such  an  approach  is  essential  for  strengthening  stakeholders’ 
confidence in the legal framework that applies to them.  

It  will  also  make  for  better  understanding  of  the  specificities  of 
social services.  

It  is,  moreover,  a  necessary  phase  before  we  can  envisage 
adopting any specific legal instrument for social services.  

Personally, I am convinced that we shall adopt such an instrument 
sooner or later." 

Extract  from  Commissioner  Vladimir  Spidla’s  address  to  the 
European  Parliament’s  first  Forum  on  Social  Services  of  General 
Interest, 

Lisbon, 17 September 2007 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contents 

- 5 - 

Forewords 

•  Michel Delebarre, President of the Committee of the Regions.............................................. 6 
•  Dimitris Dimitriadis, President of the European Economic and Social Committee............... 7 

Prefaces 
• 
Jean-Louis Destans, Member of the Committee of the Regions .......................................... 10 
• 
Joël Hasse-Ferreira, Member of the European Parliament................................................... 12 
•  Raymond Hencks, Member of the European Economic and Social Committee.................. 14 

Introducing the debate 

•  Fresh impetus from the new Treaties and the Protocol on services of general interest........ 18 
•  A  deliberately  strategic  approach  rooted  in  the  Lisbon  process  and  geared  to  its  review  in 
2010...................................................................................................................................... 23 

I: The challenges 

•  Comparing the approaches of the European Parliament, the Committee of the Regions 
and  the  European  Economic  and  Social  Committee:  summary  of  proceedings  of  the 
SSGI Collective conference on 5 June 2007  ....................................................................... 25 

II: How the European Commission has responded 

•  SSGIs in the White Paper on services of general interest (April 2004)  .............................. 58 
•  Communication on SSGIs (April 2006)............................................................................... 59 
•  SSGIs in the Communication on services of general interest in relation to the review of 

the internal market (November 2007) .................................................................................. 62 

III: The Member States’ approach to the question of SSGIs 

•  Conclusions of the Social Protection Committee’s consultation process............................. 76 
•  The thinking of the EU Presidential troika – Portugal, Slovenia and France....................... 93 
•  The Reform Treaty’s new protocol on services of general interest and the new Article 14: 

 a response to a dispute about SSGIs.................................................................................. 103 

IV:  The  SSGI  Collective’s  contributions  to  the  European  debate  on  social  services  of  general 
interest 

•  Basic text: the May 2006 Resolution........................................................................... 112 
•  Contribution to the Social Protection Committee’s consultation process.................... 116 
•  Can a framework for SSGIs be based on the new Article 14 and the Protocol on services 
of general interest?....................................................................................................... 138 

Conclusion 

•  Re-establishing a European strategy for social services of general interest....................... 159 

Appendices 

•  Capitalising on four years of debate and consultation........................................................ 161 

 
 
 
 
 
 
 
 
 
 
 
 
- 6 - 

Michel Delebarre 
President of the Committee of the Regions 

The fact that this publication exists, and the broad range of partners it has brought together, themselves 
illustrate two aspects.  

Firstly,  it  is  not  the  purpose  of  the  debate  on  social  services  of  general  interest  (SSGI)  to  discuss 
ideology.  On  the  contrary,  it  sets  out  to  focus  on  SSGI  "practitioners":  enterprises  with  public 
participation and enterprises of general economic interest, associations, mutual societies and the social 
partners,  together  with  the  European  territorial  authorities  that  are  involved,  with  variations  from 
country to country, in every stage of the "production chain" of social services as providers, regulators, 
managers, and also as recipients of such services. 

The  European  local  and  regional  authorities  that  the  CoR  officially  represents  within  the  European 
Union  are  more  specifically  concerned  by  the  discussion  on  the  European  future  of  these  services, 
since  they  have  a  democratic  mandate  to  respond  to  general  interest-related  objectives  and 
responsibilities in their management of them.   

Moreover,  all  the  practitioners  brought  together  in  the  present  publication  share  the  conviction  that 
social services of general interest cannot be governed (only) by market laws, and that legal certainty in 
the provision of services cannot be guaranteed by the case-law of the Court of Justice of the European 
Union alone, but must entail a legislative approach. 

Secondly, it points to the open and highly topical debate that is under way. 

Highly topical in that a discussion on the Commission's draft legislation on health care – in response to 
the  exclusion  of  health  services  from  the  scope  of  Directive  2006/123/EC  on  services,  the  famous 
Bolkestein directive – is currently taking shape. The draft in itself clearly has the potential to trigger a 
debate every bit as fierce as that on the Bolkestein directive. And the Commission is not even touching 
upon the issue of the other social services also excluded from the Bolkestein directive's scope, as in the 
fields of housing, child care and support for needy families and individuals.  

At  the  same  time,  as  demonstrated  by  the  current  dispute  between  the  Commission  and  the  French 
government on financing social housing through certain savings accounts ("livret A"), the debate on 
more substantial questions – particularly the funding of social services of general interest – is still far 
from resolved.  

The contributors to this publication therefore view the Commission's present policy with concern. It 
appears to operate by means of "faits accomplis" in terms of both case-law and the sectoral solutions, 
which are often put forward from an exclusively single market perspective.  

This concern is however tempered by the hope that the present publication can succeed in making a 
modest  contribution  to  identifying  specifically  European-level  issues  regarding  social  services  of 
general interest, and help spur European decision-makers to think again. It should come as no surprise 
if, side-by-side with the SSIG-France collective, the French Presidency should loom particularly large 
in our sights during the second half of 2008. 

 
 
 
 
 
 
 
 
 
 
 
 
 
- 7 - 

Dimitris Dimitriadis 
President of the European Economic and Social Committee 

Services of general interest are at the heart of the European model of society and play a defining role 
in promoting the European Union’s social, territorial and economic cohesion.  

The  European  Economic  and  Social  Committee  has  a  key  role  to  play  in  getting  the  European 
institutions  and  civil  society  organisations  involved  in  services  of  general  interest.  Within  the 
Committee,  the  permanent  study  group  on  services  of  general  interest  regularly  contributes  to  the 
European  debate,  by  drawing  up  high-calibre  opinions  and  taking  part  in  and  organising  events  on 
related issues. 

The Committee has often reiterated that the aim of social services of general interest is to meet every 
need so as to ensure access to basic social services for all. 

The  EESC  therefore  welcomes  this  publication,  which  confirms  the  importance  of  social  services 
within  the  debate  at  European  and  national  level,  the  particular  role  that  these  services  play  as  an 
integral part of the European social model and the benefits of developing a systematic approach. 

Dimitris Dimitriadis 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
- 8 - 

 
 
 
 
 
- 9 - 

Prefaces 

• 

• 

Jean-Louis Destans, Member of the Committee of the Regions 

Joël Hasse-Ferreira, Member of the European Parliament 

•  Raymond Hencks, Member of the European Economic and Social Committee 

 
 
 
 
 
 
 
 
 
 
 
 
Jean-Louis Destans 

- 10 - 

Member of the Committee of the Regions, 
Rapporteur  for  the  Committee  of  the  Regions  on  the  Communication  on  social  services  of  general 
interest 

What  the  SSGI  Collective  has  gathered  together  in  this  work  is  an  important  body  of  material.  It 
documents a struggle that will have repercussions beyond the area with which it is directly concerned, 
namely social services of general interest. The business of securing recognition for these services is, in 
fact, all about striking the right balance in the process of European integration, following the French 
and Dutch "no" votes in the Treaty referendums. The debate presented here is a new illustration of that 
challenge. 

Europe is destined to be more than a market: like many other Europeans, I am convinced that it can 
and  must  be  a  social  model.  As  Joël  Hasse-Ferreira  points  out  in  his  report,  rules  on  competition, 
support from the public purse and the internal market need to be compatible with the obligations of 
public  service  –  not  the  other  way  round.  To  take  any  other  course  would  mean  renouncing  the 
specific  nature  of  European  societies  and  their  history.  On  the  issue  of  direct  concern  to  us  here,  it 
would  also  mean  renouncing  the  know-how  of  local  and  regional  authorities  and  the  link  between 
territories and the people who live there, with regard to a number of personal services that we cannot 
call  into  question  without  attacking  notions  as  simple  and  legitimate  in  terms  of  public  activity  as 
equality, solidarity and proximity of decision-making. 

By  asking  Europe  to  define  SSGIs  in  order  to  establish  more  clearly  that  they  are  subject  to  the 
principle  of  subsidiarity  and  that  they  have  to  be  approached  with  due  regard  to  national  and  local 
competences and national and local specificities, we are simply inviting Europe to take a measure for 
the  protection  of  our  fellow  citizens,  so  that  those  citizens  may  see  European  integration  not  as  a 
threat, but indeed as the key to safeguarding and developing a tried and tested social model to which 
we  all  have  a  special  attachment.  That  is  why  we  are  in  favour  of  introducing  positive  legislation, 
rather  than  continuing  to  expose  those  working  at  local  and  national  level  to legal  challenges  while 
waiting for a relevant body of Community case law to develop. To accept the latter alternative would 
be to give up any attempt at shaping Europe’s future. Regrettably, however, that is the position that the 
European Commission has once again adopted, even though there has been every indication – from the 
2006 White Paper to the inclusion of a specific protocol in the Lisbon Treaty – that the issue is capable 
of resolution in a positive and progressive way. 

SSGIs  play  a  part  –  as  everyone  acknowledges  –  in  the  pursuit  of  various  aims  and  values  that  are 
fundamental  to  the  Union:  a  high  level  of  employment  and  social  protection;  a  high  level  of  health 
protection; equality between men and women; and economic, social and territorial cohesion. They are 
a wellspring of both solidarity and competitiveness for Europe’s economy. They are diverse, reflecting 
many different national solutions that all belong to a universal vision and to a social culture shaped by 
history.  At  the  same  time,  they  contribute  to  the  effective  implementation  of  human  rights  and  the 
principle  of  respect  for  human  dignity  as  defined  in  the  European  Charter  of  Fundamental  Rights. 

 
 
 
 
 
 
 
- 11 - 

Recognition for SSGIs can be seen as recognition for that culture, and as an assertion that Community 
law does not seek to displace it, for it constitutes no impediment whatsoever to the free functioning of 
the market in those spheres where the market can and should be free to function. 

The  opinion  of  the  Committee  of  the  Regions  concerning  SSGIs  –  which  it  is  my  privilege  to  put 
forward – is informed by several considerations, namely: 

- 

- 

the  need  for  a  stable  and  transparent  legal  framework,  in  the  Union’s  own  interest.  What  I 
fervently  want  to  see  is  a  comprehensive  legal  initiative  embracing  all  services  of  general 
economic  interest  and  including  complementary  legislative  proposals  on  SSGIs:  as  things 
stand today, there is clearly a long way to go; 

assertion of the principle that SSGIs are anchored in our history and must be part and parcel of 
the  European  social  model;  they  have  a  fundamental  role  not  only  in  affording  social 
protection but also in ensuring social and territorial cohesion. For these reasons and by their 
very nature, they can pose no threat to exchanges within the Community; 

- 

assertion of the obvious need to create legal certainty for those involved at a local level. 

Under  no  circumstances  can  SSGIs  be  regarded  as  a  residual  category  of  public  services.  On  the 
contrary, they are integrally important in ensuring universal access to quality social provision, whether 
in terms of direct assistance to individuals, access to housing, educational support, care for the elderly 
or  for  people  with  disabilities,  or  employment  and  training:  in  short  we  are  talking  about  solidarity 
with the most vulnerable people in society. All these forms of provision have to be organised through 
public  intervention,  and  delivery  of  the  services  must,  in  principle,  be  entrusted  to  the  most  able 
providers.  Who  is  better  placed  to  do  this  than  agencies  at  local  level?  The  standard 
"provider/consumer"  relationship  needs  to  be  regulated,  at  the  very  least  in  terms  of  provision  and 
pricing systems, and with regard to the information imbalance between providers and the consumers 
of SSGIs – some of the latter being what we term "vulnerable". These are the realities that we want to 
see acknowledged. Our ultimate task is to reconcile the fundamental freedoms of the internal market 
with the realisation of the European Union’s fundamental rights. 

Today – on the eve of the French presidency and just as the Commission seems bent on stopping us in 
our tracks,  opting  once  again for  a  militantly  ultra-liberal  vision  of  Europe’s future  – it is up to  the 
Council and to Parliament to re-establish the balance and to play a negotiating role, building on the 
hopes invested in the Councils’ adoption of a specific protocol to the Lisbon Treaty. The question of 
SSGIs – because it raises the issues of competition and universality, of the market and of protecting 
vulnerable  people  –  is  crucially  important.  It  constitutes  an  opportunity  for  the  European  Union, 
provided that it takes the right decision and moves in the right direction.  

 
 
 
 
  
 
 
 
 
Joël Hasse-Ferreira 

- 12 - 

Member of the European Parliament, 
Rapporteur for the European Parliament on the Communication on social services of general interest 

Growing  awareness  of  the  position  of  social  services  of  general  interest  as  a  sector  has  greatly 
increased recognition of their importance to Europe. 

The SSGI Collective, which organised the conference on 5 June 2007, plays a very significant role at 
European level. That was clearly acknowledged by Commissioner Vladimir Spidla – a pivotal figure 
and,  indeed,  one  of  those  driving  the  SSGI  process  –  when  he  hosted  the  closing  session  of  the 
conference. 

It  should  also  be  noted  that,  in  the  final  debate  in  June  2007,  Commissioner  Spidla  did  not  get 
involved in presenting, as it were, the study that had been requested by the European Commission on 
the situation of social services of general interest within the EU countries.  

In the process of drawing up the Reform Treaty and the protocols appended to it, there was a certain 
amount of discussion on the need for an explicit mention of services of general interest, and I think 
that the text as agreed is useful in terms of the general development of SSGIs. 

The strategic approach rooted in the Lisbon process is very important. Indeed, Commissioner Spidla’s 
communication is also in line with the application of the Lisbon Strategy in social terms. 

I consider, too, that the resolution of May 2006, approved by the SSGI Collective, is a very important 
document.  I  was  invited  to  the  Paris  conference  on  30 May  2006  –  where,  in  fact,  I  delivered  the 
closing address – at the initiative of the 14 organisations that comprise the Collective. 

The  whole process,  however, relates  to  securing  the continued  exclusion  of social  services from  the 
Services  Directive  –  along  with  health  services.  Certainly  there  is  already  clear  provision  for 
exclusion, particularly of social housing, but the text leaves scope for extending it to virtually all social 
services provided to people in need. 

Throughout  the  whole  process,  and  particularly  during  preparation  for  the  Portuguese  Presidency, 
Portugal  has  supported  clarification  and  development  of  the  arrangements  for  social  services  of 
general interest. Such was the background to the organisation of the first Forum on Social Services of 
General  Interest,  on  the  basis  of  a  European  Parliament  resolution  contained  in  my  report.  The 
Portuguese Presidency organised the Forum with the support of the European Commission and with 
strong participation by social organisations across Europe. 

I also believe that the discussions in Parliament and the Lisbon Forum were very significant for the 
process of continuing to strengthen and clarify the role of social services of general interest – services 
whose provision is so important in terms of translating the European social model into reality. I would 

 
 
 
 
 
 
 
 
 
 
 
 
- 13 - 

highlight, too, the important contributions made by the reports on SSGIs from the Committee of the 
Regions and the Economic and Social Committee. 

The European social organisations whose support was crucial in the preparation of my report and in 
staging the Lisbon Forum will undoubtedly find it useful to explore the ideas contained in this book. 

Personally, I see it as an excellent basis from which to work, in a committed and effective way, both 
from the social perspective and in terms of communication. 

 
 
 
 
Raymond Hencks 

- 14 - 

Member of the European Economic and Social Committee, 
Rapporteur  for  the  European  Economic  and  Social  Committee  on  the  Communication  on  social 
services of general interest, 
Deputy Chair of Luxembourg’s Economic and Social Committee 

Services of general interest remain a focus of intense debate at both European and national level.  

In the early 1990s, organised civil society began asking the big questions, at European level, about the 
future of services of general interest, and pressing for a broad, cross-sectoral approach. At that time 
the  European  Commission  was  still  thinking  in  sectoral  terms  and  solely  within  the  framework  of 
developing the internal market. Since then, however, a great deal of ground has been covered. 

The  principle  –  albeit  a  principle  sketched  with  a  very  broad  brush  –  that  the  Union’s  rules  should 
recognise  services  of  general  economic  interest  has  steadily  acquired  more  substance  as  European 
integration has proceeded and the internal market has developed. The Union now acknowledges, for 
example, that such services contribute to its shared values. 

However, while a shared vision may gradually be emerging and there is now consensus on the need to 
ensure  that  the  mechanisms  of  the  market  combine,  and  do  not  conflict,  with  the  tasks  of  public 
service,  the  situation  clearly  remains  imbalanced,  on  the  one  hand  favouring  the  doctrine  of 
competition,  and,  on  the  other,  downgrading  objectives  of  general  interest,  which  continue  to  be 
classed as exceptions to the rule. 

One  result  of the  imbalance  is  a  lack  of  legal  certainty  about  which  rules  take  precedence  and  how 
they should be interpreted and applied. Social services of general interest are clearly affected by this. 

The steps taken by organised civil society to have social services (like health services) excluded from 
the scope of the Services Directive in its initial draft signalled an unprecedented public awareness of 
the fact that social services were not – and are not yet – safe from negative effects of the application of 
rules on competition and the European internal market. 

The call from civil society for greater legal security, and for an initiative by the European Commission 
to provide it, is being taken up with increased urgency. 

In its role as the link between institutional Europe and organised civil society, the European Economic 
and  Social  Committee  has  lent its  voice,  from  the  outset,  to the  demand  for  optimum  legal  security 
and, in the interests of solidarity and territorial, economic and social cohesion, has argued strongly for 
services of general interest that are reliable, affordable and accessible, of high quality and sustainable. 

These are the ideas that led the Economic and Social Committee to argue, in its opinion of 15 March 
2007 on social services of general economic interest, for dropping the notion of opposition between 

 
 
 
 
 
 
 
 
 
 
 
 
- 15 - 

economic and social goals and promoting instead a smooth and constructive synergy between them, so 
that basic, universal services may be secured for all our citizens. 

The Reform Treaty agreed by the European Council on 17 and 18 October 2007 marks a further step 
forward  in  relation  to  services  of  general  interest  inasmuch  as  it  includes,  among  provisions  on  the 
functioning of the Union, a clause broadly applicable to services of general economic interest – which 
will take effect in all EU policy areas including the internal market and competition policy – and it is 
accompanied by a protocol, to be annexed to the Treaty on European Union and to the Treaty on the 
Functioning of the European Union, on all services of general interest. 

However,  if  application  of  the  policy  is  provided  for  via  the  inflexible  machinery  of  a  regulation, 
without any transposition into national law, there is a risk of complicating the adoption at Community 
level of a framework providing binding legal rules. 

To ensure that we achieve the Community-level legal certainty that services of general interest require, 
civil society must therefore keep up the pressure, so that the potential inherent in the Lisbon Reform 
Treaty is translated into concrete measures.  

 
 
 
 
 
 
 
- 16 - 

 
 
 
 
- 17 - 

Introducing the debate 

Fresh impetus from the new Treaties and the Protocol on services of general interest 

A deliberately strategic approach, rooted in the Lisbon process and its revision in 2010 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Social services of general interest 

- 18 - 

Fresh impetus from the new Treaties and the Protocol on services of general interest 

The  European  Council’s  inclusion  of  a  Protocol  on  services  of  general  interest  in  the  Treaty  on 
European  Union  and  the  Treaty  on  the  Functioning  of  the  European  Union  is  the  direct  result  of  a 
dispute  between  the  European  Commission  and  a  member  of  the  Council  about  the  definition  of  a 
social service of general interest and how widely it should be applied. 

When  the  Prime  Minister  of  the  Netherlands,  Jan  Peter  Balkenende,  proposed  the  addition  of  the 
protocol to his colleagues at the European Council of 21 and 22 June 2007, and went on take a stand 
on the proposal in the last round of negotiations, he caused general surprise both among the defenders 
of public services and in the camp of the hardline single-marketeers. On his return to the Netherlands 
and still riding high on his success at the Council bargaining table, he declared that defining the role of 
social housing now fell clearly within his remit. 

An unprecedented way of reaching a compromise 
In the history of the EU Treaty there is no precedent for a dispute impacting on primary law in this 
way. That it has done so reflects just what is at stake in the question of whether "manifest error" has 
occurred in  the  classification  of  a  social  housing  service  as  a  service  of  general  interest,  and  it  also 
highlights  the  fact  that  universal  access  to  a  service  of  general  interest  may  be  called  into  question 
under competition rules. Above all, it illustrates the problem for the institutions, as guardians of the 
Treaties,  of  providing  for  the  specificities  of  SSGIs  and  the  diversity  of  purpose  embraced  by  the 
concept of general interest – including, as in the case in question, social mixing and integration and 
urban  diversity  and  planning,  general-interest  objectives  that  are  deeply  rooted  in  the  culture  and 
history of the Netherlands and in the social consensus that has developed there around the principle of 
universality in relation to this service of general interest. 

Protocol on services of general interest 

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 European Union: 

Article 1 

The shared values of the Union in respect of services of general economic interest within the meaning 
of Article 16 of the 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; 

 
 
 
 
 
 
 
- 19 - 

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

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. 

Article 2: 

A difference that emerged two years ago in debate about the Services Directive 
It  was  already  clear  two  years  ago,  in  the  discussions  that  took  place  between  the  Commission,  the 
European  Parliament  and  the  Council  in  the  process  of  adopting  the  Directive  on  Services  in  the 
Internal  Market  –  discussions  that  led  to  the  exclusion,  on  a  Parliament  proposal  (see  report  by 
Evelyne  Gebhardt,  PES,  D)  of  certain  social  and  health  services  from  the  directive’s  field  of 
application  –  that  the  European  Commission  could  not  address  the  need  for  Member  States’  public 
authorities  to  have  specific  forms  of  regulation  for  social  services  providers  by  applying  what  are 
known  in  Community  jargon  as  "approval  systems"  or  other  forms  of  "special  rights".  The 
Commission was not being asked to erect unjustifiable barriers to intra-Community trade for the sake 
of services provided at local and neighbourhood level, but simply to take account of the basic nature of 
the relationship between a provider and a user of social services. That relationship cannot be reduced 
to  the  normal  pattern  of  supplier-consumer  interaction.  By  contrast,  it  features  an  imbalance  of 
information  between  the  two  parties  which,  in  itself,  justifies  supply-side  regulation  and  corrective 
measures in favour of the service recipient in the interests of social protection and solidarity. Such are 
the specificities that led Parliament and Council to exclude social and health services from the scope 
of the Services Directive. 

As well as taking account of this need for regulation in organising the provision of social services, the 
Services  Directive  as  amended  by  the  Council  and  Parliament  under  the  co-decision  procedure  also 
included the stipulation that it "should not affect the principle of universal service in Member States' 
social services" – a form of words proposed by the Finnish Presidency of the EU and approved jointly 
by the Council and Parliament in response to the European Commission’s vision of social services of 
general  interest  as  residual  and  concerned  solely  with  the  most  disadvantaged  households.  These 
political compromises are reflections of the different approaches taken by the Commission on the one 
hand and the Member States and Parliament on the other. 

Recitals in the Services Directive reflecting the exclusion of social services, as secured by the 
European Parliament 

(27)  This  Directive  should  not  cover  those  social  services  in  the  areas  of  housing,  childcare  and 
support to families and persons in need which are provided by the State at national, regional or local 
level  by  providers  mandated  by  the  State  or  by  charities  recognised  as  such  by  the  State  with  the 
objective  of  ensuring  support  for  those  who  are  permanently  or  temporarily  in  a  particular  state  of 

 
 
 
 
 
 
 
 
- 20 - 

need because of their insufficient family income or total or partial lack of independence and for those 
who risk being marginalised. These services are essential in order to guarantee the fundamental right 
to  human  dignity  and  integrity  and  are  a  manifestation  of  the  principles  of  social  cohesion  and 
solidarity and should not be affected by this Directive. 

(28) This Directive does not deal with the funding of, or the system of aids linked to, social services. 
Nor  does  it  affect  the  criteria  or  conditions  set  by  Member  States  to  ensure  that  social  services 
effectively carry out a function to the benefit of the public interest and social cohesion. In addition, 
this Directive should not affect the principle of universal service in Member States' social services. 

Services of basic importance to life and livelihood, as part of social protection systems 
It is also important to note that, unlike other so-called "network" services of general interest, which are 
currently being deregulated – services essential to economic life such as power supply, transport and 
electronic communications, that have developed at Community level – the services in question here, 
including not only health, housing and employment provision but also education and training, services 
for people with disabilities and the elderly and social inclusion services, are of basic importance to the 
lives and livelihoods of  European  citizens.  All  of  them  come  under  the  heading  of  social  protection 
and  contribute  to  the  everyday  quality  of  life  and  the  wellbeing  of  the  Europe’s  citizens;  they  are 
provided  locally,  close  to  the  people  who  use  them,  and  are  tailored  to  their  needs;  and  universal 
access to them is guaranteed at Member State level and internationally through the fundamental rights 
proclaimed by the Council of Europe and the United Nations. 

Together  these  services,  historically  linked  as  they  are  to  the  forces  of  the  social  economy,  are  an 
integral part of the European social model today and in the future. Foreseeable developments in social 
need,  combined  with  the  social  reality  of  the  European  Union,  will  require  the  Member States  to 
legislate  in  order  to  meet  the  demands  of  modernisation  and  to  adapt  social  services  to  people’s 
requirements. In the light of the European Union’s Charter of Fundamental Rights, this makes legal 
clarification with regard to the provision of services more than a necessity. 

Process suspended for the sake of a compromise to close the debate on services of general interest 
started in 2003 
The European Commission’s intention, in deciding not to publish a new strategic communication on 
SSGIs – despite its commitment to do so4 – and in tacking the issue on to the Communication on the 
review of the internal market, was to close the debate about services of general interest that it itself 
had launched in 2003 with its Green Paper on that subject. It contends that there is no longer a case for 
addressing the specificities of social services by enacting a Community framework directive to amend 
existing  primary  law,  as  was  deemed  necessary  for  other  services  of  general  economic  interest, 
including local services such as urban transport. 

4

See, in particular, the announcement of a forthcoming Communication on SSGI in the Communication on active inclusion issued 
on 17 October 2007 (COM 2007 620 final). 

 
 
 
 
 
 
 
 
                                                      
  
- 21 - 

The  unequivocal  mandate  for  a  sector-specific  directive  on  SSGIs  formulated  by  the  European 
Parliament in its 2006 report on the White Paper on services of general interest (rapporteur Bernhard 
Rapkay,  PES,  D)  was  not  enough  to  shift  the  Commission’s  stance.  Nor  was  it  moved  when  the 
situation  of  legal  insecurity  affecting  SSGIs  in  the  process  of  the  internal  market  review  was 
confirmed in the reports by Joël Hasse-Ferreira (PES, P) and Jacques Toubon (EPP-ED, FR). 

The European Parliament’s mandates to the Commission 

Rapkay report on the White Paper on services of general interest (14 September 2006) 
"15. Calls on the Commission to create more legal certainty in the area of social and health care SGIs 
and to come forward with a proposal for a sector-specific directive of the Council and Parliament and 
those fields where it is appropriate;" 

Hasse-Ferreira  report  on  the  Communication  on  social  services  of  general  interest  (6 March 
2007) 
"9. Welcomes the Commission's intention to continue the consultation process in greater depth so as to 
clarify the application of certain Community rules for social services; takes the view, further, that the 
proposed extended consultation process should be completed by mid-2007 and ask the Commission to 
formulate a decision on how to follow up this process and identify the best approach to take, including 
considering the need and legitimacy of a sector-specific legislative proposal;" 

The new Treaty as an excuse for ending the debate at Community level: a perverse stance by the 
Commission 
To astute observers of the current European Commission, its decision to ignore Parliament’s mandates 
and to refer exclusively to those of the Council came, sadly, as no surprise. What is surprising is that 
the Commission should use the new provisions introduced by the Council – namely the Protocol on 
services of general interest and the new terms of Article 14 allowing for codecision in the legal basis 
for  measures  concerning  such  services  –  to  justify  relegating  services  of  general  interest  to  the 
sidelines of the internal market and terminating four years of debate. 

It intends to close the subject, even though the effect of the Protocol on services of general interest and 
of the new provisions in Article 14 of the Reform Treaty is to re-invigorate the debate on fresh terms, 
injecting  political  impetus  and  offering  a  new  legal  basis,  via  codecision,  for  formalising  the 
Community rules on services of general interest and social services of general interest, and particularly 
on  the  economic  and  financial  conditions  that  will  enable  them  to  fulfil  their  mission.  In  fact,  the 
Reform  Treaty  explicitly  mandates  the  European  Parliament  and  the  Council  to  "establish  these 
principles’ and "set these conditions" by means of legislation. 

Article 14 of the Reform Treaty 

"Without prejudice to Article 4 of the Treaty on European Union and Articles 73, 86 and 87 [of the 
Treaty on the functioning of the European Union], and given the place occupied by services of general 
economic  interest  in  the  shared  values  of  the  Union  as  well  as  their  role  in  promoting  social  and 

 
 
 
 
 
 
 
 
- 22 - 

territorial cohesion, the Union and the Member States, each within their respective powers and within 
the  scope of application  of  this Treaty,  shall take care  that  such  services operate on  the  basis  of 
principles and conditions, particularly economic and financial conditions, which enable them to 
fulfil their missions. The European Parliament and Council, acting in accordance with the ordinary 
legislative  procedure,  shall  establish  these  principles  and  set  these  conditions  without  prejudice  to 
the competence of Member States, in compliance with the Treaties, to provide, to commission and to 
fund such services." 

The European Commission – as it nears the end of its term of office, on the eve of the campaign for 
ratification of the Reform Treaty by the Member States, and in the run-up to the European elections 
and the appointment of a new team of Commissioners – is refusing to re-open the discussion within 
the new parameters set by the Member States at the last European Council in Lisbon. 

Trying not to "cloud the issue" in relation to the internal market review 
In  refusing  to  reopen  the  debate,  the  Commission  is  probably  seeking  to  avoid  a  re-run  of  the 
controversy  surrounding  the  Services  Directive:  it  does  not  want  the  question  of  services of  general 
interest to "cloud the issue" in discussion of the internal market review and ratification of the Reform 
Treaty. 

How  can  it  claim,  however,  that  it  wants  to  develop  an  internal  market  for  the  people  of  Europe 
without  considering  more  closely  the  political  balance  that  is  likely  to  emerge  between  Treaty  aims 
that  are,  in  some  cases,  contradictory  with  regard  to  services  of  general  interest?  How  are  the 
fundamental freedoms of the internal market to be reconciled with the need for public regulation of 
social-services  provision  so  as  to  ensure  that  the  missions  of  serving  the  general  interest  and 
promoting solidarity and social protection are fulfilled? How can the notion of Europe protecting its 
citizens be credible if the European Commission refuses in principle – and in defiance of the Treaty 
amendments submitted for ratification – to legislate on services of general interest in order to establish 
principles in a democratic way and to lay down conditions for their operation? 

How can we support ratification of the Reform Treaty when the European Commission is effectively 
declaring  that  the  provisions  of  the  new  Article 14  are  meaningless  and  that,  despite  the  explicit 
mandate thus given in primary law to "establish[…] principles" and "set […] conditions", it declines, 
as an executive body, to use them? 

The Commission’s monopoly of responsibility called into question 
Part  of  the  explanation  of  the  Commission’s  refusal  may  also  lie  in  the  fact  that  the  Council  and 
Parliament have decided to take responsibility for the question of services of general interest through 
the new legal basis offered by the Treaty, using codecision. Hitherto, the Treaty provisions gave the 
Commission virtually exclusive competence for legislation in this area, on the basis of Article 86(3), 
bypassing the Council and Parliament as it did, for example, in relation to the Transparency Directive 
and the Altmark package of rules on State aid in the form of compensation for public services. 

 
 
 
 
 
 
 
- 23 - 

Strategic process cut short in expectation of a move by the Council 
So, flying in the face of its own declared intention, the European Commission is refusing to pursue the 
process initiated and supported  by  the  European  Parliament,  notably  through  the  Hasse-Ferreira and 
Toubon  reports,  and  by  the  Committee  of  the  Regions  and  the  European  Economic  and  Social 
Committee – the process of defining a proper European strategy for social services of general interest. 

This unilateral  termination  by  the  European  executive  of  the  debate and  the  process  does  not  mean, 
however, that the underlying issues have been settled, that legal uncertainty is a thing of the past and 
that social services of general interest are protected by the new Protocol. The disagreement about how 
to apply existing Community rules will inevitably grow – as illustrated by the rapidly escalating row 
over  social  housing  in  the Netherlands,  Sweden  and France  – until  the  situation  becomes  politically 
untenable for the Member States. 

In the Netherlands, the privatisation of "excess" social housing capacity as demanded by the European 
Commission, the accompanying rent rises and their social consequences are likely in the near future to 
produce calls for a political compromise on social services of general interest at the initiative of the 
Balkenende  government.  Likewise  in  Sweden,  where  upsetting  the  system  of  private-sector  rent 
control with reference to the rent rules for public housing is likely to have painful social effects during 
a catching-up period. 

If the European Parliament and the Council do not respond strongly to the Commission’s volte-face, a 
ruling by the Court of Justice in Luxembourg that prods the Council into reaction may well be the only 
means of achieving European framework legislation for social services of general interest. The words 
of Commissioner Vladimir Spidla at the first European Parliament Forum on SSGIs, held in Lisbon on 
17 September 2007, on the need for a gradual approach, are worth recalling here:  

"Today’s  debate  is  entirely  in  keeping  with  the  gradual  approach  that  we  are  taking.  Such  an 
approach is essential for strengthening stakeholders’ confidence in the legal framework that applies 
to  them.  It  will  also  make  for  better  understanding  of  the  specificities  of  social  services.  It  is, 
moreover, a necessary phase before we can envisage adopting any specific legal instrument for social 
services. Personally, I am convinced that we shall adopt such an instrument sooner or later." 

Procrastination is a risky strategy 
It  is  obvious  that  the  current  members  of  the  Commission  want  to  leave  the  problem  to  their 
successors  and  that  they  are  relying  on  the  ongoing  Community-level  dispute  to  do  some  of  the 
spadework  on  the  issue.  It  is  a  risky  strategy  for  a  body  that  has  pinned  its  hopes  on  the  notion  of 
citizen-consumers approving the new  moves to complete the internal market and establishing a new 
sense of civic identification with the European Union. 

A deliberately strategic approach rooted in the Lisbon process and geared to its review in 2010 

The gradual, strategic approach was entirely in keeping with the planned review of the Lisbon process 
in  2010,  with  the  adaptation  of  SSGIs  to  the  changing  social  reality  of  the  European  Union,  with 
contributing to the movement for active inclusion that is already under way, and with responding to 
the changing needs and the developing social-interest remit of social economy agencies, particularly in 

 
 
 
 
 
- 24 - 

terms of promoting social integration and complementing the European social partners’ efforts in the 
area of flexicurity. 

The question is, however, how the ongoing processes of modernising SSGIs at Member State level are 
to  be  dovetailed  with  these  Community  developments  if  there  is  no  guarantee  of  legal  security  for 
service providers and the public in relation to the conditions under which social services are supplied, 
financed and regulated. 

How  can intensification  of  the internal  market  as it  affects  ordinary  people  –  and  in the  interests  of 
ordinary people – be legitimised if the question of services of basic importance to life and livelihood is 
airbrushed  out  of  the  picture  because  it  is  too  awkward  and  illustrates  too  starkly  that  uniform 
application of internal market rules can only go so far? 

How  can  people  believe  in  the  image  of  a  Europe  that  protects  them  if  national  arrangements  for 
ensuring  solidarity  and  for  financing  and  regulating  social  provision  are  challenged  in  the  Court  of 
Justice of the European Communities in the name of a mechanical implementation of internal market 
rules which the Communities’ founding fathers never intended for application to the social sphere? 

The Council and the European Parliament must make the next move 
If the Reform Treaty really does place SSGIs – and, indeed, all services of general interest – in a new 
political and legal situation, if it really does constitute progress in European integration and in striking 
the  right  balance  of  power  between  Europe’s  institutions,  then  it  will  have  to  be  given  practical 
expression in the form of clear instructions by the Council and the European Parliament to introduce 
legal  security  for  SSGIs  and  to  reach  the  political  compromises  that  are  essential  for  initiating  the 
modernisation  of  the  European  social  model,  for  lending  credibility  to  the  review  of  the  Lisbon 
process that has already begun and, above all, for securing the support of Europe’s citizens. 

It is clear, therefore, that in terms of relaunching a European strategy for SSGIs, the ball is currently in 
the court of the Council and Parliament. 

* * * 

 
 
 
 
 
 
 
 
- 25 - 

I: The challenges  

Comparing  the  approaches  of  the  European  Parliament,  the  Committee  of  the  Regions  and  the 
European  Economic  and  Social  Committee:  summary  of  proceedings  of  the  SSGI  Collective 
conference on 5 June 2007 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Introduction to the 5 June 2007 conference 

- 26 - 

Purpose of the conference 
The main aim of the conference organised by the SSGI Collective on 5 June 2007 in Brussels was to 
put  on  record  the  latest  thinking  in  the  Community-wide  debate  that  began  with  the  publication  in 
April 2006 of the European Commission’s Communication on social services of general interest. 

The conference brought together the rapporteurs for the European Parliament, the Committee of the 
Regions and the European Economic and Social Committee, as well as representatives of the troika of 
EU  Presidencies  and  of  the  main  European  networks  actively  involved  in  the  debate.  The  closing 
address was given by Commissioner Vladimir Spidla and is included as an appendix to this study. 

Programme of the SSGI conference held on 5 June 2007 

Towards an EU strategy on SSGIs 

9.00: Opening by Maurice Duranton, founding member of the SSIG Alliance, AIM Vice-President 
and  Chairman  of  the  European  Affairs  Committee,  Association  Internationale  de  la  Mutualité 
(AIM) 

9.10: SSGIs for cohesion by Michel Delebarre, President of the Committee of the Regions 

9.25: Comparing EP, EESC and CoR Reports on SSGIs communication 
 Joël Hasse-Ferreira, rapporteur of the European Parliament 
 Jean-Louis Destans, rapporteur of the Committee of the Regions 
 Raymond Hencks, rapporteur of the European Economic and Social Committee 
 Moderator: Laurent Ghekiere, collectif SSIG 

10.45: Debate with partners and stakeholders 

12.00: SSGIs EU Strategy and EU Presidencies 2007-2008 : a priority for the next Troika ? 
Anna Ferreira, Portuguese Permanent Representation 
Bozica Matic, Slovenian permanent Representation 
Cyril Cosme, French permanent Representation 
Moderator: Maurice Duranton, collectif SSIG 

13.00: Conclusion : Towards an EU Strategy on SSGIs  
by Vladimir Spidla, Commissioner for Employment, Social affairs and Equal Opportunities 

 
 
 
 
 
 
 
 
 
 
 
 
 
- 27 - 

Themes discussed 

•  Opposition, consensus or political compromise? 
•  Can the specificities of SSGIs be resolved in the context of deregulating services of general 

economic interest? 

•  Residual or universal access? "Manifest error" versus subsidiarity 
•  Regulation of service providers and the information imbalance 
•  SSGI financing and the Community rules on State aid 
• 

Identifying the right political compromises and the best legal solutions 

 
 
- 28 - 

Social services 
Opposition, consensus or political compromise?  

Laurent Ghékiere 
Moderator 

Before we come to consider the content of your respective reports and the substance of the decisions 
by  your  respective  assemblies,  allow  me  to  ask  you  something  about  the  spirit  in  which  they  were 
adopted  and  the  degree  of  political  compromise  involved.  We  are  well  aware  of  the  particular 
sensitivity around the question of services of general interest – a question that has often divided the 
political groups and, indeed, the members of the European Economic and Social Committee, notably 
with  regard  to  the  necessity  or  otherwise  of  enacting  positive  legislation.  What  was  the  prevailing 
spirit of compromise that informed the adoption of your reports? How important was the balance of 
power between the different political or collegiate groups? What were the areas of consensus on which 
you were able to pull together majorities so that your respective reports could be adopted? 

Raymond Hencks 
Rapporteur on SSGIs for the European Economic and Social Committee 

Everyone who attended yesterday’s European Commission conference on social services, and had the 
privilege  of  listening  to  the  representative  from  Eurobusiness,  will  realise  just  how  difficult  the 
discussions  within  the  European  Economic  and  Social  Committee  have  been.  Group 1  represents 
employers  and,  for  a  large  part,  representatives  of  Eurobusiness,  who  are  on  a  completely  different 
wavelength from the other groups, namely Group 2 representing employees and the group representing 
civil society. 

Listening  to  the  talk  of  political  compromise,  I  still  cannot  get  over  the  fact  that  compromise,  and 
particularly  political  compromise  should  be  on  the  agenda  at  all  here. The  reality  –  and  we  need  to 
remind ourselves of it at the outset – is that we have a decision by the Barcelona European Council of 
2002 asking the European commission to bring forward a framework directive on services of general 
interest. That decision was quite clear, yet the Commission has done nothing. It has not put forward a 
framework directive as the European Council requested. 

We also have a further decision which, unfortunately, has not been applied either: I am referring here 
to  Article III-122  of  the  draft  Constitutional  Treaty.  It  was  intended  to  create  a  basis  for  enacting 
legislation  on services  of  general  economic  interest,  including  social services  of  general interest,  by 
providing  that  European  laws  should establish  principles  and  conditions, in  particular economic and 
financial conditions, which would enable services of general economic interest to fulfil their missions. 

Introducing  this  new  Article  III-122  into  the  draft  Constitutional  Treaty  was  the  result  of  another 
political decision taken by all the Member States. So I find it hard to talk about the need for political 
compromise  in  a  situation  where  we  already  have  two  political  decisions.  What  we  are  waiting  for 
now is to see those political decisions put into application.  

 
 
 
 
 
- 29 - 

Laurent Ghékiere 
Moderator 

Thank you for that analysis, Raymond. Jean-Louis Destans, am I right in saying that the debate in the 
Committee  of  the  Regions  focused  more  on  subsidiarity  –  at  the  instigation  of  local  authority 
representatives  from  the  Nordic  countries  –  and  on  the  case  for  a  positive  measure  introducing  a 
formal European legal framework specifically for these social services? 

Jean-Louis Destans 
Rapporteur on SSGIs for the Committee of the Regions 

You  are  right:  it  was  not  so  much  an  ideological  discussion  as  a  series  of  territorial  discussions, 
reflecting the reality in each of our countries. I found myself somewhat swamped to my right by the 
new  Member  States,  which  continue to  regard  public  services  and intervention  by  the  State  or  local 
and  regional  authorities  with  a  degree  of  mistrust.  Then  I  was  swamped  to  my  left  –  without  any 
suggestion of a political mirror image – by those who feared that any shift in the existing equilibrium 
in their countries would amount to a dilution of subsidiarity. The Danes took a particularly aggressive 
line on that point.  

The  opinion  was  finally  adopted  with  a  relatively  tight  and  quite  assorted  majority.  Reading  the 
outcome of the voting and looking round the room at those who had backed the report, I saw that they 
included EPP and PES members and even some Liberals. The approach taken in the Committee of the 
Regions  was  thus  a  very  pragmatic  one  that  reflected  the  realities  as  experienced  in  the  individual 
countries and the potential role for local and regional authorities in these matters. It was an eye-opener 
for me to explore what is happening in the founder countries of the European Union by comparison 
with those that have joined most recently. 

Laurent Ghékiere 
Moderator 

The final forum  was  the  European  Parliament,  where  you,  Joël  Hasse-Ferreira, were  the  rapporteur. 
The  situation  in  the  Parliament  is  always  more  complicated  inasmuch  as  there  is  a  main  report  and 
number of opinions. We had five opinions this time: from the Committees for the internal market, for 
economic  and  monetary  affairs,  for  the  environment  and  for  legal  affairs.  In  total,  the  six  reports, 
including yours, proposed almost 300 amendments. What we all found hard to understand, however, 
was when the180 amendments in your own report were withdrawn overnight at the request of the EPP 
group, to leave just four or five compromise amendments. Can you decipher for us precisely what was 
going on there because all those who took part in the policy debate found it rather disturbing?  

Joël Hasse-Ferreira 
Rapporteur on SSGIs for the European Parliament 

You are quite right. It did look rather like showmanship, or indeed eccentricity, but that was the way it 
happened.  On  the  one  hand,  I  had  prepared  the  draft  report  with  invaluable  assistance  from  social 

 
 
 
 
 
- 30 - 

organisations  and  experts  from  a  number  of  countries,  including  members  of  the  SSGI  Collective. 
Knowing the balance of power within the European Commission and the Council, however, I wanted 
to produce a consensus report that could be adopted by a substantial majority in Parliament.  

The reports that go through, while they may not all be as perfect as that on the Services Directive, are 
the product of compromise among the many different parliamentary groups. So what I chose to do, on 
the one hand, was to reflect the most important aspects that I had encountered at ground-level in the 
social sphere and, then with the help of experts – particularly from a legal perspective – to seek the 
views  of  other  experts  working  with  social  organisations  and  with  elected  representatives.  I  hope  I 
produced a report that reflected the situation and the objectives. It was drafted with a view to obtaining 
not a consensus but a majority. 

My  report  was  very  well  received,  except  by  the  draftswoman  of  the  Opinion  of  the  Committee  on 
Legal Affairs. She attacked not the report, but rather Commissioner Spidla – questioning his right to 
produce  the  Communication  in the first  place. That was  very  much  a  minority  position.  I  found  the 
opinions of the other parliamentary committees most valuable. They had been drafted by people from 
very different countries and very different political groups. 

As I said, I asked for the views of several social organisations and there were almost no criticisms of 
my initial report, either from them or from the MEPs. Indeed, they made some very astute comments. 
They understood not only what I had written but also where I was coming from in writing it. So I was 
very pleased! 

Shortly before Christmas, however, I received all the amendments. I tried – and I have to say I am not 
altogether a model of patience – to put together a compromise text. I managed to draft compromises 
on nine points.  

It did prove very difficult. Even within particular political groups there was a geographical problem. A 
French  Socialist  who  supported  the  text  was  at  odds,  for  example,  with  a  Socialist  from  another 
country who was against it.  As for the Greens, there are fewer of them but even they were not united. 
In the EPP there were more complications but I will not attempt to describe those. 

I arrived at a point where the compromises appeared to be acceptable in certain quarters but people 
found the whole thing quite complicated. I decided to focus on what was absolutely essential and one 
of the essential things was to convene the forum on social services of general interest. I thought that it 
was very important to keep the process moving on.  A directive needs to be discussed and it is only 
when a directive has been discussed by Parliament that it can assume the status of law. A report on a 
communication  is  merely  symbolic  unless  it  sets  in  motion  a  follow-up  process  and  that  gives  it 
validity.  Initially  I  had  floated  the  idea  of  a  forum  but  it  was  a  suggestion  from  the  Liberals  and 
Democrats that led me to propose convening one and to take it from there. 

Another  consideration  was  the  form  of  directive.  Some  of  my  colleagues  wanted  a  framework 
directive. Others wanted a sector-specific directive. I reacted very cautiously and I simply proposed a 
directive.  The  whole  thing  was  very  complicated.  Finally,  everyone  was  convinced  that  we  had  our 
majority. 

In my own group we decided very quickly to reach agreement with the big players. We asked the EPP 
what  it  wanted.  It  wanted  my  initial  report,  with  a  number  of  changes,  so  we  dropped  all  the 

 
 
- 31 - 

amendments.  I  personally  came  to  an  agreement  with  the  Liberals  and  Democrats.  They  came  on 
board  and  agreed  to  back  the  initial  report.    We  arrived  at  a  version  that  was  somewhat  generally 
worded and somewhat vague, in order to be acceptable to the majority. At that point, the Greens and 
the GUE Group – even those who supported the report – decided to abstain. This then prompted all the 
Liberals,  all  the  EPP  members  and  all  the  Socialists  to  withdraw  their  amendments  democratically. 
There was more discussion and we agreed on a version that was very close to the original report, with 
just a few key amendments.  

I  thus  got  a  big  vote  in  favour  of  my  report  in  the  Committee  on  Employment,  with  only  one  vote 
against from a UK nationalist who failed to justify the position she took. When I ask members of this 
type of group why they vote as they do, I am told that they oppose all directives so it follows that they 
oppose this directive. This time I did not bother asking! 

We did not count the results of the vote in the plenary session but there was certainly a big majority. 
There  were  divisions  among  the  Greens  and  in  the  GUE  Group,  who  had  wanted  a  more  reformist 
stance on some issues. I had positive dealings with members of the Council. The Commission too was 
generally  positive  but  I  have  not  yet  had  an  opportunity  to  talk  to  Mr Barroso.  I  have  talked  to 
Mr Spidla. The report was not as I would have wished it because changes were made to my original 
draft but I do believe that it will be useful in taking the process forward and keeping our aims in focus. 

Laurent Ghékiere 
Moderator 

Thank  you,  Joël,  for  giving  us  those  details:  we  need  them  in  order  to  understand  properly  how 
Parliament manages to take decisions by a large majority on subjects as complex as this. I suggest that 
we now move on to consider the actual substance of your respective reports, theme by theme. 

 
 
 
- 32 - 

Social services 
Can  the  specificities  of  SSGIs  be  resolved  in  the  context  of  deregulating  services  of  general 
economic interest? 

Laurent Ghékiere 
Moderator 

The first issue highlighted by providers of social services is always the fact that they are effectively 
classed  under  the  heading  of  services  of  general  interest:  in  particular  they  point  out  that  their 
existence  and  activities  are  justified  in  the  general  interest  in  terms  of  fundamental  rights,  social 
protection,  social  inclusion  and  the  Lisbon  strategy  –  all  reasons  for  tight  regulation  by  public 
authorities in the Member States. At the same time they are quite particular inasmuch as a social or 
health service is not comparable to a transport or a telecommunications service. You sought to reflect 
these  specificities  in  your  respective  reports,  and  it  is  something  on  which  the  three  reports  show  a 
high  degree  of  convergence.  Your  respective  thinking  is  very  clear  with  regard  to  considerations  of 
solidarity,  the  importance  of  implementing  Member  States’  social  protection  policies,  the 
implementation of fundamental rights, and the significant role of not-for-profit service providers. 

Joël  Hasse-Ferreira,  from  Parliament’s  point  of  view,  if  you  had  to  pinpoint  one  feature  specific  to 
these social services in a discussion of the appropriate European framework for them, what would it 
be?  

Joël Hasse-Ferreira 
Rapporteur on SSGIs for the European Parliament 

Let me be clear: while each of the institutions we represent, and particularly Parliament, has its own 
dynamic, my conversations with Mr Destans and Mr Hencks were very helpful to me in preparing the 
final version of my report and in the discussions about it. 

Certain  types  of  mission  are  particularly  important:  the  specific  mission  of  SSGIs  is  to  satisfy  a 
demand for social services in the context of protecting the general interest. It is important to bear in 
mind that the nature of the need for SSGIs is not static; it is always evolving. To situate the mission in 
a broader perspective, I would say that it is about promoting the social dimension within the Lisbon 
strategy  in  order  to  fulfil  the  aims  of  the  social  agenda.  What  we  are  talking  about  are  practical 
responses to need within a broader political and social context. 

 
 
 
 
- 33 - 

Social services  

Specific missions of general interest 

EP Report 

CoR Report 

EESC Report 

Joël Hasse Ferreira 
•  one  of  the  pillars  of  the 
social  model, 
European 
in 
play  an  essential  part 
securing  civic  peace  and  the 
Union’s 
European 
economic, 
and 
social 
territorial cohesion 

•  to  carry  into  effect  values 
justice, 
social 
including 
equality,  solidarity  and  the 
development  of  democracy 
and  freedom,  and  whereas 
the  ultimate  purpose  of  the 
SSGI  is  to  uphold  citizens’ 
fundamental 
and 
respect for human dignity, 

rights 

•  to 

in 

generate 

positive 
terms  of 
externalities 
economic growth, prosperity, 
employment 
social 
cohesion, 

and 

•  Reaffirms  its  commitment  to 
modern  and  high-quality 
SSGI  based  on the  values of 
equality,  solidarity,  rule  of 
law  and  respect  for  human 
dignity, and the principles of 
universal 
accessibility, 
service, 
efficiency, 
economic  management  of 
resources, 
continuity, 
proximity  to  service  users 
transparency,  which 
and 
the 
to 
contribute 

Jean-Louis Destans 
•  a  source  of  solidarity  and 
competitiveness  for  the  EU 
economy 

Raymond Hencks 
•  to  achieve  social,  territorial 
and  economic  cohesion  by 
providing solidarity  

•  a  potential 

source 

of 
community-based 
jobs,  a 
component  of  the  European 
social  model  and  national 
social 
and 
protection 
inclusion schemes;  

•  essential  and  vital  services 
social 
solidarity 

specific 
and 

fulfil 
a 
protection 
mission  

•  to  guarantee  the  fulfilment 
of  social  policy  objectives 
which are the responsibility 
of  Member  States  such  as 
social  protection,  meeting 
social  needs, 
fundamental 
the 
with 
solidarity 
vulnerable 
the 
and 
dependent, who rely on the 
social services; 

Charter 

•  active  part  in  the  effective 
application  of  human  rights 
and  respect 
for  human 
dignity,  as  defined  in  the 
of 
European 
Fundamental  Rights,  and 
arising  from  the  common 
constitutional traditions of all 
Member  States  and  their 
international 
obligations 
under  the  Revised  Social 

•  integration,  which 

goes 
beyond  simply  providing 
the  most 
to 
assistance 
disadvantaged and working 
to  improve  their  lot.  These 
services also exist to meet all 
needs,  facilitating  access  to 
all 
social 
services: they help to ensure 
the  effective  exercise  of 
citizenship 
of 
fundamental rights. 

fundamental 

and 

•  underpin human dignity and 
guarantee the universal right 
to  social  justice  and  to  full 
respect of fundamental rights, 
as set out in the Charter of 
Fundamental Rights and in 
international  commitments 
such 
revised 
European  Social  Charter 
Universal 
the 
and 
Declaration 
of  Human 
Rights.  

the 

as 

•  to 

ensure 

the 

effective 

exercise of citizenship.  

•  direct link to basic rights 

•  underpinned  by  a  number 
of  common  features,  such 
as  solidarity,  versatility  and 
personalisation,  the  not-for-

 
 
 
profit  philosophy,  voluntary 
cultural 
work, 
charity, 
an 
sensitivity 
or 
asymmetrical 
supplier-user 
relationship.  

•  to  achieve  a  high  level  of 
social protection, to raise the 
standard  of 
living  and 
quality  of  life,  to  attain  a 
health 
high 
protection 
to 
strengthen  economic,  social 
and territorial cohesion. 

of 
and 

level 

- 34 - 

of 
tasks 

the 
implementation 
Community’s 
as 
defined in Articles 2 and 3 of 
the Treaty; 

Charter  of  the  Council  of 
Europe  and  the  Universal 
of  Human 
Declaration 
Rights; 

•  to  the  implementation  of 
the Community's mission, as 
defined  under  Articles  2 
and 3 of the Treaty, 

•  to  operate  on  the  basis  of 
the  solidarity  principle  and 
are personalised.  

attaining 

•  Is  convinced  that  SSGIs  are 
an  appropriate  means  of 
the 
strengthening 
social 
the  Lisbon 
dimension  of 
the 
Strategy, 
the 
objectives  of 
social 
addressing 
agenda 
and 
as 
challenges 
industrial 
globalisation, 
technological 
change, 
demographic 
progress, 
and 
change,  migration 
changing 
and 
employment  patterns,  thus 
the 
contributing 
development  of  a  social 
Europe; 

social 

such 

to 

•  Welcomes  the  Commission’s 
recognition  of 
the  special 
nature of the main features 
whereby  SSGIs  can  be 
defined,  which  distinguish 
them  from  other  types  of 
services; 

 
 
 
 
 
 
 
 
 
- 35 - 

Social services 
Internal market v. general interest? 

EP Report 

CoR Report 

to 

freedoms 
with 
of 

Jean-Louis Destans 
•  not  a  matter  of  bringing 
internal 
fundamental 
into 
market 
the 
conflict 
application 
EU 
fundamental  rights  or  even 
the  obligation 
fulfil 
general  interest  missions, 
but rather to reconcile them 
by  adopting  a  suitable 
Community Framework for 
the  specific  features  of 
these 
the 
services  and 
specific  missions  of  public 
operators, 
and 
always  bearing 
in  mind 
that  these  grassroots  social 
services  generally  have 
little 
intra-
impact  on 
Community trade.  

private 

•  This  spirit  of  conciliation 
should apply to the internal 
market  as  well  as  EU 
external  policy,  especially 
regarding  the  social  and 
health  services  aspects  of 
international 
the 
negotiations  on  trade  in 
services (GATS); 

and 

interest 

Joël Hasse Ferreira 
•  a  mistake  to  adopt  an  approach 
to  SSGI  which  sets  up  a  false 
opposition  between  rules  on 
competition,  public  aid  and  the 
market  on  the  one  hand,  and 
service, 
concepts  of  public 
general 
social 
cohesion on the other; considers, 
on 
is 
necessary  to  reconcile  them  by 
synergies 
promoting  positive 
between 
the  economic  and 
social  aspects;  asserts,  however, 
that  in  the  case  of  SSGIs,  the 
rules  on  competition,  public  aid 
and  the  internal  market  must  be 
compatible  with  public  service 
requirements,  and  not  the  other 
way round; 

the  contrary, 

that 

it 

which  must 

•  Recognises  that,  in  the  case  of 
SSGIs, there are two contrasting 
factors 
be 
reconciled: on the one hand, the 
principle  of  subsidiarity  which 
upholds 
the  Member  State 
authorities  freedom  to  define, 
organise  and  finance  SSGIs  as 
they  see fit, in  conjunction  with 
the  principle  of  proportionality, 
and,  on  the  other,  the  joint 
responsibility of the Community 
pursuant  to  the  Treaty,  and  in 
particular Article 16 thereof, and 
the  existence  of  underlying 
values  and  principles  which  are 
shared  throughout  Europe  and 
must  be  respected  by  all,  by 

EESC Report 

Raymond Hencks 

•  According 

the 

to  Community 
case  law,  almost  all  services 
provided in the social sphere, 
of 
with 
solidarity-based 
social 
security  schemes,  can  be 
considered  to  be  economic 
activities. 

exception 

the 

•  The  consequence  (…)  is  that 
Community  competition  and 
internal  market  rules  (such 
free 
as  State  aid, 
provision  of  services, 
the 
right of establishment and the 
procurement" 
"public 
well 
directive 
as 
legislation) 
secondary 
increasingly apply to SSGIs. 

as 

•  not 

to  set 

the  economic 
dimension  against  the  social 
dimension,  but  to  promote  a 
constructive synergy between 
the two and to find a way of 
combining 
them 
harmoniously. 

by 

and 

covered 

•  to  determine  which  services 
the 
are 
internal 
competition 
rules  and  which 
market 
services,  for  reasons  of  the 
general  interest  and  in  the 
interests  of  social,  territorial 
and  economic  cohesion,  in 
line  with  the  principle  of 
subsidiarity, 
be 
these  by 
exempted 

should 

from 

 
 
 
 
 
- 36 - 

ensuring  that  the  rules  to  which 
SSGIs are subject uphold human 
rights  and  the  dignity  of  the 
individual; 

public  authorities  at 
Community, 
regional or local level. 

the 
national, 

 
 
- 37 - 

Social services 
Residual services for the poorest in society or universal services for all? 

Laurent Ghékiere 
Moderator 

If  we  try  to  explore  this  in  terms  of  the  content  of  services  of  general  interest  that  are  social  in 
character, then an important point – and also a point of dispute between, for example, the Netherlands 
and the European Commission in relation to the notion of manifest error in the classification of social 
housing services as being of general interest – is to determine whether these social services should be 
reserved for the poorest or most disadvantaged people in society or whether, on the contrary, because 
their purposes are to promote the general interest and to provide a universal service, they should be 
accessible  to  everyone,  particularly  with  a  view  to  translating  fundamental  rights  into  practice.  The 
thinking  in  your  respective  reports  was  similar  here.  I  should  like  to  ask  Mr Destans  how  the 
Committee of the Regions tackled this question. To put it plainly, are social services poor services for 
poor people or are they services of quality for everyone? 

Jean-Louis Destans 
Rapporteur on SSGIs for the Committee of the Regions 

I think you have answered that question in the way you framed it! I am hardly likely to tell you that 
they are poor services for poor people! The key point, highlighted by my colleague Joël Hasse-Ferreira 
and also noted by President Delebarre, is the great importance of the social dimension in Europe. In 
the political arena, or at least among the majority of French politicians, in the context of the ongoing 
discussions  about  the  European  Treaty,  the  feeling  is  that  the  regulation  of  social  provision,  which 
every country needs, is dependent on these social services of general interest. The specific contribution 
of the Committee of the Regions with regard to that basic aim is to point out that in many European 
countries – whether as the result of delegation of authority or on the basis of direct responsibility – 
these  social  services  are  delivered  by  local  and  regional  authorities.  The  principle  of  subsidiarity 
therefore needs to take full effect and we cannot regard these social services as residual: they must be 
seen to be universal. The clear call is for a framework directive on all services of general interest. The 
next step would then be to make particular provision for SSGIs, health services etc. 

 
 
 
 
 
- 38 - 

EP Report 

CoR Report 

EESC Report 

Jean-Louis Destans 

Raymond Hencks 

to 

•  should not be considered as 
residual 
the 
services 
population  but  can,  on  the 
for 
contrary,  be  agents 
universal  access  to  quality 
social 
all 
citizens; 

services 

for 

and 

•  The  EU  must,  with  due 
respect for the principles of 
and 
subsidiarity 
in 
proportionality 
conjunction 
the 
Member  States,  safeguard 
the 
and 
existence  of  SGI  that  are 
accessible,  affordable  and  of 
high quality for everyone.  

contribute 

with 

to 

a 

to 

Joël Hasse Ferreira 
•  whereas  social  services  must 
not  in  any  circumstances  be 
reduced 
residual 
category  defined  by  the  fact 
that  they  cannot  be  equated 
either  with 
commercial 
services  or  with  services  of 
interest; 
general  economic 
whereas,  on 
the  contrary, 
because  of 
the  sector  of 
they 
society  whose  needs 
address,  and  the  distinctive 
features of their organisation, 
funding and remit, they must 
be  regarded  as  a  separate 
and  specific  category  of 
fundamental 
services 
importance for society, 

of 

 
 
 
 
 
 
 
- 39 - 

Social services 
Social  as  opposed  to  health  services:  why  the  separate  treatment,  despite  commitments  in  the 
White Paper on services of general interest? 

Laurent Ghékiere 
Moderator 

One  important  point  made  is  the  fact  that  the  2004  White  Paper  on  services  of  general  interest 
announced a forthcoming comprehensive communication on both social and health services. What we 
actually got in the end, in 2006, was a communication on social services, leaving health services out – 
to  be  dealt  with  in  a  separate  directive,  concerned  notably  with  the  internal  market  and  patient 
mobility.  

Raymond  Hencks,  what  was  the  European  Economic  and  Social  Committee’s  opinion  on  this 
uncoupling of the two themes and the much tighter agenda for the health directive? In relation to the 
latter we have a fairly clear mandate from a section of the Council, with the bigger Member States in 
particular uniting as the Aachen Group; a consultation process has begun; and proposals on patient and 
provider  mobility  are  being  formulated.  In  relation  to  social  services,  on  the  other  hand,  we  have  a 
much slower and more cautious process: studies, reports and communications are being produced one 
after another, without leading to any legal framework. 

How  does the  European  Economic  and  Social  Committee  view this  uncoupling  of  social and  health 
provision?  

Raymond Hencks 
Rapporteur on SSGIs for the European Economic and Social Committee 

We simply do not share this separate vision of the social and health spheres. We have sought reasons 
for it but the reasons being offered are unreasonable, so we cannot explain it. If we look for a moment 
at what the Communication has to say on the subject, we find that health services have been excluded 
because they are also excluded from the Bolkestein Directive. In fact, that directive excludes not only 
health services but most social services, so the argument is meaningless. 

It is also explained in the Communication that health has been the subject of specific consideration. 
When  we  look  at  the  document  to  which  they  are  referring  –  issued  in  2006  and  entitled  "Annual 
policy strategy for 2007: boosting trust through action" – we find that the consideration amounts to a 
declaration  that  we  need  to  develop  high  quality  and  efficient  health  services.  Hardly  an  in-depth 
analysis! We still simply fail to understand why social and health services have been separated in this 
way, particularly as there are so many areas of synergy between them. The very terms "medicosocial" 
and "sociomedical" reflect the interaction between the two spheres. It is also worth pointing out that 
the  Commission,  in  the  consultation  process  it  launched  on  26 September  2006,  asked  the  question 
about the nature of the link  between  health  services and  other related  services –  social services and 
long-term  care  services,  for  example.  The  Commission  ought  to  have  asked  that  question  before 
publishing  its  Communication.  It  is  a  key  question  and  one  that  we  ought  to  have  discussed  before 
deciding  to  separate  the  two  areas.  That  is  why  the  European  Economic  and  Social  Committee  is 

 
 
 
 
- 40 - 

calling  for  the  adoption  of  a  specific  framework  directive  covering  both  social  services  and  health 
services. 

Laurent Ghékiere 
Moderator 

Your  thinking  is  broadly  shared  by  the  rapporteurs  for  the  Committee  of  the  Regions  and  the 
Parliament. Turning to Mr Hasse-Ferreira now, though, it is worth mentioning a vote that took place 
recently  in  Parliament’s  Committee  on  the  Internal  Market  and  Consumer  Protection  (the  IMCO 
Committee). Effectively it was a call to the Commission to reintroduce health services to the Services 
Directive and, of course, it failed to get a minority in the plenary session. Nonetheless, I should like to 
ask how you view that attempt to go back over old ground. Parliament has not really reached a firm 
position: we seem to be stuck in permanent conflict. 

Joël Hasse-Ferreira 
Rapporteur on SSGIs for the European Parliament 

That is true, and such is life in politics! In theory, the political make-up of Parliament is reflected in 
the  committees.  When  it  comes  to  this  type  of  political  issue,  however,  the  committees  are  also 
influenced by group thinking, and some groups are very much required to toe the party line. In relation 
to  the  agreement  on  the  Services  Directive,  the  chairman  of  the  Liberal  Group,  Graham  Watson, 
opposed it and took a stance very much to the right. Meanwhile, most of the Liberal Democrats voted 
for it. Some of the Liberals, however, were not content to oppose the agreement; they actually wanted 
to  take  a  step  backwards. That  had  been  clear  from  the  outset  –  it  was  not  something  new.  No  one 
expected it, but most of the EPP group voted in plenary for the agreement on the Services Directive, 
sometimes contrary to their earlier vote in the committees. 

EP report 

CoR report 

from 

excluded 

Joël Hasse Ferreira 
•  whereas  health  services,  which 
are 
the 
Commission  communication  on 
SSGIs, are also SSGIs, and share 
the 
same  characteristics  and 
objectives;  recognising,  however, 
the  special  features  arising  from 
the  complex  organisation  of 
health  services  and  the  financial 
burden they place on the Member 
States’ public authorities, 

Jean-Louis Destans 
•  questions  the  decision  not 
to  include  health  services 
the  Communication 
in 
whilst 
the 
noting 
Commission's  intention  to 
in  a 
deal  with 
separate 
initiative;  clear 
and  distinct  definitions  of 
social  and  health  services 
should be put forward; 

them 

EESC report 

Raymond Hencks 

•  regrets 

in 

that 

the 
communication  in  question, 
the  Commission  excludes 
health  services,  contrary  to 
what 
it  had  previously 
stated,  at  a  time  when  there 
is  so  much  interaction  and 
so  many  synergies  between 
social  services  and  health 
services.  

 
 
 
 
 
 
 
- 41 - 

Social services 
Regulation of service providers, the information imbalance, governance and control 

Laurent Ghékiere 
Moderator 

We  are  now  moving  into  the  content  of the  reports,  and  we  come  to  the  question  of  social  services 
providers, which is a crucial one in terms of the logic of the internal market. The internal market, as 
defined  by  the Treaties, is based  on  freedom  of  establishment  and  freedom  to  provide  services,  and 
tension  can  arise  between  those  concepts  and  national  provision  for  regulating  the  operators  via 
authorisation  systems  and  special  rights.  In  terms  of  the  specificity  of  these  service  providers,  how 
have  you,  in  your  respective  reports,  approached  the  particular  relationship  between  the  consumers 
and the providers of social services, with regard to regulation and governance? What, for you, is the 
key feature of that relationship – which is really central to the business of regulating social services? 

Raymond Hencks 
Rapporteur on SSGIs for the European Economic and Social Committee 

We have recognised that the provider-user relationship here suffers from a certain imbalance. We are 
bound  to  welcome  publication  of  the  Communication  inasmuch  as  it  reflects  a  systematic  effort  to 
identify and acknowledge the particularities of SSGIs and to clarify their operating context – with a 
view (to use the Commission’s terminology) to their "modernisation". 

I  would  remind  you  here  of  what  we  heard  yesterday  at  the  European  Commission  conference  on 
SSGIs,  which  still  dismays  me.  Mr Vignon  said  he  was  irritated  by  the  use  of  the  word 
"modernisation".  To  my  mind,  it  is  not  the  word  that  is  irritating  but  the  fact  that,  in  this 
Communication,  the  European  Commission  equates  modernisation  with  the  outsourcing  of  public 
services to private operators. It would seem that all public service provision is necessarily bad and all 
private  service  provision  is  excellent.  That  is  a  one-sided  approach  on  the  Commission’s  part  and  I 
cannot endorse it. 

In the eyes of the European Economic and Social Committee, modernisation of social services means 
exploring  how to improve  quality,  how to  be  more  efficient  and,  most importantly,  how  to adapt to 
changing needs. 

I would also like to return to the question of who uses and who benefits from social services. I also 
had to sit and listen yesterday to the contention that people who use and benefit from social services 
are  no  different  from  people  who  use  and  benefit  from  any  other  form  of  service.  That  is  utter 
nonsense. As I see it, people who use these services are of three types:  

• 

• 

firstly, there are people in vulnerable or crisis situations; 

secondly – and we have to take a broader perspective here – social services meet basic needs 
that we all share; 

 
 
 
 
- 42 - 

• 

thirdly, there are people who are obliged to accept help. I am talking about those who benefit 
from social services who have no choice in the matter, because a legal decision has been taken 
to place them under supervision and to give them social assistance.  

It is recognised that people in the third category are subject to dependency and to constraint. But the 
first type of people that I  mentioned – those who are in trouble or going through a time of crisis in 
their  lives  –  are  also  under  constraint.  They  too  are  in  a  situation  of  dependency  and  they  have  no 
choice  in  the  matter  of  who  provides  services  to  them.  They  are  dependent  on  the  assistance  they 
receive – and therein lies the difference between social services and other services of general interest. 
So I do not believe we can say that social services users are the same as users of any other service. 

Laurent Ghékiere 
Moderator 

Jean-Louis Destans, I would like to pursue this concept of an information imbalance: it is a typically 
technocratic  term  but  it  does  reflect  the  inequality  here  between  providers  and  consumers,  and  the 
consequent need to supervise the providers to prevent them from abusing their position of superiority. 
How does the Committee of the Regions view the specific role of the not-for-profit organisations?  

Jean-Louis Destans 
Rapporteur on SSGIs for the Committee of the Regions 

I should like first to expand on a point made by Raymond Hencks. SSGIs cannot be equated with other 
types of service provided to our fellow citizens. First and foremost, we have the general requirements 
that  these  services  should  be  universally  available  and  accessible.  In  many  cases  –  in  relation  to 
vulnerable groups – meeting those requirements entails putting in place special arrangements so that 
we can effectively realise the aim of reaching as many people as possible and ensuring that specific 
groups have access. This means (to return to the technocratic jargon) that there is often an information 
imbalance between the intended provider of the service and its intended recipient. We cannot simply 
look to the market, as we know it, to overcome that imbalance. Special arrangements need to be put in 
place.  This  brings  us  back  to  the  aims  that  we  talked  about  earlier  and  to  the  business  of  service 
provision, particularly by local and regional authorities or providers with whom those authorities co-
operate  –  either  private-sector  operators,  to  whom  a  public  service  has  been  delegated,  or  public  or 
voluntary  sector  agencies  operating  on  the  basis  of  an  agreement.  It  is  a  matter  of  establishing 
appropriate legal arrangements and these have to be compatible with the principle of free competition. 
So we come back to the question of competition law and the internal market. 

Clearly, the important consideration in all this is balance. It is not acceptable to do as the European 
Commission  sought  to  do  via  the  Services  Directive,  namely  to  sweep  aside  the  specificity  of  the 
general-interest remit and announce that the private sector can now tap into a major source of work in 
social provision. 

I  would  add  just  one  further  comment  –  albeit  belated  –  in  relation  to  what  was  said  about  health 
services and about discussions that are likely to take place within French local and regional authorities. 
I  do  not  know  how  the  situation  in  other  countries  compares.  With  regard  to  financing  and  to  the 

 
 
 
 
- 43 - 

separation between health and medicosocial provision, there is a tendency, in the light of deficits in the 
health insurance sector, to seek to shift healthcare into the medicosocial bracket, thus displacing the 
burden from social costs and the social security budget towards local and regional authorities and thus 
towards the tax budget. What we will see is a transfer of social financing into the realm of taxation. 
That too is a major issue for local and regional authorities. 

Laurent Ghékiere 
Moderator 

Joël Hasse-Ferreira, in your report, the European Parliament’s emphasis, with regard to this question 
of an imbalanced relationship, was on proximity between service providers and service users. What we 
are  talking  about  here  are  social  needs  that  are  absolutely  basic  and  thus  of  vital  importance  to  the 
service consumer, so there is a duty of universal cover, and likewise a duty to make the relationship 
between  provider  and  consumer  one  of  proximity.  What  is  the  European  Parliament’s  thinking  on 
these principles, particularly with regard to regulation by pubic authorities in the Member States?  

Joël Hasse-Ferreira 
Rapporteur on SSGIs for the European Parliament 

I believe that accessibility is the key question in this relationship between the services and those who 
use them. So guaranteeing user access to the services is extremely important.  

The principles of accessibility and of universal service must be properly safeguarded. Social services 
of general interest must be delivered in every country right across the European Union. The Union’s 
economic, social and territorial cohesion is partly dependent on this.  

I  do  not  believe  these  can  be  poor  services  for  poor  people:  they  have  to  be  services  of  quality  for 
everyone, and I think that principle is universally, or at least very widely, accepted.  

EP Report 

CoR Report 

EESC Report 

Joël Hasse Ferreira 
•  Reaffirms  its  commitment  to 
high-quality 
and 
modern 
SSGI  based  on  the  values  of 
equality,  solidarity,  rule  of 
law  and  respect  for  human 
dignity, and the principles of 
accessibility, 
universal 
service,  efficiency,  economic 
resources, 
management  of 
continuity,  proximity 
to 
and 
service 
which 
transparency, 

users 

Jean-Louis Destans 

Raymond Hencks 

•  considers,  moreover,  that 
SSGI should in principle be 
undertaken  by 
the  best 
suited provider.  

•  The 

of 
values 
core 
accessibility, 
universality, 
quality 
regional 
and 
programming cannot be met 
unaided  by  the  market  and 
require 
public 
structured 
intervention,  especially  for 

•  In  all  Member  States  the 
status of the operators who 
services 
these 
provide 
varies, 
a 
including 
considerable  number  of  not-
for-profit 
and 
cooperative  organisations  of 
types 
many 
different 
charitable, 
(public, 
philanthropic, 
religious, 
private, etc.). 

social 

 
 
 
 
 
•   The  operation  of 

these 
is  governed  by 
services 
financial 
regulatory  and 
frameworks  drawn  up  by 
the public authorities.  

to 

the 
contribute 
the 
implementation 
as 
Community’s 
defined in Articles 2 and 3 of 
the Treaty; 

of 
tasks 

•  Reiterates the importance of 
market  regulation  by  the 
Member States in the field of 
social  services  of  general 
interest  and  the  freedom  of 
Member States to maintain or 
set  up  authorisation  schemes 
in  order  to  ensure  access 
for  all,  continuity  and  high 
quality  of  social  services  of 
general interest; 

- 44 - 

the  delivery  and  payment 
schemes  of  the  local  and 
regional  authorities  closest 
to the citizens;  

•  considers 

that 

the 
existential  nature  of  the 
needs  to  be  met  (housing, 
health, jobs), the asymmetry 
of information between SSGI 
providers  and  beneficiaries 
and, 
in  numerous  cases, 
their extreme vulnerability, 
justifies  a 
requires  and 
service  delivery  framework 
that  exempts  these  services 
"normal" 
from 
supplier/customer relations; 

to 

•  are  provided  directly  by  the 
local and regional authorities 
or  delegated 
specific 
operators with responsibility 
for  them.  They  therefore 
depend  on 
the  Member 
States' 
regulatory  process 
regarding  the  social  public 
policy  objectives  entrusted 
to  them.  The  requirement 
that 
their  missions  be 
fulfilled properly, as set out 
in  Articles  16  and  86(2)  of 
the  EC  Treaty, 
should 
apply to them a priori; 

 
 
 
 
 
 
- 45 - 

Social services 
Legal uncertainty: identifying the right political compromises and the best legal solutions 

Laurent Ghékiere 
Moderator 

Now we come to the nub of the matter. What sort of European framework should be applied to social 
and health services? For anyone trying to gain an understanding of Community law, the first question 
to be asked is fairy straightforward: what falls within it and what lies outside it?  

The simple answer is that everything of an economic nature lies within it, and everything of a non-
economic  nature  lies  outside  it.  The  interesting  thing  here  is  that  all  three  reports  concur  in 
acknowledging that social services – which were non-economic when the Treaty of Rome was signed 
– are today, in essence, economic. All the competition rules and the internal market rules laid down in 
Treaties can thus be applied to them. We see that as a very important starting point, although of course 
we realise that the problem is not, for the most part, framed in these terms.  

I should like, nonetheless, to focus on the proposal by the European Economic and Social Committee 
–  which  differs  from  the  thinking  of  the  European  Parliament  and  the  Committee  of  the  Regions  – 
about how this distinction between the economic and the non-economic should ultimately be seen. Is it 
solely a matter for the Court of Justice, because it alone has the final authority to determine what is 
classed as economic activity and what is classed as non-economic activity, given that Community law 
provides for a very wide-ranging definition of economic activity – namely any activity carried out in a 
given  market in return for remuneration? It is enough for a Member State to develop a market, to a 
certain extent, in a given sphere of activity in order to render that activity economic in nature and for it 
to attract remuneration or other consideration of an economic nature. Most social services are in effect 
remunerated, albeit from the public purse under third-party payment arrangements. We are not talking 
here about free services, which are effectively non-economic. 

How  did  the  European  Economic  and  Social  Committee  go  about  making  constructive  proposals  in 
relation to this division between what is economic and what is not?  

Raymond Hencks 
Rapporteur on SSGIs for the European Economic and Social Committee 

The  concept  of  a  service  of  general  economic  interest  is  of  major  importance  in  economic  terms 
because  it  determines  the  applicability  or  otherwise  of  Article 86,  permitting  derogations  from  the 
rules on competition and the internal market. 

Our opinion, in the European Economic and Social Committee, is very different from that of all the 
other  players  and  different,  too,  from  the  opinions  reflected  in  the  five  draft  framework  directives 
drawn up, respectively, by the European Centre of Enterprises with Economic Participation (CEEP), 
the  European  Liaison  Committee  on  Services  of  General  Interest  (CELSIG),  the  Committee  of  the 
Regions and the Party of European Socialists. We base our thinking on recognition that the distinction 
between being of an economic nature and being of a non-economic nature is still loose, uncertain and 
shifting.  As  we  see  it,  any  service  of  general  interest,  even  if  it  is  provided  free  of  charge  or  on  a 

 
 
 
 
- 46 - 

voluntary  basis,  represents  a  certain  economic  value.  Every  service has an  economic  value.  What  is 
more,  one  and  the  same  service  can  be  both  economic  and  non-economic  –  to  use  the  European 
Commission’s terminology – or a service may be economic in nature even if the market is not capable 
of delivering it. 

From  that  perspective,  and  given  the  diversity  among  different  countries,  one  cannot  produce  an 
exhaustive  definition  of  the  concepts  of  service  of  general  interest  or  service  of  general  economic 
interest. Nor can the definition be too restrictive. 

Our  proposal,  therefore,  is  simply  to  abandon  the  distinction  between  economic  and  non-economic 
services. We are told that the distinction must be retained because non-economic services are not in 
principle subject to the provisions of the Treaty and the rules on competition, but fall instead within 
the exclusive competence of the Member States. It is not fair to say that "we" are told, because in fact 
all services of general interest have a role to play in implementation of the European Union’s aims. 
Among those aims are human wellbeing and social cohesion. Services of general interest, economic or 
otherwise,  have  their  contribution  to  make  in  pursuit  of  those  aims.  Certainly,  on  the  one  hand,  we 
have a set of aims and it is the task of the European Commission to ensure that they are realised, but 
the Commission also has responsibilities for deploying the right tools to ensure that all these aims are 
capable of realisation. 

That is why we say that the Member States and the European Union have a shared responsibility in 
relation to all services of general interest, commercial or non-commercial. Let us stop focusing on this 
distinction  between  the  economic  and  the  non-economic  and  concentrate  instead  on  the  mission  in 
question. Let us ask whether that mission is in the general interest and whether, in the interest of social 
cohesion, it should be subject to competition or not. That is the crucial question: should the service be 
subject to competition or not?  

We propose, therefore, to abandon the distinction between the economic and the non-economic and to 
concentrate  on  the  nature  of  specific  missions,  leaving  the  Member  States  free  to  choose  which 
services should – for reasons of the general interest or social cohesion – be subject to competition or 
be provided on the open market. 

Laurent Ghékiere 
Moderator 

Thank  you,  Raymond.  That  is,  indeed,  an  innovative  approach  to  the  European  institutional  debate. 
Let us move on, then, to the crucial element in your respective reports. In practical terms, what is to be 
done? What are you proposing to the Community institutions – not only to the Commission in its role 
as the European executive, empowered to take legislative initiatives, but also to the Council and the 
Heads of State and Government?  

You  concur  in  your  three  reports  in  depicting  a  situation  of  legal  uncertainty.  Thus  far  there  is 
certainly consensus among the three institutions. On the question of how to resolve the uncertainty, on 
the  other  hand,  your  approaches  differ  and,  while  those  of  the  Committee  of  the  Regions  and  the 
European Economic and Social Committee are broadly similar, the European Parliament’s stands out 
as somewhat cautious. 

 
 
 
- 47 - 

Raymond Hencks, in practical terms, where does the European Economic and Social Committee stand 
with  regard  to  initiatives  to  resolve  the  problems  of  uncertainty  through  some  form  of  European 
framework, possibly in the shape of directives? 

Raymond Hencks 
Rapporteur on SSGIs for the European Economic and Social Committee 

As I said, the first step is to end the distinction between what is economic and what is non-economic. 
What we want to achieve at the end of the day is active implementation of the principle of subsidiarity, 
and  to  be  able  to  determine  those  types  of  service  for  which  –  under  Article 86(2)  providing  for 
derogations (so much for the persistent criticism that there are no legal bases!) – the Member States 
are empowered to introduce arrangements that constitute exceptions to the general rule. 

With regard to the form of regulatory provision, we are favour of a framework directive, leaving the 
Member States free to determine those types of services which, for reasons of social cohesion, are not 
subject to competition and internal market rules. To avoid abuses (because we are told that there will 
be  abuses),  we  take  the  view  that  all  such  services  should  be  entrusted  to  their  providers  under  the 
terms  of  an  official  mandate  from  the  Member  State  in  question  or  a  public  authority  –  be  it  at 
Government, local or regional level. In every case, there should be a system of official approval for the 
service providers. 

Laurent Ghékiere 
Moderator 

It  should  be  pointed  out  that  the  requirement  for  an  official  act  of  entrustment  already  applies  in 
relation to ensuring that public financing is compatible with the rules of competition. I am referring 
here to the famous Altmark judgment and to the provisions of the Altmark package on State aid in the 
form of public service compensation, adopted in November 2005. Jean-Louis Destans, how did you in 
the Committee of the Regions address the problems of the legal initiatives announced by the European 
Commission? Are you in favour or would you wish to go further?  

Jean-Louis Destans 
Rapporteur on SSGIs for the Committee of the Regions 

Beyond the standard calls for more clarity and dialogue etc., three specific proposals have been made. 

Firstly, we want a statutory instrument providing for the definition of certain common principles for 
all  services  of  general  economic  interest:  this  would  be  an  umbrella  initiative  with  scope  for 
complementary  legislative  proposals,  notably  on  SSGIs,  taking  account  of  the  specificities  we  have 
just considered and offering enhanced legal security not only for local and regional authorities but also 
for  service  providers.  It  is  something  we  have  not  discussed  in  depth  today,  but  the  fact  is  that  the 
European Court of Justice is currently deciding how SSGIs should be organised. 

 
 
 
 
 
- 48 - 

Secondly,  we  call  on  the  European  Commission  to  undertake  more  detailed  and  rigorous 
categorisation of the definitions and conceptions of the SSGIs concerned, taking into consideration the 
requirements  of  general  interest  as  determined  by  the  Member  States  and  recognising  them  as  an 
integral element in the definition of these services. This will entail interaction with the Member States. 

Lastly  and  in  the  same  spirit,  we  ask  the  European  Commission  not  to  close  the  list  of  possible 
conceptions,  missions  and  organisational  characteristics  of  SSGIs  but  to  respect  the  principle  of 
subsidiarity and the freedom of the Member States to determine the governing principles and remits of 
these  services, the  means of  financing  them  and  how  they  are to  be  organised  –  and  on that  point  I 
would echo Raymond Hencks. 

Laurent Ghékiere 
Moderator 

Thank  you.  That  brings  us  to  the  European  Parliament,  where  the  situation  was  somewhat  more 
complex.  There  had  actually  been  a  vote  in  the  plenary  session,  a  few  months  previously,  on  the 
Rapkay  report  and  the  European  Commission’s  White  Paper  on  services  of  general  interest.  This 
meant that Parliament had clearly formulated a call for conditions of legal security for social services 
and  had  proposed  a  sector-specific  directive  of  the  Council  and  Parliament  on  social  services  of 
general  interest,  covering  the  necessary  areas.  How  does  your  report  complement  these  earlier 
mandates from Parliament to the European Commission in relation to SSGIs? Do you go further? Are 
you  more  specific?  Or  do  you  support  the  proposal  by  the  Employment  DG  to  study  the  legal 
advisability of moving towards a Community framework?  

Joël Hasse-Ferreira 
Rapporteur on SSGIs for the European Parliament 

First of all, this was not about a specific vote to approve a directive. What we did was threefold. We 
welcomed  the  Commission's  intention  to  continue  the  consultation  process  in  greater  depth  so  as  to 
clarify the application of certain Community rules for social services. I really believe that there is a 
legal  basis  available  using  Article  86(2).  The  opposition  voiced  by  certain  legal  specialists  in 
Parliament was not echoed in the advice I took from other legal specialists outside Parliament. 

We also asked the European Commission to formulate a decision on how to follow up the consultation 
process  and  identify  the  best  approach  to  take,  including  considering  the  need  and  legitimacy  of  a 
sector-specific legislative proposal. 

The need for legitimacy is the problem here and it has to do with responding directly to a majority in 
Parliament’s  Committee  on  Legal  Affairs.  There  is  also  the  matter  of  the  agreement  we  reached  to 
include in the text of the report Bernard Rapkay’s proposal on behalf of the Parliamentary Committee 
on Economic and Monetary Affairs. In negotiation, Bernard Rapkay asked for my agreement that the 
vote initially scheduled for 18 December should take place in March of the following year – and that is 
what we did. As you know, I am personally in favour of a directive on SSGIs. However, a directive on 
services of general interest is a different proposition. On social services of general interest I believe it 
will be easier to reach agreement in most of the Member States, provided that we can overcome the 

 
 
 
 
- 49 - 

objections  – for  which  there  are  very  different  grounds  –  in certain  of  them.  I  know  there is  a  very 
strong body of opinion in favour of having a directive on services of general interest. I think, though, 
that we are talking about two different things here. I would add that the caution expressed in the first 
version of my draft report was a response to the Rapkay report. With regard to a section of what are 
traditionally  classed  as  services  of  general  economic  interest,  there  is  considerable  division  within 
several of the political groups and most of the European governments, even among people of similar 
political leanings. By contrast, I believe there is a much greater degree of convergence on the social 
services of general interest. 

On  the  question  of  services  of  general  economic  interest,  or  networks,  there  is  a  wide  spread  of 
opinion. For this category of services, we can have a more broadly framed directive and that will be 
acceptable. When it comes to the discussion on social services of general interest, on the other hand, to 
propose  a  directive  –  respecting  the  principle  of  subsidiarity  and  the  Member  States’  areas  of 
responsibility – I think we need to inject some real impetus, in order to move forward and to clarify 
provision for that sector. 

I think that the two directives are compatible although I know the European Commission is not overly 
keen on that solution. 

EP Report 

CoR Report 

Joël Hasse Ferreira 
•  all  the  sectors  concerned  are 
calling  for  a  clear  operating 
framework  which  reduces  the 
need  for  judicial  interpretation 
to  the  minimum  and  aims  to 
achieve  maximum 
legal 
certainty, 

•  urgent  need 

to  clarify 

framework 
operate, 
to 

the 
concepts  in  question  and  the 
in  which 
legal 
in 
and 
SSGIs 
particular 
the 
clarify 
principle  of  "general  interest" 
and  the  rules  on  competition 
and aid from public funds, 

•  Welcomes 

the  Commission 
initiative  (…)  to  provide  a 
specific  conceptual  and  legal 
framework  for  the  services  in 
question;  

EP  

Rapport Rapkay  

Jean-Louis Destans 
•  need  to  overcome  existing 
legal uncertainty regarding 
the 
the  conditions 
application of Community 
law  to  arrangements  for 
implementing SSGI.  

for 

•  in  the  absence  of  legal 
certainty  in  relation  to 
SSGI,  the  latter  tend  to 
fall  under  the  general 
competition  and  internal 
market  rules,  which  may 
not be appropriate for the 
missions 
specific 
delegated  to  them  by  the 
regional 
local 
authorities.  This 
legal 
uncertainty  became  clear 
during 
the  debate  on 
whether  they  should  be 
covered  by  the  proposal 
for a directive on services 
in  the 
internal  market 
and  led  to  their  being 
excluded  from  its  sphere 
of application;  

and 

EESC Report 

Raymond Hencks 

adopting 

•  recommends 

a 
specific legal framework that 
is  common  to  social  services 
and health services of general 
interest, as part of an overall 
approach  in  the  form  of  a 
framework  directive  for  all 
services  of  general  interest. 
This  should  help  to  ensure 
the appropriate legal stability 
and transparency for SSGI at 
Community  level,  in  strict 
with 
compliance 
the 
principle  of 
subsidiarity 
and  in  particular  with  the 
and 
powers 
regional 
to 
define 
missions, 
management  and  funding 
of these services.  
•  The  EC  Treaty 

of 
authorities 
the 

gives 
Member States the freedom 
of 
to  define  missions 
general 
to 
interest  and 
establish  the  organisational 
for  providers 
principles 

local 

 
 
 
on SGIs white book 
•  “Calls  on  the  Commission  to 
create more legal certainty in 
the  area  of  social  and  health 
care  SGIs  and 
to  come 
forward with a proposal for a 
sector-specific  directive  of 
the  Council 
the 
Parliament  and  those  fields 
where it is appropriate”; 

and 

- 50 - 

•  urges  the  Commission  to 
deliver on its commitment 
to give consideration to the 
need  and  legal  possibility 
for a legislative proposal on 
SSGI  at  the  end  of  the 
open 
of 
consultation; 

process 

•  also 

certain 

its 
reiterates 
recommendation  to  the 
Commission to draw up a 
proposal 
legislative 
for 
regulation  which  should 
make  possible  a  definition 
positive 
of 
principles  for  all  SGEI,  as 
an  "umbrella"  initiative 
for  other  complementary 
legislative  proposals,  and 
specific 
their 
due 
to 
features, 
in 
for  SSGI 
particular,  with  a  view  to 
legal 
providing  greater 
certainty  for 
local  and 
regional  authorities  and 
service providers;  

entrusted  with  the  task  of 
accomplishing them.  

and 

interest), 

contracts 

respect 
of 

•  However,  when  exercising 
this  freedom  (which  must 
be  done  transparently  and 
without misusing the concept 
the 
of  general 
Member  States  must  take 
account  of  Community  law 
and  must 
the 
non-
principle 
discrimination 
the 
Community  legislation  on 
public 
and 
when 
concessions 
organising  a  public  service, 
including  a  social  service. 
Moreover, when it comes to 
services that are considered 
to  be  of  an  economic 
nature, the compatibility of 
their 
organisational 
arrangements  with  other 
areas  of  Community  law 
(in 
must 
be 
particular 
to 
provide services and freedom 
of 
and 
establishment, 
competition law).  

ensured 
freedom 

a 

•  In  order  to  ensure  that  the 
general  interest  mission  is 
non-
fulfilled 
in 
discriminatory 
and 
transparent manner and is not 
abused,  Member  States 
should  explain  why  these 
services  are  in  the  general 
interest and in the interests 
of  social,  territorial  and 
in  an 
economic  cohesion 
official 
of 
legal 
"delegation"  or  equivalent 
and  in  authorisation  rules, 
setting  out  the  mission  that 
public 
the 
given 
of 
authority 
Member  State  entrusts  to 
service 
for 
providing  an  SGI  and 
their 
lays  down 
which 
obligations, 
and 
rights 

competent 

providers 

act 

a 

 
 
 
 
 
- 51 - 

without  prejudice  to  the 
right of initiative conferred 
on 
the 
regulations. 

operators 

by 

which 

•  The  EESC  doubts  that  the 
flexibility 
the 
Commission claims exists in 
the  application  of 
the 
Treaty 
regards 
as 
recognition  of  the  specific 
characteristics  inherent  in 
missions of general interest, 
pursuant to Article 86(2) in 
particular,  is  sufficient  to 
allay all legal concerns and to 
guarantee  social  services  for 
all. The same applies to the 
open 
of 
coordination. 

method 

•  Consequently,  the  Union, 
which 
is  responsible  for 
achieving these aims, is also 
the 
for 
responsible 
instruments 
implementing 
which 
where 
are, 
fundamental rights and social 
concerned, 
are 
cohesion 
economic  or  non-economic 
SGI. 

with 

contribute 

•   The  EU  must  therefore, 
with  due  respect  for  the 
principles  of  subsidiarity 
and  proportionality  and  in 
the 
conjunction 
Member  States,  safeguard 
and 
the 
existence  of  SGI  that  are 
accessible,  affordable  and  of 
high quality for everyone.  
•  This  act  (in  the  form  of 
contract, 
a 
legislation, 
agreement,  decision,  etc.), 
could, in particular, detail: 

to 

of 
the 

1.  the  nature  of  the  specific 
general 
mission 
related 
interest, 
requirements 
and 
attendant  public  service 
including 
obligations, 

 
 
- 52 - 

continuity 

pricing,  the  provisions  to 
ensure 
of 
service  and  the  measures 
potential 
avoid 
to 
interruptions 
in  service 
provision; 

2.  the  rules  for  drawing  up 
and, 
necessary, 
if 
amending the official act; 

3.  the 

and 
authorisation 
professional  qualifications 
arrangements; 

4.  the  funding  methods  and 
the models for  calculating 
compensation for the costs 
incurred in accomplishing 
specific missions; 

5.  the 

arrangements 

evaluating 
implementation of SGI. 

for 
the 

Social services 
Financing and State aid rules 

EP Report 

CoR Report 

conditions 

Jean-Louis Destans 
•  solidarity-based  funding  for 
especially 
services, 
these 
for 
under 
compatibility  between 
the 
provisions of the Treaties and 
funding  schemes  and  public 
authority 
for 
service  providers  in  order  to 
to 
ensure 
social and health services for 
the  community  and  develop 
new  services  for  emerging 
needs. 

reliable  access 

subsidies 

Joël Hasse Ferreira 
•  Calls on the Commission and 
the Member States to respect 
the  diversity  of  the  methods 
of  organising  and  managing 
SSGIs, of their resources and 
of  the  methods  of  funding 
these  services;  also  calls  for 
the  establishment  of  public-
private  partnerships 
to 
provide  such  services,  while 
taking  care  to  promote  the 
general  interest  and  ensure 
the provision of efficient and 
high-quality services; 

•  Notes  that  in  some  Member 
States  the  decentralisation  of 

EESC Report 

Raymond Hencks 

•  Since  pricing  does  not 
always  directly  reflect  the 
cost of these services, or the 
cost  determined  by  the  law 
of supply and demand, they 
could  not  be  provided  at  a 
price  that  is  accessible  to 
everyone  without 
funding 
from public authorities. 

•  In  conjunction  with  their 
duty  to  ensure  that  SSGI  are 
properly 
public 
funded, 
authorities  have  overall 
responsibility  for  ensuring 
that social services are able 
to  operate  and  that  they 
maintain their high quality, 

 
 
 
 
 
- 53 - 

whilst 
competences 
stakeholders. 

respecting 
of 

the 
the 

power  to  regional  or  local 
authorities for the purpose of 
providing  SSGIs  has  not 
been  accompanied  by  the 
allocation 
sufficient 
of 
budget  resources  to  enable 
them  to  deliver  services  of 
the  highest  standard 
in 
terms  of  quantity  and 
quality;  consequently,  calls 
on  the  Member  States  to 
ensure  that  any  transfer  of 
powers  to  regional  and  local 
authorities for the purpose of 
delivering 
is 
accompanied  by  adequate 
budgetary resources; 

SSGI 

 
 
 
 
- 54 - 

Social services 

What new instruments do we need? 

Laurent Ghékiere 
Moderator 

We come now to the final point of comparison. What practical action is to be taken? How should these 
reports be followed up? I would point out that the Committee of the Regions and the Economic and 
Social  Committee  concur  in  calling  for  an  independent  evaluation  of  social  services.  Currently, 
biennial  reports are  prepared  by  the  European  Commission,  which thus  sits in judgment  on  itself  to 
some extent, and the democratic institutions that are represented here today are not involved at all. So 
there is a clear demand for involvement in a process of monitoring and evaluating social services in 
relation  to  Community  law,  a  process  that  would  be  independent  and  in  which  all  the  stakeholders 
would  have  a  role.  Parliament,  however,  has  gone  one  step  further.  Joël  Hasse-Ferreira,  you  had 
effectively proposed that the European Parliament should convene a forum on SSGIs. What will that 
entail in practice? How will it work? What is your agenda? What specifically do you want to do? 

Joël Hasse-Ferreira 
Rapporteur on SSGIs for the European Parliament 

The  forum  will  go  ahead:  Parliament  has  convened  it.  Parliament  itself  was  not  in  a  position, 
logistically speaking, to organise it and it was too late to ask the German Presidency. So we turned to 
Portugal and the Portuguese Presidency agreed to take on the task. 

What  we  want  to  achieve  with  this  forum  is  to  take  the  discussion  to  a  deeper  level,  to  learn  more 
about one another’s systems and approaches – that is very important because many of us are unaware 
of what is going on in other countries – and to demonstrate just how big the social sector is in Europe. 
There  is  very  little  conception  –  to  take  one  example  –  of  the  numbers  of  people  covered  by  the 
Belgian mutual insurance system, or of the scale of other social organisations. 

Pressure needs to be applied, not just to obtain legal clarification but also to take stock of progress in 
the Council and the European Commission.  

What we want to see at this forum is a major presence by social organisations from all over Europe 
and  particularly  from  those  countries  where  they  are  very  pro-active  and  can  make  a  positive 
contribution  by  raising  other  countries’  awareness  of  the  work  that  they  do.  There  are  some 
outstanding experts in this field. Representatives of Ministries of Social Affairs or the equivalent are 
another  group  common  to  all  the  countries  concerned.  Then  there  are  the  social  partners,  the  trade 
unions and the business community, of course. Altogether, around 100 people will be invited. 

I  see  a  lot  of  commitment  on  the  part  of  the  Portuguese  Presidency  and  a  lot  of  interest  from  the 
European Commission and I see that many government ministers from the Member States are keen to 
discuss the subject with me. Last week the German Minister of Foreign Affairs wanted to talk with me 
and  I  was  most  impressed.  I  have  pushed  for  the  Danes  to  be  represented  at  the  forum.  I  am  very 

 
 
 
 
- 55 - 

enthusiastic about it and I hope it comes off because it could represent a real advance in the process of 
addressing the social services of general interest. 

As I see it, the European Commission and the Council are quite sensitive to the balance of power on 
the ground and in terms of public opinion. If we can organise a successful event and move forward on 
clarification, I am convinced that it will be worthwhile and that it will help to make progress on social 
questions generally, at European level. 

EP report 

CoR report 

EESC report 

Joël Hasse Ferreira 

Jean-Louis Destans 

Raymond Hencks 

•  Recommends 

the 
convocation  of  a  forum, 
under  the  auspices  of  the 
European  Parliament,  which 
together 
would 
bring 
social 
European 
and 
organisations 
the 
representatives 
the 
Council 
and 
Commission 
to  guide  the 
way this process is handled;  

of 

•  suggests 

that 
involve 

the 
Commission 
the 
Committee  of  the  Regions 
in  a  permanent  monitoring 
and  evaluation  process  for 
SSGI  (particularly  in  order 
to monitor compliance with 
the  right  of  access  to  all 
financial 
the 
services, 
sustainability  of  services 
and  achieved  performance 
objectives); 

•  With  regard  to  evaluating 
social  services  of  general 
interest,  the  EESC  wishes 
to recall, in this context, its 
proposal 
to  set  up  an 
independent  monitoring 
centre  to  evaluate  services 
of  general  economic  and 
non-economic  interest,  with 
a  membership  consisting  of 
the 
representatives 
the 
European  Parliament, 
Committee  of  the  Regions 
and 
of 
representatives 
organised  civil  society  from 
the  European  Economic  and 
Social Committee.  

of 

level, 

•  At  national,  regional  and 
the  public 
local 
authorities  should  involve 
all  stakeholders,  providers 
and  beneficiaries  of  social 
services, 
social 
partners, bodies working in 
the  social  economy  and  to 
combat  exclusion,  etc.,  in 
regulating SSGI. 

the 

 
 
 
 
 
 
 
- 56 - 

 
 
 
 
- 57 - 

II: How the European Commission has responded 

Analysis of the Communications of 

•   April 2004  
•   April 2006  
•   November 2007 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
- 58 - 

The aims of the process that began in 2004, encouraged by Romano Prodi and based on wide-ranging 
consultation  with  the  Member  States  via  the  Social  Protection  Committee  and  with  all  the  major 
players, were as follows: 

• 

• 

• 

to pinpoint the particularities of social services of general interest; 

to determine, step by step, the areas of tension with Community law; 

to design, on that basis, appropriate legislation reflecting a strategic approach. 

This  comprehensive  and  gradual  process concluded with the  Communication  relating  to  the  internal 
market review. 

In  deciding  not  to  publish  a  new  strategic  communication  on  social  services  of  general  interest,  but 
simply to tack the subject on to the internal market review as part of a wider-ranging text on services 
of general interest, the Commission signalled that it did not wish to pursue the process further and now 
sought  to  close  the  debate  on  the  pretext  that  the  Reform  Treaty’s  Protocol  on  services  of  general 
interest constituted a new commitment on the part of the Community. 

The  abrupt  halt  was  necessitated  by  internal  negotiations  in  the  Commission  which  reflect  the 
sensitivity of the subject, the relevance of the questions raised and the proposals made for clarification, 
and – above all – the precedent for political compromise that might have been created, following on 
from  the  European  Parliament’s  move  to  address  the  question  of  social  services  in  the  Directive  on 
services in the internal market. 

Four years of work had been done on studying the sector, extending knowledge of it and identifying 
areas  of  tension  between  the  provisions  of  Community  law  and  the  fulfilment  by  social  services  of 
their general-interest remit, and it is useful to trace the reflection of that work in the Communications 
of April 2004 and April 2006 as well as the most recent Communication, of 20 November 2007, on 
services of general interest in the context of the single-market review, the document which brought to 
process to a halt. 

Foundation laid by the White Paper on services of general interest (April 2004) 

The 2004 White Paper on services of general interest marked the first formal reference in a European 
Commission communication to the concept of social services of general interest – embracing health 
services, long-term care, social security, employment services and the provision of social housing.  

These services were recognised not as a specific legal category of services of general interest, but on 
the basis of certain particularities. 

The  White  Paper  made  clear  that  these  particularities  lay  in  the  specific  missions  that  the  services 
fulfilled in the Member States and also reflected the Community’s concern that they should develop 
and should play their full part in achieving the aims of the Lisbon strategy. 

The White Paper states: ‘Social services of general interest have a specific role to play as an 
integral part of the European model of society. Based on the principle of solidarity, social and 
health services of general interest are person-centred and ensure that citizens can effectively 
enjoy  their  fundamental  rights  and  a  high  level  of  social  protection,  and  they  strengthen 

 
 
 
- 59 - 

social and territorial cohesion. Their provision, development and modernisation is fully in line 
with  the  achievement  of  the  objectives  set  at  the  Lisbon  European  Council  of  March  2000, 
and  in  particular  with  the  goal  of  achieving  a  positive  link  between  economic,  social  and 
employment policies.’ 

The public consultation initiated by the 2003 Green Paper on services of general interest had indicated 
that providers of social services wanted a clearer and more predictable framework in which to operate 
in order to be able to modernise social services of general interest. 

While  it  fell  within  the  responsibility  of  the  Member  States  to  determine  the  missions  and  aims  of 
social and health services, that fact did not lessen the impact of competition and internal market rules 
on  arrangements  for  delivering  and  financing  the  services  in  question  if  they  could  be  classed  as 
"services" or "activities of an economic nature" within the meaning of the Treaties.  

The Commission stated its view in the White Paper that it would be ‘useful to develop a systematic 
approach  in  order  to  identify  and  recognise  the  specific  characteristics  of  social  and  health 
services  of  general  interest  and  to  clarify  the  framework  in  which  they  operate  and  can  be 
modernised’. 

It  went  on  to  propose  the  publication  in  2005  of  a  specific  Communication  on  social  services  of 
general interest and to make arrangements for facilitating cooperation among the Member States in the 
field of health and medical care. 

The Communication on social services of general interest (April 2006) 

It  was  not  until  April  2006  that  the  Commission  adopted  a specific  Communication,  which  referred 
explicitly to implementation of the Community Lisbon programme.  

The Communication was published in a very particular context – following the European Parliament’s 
vote on the first reading of the draft Directive on services in the internal market. That vote had seen 
the  MEPs  exclude  social  and  health  care  services  from  the  new  Directive’s  field  of  application,  in 
opposition to the Commission’s initial proposal. 

Justified  by  the  fact  of  the  Member  States  and  the  European  Union  sharing  responsibility  for  the 
fulfilment  of  specific  missions  of  general  interest,  in  line  with  Article 16  of  the  EC  Treaty,  the 
Communication constituted "a further step in taking the specific nature of social services into account 
at European level and clarifying, to the extent that they are covered, the Community rules applicable 
to them". 

According to the European Commission, the social services covered by the Communication could be 
divided into two main categories, namely: 

-   "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"; 

 
 
 
 
 
 
 
- 60 - 

– 

"other essential services provided directly to the person. These services that play a preventive and 
social cohesion role consist of customised assistance to facilitate social inclusion and safeguard 
fundamental  rights.  They  comprise,  first  of  all,  assistance  for  persons  faced  by  personal 
challenges or crises (such as debt, unemployment, drug addition or family breakdown). Secondly, 
they include activities to ensure that the persons concerned are able to completely reintegrate into 
society  (rehabilitation,  language  training  for  immigrants)  and,  in  particular,  the  labour  market 
(occupational  training  and  reintegration).  These  services  complement  and  support  the  role  of 
families  in  caring  for  the  youngest  and  oldest  members  of  society  in  particular.  Thirdly,  these 
services  include  activities  to  integrate  persons  with  long-term  health  or  disability  problems. 
Fourthly,  they  also  include  social  housing,  providing  housing  for  disadvantaged  citizens  or 
socially less advantaged groups." 

Without going so far as to recognise them as a legally distinct category of service within services of 
general  interest,  this  definition  of  social  services  of  general  interest  gives  them  special  status  as 
cornerstones  of  European  society  and  acknowledges  their  contribution  to  a  number  of  essential 
Community aims and values, including: 

• 

• 

• 

• 

a high level of employment and social protection; 

a high level of human health protection; 

equality between men and women; 

economic, social and territorial cohesion. 

The Commission noted that their value was also a function of the vital nature of the needs they were 
intended to cover: in effect, they guaranteed application of fundamental rights such as the dignity and 
integrity of the person. 

It  also  stipulated  a  number  of  characteristics  shared  by  social  services  –  which are listed  in  the  box 
below – and referred to the processes of modernisation under way in the Member States, notably in the 
areas of decentralisation, outsourcing, funding and quality control. 

Application of Community rules to social services of general interest 

The  general  problem  of  determining  which  Community  laws  to  apply  to  social  services  of  general 
interest was addressed as follows:  

•  on the one hand, it was recognised that, under the principle of subsidiarity, the Member States 
were free to define missions of general interest and to establish the organisational principles of 
the services intended to perform them, with the proviso that this freedom had to be exercised 
transparently  and  without abusing  the notion of  general  interest.  It  is  worth  noting  here  that 
this stipulation – and the associated concept of "manifest error" – is the focus of the difference 
between  the  European  Commission  and  the  Government  of  the  Netherlands  concerning  the 
scope of social housing provision as a social service of general interest. 

•  on  the  other  hand,  Member  States  had  to  take  account  of  Community  law  when  fixing  the 
arrangements for implementing the objectives and principles they had laid down. For example, 

 
 
 
 
 
- 61 - 

they  had  to  respect  the  principle  of  non-discrimination  and  the  Community  legislation  on 
public  contracts  and  concessions,  taxation,  freedom  to  provide  services  and  freedom  of 
establishment when organising a public service capable of definition under European law as 
an "conomic activity" and/or a "service". 

The  practical  arrangements  for  implementing  social  services  of  general  interest  concerned  in 
particular: 

•  deciding whether to delegate a social mission in whole or in part; 

•  management  of  a  social  service  of  general  interest  as  a  public-private  partnership  or  a 

concession; 

•  management of a social service of general interest by an in-house provider; 

• 

• 

recourse to financial compensation and the requirement of entrustment; 

recourse  to  market  regulation,  and  particularly  the  structuring  of provision in  relation to the 
principles of freedom of establishment and freedom to provide services. 

Special organisational characteristics of social services of general interest 

•  They  operate  on  the  basis  of  the  solidarity  principle,  reflected  in  particular  by  the  non-
selection  of  risks  and  the  absence,  on  an  individual  basis,  of  equivalence  between 
contributions and benefits. 

•  They are comprehensive and personalised, integrating the response to differing needs in order 

to guarantee fundamental human rights and protect the most vulnerable. 

•  They are not for profit5, in particular to address the most difficult situations and are often part 

of a historical legacy. 

•  They include the participation of voluntary workers – an expression of citizenship capacity. 

•  They  are  strongly  rooted  in  (local)  cultural  traditions.  This  often  finds  its  expression  in  the 
proximity  between  the  provider  of  the  service  and  the  beneficiary,  enabling  the  latter’s 
specific needs to be taken into account. 

•  An  asymmetrical  relationship  between  providers  and  beneficiaries  cannot  be  assimilated 
within a "normal" supplier/consumer relationship and requires the participation of a financing 
third party. 

Monitoring and supporting social services of general interest 

On  the  basis  of  its  initial  analysis,  the  Communication  proposed  to  begin  a  thorough  consultation 
process, looking at the specific characteristics of social services of general interest. 

5 

In  the  Sodemare  judgment,  the  Court  took  the  view  that  a  not-for-profit  condition  could  be  compatible  with  the  principle  of 
freedom of establishment. 

 
 
 
 
                                                      
  
- 62 - 

In  addition  to  the  traditional  criteria  of  the  general  interest  (universality,  transparency,  continuity, 
accessibility,  etc.) recognised  for social  service  missions, the characteristics  to be  explored included 
their organisational conditions and arrangements. 

In particular the consultation was to cover: 

-   "the  elements  constituting these  characteristics  as  well  as  their  pertinence to  gauge  the  specific 

features of social services of general interest;  

-   how they could be considered by the Member States when defining the general-interest missions of 
social  services  and  the  arrangements  for  their  organisation,  so  as  to  ensure  a  good 
institutionalised link with the Community framework;  
the experiences  with  the  application  of  Community  law  in  the field  of  social services  of  general 
interest and possible problems that are faced in this context;  

-  

-   how the same (or other) characteristics could be considered by the Commission where it has to 
check, subsequently and individually, the compatibility of the organisational modalities of social 
services with the applicable Community rules". 

Biennial reports on the situation of social services of general interest 

The Communication also proposed that social services of general interest in the Member States should 
be monitored on the basis of biennial reports, the first of which would appear at the end of 2007 and 
would focus on the functioning of the sector, its socio-economic importance and the implications of 
the application of Community law. 

The  reports  were  envisaged  as  part  of  a  framework  of  other  Community  initiatives  supporting  the 
modernisation  of social  services,  in  particular the  open  method  of  coordination  in  the area  of  social 
protection and inclusion. 

The Communication stated that the aim was to take better account of the diversity of social services 
and to consider how the specific characteristics of social services of general interest could be used by 
both  the  Commission  and  the  Member  States  in  order  to  reduce  the  legal  uncertainty  inherent  to 
situations where a case-by-case approach was needed. 

It concluded with the following undertaking: 

"In the light of this experience, the Commission will decide how to follow up this process and identify 
the  best  approach  to  take,  including  giving  consideration  to  the  need  and  legal  possibility  for  a 
legislative proposal." 

SSGIs  in  the  Communication  on  services  of  general  interest  in  relation  to  the  review  of  the 
internal market (November 2007) 

This Communication marked a break with the work that had been under way since 2004. It was the 
result  of  a  compromise  within  the  European  Commission,  which  amounted  to  termination  of  the 

 
 
 
 
 
 
 
 
 
 
- 63 - 

process  of  recognising  specific  characteristics  and  formalising  a  systematic  approach  involving 
adaptation  of  the applicable  Community  law and definition  of  a proper  European  strategy  for  social 
services of general interest. 

Instead  of  a  new  Communication  on  a  European  strategy  for  social  services  of  general  interest,  a 
different Communication was published on 20 November 2007, in the context of the internal market 
review, dealing with both services of general interest and social services of general interest. 

Direct consequences of the internal compromise reached in the European Commission on how to 
treat services of general interest 

The logic of the compromise was clear: a declaration – unanimously supported by all the members of 
the Commission, as its President José Manuel Barroso told the press – that the Community debate on 
services  of  general  interest  launched  in  2003  by  Romano  Prodi  was  now  closed  could  not  be 
accompanied by a parallel announcement of continuation of a process leading "sooner or later" (in the 
words  of  Commissioner  Spidla  at  the  Lisbon  Forum  on  SSGIs  a  month  previously)  to  transverse 
legislation on social services of general interest. 

From that point on, the process aimed at recognising the specificities of the social services sector, with 
a view to designing the right European framework for them, was replaced by attempts to assert that 
there  was  no  clash  whatever  between  the  requirements  of  Community  law,  including  in  particular 
competition and internal market rules, and the need for public regulation of social services. 

The  section  of  the  Communication  devoted  to  social  services  –  less  than  two  pages  of  it  –  merely 
recalled the process of exchange begun in 2006 and noted the scope of SSGIs as defined by the 2006 
Communication and the fact that certain social services had been excluded from the Services Directive 
(on a proposal by the European Parliament and despite the view of the European Commission!). 

The  text  referred  to  the  consultation  process  launched  under  the  auspices  of  the  Social  Protection 
Committee  and  included  a  boxed  list  (reproduced  below)  of  specific  characteristics  that  had  been 
highlighted in the 2006 Communication. 

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;  

 
 
 
 
 
- 64 - 

- 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; 

-  service  providers  often  need  a  large  measure  of  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  Communication  also  mentioned  the  concept  of  an  imbalance  of  information  in  the  relationship 
between providers and beneficiaries of social services, without concluding from this that there was any 
specific  need  for  public  regulation  of  their  provision,  or  any  latent  conflict  with  the  fundamental 
freedoms  of  the  internal  market  –  as  reflected  in  the  European  Parliament’s  exclusion  of  social 
services from the Services Directive. 

It went on to refer to the process of modernisation under way in the Member States, with a view to 
addressing new challenges and new social needs, to the increased outsourcing of social services and to 
their gradual inclusion within the scope of European law. This meant there was a need to clarify the 
rules applicable to providers and to public authorities in the Member States, particularly at local level 
… 

"…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 

 
 
 
- 65 - 

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." 

The Communication does, however, acknowledge the need to strike a balance between application of 
the  Treaty  provisions  and  fulfilment  of  the  general-interest  remit  of  social  services.  In  particular  it 
states that:  

"…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  systems,  to  the  extent  they  are  justified  by  public  interest 
objectives and proportionate to the objectives pursued. In secondary law, the pursuit of public interest 
objectives  by  services  of  general  economic  interest  is  also  taken  into  account  in  the  Services 
Directive." 

Among  points  that  the  Communication  fails  to  mention,  however,  is  the  fact  that  the  European 
Parliament – opposing the Commission’s position – was responsible for the inclusion in the Services 
Directive  of  specific  provisions  on  services  of  general  interest  (i.e.  their  exclusion  from  the  overall 
rule  of  freedom  to  provide  services,  their  coverage  by  Article 15  of  the  Treaty  subject  to  the 
requirement that general-interest missions should be fulfilled, and the exclusion of social and health 
services).  Similarly  it  fails  to  explain  that,  because  there  is  no  secondary  legislation  laying  down 
assessment criteria, the justification of specific regulatory measures such as authorisation systems or 
special  rights,  granted  in  the  name  of  public-interest  aims  and  in  accordance  with  the  principles  of 
necessity and proportionality, is ultimately the task of the Court of Justice. 

The Communication concludes by asserting that the Commission will continue to consolidate the EU 
framework  applicable  to  services  of  general  interest,  providing  concrete  solutions  for  concrete 
problems through application of Community law – an approach quite different from the systematic one 
advocated in the earlier Communication. The Commission also undertakes to answer questions via an 
interactive information service, with a website carrying questions and answers – examples of which 
are offered in two (very useful) documents appended to the Communication – on the subject of State-
aid and public-contract rules applicable to social services of general interest. 

Replies to the questions set out in these documents are summarised in the tables below, the documents 
themselves being included in full as appendices. 

 
 
 
- 66 - 

European law applicable to SSGIs 
SSGI financing and the EU rules on State aid 

Question 

Reply 

Comments / further questions 

Application of the rules on State aid 

Application of the Treaty 
and competition rules 

Economic activity 

•  Applicable  to  "undertakings":  i.e. 
an 

engaged 

in 

any 
entity 
economic activity 

•  Any 

activity 

consisting 

of 
supplying  goods  or  services  in  a 
given market 

•  Classification  of  an  activity  as 
social  does  not  necessarily  mean 
it is not economic. 

What about the 
independent professions? 
Non-economic activities  •  Sovereign activities 

•  They are treated as undertakings 

•  Exclusively 

social 

activities 
(compulsory  sickness  insurance 
compulsory 
schemes 
education) 

and 

What about not-for-
profit organisations? 

•  They  are  undertakings  if  they 
exercise  an  economic  activity 
(irrespective  of  whether 
the 
ultimate aim is to make a profit). 

Assistance to individuals 
to access SSGIs 

•  OK 

there 

provided 

no 
discrimination as  to  the nature of 
the product or service concerned 

is 

Assistance of 
EUR 150 000 to a 
household? 
Funding of a pilot 
project with a view to 
establishing an SSGI 

•  Below  the  de  minimis  ceiling  of 
EUR 200 000  over  three  years,  it 
is not classed as State aid. 

•  Application  of  the  de  minimis 

rules 

this 

include 
Question:  does 
households 
(e.g.  an  owner-
occupier  household  that  rents 
out accommodation)? 
Question:  is  it  feasible  to  use 
the  term  "market"  when  the 
price  and  the  beneficiaries  of 
the  services  in  question  are 
fixed  by  a  public  authority  on 
the  basis  of  its  public-service 
being 
duties, 
determined 
the 
provider 
in  accordance  with 
market conditions? 
_ 

rather 

freely 

than 

by 

_ 

_ 

Clarification  needed  here:  for 
example,  what  about  housing 
benefit 
to 
persons occupying certain types 
of accommodation? 

available 

only 

 
 
 
 
 
 
Principles  of  proportionality 
and necessity > refer to ECJ 

- 67 - 

Effect on trade of local 
SSGIs  

•  There  is  no  connection  between 
effect  on  trade  and  the  local 
dimension of an SSGI. 

Examples of 
compensation with no 
effect on trade 
Economic activity + 
effect on trade = 
application of 
competition rules 

Granting of 
compensation 

How can an SSGI be 
financed? 

Compensation does not 
amount to State aid if: 

•  Subsidies 

to  swimming  pools, 
small local hospitals and regional 
airports for use by local people 
It  is  possible,  nonetheless,  to 
maintain  exclusive  or  special 
rights  if  they  are  necessary  and 
proportionate  in  relation  to  the 
proper performance of the SSGI. 
If 
the  Altmark  criteria  are 
observed, this  does  not constitute 
State aid. 

• 

• 

•  Otherwise, it does constitute State 
aid  and  its  compatibility  depends 
on  observance  of  the  criteria  laid 
down 
the  "SGEI  package 
in 
decision. 

or 

•  At the Member States’ discretion, 
by means of subsidy, tax relief or 
exclusive 
rights 
required for the proper delivery of 
the  SSGI  in  accordance  with  the 
principles 
and 
of 
proportionality 

necessity 

special 

Altmark judgment and SGEI package 

1. 

2. 

the  undertaking  is  entrusted  with 
the  discharge  of  public-service 
duties; 
the  parameters  for  calculating 
compensation must be established 
in  advance  in  an  objective  and 
transparent manner; 

4. 

3.  compensation  must  not  exceed 
the cost incurred in the discharge 
of the public-service duties; 
if  the  undertaking  is  not  chosen 
via  public  tender,  the  level  of 
compensation must be determined 
with  reference  to  the  costs  of  an 

_ 

_ 

_ 

 
 
 
 
 
_ 

_ 

_ 

_ 

Consequences  

• 

Consequences if 
compensation is part of a 
State-aid scheme 

Decision or reference to 
law? 

Decision’s 
application  

field 

of 

Compatibility criteria 

- 68 - 

average well-run undertaking. 
If the four conditions are met, the 
compensation  does  not  constitute 
State aid. 
If not, it does constitute State aid. 
compatible 
subject to conditions laid down in 
a  Commission  Decision  or  in 
Community law. 

is 

• 
•  Compensation 

•  Compensation  measures  covered 
by  the  Decision  are  in  principle 
compatible and are not subject to 
notification. 

granted 

•  Compensation  measures  covered 
law  must  be 

by  Community 
notified to the Commission. 
•  Compensation  worth  less  than 
EUR 30  million 
to 
undertakings  with  a  turnover  of 
less 
than  EUR 100  million  + 
compensation granted to hospitals 
and  to  social  housing  below  a 
threshold level + certain forms of 
compensation 
transport 
in 
field 

the 

•  An  act  of  entrustment  must 
specify  the  nature  of  the  public-
service  duties,  the  undertaking 
and  the  territory  concerned,  the 
nature of any exclusive or special 
for 
rights, 
calculating 
for 
monitoring  and  review  and  for 
reimbursement  of  any  excess 
compensation payments. 

parameters 
compensation, 

the 

•  The  compensation  must  not 
exceed  the  cost  incurred  in  the 
discharge  of  the  public-service 
duties. 

•  The  public  authority  concerned 
must  have  safeguards  to  prevent 
excess compensation. 

 
 
 
- 69 - 

Notification of State aid above the threshold in the Decision 

Is notification necessary 
if thresholds are 
exceeded? 

Purpose of the act of 
entrustment 

•  Yes,  except 

hospitals  and 
undertakings. 

in 

the  case  of 
social  housing 

Concept of the "act of entrustment" 

entrusts 

•  An  official  document  whereby  a 
public 
a 
authority 
provider with the management of 
an  SSGI  and  defines  the  specific 
public-service  mission  and  duties 
entailed 

Types of act of 
entrustment 

•  Any  official  document,  at  the 
public authority’s discretion 

Examples:  
•  Concession 

or 

public 

•  An 

instrument 

that  does  not 
impose a specific duty to provide 
an  SSGI  cannot  be  deemed  to  be 
an act of entrustment. 

Definition of the mission 
or specific activity 
through the act of 
entrustment 
Content of the act of 
entrustment 

•  Definition of the specific mission 
•  The more detailed, the better! 

•  Nature and duration of the public-

service duties 

•  The authorised undertakings 
•  The  parameters  for  calculating 

compensation 

•  Safeguards 

against 

excess 

compensation 

procurement documents 

•  Ministerial 
contracts 

programme 

•  Ministerial instructions 
•  Laws 
•  Annual 

performance 

contracts 
•  Legislative 

decrees, 

municipal instruments, etc. 

•  It  is  not  necessary  to  list  all 
the  services  but  the  general 
framework in which they are 
provided must be indicated. 

How should the 
changing nature of an 
SSGI be managed? 

Providers’ freedom of 
initiative in relation to 

•  The  mission  may  be  revised  to 

•   

reflect changing need. 

•  The  content  of 

the  specific 
mission  as  stated  in  the  act  of 
entrustment may be updated. 
•  Compatible:  action  proposed  by 
the providers must be included in 

•   

 
 
 
 
 
 
 
- 70 - 

the act of entrustment 

the act of entrustment. 

Parameters for 
calculation 

Changes in costs over 
time 

Calculation of 
compensation in the case 
of co-financing by more 
than one public authority 

Separate accounting 
where an SSGI is 
provided alongside 
other, commercial 
activities 
Separate accounting 
where an SSGI is 
provided alongside other 
non-economic activities 

How should use of 
shared infrastructure for 
provision of an SSGI 
and a commercial 
activity be charged? 
Reasonable profit? 

What about tax relief? 

Compensation 

•  General  principles for  calculating 
compensation  but  not  necessarily 
details and figures 

•  Calculation  of  compensation  can 
be adjusted retrospectively on the 
basis of actual costs. 

•  Parameters 

for  calculation  as 
stated  in  the  act  of  entrustment 
may be adapted if necessary. 

•  Each  public 
parameters. 

authority 

fixes 

•  The  total  of  "co-compensation" 
payments  must  be  in  accordance 
with 
fair 
the  principle  of 
compensation. 

•  A  formal  undertaking  must  be 
given  to  monitor  for  possible 
excess compensation. 

•  While  they  are  not  compulsory, 
accounting 
SSGI 
to 
are  necessary 
excess 

specific 
procedures 
safeguard 
compensation. 

against 

•  Charge  costs  to  each  service; 
the 
variable 
costs 
of 
the  SSGI,  and 

indicate 
proportion 
chargeable 
reasonable profit. 

costs, 

fixed 

to 

•  A  rate  of  return  on  investment 
commensurate  with 
risk 
involved  and  in  line  with  the 
average rate of return in the sector 
•  To  be  included  in  the  calculation 

the 

of compensation 

Financial transfers 
between public 
undertakings and a 

•  To  be  included  as  revenue  in  the 
calculation  of  compensation,  if 
the transfer is positive 

 
 
 
 
 
 
 
 
 
 
 
 
- 71 - 

holding company 
Fair compensation and 
efficiency 

Selection of providers on 
the basis of the costs of 
delivering the SSGI 

•  The 

any 

imply 

that 
requirement 
compensation should be fair does 
not 
particular 
requirement of efficiency – which 
is 
case, 
according to the service provided 
and its level of quality. 

assessed 

case 

by 

•  There  is  no  stipulation  here:  it  is 
at  the  Member  States’  discretion 
subject 
the 
Decision. 

terms  of 

the 

to 

European law applicable to SSGIs 
Provision of an SSGI and public tendering 

Question 

Reply 

Comments / further questions 

Direct provision of an SSGI by a public authority itself or an in-house provider 

Is there a free choice? 

• Yes, these forms of provision are at 

- 

- 

the authority’s discretion. 

• Public tendering procedure does not 

apply. 

in 

• Public tendering procedure does not 
apply 
in-house 
the  case  of 
provision  but  the  Treaty  principles 
(of  transparency,  equal  treatment 
and  non-discrimination)  must  be 
observed. 

• Provision  is  deemed  to  be  in-house 
if  it  is  subject  to  the  same  control 
(implying  that  capital  cannot  be 
held  by  a  private  partner)  +  the 
provider’s  activity  is  concentrated 
internally with the public authority. 

Internal 
provision? 

in-house 

Do the Directive rules on 
public tendering apply? 

SSGI provision outsourced to a third party 
• Yes,  in  a  services  market  where 
there  is  a  set  level  of  remuneration 
for the SSGI provided, except in the 
case of certain social services. (The 

The  provider  of  the  SSGI  is 
chosen 
tendering 
procedure. 
Question:  does  compensation 

via 

a 

 
 
 
 
 
 
 
 
 
- 72 - 

key  principles  are 
equal 
discrimination.) 

treatment 

transparency, 
non-
and 

constitute remuneration? 

is 

provider 

A 
directly 
authorised  to  deliver  the  SSGI 
without  a  tendering  procedure 
but subject to observance of the 
general  Treaty  principles  (and 
to 
advance 
notification). 

adequate 

Question:  what  rules  apply  if 
external  SSGI  providers  are 
accorded  exclusive  or  special 
rights? 

• No,  in  the  case  of  concessions 
where  the  providers  operate  the 
service  and  carry  the  operational 
of 
risk. 
transparency,  equal  treatment  and 
non-discrimination still apply.) 

principles 

(The 

In the case of public 
tendering procedures, 
how should the service 
requirements be 
specified? 

How to avoid squeezing 
out small providers and 
SMEs 

• At the public authority’s discretion, 
provided  that  the  specifications  do 
not produce discrimination between 
providers. 

• Specifications  may  be  adapted 
provided the nature of the market is 
not called into question. 

• The  public  authority  has  discretion 
to  adjust  the  size  of  the  market, 
which  may  involve  dividing  it  into 
lots. 

local 

exclusively 

• Treaty rules do not apply in the case 
activities 

of 
involving small sums of money. 
• The  public  authority’s  intention  to 
outsource  provision  of  the  SSGI 
must be adequately publicised. 

• Non-discrimination 

treatment  for 
providers 

equal 
and 
interested  external 

• The  public  authority  has  discretion 
to  entrust  delivery  of  the  service  to 
a number of providers. 

• Risk of discrimination 
• Yes,  if  the  requirement  is  for  a 

_ 

Transparency, equal 
treatment and 
non-
discrimination 

Public tendering 
procedures and freedom 
on the part of 
beneficiaries of an SGEI 
to choose a provider? 
Is it acceptable to require 
that a provider be based 

_ 

_ 

_ 

_ 

 
 
 
 
 
- 73 - 

locally? 

permanent local presence. 

• Yes, 

if 

the  requirement 
is  for 
knowledge  of  the  local  context,  the 
service 
local 
networks. 

beneficiaries 

or 

Sole use of not-for-profit 
providers? 

• The  principles  of  proportionality 

and necessity are applicable. 

• Prohibited  in  isolated  cases  in  a 

public-authority market 

• Permitted  if  there  is  an  existing 
legal  framework  limiting  access  to 
the  provision  of  certain  services  to 
not-for-profit  organisations  and  if 
such a framework complies with the 
Treaty  rules  (concerning  justified 
fundamental 
restriction  of 
freedoms  of  establishment  and 
service  provision  –  on  grounds  of 
social aims and social protection). 

the 

Individual  cases  are  referred  to 
the  ECJ  for  rulings  on  the 
principles of proportionality and 
necessity 
the 
and 
classification 
social-
protection aims. 

on 

of 

Intermunicipal 
cooperation 

_ 

• Public  tendering  procedures  apply 
where  any  services  are  purchased 
from  a  third  party,  whether  that 
party is a private-sector provider or 
another local authority. 

• Joint  calls  for 

tenders  may  be 

issued. 

• Such procedures do not apply in the 
case of transfer of a task to another 
entity 
longer 
it 
constitutes a service. 

because 

no 

What about public-
private partnerships? 

• By  definition,  this  is  not  in-house 

provision. 

• If  the  private  partner  is  chosen  on 
the  basis  of  a  public  tendering 
procedure,  no 
for 
tenders  is  necessary  in  order  to 
commission the service. 

further  call 

• Relevant  Communication due  to  be 

published 

What is the relationship 

• They 

are 

two 

distinct 

and  Question:  does  public  service 

 
 
 
 
 
- 74 - 

between public tendering 
procedures and State 
aid? 

independent spheres. 

• State  aid  implies  a  need  to  prevent 
distortion  of  competition  in  the 
financing of SSGI. 

compensation 
remuneration for an SSGI? 

constitute 

• Public 

tendering  will  entail 

the 
selection of external SSGI providers 
in the case of outsourcing. 

The  Communication  also  announced  the  forthcoming  publication  of  the  biennial  report  on  social 
services of general interest, as proposed in the 2006 Communication. 

Lastly, in a paragraph on the modernisation of sector-specific policies, the Commission undertook to 
put in place a "strategy for supporting the quality of social services across the EU" the rationale for 
which was outlined as follows:  

"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." 

Sacrificed for the sake of closing the debate on services of general interest 

All  this  represents  an  unravelling  of  the  commitment  given  by  the  Commission,  with  the  European 
Parliament’s support, to follow up the consultation process "including considering the need [for] and 
legitimacy  of  a  sector-specific  legislative  proposal"  –  a  commitment  set  out  in  the  April  2006 
communication on social services of general interest. 

Attention  has  been  shifted  onto  the  less  controversial  question  of  supporting  the  quality  of  social 
services of general interest via the open method of coordination, the Community’s PROGRESS action 
programme and exchanges of good practice. 

What has happened amounts to a compromise rooted directly in the Commission’s wish to terminate 
the debate – begun in 2004 by Romano Prodi with the White Paper on services of general interest – on 
the  need  or  otherwise  for  a  framework  directive.  The  Commission  now  seeks  to  end  that  debate, 
concluding that there is no need for a directive, even on social services of general interest. 

* * *  

 
 
 
 
 
- 75 - 

III: The Member States’ approach to the question of SSGIs 

Conclusions of the Social Protection Committee’s consultation process 

The thinking of the Presidential troika – Portugal, Slovenia and France 

The  Reform  Treaty’s  new  Protocol  on  services  of  general  interest  and  the  new  Article 14: 
addressing a dispute about an SSGI 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
- 76 - 

Social Protection Committee 
Conclusions of the consultation with Member States 

Introduction 

The present document synthesises the contributions received to the second questionnaire launched by 
the  Social  Protection  Committee  in  September  2006  as  part  of  the  continuation  of  the  open 
consultation  process  mentioned  in  the  communication  on  social  services  of  general  interest 
(COM(2006)177) (hereafter "the Communication").  

This  questionnaire  was  addressed  to  the  Member  States  represented  in  the  Social  Protection 
Committee as well as to the European social partners and further European stakeholder organisations 
in  the  field  of  social  services.  It  is  important  to  stress  that  this  document  only  attempts  to  give  an 
accurate  summary  account  of  the  responses  as they  were  presented  to  the  Commission's  services.  It 
does  neither  take  position  as  to  the  comments  received,  nor  seek  to  correct  any  potential 
misunderstandings or factual inaccuracies, nor aim at drawing conclusions from the contributions. 

Therefore, the report does not express the views of the Commission services and therefore it does not 
engage the Commission or any service of the Commission. 

Given the wide range of topics the consultation raised, it is impossible to do full justice to the richness 
of  the  replies  in  a  summary  report.  Those  interested  in  reading  more  are  invited  to  consult  the 
individual  responses 
link: 
that  will  be  published  on 
http://ec.europa.eu/employment_social/social_protection/questionnaire_en.htm. 

the  consultation 

the  following 

to 

Description of social services 

Scope of social services of general interest 

In  general  the  scope  as  described  by  the  communication  is  recognized  and  found  appropriate  and 
adequate. Social services of general interest are those services that make a right effective. 

Some contributors underlined, like the communication, that the role of social services is not limited to 
assistance to the most vulnerable groups but concern the social protection of the whole population and 
that these services also play a preventive role. Social services of general interest (SSGI) address the 
whole population (individuals or families) and are related to the realization of social policy goals and 
objectives. 

Most respondents feel that the EU should not try to come to a definition of SSGI. Like for services of 
general interest in general this definition role belongs to the competent national authorities. Moreover, 
for some contributors it is not desirable to distinguish a specific category of SSGI since SSGI are not 
different from other services of general interest. It is argued that a distinction between SSGI and SGI 
might lead to more confusion. 

 
 
 
 
 
 
- 77 - 

Some  contributors  feel  that  only  social  services  of  an  economic  nature  should  be  listed,  since  they 
consider  that  most  SSGI  cannot  be  classified  as  economic  activity,  because  of  their  specific  social 
nature. 

Others emphasise the need to establish a clear distinction between SSGI that cannot be classified as 
economic activity and therefore are not submitted to competition and internal market rules and SSGI 
which are of an economic nature but nevertheless, because of their specific features, require that these 
rules  should  be  applied in an  appropriate  manner.  Some  contributions  point  out  that statutory  social 
security  schemes  should  be  presented  separately  since  these  have  been  clearly  recognised  as  non-
economic by the European Court of Justice but others do not agree with this separation . It is however 
also  mentioned  that  even  if  statutory  social  security  schemes  are  non-economic  and  complementary 
social security schemes are economic, they both allow for a sustainable social protection system based 
on solidarity. Other contributions mention that the division between social security schemes and social 
services  is  not  always  clear.  Statutory  and  complementary  social  security  schemes  are  not  in 
themselves  social  services,  but  are  implemented  by  these  services.  Some  respondents  reject  the 
integration of the supplementary social security schemes into social services, as it is not clear how this 
would  add  value.  Some  respondents  highlight  the  strong  link  between  social  security  and  the  2nd 
group of “person oriented” services. 

The exclusion of health services from the scope of the Communication appears as a concern for many 
contributors. Some point out that the Communication still covers health since it specifies that social 
security schemes covering the main risks of life, including health are SSGI. Others highlight the thin 
line  and  the  complementary  aspects  between  social  and  health  services  (e.g.,  long-term  care,  the 
medico-social sector, etc) and regret the separate treatment. 

Also, it  is  argued  that  the objectives  and  modes  of  organisation  of  health services are  similar  to  the 
ones  of  social  services.  Most  contributors  state  that  coherence  with  the  health  initiative  must  be 
guaranteed and a common approach would be preferable. Some of these contributors feel however that 
a common approach would only be needed in specific areas. It is proposed to refer in the description to 
services taking care of women and children victims of domestic violence, victims of human trafficking 
and women in distress. 

Also,  regarding  social  housing,  a  much  broader  approach  should  be  taken,  encompassing  the  part 
played in promoting a socially mixed society. More attention should also be paid to job training for 
members of vulnerable groups and to services specialised in employment for handicapped people. 

The notion of general interest 

Almost  all  contributors  agree  that  there  is  no  general  definition  of  the  general  interest.  The  general 
interest  is  defined  by  the  national  public  authorities  responsible  for  the  service.  It  was  recalled  that 
several  aspects  relating  to  the  general  interest  are  defined  at  Community  level  (e.g.,  fundamental 
rights, protection of public health). Even though, some contributions mentioned that it would not be 
meaningful to try to define the general interest at the European 

level. In the same time it is highlighted that it is important to distinguish services of general interest 
from other services and to identify which services of general interest are of an economic nature. 

 
 
 
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Some  contributions  reported  that  services  of  general  interest  are  determined  by  law,  also  when 
provided at the municipal level. The content of the term depends on the content of the respective Act. 
First, the general interest is defined and then the ways how to implement it are worked out. 

Many elements of the expression of the general interest have been reported: it includes the provision 
of  services  targeted  to  the  society  as  a  whole;  it  refers  to  services  provided  or  funded  by  the  State, 
semi-governmental  organisations  and  NGOs;  it  is  carried  out  in  light  with  public  interest,  profit  is 
secondary. Other key elements listed are the objectives of a social nature the link with public funding, 
the  implementation  of  the  principle  of  solidarity,  accessibility,  availability,  equal  access  and  equal 
terms, democratic control. Reference is often made to principles such as social justice, welfare, social 
capital, users' participation, social integration, human dignity, cohesion. 

In the field of social services the general interest must take into account the welfare state principles 
which  are  based  on  constitutional  rights.  Indeed,  most  Member  States'  constitutions  state  that 
(minimum) conditions for an existence in dignity should be guaranteed. 

It  is  also  mentioned  that  the  distinction  between  which  social  services  embody  elements  of  general 
interest is more relevant than the distinction between economic and non-economic. For instance, the 
COREVA  ruling  has  recognised  the  economic  aspect  of  the  activity  but  has  established  other 
characteristics defining the general interest. 

Characteristics of social services of general interest 

The pertinence of most of the proposed characteristics is recognised 

First of all, many contributors confirm that the characteristics applying to services of general interest 
(e.g.,  universality,  affordability,  accessibility,  quality,  continuity,  etc)  do  apply  to  social  services  of 
general interest. However, some contributions have pointed out differences in the application of these 
principles  to  social  services.  They  argue  that  the  universality  of  a  service  does  not  relate  to  social 
services  which are  provided  to  particularly  disadvantaged  groups  and  this  type of  service  should  be 
tailored to the needs of the beneficiary. Some stress that those services are generally targeted towards 
persons in need of help, who cannot be assimilated to the ordinary consumer. 

Continuity  should  also  be  understood  in  a  special  way.  Network  services  should  be  provided 
continuously,  while  certain  social  services  should  be  provided  with  no  interruption  in  periods  when 
they are needed. Affordability and accessibility should be understood with regard to price maintaining 
and  guarantees  for  the  most  vulnerable.  On  top  of  that,  the  specific  characteristics  for  SSGI,  which 
cannot  be  described  as  simply  “organisational”,  are  recognised  by  most  as  pertinent  to  gauge  the 
specific features of social services of general interest, even if some feel it has to be made clear which 
characteristic  applies  to  which  of  the  two  groups  of  social  services  as  described  in  the  April  2006 
Communication. Moreover not all of the organisational characteristics apply to all the social services. 
Others highlight that the pertinence of the characteristics depends on the use that will be made of it. 
Finally one contributor rejects the idea of organisational characteristics to distinguish SSGI from SGI 
arguing that SSGI are not different from other services of general interest. 

 
 
 
 
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Comments made on each proposed characteristic 

To synthesize the main issues at stake, it is proposed to go through each of the characteristics listed in 
the  Communication  with  a  description  of  the  comments  received.  The  characteristics  are  presented 
according to the pertinence the respondents attribute to them. 

(i) "They operate on the basis of the solidarity principle, which is required, in particular by the non-
selection of risks or the absence, on an individual basis, of equivalence between contributions and 
benefits" 

It has been mentioned that the operation on the basis of solidarity is the main characteristic of SSGI. 
Social  justice  has  also  been  mentioned  as  a  mode  of  operation  of  SSGI.  From  these  principles  of 
solidarity  and  social  justice  derive  important  specificities  of  SSGI:  the  risks  their  cover  are  not 
individual  but  structural,  as  they  offer  wide  protection  without  being  selective  or  discriminating. 
Public  responsibility  is  therefore  required  to  ensure  reliable  provision  of  and  in  regulating  social 
services.  Furthermore,  certain  organisations  consider  that  as  such  they  are  key  elements  in  the 
operation of social security schemes. 

However,  it  was  also  pointed  out  that  social  services  do  not  operate  exclusively  on  the  basis  of  the 
solidarity principle, but also on the basis of welfare principles, whereby access to other social welfare 
services is often subject to a means test or assessment of the specific need. 

(ii) "They are comprehensive and personalised integrating the response to differing needs in order 
to guarantee fundamental human rights and protect the most vulnerable" 

While  the  importance  of  the  link  between  fundamental  human  rights  and  social  services  is 
acknowledged,  it  is  often  pointed  out  that  this  characteristic  mixes  two  different  notions  and  is 
formulated in a too restrictive way. Social services of general interest -while aiming at protecting the 
most vulnerable and ensuring the equal dignity of all human-being- do not only address the need of the 
most disadvantaged people but base their work on a universalistic approach. Indeed, in the course of a 
life-time  needs  might  arise  that  call  for  specific  help  (e.g.  child  care  or  care  for  the  elderly).  It  is  a 
fundamental right for everybody to have access to the  appropriate social services. In the meantime, 
the vulnerability of certain users of social services has been highlighted as distinguishing them from 
normal consumers. 

It was also highlighted that personalisation implies the integration of different services. 

Moreover, the aim of the operators of social services to addressing the specific needs of everyone and 
to  guarantee  an  equal  access  over  the  territory  has  been  stressed.  As  they  must  be  tailored  for 
individual situations, standardised products would not meet the requirements. 

Finally, it has been mentioned that person-oriented social services often address not only the physical 
and mental needs but also the spiritual aspect of care for each human being. 

 
 
 
 
 
 
- 80 - 

(iii)  "An  asymmetric  relationship  between  providers  and  beneficiaries  that  cannot  be  assimilated 
with a "normal" supplier/consumer relationship and requires the participation of a financing third 
party" 

The asymmetric relationship and the often vulnerable position of the beneficiaries are acknowledged. 
The  asymmetric  relationship  is  moreover  expressed  through  the  fact  that  users  find  themselves  in 
circumstances outside one’s control (illness, poverty). This underlines the need to put an emphasis on 
quality. 

Some contributions mention that there is generally no direct link between the actual cost of the service 
provided and the financial contribution of the user, but also that there is not always the participation of 
a financing third party (e.g., child care).  

(iv) "They are not for profit and in particular to address the most difficult situations and are often 
part of a historical legacy" 

Three types of reactions can be distinguished: 

1. For many contributors the non-for profit nature is not a distinguishing characteristic. There should 
be no limits or preferences regarding the form of ownership of the providers of SSGI as long as the 
service providers comply with the service (quality) requirements and guarantee an effective provision. 

2. It has often been mentioned that whatever the nature of the provider (for-profit or not for profit), 
profit is not the main purpose of providers delivering social services of general interest. Even if some 
profits are made through the provision of a social service, it should be looked at how this profit is then 
used. Some contributions highlighted the importance of non profit providers and that profits are often 
invested to achieve social objectives. 

3. Other contributors would like to enlarge the reference to public authorities, organisations close to 
public  authorities  with  a  specific  public  status,  charity  or  welfare  organisations,  churches  or  their 
organisations, associations, mutualities, cooperatives or organisations consisting of volunteers. 

(v) "They include the participation of voluntary workers, expression of citizenship capacity" 

The  contribution  of  volunteers  in  the  provision  of  certain  social  services  of  general  interest  is 
recognised,  however,  its  importance  varies  across  the  EU.  It  is  also  mentioned  that  some  social 
services of general interest (e.g., child care, social housing) do not necessarily include the participation 
of voluntary workers and often require highly skilled workers. Volunteers should not be singled out as 
an  exclusive  characteristic.  Furthermore,  the  scope  of  workforce  employed  should  be  significantly 
enlarged,  and  not  reduced  to  the  existence  of  voluntary  workers  especially  considering  the  growth 
potential for European labour markets that social services represent. 

Meanwhile, other contributors would like to reinforce this characteristic by adding that volunteering is 
an  added  value  for  both  the  user  as  well  as  the  volunteer,  promotes  active  citizenship  and  social 
inclusion, as well as social cohesion and the creation of social capital. Volunteers are crucial for the 

 
 
 
 
- 81 - 

detection  of  needs  and  the  development  of  innovative  solutions  in  social  service  provision.  The 
importance of professionalisation of workers in social services is also stressed. 

(vi)  "They  are  strongly  rooted  in  (local)  cultural  traditions.  This  often  finds  its  expression  in  the 
proximity between the provider of the service and the beneficiary, enabling the taking into account 
of the specific needs of the latter" 

The notion of proximity is largely recognised. For some, the service provider must be familiar with the 
customs, standards and traditions in order to provide the service to the user in the 

most  suitable  way.  For  others,  the  notion  of  proximity  should  be  reinforced  to  stress  that  they  are 
provided at a local level to respond to specific and locally expressed needs, and to ensure equal access 
throughout the country. Along with local cultural traditions, a reference to religious traditions is also 
proposed. 

Proposals for additional characteristics 

Finally,  some  contributions  have  proposed  additional  characteristics  to  highlight  the  specificities  of 
social services of general interest: 

• 

they  work  with  the  capacity  of  the  user  and  assist  him/her  to  become  independent  (towards 
empowerment); 

•  The aspect of universal access should be further stressed 

• 

• 

• 

• 

• 

• 

• 

they often include an element of advocacy in order to defend the interests of the beneficiary and to 
work for social justice in society; 

they are provided according to the wishes and the personal choice of the beneficiaries; 

they  should  rely  on  a  multidisciplinary  approach  towards  the  beneficiaries  and  should  be 
flexible; 

they  place  an  important  emphasis  on  users’  rights.  Indeed,  the  ability  of  the  individual  to 
participate in the choice of provider and method is important for a satisfactory result from the 
service; 

as the user of social services holds a weaker position and the provision of service deals with the 
questions  concerning  a  person’s  life  arrangements,  the  existence  of  a  quality  monitoring  and 
assessment system is extremely important, especially the existence of ex-ante verification and 
the possibility to authorize service providers; it is underlined that the quality of a service will be 
strongly  dependent  on  the  quality  of  the  labour  input,  hence  the  necessity  of  improvements  of 
working conditions 

they affect the recipient and his or her integrity personally, which imposes special requirements as 
to the provision of these services; 

they often concern acute needs that must be met; 

 
 
 
 
- 82 - 

• 

• 

• 

they imply an active role of local communities in their set up, management and organisation; 

the providers of social services of general interest often operate in a democratic and autonomous 
manner  (e.g.,  mutualities,  associations,  some  social  housing  organisations)  involving  the 
participation  of  their  beneficiaries  in  the  decision  making  process  regarding  both  the  general 
planning of services and the provision of services to a specific person; 

the  recognition  of  the  right  of  initiative  of  the  providers  and  the  recognition  of the  existence  of 
providers created specifically to cover certain services, for instance in the area of social housing. 

•  They imply government regulation and planning related to the identified needs 

•  Funding  can  be  public  or  private  (mutual  contributions,  patronage…)  but  is  dedicated  to  social 

rights. Financing through taxes and/or compulsory social contributions; 

•  The existence of an act of power or authority which specifies the general interest objectives to 

be achieved by the service and the means for doing it 

•  Regarding  the  personal  social  services  developed  by  the  State  or,  in  the  framework  of  public-
private  partnerships,  by  private  non-profit  social  solidarity  institutions,  recognised  by  the  State 
which  would  be  responsible  for  technical  supervision  and  monitoring,  financial  support,  and 
quality  control  for  the  services  provided  fulfilling  a  role  of  prevention  and  support  to  social 
inclusion. 

Some contributors stated that discussion should focus not only on how they are organised. Some also 
mentioned  that  the  purpose  of  SSGI  and  the  outcomes  they  achieve  are  more  important  and  would 
provide  a  more  straightforward  basis  for  a  common  description.  In  this  light,  the  following 
characteristics have been proposed: 

• 

• 

in  addition  to  meeting  the  needs  of  a  specific  person,  the  universal  availability  of  services  also 
aims  at  guaranteeing the  fulfilment  of  social  policy  objectives  (e.g.,  the  promotion  of  social 
cohesion) and the general good. Social services react to social needs and problems which occur 
because  services  in  the  market  are  not  effective  enough.  They  realise  public  responsibility 
following  the  principle  of  general  interest  and  constitute  a  fundamental  pillar  of  the  European 
social model; 

they meet the social needs of societies, groups or individuals and which national, regional and/or 
local authorities consider to be essential in the light of the general interest.  

Social  services  seek  to  provide  security  and  equal  opportunities  for  all  and  social  policy  is  also 
about redistribution between rich and poor, between those who are employed and those who are not, 
between  young  and  old,  between  families  with  children  and  families/persons  without  etc.  They  are 
often free of charge. It is the responsibility for the Member States to set and to decide the targets and 
how to meet the targets at the local level. 

The need and use of characteristics at national and EU level is debated 

Respondents are divided on the need and the use of characteristics. Many respondents are against the 
use of characteristics at EU level mainly for reasons of subsidiarity and because of the high diversity 

 
 
 
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in the organisation of social services at the Member State, regional and local levels. For most of those 
in favour of the use of characteristics at EU level, they should be used in a non-binding manner at EU 
level and serve as guidelines for Member States when defining and organising their social services of 
general interest. In this respect, some contributions indicated that all or most of the characteristics are 
already  embodied  in  their  national  law.  For  few  respondents,  the  characteristics  should  be  legally 
binding and allow for checking the application of EU rules. 

For those against the use of characteristics at EU level, the main reasons are as follows. The definition 
and organisation of social services is a national or local responsibility and there is no need to fulfil it 
with EU wide characteristics. Therefore, there is no need for EU action until issues in the management 
of national processes are identified by Member States. 

Moreover, the proposed characteristics are too narrow to encompass the diversity across the EU, the 
role of market mechanisms and free choice. There is a need to agree on terminology first. Using an 
agreed checklist for social services can be an issue due to the differences in terminology and cultural 
traditions  across  EU  Member  States.  Finally,  for  some  respondents,  social  services  are  not  legally 
different from services of general interest and there is no need for separate definitions. 

For  those  in  favour,  characteristics  defined  at  EU  level  could  provide  a  basis  for  a  clear  distinction 
between services of general economic interest and social services of general interest and be therefore a 
tool for better clarity (in some cases also to determine whether a service provider is an undertaking in 
the sense of the Treaty and coordination. Moreover, they could serve as guidelines for the definition of 
social  services  of  general  interest  and  their  compliance  with  EU  rules  i.e.,  the  non  cumulative 
characteristics  would  be  used  as  a  “cluster  of  evidence”.  For  instance,  when  drafting  a  mandate  to 
attribute a mission of social general 

interest  to  a  service,  Member  States  could  refer  to  the  characteristics  to  clarify  the  mission.  In  this 
light, they would be a tool to define a priori compatibility with EU law and respond to the need for 
clear a priori conditions for compatibility with EU rules in order to secure public 

authorities and providers while introducing the possibility to appeal (as planned in the Monti- Kroes 
package)  and  a  regular  evaluation  process.  Furthermore,  they  could  be  used  in  a  comparative  and 
monitoring way at EU level. 

Finally, also for those in favour of non-binding EU characteristics, some clear restrictions have been 
highlighted.  These  characteristics  should  be  flexible  as  the  sector  is  evolving  and  defining  social 
services  of  general  interest  remains  a  Member  States  competence.  Furthermore,  the  characteristics 
should  not  overrule  the  variety  of  social  services  requirements  which  are  the  result  of  a  long-term 
democratic  policy  process  reflecting  the  population  needs  more  than  a  legal  process.  Moreover,  the 
methodology  to  use  the  characteristics  should  be  set-up  in  a  proportionate,  transparent  and  securing 
manner. 

For  some  contributors,  the  characteristics  proposed  are  too  narrow  to  encompass  the  diversity  of 
situations  across  the  EU.  The  examples  of  child  care  and  care  for  the  elderly  have  been  used  to 
illustrate this point. 

 
 
- 84 - 

One  example  is  child  care.  Across  the  EU  there  is  general  agreement  on  the  need  for  societies  to 
provide  child  care  to  families/individuals  (e.g.  Barcelona  targets)  and  there  is  therefore  not  much 
discussion about the general interest and the social character of these services. 

However, there are across the European Union many different ways in which child care is organised 
and provided. Child care services for instance do not necessarily include the participation of voluntary 
workers,  and  also  are  not  exclusively  provided  by  non-profit  organisations.  Also,  not  all  child  care 
providers deliver on the basis of solidarity and they not always require the participation of a financing 
third party. Finally, it has to be said that in most EU-countries the character of these services is not 
born  out  of  deep-rooted  historical  traditions,  but  could  be  seen  as  relatively  modern  and  dynamic, 
since  the  character  and  the  number  of  child  care  services  have  developed  considerably  in  the  past 
decades closely connected to the changes in the working patterns of women. 

Another example is elderly care; in this case as well the general character of this type of services is 
recognised.  Elderly  care  is  serving  the  needs  of  a  general  public  and  not  necessarily  only  the  most 
vulnerable. Indeed, as all people grow older, these services serve a very large part of society. They are 
provided by public, non-profit as well as profit-based organisations. The character of the elderly care 
sector  has  also  recently  changed  significantly  because  of  population  ageing,  the  shift  in  working 
patterns  of  women,  and  the  increase  in  the  number  of  single  elderly  persons.  Some  of  the  services 
include the participation of voluntary workers, but many of them do not. It is also important to notice 
that not all elderly care services include the contributions of a financing third party. 

The link with the Services Directive 

For some, the Services Directive goes some way to recognise the special nature of social services. For 
instance, the special role of the State as mentioned in the Services Directive could be a good starting 
point for differentiating social services from services of general interest. Others highlight however that 
the  framework  of  the  Services  Directive  is  not  suitable  for  creating  a  reasonable  balance  between 
opening up the market for SSGI and the provision of the users’ rights and needs. 

Some contributors state that the relation between SSGI and the Services Directive is clear, but other 
contributors find the exclusion of certain social services from the Services Directive vague and feel it 
creates confusion. For instance: what is "commissioned" by the state? What are "charity organisations 
recognised  as  such  by  the  State"?  Some  contributors  are  of  the  opinion  that  the  exclusion  is  too 
restrictive and that all social services should be excluded from the Services Directive. 

Certain contributors feel the Communication could be a helpful basis for further interpretation of the 
scope of the exclusion. Some contributors feel however that the political compromise on the Services 
Directive should be respected and that there should be no attempts to interpret this Directive through 
other instruments. 

Moreover, the exclusion in the Services Directive should match the scope of social services mentioned 
in the Communication and the characteristics should apply to the exempted social services. 

Others think however that the characteristics are not suitable for defining the scope of SSGI which are 
exempted from the Services Directive (where concrete social services are exempted) and point to the 
fact that SGI are already exempted. The characteristics are too limited and cannot be used to exclude 

 
 
 
- 85 - 

or include specific social services in the scope of the Services Directive. For some, the principles in 
the  Services  Directive  are  more  in  line  with  describing  SSGI  by  their  purpose  than  are  the 
characteristics used in the Communication. Others consider the exemption from the Services Directive 
is  in  line  with  the  characteristics  identified  in  the  communication.  The  liberalisation  of  services,  to 
which the Directive would apply, would question the existence of certain public regulation tools and 
certain means of financing, while these are essential to guarantee social cohesion and equal treatment 
across the country. 

Finally,  it  has  been  stressed  that  the  exclusion  does not  solve  the  problem  of  legal  security  because 
social services of general economic interest remain subject to the general principles of the Treaty. 

Experiences with the application of Community law 

In general, contributions have mentioned that EU rules should take account of SSGI specificities and 
that the general interest should be reinforced in the body of EU rules and prevail in case of conflict 
with EU rules. Also, it has been highlighted that clarifications are still needed, in particular regarding 
the notion of undertaking, the distinction between economic and non-economic. 

One  Member  State  indicates  that  there  are  no  problems  as  such  with  the  application  of  Community 
rules, but in some concrete cases the question arises to which extent the Community rules give enough 
room to allow for a smooth transition of public towards private provision. 

Public procurement 

Regarding  public  procurement,  the  issues  highlighted  are  threefold:  how  public  authorities  prepare 
tenders, the consequences of public procurement procedures on the providers and on the users. 

First  of  all,  public  authorities  doing  public  tenders  in  the  field  of  social  services  are  facing  many 
difficulties  according  to  the  responses  to  the  consultation.  Drafting  tenders  is  reported  as  being  a 
difficult  and  demanding  task.  Indeed,  public  authorities  (and  very  often  municipalities)  have 
difficulties to define the content of the services and to develop requirements in a detailed way all the 
more that the services will have to be personalised to the specific needs of each user. These difficulties 
are  reinforced  by  the  fact  that  public  authorities  do  not  necessarily  know  in  details  the  needs  and 
specificities of social services. 

Therefore, the risk of public tenders focusing on prices has been often mentioned. In this respect, the 
new EU public procurement regulations allowing for social, employment, ethical as well as ecological 
considerations  to  be  taken  into  account  has  been  welcomed  and  considered  as  an  important  step 
forward. However, it is now important that the inclusion of social, employment, ethical and ecological 
considerations is also transposed into national legislation. Moreover, the difficulties in drafting public 
tenders taking account of all important criteria (e.g., the long-term sustainability and continuity of the 
services, the risk of segmentation of the services) pose a risk for the quality and the social efficacy of 
the  services.  For  instance,  sustainability  has  been  described  as  underpinning  the  confidence  in  the 
social protection system of Member States. 

 
 
 
 
- 86 - 

Furthermore,  the  public  procurement  rules  are  seen  as  not  flexible  enough  regarding  intermunicipal 
cooperation. For some contributors, inter-municipal procurements need to be removed from the scope 
of application of the Procurement Directives. Inter-municipal cooperation on a social service aiming at 
attaining  a  sufficient  population  base  is  made  more  difficult  or  even  impossible  by  the  public 
procurement  legislation.  In  order  to  obtain  a  sufficient  population  base,  small  municipalities  often 
need to cooperate with large municipalities in order to be able to provide certain social services (e.g., 
social  activities  for  people  with  disabilities,  which  must  be  provided  close  to  the  person’s  home). 
According  to  contributors,  under  the  procurement  legislation  it  is  not  possible  for  a  smaller 
municipality to purchase these services directly from a large municipality nearby. 

Moreover, contributors point out that some public authorities do apply public procurement rules even 
when  not  necessary  or  in  a  restrictive  manner  to  be  sure  to  comply  Community  rules.  Therefore,  a 
clearer  communication  on  the  application  of  public  procurement  rules  is  requested  by  some 
contributors. 

In addition, a need for clarification of the obligations deriving from the principle of openness has been 
expressed. The Treaty presupposes that the principle of openness must be observed in purchases that 
are  not  covered  by  the  scope  of  the  Directive  on  public  procurement,  i.e.  they  must  be  advertised 
publicly. However, the application of this principle is subject to interpretation. The vagueness of the 
obligations on how to act has been experienced problematic and four cases are currently pending at the 
European  Court  of  Justice  regarding  application  of  the  obligations  derived  from  the  Treaty  to 
purchases not covered by the Directive on public procurement. 

Finally, one contribution has highlighted the possibility to reconcile the pursuit of the general interest 
and public procurement procedures. Under the process for UK public sector procurement, the structure 
of the specifications takes into account the wider Government objectives. These specifications focus 
on the organisation’s strategic goals and describe business requirements in terms of output or outcome. 

Secondly,  the  issues related  to  providers  revolve  around  the  administrative  burdens  placed  on  small 
organisations, the risks of important concentration moves leading to monopolistic situations, and the 
changing  relationship  between  the  providers  and  the  public  authorities,  the  risks  on  the  right  of 
initiative of providers being one illustration. 

Contributors  indicate  that  providers  have  experienced  increased  paperwork  in  the  last  few  years, 
manifold bureaucratic requirements for applications and reporting. These increased requirements bind 
a lot of valuable resources of organisations, which is especially difficult for small NGOs. Also, small 
NGOs face difficulties as small operating units risk being evaluated as uneconomical. In the long run, 
tendering  decisions  might  lead  to  concentration  processes  and  oligopolies  in  a  region,  as  especially 
small organisations might have problems ensuring their survival if losing a tender. 

Furthermore,  the  application  of  public  procurement  is  reported  as  changing  the  traditional  type  of 
relationship  between  public  authorities  and  providers,  for  instance  in  Germany  from  cooperation  to 
regulation of competition. As a result, it is said that private initiatives in social services that require 
public financing may be difficult to carry out within the framework of public procurement legislations. 

 
 
 
- 87 - 

The change of relationship between public authorities and providers. The case of France: 

The European directives concerning public procurement induced increasing penetration of competition 
logics in the contractual methods between local authorities and solidarity associations. 

Usually,  in  France,  the  contractual  relationship  between  local  authorities  and  solidarity  associations 
(health, social and medico-social) is governed by two main modalities: 

• 

the convention around objectives with subsidising 

•  or a framework of creation of the activity fixed by law 

These two methods follow a logic of promotion of the initiative by the associative actor submitting a 
project. 

However, this logic is thwarted gradually by a new logic, which is induced (inter alia) by the European 
level, that of competition of the operators within the framework of a call for tenders. In the latter case, 
the local authority has the control of the order and of the conditions of carrying out a project. 

This passage from a logic of subsidy to a logic of remuneration of services, with competition of the 
operators  by  the  local  authorities,  standardises  the  associative  specificity  in  the  implementation  of 
missions of general interest. 

Thirdly,  regarding  the  users  of  social  services,  the  main  issue  reported  is  the  lack  of  choice  of  the 
provider. The individual’s choice of the method of care or provider of a social service is made difficult 
by  public  procurement  legislations.  Indeed,  under  a  tender  selection  process  only  one  provider  is 
chosen. 

In the light of these issues, the positive effects of public procurement applied to social services (more 
quality, more choice and reduced prices) are questioned by some contributors. 

If the market functions well, competition may contribute to making the activities more effective and to 
cost  savings,  but  there  are  several  problems  in  the  field  of  social  welfare  and  health  care  that  are 
caused by market failures, such as asymmetric information. Services must also be ensured in situations 
where the service concerned only is needed for a few users. When a user is in need of several services 
simultaneously, it is vital to tailor an entirety of services according to one’s individual needs. Social 
and health services are also developed continually so that provision of services may at the same time 
involve reforming and developing the service in question. 

Public-private partnerships 

Regarding public-private partnerships (PPP) the main comments relate to the need for clarification at 
EU level of the rules: how an institutional public-private partnership should be implemented? What is 
the  applicable law  to  PPP  and  to institutional  PPP?  In  social  housing,  there  are  uncertainties  on  the 
status  of  PPP  of  certain  mixed  operations  (e.g.,  some  HLM  organisations).  These  issues  should  be 
debated in the framework of the Green paper currently under review. 

The  issues  reported  on  public-private  partnerships  are  linked  to  the  fact  that  public  procurement  is 
needed. Therefore, some of the problems exposed in the previous part are also applicable: the freedom 
of  choice  of  citizens  should  be  taken  into  account;  cooperation  with  private  actors  like  NGOs  is 

 
 
 
- 88 - 

reported  more  difficult  as  it  needs  to  go  through  public  procurement  first  (for  instance,  providing 
housing  for  homeless  people,  help  to  older  single  people);  Therefore,  for  some  contributors, 
cooperation between municipalities should not fall under EU law and PPP should be excluded from 
public procurement rules. 

Internal market rules, freedom of establishment and freedom to provide services 

In the field of freedom of establishment and freedom to provide services, the issues reported relate to 
unclear rules, the scope of the Services Directive and the application of internal market rules. 

Concerning  the  need  for  clarification,  to  be  compatible  with  EU  rules,  all  measures  aiming  at 
regulating the market must be “proportionate”. It is asked how the proportionate feature of a measure 
is defined. 

On the Services Directive, the current wording of the exclusion of social services from the Directive is 
said to be vague and to create confusion about which services are covered by the Directive and which 
are not and are therefore covered by the Treaty dispositions on internal market. Some request that all 
social  services  dealing  with  people  having  temporary  or  long  term  need  for  assistance  and  support, 
irrespective of their financial situation should be excluded from the Services Directive. 

On the application of internal market rules, the will to suppress the obstacles between Member States 
and the barriers considered discriminatory for the operators from other Member States induces a risk 
of  questioning  the  national  regulations  framing  the  activity  of  social  and  health  services  (e.g., 
approvals,  prior  authorisations,  systems  requiring  habilitations)  and  of  non  taking  into  account  their 
specific characters. Indeed, these national 

frameworks are built with the stakeholders with the aims of protecting the users, bringing quality and 
distributing  the  offer  over the  whole  national  territory.  Although  contributions state  that  this  risk  of 
deconstruction of the national regulatory frameworks seems temporarily to have been ruled out after 
the adoption of the revised Services Directive, they also stress that it is important to specify within a 
specific  Community  legal  framework  the  conditions  of  agreement  and  contracting  between  social 
services operators and the relevant public authorities. 

State aid 

In  general,  the  pragmatic  approach  of  the  Monti-Kroes  package  with  its  aim  to  create  more  legal 
certainty and transparency (e.g., a priori criteria, exemptions, threshold for notification) is welcomed. 
Following this package, some actors are requesting from their public authorities a mandate respecting 
the principles of proportionality, non-discrimination, transparency in order to formalise legal security 
for the operators in the sector. Some insist the issue of the mandate should be addressed in a flexible 
manner. 

However, according to the replies to the consultation, there are still some clarifications to be brought 
and issues to be tackled and it is felt that a lot will depend on how the regulations are interpreted and 
applied. 

 
 
 
 
- 89 - 

First  of  all,  regarding  the  clarifications,  the  notion  of  "hospital"  leads  to  questions  and  it  has  been 
reported  that  public  authorities  have  asked  questions  to  the  Commission  in  order  to  validate  their 
mandates. For instance, does the notion include social welfare institutions (care homes)? It has been 
stressed that the type of institutions covered by the notion of hospitals should be considered according 
to each national system. Furthermore, in relation to financing of social housing, a broad application of 
the  exemption  is  expected  in  order  to  include  not  only  dwellings  but  also  ancillary  infrastructure 
elements that contribute to the overall social housing environment. More broadly on competition rules, 
the notion of "undertaking" and the criteria "effect on trade" calls for clarification. The definition of an 
undertaking  is  still  vague,  taking  into  account  the  diversity  of  bodies  providing  social  services. 
Although some of those bodies provide social services on payment there are other bodies that do so 
without payment such as voluntary organisations, foundations etc. State aid that covers only a part of 
their  expenditures  cannot  be  considered  as  “remuneration”  according  to  the  ruling  on  Bond  van 
Adverteerders,  since  the  aid  does  not correspond to  the  price  value  of  that service. Moreover,  some 
SSGI  providers  –  whether  they  constitute  undertakings  or  not  –  provide  services  in  a  small 
geographical area, e.g. in a town, or a village. The geographical coverage is so small that a question 
arises as to whether state aid to those bodies would satisfy the “effect on trade” criterion. This criterion 
is  necessary  for  the  existence  of  state  aid  according  to  article  87  of  the  Treaty.  For  example,  care 
services for older persons in rural areas of Cyprus do not constitute an economic activity attractive to 
undertakings abroad. 

Secondly, some issues have been highlighted regarding the requirements in the Altmark decision (e.g., 
mandate, a priori cost definition). Indeed, the requirement for an official act mandating the providers 
can be problematic in countries where the operators are autonomous. 

In  accordance  with  the  provisions  of  Community  law,  it  is  not  the  existence,  nor  the  nature  of  the 
financing  of the  activities which induces  the social  general  interest  qualification  but  on  the  contrary 
the  qualification  which  enables  the  public  authorities  to  grant  them  public  financing  (direct  or 
indirect), in particular in the form of compensation for the charges bound for the accomplishment of 
the  mission.  Even  if  they  are  entrusted  with  public  service  delegations,  the  social  protection 
mutualities undertake activities of general interest of their own initiative. 

The  compensation  paid  to  social  services  of  general  interest  is  limited  to  the  cover  of  the  general 
interest missions (as defined in an official act) and does not give rise to overcompensation (to cover 
for instance some provider's initiatives). Moreover, there is the question of the a priori evaluation of 
the public service costs. 

Regarding the required cost analysis, it is asked how to proceed when the activity is provided by only 
one operator or by only not-for profit providers or when there is no private company on the market to 
benchmark with. It has also been pointed that it is difficult to separate activities subject to competition 
rules from other activities, for instance, for some, the combination of obligatory and voluntary social 
schemes  should  remain  possible  without  separate  bookkeeping.  Moreover,  regarding  the question  of 
financing, characteristic and operational elements of the social activities have to prevail. For instance, 
the  logic  of  overall  participation  to  the  interdependent  social  protection  system;  the  logic  of 
sustainable projects in response to the needs of the population and to the requirement of accessibility 
based on needs. 

 
 
- 90 - 

Therefore,  it  is  asked  to  adapt  the  four  Altmark  conditions  to  the  specificities  of  social  services  of 
general  interest  or  more  broadly  to  adapt  competition  rules  to  the  specificities  of  social  services  of 
general interest in order to allow Member States to finance them. In this light, it is recalled that access 
to social services is a fundamental citizen's right and therefore the rules on government funding should 
not obstruct the financing of social services. 

Considering  that  social  housing  and  hospitals  are  already  excluded  together  with  small  aids,  some 
contributors  propose  to  enlarge  the  exemption  in  the  Monti-Kroes  package  to  all  social  services  of 
general interest. Indeed, social services are services that society is interested in and whose provision is 
considered  necessary  by  the  state  but  the  market  is  not  capable  or  interested  in  providing  these 
services, or would provide them insufficiently. 

Future steps at Community level 

Ambivalent opinions towards EU regulation 

The outcome of the consultation is not conclusive regarding future steps at EU level. In general, most 
Member States and associations of local governments as well as one social partner do not see the need 
for a special legal instrument on social services. On the other hand, organisations from the civil society 
welcome the idea of an EU legal initiative for social and health services of general interest aiming at 
providing  legal  certainty  in  the  field.  Most  social  partners  for  their  part  seem  to  favour  a  legal 
framework for services of general interest prior to assessing the need for further instruments for SSGI. 

However indications are given on issues that could be addressed in further initiatives at EU level: 

•  Recognise  the  specific  nature  and  role  of  social  services  and  raise  awareness  about  the 

essential role played by those services (social cohesion, employment); 

•  Define the characteristics of social services of general interest; 

•  State some principles of quality for SSGI like the evaluation of needs and participation of the 

beneficiaries; 

•  Reassess  the  Member  States  responsibility  and  freedom  in  the  definition,  organisation  and 

financing of social services; 

•  Clarify  the  position  of  social  services  of  general  interest  in  regards  to  EU  rules,  notably 
competition,  internal  market  and  public  procurement  rules  with  the  aim  of  balancing  the 
specific  characteristics  of  the  sector  and  the  current  EU  rules  in  order  to  promote  high 
standards of social protection and preserve their contribution to social policy objectives; 

•  Define  conditions  for  a  priori  compatibility  with  EU  rules  of  special  rights  granted  to 
providers of SSGI, of contractual or conventional relationships between providers and public 
authorities; 

•  Ensure a stable and transparent legal framework in the respect of the principle of subsidiarity 

as stated in the EC Treaty; 

 
 
 
 
- 91 - 

•  Recognise  the  role  played  by  actors  from  the  social  economy  and  establish  at the  European 
level  the  participation  of  social  actors  in  the  decision-making  (identification  of  the  needs, 
definition of the missions, evaluation); 

•  Focus on cross-border situations or where exclusive rights are granted. 

The principle of subsidiarity and the primary responsibility of Member States to define and organise 
their social services sector have been largely expressed in the contributions, by Member States but also 
by  social  partners  and  organisations  from  the  civil  society.  It  is  also  mentioned  that  any  EU  level 
action in the field of social policy would require thorough analysis and impact assessment. 

Among the Member States, only a few have expressed the advantages of a Directive on social services 
of general interest. For these Member States, an EU legal initiative, to be taken as soon as possible, 
should  confirm  the  specific  characteristics  of  SSGI  and  focus  on  bringing  legal  clarity  and  a  stable 
framework which should strike the right balance between these characteristics and EU rules. It should 
also  promote  a  high  level  of  social  protection  and  quality  and  allow  for  the  development  of  the 
European social model. This instrument should also respect Member States' freedom to organise their 
social  services  sector  (as  regards  operating,  financing  and  evaluation).  For  some,  the  scope  of  the 
Directive  on  SSIG  would  exclude  social  security  schemes  as  these  are  non  economic.  Some  have 
basically expressed their positive expectations on further legal initiatives. 

The  issue  of  finding  an  appropriate  legal  basis  for  such  an  instrument  is  raised.  Some  contributors 
stressed that a more detailed examination of what exactly can be achieved with which legal instrument 
is  needed.  Furthermore,  there  could  be  an  examination  of  whether  a  legal  instrument  could  more 
clearly define the conditions under which restrictions of competition law for social services of general 
economic interest are covered by Article 86(2) of the EU Treaty. 

Six Member States do no state clearly whether they are in favour of a framework Directive on SSGI. 
However, they clearly express the need for more legal certainty, for instance regarding the relationship 
between  EU  rules  and  Member  States'  rights,  the  concept  of  SSGI,  the  need  to  define  clear  and 
unambiguous criteria allowing Member States to define which social services are of general interest, 
the need to avoid a case by case interpretation by the European Court of Justice, the need to avoid a 
inhomogeneous  geographical  implementation.  It  is  suggested  to  start  with  an  OMC  kind  of 
cooperation and move to making the criteria emerging ever more stringent. 

Finally many Member States have either expressed a preference for other non-legislative instruments 
or stressed that a legislative instrument is not necessary or appropriate for the moment, stressing that 
the  there  seems  to  be  no  added  value  of  such  a  framework  and  that  there  is  no  evidence  of  any 
significant EU-wide problems requiring EU-wide action, pointing out that EU-level criteria (beyond 
the  one  already  in  the  Treaty)  must  not  be  applied  to  Member  States  social  policy  goals  and 
highlighting  that  powers  that  belong  to  Member  States  would  in  this  way  be  transferred  to  the 
European Union. 

In general, organisations from the civil society welcome the idea of an EU legal initiative for social 
and health services of general interest aiming at providing legal certainty in the field. If needed, this 
Directive could be broken down into sector directives and the first of them could be a response to the 
recent  consultation  on  health  services.  Some  organisations  from  the  civil  society  promote  both  a 

 
 
- 92 - 

framework  directive  on  services  of  general  interest  and  a  specific  directive  on  SSGI  to  solve  the 
specific issues that a directive on SGI would not address. It is mentioned that a piecemeal approach 
should  be  avoided  to  prevent  conflicting  approaches  across  different  sectors  of  services  of  general 
interest. It is also highlighted that the scope of the directive should be on social and health services of 
general economic interest. In term of method, it has also been proposed to extend the pragmatic and 
proportional approach followed in the Monti-Kroes decision to all SSGI and to the questions relating 
to  internal  market  rules  (i.e.,  special  rights  and  authorisation  regimes),  and  to  define  a  priori 
conditions for compatibility with EU rules in order, on the one hand, to secure public authorities and 
operators  and  on  the  other  hand,  to  allow  relevant  public  authorities  to  organise  and  finance  SSGI 
according to the principle of subsidiarity. 

Most  social  partners  seem  to  favour  a  legal  framework  for  services  of  general  interest  prior  to 
assessing the need for further instruments for SSGI. It is mentioned that instead of defining categories 
of services of general interest, actions should be taken to safeguard them all. 

Finally,  some  contributors  are  of  the  opinion  that  the  principles  of  open  competition  should  not  be 
undermined. There should be full stocktaking of the delivery of social services, with no inherent bias 
towards public or private provision. The boundary between public and private must not be frozen and 
the frontier between economic and non-economic services should be seen as dynamic. EU rules should 
apply to any provider in the same market, profit and non profit. 

A clear need for further exchange of information, a dialogue and monitoring tool and a quality 
initiative 

Monitoring  coordinated  by  the  Commission  is  largely  welcomed  by  all  contributors.  It  is  also 
mentioned  that  the  OMC  could  contribute  to  this  specific  field  and  the  focus  should  be  on  the 
exchange of good practices. In this respect, topics for exchange of good practices are often mentioned: 
quality in the field of social services, debates on minimum standards, how to involve social partners, 
providers  and  other  interested  parties  to  find  a  common  understanding  and  progress  on  SSGI  at 
national level, and experience with the application of EU rules. The need for statistics and the need to 
define  common  indicators  have  also  been  stated.  Finally,  it  has  been  specified  that  exchange  of 
experiences should focus on specific and comparable sectors within the broad SSGI category, where 
questions and problems arise. 

Some limits to the OMC are stated: the OMC would not contribute to achieving legal certainty. 

However, it has been stressed that the use of the OMC in the field of social services should be limited 
to exchange of experiences and not go in the direction of defining common goals and indicators, nor 
create supplementary administrative burden for the Member States. The contributions which did not 
find  the  use  of  the  OMC  appropriate  in  this  field  also  highlighted  the  high  administrative  burden. 
These  Member  States  would  favour  monitoring  and  dialogue  procedures  allowing  for  exchange  of 
information and coordinated by the Commission or periodic reporting based on a questionnaire. 

Moreover,  several  contributions  from  social  partners or  organisations  from  the  civil  society  stressed 
the necessity to involve them in the OMC in this field. 

 
 
 
- 93 - 

Furthermore, the  need for a  quality  initiative  has  been  supported.  Some  organisations  from  the civil 
society  asked  for  an  evaluation  of  effectiveness  and  appropriateness  of  tendering  procedures  in  the 
social sector and also for the development of some agreed quality principles (to be distinguished from 
standards) for social services. 

The need for the national public administrations to inform and publicise at national and local level the 
results  and  clarifications  emerging  at  European  debates  on  social  services  of  general  interest  is 
recognised. 

The  proposed  dialogue  and  monitoring  tool in  the form  of  biennial reports is largely  welcomed  and 
should aim at contributing to the sharing of information, including the part played by SSGI and their 
weight  in  the  economy,  highlighting  commonalities  and  differences  between  Member  States, 
monitoring experiences and issues arising from the application of Community rules and ECJ decisions 
and further develop and clarify the Community framework encompassing the SSGI. The importance of 
social  dialogue  has  been  stressed  by  many  contributions  from  Member  States,  local  authorities' 
organisations, social partners and organisations from the civil society. It has also been mentioned that 
this tool should not place additional administrative burden on Member States. 

In  general  terms,  the  role  the  SPC  plays  in  the  process  should  be  clarified  (if  possible  through  a 
concrete  mandate  from  the  Council)  and  strengthened  in  the  event  of  legislative  proposals  affecting 
social services. 

The thinking of the EU Presidential troika – Portugal, Slovenia and France 

Proceedings of Part II of the conference on 5 June, exploring the thinking of the EU Presidential 
troika on social services of general interest 

Maurice Duranton 
Chair 

I  will  now  call  on  the  delegates  from  the  Permanent  Representations  of  the  three  countries  due  to 
assume the Presidency of the Union in the next 18 months to tell us how they envisage that this issue 
will be addressed. 

Very clearly, we are in a situation where much will be expected of the Presidencies’ role. The German 
Presidency has already done a certain amount of work on the question with the support of Joël Hasse-
Ferreira. What we need now, in my view, is further effort and a degree of continuity in that effort. 

Let us consider – taking the Presidencies in chronological order – whether we can expect to see such 
continuity. 

 
 
 
 
 
 
- 94 - 

Anna Ferreira,  
Portuguese Presidency of the EU 

Members  of  the  European  Parliament,  colleagues,  representatives  of  the  various  sectors,  ladies  and 
gentlemen, I should like first of all to thank you for inviting us to outline the work that the Portuguese 
Presidency intends to do. 

I am honoured to be here and I am very pleased to share with you the Portuguese Presidency’s plans 
with regard to social services of general interest and health services. 

The  first  thing  to  note  is  the  importance  of  these  issues  in  the  context  of  national  social  policies. 
Services  of  general  interest  should  be  universal,  they  should  be  of  high  quality  and  they  should 
promote  not  only  equality  and  solidarity  but  also  respect  for  human  dignity.  They  should  also  be 
efficient,  accessible  to  everyone  and  financially  well  managed.  We  should,  moreover,  identify 
methods of financing and functioning that are fully transparent. 

The Commission’s 2006 Communication pointed the way ahead and will help to consolidate the work 
already  begun  in  relation  to  these  services,  which  underpin  social  cohesion.  The  Commission’s 
Communication contributes to clarifying the role of social services of general interest and also enables 
us to identify their specificities. 

The Communication in question thus strengthens the European Union’s social dimension, within the 
framework of the European social model. 

We, as the Portuguese Presidency, would also make the point that social services represent a tool for 
safeguarding citizenship. In that way, the services themselves contribute to social cohesion. 

Nonetheless,  we  need  to  produce  a  definition  of  social  services  of  general  interest.  Further  work  is 
needed on clarifying the concepts of general interest and services of general interest.  

A  framework  of  reference  is  also  needed  in  order  to  end  the  lack  of  clarity  in  definitions  of  these 
concepts in European law. Producing such a framework would create legal security for the bodies that 
provide services of this type. 

It  seems  clear  that  we  need  to  respect  the  considerable  diversity,  in  terms  of  organisation  and 
management systems, currently existing in the Member States. The diversity is explained by national 
specificities. This makes it particularly important that the standards and processes for financing such 
services should be based on common principles and rules with regard to transparency – with a view 
not only to respecting people’s needs but also to guaranteeing the quality of the services, as defined by 
public authorities.  

Social  services  in  Portugal  can  be  delivered  by  bodies  attached  to  central  government  or  regional 
administrations. They can also be provided by private institutions with a social solidarity remit or by 
private companies whose aims are commercial. 

As we see it, the State must remain in charge of managing and regulating social protection models. It 
must  also  determine  the  nature  of  the  services  in  question  and  how  they  contribute  to  combating 
poverty and social exclusion. 

 
 
- 95 - 

It is vital that the infrastructure necessary to the delivery of these services – and particularly social-
economy  infrastructure  –  should  be  taken  into  account.  In  Portugal,  the  social  economy  plays  an 
important role in tackling social problems and, indeed, social exclusion. There is also a framework in 
place for evaluating the quality of services provided. 

The services in question are generally provided by private institutions with a social solidarity remit but 
they may also be delivered by mutual benefit organisations or local development agencies. There are 
more than 3 000 institutions with a social solidarity remit. They have signed a cooperation agreement 
and are partly financed by the State. In total, Portugal has 4 600 private institutions. 

What has become of proposals for a system of direct financing to individuals and families, according 
to their level of income? We  believe  that  such  a solution  would  not  only  promote inter-institutional 
freedom,  but  would  also  make  for  greater  freedom  of  choice  in  relation  to  social  services.  It  could 
constitute a useful mechanism for improving the quality of the services provided.  

On the other hand, we consider it essential that public bodies should monitor the providers of these 
services  very  closely  –  the  aim  being  to  ensure  their  quality  and  consistency  in  the  light  of  the 
legislation on principles and aims that they must respect. We also consider, in terms of strategy, that it 
is essential not only to support the particular nature of these institutions but also to provide training for 
the people they employ. 

With regard to the process of modernising social services of general interest, our working priorities are 
as follows: 

• 

• 

• 

• 

firstly, to improve the quality of the services provided; 

secondly, to facilitate evaluation of social services of general interest or access to them; 

thirdly, to devise a new means of assistance and financing and a new model for cooperation in 
order  to  make  it  easier  for  the  most  disadvantaged  people  in  society,  and  those  living  in 
poverty, to access the services; 

fourthly,  to  respond  more  effectively  to  the  needs  of  the  most  vulnerable  families  and 
individuals, and provide them with social support. 

The  Portuguese  Presidency  is  impatient  to  get  started  and  is  also  keen  to  play  a  part  in  creating  a 
European framework for services of general interest.  

Another priority for the Portuguese Presidency is to advance on two fronts. 

•  On the one hand, we will endeavour to ensure that there is a joined-up approach to this theme, 
through  the  various  meetings  that  are  scheduled.  We  will  establish  the  connection  not  only 
between  the  services  debate  and  the  question  of  achieving  better  reconciliation  of  working 
and private life but also between the discussions on services and flexicurity, because the issue 
of social services cuts across all these areas. 

•  At the same time, we want to highlight these problems at a higher level of debate and decision 
making.  We  hope  to  cooperate  here  with  the  European  Parliament  and  the  Social  Affairs 
Committee. The Portuguese Presidency is to host the first forum on social services of general 
interest. The idea for the forum came from the European Parliament and this first forum is to 

 
 
- 96 - 

be  financed  through  a  three-way  partnership  involving  the  Parliament,  the  European 
Commission and the Portuguese Presidency. It will take place on 17 September in Lisbon. 

I  should  like  once  again,  on  behalf  of  the  Portuguese  Presidency,  to  congratulate  the  conference 
organisers and to thank them for inviting us. We hope that this partnership will continue and that it 
will take forward the excellent work it is doing. Thank you for your attention. 

Maurice Duranton. 

Thank you, Ms Ferreira – for outlining your programme and for putting these issues on the Portuguese 
Presidency’s  agenda.  We  will  work  hard  to  give  substance  to  these  plans.  Turning  now  to  the 
Slovenian representative,  I will be quite blunt: the Portuguese Presidency will take a real interest in 
this  matter  of  SSGIs  and  we  also  expect  much  from  the  French  Presidency.  There  is,  however,  an 
impression  that  between  those  two  Presidencies  we  might  find  ourselves  marking  time  because  the 
Slovenian Presidency would not give the matter the same level of attention. I can hardly imagine that 
will be the case and I hope that you will dispel my misgivings. 

Bozica Matic 
Slovenian Permanent Representation to the EU 

Thank you very much, Chair. I do hope to be able to reassure you and to prove that your misgivings 
are unfounded.  

Rapporteurs, Chair, ladies and gentlemen, allow me to begin by offering congratulations. I welcome 
the alliance that you represent through your joint organisation of this very important event. I should 
also like to thank you most sincerely for giving me the opportunity of being with you, of listening to 
the  discussion and  also of sharing  with  you  some  thoughts  and ideas  about  Slovenia’s  plans  for the 
period of its Presidency in the first six months of 2008. 

We have a little time left before we assume the Presidency. We are keen to see what will happen over 
the  next  six  months,  that  is  to  say  during  the  Portuguese  Presidency,  but  I  should  like  to  begin  by 
looking at the current situation. 

First of all, we have prepared a framework for our activity: it is not very detailed but we are working 
on it. I should like – very briefly – to highlight two points in that regard and to say a few words about 
how we in Slovenia see things. What is our perspective on the ongoing consultation and on the debate 
about services of general interest? I intend to answer those questions in the first part of my address. 

In the second part I will outline our plans for next year.  

The  first  point  to  be  made  is  that  Slovenia  welcomes  the  open  consultation  launched  by  the 
Communication  which the  Commission  published last  year.  It  also  welcomes  the  very  wide-ranging 
debate  on  services  of  general  interest.  We  are  glad  the  debate  is  taking  place  not  only  because  the 
issues involved are very important ones at European level, but also because we in Slovenia are largely 
asking the same questions and facing the same problems that were discussed this morning. 

 
 
 
 
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We feel involved in these problems. We recognise that the debate is extremely complex and we also 
recognise  the  complexity  of  the  various  issues  we  are  tackling.  We  recognise,  too  that  the  whole 
subject is a very important one because the services in question are important not only to Slovenians 
but to all the citizens of the European Union. 

Of course, this does not mean we can overlook the major differences of opinion evident in the debate 
and in the consultation. There is, however, a point of convergence, or a common denominator, which 
could  serve  as  a  basis  for  future  discussion  and  debate  on  these  issues.  The  Slovenian  authorities 
believe  that  these  differences  of  opinion  should  not  discourage  either  the  institutions  or  the  other 
players  involved  from  pursuing  their  discussions  and  debate.  Nor  should  the  differences  of  opinion 
make  us  pessimistic  about  eventually  achieving  cooperation,  because  the  work  in  hand  has  the 
potential to produce a future European strategy. 

The Slovenian Presidency supports the concept of a social Europe for all. In that context, I welcome 
this morning’s conference. The Slovenian Presidency is keen to see what will happen in the course of 
the Portuguese Presidency. It is looking forward already to taking part in the many events which the 
Portuguese Presidency is to organise and which my colleague has already mentioned, and we are also 
keen  to  participate  in  the  Forum  on  SSGIs  in  September.  Lastly,  we  look  forward  with  equal 
anticipation to publication of the Commission’s new Communication, which is expected at the end of 
this year. 

We hope that the Communication will set out the latest results of the consultation process and will also 
reflect the results already amassed in the course of that process and the debate. We hope, too, that the 
Communication will be something of a light at the end of the tunnel. We hope it will include in outline 
a framework for any future related activities. 

I  will  move  on  now  to  the  second  part  of  what  I  have  to  say,  which  concerns  the  Slovenian 
Presidency’s plans for 2008.  

I  should  like  to  emphasise,  first  and  foremost,  that  we  will  continue  the  work.  We  will  attempt  to 
capitalise on the Commission’s Communication and we will try to pursue the discussions which are to 
begin during the Portuguese Presidency. 

I  can  assure  you  that  Slovenia  intends  to  keep  this  debate  on  the  agenda.  The  debate  concerns  the 
future of services of general interest and we intend to give those services the priority they deserve. In 
relation to the activities we envisage, I should like simply to share a few thoughts with you. 

Firstly, we believe that the consultation about SSGIs and, of course, the discussions conducted by the 
Social  Protection  Committee  have  both  confirmed  the  need  for  some  clarification  concerning  the 
applicability  and  impact  of  a  legal  framework  and  European  legal  provisions  in  relation  to  these 
services. 

The discussion and consultation also highlighted the fact that modernisation of social services should 
be aimed chiefly at improving not only their quality but also their accessibility. 

Quality is an area on which we intend to focus attention in the course of our Presidency, for we believe 
that we need to reach agreement on certain fairly broad quality-related principles. By building on those 
principles it might be possible to achieve accord on quality standards, particularly for certain types of 

 
 
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service.  My  country  and  the  authorities  I  represent  would  be  very  pleased  if  we  could  take  a  step 
forward – if we could really advance – in this regard in 2008. 

I  should  like  to  say,  too,  at  this  juncture,  that  the  Slovenian  Presidency  believes  a  shared  learning 
process  is  necessary.  It  is  also  necessary  to  exchange  good  practices  between  different  countries.  I 
refer here to good practices in relation to awarding public contracts, developing quality management 
systems  for  social services  and  promoting  training  for  staff  and  others  involved  in  the  sector.  User-
friendliness is also something that needs to be encouraged. 

One question emerging from this debate – at least as the Slovenian authorities see it – is whether there 
will be scope in future to develop a European quality framework for certain types of service? In other 
words,  is  it  possible  to  reach  agreement  on  certain  quality  principles  that  would  be  sufficiently 
representative? Will it be possible to produce quality standards? We have heard mention today of the 
need  for  better  monitoring  and  evaluation  in  this  field.  Can  we  then  we  envisage  the  future 
development of quality indicators that will enable monitoring and evaluation to be improved? 

Turning  now  to  the  characteristics  and  principles  of  quality,  we  cannot  overlook  such  important 
characteristics as the continuity of these services and their comprehensiveness. Nor can we overlook 
the service users’ rights and their freedom of choice, where it is applicable. We also need to highlight 
assistance or guidance for users because that is another important element. Attention must be paid to 
the  matter  of  active  participation  by  users  not  only  in  planning  service  provision  but  also  in 
determining what it entails and in evaluating the quality of the services. We need to bear in mind the 
involvement and the role of local communities, the social partners, employers’ representatives and the 
relevant  voluntary-sector  organisations.  Lastly,  of  course,  there  is  the  involvement  of  the  public 
authorities. 

Who knows? Perhaps we shall be able to move towards establishing partnerships for the provision of 
social  services  and  organising  partnership  arrangements  at  different  levels.  Service  providers  and 
public authorities, as well as service users, could all play a key role in such partnerships. 

In  conclusion,  Chair,  I  am  convinced  that  action  is  needed  in  this  field,  and  it  depends  on  close 
cooperation among all those involved. Whatever the outcome – whether we end up with a framework 
directive or some other form of European legal provision – it is our conviction that it must be rooted in 
consensus. This is important because we are talking here about people, individuals and citizens: people 
like you and me. We are considering, too, the services that we may need in the future. We are talking 
about social services, which are services for human beings. 

This is an area in which we feel it is high time to quash the myth that the European Union can reach 
agreement  about  everything  in  relation  to  the  internal  market  and  its  rules  and  in  relation  to 
competition. We can see that the European Union finds it hard to make progress on social policy. I 
hope that what we do in the future will change that. I also hope that the institutions and all the other 
parties involved will, in future, sustain their commitment to this debate. I hope that everyone will be as 
busy as the activists who are gathered here in this room, because this is something that matters to all 
Europe’s citizens: it affects not only their wellbeing but also the quality of life in the European Union. 
Thank you very much. 

 
 
 
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Maurice Duranton 
Chair 

Thank you very much. You have, indeed, reassured me inasmuch as I believe the troika will take steps 
to ensure that – despite our occasional fears to the contrary – this matter will not be sidelined.  

The  final  speaker  is  Cyril  Cosme,  who  is  in  charge  of  social  affairs  with  the  French  Permanent 
Representation to the EU. I must make a particular acknowledgement here, not because we are fellow 
countrymen but because the French Permanent Representation hosted the first public meeting of the 
SSGI Collective. Considerably fewer of us were present on that occasion but it marked a beginning. I 
would  mention,  too,  that  a  small  publication  is  available,  providing  up-to-date  information  on  these 
issues and it is very interesting.  It is beginning to be circulated reasonably widely.  If anyone would 
like  a  copy,  please  ask  us.  We  have  thus  had  an  opportunity  to  appreciate  the  interest  taken  in  this 
matter by the French institutions and the French Government. Mr Cosme finds himself in a somewhat 
unusual situation, however, because major political changes have been – and still are – taking place in 
France. 

We should be grateful, Mr Cosme, if you would tell us how the French Presidency is gearing up. We 
hear a lot of talk about things that are being prepared with a view to the French Presidency, so it had 
better not disappoint us. 

Mr Cyril Cosme,  
French Permanent Representation to the EU 

Thank you, Chair. I have to confess that, in coming to this round table, I imagined somewhat naively 
that I would have a simpler task than my Portuguese or my Slovenian colleague because the French 
Presidency, starting on 1 July 2008, is the last in the troika. We therefore have a little more time in 
which to announce our intentions, and it is my experience that announcing one’s intentions effectively 
is important. I will try today to outline the main features of our approach to these issues. 

You, in this room, are well placed to appreciate just how sensitive the questions of services of general 
economic interest and social services of general interest are in France. I do not intend to elaborate on 
that. I would, however, emphasise one point, which is the following. 

You are aware that, for some time now, France has supported the principle of a directive not only on 
SSGIs  but  also  on  services  of  general  economic  interest.  That  could  be  said  to  be  my  country’s 
traditional  position.  What  happens,  however,  depends  not  just  on  us.  The  fact  is  that,  within  the 
Council  of  Ministers  of  the  EU  today  –  although  the  subject  might  seem  less  emotive  and  more 
straightforward than the broader question of services of general economic interest – the concept of a 
directive on social services of general interest does not command a majority. 

So what are we attempting to do? Well, we are seeking to make this a genuinely European question – a 
question closely bound up with the internal market. During some of this morning’s discussion I sensed 
a risk, in talking about social services, that we could end up demonising the internal market. There was 
a sense of erecting an opposition between social policies and internal market principles. 

 
 
 
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I think that when we look back at the history of this process we will see the Services Directive as a 
turning point. What the Services Directive and the discussion around it showed, in my opinion – and 
the fact of omitting initially to exclude SSGIs and health services showed it very clearly – was that 
these services do fall within the scope of the Treaty. Everyone recognised then that this was the case. I 
believe that those who advocate a legal framework for SSGIs succeeded, after all, in scoring a point – 
and  that  was  largely  thanks  to  the  European  Parliament.  It  was  shown  that  we  could  no  longer 
confidently  continue  to  regard  the  principle  of  subsidiarity  as  the  ultimate  safeguard,  sheltering  all 
these services from application of the rules of the single market. The debate on the Services Directive 
showed that quite clearly. We can see now that, in order to reflect the specificity of certain services, 
we needed to look to secondary European legislation. 

I should like now to set out our views on this subject and to explain how we intend to go forward in 
the coming months. Obviously we will work – to good effect, I hope – in partnership with the other 
members of the troika. I would remind you, too, that France also has to prepare a programme for the 
next  troika,  to  take  effect  from  1 July  2008.  The  three  countries  involved  there  will  be  France,  the 
Czech Republic and Sweden. In effect, what we are talking about is a medium-term process. We shall 
do our best to convince our partners that it is worthwhile building on what we have begun. 

I should also like to refer you to a declaration that was signed by a number of countries last February. 
Its  aim  was  to  relaunch  social  Europe.  It  was  very  much  a  political  initiative,  simply  laying  down 
certain principles and re-stating the values of the European social model. It made the point, too, that 
we  needed to  use  the  full armoury  available  under  the  Treaty  to  make  the  European  social  model  a 
reality. 

I  mention  these  initiatives  to  show  you  how  we  are  trying  to  put  the  subject  of  SSGIs  high  on  the 
European agenda and to relate it to the internal market. I believe that the only basis for progress here is 
that of the existing Treaty provisions. Currently, when the Court of Justice rules on these questions, it 
does so with reference to the existing legal framework. The problem we face today is much more the 
absence of secondary legislation, between the relevant Treaty articles and their literal interpretation by 
the Court, than the fact of applying an internal-market perspective. Given the legal bases contained in 
the Treaty,  and  looking  to  the  years  ahead,  I  believe  that  the  internal  market  is  the  only  foundation 
available on which to build. 

I  should  like  to  say  a  few words  on  the  more  or  less  consensual  nature  of  these  questions.  You  are 
aware that, within the Social Protection Committee, few Member States came out explicitly in favour 
of  a  legal  framework  in  the  form  of  a  directive  on  SSGIs.  I  do  not  think  we  need  draw  any  overly 
gloomy  conclusions  from  this,  given  what  I  have  heard  this  morning.  Typically,  when  the  Member 
States have to tackle a specific problem – health services are one example but social housing, which 
we  have  discussed  today,  is  another  –  it  is  clear  that  collectively  they  are  keen  to  find  solutions, 
whether that means a directive or legislation of another kind. 

I  know  that  the  SSGI  Collective  in  France  has  major  reservations,  which  are  broadly  shared  by  a 
number of Member States including France, about a specific consultation exercise on health services. 
The  problems  of  Member  States’  expectations  and  their  motivations  with  regard  to  securing  health 
services are very similar to the problems around SSGIs at the most general level. The fact is, however, 
that  in  relation  to  health  services,  we  have  decisions  by  the  Court  of  Justice  and  we  have  the 

 
 
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infringement  proceedings  taken  by  the  Commission,  particularly  by  the  internal  market  DG. 
Collectively the Member States are seeking solutions. When we need to resolve a problem, we always 
come  back  to  the  option  of  a  directive  or  another  type  of  legal  instrument  –  or  at  least  that  idea  is 
always there in the background – and there is probably a greater degree of consensus in this case than 
there  is  on  a  framework  directive  for  health  services.  I  think  we  can  say  that  the  same  applies  with 
regard to social housing. 

These two examples, and especially that of health services which is probably shaping up more clearly, 
show that behind the highly politicised confrontations in the Council – and, after all, the question of 
services of general economic interest and SSGIs goes to the very core of the European social model – 
there is a fair degree of consensus about the need to find solutions to problems as they arise. So, where 
do we go from here in defending the importance of the SSGI question? 

First of all, it is my turn to commend the work done by the SSGI Collective. I believe it constitutes a 
clear contribution to a positive European approach – and I want to emphasise the positive nature of the 
approach we need to take, or at any case the approach that France will endeavour to promote. We are 
not die-hard advocates of subsidiarity. What I  mean  here is that we recognise – and indeed it is the 
reason for our belief in the ultimate value of a directive – that the combination of Articles 16 and 86 of 
the  Treaty  with  the  principle  of  subsidiarity  no  longer  constitutes  an  adequate  response  in  terms  of 
ensuring that the Member States can implement their social policies properly. Specific structures and 
bodies are needed for that task. 

We have managed to live with the current balance for some time now and we have seen clearly, with 
the Services Directive, just where the limits of that approach lie. So we need to come up with some 
genuinely European ideas that will give the Member States more support in structuring their policies 
and in involving various agencies in society in that effort. 

I would also like to emphasise the deeply legitimate nature of our approach. Again I come back to the 
relevance  of  internal-market  concepts  here:  no  one  can  deny  that  it  is  a  legitimate  concern  of 
companies, workers and consumers to have a degree of legal certainty in the internal market. I believe 
that what we are trying to help to do is to show how a range of players – of very different kinds but all 
tasked, in the various Member States, with mission of general interest – can claim the benefit of that 
legal security. This is an important factor to include in our arguments. 

Others  are  better  placed  than  I  am  to  develop  this  point,  but  I  think  the  fact  that  we  are  currently 
discussing  the  potential  usefulness  of  a  legal  framework,  in  order  to  put  social  services  of  general 
interest on a secure footing, also reflects the developing nature of public policy implementation in all 
the Member States. 

I come from a country with which many of you are familiar, a country where, over the last 20 years, a 
range of agencies in society have become involved in implementing certain policy aims defined by the 
public  authorities.  That  is  the  pattern  not  only  in  the  social  policy  field  but  also  in  the  area  of 
employment. What it means is that the model we lived with for so long in all the EU countries – the 
model  of  State  agencies responsible  for  implementing  specific  public  policies  in  a  totally  integrated 
way, from one end of the chain to the other – has had its day. 

 
 
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As we have introduced non-State agencies into the process, however, we have been walking straight 
into the minefield of Community law. That is the problem we now need to resolve and it is particularly 
important  to  resolve  it  because  the  new  model,  with  its  implications  for  the  organisation  of  public 
policies, is spreading quite rapidly. 

So what currently needs to be done? I propose three ideas to speed up the process. 

1.  First of all – and here lies the value of the consultation process and the work initiated by the 
Employment  DG  and  Commissioner  Spidla  –  we  need  to  know  what  we  are  talking  about. 
Until we are sure of that, we cannot make a convincing case. Definition of the scope of social 
services  of  general  interest  was  the  subject  of  the  debate  that  took  place  when  the  Services 
Directive  was  published,  and  producing  such  a  definition  is  our  first  task.  Establishing  a 
number of indicators on which to rely may be the first building block in the construction of a 
credible  case.  Once  we  have  identified  the  scope  of  what  we  are  talking  about,  the  next 
immediate  step  –  and  it  is  a  very  political  and  symbolic  one  –  is  to  seek  recognition  for 
agencies  of  a  specific  type.  In  my  view  it  is  important,  at  least,  to  gain  European-level 
acceptance  for  the  idea  that  there  exist  a  number  of  agencies  which,  having  been  formally 
entrusted with missions of general interest, may be subject to specific rules recognising them 
as something other than solely economic or commercial operators in the internal market.  

2.  Our second task is to identify, as accurately as we can, the tools and resources that need to be 
given to public authorities in the Member States, and that may well include local authorities, 
to  enable  them  to  carry  out  their  policies  properly  and  to  achieve  the  aims  of  social  and 
territorial cohesion that are enshrined in the Treaty. We heard mention earlier of the Report on 
Economic and Social Cohesion, which highlighted the challenges for European policies in this 
field  today.  In  identifying  the  tools  and  resources  that  will  be  needed  –  which  must  be 
reflected  in  appropriate  legal  provision  –  the  point  I  made  earlier  is  very  relevant:  the 
balancing act we have engaged in for so long, between the Treaty articles and the principle of 
subsidiarity,  no  longer  constitutes  an  adequate  response  in  terms  of  ensuring  that  social 
services of general interest can be delivered properly. Like it or not, those services are now 
affected by the Treaty and the fact is that the opposition between economic and non-economic 
services is  becoming  increasingly  academic,  as  we  have  accepted  a  very  broad definition  of 
the economic nature of services. 

3.  The third and final point is this: a strategy for SSGIs should include the concept that becoming 
a  player  in  the  internal  market  means  accepting  a  number  of  the  rules  of  that  market. 
Moreover, the developments in national public policy organisation, to which I referred earlier, 
have  often  involved  greater  insistence  on  transparency  and  on  playing  by  the  rules  in  the 
reorganisation of the market. We therefore have to accept that transparency and evaluation are 
required and that effectiveness and efficiency do entail some form of measurement. I believe 
these  are  aspects  of  the  question  that  need  to  be  further  developed.  My  Portuguese  and 
Slovenian colleagues emphasised the importance of quality and outlined some very interesting 
ideas to follow up in that regard. 

The last thing I have to say – and it is very important – is that no one should see this process as an 
attempt  to  export  any  particular  national  model  or  to  impose  it  on  the  European  Union.  As  you  are 

 
 
- 103 - 

well aware, that suspicion, directed at the French, is very  much present in the debate. I believe it is 
vital to demonstrate that this is a genuinely European debate, which assumes different configurations 
in the different Member States. I think that all the Member States have their own traditions of seeking 
to achieve certain aims in terms of social and territorial cohesion. The potential problem concerns the 
current shortcomings in Community law. 

Those  are  the  main  ideas  that  I  wanted  to  leave  with  you.  They  do  not  constitute  an  off-the-peg 
programme for a Presidency.  I apologise if that was what you were hoping for, but I think you will 
understand that I cannot project myself into that situation just yet. I am confident, however, that the 
troika due to take the reins on 1 July will create a climate for moving these questions forward as best it 
can, building on our efforts to develop broadly shared thinking. 

Maurice Duranton 
Chair 

Thank you very much, Cyril Cosme. I think we can rest assured that the incoming Presidencies will 
not  abandon  this  question  –  and  that  is  something  in  itself.  It  has  been  quite  interesting  to  see  the 
convergence  on  views  in  the  three  reports  by  the  major  European  institutions  that  have  tackled  the 
issue. 

Cyril Cosme outlined the need to work on explaining our approach in order to gain support from the 
Member  States,  for  the  current  level  of  support  is  almost  certainly  insufficient.  I  think  that  the 
Commission will have a key role to play because it is the body empowered to make proposals in these 
areas; it will need to focus its efforts in the coming 18 months and to initiate developments. 

Once again we can see that comparing ideas, working hard, pursuing a consistent line within our own 
organisations and mobilising national energy around these issues are the ways to overcome the inertia 
that is inevitable in today’s European Union with its 27 members. When we had just 15, it was no easy 
matter. With 27, even more effort is required in the pursuit of convergence. I hope that we have done 
some groundwork in that regard.  

The Reform Treaty’s new Protocol on services of general interest and the new Article 14: 

A response to a dispute about SSGIs 

The Treaty of Lisbon, adopted at the October 2007 European Council, helps to reopen the question of 
situating services of general interest in primary law. It does this in four ways: 

•  by  introducing  the  notion  of  services  of  general  interest  into  the  Treaty  for  the  first  time  – 
previously  only  services  of  general  economic  interest  had  been  explicitly  provided  for,  in 
Articles 16 and 86(2); 

•  by introducing the notion of non-economic services of general interest into the Treaty for the 

first time and stipulating the scope of its application; 

 
 
 
 
 
 
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•  by  interpreting  the  notion  of  the  European  Union’s  shared  values  in  relation  to  services  of 
general economic interest and defining them in terms of the Member States’ essential role, the 
diversity  of  the  services  concerned  and  overall  principles  applicable  to  services  of  general 
economic interest; 

•  by  introducing  a  new  legal  basis  for  services  of  general  economic  interest,  in  Article 14 
(replacing  the  existing  Article 16),  making  the  Council  and  Parliament  responsible  for 
establishing, via regulations adopted in codecision, the principles and conditions necessary for 
services  of  general  economic  interest  to  fulfil  their  missions.  The  Council  had  already 
introduced this  innovation in  Article III-122  of  the  draft  Constitutional Treaty,  so  Article 14 
represents an adaptation of these provisions to the new framework of the Reform Treaty. 

This new context for services of general interest has wide-ranging significance because it has emerged 
at the heart of primary law – Article 14 and the Protocol on services of general interest carrying the 
same legal weight as other Treaty provisions. There is clearly a connection between this compromise 
on the Council’s part and the debate opened by the White Paper on services of general interest, by the 
discussions in relation to the Services Directive, about where to situate services of general interest, and 
by the Community-level dispute in relation to social services of general interest that has been brewing 
in the Netherlands, Sweden and France. 

It is therefore useful to take a closer look at the four innovations described above and to explore their 
precise significance. 

Introduction of the notion of services of general interest (SGI) into primary law 

The Protocol on SGIs helps to introduce the concept into primary law. The Protocol opens with the 
following words: "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 European Union". It goes 
on  to  describe  in  two specific  articles the notions of services  of  general  economic  interest  and  non-
economic services of general interest. This new provision thus helps to clarify the concepts – the 2006 
Services  Directive  having  already  referred  to  non-economic  services  of  general  interest  –  and  to 
establish  clearly  that  SGIs  comprise  both  services  of  general  economic  interest  and  non-economic 
services of general interest. The term SGIs had tended to be used carelessly, signifying sometimes all 
SGIs and sometimes only non-economic services. Apart from correcting that error, the inclusion in the 
Treaty of SGIs, and thus of non-economic services of general interest, also helps to clarify how the 
Treaty provisions apply to the latter. 

Introduction of the notion of non-economic services of general interest (NESGIs) into the Reform 
Treaty 

Article 2 of the Protocol details the conditions of application of the Treaty to NESGIs as follows: "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". This wording makes explicit the 

 
 
 
 
- 105 - 

relationship  between  the  Treaty  provisions  and  NESGIs  by  asserting  the  principle  that  the  Member 
States’ competence with regard to the latter remains intact. 

Interpreting  the  notion  of  the  European  Union’s  shared  values  in  relation  to  services  of  general 
economic interest (SGEIs) 

The first article of the Protocol interprets the notion of the European Union’s shared values in relation 
to SGEIs in three distinct paragraphs. 

•  The  first,  on  the  role  of  the  Member  States,  refers  to:  "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". As well as clarifying that the Member States have discretionary competence for SGEIs 
(their  provision,  commissioning  and  organisation), this  paragraph expands  on  what is  meant 
by "Member State" through its explicit mention of national, regional and local authorities and 
asserts  the  importance  of  responding  to  users’  needs.  The  reference  to  users’  needs  is 
important because it introduces the notion of an SGEI being flexible and adapting to change in 
the nature and scope of the needs it has to meet. Seen in the context of the dispute between the 
Government of the Netherlands – which drafted the Protocol – and the European Commission, 
concerning the scope of social housing provision, the importance of this detail becomes clear. 

•  The second paragraph, on the diversity of SGEIs, refers to: "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". It further reinforces 
the assertion that diversity and disparity are shared values with reference to users’ needs and 
preferences  and  different  types  of  context.  These  assertions  go  to  the  nub  of  the  dispute  in 
question, which concerns the European Commission’s assessment that classification of social 
housing  as  a  service  of  general  economic  interest  irrespective  of  its  geographical,  social  or 
cultural context represents "manifest error". 

•  The  third  paragraph  concerns  the  principles  common to  SGEIs,  namely: "  high  level  of 
quality, safety and affordability, equal treatment and the promotion of universal access and of 
user rights". These principles, which are shared by SGEIs, are generally recognised and are 
discussed in the 2004 White Paper on services of general interest, are thus set in the stone of 
the  Treaties  –  into  which  they  explicitly  introduce  the  concepts  of  promoting  SGEIs  and  of 
universal access to them. 

Protocol on services of general interest 

"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 European Union:" 

 
 
 
 
 
- 106 - 

Article 1 

"The shared values of the Union in respect of services of general economic interest within the meaning 
of Article 16 of the 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." 

"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." 

Article 2 

Article 14 of the Reform Treaty 

1.1 

"Without prejudice to Article 4 of the Treaty on European Union and Articles 73, 86 and 87 
[of  the  Treaty  on  the  functioning  of  the  European  Union],  and  given  the  place  occupied  by 
services of general economic interest in the shared values of the Union as well as their role in 
promoting social and territorial cohesion, the Union and the Member States, each within their 
respective powers and within the scope of application of this Treaty, shall take care that such 
services operate on the basis of principles and conditions, particularly economic and financial 
conditions, which enable them to fulfil their missions. The European Parliament and Council, 
acting  in  accordance  with  the  ordinary  legislative  procedure,  shall  establish  these  principles 
and set these conditions without prejudice to the competence of Member States, in compliance 
with the Treaties, to provide, to commission and to fund such services." 

Legal  basis  for  establishing,  via  codecision,  principles  and  conditions  that  enable  services  of 
general economic interest to fulfil their missions 

A further important innovation is the legal basis for SGEIs constituted by the reference to "the place 
occupied by services of general economic interest in the shared values of the Union as well as their 
role in promoting social and territorial cohesion" and the stipulation that "the Union and the Member 
States,  each  within  their  respective  powers  and  within  the  scope  of  application  of  this  Treaty,  shall 

 
 
 
 
 
 
 
 
 
- 107 - 

take care that such services operate on the basis of principles and conditions, particularly economic 
and financial conditions, which enable them to fulfil their missions". 

These  provisions  reassert  both  the  requirement,  formulated  in  what  was  Article 86(2)  of  the  Treaty, 
that  the  missions of  SGEIs  should  be  properly  fulfilled  and the  principle  of  co-responsibility  by  the 
Union  and  the  Member  States  for  meeting  that  requirement,  at  the  same  time  emphasising  the 
importance of economic and financial conditions while recognising that they are not the only ones. 

In  this  way,  the  Treaty  confers  upon  "the  European  Parliament  and  Council,  acting  in  accordance 
with  the  ordinary  legislative  procedure,"  the  responsibility  for  establishing  "these  principles  and 
[setting] these conditions without prejudice to the competence of Member States, in compliance with 
the  Treaties,  to  provide,  to  commission  and  to  fund  such  services".  Thus,  while  acknowledging  the 
Member  States’  responsibility,  in  accordance  with  the  Treaties,  for  providing,  commissioning  and 
funding SGEIs, the article entrusts the European Parliament and the Council, via regulation adopted in 
codecision, with the task of legislating to establish principles and conditions whereby the missions of 
these services can be properly fulfilled. 

This  is  a  fundamental  democratic  development  in  the  treatment  of  SGEIs,  which  had  hitherto  lain 
within  the  exclusive  competence  of  the  Commission  under  the  provisions  of  Article 86(3).  The 
relevant legal instrument is that of regulation, however, implying that any provisions adopted will be 
directly applicable in the Member States, without the need for transposition into domestic law. 

The significance of these developments – including particularly the scope of the Protocol on SGIs – is 
more  readily  understood  when  we  remember  that  the  new  provisions  were  drafted  by  the  Prime 
Minister of the Netherlands, Jan Peter Balkenende. 

The  basis  for  the  Protocol  on  SGIs  proposed  by  the  Prime  Minister  of  the  Netherlands:  the 
significance of assessing "manifest error" in the classification of social housing services as being 
of general interest 

The case in question has shown clearly the European Union’s ability to call into question a Member 
State’s social housing system. The European Commission not only considers that the Netherlands has 
committed  "manifest  error"  in  the  classification  of  its  social  housing  services  as  being  of  general 
interest;  it  has  also  asked  the  Netherlands  to  sell  off  social  housing  stock  which  does  not  meet  its 
interpretation  of  the  "service  of  general  interest"  criterion  and  which  it  deems  to  constitute  "over 
capacity". 

Responding  to  notification  of  a  legislative  measure  by  the  Government  of  the  Netherlands,  the 
European  Commission  assessed  the  market-compliancy  of  the  Dutch  system  for  financing  social 
housing in the light of a principle established in 2001 in a case concerning the Irish Housing Finance 
Agency.6 The Commission acknowledged that "when renting out property, housing associations are 
obliged to grant priority to persons who have difficulty finding suitable accommodation (owing to low 
income  or  other  circumstances)".  It  also  stated,  however:  "Their  housing  activities  are  not  […] 

6  

European Commission, Competition Directorate General, Brussels, 14 July 2005, 0 / 55413, COMP H1FSP / lc (2005) A / 30854 
D / 1001. 

 
 
 
                                                      
- 108 - 

confined to socially disadvantaged households. If there is a surplus capacity the housing associations 
let the dwellings to tenants with relatively high incomes, thus undermining the competitive position of 
commercial players who receive no State support." 

Its  conclusion  was  that  "the  possibility  of  letting  property  to  higher-income  groups  or  businesses 
should be regarded as a manifest flaw in the understanding of public service", specifically because the 
State support in question – consisting of a back-up guarantee by the Government and partial tax relief 
for the housing associations – was available only to those associations and thus distorted their position 
vis-à-vis their competitors in the housing market. 

Given that the service of general interest in question had a social character, the Commission stipulated 
that  housing  associations’  activities  had  to  be  directly  connected  with  "socially  disadvantaged" 
households. 

The  Commission  took  the  clear  view  that  "renting  out  homes  to  parties  who  are  not  socially 
disadvantaged  does  not  qualify  as  a  public  service".  It  concluded  by  requiring  that  "excessive  and 
permanent  surplus  capacity  of  social  dwellings  should  be  precluded  by  selling  the  dwellings  in 
question" and that "surplus capacity should be limited to a small percentage of the total stock". 

While  the  European  Commission  is  certainly  competent  to  assess  whether  "manifest  error"  has 
occurred in the definition of a service of general interest, there is reason to question its analysis of the 
"social character" of such a service. By taking the stance it has adopted, it effectively undermines the 
principle of universal access as applicable to social services, defined as such by the Member States, 
and  more  broadly  to  services  of  general  interest  within  the  European  Union.  It  also creates tensions 
with  the  principle  of  subsidiarity  and  with  the  freedom  of  Member  States  and  the  competent  public 
authorities to define services of general interest. 

The Commission’s decision, following its assessment of "manifest error" in the Dutch case – namely 
to  require  that  the  housing  associations  in  question  sell  off  their  so-called  excessive  and  permanent 
surplus capacity seems wrong-headed and partial. There is no provision in European law forbidding a 
social  housing  operator  to  manage  simultaneously  both  social  housing,  in  respect  of  which  it  has 
public-service obligations, and housing stock in respect of which no obligations apply. If the operator 
complies with the provisions of the Transparency Directive, requiring it to keep separate accounts for 
its two areas of activity and to ensure that State aid in the form of compensation is directed only to the 
general-interest section of the operation, then requiring it to sell off housing stock is an unjustified and 
disproportionate  response.  Moreover,  against  a  background  of  cuts  in  State  aid  for  housing  in  the 
Netherlands, compensation is necessary in order to ensure continuity of social housing as a service of 
general interest and the construction of new social housing stock. 

The  Commission  goes  on  to  acknowledge  this  in  its  decision  by  accepting  that  the  Dutch  housing 
associations  may  rent  out  on  the  real  estate  market  a  small  percentage  of  the  so-called  "surplus" 
housing stock as part of their activity as a service of general interest, provided that the profits from 
such rentals are allocated to the financing of their public-service remit and thus reduce the amount of 
State  aid  that  they  require  in  the  form  of  compensation.  Although  the  Commission  fails  to  specify 

 
 
 
 
 
 
- 109 - 

what it means by a "small percentage", the fact that it leaves this possibility open creates a degree of 
leeway  in  the  definition of  what  is  meant  by  a  social  housing  service  in  the  general  interest,  and  in 
tracing  the  dividing  line  between  service  activities  within  the  general-interest  remit  and  those  that 
serve private interests.  

This is an illustration of what happens when competition rules are applied mechanically to a sector as 
complex as social housing, deeply rooted as it is in a Member State’s culture of universal service and 
it lies at the origin of the compromise reached by the Council with the introduction of the Protocol on 
SGIs.

 
 
- 110 - 

 
 
- 111 - 

IV:   The SSGI Collective’s contributions to the European debate 

on social services of general interest 

•  Basic text: the May 2006 Resolution 

•  Contribution to the Social Protection Committee’s consultation process 

•  Can  a  framework  for  SSGIs  be  based  on  the  new  Article 14  and  the  Protocol  on 

services of general interest? 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
- 112 - 

The  SSGI  Collective’s  contributions  to  the  European  debate  are  based  on  three  very  different 
documents: 

• 

• 

• 

the  resolution  from  the  Paris  conference  of  30 May  2006  in  response  to  the  Commission’s 
Communication on SSGIs of 26 April 2006, addressed both to the Community institutions and to 
the Member States; 

the contribution to the Social Protection Committee’s consultation process; 

the  "non  paper"  on  an  SSGI  Directive  which  featured  in  Parliamentary  debate  about  the  Hasse-
Ferreira report on the Communication on SSGIs. The "non paper" sought to identify the elements 
of  legal  security  that  needed  to  be  achieved  in  order  to  develop  social  and  health  services  of 
general interest in the EU, and proposed an initial draft for legislation on SSGIs, based on the new 
provisions of the SGI Protocol and of Article 14 of the Reform Treaty. 

The conference resolution of 30 May 2006 

The members of the SSGI Collective – operators in the fields of social protection, health care, social 
and medicosocial services, social inclusion, integration through housing, social housing and housing 
improvement  –  made  a  joint  representation  to  the  Community  institutions  and  to  French  local  and 
regional authorities in response to the European Commission’s publication of its Communication on 
SSGIs of 26 April 2006. 

At  a  joint  conference,  held  in  Paris  on  30  May  2006  and  entitled  "Droits  fondamentaux,  protection 
sociale  et  intégration  européenne:  quel  cadre  communautaire  pour  les  services  sociaux  d’intérêt 
général?" ["Fundamental rights, social protection and European integration: how should Community 
law address social services of general interest"], the members of the Collective, as the active voices of 
representative  European  organisations,  outlined for  discussion their shared  prognosis  concerning  the 
impact of European law on their operating conditions. 

A shared prognosis 
Because  our  activities  as  SSGIs  are  intrinsically  economic,  we  are  subject  to  European  law,  and 
deregulation  represents  a  real  risk.  Despite  the  diversity  of  their  missions  in  the  fields  of  social 
protection,  health  and  personal  social  services,  French  SSGI  operators  believe  that  the  question  of 
legal security in European law, with regard to the conditions under which those missions are fulfilled, 
directly  reflects  structural  changes  that  have  taken  place  not  only  in  France  but  also  in  the  other 
Member States. Key features of these changes are: 

1.  a trend towards disengagement by the State, decentralisation of responsibilities for SSGIs and 
increased  local  and  regional  outsourcing  of  service  provision  on  the  basis  of  tendering 
procedures; 

2. 

the  emergence  of  private,  profit-oriented  players  in  a  field  of  activity  characterised  by  a 
the  social  economy  sector  (organisations  whose 
predominance  of  operators  from 

 
 
 
 
 
 
 
 
- 113 - 

administrators  have  no  pecuniary  interest  in  them,  not-for-profit  associations  and  trusts, 
mutual organisations, cooperatives, etc.) the mixed-economy sector (semi-public companies) 
and the public or quasi-public sector (utilities or public establishments); 

3. 

the  consequent  classification  of  SSGIs  (other  than  social  security  systems)  as  economic 
activities. 

The new legal context in which SSGI operators now have to take their activities forward has not been 
imposed as a direct result of Community legislation. It is as much a product of sovereign decisions and 
choices on the part of the legislature in France and other EU Member States. 

As  a  direct  consequence  of  those  choices,  however,  the  great  majority  of  SSGIs  have  been  placed 
within the field of application of the Community Treaties, and internal market and competition rules 
thus apply to them. 

We must therefore ask – given the need to sustain the planning and public regulation of the structures 
which  provide  the  services  –  under  what  conditions  the  rules  are  applicable,  taking  account  of  the 
specific social missions that the services fulfil, whether or not they have yet been classified explicitly 
in domestic law as services of general interest. 

The requirement of public regulation reflects legitimate aims of accessibility, continuity and quality of 
service in the areas of life affected, as well as the aim of protecting those who use and benefit from the 
services. 

A shared demand 
We  are  calling  for  the  legal  security  provided  by  a  European  legal  framework  appropriate  to  the 
specific nature of our social missions. 

Given 
- 

- 
- 

their  purpose  as  not-for-profit  organisations  or  organisations  whose  administrators  have  no 
pecuniary interest in them, 
the specific nature of the social missions they fulfil, 
and their contribution to effective implementation of the Treaty aims of strengthening social 
and territorial cohesion and promoting the fundamental rights of the European Union, 

SSGI operators are entitled to expect that the Community institutions and the French public authorities 
will  establish  a  stable  and  systematic  legal  framework  that  will  enable  them  to  fulfil  their  missions 
properly in full legal security. They therefore call upon: 

the  Community  institutions  to  enact  legislation  on  social  services  of  general  economic  interest 
(SSGEIs) without prejudice to any proposal for a framework directive on services of general economic 
interest, and thus: 

 
 
 
 
 
 
 
 
 
 
 
- 114 - 

1.  to  adopt  a  coordinated,  coherent  and  non-compartmentalised  approach  to  social  and  health 
services of an economic nature, via the adoption of a sector-specific directive establishing in 
particular, and in pursuit of the concept of a group of indicators, 

a.  the Member States’ freedom to define, organise and finance SSGEIs; 

b.  the  conditions  under  which  social  missions  of  general  interest  are  subject  to  the 
provisions of Articles 16 and 86(2) of the Treaty, laying down the principle that the 
fulfilment of missions of general interest shall take precedence over competition and 
internal market rules; 

c.  the conditions in relation to entrustment, approval, the granting of exclusive or special 
rights and the definition of authorisation arrangements necessary to the fulfilment of 
social  missions,  and  specifically  whether  or  not  public-procurement  rules  are 
applicable; 

d.  recognition of the specificity of the social economy and the mixed economy and the 
roles they play in the provision of social and health services, in accordance with the 
case  law  of  the  European  Court  of  Justice  and  its  implementation  by  means  of 
appropriate authorisation systems; 

e.  the principle that providers of SSGIs should be involved in identifying needs, defining 
and evaluating social missions and defining Community guidelines in respect of them; 

2.  to  evaluate  the  extent  to  which  the  Commission  Decision  on  the  financing  of  services  of 
general  economic  interest  (the so-called "Monti-Kroes  package")  of  28  November  2005  can 
provide effective legal security for national and local systems of financing SSGEIs in the form 
of compensation; 

and on the Member States, to clarify in their domestic law the conditions for recognition of SSGI 
missions and their assignment to operators, by: 

1.  calling within the Council for a sector-based directive on SSGEIs, as a logical follow-up to the 
amended  proposal  for  a  Directive  on  services in  the  internal  market  and  to  the Commission 
Communication on SSGIs; 

2.  clarifying  in  their  domestic  law  the  general-interest  nature  of  social  and  health  service 
missions,  while  respecting  the  right  of  initiative  of  those  involved  in  their  provision,  and 
without prejudice to the means whereby they are entrusted to operators; 

3.  including  socially  useful  activities  within  the  classification  of  SSGIs  in  their  domestic 

legislation; 

 
 
 
 
 
 
 
 
 
 
 
 
 
- 115 - 

4.  establishing  instruments  of  entrustment  for  operators  whose  missions  are  not  yet  explicitly 
classified as SGIs in domestic law, particularly for associations, socially useful organisations 
whose administrators have no pecuniary interest in them and mutual organisations; 

5.  implementing in domestic law the provisions of the Commission Decision on the financing of 
services  of  general  economic  interest  (the  Monti-Kroes  package)  which  introduced,  as  a 
condition of legal security for State aid in the form of compensation, the existence of an act of 
entrustment  –  to  be  produced,  in  respect  of  social  services  not  already  covered,  by 
29 November 2006; 

6.  clarifying,  for  the  benefit  of  local  and  regional  authorities,  provisions  based  on  the  Treaties 
and  the  case  law  of  the  Court  of Justice in  relation  to  the  delegation  of  missions  of  general 
interest,  particularly  through  the  granting  of  special  or  exclusive  rights,  entrustment  of  a 
mission of general interest and the definition of specific authorisation and approval systems; 

7.  ensuring that account is taken, particularly by local and regional authorities, of the diverse and 
specifically tailored means of assigning and contracting out social missions of general interest, 
given  the  increased  incidence  of  contracting  out  via  competitive  tender  in  ways  that  fail  to 
reflect missions in their entirety and have the effect of segmenting them to the detriment of 
their  quality  and  social  effectiveness.  Competitive  tendering  takes  no  account  of  operators’ 
capacity  for  initiative  or  their  ability  to  identify  social  needs  and  precludes  them  from 
involvement in the definition and evaluation of social missions of general interest. 

SSGI operators point out that, under European law, an SSGI is not classified as such on the basis of 
whether or how its activities are financed, but rather the converse: the classification of a service as an 
SSGI enables the public authorities to grant it public financing, notably in the form of compensation 
for costs connected with the fulfilment of its mission and/or of exclusive or special rights. 

SSGI operators demand to be closely involved in the entire decision-making process. 

 
 
 
 
 
 
 
 
 
 
- 116 - 

Contribution to the Social Protection Committee’s consultation process (2006 questionnaire) 

While not all social services are SSGIs, the aim of an SSGI is to meet a need, in order to guarantee 
effective universal access to locally delivered services and social protection services in accordance 
with the principles of the European Union’s Charter of Fundamental Rights. 

Two questions have to be asked in relation to social services:  

-  whether they are in the general interest or not, 
- 

and whether they are of an economic or a non-economic character.  

Although  the  questions  are  complementary,  they  are  separate.  The  answers  to  them  have  major 
consequences for the sectors concerned. 

In some cases, therefore, questions in the document presented for consultation need to be clarified. 
Is the European Commission talking about all social services or about economic social services of 
a general-interest nature? The response of the French SSGI Collective relates very specifically to 
social and health services of general economic interest. 

The French SSGI Collective is an informal network of 14 French not-for-profit organisations or 
federations  of  organisations  involved  in  social  and  health  services  of  general  interest,  ranging 
across  health,  social  housing,  social  inclusion  and  mutually-based  social  protection.  The 
Collective was formed in October 2005. 

The  activities  of  the  bodies  represented  in  the  French  SSGI  Collective  span  a  huge  range  that 
includes  social  housing,  youth  protection,  social  and  educational  action,  retirement  homes, 
establishments for people with disabilities, not-for-profit private care establishments, personal and 
home  care  services, sheltered  accommodation  for  persons  in  danger  and  victims  of  child abuse, 
social  reintegration,  crèches,  health  centres,  social  centres,  services  to  persons  in  situations  of 
social  exclusion  and  to  the  homeless,  nursing  and  nursing-care  services,  home-help  provision, 
personal care, social tourism, complementary social protection schemes and the administration of 
compulsory schemes. 

The aims of the French SSGI Collective are as follows: 

- 

- 

- 

to  promote  the  specific  features  of  SSGIs  and  of  not-for-profit  operators  (in  the  social 
economy sector) in France and in Europe; 

to participate in the ongoing European debate about SSGIs and to be in a position to the 
influence the relevant processes; 

to create a forum for information, exchange, co-operation and lobby-building for French 
SSGI operators. 

 
 
 
 
 
- 117 - 

Field 1 – Description of social services 

Please indicate whether the description of the social services as provided by the Communication 
(see  above  under  "scope")  is  appropriate  and  adequate,  also  with  a  view  to  social  security 
schemes responding to the criteria deriving from the Poucet and Pistre case law. 

By  way  of  a  preliminary  comment,  the  Collective  notes  that  the  questionnaire’s  description  of 
social  services  represents  an  advance  on  that  contained  in  the  Commission  Communication  of 
26 April  2006.7  The  questionnaire  draws  a  clear  distinction  between  compulsory  social  security 
schemes  and  complementary  social  protection  schemes.  We  believe  it  is  essential  to  make  this 
distinction  between  a  non-economic  SSGI  (social  security)  and  a  social  service  of  general 
economic  interest  (complementary  insurance).  Compulsory  schemes,  by  virtue  of  their  non-
economic character, lie outside the scope of the Treaties. There is thus no need to deal with them 
in the answer to this question. 

The  first  positive  point  is  the  Communication’s  emphasis  on  prevention,  on  the  proper 
implementation of fundamental rights and on social cohesion – functions historically performed 
by associations and mutual or semi-public bodies. 

We think it is also important to reiterate the fact that social services address the specific needs of 
persons  in  a  vulnerable  physical,  mental  or  social  situation,  albeit  temporarily.  They  pursue  a 
positive  role  in  society  inasmuch  as  they  participate  in  a  major  way  in  realising  the  Lisbon 
strategy, including with regard to employment and related economic and social perspectives. 

On the relationship between social security schemes and the criteria deriving from the Poucet and 
Pistre  case law,  the  Collective  remains  unclear:  is  this  question  directed  at  social  security  –  i.e. 
compulsory  schemes  –  or  at  social  protection  generally  (embracing  compulsory  and 
complementary schemes and health and social measures)?  

The  nub  of  the  Poucet  and  Pistre  case,  which  concerned  a  compulsory  sickness  and  maternity 
insurance scheme, concerned not its character of general interest but rather whether or not it had 
an  economic  dimension.  The  Court  spelled  out  a  number  of  criteria  for  the  non-economic 
character of social security schemes, namely that they were solidarity-based and compulsory, that 
they were financed from contributions in proportion to income, and that the benefits they provided 
were  not  proportionate  to  contributions  and,  indeed,  could  be  awarded  even  where  no 
contributions had been paid. Inter-scheme compensatory mechanisms also existed. 

Subsequently,  general-interest  criteria  were  also  included  in  the  case  law,  notably  in  the  1995 
COREVA judgment. They included: pursuit of a social purpose, absence of a profit motive, the 

7

"Implementing the Community Lisbon programme: social services of general interest in the European Union", COM 2006 177, 
26 April 2006. 

 
 
 
 
 
                                                      
  
- 118 - 

requirement  of  solidarity,  and  restrictions  on  management  bodies  in  relation  to  making 
investments. 

It  would  see,  therefore,  that  the  principles  expressed  by  the  Court  of  Justice  of  the  European 
Communities (ECJ) are a restatement of fundamental principles that ought to be used to identify 
social  services  at  Community  level,  in  order  to  clarify  not  only  what  is  or  is  not  in  the  general 
interest, but also what is or is not economic. 

The solidarity present in a national community or a community of scheme members (based on the 
absence  of  a  proportional  relationship  between  rights  to  benefit  and  contributions,  benefit 
depending on the risk represented by each individual) is a fundamental principle, around which a 
Community-level description of the concept of general interest could be constructed. 

The  Collective  would  make  the  point  that  complementary  social  protection  is  economic  in 
nature, whereas social security is non-economic. Both, however, need to be envisaged in the 
context of perpetuating a solidarity-based system of social protection designed to be in the 
general interest. 

The  social  usefulness  of  complementary  schemes  was  highlighted  in  a  report  adopted  by  the 
European Parliament in November 20008 in the following terms: 

"[…] health protection is no longer provided solely by State or statutory social protection systems, 
[…]  private-sector  schemes  set  up  on  a  profit-making  or  non-profit-making  basis  under  the 
general  heading  of  supplementary  health  insurance  have  developed  and  are  playing  an 
increasingly  decisive  role  in  providing  access  to  essential,  high-quality  care  within  reasonable 
time limits". 

Similar thinking informed the French Act no 99-641 of 27 July 1999, establishing universal health 
cover  and  making  supplementary  universal  health  insurance  ("couverture  maladie  universelle 
complémentaire" or CMUC) compulsory, and the Sickness Insurance Act of 13 August 2004. In 
our  view,  these  provisions  constitute  a  sufficient  and  appropriate  basis  on  which  the  national 
administration can issue  documents  of entrustment,  recognising  the  general-interest  character  of 
mutual social protection bodies. 

Insert N°1: The principle of universality in the social housing sector 

In the questionnaire’s definition of social housing, the universalist conceptions that exist in certain 
Member  States  are  excluded  from  classification  as  SSGIs.  European  competition  law  tightly 
restricts the public assistance that can be awarded to operators, including those entrusted with a 
general-interest  mission.  One  of  the  trends  currently  is  evidence  is  a  calling-into-question  of 
financing  for  mechanisms  intended  to  ensure  universal  solidarity:  the  only  types  of  mechanism 
that  may  be  financed  are  apparently  those  aimed  at  ensuring  focused  solidarity  (for  example, 

8  

Report on supplementary health insurance, (2000/2009 (INI), Rapporteur M. Rocard, Doc. A5-0266/2000. 

 
 
 
 
 
                                                      
- 119 - 

public financing targeted at vulnerable user groups). This trend is well illustrated by an ongoing 
dispute  concerning  the  social  housing  sector  in  Sweden  and  Holland,  where  financing  for  a 
universal  system  of  social housing,  accessible  to  all  sections  of  the  public,  has been  called  into 
question  because  it  is  deemed  incompatible  with  European  competition  law.  In  future,  public 
funds may be directed only to financing a system accessible to groups in difficulty. This reflects a 
new conception of solidarity and resembles the late-19th-century conception of welfare. 

If you consider that the description could be improved or other (types of) services 
should be added, please provide for concrete drafting suggestions. 

The SSGI Collective points out that the scope of this questionnaire, in terms of the sector covered, 
is not the same as that of the Social Protection Committee’s 2004 survey. 

It is unfortunate that health services are excluded from the scope of the Communication, and thus 
from the questionnaire. Although it is hard to delimit the health sector exactly, the aims and forms 
of organisation found there are similar to those of social services and it should be recognised that 
the  two  sectors  share  the  same  approach.  In  the  absence  of  that  recognition,  the  position  of 
medicosocial provision, straddling the health and social sectors, is blurred. 

The separation of social services from health services is largely artificial. In France, for example, 
the Public Health Code (Code de la santé publique, Article L 6323-1) stipulates that health centres 
must provide local care services and implement social measures. They do this particularly in areas 
where there is under-provision of health care. Similarly, personal services, as defined in Article 
L119-1  of  the  Labour  Code,  which  excludes  care  services,  are  intended  to  complement  health 
services for vulnerable user groups. Multi-disciplinary nursing and home-help services have also 
been  established  under  statutory  provision.  The  two  forms  of  service  are  linked  and 
complementary. 

There is a danger that differentiating between health and social services could complicate the legal 
position for operators. We would therefore like to see all social and health services dealt with in a 
single European law. It is important to emphasise that social policy and public health policy are 
one and prevention, care, social support and the organisation and financing of care and health and 
social  services  cannot  be  treated  as  distinct  stand-alone  elements.  It  is  vitally  important  to 
maintain  overall  coherence,  which  in  some  Member  States  is  the  product  of  many  years’ 
endeavour. 

 
 
 
 
 
 
 
 
- 120 - 

Insert N°2: Sector-based examples of the connection between social and health provision in 
France 

-  Provision  for  people  with  disabilities  and  elderly  people:  establishments  and  services  for  the 
elderly and people with disabilities, which assist them with everyday living, provide care or help 
them  to  integrate  into  society  (types  of  facility  include  homes  for  dependent  elderly  people, 
sheltered  accommodation,  residential  medical  care  establishments  for  adults  with  disabilities, 
specialised  accommodation,  medicosocial  support  services  for  adults  with  disabilities  and  home 
nursing  services  as  well  as  various  forms  of  provision  for  minors  and  young  adults  with 
disabilities  –  for  example,  educational  facilities  offering  medical  and  psychological  support, 
medical and educational institutions, medical and vocational institutions, specialised educational 
services and home care services). 
The  French  public  authorities  also  decided  very  recently  that  home-hospitalisation  teams  would 
work  in  homes  for  the  elderly,  bring  with  them  specialist  skills  that  might  otherwise  have  been 
unavailable in that setting. 

-  Integration:  establishments  and  services  to  assist  people  in  difficulty  (e.g.  drug  addicts  and 
alcoholics), including non-residential treatment centres for alcoholism and specialised centres for 
the care of drug addicts – facilities offering both social and medical support. 

-  Medical-educational  sector:  including,  for  example,  medical  and  educational  institutions 
(establishments for minors with disabilities, offering care and educational support).  

The social housing sector, however, does not consider that the Communication’s definition of it is 
pertinent, for two reasons:  

(cid:1)  the  very  fact  that  the  Communication  defines  the  mission  of  social  housing,  whereas 
responsibility  for  such  a  definition  lies  with  the  Member  States,  subject  to  the  general 
principles of the Treaties, and with the ECJ through its consistent case law in relation to 
services of general economic interest, and housing policy is an exclusive competence of 
the Member States; 

(cid:1)  the gap between this definition and the French conception of social housing as reflected in the 
missions entrusted by the national legislature to social housing schemes under Articles L411 
and  L411-2  of  the  Construction  and  Housing  Code  (Code  de  la  construction  et  de 
l’habitation),  particularly  those  of  "contributing  to  the  necessary  social  mix  in  towns  and 
neighbourhoods" and "pursuing diversity in housing stock". 

We would also like to clarify one important detail in relation to the characteristics of social services. 
Whereas  charitable  intervention  simply  responds  on  a  one-off  basis  (or  repeatedly)  to  morally 
unacceptable  situations  created  (in  most  cases)  by  individuals’  vulnerability,  social  intervention 
responds  to  such  situations  by  questioning  the  economic  and  political  conditions  under  which  such 
vulnerability finds expression and generates the given situation. 

 
 
 
 
 
 
 
 
- 121 - 

Field 2 – Pertinence of the characteristics 

Please  indicate  whether  the  characteristics  identified  by  the  Communication  are  pertinent  to 
gauge the specific features of social services of general interest as compared to other services 
(of general interest)? 

The characteristics highlighted by the Communication are pertinent and reflect the specific mode 
of  functioning  of  bodies  that  observe  certain  principles  such  as  solidarity,  absence  of  a  profit 
motive or a non-selective approach to risks. This group of indicators enables a clear distinction to 
be drawn between SSGIs, on the one hand, and, on the other, the so-called "network" services of 
general economic interest as well as those social services that cannot be classified as being in the 
general interest and to which internal market rules will apply. 

The concept of a group of indicators should be implemented in a proportionate, transparent and 
stable  manner,  according  to  the  activity  in  question.  It  would  enable  each  Member  State  to 
produce its own exact definitions of SSGIs by type of activity and operator. 

Are  there  characteristics  to  be  added?  Please  provide  for  concrete  drafting  suggestions  and 
examples of services concerned by these characteristics. 

The  Collective  would  like  to  see  greater  emphasis  placed  on  operators’  independent  and 
democratic functioning. Recognition should be afforded, for example, to the specific operation of 
mutual  associations  on  the  principle  of  members’  participation  in  decision-making  at  general 
assemblies (a form of democratic control). 

Similarly, social housing bodies and organisations offering sheltered and halfway housing accord 
importance to mechanisms whereby beneficiaries are involved in meeting the need. 

The  Collective  would  also  emphasise,  on  the  one  hand,  the  existence  of  providers  created 
specifically  for  a  given  mission,  as  in  the  housing  sector  for  example,  and,  on  the  other,  the 
importance of recognising the operator’s right of initiative. 

Insert N° 3 

With regard to complementary insurance as an area of mutual organisations’ activity, most of the 
points highlighted by the European Parliament’s November 2000 report on supplementary health 
insurance are pertinent in terms of European legislation. They include a de-personalised approach 
to premiums and to acceptance of risk; non-discrimination between different categories of people 
in  the  fixing  of  premiums,  with  no  requirement  for  a  medical  prior  to  joining  a  scheme,  thus 

 
 
 
 
 
 
- 122 - 

avoiding any tendency to select as members only "good risks"; introduction of an obligation on 
insurers  to  provide  lifelong  cover;  introduction  of  a  system  of  guarantee  to  protect  scheme 
members  in  the  event  of  the  operator  going  bankrupt;  measures  to  take  account  of  certain 
categories  of  user  in  vulnerable  situations  for  medical,  social  or  economic  reasons;  and 
encouragement  for  private  insurers  to  participate  in  developing  preventive  measures  and 
implementing a policy of access to care through reasonable pricing. 

The concept of proximity should also be emphasised via measures targeting both specific areas of 
life  and  individuals.  The  Communication’s  reference  to  the  characteristic  of  being  "strongly 
rooted  in  (local)  cultural  traditions"  could  be  strengthened  by  adding  the  words  "and  in 
geographical areas where local provision is offered to meet specific, locally identified needs". It 
is, in fact, one of the specific features of SSGIs that they are delivered at a local level in response 
to locally expressed needs. 

Lastly, the Collective would like to introduce a definition of individual vulnerability and reference 
to the principle of respect for the equal dignity of all human beings. It is important to remember 
that  the  aim  of  the  operators’  activities  is  to  respond  appropriately  to  each  individual’s  needs, 
while ensuring equality of access across an entire territory. 

Please provide as a maximum 3 relevant examples of social services representing one or more 
of the (additional) characteristics which could be taken as good example for the special nature. 
Please  indicate  which  concrete  element  of  the  characteristics  is  clearly  deducible  from  the 
example chosen. 

The SSGI Collective proposes the following examples:  

Rural  nursing  homes:  sustaining  healthcare  provision  in  all  geographical  areas  has  become  a 
major  challenge.  It  is  important,  in  areas  already  under  provided  for  and  unattractive  to  health 
professionals,  to  ensure  access  to  care  and  continuity  of  care.  Remote  rural  areas  suffer 
particularly in this regard. Innovative solutions therefore need to be identified in order to reconcile 
economic imperatives with the principles of public health care and equality of access to care. The 
challenge  for  local  services  is  to  strike  a  balance  between  patients’  and  health  professionals’ 
expectations  in  order  to  maintain  a  direct  connection  that  can  never  be  replaced  by  information 
and communication technologies. Such was the thinking behind the establishment in 2005 by the 
Mutualité Sociale Agricole (MSA) of nine multi-disciplinary nursing homes in rural areas. The aim 
is  to  promote  improved  coordination  of  care,  while  at  the  same  time  seeking  to  improve  heath 
professionals’ working conditions in a multi-disciplinary environment: not only GPs are involved, 
as the nursing homes seek to draw on the widest possible panel of health professionals (including 
nurses,  masseurs  and  physiotherapists,  and  indeed  pharmacists,  ambulance  drivers,  podiatrists, 
psychologists, midwives and dentists). Resources (in the form of premises, secretarial services and 
medical  equipment)  are  shared  by  all  these  professionals  in  the  provision  of  everyday,  non-
residential  care.  There  are  many  advantages  in  this  locally-focused  system,  ensuring  as  it  does 

 
 
 
 
 
- 123 - 

both continuity of care and a permanent base for it. A further advantage lies in the nursing homes’ 
potential to promote public health campaigns. 

Insert N°4 

The respective positions of paid and voluntary staff in executive and representational roles 

While management teams are generally remunerated in both the charitable sector and the social 
sector,  a  distinguishing  feature  of  the former is its  greater reliance  on  volunteers  for  day-to-day 
tasks,  particularly  in  the  area  of  support  to  households.  Not-for-profit  bodies  are  increasingly 
opting to pay professionals with training in relevant areas; these staff are supported by teams of 
volunteers for  whom  they  perform  a  consultancy  role.  Opting  to implement  associative  projects 
using teams of paid staff reinforces the economic nature of the activities concerned. 

Although  economic,  however,  these  activities  remain  not-for-profit.  The  associations  concerned 
are administered on a non-profit-making basis by bodies (such as bureaux or management boards) 
made up of volunteers. It is the latter who are responsible for representing the associative project 
at a political level in dealings with public authorities and operational partners. While the initiative 
may well be associative, its aim is to meet social needs not otherwise covered and it involves end-
users  –  i.e.  persons  in  need  –  in  the  definition  and  implementation  of  solutions  (by  taking 
ownership of processes, and in the pursuit of autonomy rather than dependency, for example). As 
general-interest  operators  (recognised  in  domestic  law  as  socially  useful),  social-sector 
associations work within a statutorily prescribed framework and play a full part in the definition 
and/or implementation of local social policies. This work is generally done by volunteer members 
of their controlling bodies or delegated to the association managers. 

Insert N°5 

The vulnerable nature of people cared for in health, social and medicosocial establishments 

Under French law, social and medicosocial intervention aims, "respecting the equal dignity of all 
human  beings,  […]  to  respond  appropriately  to  their  individual  needs  […]  ensuring  equitable 
access throughout the territory" (Article L116-2 of the Code of Social and Family Intervention, in 
accordance  with  Section 3  of  the  Act  of  2 January  2002,  reforming  social  and  medicosocial 
intervention). 

It is essential to bear in mind the characteristics of the groups cared for by social and medicosocial 
services. It is difficult to regard them as consumers in a position to make rational and informed 
choices in the context of a supply-and-demand system in a traditional market. Social intervention 
is directed at people in extremely precarious and vulnerable situations. How does one assess the 
ability of these types of user to make choices and to act independently? 

- Elderly people 

 
 
 
 
 
 
 
 
 
- 124 - 

The average age at which people move into a home for the elderly is 84 and the average length of 
stay rarely exceeds a year. In many cases, this is the move of last resort, made under constraint. 

 - People with disabilities 

Some of the people in this category have mental disabilities that affect their capacity for choice 
and discernment. Others suffer from a physical disability. 

  - People excluded from society and family 

A feature of this group is the wide range of people it covers: single men, single women or single 
mothers  with  children,  entire  families,  homeless  people,  migrants  in  difficulty,  people  on  the 
margins of society, elderly people, asylum seekers, people from broken homes, illegal residents, 
drug addicts, alcoholics and people with mental illnesses, for example. These people suffer from a 
process of exclusion that may involve many factors – economic, social, family-related or cultural 
– as well as psychiatric illness. 

 - Children at risk and/or delinquent children 

These are children who find themselves in a vulnerable situation as a result of abuse or who have 
broken  the  law  and  have  been  placed  by  the  courts  in  care  or  under  the  supervision  of  a  social 
service. 

 - Users of healthcare associations 

Not-for-profit  healthcare  establishments  have  specialised  in  long-term  care  (of  the  elderly  and 
people  with  disabilities),  in  the  treatment  of  cancer  and  drug  addiction  and  in  various  forms  of 
medium-term rehabilitative residential care. Users of these establishments are people in situations 
or physical or psychological vulnerability. 

Healthcare associations have also developed service activities, either based in permanent centres 
or provided on a mobile basis,  for very vulnerable, elderly or isolated people. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
- 125 - 

How could these characteristics relate to the exclusion of specific social services from the scope 
of the  Services  Directive  (Art.  2(2)(j) read  together with the  relevant  Recital 27)  as  politically 
agreed on 29 May 2006 (Doc. 100003/06)? 

The Collective finds it regrettable, precisely on account of these characteristics, that the field of 
exclusion of social services from the scope of the Services Directive did not take the form of an 
open list, as adopted by the European Parliament at the Directive’s first reading. This would have 
made the situation more coherent. 

As  an  area  of  social  services,  the  social  services  of  general  economic  interest  would  have  been 
explicitly  excluded  –  a  solution  better  reflecting  the  reality  of  health  and  social  provision  at 
national  level.  With  regard  to  the  wording  of  the  Directive  supported  at  second  reading,  the 
Collective  has  questions  about  the  practical  interpretation  of  the  formulation  "social  services 
relating to […] support of families and persons permanently or temporarily in need". 

The exclusions from the Services Directive, as adopted by the European Parliament at the second 
reading on 15 November 2006, are not consistent with the field of application of the Commission 
Communication  and  the  characteristics  it  defines.  The  existing  formulation  is  certain  to  require 
interpretation  by  the  Court  of  Justice  and  will  make  no  contribution  to  legal  clarification  for 
SSGIs. 

As  illustrated  by  the  examples  cited  above  there  is  no  justification  for  dissociating  the  health 
sector from that of social services. 

Field 3 – Use of characteristics by Member States 

Please give a definition of what the  "general interest" is in your country, and specify in which 
way (at national, regional or local level) it is defined or is intended to be defined in the future. 

There  is  no  explicit  definition  of  the  concept  of  general  interest  but  it  is  explained  in  terms  of 
specific requirements. 

The  concept  needs  to  be  clarified  because  its  non-recognition  poses  problems  for  certain 
organisations, as will be clear from the following. 

When  France  responded  to  the  Social  Protection  Committee’s  2004  questionnaire  on  SSGIs,  it 
made  the  point  that  services  of  general  interest  (SGIs)  play  a  key  role  in  social  and  territorial 
cohesion in France. They are provided by organisations of different types, are financed variously 
and pursue missions of general interest that are defined in different ways. The notion of "national" 
SGIs  is  not  generally  relevant  in  describing  the  characteristics  of  these  services  in  France.  The 
concept of a service "of general social interest" is not defined as such. 

 
 
 
 
 
 
 
 
- 126 - 

Nonetheless, there are French laws and regulations that refer explicitly to the concept of general 
interest. 

(cid:2)  The Act of 2 January 2002, reforming social and medicosocial intervention, makes no distinction 
between  public  and  private  operators  or  commercial  and  not-for-profit  operators.  Among  the 
necessary agents of social and medicosocial provision, private operators are accorded the status of 
"développeur  de  l’intérêt  general"  ["promoter  of  the  general  interest"]  on  the  same  footing  as 
public and semi-public operators. In relation to local authorities’ recourse to cooperation with the 
private  sector  on  specific  missions,  the  Act  refers  to  missions  "of  general  interest  and  social 
utility" rather than public service missions. It would seem that in the case of missions of general 
interest,  the  bodies  concerned  identify  themselves  as  initiators  of  the  proposed  intervention  of 
general  interest  and  social  utility.  Article  L 311-1  of  the  French  Code  of  Social  and  Family 
Intervention  transposes  this  concept  by  breaking  it  down  into  six  distinct  categories.9  It  also 
stipulates that the mission in question are fulfilled by "physical persons or social and medicosocial 
institutions". 

(cid:2) 

(cid:2) 

Delivery  of  public-health  missions  is  commissioned  and  supervised  by  local  authorities.  While 
there  is  clearly  provision  for  this  in  national  legislation,  including  an  official  list  of  mission 
characteristics,  the  further  question  arises  of  public-authority  recognition  in  the  form  of  an 
instrument concerning the mission of general interest. 

In the health sector, a list of missions of general interest, with reference to their funding from the 
public  purse,  is  set  out  in  the  Decree  of  8 April  2005.  The  missions  included  (as  opposed  to 
their  characteristics)  are  those  accessible  at  all  healthcare  establishments.  Within  the  range  of 
missions, however, certain types of activity are not necessarily accessible at all establishments. 

There is also evidence of use of Article 4 (Entrustment) of the European Commission Decision of 
28 November 2005 "on the application of Article 86(2) of the EC Treaty to State aid in the form 
of  public  service  compensation  granted  to  certain  undertakings  entrusted  with  the  operation  of 
services  of  general  economic  interest",  which  covers  aid  to  "hospitals".  In  France,  healthcare 
establishments  are  defined  in  the  Public  Health  Code;  Articles  L 6112-2  and  L 6161-6  provide 
that a public hospital service shall be delivered by private healthcare establishments; and that not-

9

1)  Evaluation  and  prevention  of  social  and  medicosocial  risks,  information,  investigation,  advice,  guidance,  training  and 
mediation and reparation 

2) Administrative and legal protection for children and the family, young people, people with disabilities, elderly people or people 
in difficulty 

3) Educational, medico-educational, medical, therapeutic and learning and training-related interevention, adapted to the needs of 
indviduals, their level of development and potential, changes in their circumstances and their age 

4) Intervention to promote educational integration, adaptation, rehabilitation, inclusion, social and occupational integration, help 
with return to work, information and advice about technical aids and work support 

5) Assistance with day-to-day activities, support and care, including palliative care 

6) Intervention to promote social and cultural development and integration through work. 

 
 
 
                                                      
 
 
 
 
 
 
 
- 127 - 

(cid:2) 

for-profit  private  healthcare  establishments  shall  be  allowed  to  participate  in  delivery  of  the 
hospital service, provided that they meet a number of organisational and operational conditions. 

In the medicosocial field, if an activity falls within the scope of competition, there is a system of 
authorisation  for  "social  assistance"  which  implicitly  recognises  missions  of  general  interest. 
Because  the  authorisation  system  is  run  by  département  [county]  authorities,  however,  and 
requires  users  to  contribute  to  the  financing  of  the  activities,  it  is  not  always  operated  –  some 
authorities considering it unsuited to activities directed at certain types of people. Under European 
law, however, an SSGI is not classified as such on the basis of whether or how its activities are 
financed,  but  rather  the  converse:  the  classification  of  a  service  as  an  SSGI  enables  the  public 
authorities to grant it (direct or indirect) public financing, notably in the form of compensation for 
costs connected with the fulfilment of its missions. 

(cid:2)  With regard to social housing, French law interprets the general interest in terms of the particular 
requirements  and  missions  pertaining  to  it  (see  the  Loi  Solidarité  et  Renouvellement  Urbain 
[Urban  Solidarity  and  Renewal  Act])  and  its  codification  in  Articles L411  and  L411-2  of  the 
Construction and Housing Code) namely:  

• 

• 

• 

implementing the right to housing; 

contributing to the necessary social mix in towns and neighbourhoods; 

improving the housing conditions of people on low incomes or people in disadvantaged 
circumstances; 

•  pursuing diversity in housing stock. 

In the areas of social housing, housing improvement and integration through housing, the general 
interest  can  be  understood  as  the  requirement  of  meeting  a  basic  social  need,  namely  that  of 
accessing  or  keeping  decent  accommodation.  This  general-interest  requirement  is  rooted  in 
practical  implementation  of  the  right  to  housing,  which  in  France  is  constitutionally  recognised 
and enshrined in law. 

How can the characteristics be used by the Member States, at national, regional or local level, when 
defining the particular general-interest mission of a social service and determining the arrangement 
for its performance and organisation? 

The "group of indicators" method is a means of identifying SSGI operators’ missions based on the 
principle  of  general interest  and  of  giving  it  practical  expression  in  the  form  of  the  entrustment 
obligation.  The  major  principles  of  a  system  geared  to  the  protection  of  individuals  must  be 
respected and must underpin general-interest activities. They include: 

- 

specific principles such as recognition of the importance of human dignity, solidarity, 
social  justice,  social  cohesion  and  wellbeing,  social  capital,  the  empowerment  of 

 
 
 
 
 
- 128 - 

service users and their participation in the conception, implementation and evaluation 
of social services; 

- 

- 

response  to  needs  and  shortcomings  in  society,  which  the  market  is  incapable  of 
addressing  satisfactorily,  or  which  may  even  be  generated  by  certain  market 
structures; 

not-for-profit  operation  or  the  limited  pursuit  of  profit,  assignment  of  earnings  to 
improvement  of  service  quality  and  production  of  new  social  services,  and  a  local 
base  with  responsibility  for  a  specific  territory  –  all  principles  that  express  the 
common characteristics identified in the Communication. 

Have  there  been  problems  in  the  past  with  giving  a  concrete  mandate  to  fulfil  the  particular 
general-interest mission of a social service? 

As  outlined  above,  objective  legal  considerations  inform  the  provision  for  missions  of  general 
interest in legislation and regulations. The SSGI Collective considers that the texts in question are 
sufficiently  detailed  to  be  regarded  as  explicit  acts  of  entrustment.  This  applies  notably  to  the 
provisions  concerning  housing  associations.  That  view  has  to  be  qualified,  however,  on  two 
grounds in particular. 

• 

In  certain  sectors  in  France,  the  problem  is  an  absence  of  recognition  (or  limited 
recognition)  of  general-interest  characteristics.  This  means  that  establishments  or 
activities receive authorisation on the basis of these characteristics even though they have 
not  been  clearly  identified  as  representing  the  general  interest.  Even  among  bodies  in 
receipt  of  public  financial  support,  there  are  few  examples  of  explicit  entrustment  by 
public  authorities  for  missions  in  the  general  interest.  Establishments  and  activities  are 
nonetheless properly authorised on the grounds that they address the general interest (by 
meeting peoples’ needs). 

•  Not-for-profit  bodies  fulfilling  socially  useful  missions,  notably  under  the  terms  of  the 
Urban  Solidarity  and  Renewal  Act,  have  no  specific  status  under  competition  law, 
particularly in relation to access to public procurement, and this leaves them increasingly 
exposed to competition from commercial entities. The situation is exacerbated by the lack 
of territory-specific rules for the sector and the absence of a culture of agreed aims at local 
authority level. 

As  outlined  above,  the  Act  of  2 January  2002,  reforming  social  and  medicosocial  intervention, 
defines operators in the field in question as "promoters of the general interest". The French SSGI 
Collective  stresses  the  need  to  clarify  the  general-interest  character  of  social  and  healthcare 
missions,  respecting  the  operators’  right  of  initiative  and  without  prejudice  to  means  of 
entrustment of those missions. 

 
 
 
 
 
- 129 - 

Field 4 – Use of characteristics at EU level 

Please  indicate  how  (e.g.  in  a  binding  way  or  not),  in  your  view,  the  organisational 
characteristics  could/should  be  used  at  EU  level  (e.g.  agreed  checklist)  in  order  to  verify 
whether for a specific social service the applicable Community rules are respected? 

(cid:1)  We  need  to  be  guided  generally  by  pragmatism,  proportionality  and  the  decision-
making  method  for  State  aid  to  small-scale  services  of  general  economic  interest, 
hospitals  and  social  housing  (the  so-called  Monti-Kroes  package),  which  is 
particularly applicable in relation to SSGIs. 

(cid:1)  The  conditions  under  which  SSGIs  are  compatible  with  European  law  need  to  be 
defined in advance, so that public authorities and service providers can enjoy legal 
certainty, at the same time introducing a possibility of appeal, as envisaged in the 
Monti-Kroes package, and a regular evaluation process. 

(cid:1)  The Monti-Kroes package is a basis from which to work, and it should be extended 
to  all  SSGIs,  particularly  with  regard  to  the  questions  of  special  rights  and 
authorisation systems. Its field of application should be determined with reference 
to  specific  missions  of  general  interest  (for  example,  promoting  solidarity, 
fundamental  rights  and  human  dignity  and  meeting  basic  social  needs)  as  well  as 
shared  organisational  characteristics,  and  in  accordance  with  the  principle  of 
subsidiarity. 

(cid:1)  A  legal  instrument  along  these  lines  must,  however,  result  from  codecision  and 
must  be  drafted  on  the  basis  of  internal-market  law.  Its  essential  effect  will  be  to 
harmonise  the  conditions  on  which  regulatory  arrangements  for  SSGIs  are 
compatible  with  European  law,  such  arrangements  remaining  entirely  within  the 
competence  of  the  Member  States.  This  will  entail  laying  down  conditions  of 
compatibility and providing for avenues of appeal where they are not applied. 

The  French  SSGI  Collective  sees  a  directive  on  social  and  health  services  of  general  economic 
interest  (excluding  social  security,  which  is  non-economic)  as  a  vital  tool  for  the  operators 
concerned. Its purpose should be to set out major principles and values and to list characteristics 
(as identified in Field 2 above) in the form of a group of indicators available to the Member States 
in exercising their authority to determine and finance the services in question. 

If necessary, such a directive could be broken down into a series of sector-based instruments. The 
first  of  these  could  be  a  response  to  the  Commission’s  recent  initiative  in  the  form  of  a 
Communication on health services. 

 
 
 
- 130 - 

Field 5 – Experiences with the application of Community law 

The  Communication  and  its  Annex  provide  for  a  further  clarification  on  the  conditions  of 
application  of  Community  rules  and  principles  to  social  services  in  particular  in  the  following 
fields: 

o 

o 

o 

o 

Public procurement 

Public-private partnerships 

Freedom to provide goods and services and freedom of establishment 

State Aid 

In  the  application  of  Community  law,  there  are  a  number  of  grey  areas  and,  indeed,  areas  of 
potential  friction. The  Collective  has  produced  a  publication  on  SSGIs,10  which  addresses  these 
questions and illustrates them in relation to each of the sectors that the Collective represents. 

It is our conclusion that legal clarification is necessary. 

We believe it is also worthwhile adapting Community law to avoid the risk of a creaming-off of 
certain  activities.  Agencies  and  bodies  active  in  social  protection  are  already  campaigning  to 
prevent  discrimination  and  the  creaming-off  effect,  which  are  inevitable  risks  if  internal  market 
rules  are  applied  without  regard,  in  any  directive  that  characterises  the  operators  performing 
missions of general interest, to the specificities of such operators. A development along these lines 
was  proposed  in  the  European  Parliament’s  November  2000  report  on  supplementary  health 
insurance. 

Please indicate whether difficulties (may) still arise and if so in which legal areas and for which 
type of social services. 

The Collective is convinced that implementation at national level is potentially complicated by the 
absence of clear descriptions and definitions of what constitutes a health or social service. If the 
list of characteristics produced were to be exhaustive, it would conflict with existing provisions in 
national legislation, which should – in the interests of proportionality and subsidiarity – be more 
pertinent to national systems. 

Nonetheless, the  Collective  believes it  would  be useful at  European  level  to have  a  harmonised 
group  of  indicators  that  would  clarify  conditions  for  the  recognition  and  assignment  of  SSGI 
missions at the national level. 

10

Les services sociaux et de santé d’intérêt général: droits fondamentaux versus marché intérieur?, Editions Bruylant, 2006 

 
 
 
 
 
                                                      
  
- 131 - 

Please provide for concrete examples and experiences to illustrate these difficulties. 

Examples of difficulties relating to the impact of Community legislation on the SSGI sector in 
France: 

Freedom to supply goods and provide services and freedom of establishment 
In  seeking  to  remove  obstacles  between  Member  States  and  barriers  deemed  discriminatory  to 
operators from other Member States, there is a risk of undermining regulatory arrangements for 
social and health services and failing to take account of their specificities. 

It is not so much the possibility of operators from other Member States coming to set up in France 
that poses the risk (the concept of proximity to the user being unaffected), but rather the calling-
into-question – for the sake of the European internal market – of national arrangements to regulate 
the  operation  of  services (namely  systems  of  approval,  prior  authorisation  etc.).  The  fact is that 
these national arrangements are developed, in cooperation with the relevant stakeholders, with the 
aims  of  protecting  service  users,  defending  the  quality  of  services  and  ensuring  that  they  are 
available across the national territory. 

The risk of dismantling national regulatory arrangements appears to have been avoided, at least 
provisionally, since the adoption of the amended Directive on Services in the Internal Market, but 
a specific European framework, stipulating the conditions for systems of approval and contracting 
between SSGI operators and the public authorities, remains an important requirement. 

Public procurement 
European rules on public procurement11 have increasingly introduced the logic of competition into 
contractual arrangements between local authorities and solidarity-based associations. 

In  France,  as  a  rule,  contractual  arrangements  between  local  authorities  and  solidarity-based 
associations  (engaged  in  healthcare  and  social  and  medicosocial  provision),  in  relation  to  the 
development of service activities or the establishment of facilities, take two main forms: 
an agreement around a specific set of aims and the payment of a grant; 
a  legally  specified framework  establishing  a  given activity  (under, for  example,  Act  no  
2002/2 concerning the social and medicosocial sector). 

- 
- 

Both  these  forms  of  agreement  are  based  on  the  notion  of  promoting  initiatives  by  voluntary-
sector operators who come forward with projects. 

Gradually,  however,  that  notion  is  being  overtaken  –  partly  as  a  result  of  developments  at 
European level – by a different approach, that of inviting operators to compete by putting out a 
call for tenders. In this scenario the public authority is in charge both of commissioning projects 
and of the conditions for their implementation. 

11  

Directive  2004/18  of 31 March 2004  on the  coordination  of procedures  for  the  award  of public  works  contracts, public  supply 
contracts and public service contracts. 

 
 
 
 
 
 
 
 
                                                      
- 132 - 

From a broader perspective, application of general EC Treaty principles on the free movement of 
goods  and  services  and  freedom  to  provide  services  has  led  the  Community  authorities  to  lay 
down conditions for public procurement, to ensure that procurement procedures are not organised 
solely  at  national  or  regional  level,  thus  restricting  the  exchange  of  goods  and  services  in  the 
European single market. 

Public bodies that wish to award contracts for the works, services or the supply of equipment, are 
thus  required  to  obey  rules  on  publicising  such  contracts,  on  equality  of  treatment  and  on 
competitive tendering by potential suppliers. These requirements are set out in European public-
procurement law and detailed in French law, in the form of the Public Procurement Code12. 

In  France,  the  social  and  medicosocial  sector  is  exempt  from  any  formal  competitive-tendering 
requirements inasmuch as there is a specific statutory procedure whereby operators’ projects for 
the establishment of new services have to be submitted for consideration. It would seem, however, 
that social, medicosocial and health services are gradually being brought within the scope of "the 
competitive  procedures  inherent  to  the  award  of  public  contracts:  public  procurement  or  the 
delegation of public services". 

To date there exist only a few isolated decisions by public authorities along these lines, but they 
could  subsequently  be  used  to  extend  this  approach  to  the  sector  generally,  on  the  basis  of 
respecting  the  principles  of  equal  treatment  of  operators,  free  access  to  public  contracts, 
transparency and free competition. Pressure from European level could combine here with a trend 
in  local  and  regional  authorities’  practices.  In  France,  for  example,  councils  at  département 
[county] level are making increasing use of the Public Procurement Code in awarding contracts to 
solidarity-based associations; they are not automatically renewing existing agreements with such 
associations  and  in  some  cases  they  are  cancelling  agreements  on  the  grounds  that  they  do  not 
comply with the Public Procurement Code. 

Insert N° 6 
Public-private  partnerships  in  the  field  of  social  housing:  considerable  uncertainty  prevails  over 
the  classification  of  certain  mixed-economy  social  housing  operators  as  public-private 
partnerships  (PPP),  over  the  classification  of  certain  housing  associations  as  public-private 
infrastructure partnerships (PPIP), and over the law as it applies to both PPP and PPIP. 

Examples of changing practice among local and regional authorities 
In some areas, limited companies have taken over housing-related social support tasks. There is a 
similar  trend  in  relation  to  social-support  initiatives  that  aim  to  offer  individuals  integration 
through work. In fact, integration through work is one of the areas most affected by the change, 
along with specialised prevention, infant care and housing-related social support. 

12  

Decree no 2006-975 of 1 August 2006 establishing the Public Procurement Code. 

 
 
 
 
 
 
 
 
                                                      
- 133 - 

This shift from a grant-based approach to one organised on the principle of payment for services, 
with  contract-awarding  authorities  encouraging  competition  among  providers,  blurs  the 
specifically associative dimension in the implementation of general-interest missions. There is an 
inherent risk here that the procedures followed will implicitly deny recognition of the significance 
of the not-for-profit principle in the fulfilment of these missions. 

Please give an indication on the debate in your country/organisation on how these difficulties 
should  be  addressed  (e.g.  clarification  of  the  non-applicability  of  State  aid  rules  to  different 
social services of general interest). 

The  Altmark  Trans  judgment  of  24 July  200313  clarifies  to  some  extent  the  uncertainty  around 
financing for missions of general interest. It also touches on the issue of entrustment. 

The judgment stipulates that subsidies which represent compensation for services provided by the 
recipient  undertakings  in  order  to  discharge  public  service  obligations  shall  be  exempt  from 
classification as State aid, provided that four strict conditions are met: 

o  the  recipient  undertaking  is  actually  required  to  discharge  public  service  obligations  and  those 

obligations have been clearly defined14; 

o  the  parameters  on  the  basis  of  which  the  compensation  is  calculated  have  been  established 

beforehand in an objective and transparent manner; 

o  the  compensation  does  not  exceed  what  is  necessary  to  cover  all  or  part  of  the  costs  incurred  in 

discharging the public service obligations; 

o  where  the  undertaking  which  is  to  discharge  public  service  obligations  is  not  chosen  in  a  public 
procurement procedure, the level of compensation needed has been determined on the basis of an 
analysis of the costs which a typical undertaking would have incurred. 

Where these four criteria are met, public-service compensation does not constitute State aid, and 
Articles 87 and 88 of the Treaty are not applicable. 

The SSGI Collective explicitly calls for recognition in respect of public authorities, in the form of 
an instrument that observes the principles of proportionality, non-discrimination and transparency. 
Such an instrument would produce formal legal certainty for SSGI operators. 

With  regard to  the  question  of  financing,  certain  characteristics  and functional aspects  of  social 
and health activities must be given their place, through: 

13  

14

Judgment of 24 July 2003 in Case C-280/00, Altmark Trans, ECR I-7747. 

In  this  regard,  the  ECJ  concluded  that  it  was  for  the  national  court  –  which  referred  the  case  for  a  preliminary  ruling  –  to 
ascertain whether the public service obligations imposed on Altmark Trans were based clearly in national legislation and/or on 
the licences which were the subject of the main dispute. 

 
 
 
 
 
 
 
                                                      
  
- 134 - 

• 

• 

a  comprehensively  participatory  approach  to  a  system  of  social  protection  based  on 
solidarity; 

the  concept  of  viable  projects  that  respond  to  peoples’  needs  and  to  the  requirement  of 
access for all, in accordance with those needs. 

Given  those  two  principles,  it  should  be  noted  that  mutual  social  protection  bodies  derive  their 
resources chiefly from members’ contributions and such bodies play a full role in the solidarity-
based French social protection system. They may also benefit in a peripheral way from subsidies 
and other advantages of a practical or financial nature, such as tax relief or exemption or credit 
facilities, the sole aim of which must be to enable them to sustain their role. 

As  a  logical  response  to  this  reality,  the  French  national  authorities  have  identified  a  group  of 
characteristics  justifying  tax  relief  for  the  responsible  administration  of  solidarity-based 
supplementary  insurance  contracts,  provided  that  the  operators  concerned  fulfil  the  additional 
criteria of solidarity and a mutual approach. 

Under European law, an SSGI is not classified as such on the basis of whether or how its activities 
are financed, but rather the converse: the classification of a service as an SSGI enables the public 
authorities to grant it public financing (directly or indirectly), notably in the form of compensation 
for costs connected with the fulfilment of its mission. 

Although public-service tasks may be delegated to them, it is generally on their own initiative that 
mutual social-protection associations engage in general-interest activities. The compensation paid 
to SSGIs is just enough to cover their missions of general interest and does not create situations of 
over-compensation. Evaluation of public service costs is, however, problematic in itself. 

The  not-for-profit  nature  of  the  bodies  in  question  also  complicates  the  task  of  analysing  their 
costs by comparison with those of a typical undertaking (as required in the fourth of the Altmark 
judgment’s conditions).  

Finally,  Community  rules  concerning  State  aid  in  the  form  of  public-service  compensation15 
include provision for public-service compensation that is potentially classifiable as State aid but 
may, nonetheless, be exempted from the requirement of notification or, in the cases of hospitals 
and  social  housing,  may  enjoy  more  general  exemption. These  provisions  in  themselves  are  not 
enough, however, to resolve the problems created by the specificities of SSGIs.  

According to the Commission, aid that does not meet all the Altmark criteria may, nevertheless, 
be deemed compatible with European law, under Article 86§2 of the EC Treaty, if it is necessary 
to the functioning of a service of general economic interest. Thus, the Community rules exempt 
from the requirement of notification small-scale aid16 and aid to activities related to social housing 
and  hospitals.  There  is  every  reason  for  extending  this  exemption  from  the  notification 
requirement to SSGIs generally. 

15  

16  

The Communication in which the Commission sets out important details concerning calculation of compensatory amounts and the 
problem of over-compensation, OJ C 297, 29 November 2005. 

Commission Decision 2005/842/EC of 28 November 2005, OJ L 312, 29 November 2005, p. 67. 

 
 
                                                      
- 135 - 

As already explained, aid to "hospitals" and "social housing" is exempt from notification on the 
basis of the characteristics referred to in the Commission Decision of 28 November, cited earlier 
28  November  2005.  The  term  "hospital"  must  be  considered  with  reference  to  each  national 
healthcare  system,  which  will  determine  the  types  of  establishment  covered  by  it.  Despite  this 
exemption, the national public authorities require that each point in Article 4 of the Commission 
Decision  be  addressed in  order  for  an  act  of  entrustment  for  a  mission  of  general  interest to  be 
valid. 

If the bodies which are members of the SSGI Collective did have to meet the Altmark criteria in 
order for it to be recognised that they fulfil missions of general interest, they would point out that 
the  four  conditions  in  question  refer  specifically  to  the  Altmark  case.  It  ought  to  be  possible  to 
transpose them to SSGIs and to social protection in a way that reflects the specificities of these 
activities.  As  it  stands,  by  the  very  nature  of  what  they  do,  not  all  the  bodies  that  deliver 
healthcare  and  social  services  are  capable  of  meeting  literally  the  conditions  laid  down  in  the 
Altmark judgment. 

Field 6 – Social security schemes responding to the criteria deriving from the Poucet and 
Pistre case law 

Please indicate whether the questions in the Fields 2, 3 and 4 could also have significance with 
regard to social security schemes responding to the criteria deriving from the Poucet and Pistre 
case law. 

This question requires clarification. Fields 2, 3 and 4 concern the concept of general interest in the 
case of services of an economic nature. According to ECJ case law, however, social security (as 
an activity) remains a clearly non-economic SSGI, so the question as framed does not arise. 

By  the  same  token,  all  the  proposals  referred  to  for  a  directive  on  social  services  of  general 
interest should confine themselves to addressing economic SSGIs and should not apply to social 
security. 

Please indicate whether there is a need for further and specific clarification on the application 
of Community rules as enumerated in Field 5 with regard to these social security schemes.  

A clear distinction needs to be made here between social security systems (to which a functional 
approach is required) and social security bodies (which require an organic approach).  

With regard to the former, the situation is clear: unlike complementary social protection activities, 
social security systems constitute non-economic SSGIs, which are required to observe Community 
rules solely in the area of coordination (Regulation 1408-71 et seq.). 

 
 
 
 
 
- 136 - 

The situation of the latter has to be seen in two lights, in relation to their activities. As providers of 
social  security  systems  they  are  covered  by  the  argument  in  the  previous  paragraph.  As  an 
extension of their public-service obligations, however, certain, social security bodies may develop 
other,  clearly  economic,  activities  (personal  services,  healthcare  and  social  provision  or  health 
services,  for  example)  in  respect  of  which  their  concerns  about  the  application  of  Community 
rules  to  SSGIs  will  be  the  same  as  those  of  other  types  of  operator,  including  voluntary 
associations and mutual organisations, given that they are covered by the same Regulation. 

Field 7 – Future steps at Community level 

Which expectations do you have concerning future steps at Community level? 

The community-level approach that the European institutions adopt needs to be coordinated and 
cohesive and it should not separate social and health services of an economic nature through the 
adoption  of  a  sector-based  directive  or  similar  legal  framework.  Currently,  social  and  health 
services are the subject of two distinct Community processes. A separate proposal for a directive 
on health services, covering questions such as patient mobility, is expected to be published in the 
near  future,  while  the  theme  of  social  services  was addressed  in  a  Commission  Communication 
that appeared at the end of last April. This split approach is regrettable. 

The SSGI Collective wants to see greater legal certainty and believes that a directive is needed to 
characterise missions of general interest in relation to social and health services of an economic 
nature. 

Such  a  legal  framework  would  be  capable  of  providing  a  stable  and  transparent  operating 
environment for SSGIs at Community level, in strict observance of the principle of solidarity and 
particularly of the responsibilities of local and regional authorities for defining the missions of the 
services in question and for their administration and financing. 

In terms of content, the SSGI Directive should: 

- 

- 

- 

- 

- 

- 

reassert  that  Member  States  are  free  to  define,  organise  and  finance  social  services  of 
general economic interest (SSGEIs); 
acknowledge the specificities and roles of the social economy and the mixed economy in 
the provision of these services; 
lay  down  conditions  for  the  conclusion  of  agreements  and  contracts  between  SSGEI 
operators and public authorities (based on the requirement of transparency in relation to 
the terms and content of acts of entrustment); 
define  the  essential  conditions  of  compatibility  for  the  existence  of  special  rights  in  the 
form  of  authorisation  systems  as  a  means  of  imposing  public-service  obligations  in 
respect of missions of general interest; 
stipulate the conditions under which the EC Treaty provisions on competition law shall be 
applicable to the missions of general interest discharged by the services in question; 
assert  the  principles  of  quality  in  SSGIs,  evaluation  of  needs  and  participation  by 
beneficiaries of the services; 

 
 
 
 
- 137 - 

- 

establish  a  European-level  system  whereby  social  operators  can  take  part  in  decision 
making (on the identification of needs, the definition of missions and evaluation). 

Because  social  and  health  services  have  been  excluded  from  the  field  of  application  of  the 
Services  Directive,  it  is  important  in  the  near  future  to  achieve  the  adoption  of  a  stable  and 
specific European legal framework that will clarify the application of competition law and internal 
market rules in relation to missions of general interest discharged by these services, for without it 
they  will  continue  to  suffer,  to  some  extent,  from  legal  uncertainty,  being  dependent  on 
developments in the case law of the ECJ. 

Lastly, it is important throughout the process of developing provision for SSGIs that the European 
institutions should provide a secure framework for dialogue and cooperation with voluntary sector 
operators. The fact is that not-for-profit operators will be key players in the process of identifying 
needs and structuring responses to them. They therefore have a vital role in monitoring SSGIs and 
discussing provision for them. 

The member bodies of the SSGI Collective are acutely aware of the responsibilities and duties that 
this implies.  

In case further steps should be considered, what could be the content, but also the advantages 
or  disadvantages  of  these,  including  in  particular  intensified  exchange  of  information,  open 
method  of  co-ordination, Commission’s  Communications  but  also  a  Framework  Directive for 
social services? 

In  the  current  situation,  the  open  method  of  coordination  (OMC)  is  a  less  relevant  tool  than  a 
statute capable of offering legal security. It is a useful approach in terms of exchanges of practice 
but it cannot clarify grey areas and areas of potential conflict with Community law. 

The call for new legislation has already been formulated by many of the bodies active in social 
provision,  at  various  conferences  and  meetings  and  in  the  course  of  consultations.  The 
Commission  undertook  to  bring  forward  proposals  in  the  second  half  of  2007,  and  the  SSGI 
Collective hopes to be fully involved in their preparation. 

Please indicate the expectations with regard to the monitoring and dialogue procedure in the 
form of biennial reports announced by the Communication.. 

The  Collective  supports  the  Commission’s  initiative  for  obtaining  an  overview  of  the  sector  in 
Europe. We are waiting for the Commission to respond to the demand from those involved in the 
sector  for  a  directive  dealing  specifically  with  social  and  health  services  of  general  economic 
interest. The same demand was also formulated recently by both the European Parliament, when 
adopting its opinion on the White Paper on services of general interest, and by the Committee of 
the Regions. 

 
 
 
 
 
 
 
- 138 - 

Can  a  framework  for  SSGIs  be  based  on  the  new  Article 14  and  the  Protocol  on  services  of 
general interest? 

The  SSGI  Collective  considers  that  the  only  way  to  resolve  the  legal  insecurity  affecting  efforts  by 
public authorities in the Member States to regulate in relation to social services of general interest is 
by establishing an appropriate framework for these services in European law.  

Following the exclusion of social services from the Services Directive, that framework will inevitably 
reflect  a  political  compromise  between  the  Council  and  Parliament  with  regard  to  conditions  for 
reconciling the Treaty provisions with the requirement that social services of general interest should be 
regulated and organised by the Member States. 

The draft of the Reform Treaty, adopted by the Heads of State and Government in Lisbon, contained 
provisions and proposals – notably the new Article 14 – which have reopened the debate about a legal 
basis for a Community framework instrument specific to social services of general interest. 

The new Protocol to the Treaty has also reaffirmed the values particular to services of general interest 
by  listing  them  explicitly  in  primary  law.  This  political  step  on  the  Council’s  part  is  all  the  more 
significant  in  that  it  resulted  from  a  dispute  between  the  Prime  Minister  of  the  Netherlands  and  the 
European Commission concerning application of the principle of universal access to a social service of 
general interest and use of the Commission’s power to assess whether manifest error is present in the 
classification of a generally accessible social service as being in the general interest. 

Against  this  background,  the  SSGI  Collective  has  prepared  a  practical  proposal  for  a  European 
framework for social services of general interest. It is not a formal or definitive proposal but rather a 
working document. 

As  a  contribution  to  the  debate  within  the  Community,  it  is  intended  primarily  as  an  interactive, 
educational initiative that will help to highlight, in the most practical possible way, existing areas of 
tension between European law and the Member States’ regulation of social services of general interest. 

At this stage the text is an initial draft and it represents no commitment on the part of the Collective 
members. It should be regarded as a work in progress, the sole aim of which is to stimulate ideas from 
all stakeholders and to involve them in discussing its content and its relevance.  

Explanatory statement 

Social  services  of  general  interest  (SSGIs)  have  a  particular  role  to  play,  as  an  integral  part  of  the 
European model of society. Organised on the basis of the solidarity principle, they are person-focused, 
they  enable  people  to  benefit  properly  from  their  fundamental  rights  and  offer  them  a  high  level  of 
social protection, and they promote social and territorial cohesion. It is therefore in the Community’s 
interest that the Member States should develop high-quality SSGIs that meet people’s essential social 
needs, particularly in the areas of housing, health, employment, education and training. 

 
 
  
 
 
- 139 - 

The provision, development and modernisation of these services are entirely consistent with the goals 
set  by  the  Lisbon  European  Council  in  March  2000,  notably  with  regard  to  a  positive  connection 
between economic, social and employment policies.  

While  it  is  the  exclusive  responsibility  of  the  Member  States,  in  accordance  with  the  principle  of 
subsidiarity and the Treaty Protocol on services of general interest, to define specific missions and the 
general-interest requirements to be met through the provision of SSGIs, and to determine how they are 
organised and financed, application of the general Treaty provisions, of secondary legislation and of 
European Court of Justice case law nevertheless impacts directly on arrangements for discharging and 
financing services if they are of an economic nature. 

Clarification of how these principles and rules are applied – which is the purpose of this proposal for a 
European framework instrument based on Article 14 of the Treaty – will help those authorities in the 
Member States which use commercial systems for the provision of SSGIs to develop and modernise 
their services in an environment of complete legal security, in the interests of the Community and in 
accordance  with  the  principles  of  subsidiarity  and  local  autonomy.  The  Commission  has,  indeed, 
stated that it is in the Community’s interest to develop a "systematic approach in order to identify and 
recognise the specific characteristics of social and health services of general interest and to clarify the 
framework in which they operate and can be modernised". 

The aim of this initial draft is largely educational: to initiate discussion about the actual content of the 
proposed  European  framework  instrument,  taking  account  of  the  new  legal  basis  provided  by  the 
Reform Treaty (Article 14) and the Protocol on services of general interest. It sets out to define in a 
systematic way the conditions of application of European law, and particularly of internal-market and 
competition rules, to arrangements for the implementation and financing of SSGIs which the Member 
States deem to be in the general interest but which are classed as economic in nature. 

Thirteen  potential  themes  for  legislative  provision  have  been  identified  and  practical  proposals  for 
each are presented in the following series of notes. 

 
 
 
 
 
 
 
 
- 140 - 

Note 1 
Which social services does this framework instrument cover? 

Article 1: Aim and scope 

1.  The aim of these rules is to detail how, while observing the general principles of the Treaty and 
especially the principle of subsidiarity, and in accordance with the provisions of the Protocol on 
services  of  general  interest,  Member  States  shall  safeguard  the  provision  of  social  and  health 
services that meet certain general-interest requirements of a specific nature, given that it is in the 
Community’s interest for the Member States to develop these services because they contribute to 
the  effective  realisation  of  its  aims  of  strengthening  social  and  territorial  cohesion  and  ensuring 
that its fundamental rights are properly respected and because, at the current stage of development 
of the internal market, they have little impact on intra-Community trade. 

2.  These  rules  are  concerned  solely  with  social  and  health  services  of  general  interest,  which  are 
economic  in  nature  and  are  provided  by  undertakings  in  a  given  market  and  in  return  for 
remuneration. Compulsory social protection schemes and public health systems, as non-economic 
services  of  general  interest,  are  not  covered  by  these  rules,  and  nor  are  other  social  and  health 
services  that  are  provided  free  of  charge  without  direct  or  indirect  remuneration  and/or  at  the 
initiative of the competent authorities in the Member States where services of the same nature are 
not available on the market. 

Comments 

The  first  article  describes  the  aim  and  scope  of  the  proposed  framework  instrument  in  accordance 
with  the  provisions  of  the  Treaties  and  with  European  Court  of  Justice  case  law,  pointing  out  in 
particular the non-economic nature of social protection schemes and public health systems. 

The  effect  of  this  first  article  is  to  recognise  specifically  that  it  is  the  task  of  the  Member  States  to 
safeguard  the  provision  of  social  and  health  services  but  that,  because  many  of  the  services  in 
question are economic in character, the provisions of Community law on the internal market and on 
competition are applicable. 

The point is also made that it is in the Community’s interest for the Member States to develop these 
services, and this brings a positive and purposeful dimension to the legislative proposal, in line with 
the principle of co-responsibility inherent in the Treaty. 

Because  the  impact  of  these  services  on  trade  is,  by  their  nature,  limited,  the  provisions  of 
Article 86(2)  apply  in  their  entirety,  the  Community’s  interest  being  preserved  by  the  low  level  of 
impact and by the positive contribution to strengthening social cohesion and to the implementation of 
the fundamental rights laid down in the European Union Charter of Fundamental Rights. 

 
 
 
 
 
 
Note 2 
Definition of common concepts 

- 141 - 

Article 2: Definitions 

For the purposes of this legislation, the following definitions shall apply: 

"social  and  health  services  of  general  economic  interest"  means  services  of  general  economic 
interest  that  discharge  a  specific  general-interest  mission  for  a  social  and/or  health-related  purpose 
defined by the competent authorities in the Member States; 

"economic activity" means an activity consisting of the supply of services in a given market by an 
undertaking or by a not-for-profit or charitable organisation irrespective of its legal status or the means 
whereby it is financed; 

"competent  authority"  means  any  public  authority  in  a  Member  State  that  is  responsible  for 
organising the provision of social and health services or for entrusting providers to discharge a specific 
mission of general interest, or any body invested with such responsibility by a public authority; 

"provider of social and/or health services of general economic interest" means 

- 

- 

- 

any undertaking or group of undertakings established under public or private law and tasked by a 
competent  authority  with  the  provision  of  social  and/or  health  services  of  general  economic 
interest; 

any public, public-private or private not-for-profit body created specifically to meet social and/or 
health-related general-interest needs; 

any  private  not-for-profit  and/or  charitable  body  recognised  by  a  competent  authority  as 
discharging a social and/or health-related general-interest mission on its own initiative; 

"in-house  provider"  means  a  provider  over  which  the  competent  authority  in  a  Member  State 
exercises a dominant influence and a comprehensive level of supervision, comparable to that exercised 
over  its  own  services,  and  whose  geographical  area  of  responsibility  is  restricted  to  that  of  the 
competent authority; 

"external  provider"  means  a  provider  over  which  the  competent  authority  in  a  Member  State 
exercises  neither a  dominant  influence  nor a  comprehensive  level  of supervision  comparable  to that 
exercised over its own services; 

"specific  general-interest  mission  for  a  social  and/or  health-related  purpose"  means  a  task 
specifically concerned with the provision of social and/or health services, as defined by a competent 
authority in a Member State, and directed at meeting a social need; 

 
 
 
 
 
 
 
- 142 - 

"public-service  obligation"  means  a  requirement  or  set  of  requirements  defined  by  a  competent 
authority in a Member State and determined in conjunction with a provider, by means of an official 
document, to ensure the discharge of a specific general-interest mission; 

"authorisation  system  as  a  means  of  imposing  a  public-service  obligation"  means  a  procedure 
defined by the competent authority in a Member State, under which a provider is required to take steps 
in  order  to  obtain  from  a  competent  authority  a  formal  act  of  entrustment,  or  an  implied  decision, 
concerning the exercise of a social and/or health-related service activity of general economic interest, 
and the object of which is to ensure the proper discharge of the specific general-interest mission and/or 
to correct an imbalance of information between the beneficiary of a service and its provider; 

"exclusive right" means a right granted by a competent authority in a Member State to a provider of 
social and/or health-related services of general economic interest, entitling that provider to discharge 
social  and/or  health-related  services  in  a  given  geographical  area  to  the  exclusion  of  other  potential 
providers; 

"special  rights"  means  rights  granted  by  a  competent  authority  in  a  Member  State  to  a  number  of 
providers  of  social  and/or  health-related  services  of  general  economic  interest,  entitling  those 
providers to discharge social and/or health-related services in a given geographical area, through the 
introduction of an authorisation system as a means of imposing a public-service obligation in order to 
ensure the discharge of a specific mission. 

"direct  entrustment"  means  the  entrustment  by  a  competent  authority  in  a  Member  State  of  a 
specific general-interest mission to a given provider without any formal prior procedure opening the 
mission to competition by inviting tenders in accordance with public procurement provisions; 

"official  act  of  entrustment"  means  one  or  more  legally  binding  documents  that  demonstrate  the 
existence  of  an  agreement  between  a  competent  authority  in  a  Member  State  and  one  or  more 
providers  for  the  purpose  of  tasking  the  provider  or  providers  with  the  provision  of  social  and/or 
health-related  services  of  general  economic  interest,  acknowledging  that  the  provider  or  providers 
have  a  right  of  initiative  in  that  regard,  or  officially  recognising  that  the  provider  or  providers 
effectively discharge the specific mission of general interest. For the purposes of this legislation, and 
in accordance with the rights of the Member States, such documents may also consist of: 

(i) 

(ii) 

a decision adopted by competent authorities in the Member States with the prior consent of the 
provider or providers, which may take the form of a law, regulation, contract or agreement, or; 

a  decision  adopted  by  competent  authorities  in  the  Member  States  for  the  purpose  of 
acknowledging  that  bodies  created  specifically  to  meet  needs  of  a  general-interest  character 
and/or  private  not-for-profit  bodies,  recognised  as  such,  effectively  discharge  the  specific 
mission of general interest; 

(iii) 

the conditions attached to a decision adopted by a competent authority in a Member State, to 
the  effect  that  the  authority  will  provide  the  services  in  question  itself  or  entrust  their 
provision to an in-house provider; 

 
 
- 143 - 

"public  service  compensation"  means  compensation,  particularly  of  a  financial  nature,  directly  or 
indirectly granted to a provider from public funds by a competent authority in a Member State during 
the period of implementation of a public-service obligation, for the purpose of covering all or part of 
the associated costs; 

"evaluation" means analysis of the way in which a specific mission of general interest is discharged, 
with a view to its proper performance and its capacity to meet the relevant general-interest needs of a 
social and/or health related nature. 

Comments  

The purpose of Article 2 is to define precisely the various key concepts commonly used in Community 
law,  which  feature  in  the  legislative  proposal  and  explain  the  specific  requirements  inherent  in  the 
classification of social and health services as services of general economic interest. 

General-interest  need  >  specific  mission  >  public-service  obligations  >  entrustment  of  the 
administration  of  a  service  to  a  provider  >  compensation  for  costs  or  other  form  of  financing> 
evaluation of the proper performance of a mission. 

Apart from its legal aspect, the list of definitions also serves the educational purposes of "translating" 
European jargon into "ordinary" language and highlighting the essential and exclusive role played by 
the  competent  authorities  in  the  Member  States  in  classifying  services  and  ensuring  that  they  are 
properly discharged. 

Effective access to legal security depends just as much on the responsibility of the Member States as 
that of the Community – if not more so – particularly with regard to meeting the obligations implied 
by transparency. 

The  suggested  definitions reflect the generally  accepted  sense  of the terms,  as well  as  the  meanings 
inherent in the Treaty provisions and the relevant case law, while adapting them to the special nature 
of social and health services. This applies particularly in relation to the existence of (public, public-
private  and  predominantly  social-economy)  providers  specifically  created  to  meet  general-interest 
needs, and in respect of which specific entrustment provisions, based on Article 86(2) of the Treaty, 
will be proposed in Article 6. 

 
 
 
 
 
- 144 - 

Note 3 
Who defines social services of general interest? 

Article 3 
Definition of social and health services of general economic interest and of specific missions of 
general interest 

Under  the  provisions  of  the  Protocol  on  services  of  general  interest,  annexed  to  the  Treaty  on 
European Union and to the Treaty on the Functioning of the European Union: 

1.  It  is  the  responsibility  of  the  competent  authorities  in  the  Member  States  to  define  social  and 
health services of general economic interest and to ensure that they are provided, in order, in the 
interest of the Community, to meet people’s social needs. 

2.  Without prejudice to the Member States’ competence to lay down explicit definitions in domestic 
law, services that present the characteristics listed in Appendix 1 shall automatically be considered 
as social and health services of general economic interest. 

3.  In accordance with the principle of transparency, when the competent authorities in the Member 
States  define  a  social  and/or  health  service  of  general  economic  interest,  they  shall  stipulate  its 
specific mission of general interest, as well as the general-interest requirements that will apply to 
its provision, without prejudice to application, at the Member States’ discretion, of the principle of 
universal service. 

4.  The competent authorities in the Member States shall define specific requirements, characterising 
the provision of the relevant social and/or health services, by means of public-service obligations, 
which they shall impose on the service providers in order to ensure that specific general-interest 
missions are properly performed. 

Comments 

Article 3 sets out the general conditions that follow from the Treaties (and specifically the Protocol on 
services  of  general  interest)  and  from  case  law  concerning  the  definition  of  services  of  general 
interest, establishing in particular the responsibility of the Member States for defining and classifying 
the  general-interest  services  concerned;  for  defining  their  specific  mission  or  missions  of  general 
interest as well as the particular requirements that will determine how those missions are discharged; 
and lastly for commissioning undertakings to discharge them by means of formal entrustment. 

The Article also refers, by way of illustration, to a list of indicators for the classification of SSGIs 

 
 
  
 
 
 
 
- 145 - 

Note 4 

Who defines how social services are implemented? 

Article 4 
Means whereby specific social and/or health related missions of general interest are discharged 

1.  In  observance  of  the  European  Union’s  shared  values,  the  competent  authorities  in  the  Member 
States shall define how specific general-interest missions are discharged and how social and health 
services of general economic interest are provided. 

2.  The competent authorities in the Member States may do any of the following (the list not being 

exclusive): 

a.  provide social and health services of general economic interest themselves; 

b.  assign provision of social and health services of general economic interest to an in-house 

provider or providers; 

c.  assign provision of social and health services of general interest to an external provider or 
providers  entrusted  with  such  provision  and  established  specifically  to  meet  a  general-
interest need; 

d.  assign provision of social and health services of general interest to an external provider or 
providers  with  the  status  of  a  not-for-profit  or  charitable  organisation,  which  discharges 
missions recognised by the competent authority as being in the general interest; 

e.  assign provision of social and health services of general interest to one or more external 
providers  under  an  existing  public-private  institutional  partnership  or  a  public-private 
institutional partnership specifically established for the purpose; 

f.  assign  provision  of  social  and  health  services  of  general  interest  to  any  other  external 

provider. 

3.  The  competent  authorities  in  the  Member  States  shall,  when  assigning  provision  of  a  service  to 
one or more in-house or external providers, as listed in subparagraphs b to f above, draw up a legal 
document  entrusting  the  specific  mission  of  general  interest,  in  accordance  with  Article 5  and 
observing the principle of transparency enshrined in the Treaties. 

Comments 

This article confirms both the freedom of the competent authorities to select how a mission or service 
is discharged and the need for an act of entrustment to meet the Treaty requirement of transparency.  

 
 
  
 
- 146 - 

It also includes reference to one of the specificities of the sector, namely the existence of not-for-profit, 
voluntary and/or charitable (i.e. social economy) providers, to whom the competent authorities may 
assign  the  administration  of  these  services  in  accordance  with  European  Court  of  Justice  case  law 
(the Sodemare judgment), provided that they are financed under the principles of solidarity. 

The  Community  law  provisions  applicable  to  the  act  of  entrustment  of  a  specific  general-interest 
mission are laid down in Articles 5 and 6. 

 
 
 
- 147 - 

Note 5  

How is the Treaty principle of transparency to be applied? 

Article 5 
Application of the principle of transparency:  
official act of entrustment of a specific social and/or health related mission 
of general interest 

1.  The competent authorities in the Member States shall implement the provisions of Articles 3 and 4 

in observance of the Treaty principle of transparency. 

2.  The  competent  authorities  in  the  Member  States,  when  assigning  a  specific  social  and/or  health 
related mission of general interest to an in-house or an external provider, shall establish an act of 
entrustment.  This  official  document  may  take  the  form  of  a  law  or  regulation,  a  contract  or 
agreement, or a decision adopted by a competent authority to assign the discharge of the mission 
to one or more in-house or external providers by means of a call for tenders or a direct entrustment 
procedure.  The  act  of  entrustment  must,  in  particular,  indicate  in  advance,  in  an  objective  and 
transparent manner, the following:  

- 

- 

- 

- 

the  nature  of  the  specific  mission  of  general  interest,  the  general-interest  requirements 
associated  with  it,  the  public-service  obligations  inherent  in  it,  including  requirements  in 
respect of pricing, and their duration; 

rules  concerning  the  amendment  or  termination  of  the  act  of  entrustment,  in  order  to  take 
account of unforeseeable developments, to ensure continuity of the service and to avoid any 
disruption to it; 

the  provider  or  providers  to  whom  the  service  is  entrusted,  whether  the  entrustment  is  on  a 
one-off or an ongoing basis, any exclusive or special rights, any authorisation system, and the 
geographical area concerned; 

in the case of financing in the form of compensation, the parameters to be used for calculating 
the compensation in respect of costs associated with the performance of the specific mission. 
Such  parameters  shall  be  set  so  that  the  level  of  compensation  cannot  exceed  the  amount 
necessary  to  cover  all  or  part  of  the  costs  incurred  in  implementing  the  public-service 
obligations, taking account of any revenue arising there form and retained by the provider as 
well as any reasonable profit realised. 

 
 
 
  
 
Comments 

- 148 - 

This article contains provisions that follow from the Treaties and from the relevant Court of Justice 
case law concerning the obligation of entrustment, an obligation restated in the Monti-Kroes package 
– and one which determines the legitimacy of aid in the form of compensation to "small-scale services 
of general economic interest", hospitals and social housing undertakings – as well as in the common 
position  adopted  by  the  Council  which  led  to  the  exclusion  of  social  services  from  the  Services 
Directive. 

The  article  introduces  the  option  of  entrustment  by  means  of  an  agreement  between  the  competent 
authority and the provider. 

 
 
- 149 - 

Note 6 
How is the requirement of entrustment of providers to be implemented? 

Article 6 
Means of entrusting a specific social and/or health related mission of general interest 

1.  Specific social and/or health related missions of general interest shall be entrusted to an external 

provider by means of an official act in the form of a call for tenders or direct entrustment. 

2.  The procedure adopted in the case of a call for tenders shall be open, transparent, fair and non-
discriminatory.  Without  prejudice  to  the  binding  Community  rules  on  calls  for  tenders,  the 
procedure  may  give  rise  to  negotiations,  provided  that  the  principle  of  transparency  is  observed 
and the candidates are accorded equal treatment. 

3.  The competent authorities in the Member States may decide to entrust specific social and/or health 
related missions of general interest directly to one or more in-house or external providers, either 
on a one-off or an ongoing basis, without issuing a call for tenders but subject to observance of the 
general principles of transparency, non-discrimination and equality of treatment among providers. 
To  that  end,  the  competent  authorities  shall  ensure  that  such  a  step  is  adequately  publicised  in 
advance. 

4.  In the case of bodies created specifically to meet a general-interest need, and that of not-for-profit 
and/or  charitable  bodies  recognised  as  such  by  a  competent  authority,  the  latter  may  decide  to 
entrust a specific general-interest mission directly and/or to recognise by means of an official act 
that  the  bodies  in  question  do,  in  fact,  discharge  specific  general-interest  missions,  without 
prejudice to provisions imposed by the competent authority concerning specific requirements and 
observance of public-service obligations. 

Comments  

This article sets out the two main methods of entrustment, namely the call for tenders (following public 
procurement  procedures)  or  direct  entrustment  (subject  to  the  general  Treaty  principles  of 
transparency, equality of treatment and non-discrimination).  

It introduces the option of comprehensive and specific entrustment of not-for-profit and/or charitable 
bodies, in the form of an official act of recognition of the particular general-interest missions that they 
discharge, under application of the principles contained in the Sodemare judgment and subject to the 
terms  of  the  Council’s  common  position  with  regard  to  the  exclusion  of  social  services  from  the 
Services Directive.  

Introduction  of  the  possibility  of  comprehensive  entrustment  reflects  one  of  the  specificities  of  the 
sector in question – the fact that local providers are widely scattered and numerous, thus making it 
difficult to insist on individual entrustment. 

 
 
 
 
 
 
 
 
- 150 - 

Note 7 
How is the supply of social services of general interest to be regulated? 

Article 7 
Authorisation systems as a means of imposing public-service obligations in respect of social 
and/or health related missions of general interest 

1.  The competent authorities in the Member States may impose upon service providers a system of 
authorisation, under which their capacity to fulfil particular social and/or health related missions 
of general interest has to be verified in advance, bearing in mind the information imbalance that 
makes the beneficiaries of social and/or health related services dependent on the service providers 
because of the vital nature of the needs to be met. 

2.  The system of authorisation may entail administrative authorisation prior to the exercise of a given 
service; a specific statute requiring that beneficiaries be represented on the board of the providing 
body;  the  requirement  that  providers  should  operate  on  a  not-for-profit  basis;  an  obligation  to 
maintain  a  presence  in  a  given  area  and  to  offer  a  locally  orientated,  ongoing  service;  or 
observance of a particular ethical approach in the provision of services to the beneficiaries.  

3.  The system of authorisation must be transparent and objectively justified under the terms of the 
first paragraph of this article; it must not discriminate with regard to the nationality of providers; 
and potential providers must be notified about it in advance. 

4.  Systems  of  authorisation  that  meet  these  criteria  shall,  in  principle,  be  compatible  with  the 
provisions  of  the  Treaty,  inasmuch  as  they  are  objectively  justified  by  the  requirement  that  a 
specific  social  and/or  health  related  general-interest  mission  be  properly  performed  and  that 
public-service  obligations  be  imposed  –  that  requirement  arising  from  a  compelling  reason  of 
general interest because it concerns the practical implementation of a social and/or health policy 
objective.  

Comments 

This article is innovatory in that it reflects provisions inherent in the relevant Court of Justice case 
law, allowing public authorities in the Member States to establish authorisation systems as a means of 
imposing public-service obligations (see Analir judgment).  

It provides legal security for the authorisation schemes particular to SSGIs that were excluded from 
the field of application of the Services Directive, inasmuch as it establishes for them basic conditions 
of compatibility by combining the concept of a compelling reason of general interest in the internal 

 
 
 
 
 
 
 
- 151 - 

market  and  the  requirement,  under  Article 86(2)  of  the  Treaty,  that  missions  should  be  properly 
performed. 

It is a key article in the process of securing the way that provision is organised, in the light of Articles 
43 and 49 of the EC Treaty concerning the internal market. Social and health services were excluded 
from  the  revised  draft  of  the  Services  Directive  on  account  of  the  risk  of  undermining  these 
authorisation  systems,  the  purpose  of  which  is  to  correct  the  information  imbalance  between  the 
beneficiaries and the providers of services. 

 
 
- 152 - 

Note 8 

How can regulation of social services be reconciled with the internal market? 

Article 8 
Granting of exclusive or special rights necessary to the fulfilment of a specific social or health-
related mission of general interest 

1.  The competent authorities in the Member States shall grant or maintain exclusive or special rights 
only  where  these  are  objectively  justified  by  the  provisions  of  Article 7  or  necessary  for  the 
economic viability of the services concerned. 

2.  Such exclusive or special rights must be defined with reference to the official act of entrustment 
for the social or health-related services of general economic interest concerned, and must specific 
the geographical area in which they are applicable  

3.  The  granting  of  exclusive  or  special  rights  must  be  adequately  publicised  in  advance  and  must 

respect the principles of equality of treatment and non-discrimination among providers. 

Comments 

This article sets out the relevant provisions inherent in the Treaty and in Court of Justice case law. It 
brings legal security to the existence of special or exclusive rights by making their compatibility with 
the Treaty provisions contingent on the proper performance of general-interest missions, as required 
by Article 7 under the terms of the Treaty. 

 
 
  
 
 
- 153 - 

Note 9 

In the light of competition rules, how are social services to be financed? 

Article 9 
Financing implementation of a specific social or health-related mission of general interest 

1.  The  competent  authorities  in  the  Member  States  shall  determine  methods  of  financing  the 
implementation of specific social or health-related missions of general interest so as to ensure that 
social  and  health  services  of  general  economic  interest  are  financially  viable  and  affordable  by 
their beneficiaries. 

2.  Aid  in  the  form  of  compensation  for  costs  inherent  to  the  implementation  of  social  or  health-
related  public-service  obligations  and  granted  by  the  competent  authorities  to  service  providers 
shall  not  fall  under  the  Community  rules  on  the  control  of  State  aid,  where  the  provisions  of 
Article 5 are applied. 

3.  When the competent authorities in the Member States grant providers exclusive or special rights, 

they shall comply with the provisions of Article 8 of this directive. 

Comments 

This article proposes an innovative political compromise, going back, in effect, on the fourth criterion 
in the Altmark judgment, so that aid in the form of compensation will not fall within the scope of State 
aid  rules,  subject  to  satisfaction  of  the  first  three  Altmark  criteria  as  enshrined  in  Articles  5  and  6 
(concerning acts of entrustment and the principle of fair compensation, definition of the parameters 
used  for  calculating  compensation  and  transparency  of  direct  entrustment).  It  could  be  seen  as  a 
return to the position of the Ferring judgment. 

Given  the  minimal  impact  of  the  services  in  question  on  trade,  provided  that  the  principle  of  fair 
compensation  is  observed,  along  with  the  principles  of  transparency,  non-discrimination  and  equal 
treatment,  aid  from  the  public  purse  cannot  constitute  an  economic  advantage  for  the  recipient 
undertaking,  nor  can  it  affect  competition  because  the  general  principles  of  the  Treaty  will  be 
respected in the entrustment procedure for service providers. 

At  the  same  time,  while  the  article  asserts  the  Member  States’  freedom  with  regard  to  financing 
arrangements, it lays down the principle that the services should be financially viable and that, in the 
light of the Community interests involved (notably that of social cohesion), they should be affordable 
by those who benefit from them. 

The  provision  requiring  that  acts  of  entrustment  be  transparent  guarantees  both  the  principle  of 
transparency and the possibility of appeal for providers. 

 
 
 
 
 
- 154 - 

It is not the proposal’s aim to circumvent the basic conditions of compatibility for aid in the form of 
compensation, for these are incorporated into the preceding articles; what it postulates is that once 
those conditions are in place, the possibility of any effect on trade is sufficiently neutralised for the de 
minimis aid rules to be applicable. 

It is hard, moreover, to reconcile development of social and health services – in which affordability is 
of prime importance (given the proportion of household spending on housing and health, for example) 
with  the  Community  aim  of  cutting  State  aid.  Surely,  in  a  27-member  European  Union,  excluding 
public  support  for  SSGIs  from  the  scope  of  State  aid  controls,  provided  that  the  provisions  of  this 
directive are applied, constitutes sound application of the principle of proportionality. 

 
 
- 155 - 

Note 10 

How and by whom are social services to be evaluated? 

Article 10 
Evaluation of the performance of a specific social or health-related mission of general interest 

1.  The  competent  authorities  in  the  Member  States  shall  define  methods  for  evaluating  the 
performance  of  specific  missions  of  general  interest  and  the  satisfaction  of  social  and/or 
health-related general-interest needs. 

2.  In  carrying  out  such  evaluation,  identifying  the  needs  in  question  and  defining  specific 
missions,  the  competent  authorities  in  the  Member  States  shall  ensure  that  all  stakeholders, 
particularly service providers and beneficiaries, are involved. 

Comments 

This article introduces the principle that the performance of general-interest missions shall be subject 
to evaluation at the initiative of the Member States and with the involvement of service providers and 
beneficiaries. 

 
 
 
 
 
 
- 156 - 

Note 11 

What about the quality of social services? 

Article 11 
The quality of social and health services of general interest 

1.  The  competent  authorities  in  the  Member  States  shall  establish  a  high  level  of  quality  for 

social and health services of general interest. 

2.  When they evaluate the quality of social and health services of general interest, the competent 
authorities  in  the  Member  States  shall  ensure  that  all  stakeholders,  particularly  service 
providers and beneficiaries, are involved. 

Comments 

This article introduces the requirement that SSGIs should be of high quality and stipulates that 
stakeholders should be involved in their evaluation. In accordance with the principle of subsidiarity, it 
does not, at the current stage of development of the internal market, lay down any minimum standards. 

 
 
 
 
 
 
- 157 - 

Note 12 

What role will the beneficiaries of social services play? 

Article 12 
Beneficiaries’ participation 

3.  The  competent  authorities  in  the  Member  States  shall  ensure  that  high  levels  of  protection, 

information and transparency are observed in relation to service beneficiaries. 

4.  The competent authorities in the Member States shall ensure that beneficiaries participate in 

evaluating the implementation of missions of general interest and in defining them. 

Comments 

This article introduces both the principle that implementation of missions of general interest shall be 
subject to evaluation by those who benefit from them and the principle of protection. 

 
 
 
 
 
 
 
 
- 158 - 

Note 13  
Defining characteristics common to social services 

Appendix 

Characteristics common to social and health services of general interest 
(The list is non cumulative.) 

-  Operation in accordance with the principle of solidarity 

-  No risk-based selection of beneficiaries 

-  No link between the real cost of a benefit and the cost to the beneficiary 

-  Absence of a profit motive, and reinvestment of profits in the service 

-  Equality of access to high-quality benefits 

-  Relationship of proximity between provider(s) and users 

-  Ongoing presence in given areas of life 

- 

Involvement of beneficiaries 

-  Participation by volunteers 

- 

Identification with a particular territory and/or culture. 

 
 
 
 
 
 
 
 
 
 
 
- 159 - 

Conclusion 

Re-establishing a European strategy for social services of general interest 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
- 160 - 

Re-establishing a European strategy for social services of general interest 

The Commission’s proposal to open an "internal market hotline", in response to the legitimate call for 
legal  security  voiced  by  both  MEPs17  and  social  services  providers,  is  symptomatic  of  the  gulf 
between the European Commission’s perception of the problems and that of the people and agencies 
working  in  social  services  at  ground  level  throughout  the  EU,  notably  service  providers  and  local 
authorities. 

The European strategy for social services of general interest sketched out by Commissioner Spidla at 
the European Parliament’s first SSGI Forum, in September 2007 in Lisbon, needs to be re-established 
politically  at the joint  initiative  of the  Council  and  the  Parliament in the  context  of the  forthcoming 
spring European summit and ratification of the Reform Treaty. 

The challenges in terms of giving Europe’s citizens a sense of ownership of the European project – 
effectively  meeting  their  calls  for  a  "caring"  Europe  that  is  concerned  about  improving  their  living 
conditions in terms of employment, housing and health and about consolidating social models based 
on solidarity and social protection – can no longer be overlooked by the Council and the EU’s Heads 
of State and Government, especially with the campaign for ratification of the Reform Treaty getting 
under way. 

The signal sent to the Commission by the European Council in the form of the Protocol on services of 
general interest – representing a compromise in an SSGI-related dispute – must be confirmed, with the 
support of the European Parliament, the Committee of the Regions and the European Economic and 
Social Committee, by specifically mandating it to:  

•  pursue the work already begun on defining a European strategy for social services of general 
interest  in  close  cooperation  with  the  Social  Protection  Committee  and  the  parties  actively 
involved; 

•  pursue  clarification  of  the  European  framework  applicable  to  social  services  of  general 
interest, notably with regard to conditions of compatibility affecting Member States’ systems 
for the public regulation of social services provision by means of exclusive and special rights, 
and particularly authorisation systems, that fall outside the provisions for Community control 
introduced by the Services Directive; 

• 

identify  areas  of  tension  between  what  can  be  conflicting  aims  of  the  Treaty  and  proceed, 
where  necessary,  to  strike  the  inevitable  political  compromises  based  on  the  principle  that 
proper performance of missions of general interest takes precedence over the Treaty rules, and 
on  a  concern  to  simplify  the  way  that  European  law  is  applied  to  locally  provided  services 
essential to the lives and livelihoods of European citizens. 

Also  at  stake  is  the  credibility  of  the  process  begun  four  years  ago  and  of  the  new  commitment  on 
SGIs formulated by the Council in the terms of the new Protocol on services of general interest and 
Article 14 of the Reform Treaty. 

17

See,  in  particular,  the  Rapkay  report  on  the  White  Paper  on  SGIs  and  the  Hasse-Ferreira  report  on  social  services  of  general 
interest. 

 
 
 
                                                      
  
- 161 - 

APPENDICES:  

Capitalising on four years of debate and consultation 

•  Commissioner  Vladimir  Spidla’s  closing  address  to  the  SSGI  Collective  conference  in 

Brussels on 5 June 2007 ........................................................................................................... 162 

•  Commissioner  Vladimir  Spidla’s  closing  address  to  the  European  Parliament’s  first 

Forum on SSGIs, in Lisbon on 17 September 2007................................................................. 164 

•  European Commission communications on SSGIs 

o  May 2004 (SSGI section of the White Paper on services of general interest) ............ 170 
o  April 2006 (Communication on SSGIs)...................................................................... 173 
o  November  2007  (SSGI  section  of  the  Communication  on  services  of  general 
interest  as  part  of  the  internal  market  review  +  and  appendices  on  the  process 
under way, public procurement and State aid to SSGIs)............................................. 182 

•  Parliamentary reports on the April 2006 Communication on SSGIs 

o  European Parliament: Hasse-Ferreira report ............................................................... 230 
o  Committee of the Regions: Destans report.................................................................. 259 
o  European Economic and Social Committee: Hencks report ....................................... 268 

•  The Collective’s glossary on SSGIs ......................................................................................... 279 

•  SSGI-related websites .............................................................................................................. 282 

•  The members of the SSGI Collective....................................................................................... 283 

 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
- 162 - 

Speech by Commissioner Vladimir Spidla Conference of the Collectif SSIG-FR,  
Brussels, 5 June 2007 

Ladies and Gentlemen, 

First of all, I would like to thank Collectif SSIG-FR for taking the initiative to hold this conference, the 
results of which constitute a wealth of learning for the Commission. 

Indeed,  we  have  been  able  to  hear  the  main  conclusions  and  recommendations  set  out  by  the 
rapporteurs  on  the  Communication  on  Implementing  the  Community  Lisbon  programme:  Social 
services of general interest in the European Union. 

I  would  therefore  also  like  to  thank  the  three  rapporteurs,  Mr  Hasse-Ferreira  for  the  European 
Parliament, Mr Destans for the Committee of the Regions and Mr Hencks for the European Economic 
and  Social  Committee,  for  reaffirming  their  institutions'  commitment  to  effective,  quality  social 
services of general interest. 

The  first  point  brought  home  to  me  by  your  respective  reports  concerns  the  need  to  build  positive 
synergies  between  the  economic  and  social  sectors.  The  second  is  the  need  to  ensure  that  the 
application  of  competition,  state  aid  and  the  internal  market  rules  is  compatible  with  public  service 
obligations, and not the other way around. The third point brought home to me is your reminder of the 
need to guarantee a stable and transparent legal framework at EU level for developing social services 
of  general  interest,  and,  the  fourth  and  final  point  is  the  need  to  monitor  and  evaluate  ongoing 
developments in this sector and to be particularly vigilant with regard to labour standards.  

I  would  like  to  thank  the  German  presidency  for  placing  social  services  of  general  interest  on  the 
agenda of the Employment and Social Affairs Council of 30 May. I am in a position to say that, on 
that occasion, the ministers gave considerable attention to social services and welcomed the synthesis 
report on the Social Protection Committee's consultation. 

Moreover, I  welcome the interest that the next three presidencies have shown in social services and 
their  high  ambitions  for  this  crucial  issue.  Social  services  of  general  interest  are  indeed  among  the 
fundamental  pillars  on  which  the  European  social  model  is  built  and  they  are  at  the  heart  of  public 
concern. In this respect, social services are among the key aspects of economic, social and territorial 
cohesion in the European Union. 

Following  its  Communication  of  April  2006  on  social  services,  the  Commission  launched  a 
consultation process. In cooperation with the Social Protection Committee, the Commission prepared a 
questionnaire giving Member States, the social partners and European associations the opportunity to 
express their views on key issues and to take a position on the on-going process. 

We  received  very  valuable  feedback  and  the  synthesis  report  was  discussed  and  approved  by  the 
Social  Protection  Committee.  Analysis  of  the  feedback  revealed  that  many  areas  were  perceived  as 

 
 
 
- 163 - 

requiring  EU  action.  Moreover,  many  respondents  stressed  the  need  to  identify  their  specific 
characteristics in order to create a general framework for social services of general interest. Finally, 
some Member States took stock of ongoing modernisation processes in their countries and the opening 
up of the social services market. These processes must be well-managed and monitored. 

I am determined to explore all avenues liable to increase legal certainty, and I have set up a group of 
legal experts to support my staff's work in this area. 

In response to this consultation, I intend to put before the College of Commissioners in autumn 2007 a 
strategy for social services of general interest in the form of a Communication setting out the measures 
to be undertaken in order to clarify the legal issues highlighted by the feedback from consultation and 
develop a quality approach within the sector.   

In the meantime, the forum on social services of general interest convened by the European Parliament 
to  take  place  in  Lisbon  in  September  will  provide  an  opportunity  for  pursuing  discussions  on  this 
important issue. 

Thank you for your attention! 

 
 
 
 
 
 
- 164 - 

Speech by Commissioner Vladimir Spidla  
First SSGI  Forum of the European Parliament, Lisbon, 17 September 2007 

Ladies and gentlemen, 

First of all, I would like to express my warm appreciation to the Portuguese presidency for holding this 
conference on social services of general interest. 

I would also like to pay tribute to the rapporteur of the European Parliament, Mr Hasse-Ferreira, who 
initiated  the  organisation  of  the  forum.  Finally,  I  would  like  to  thank  the  European  Parliament,  the 
Committee of the Regions, and the European Economic and Social Committee for the quality of their 
reports and their institutions' commitment to effective, quality social services. 

Consultation based on the Communication 

In  its  Communication  of  April  2006  on  social  services,  the  Commission  undertook  to  continue  the 
work it had already accomplished by holding a broad consultation process. I will summarise the key 
phases. 

•  During  the  first  phase,  a  questionnaire  prepared  in  cooperation  with  the  Social  Protection 
Committee enabled us to gather the opinions of Member States, service providers and users 
on a range of key issues raised in the Communication. 

•  During the second phase, we received the results of an independent study on social services 

in Europe. 

•  During the third phase, on 4 June this year, the Commission held a conference in Brussels, 
during which the results of the consultation and the study were presented and discussed. 

•  Finally,  on  the  more  precise  issue  of  interaction  between  social  services  and  EU  rules,  the 
Commission  called  on  the  services  of  a  group  of  legal  experts,  whose  report  was  also 
finalised this summer. Indeed, I am pleased to say that two of these experts, Mr Jorens and Mr 
Rodrigues, are with us today. 

This consultation process first confirmed what our various partners have been emphasising to us, i.e. a 
sense of considerable legal uncertainty. But we also learnt more about the reasons for this uncertainty. 

Secondly,  the  consultation  stressed  the  need  and  the  will  to  promote  high-quality  and  effective 
services, the role of which, as guarantees for social cohesion, requires no further proof. 

It also revealed the need for continued dialogue with Member States, service providers and users, and 
for further developing mutual learning. 

In order to respond to these needs, I intend to suggest before the end of the year that the Commission 
adopt a strategic Communication on social services. This Communication will define the measures 
to  be  taken  in  order  to  solve  –  systematically  rather  than  on  a  case-by-case  basis  -  the  legal 
uncertainties pointed out to us.  

 
 
 
 
- 165 - 

It will also bring European added value to the analysis and evaluation of quality and effectiveness in 
the social services sector. 

A sufficiently clear and simple legal framework 

There  is  nothing  new  about  the  need  to  develop  a  sufficiently  clear  and  simple  legal  framework  to 
facilitate  the  optimum  organisation,  delivery  and  financing  of  these  services.  This  need  had  already 
been identified in the White Paper on services of general interest published in 2004. 

The Communication of April 2006 and the ensuing intensive consultation process has made it possible 
to move into a new phase. 

The consultation process has provided a clearer overview of the problems facing public authorities and 
social service providers. 

The Member States' modernisation of social services of general interest has modified the environment 
in which these stakeholders operate. It has transformed the way in which these services are delivered. 
Their  organisation  is  increasingly  decentralised  to  the  regional  and  local  levels.  And  many  of  its 
services are outsourced to the private sector. 

These  changes  in  the  organisation,  delivery  and  financing  of  social  services  have  increased 
interactions with EU competition and internal market rules. 

In  this  new  environment,  public  authorities  and  service  providers  often  misinterpret  and  misapply 
these rules. Moreover, even when the case-law and the rules are known, they are not always adapted to 
the  specific  characteristics  of  social  services  of  general  interest  brought  to  light  by  the  2006 
Communication. Allow me to give you three examples:  

•  First question. How are we to establish by "legal act" a general interest mission entrusted by a 
public  authority  to  a  social  service  institution,  if,  moreover,  according  to  national  tradition, 
social service institutions have an innovative capacity within the social sector and their own 
autonomy within the subsidiarity framework? 

•  Second question. How are we to set strictly defined limits for such a social service mission of 
general  interest,  when  social  services,  especially  where  person-centred  care  in  concerned, 
require a diverse palette of services catering for the needs of people who are given assistance, 
support or care? 

•  Third question. When launching a public procurement tender, how can we take into account 
the  essential  qualitative  criteria  such  as  continuity  of  service,  non-selection  of  risks  and  the 
cultural and local context on which the users' welfare depends? These criteria cannot generally 
be expressed merely in terms of the day-to-day price.   

These questions are growing extremely acute for local authorities and small service providers, which 
often have limited resources to allocate to the learning process entailed by this new environment. 

The  ensuing  difficulties  undermine  the  effectiveness  of  social  services  of  general  interest,  which  is 
contrary to the very objective of the EU rules in question. Indeed, we should remember that these rules 
are supposed to increase the transparency and effectiveness of these services. 

 
 
 
- 166 - 

In  order  to  respond  to  this  growing  need  for  legal  certainty,  the  strategic  Communication,  which  I 
intend to present in the coming months, will propose a proactive approach, in the spirit of Article 16 of 
the  Treaty  on  the  European  Union.  It  will  mainly  be  a  matter  of  clarifying  the  aspects  of  EU 
competition  and  internal  market  rules  most  relevant  to  the  provision  of  social  services  of  general 
interest. 

I would like the Communication to outline a set of principles which the Commission considers to be 
particularly typical of general interest missions laid down by public authorities and implemented with 
the social services' support. 

These principles will create greater political visibility at EU level for the role played by social services 
of general interest, as a pillar of our social cohesion, as the President of the Portuguese Republic has 
recently reminded us. These principles demonstrate that the Commission, in its coming initiatives, is 
fully  aware  of  these  specific  characteristics.  I  call  on  Member  States  to  take  inspiration  from  these 
principles.  

These principles are the product of the broad consultation process following the 2006 Communication. 
They will also be inspired by the common values set out in the draft protocol on services of general 
interest included in the mandate of the Intergovernmental Conference. They will be a useful reference 
framework for Member States and EU institutions alike in the fulfilment of their respective roles. 

Promoting the quality and effectiveness of social services  

The quality and effectiveness debate has already acquired a European dimension.   

Several ongoing projects, initiated by the Commission as well as by grassroots stakeholders, testify to 
this.  The  draft  protocol  on  social  services  of  general  interest  included  in  the  mandate  of  the 
Intergovernmental Conference also makes explicit reference to this. 

The importance of these challenges will also be reflected in the principles that I have just mentioned, 
and which will feature in the strategic Communication. The debate on the quality and effectiveness of 
social services is multifaceted, due to a combination of several factors, which I am about to describe. 

First  of  all,  we  should  mention  the  growing  diversity  of  service  providers,  which  obliges  public 
authorities to define more clearly the services they delegate and the quality standards they expect. This 
is  one  of  the  consequences  of  the  Member  States'  modernisation  drives,  which  often  lead  to  an 
increase in decentralisation and outsourcing. 

Secondly,  we  should  mention  more  sophisticated  demand,  which  reflects  the  growing  needs  of 
complex societies and economies. 

The third factor is the need to protect the most vulnerable users in the face of an increasingly complex 
and diversified supply structure. 

The fourth factor is of course the growing need for qualified personnel to meet this demand. 

The fifth and final factor, I would stress, is the increased need for the comparability of the services 
provided, with a view to cross-border service provision.  

 
 
 
- 167 - 

In order to take these many dimensions into consideration, we need a structured approach at EU level. 
The  future  Communication  will  define  the  strands  of  this  approach,  which  will  have  three  main 
objectives. 

The first of these objectives is to promote dialogue within the Social Protection Committee, to include 
among  its  goals  the  adoption  of  broad  methodological  guidelines  for  facilitating  the  establishment, 
monitoring and evaluation of quality standards at national level. 

The second objective is to support existing initiatives launched by grassroots stakeholders, and aimed 
at  developing  voluntary  quality  standards.  The  third  objective  is  to  support  and  develop  specific 
training measures for both social service and public authority staff. 

Two strands 

I  have  just  presented  you  with  the  two  strands  of  our  future  strategic  Communication.  These  two 
strands should be viewed from an interactive perspective.  

The first strand, i.e. the clarification of the legal framework for social services of general interest will 
result  in  greater  transparency.  Thus,  public  authorities  will  be  in  a  better  position  to  compare  the 
tenders they receive and to select those that best meet their quality and cost requirements. This will 
make  it  easier  to  plan  and  finance  these  services.  It  will  also  create  a  more  stable  and  clearer 
framework  enabling  service  providers  to  optimise their  tenders. This  will  ultimately  have  a  positive 
impact on the quality of services provided.  

The second strand, i.e. measures for supporting quality and effectiveness, will give public authorities 
the  necessary  tools  to  improve  the  definition  of  conditions  for  supplying  services  and  their  quality 
standard  requirements,  while  respecting  the  EU  framework.  These  measures,  I  am  convinced,  will 
contribute to promoting effective, high-quality social services. 

Our step-by-step approach 

Today's  debate  falls  perfectly  within  the  framework  of  our  step-by-step  approach.  This  approach  is 
vital  for  building  stakeholder  confidence  in  the  legal  framework  applicable  to  them.  It  will  also 
contribute to a better understanding of the specificities of social services. 

It is also a step we need to take before we consider adopting any future legislative instrument specific 
to social services. 

For my part, I am convinced that sooner or later we will come to that point. 

I am convinced that the outcome of this forum will contribute to defining our strategy. I welcome the 
relevance of the issues to be discussed today, especially with regard to the quality of human resources 
involved in social services of general interest, a subject that is rarely addressed, and an area where the 
European Social Fund could play a role. 

 
 
 
 
 
- 168 - 

Ladies and Gentlemen, 

Allow  me  to  conclude  by  saying  that  the  construction  of  an  appropriate  European  framework  for 
protecting  and  promoting  social  services  of  general  interest  reaches  to  the  very  heart  of  what  some 
describe as a "well-being society", i.e. an active welfare State.  

With  this  in  mind,  our  goal  is  to  give  everyone,  but  especially  the  most  vulnerable,  the  most 
disadvantaged, and the most excluded from the labour market, an opportunity to participate in society. 
It is not by chance that social services of general interest are an aspect of flexicurity, active inclusion, 
and equal opportunities. 

Thank you for your attention! 

 
 
 
- 169 - 

European Commission communications on SSGIs 

o  May 2004 (SSGI section of the White Paper on SGIs) 

o  April 2006 (Communication on SSGIs) 

o  November 2007 (SSGI section of the Communication on services of general interest 

as part of the internal market review ) 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
- 170 - 

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 12.5.2004 
COM(2004) 374 final 

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

White Paper on services of general interest 

(section on social and health services of general interest) 

 
 
 
  
 
 
 
Social services of general interest in the White Paper on services of general interest 

- 171 - 

Section  of  the  White  Paper  on  services  of  general  interest  relating  to  the  issue  of  social  and  health 
services of general interest. 

Recognising fully the general interest in social and health services  

The Green Paper on services of general interest raised a considerable interest from interested parties in 
the  area  of  social  services,  including  health  services,  long  term  care,  social  security,  employment 
services,  and  social  housing.  Social  services  of  general  interest  have  a  specific  role  to  play  as  an 
integral part of the European model of society. Based on the principle of solidarity, social and health 
services  of  general  interest  are  person-centred  and  ensure  that  citizens  can  effectively  enjoy  their 
fundamental  rights  and  a  high  level  of  social  protection,  and  they  strengthen  social  and  territorial 
cohesion. Their provision, development and modernisation is fully in line with the achievement of the 
objectives  set  at  the  Lisbon  European  Council  of  March  2000,  and  in  particular  with  the  goal  of 
achieving a positive link between economic, social and employment policies. The public consultation 
has shown that providers of social services are ready to engage in a modernisation process in order to 
better  respond  to  changing  needs  of  European  citizens.  However,  they  also  expressed  a  need  for 
greater clarity and predictability necessary to ensure a smooth evolution of social services, including 
health services. 

While  in  principle  the  definition  of  the  missions  and  objectives  of  social  and  health  services  is  a 
competence of the Member States, Community rules may have an impact on the instruments for their 
delivery and financing. A clear recognition of the distinction between missions and instruments should 
help to create more clarity with a view to the modernisation of these services in a context of evolving 
user needs while preserving their specific nature in terms of the particular requirements of, amongst 
others, solidarity, voluntary service and the inclusion of vulnerable groups of people. Clarifying this 
distinction  will in  particular  assist  Member  States  which  use  market-based  systems  to  deliver  social 
and health services to anticipate the possible impact of EU competition law on them. It will of course 
remain  a  matter  of  political  choice  for  Member  States  whether  to  use  such  systems  or  to  provide 
services directly via tax funded state agencies. 

The Commission is of the view that it is useful to develop a systematic approach in order to identify 
and recognise the specific characteristics of social and health services of general interest and to clarify 
the  framework  in  which  they  operate  and  can  be  modernised.  This  approach  will  be  set  out  in  a 
Communication on social services of general interest, including health services, to be adopted in the 
course of 2005. 

This  Communication  will  take  stock  of  the  Community  policies  that  are  related  to  the  provision  of 
social and health services of general interest. It will also describe the ways social and health services 
are  organised  and  function  in  the  Member  States.  This  description  will  be  prepared  in  close  co-
operation with the Member States and with organisations from civil society. 

 
 
 
 
- 172 - 

The  Communication  would  also  set  out,  in  line  with  the  Commission’s  general  principles  on 
evaluation, a mechanism for a regular assessment and evaluation of the national frameworks for the 
provision of social services of general interest. The existing open methods of coordination in the field 
of  social  inclusion  and  social  protection  could  be  used  to  this  effect.  The  Commission  has  recently 
proposed an open method of coordination in the field of health care and long term care which would 
usefully  contribute  to  the  exchange  of  best  practices  in  the  field  of  health  services  and  support  the 
reforms undertaken in the field. 

The  Commission  is  currently  also  working  on  the  follow-up  to  the  high-level  reflection  process  on 
patient mobility and health care developments and has adopted a Communication in April 2004 which 
recalls the principles of the case law of the European Court of Justice and sets out a range of initiatives 
on  subjects  such  as  sharing  spare  capacity  and  cooperating  on  cross-border  care  identifying  and 
networking  European  centres  of  reference  and  coordinating  assessment  of  new  health  technologies. 
The  accompanying  Decision  establishes  a  new  High  Level  Group  to  facilitate  cooperation  among 
Member States in this area.  

The Commission 

•  will submit a Communication on social and health services of general interest in the course of 

2005. 

•  will facilitate cooperation among Member States on health services and medical care in order 

to contribute to ensuring a high level of health protection throughout the Union. 

Member States  

• 

should improve cooperation on health services and medical care in order to ensure a high level 
of health protection throughout the Union. 

 
 
 
- 173 - 

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 26.4.2006 
COM(2006) 177 final 

COMMUNICATION FROM THE COMMISSION 

Implementing the Community Lisbon programme: 
Social services of general interest in the European Union 

{SEC(2006) 516} 

 
 
 
  
- 174 - 

Introduction 

Modernising social services is one of the most important issues facing Europe today: on the one hand, 
these  services  play  a  vital  social  cohesion  role;  on  the  other,  their  transformation  and  job-creation 
potential make them an integral part of the Lisbon Strategy. The conclusions of the European Council 
in  March  2006  confirmed  this,  reiterating  that  the  internal  market  for  services  must  be  made  fully 
operational, while preserving the European social model. 

This  communication  is  a  follow-up  to  the  White  Paper  on  services  of  general  interest18,  which 
announced  a  “systematic  approach  in  order  to  identify  and  recognise  the  specific  characteristics  of 
social and health services of general interest and to clarify the framework in which they operate and 
can  be  modernised”,  as  reiterated  in  the  Social  Agenda19  and  the  Community  Lisbon  programme20. 
Following the vote in Parliament on the first reading of the proposal for a directive on services in the 
internal  market  on  16 February 2006,  the  Commission  excluded  health  services  from  the  field  of 
application of its amended proposal21. It undertook to present a specific initiative and is now giving 
thought to this subject22. Consequently, this communication does not deal with these services. In its 
amended proposal for a directive on services in the internal market the Commission excluded "social 
services relating to social housing, childcare and support of families and persons in need" from the 
scope of the Directive. It is now the responsibility of the European legislator to finalise the legislative 
process. 

This communication should be seen in the context of the shared responsibility of the Community and 
of the Member States for services of general economic interest, established by Article 16 of the EC 
Treaty. It is the result of close consultation23 with the Member States and civil society organisations, 
which has allowed the Commission to conduct an initial survey of the issues at stake and the relevant 
questions. The Commission strongly wishes to pursue this open process of consultation and reflection 
through the following steps as set out in this communication. 

It should be remembered that the existing Community framework respects the subsidiarity principle. 
Member  States  are  free  to  define  what  they  mean  by  services  of  general  economic  interest,  or  in 
particular by social services of general interest. Within the Member States, the public authorities, at 
the appropriate level, define the obligations and missions of general interest of these services, and how 
they  are  to  be  organised.  On  the  other  hand,  the  Community  framework  requires  Member  States  to 
take certain rules into account when they determine the arrangements for applying the objectives and 
principles they have established. This Communication is a further step in taking the specific nature of 

18 

19 

20 

21 

22 

23 

COM(2004) 374, 12.5.2004. 

COM(2005) 33, 9.2.2005. 

SEC(2005) 981, 20.7.2005. 

COM(2006) 160, 4.4.2006. 

See Annual Policy Strategy for 2007, COM(2006) 122, 14.3.2006, p. 11. 

The results can be found at: http://europa.eu.int/comm/employment_social/social_protection/questionnaire_en.htm. 

 
 
                                                      
- 175 - 

social services into account at European level and clarifying, to the extent that they are covered, the 
Community rules applicable to them. 

1.1  

Social services in the European Union  

What do we mean by social services in the European Union? In addition to health services, which are 
not covered by this communication, we find two main categories of social services:  

• 

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; 

•  other essential services provided directly to the person. These services that play a preventive and 
social  cohesion  role  consist  of  customised  assistance  to  facilitate  social  inclusion  and  safeguard 
fundamental rights. They comprise, first of all, assistance for persons faced by personal challenges 
or  crises  (such  as  debt,  unemployment,  drug  addition  or  family  breakdown).  Secondly,  they 
include  activities  to  ensure  that  the  persons  concerned  are  able  to  completely  reintegrate  into 
society  (rehabilitation,  language  training  for  immigrants)  and,  in  particular,  the  labour  market 
(occupational  training  and  reintegration).  These  services  complement  and  support  the  role  of 
families  in  caring  for  the  youngest  and  oldest  members  of  society  in  particular.  Thirdly,  these 
services  include  activities  to  integrate  persons  with  long-term  health  or  disability  problems. 
Fourthly,  they  also  include  social  housing,  providing  housing  for  disadvantaged  citizens  or 
socially  less  advantaged  groups.  Certain  services  can  obviously  include  all  of  these  four 
dimensions24.  

Although, under Community law, social services do not constitute a legally distinct category of service 
within  services  of  general  interest,  the  list  above  demonstrates  their  special  role  as  pillars  of  the 
European society and economy, primarily as a result of their contribution to several essential values 
and objectives of the Community, such as achieving a high level of employment and social protection, 
a high level of human health protection, equality between men and women, and economic, social and 
territorial cohesion. Their value is also a function of the vital nature of the needs they are intended to 
cover, thus guaranteeing the application of fundamental rights such as the dignity and integrity of the 
person.  It  became  clear  during  the  consultation  with  Member  States  and  civil  society  organisations 
that,  as  a  result  of  these  specific  features  -  in  the  performance  of  their  general  interest  role  -  social 
services often present in practice one or more of the organisational characteristics below25: 

• 

• 

24 

25 

they  operate  on the  basis of  the  solidarity  principle, which is required, in  particular  by  the  non-
selection of risks or the absence, on an individual basis, of equivalence between contributions and 
benefits, 

they  are  comprehensive  and  personalised  integrating  the  response  to  differing  needs  in  order  to 
guarantee fundamental human rights and protect the most vulnerable, 

Education  and  training,  although  they  are  services  of  general  interest  with  a  clear  social  function,  are  not  covered  by  this 
Communication. 

These criteria are the result of the survey mentioned above (see footnote 6).  

 
 
                                                      
- 176 - 

• 

• 

• 

• 

they are not for profit26 and in particular to address the most difficult situations and are often part 
of a historical legacy, 

they include the participation of voluntary workers, expression of citizenship capacity, 

they  are  strongly  rooted  in  (local)  cultural  traditions.  This  often  finds  its  expression  in  the 
proximity between the provider of the service and the beneficiary, enabling the taking into account 
of the specific needs of the latter, 

an asymmetric relationship between providers and beneficiaries that cannot be assimilated with a 
"normal" supplier/consumer relationship and requires the participation of a financing third party. 

1.2. 

A general trend towards modernisation and quality 

Social services constitute a booming sector, in terms of both economic growth and job creation. They 
are also the subject of an intensive quest for quality and effectiveness27. All the Member States have 
embarked  upon  modernisation  of  their  social  services  to  tackle  the  tensions  between  universality, 
quality  and  financial  sustainability.  Although  social  services  are  organised  very  differently  in  the 
Member States, certain general aspects of this modernisation process can be seen: 

• 

the  introduction  of  benchmarking  methods,  quality  assurance,  and  the  involvement  of  users  in 
administration, 

•  decentralisation of the organisation of these services to local or regional level, 

• 

• 

the outsourcing of public sector tasks to the private sector, with the public authorities becoming 
regulators,  guardians  of  regulated  competition  and  effective  organisation  at  national,  local  or 
regional level, 

the development of public-private partnerships and use of other forms of funding to complement 
public funding. 

This more competitive environment and the taking into account of the specific needs of each person, 
even those that cannot be met, create a climate favourable to a “social economy”, characterised by the 
importance of not-for-profit providers but faced with the need to be effective and transparent. 

1.3. 

A  Community 
modernisation 

framework 

that  welcomes  differences  and 

is 

favourable 

to 

Many  financial  and  political  Community  initiatives  and  actions,  including  the  social  dialogue,  are 
already supporting the development and modernisation of social services. From a financing point of 
view,  the  European  Social  Fund  supports  many  projects  concerned  with  the  quality  of  services 
intended  to  foster  social  inclusion  and  integration  through  employment.  Similarly,  the  ERDF  has 
earmarked  almost  seven  billion  euro  for  social  services  and  healthcare  infrastructure  in  the  EU25 

26 

27 

In  the  Sodemare  judgment,  the  Court  took  the  view  that  a  not-for-profit  condition  could  be  compatible  with  the  principle  of 
freedom of establishment.  

See Annex 1 to Commission working document SEC(2006) 516.  

 
 
 
                                                      
- 177 - 

during  the  period  2000-2006.  Among  the  political  initiatives,  the  open  method  of  coordination  has 
allowed  the  identification  of  good  European  practices  for  the  quality  and  integration  of  services 
intended to combat poverty; it has applied directly since 2005 to long-term care services. The action 
programme  for  social  inclusion  encourages  the  exchange  of  good  practices  and  transnational 
cooperation.  Other  fields  of  activity  of  the  Union,  in  particular  in  the  area  of  public  finances,  also 
provide support and a framework to the modernisation of social services. 

The  European  involvement  in  the  field  of  social  services  also  has  a  basis  in  the  application  of 
Community law, as a result of the processes of opening up and diversification initiated by the Member 
States themselves, with the consequence that a growing proportion of social services in the European 
Union, until now managed directly by the public authorities, now come under the Community rules on 
the internal market and competition. This European involvement is, itself, a sign of the trend towards 
modernising  social  services,  via  greater  transparency  and  greater  effectiveness  in  organisation  and 
financing. It urges better use of budgetary resources, limited in principle, earmarked for social policies 
and contributes to greater variety and higher quality of services. 

At  the  same  time,  this  new  situation  for  those  concerned  has  meant  that  the  conditions  for  the 
application of certain Community rules need to be clarified28.  

II – 

The application of the Community rules in the area of social services – an ongoing logic 

2.1. 

Applying  the  subsidiarity  principle  and  the  distinction  between  economic  and  non-
economic services of general interest 

In  general,  the  case  law  of  the  Court  of  Justice  (“the  Court”)  indicates  that  the  EC  Treaty  gives 
Member States the freedom to define missions of general interest and to establish the organisational 
principles of the services intended to accomplish them.  

However,  this  freedom  must  be  exercised  transparently  and  without  misusing  the  notion  of  general 
interest, and the Member States must take account of Community law when fixing the arrangements 
for implementing the objectives and principles they have laid down. For example, they must respect 
the principle of non-discrimination and the Community legislation on public contracts and concessions 
when organising a public service. 

Moreover, when it comes to services of an economic nature, the compatibility of their organisational 
arrangements with other areas of Community law must be ensured (in particular freedom to provide 
services and freedom of establishment, and competition law).  

In  the  field  of  competition  law,  the  Court  has  established  that  any  activity  consisting  of  supplying 
goods and services in a given market by an undertaking constitutes an economic activity, regardless of 
the legal status of the undertaking and the way in which it is financed29.  

28 

29 

This request for clarification was one of the main results of the consultation exercise. 

See, for example, cases C-180/98 to C-184/98, Pavlov and others. 

 
 
 
                                                      
- 178 - 

With regard to the freedom to provide services and freedom of establishment, the Court has ruled that 
services provided generally for payment must be considered as economic activities within the meaning 
of  the  Treaty.  However,  the  Treaty  does  not  require  the  service  to  be  paid  for  directly  by  those 
benefiting  from  it30.  It  therefore  follows  that  almost  all  services  offered  in  the  social  field  can  be 
considered “economic activities” within the meaning of Articles 43 and 49 of the EC Treaty.  

The public authorities and the operators in the field of social services of general interest perceive the 
constant  evolution  of  Court  jurisprudence,  in  particular  for  the  notion  of  “economic  activity”  as  a 
source of uncertainty. Whilst the case law and Community legislation31 have endeavoured to reduce 
this uncertainty or clarify its impact, they cannot do away with it completely. 

2.2. 

Specific situations encountered today by the social services 

To  properly  understand  the  specific  conditions  for  the  application  of  the  Community  framework  to 
social services, this Communication deals with the most frequent situations.  

2.2.1.  Delegation  

- Deciding whether to delegate a social mission in whole or in part 

If  the  public  authorities  decide  to  delegate  the  mission  to  an  external  partner  or  to  form  a public-
private partnership, Community law on public contracts and concessions may come into play.  

In  such  cases,  the  public  body  delegating  a  social  mission  of  general  interest  to  an  external 
organisation  must,  at  the  very  least,  respect  the  principles  of  transparency,  equal  treatment  and 
proportionality.  Moreover,  in  certain  cases,  the  public  contracts  directives  impose  more  specific 
obligations.  For  example,  Directive  2004/18/EC  concerning,  inter  alia,  public  service  contracts 
requires  contracting  authorities  to  establish  technical  specifications  for  contract  documents  such  as 
contract notifications, specifications or complementary documents. Certain Member States and service 
providers  have  pointed  out  the  difficulty  of  establishing  in  advance  a  precise  description  of  the 
specifications for social services, which must be adaptable to the individual circumstances of persons 
in need. 

To overcome this difficulty, technical specifications may be established on the basis of performances 
and  functional  requirements.  This  means  that  the  contracting  or  awarding  authorities  may  decide  to 
define  just  the  aims  to  be  achieved  by  the  service  provider.  This  way  of  defining  technical 
specifications should guarantee the necessary flexibility and, at the same time, sufficient precision to 
identify the subject of the contract. 

- Management of a social service under a public-private partnership 

Public-private  partnerships  (PPPs)  are  being  used  increasingly  to  provide  social  services  of  general 
interest.  

30 

31

Case C-352/85, Bond van Adverteerders. 

See Annex 2 to Commission working document SEC(2006) 516. 

 
 
                                                      
 
- 179 - 

In this context, the term “concessions” and the rules concerning their award, as well as the application 
of the provisions of public contracts relating to the creation of mixed capital entities whose objective is 
to provide a public service (institutionalised PPPs), should be clarified. Consultation has shown that 
clarification is required for institutionalised PPPs. 

Significant clarifications on the distinction between “internal” and “third party” entities were brought 
by the Court of Justice’s judgment in the Stadt Halle case32. According to this ruling, the procedures 
for  awarding  public  contracts  apply  as  soon  as  a  public  authority  intends  to  conclude  a  contract for 
pecuniary interest with a legally distinct enterprise in whose capital it has a holding with one or more 
private enterprises. 

2.2.2.  Use of public financial compensation  

A public authority may decide to pay compensation to an external body for the performance of a social 
mission of general interest. This financial compensation is intended to make up for any expenditure 
involved in accomplishing this mission which would not have been incurred by an enterprise operating 
solely  according  to  market  criteria.  Following  a  judgment  of  the  Court33,  the  Commission34  took  a 
decision  pertaining  to  State  aid  which  has  already  considerably  simplified  the  requirements  on 
financial compensation received by social service providers and provided the necessary legal certainty. 
This decision established the thresholds and criteria in such a way that the compensation received by 
the vast majority of social services is automatically considered to be compatible with the competition 
rules and therefore exempt from the obligation of prior notification. Compensation will still have to be 
communicated  to  the  Commission  for  the  small  number  of  social  services  which  do  not  meet  these 
thresholds and criteria35. 

However, these simplifications can apply only if the services in question have, in advance and by legal 
act,  been  attributed  a  mission  of  general  interest.  The  Commission’s  decision  therefore  encourages 
Member  States  to  make  the  missions  they  delegate  to  social  services  explicit,  thus  leading  to 
transparency which is useful for everyone, both the services in question and their users. 

2.2.3.  Regulation of the market  

Where private operators provide a social service, Member States may decide to support the operation 
of  the  market  to  ensure  that  certain  objectives  of  general  interest  are  met.  In  so  doing,  they  must 
respect Community law, in particular the rules and general principles of the Treaty pertaining to the 
freedom  to  provide  services  and  freedom  of  establishment.  It  should  be  remembered in  this  context 
that services excluded from the scope of the Directive on services in the internal market will continue 
to be subject to these rules and principles.  

32 
33 

34 

35 

Case C-26/03, judgment of 11.1.2005. 

Case C-280/00, judgment of 24.7.2003, Altmark Trans. 

OJ L 312 of 29.11.2005, pp. 67-73. 

See Annex 2 to Commission working document SEC(2006) 516. 

 
 
                                                      
- 180 - 

Freedom of establishment (Article 43 of the EC Treaty) allows an operator to perform an economic 
activity through a permanent base in another Member State for an indefinite period. This will often be 
the case  for social  services  frequently  requiring  the use  of  infrastructure in  practice  (social  housing, 
homes for elderly people).  

Freedom  to  provide  services  (Article  49  of  the  EC  Treaty)  means  that  an  economic  operator  may 
provide services temporarily in another Member State without being established there. It also allows a 
consumer to use services offered by a provider established in another Member State. Articles 43 and 
49 of the EC Treaty rule out not only discriminatory national rules but also any national rule applied 
indiscriminately to national and foreign operators which makes exercising these fundamental freedoms 
more  difficult  or  less  attractive.  However,  according  to  the  case  law  of  the  Court,  social  policy 
objectives  are  overriding  reasons  based  on  the  general  interest  which  may  justify  the  application  of 
measures intended to regulate the market, such as the obligation to hold a permit in order to provide a 
social  service.  The  Court  ruled  that  such  measures  must  be  based  on  objective,  non-discriminatory 
criteria which are known in advance so as to support the exercise of the national authorities’ powers of 
appraisal.  To  be  compatible  with  Community  law,  these  measures  must  also  be  proportionate. 
Moreover, the opportunity for access to an adequate recourse has to be guaranteed36. 

2.2.4.  Compatibility with the rules on access to the market  

An analysis of these examples illustrates the flexibility in the application of the Treaty when it comes 
to  recognising  (in  particular  in  the  spirit  of  Article  86,  paragraph  2)  the  inherent  features  of  these 
services’  missions  of  general  interest.  When  the  compatibility  of  the  modalities  of  accomplishing  a 
mission of general interest with the rules of access to the market is assessed, these specific features are 
therefore taken into account. The Community rules encourage the public authorities to be clear about 
the correspondence between the burdens or obligations associated with the mission and the restrictions 
on  access  to  the  market  they  consider  necessary  to  allow  these  organisations  to  perform  properly, 
beyond the definition of missions of general interest attributed to a social organisation. 

III – 

Better monitoring of and support for social services of general interest in the European 
Union 

3.1. 

In-depth consultation on the specificity characteristics 

This  Communication  presents  an  open  list  of  characteristics  reflecting  the  specific  nature  of  social 
services  as  services  of  general  interest  (see  section  1.1).  In  addition  to  the  traditional  criteria  of  the 
general interest (universality, transparency, continuity, accessibility, etc.) recognised for social service 
missions, these characteristics refer to the organisational conditions and modalities applying to them. 
They  will  constitute  the  starting  point  for  a  consultation  by  the  Commission  of  all  the  actors 
concerned: Member States, service providers and users. This consultation will notably look at: 

• 

36 

the  elements  constituting  these  characteristics  as  well  as  their  pertinence  to  gauge  the  specific 
features of social services of general interest; 

See for instance the judgment of 20.2.2001, Case C-205/99, Analir. 

 
 
                                                      
- 181 - 

•  how they could be considered by the Member States when defining the general interest missions 
of  social  services  and  the  arrangements  for  their  organisation,  so  as  to  ensure  a  good 
institutionalised link with the Community framework;  
the experiences with the application of Community law in the field of social services of general 
interest and possible problems that are faced in this context; 

• 

•  how  the  same  (or  other)  characteristics  could  be  considered  by  the  Commission  where  it  has to 
check  subsequently  and  individually,  the  compatibility  of  the  organisation  modalities  of  social 
services with the applicable Community rules. 

3.2. 

Monitoring the situation regarding social services of general interest in the European 
Union  

In order to improve the reciprocal knowledge of operators and the European Commission of questions 
concerning  the  application  of  the  Community  rules  to  the  development  of  social  services  and  to 
deepen the exchange of information between operators and the European institutions, a monitoring and 
dialogue procedure in the form of biennial reports will be established.  

The  reports  will  come  within  the  framework  of  other  Community  initiatives  supporting  the 
modernisation  of social  services,  in  particular the  open  method  of  coordination  in  the area  of  social 
protection and inclusion. 

In early 2006, the Commission launched a study to collect the necessary information to draft the first 
biennial  report.  This  information  will  concern  the  functioning  of  the  sector,  its  socio-economic 
importance, as well as the implications of the application of Community law. The results of the study 
are expected by mid 2007. 

Conclusion 

This Communication is a further step towards taking into account the specific nature of social services 
at European level. On this basis, the Commission will pursue its consultation with the Member States, 
service providers and users of services. 

On  the  basis  of  this  open  process  of  consultation  to which  the  Commission  attaches  a  great  deal  of 
importance, the results of the ongoing study on social services and the work of the Social Protection 
Committee, the Commission will publish a first biennial report and re-examine the situation of social 
services  of  general  interest  or  certain  sectors  among  them  in  the  light  of  Community  law  being 
applied. The aim is to take better account of the diversity of social services, as defined in section 1.1. 
above,  and  to  consider  how  the  specific  characteristics  of  social  services  of  general  interest  can  be 
used by both the Commission and the Member States in order to reduce the legal uncertainty inherent 
to situations where a case-by-case approach is needed. In the light of this experience, the Commission 
will  decide  how  to  follow  up  this  process  and  identify  the  best  approach  to  take,  including,  giving 
consideration to the need and legal possibility for a legislative proposal. 

 
 
 
- 182 - 

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} 

 
 
 
 
  
 
- 183 - 

TABLE OF CONTENTS 

1. 

2. 

3. 

4. 

Introduction 

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

2.1. 

2.2. 

2.3. 

2.4. 

The scope of EU action 

The approach: meeting public interest objectives in a single market 

The particular situation of social services 

The particular situation of health services 

The Protocol: a coherent framework for EU action 

Moving forward 

4.1. 

4.2. 

4.3. 

Providing legal guidance on cross-cutting issues 

Modernising and developing sector-specific policies 

Monitoring and evaluation 

5. 

Conclusion

 
 
- 184 - 

(Excerpt from Communication / section on SSGIs) 

1. 

INTRODUCTION18 

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 
14 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 Paper and the 2006 
opinion of the Parliament. 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, 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 

 
 
 
- 185 - 

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 
Directive. 

•  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. 

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, 
the  devolution  of 
technological  change, 
responsibilities to the local level. 

the  modernisation  of  public  administrations  and 

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 

 
 
- 186 - 

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  activities.  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 
basis. According to this functional approach, each activity has therefore to be analysed separately. 

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 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 
Justice.  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.  

 
 
- 187 - 

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 pursued. In secondary law, the pursuit of public interest objectives by 
services of general economic interest is also taken into account in the Services Directive. 

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. 

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 rules. 

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; 

 
 
- 188 - 

-  

-  

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; 
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 

 
 
 
- 189 - 

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 has recently held an open 
consultation regarding Community action and possible difficulties with the application of EC law. 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. 

(…) 

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 interest. 

 
 
- 190 - 

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. 

(…) 

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 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. 

(…) 

 
 
- 191 - 

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’ Agenda 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. 

 
 
 
- 192 - 

COMMISSION OF THE EUROPEAN COMMUNITIES 

SEC(2007) 1515 

Brussels, 

PROVISIONAL VERSION 
COMMISSION STAFF WORKING DOCUMENT 

Progress since the 2004 White Paper on services of general interest 

Accompanying document to the Communication on  

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

{COM(2007) 725 final} 
{SEC(2007) 1514} 
{SEC(2007) 1516} 

 
 
 
 
 
 
 
 
 
 
 
 
 
- 193 - 

COMMISSION STAFF WORKING DOCUMENT 
Progress since the 2004 White Paper on services of general interest 
Accompanying document to the 
Companion document 
to the Communication on "A single market for 21st century Europe" 
Services of general interest, including social services of general interest: 
a new European commitment 

(abstract of social services issues) 

The first Communication of the Commission in 1996 initiated a reflection about the role the EU could 
play in ensuring the provision of high-quality services of general interest. The Commission's White 
Paper  of  2004  highlighted  the  main  elements  of  an  EU  approach,  clarifying  key  principles  of  EU 
action  and  setting  out  areas  for  further  work.  This  annex  presents  recent,  on-going  or  planned  EU 
initiatives in the following areas: 

(1) Respecting diversity in a coherent framework 

In its White Paper, the Commission announced that it would re-examine the feasibility of and the need 
for  a  framework  law  for  services  of  general  interest.  The  present  Communication  responds  to  this 
undertaking. 

In the meantime, the issue of services of general interest has featured prominently in the discussion on 
the directive on services in the internal market. This so-called "services directive" was adopted on 12 
December  20063. The  aim  is  to  facilitate  the  freedom  of  establishment  and  the  freedom  to  provide 
services  across  the  EU.  Already  in  the  Commission's  original  proposal,  it  was  made  clear  that  the 
directive did not cover noneconomic services of general interest. Furthermore, it provided a number 
of  exceptions  for  services  of  general  economic  interest.  The  European  Parliament,  followed  by  the 
Council  and  the  Commission,  provided  further  clarification  to  the  effect  that,  while  non-economic 
services  are  indeed  excluded,  services  of  general  economic  interest  are  in  principle  covered  by  the 
directive. It follows that services of general economic interest fall within the scope of application of 
the  Services  Directive  as  long  as  they  are  not  explicitly  excluded.  Telecommunications,  transport 
services, healthcare services, certain social services and audiovisual services are explicitly excluded 
from its scope (article 2). For those services of general economic interest not excluded, the provisions 
of the Directive aiming at facilitating the freedom of establishment will allow Member States to take 
account  of  the  specificities  of  services  of  general  economic  interest.  In  particular,  the  review  and 
assessment  of  certain  requirements  under  national  law  that  Member  States  will  have  to  carry  out 
“should not obstruct the performance of the particular task assigned to services of general economic 
interest” (article 15(4)). The Directive also provides that the specific rules in Article 16 on the free 
movement  of  services  do  not  apply  to  services  of  general  economic  interest  provided  in  another 
Member  State  (article  17),  in  particular  postal  services,  water  supply,  electricity  and  waste 
management. Member States have to transpose the Directive by the end of 2009. 

 
 
 
 
 
- 194 - 

(2) Clarification and simplification of the state aid rules 

The funding of services of general economic interest (SGEI) must comply with state aid rules set out 
at  EU  level.  The  application  of  state  aid  rules  for  the  financing  of  services  of  general  economic 
interest  has  been  clarified  in  July  2005  when  the  Commission,  building  on  the  case  law  of  the 
European Court of Justice, adopted its "SGEI Package". Its aim was to clarify and simplify the legal 
framework for the compensation of public service obligations which constitute state aid, according to 
the Altmark criteria, and to reduce the administrative burden related to such state aid notifications. As 
a result, the SGEI Decision allowed legal certainty and continuity in the organisation and finance of 
public service missions especially at a local level, and at the same time the SGEI Framework gave a 
solid  and  clarified  basis  on  which  Member  states  as  well  as  SGEI  providers  could  anticipate  the 
Commission's  assessment  regarding  compensation  schemes  that  should  be  notified  in  order  to  be 
declared  compatible  with  the  Treaty  state  aid  rules.  As  mentioned  above,  Member  States  can  grant 
compensation for SGEI without notifying it to the Commission for public services up to € 30 million 
per year and for hospitals and social housing without limits, provided the necessary safeguards are in 
place. Member States are responsible for ensuring the respect of the principles and requirements set 
out in the "SGEI Package" and the Commission is determined to monitor its impact on the ground, 
either when the allocated compensations are exempted from notification, or when their compatibility 
is assessed by the Commission on the basis of the SGEI framework. 

These  measures  allow  companies  to  receive  public  support  to  cover  all  the  net  costs  incurred, 
including where appropriate a reasonable profit, in carrying out public service tasks as clearly defined 
and entrusted to them by public authorities, within official acts, whilst ensuring that there is no over-
compensation  liable  to  distort  competition.  The  SGEI  package  constitutes  a  safe  tool  for  Member 
states  and  public  service  providers  to  organise  and  provide  such  services  in  a  transparent  and 
predictable manner, perfectly compatible with Community rules. 

Showing  respect  to  the  national  traditions  related  to  the  organisation  of  public  services  within  the 
different Member States, the requirements related to an act of entrustment and the safeguards avoiding 
overcompensation through a transparent accountability, can guarantee the legal certainty in this field. 

(…) 

(4) Recognising fully the general interest in social and health services 

In its White Paper, the Commission announced its intention to develop a systematic approach in order 
to identify and recognise the specific characteristics of social and health services of general interest 
and to clarify the framework in which they operate. 

As regards social services, the Commission adopted a Communication aimed at taking better account 
of the characteristics of these services and reducing possible areas of legal uncertainty. Following the 
Communication,  the  Commission  initiated  a  consultation  of  Member  States,  service  providers  and 
users, through a questionnaire launched by the Social Protection Committee. It commissioned a study 
on social services of general interest in the EU and requested the advice of a group of legal experts on 
the  interaction  between the  provision  of  social  services  of  general  interest  and  Community  rules.  It 

 
 
 
- 195 - 

also took good note of the opinions of the European Parliament, the European Economic and Social 
Committee and of the Committee of Regions. 

Following the "High Level Process of Reflection on patient mobility and healthcare developments in 
the European Union" in 2003, the Commission launched a consultation on the issues to be addressed 
through  Community  action  on  health  services,  and  the  appropriate  tools  to  be  used  for  different 
aspects. The Commission will present its ideas for further initiatives to reinforce cooperation between 
Member States and provide greater certainty over the application of Community law to health services 
and healthcare later in 2007. 

(…) 

 
 
 
- 196 - 

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 

SEC(2007) 1514 

PROVISIONAL VERSION 

COMMISSION STAFF WORKING DOCUMENT 

Frequently asked questions concerning the application of public procurement rules to 

social services of general interest 

Accompanying document to the 

Communication on "Services of general interest, including social services 

of general interest: a new European commitment" 

{COM(2007) 725 final} 

{SEC(2007) 1515} 

{SEC(2007) 1516} 

 
 
 
 
 
 
 
 
 
 
 
 
- 197 - 

Frequently  asked  questions  concerning  the  application  of  public  procurement  rules  to  social 
services of general interest 

In the framework of the consultation process launched by the Commission Communication on Social 
Services of General Interest (SSGI) of April 2006, the Commission received a number of questions 
concerning  the  application  of  the  public  procurement  rules  to  social  services  of  general  interest 
(SSGI). The present document provides answers to these queries, clarifying the obligations on public 
authorities when procuring social services on the market. Where possible, the answers refer to case 
law or to specific provisions of the procurement Directives to guide interested readers who would like 
to have further information. 

This  document  is  a  Staff  Working  Paper  prepared  by  the  services  of  the  Commission.  It  provides 
technical  guidance  notably  on  the  basis  of  a  concise  and  sometimes  simplified  summary  of  public 
procurement  legislation  and  case  law  related  to  social  services  of  general  economic  interest.  This 
document is not binding on the European Commission as an Institution. 

TABLE OF CONTENTS 

1. Direct provision of SSGI 

1.1.  Is  it  still  possible  for  a  public  authority  to  decide  to  provide  a  SSGI  directly?  In  other 
words, what is the public authorities' room for manoeuvre when deciding whether to provide a 
service directly or to externalise it? Is such decision completely left to their discretion? 

1.2.  Community  rules  concerning  the selection  of  the  provider  normally  do  not  apply  when 
public authorities provide the service directly or through an internal provider (this is referred 
to  as  an  "in-house  provider"  situation).  What  are  the  scope  and  limits  of  the  "in-house" 
exception?  

2. Externalised provision 

2.1. What is the applicable legal framework when a public authority decides to 

externalise the provision of SSGI? 

2.2.  How  to  draft  detailed  specifications  in  the  context  of  a  public  procurement  procedure 
concerning  services  which  (i)  are  personalised  to  the  specific  needs  of  individual  users;  (ii) 
address  users  multiple  needs  through  an  holistic  approach  and  (iii)  must  be  adapted,  in  the 
process of delivery, to changing situations in terms of care intensity, users’ number, etc. 

2.3. How to avoid creating too heavy a burden for small service providers, which are often the 
best equipped to deal with situations which have a strong local dimension? 

2.4.  What  are 
nondiscrimination? 

the  obligations  deriving  from 

the  principles  of 

transparency  and 

2.5.  How  to  reconcile  public  procurement  procedures,  which  limit  the  number  of  providers 
selected, with the preservation of a sufficient degree of freedom of choice for SSGI users? . 

 
 
 
 
- 198 - 

2.6.  Is  it  allowed  to  introduce  as  a  criterion  for  the  selection  of  a  service  provider  its 
familiarity with the local context, this aspect being often essential for the successful provision 
of an SSGI? 

2.7. Is it allowed to limit the selection only to non-profit service providers? 

2.8. Do public authorities still have the possibility to negotiate with service providers during 
the  selection  process?  This  is  particularly  important  for  SSGI  as  public  authorities  are  not 
always  in  a  position  to  define  very  precisely  their  requirements  at  the  beginning  of  the 
process. Discussion with potential service providers is therefore sometimes necessary to help 
public authorities to define these requirements. 

2.9. To what extent do public procurement rules apply to inter-municipal cooperation? This 
cooperation could take different shapes, e.g. one municipality buying a service from another; 
two  municipalities  organising  together  a  call  for  tender  or  creating  a  new  entity  for  the 
provision of an SSGI, etc. 

2.10. To what extent do public procurement rules apply to public-private partnerships?  

2.11. What is the interaction between public procurement rules and state aid rules? In which 
situations  a  public  authority  which  finances  a  service  provider  in  conformity  with  state  aid 
rules must also abide by public procurement/transparency rules? 

 
 
 
1. DIRECT PROVISION OF SSGI 

- 199 - 

1.1.  Is  it  still  possible  for  a  public  authority  to  decide  to  provide  a  SSGI  directly?  In  other 
words, what is the public authorities' room for manoeuvre when deciding whether to provide a 
service directly or to externalise it? Is such decision completely left to their discretion? 

A public authority has full discretion to decide whether it provides services itself or entrusts them to a 
third  party.  Public  procurement  rules  do  only  apply  if  the  public  authority  opts  to  externalise  the 
service provision by entrusting it to a third party against remuneration. 

1.2.  Community  rules  concerning  the  selection  of  the  provider  normally  do  not  apply  when 
public authorities provide the service directly or through an internal provider (this is referred 
to  as  an  "in-house  provider"  situation).  What  are  the  scope  and  limits  of  the  "in-house" 
exception? 

The "in-house" exception is meant to cover a situation where a public authority decides to provide a 
service itself, albeit acting through a legally independent entity. In this case the public authority and 
the legally independent entity are effectively regarded as one. Such a relationship is neither covered 
by the principles of transparency, equal treatment and non-discrimination derived from the EC Treaty, 
nor by the public procurement Directive 2004/18/EC (hereinafter, the Directive). 

The conditions for the application of the "in-house" exception are that  

A) the public authority exercises over the legally independent entity a control which is similar to that 
which it exercises over its own departments and  

B)  the  legally  independent  entity  carries  out  the  essential  part  of  its  activities  with  the  controlling 
public authority.  

The  Court  of  Justice  has  made  it  clear  that  the  participation,  even  as  a  minority,  of  a  private 
undertaking in the capital of a company in which the public authority is itself a participant prevents 
criterion  A)  from  being  fulfilled,  which  means  that  "in-house"  status  is  then  excluded.  For  further 
information please refer to the answers to questions 2.9 and 2.10. 

2. EXTERNALISED PROVISION 

2.1. What is the applicable legal framework when a public authority decides to externalise the 
provision of SSGI? 

If  the  public  authority  decides  to  externalise  the  service  against  remuneration  it  has  to  follow  the 
Community law rules on the award of public service contracts or public service concessions. 

Two cases have to be distinguished: 

A) The public authority concludes a public service contract. In this case the public authority pays the 
service  provider  a  fixed  remuneration.  If  the  applicable  thresholds  are  met,  public  service  contracts 
are  covered  by  the  Directive.  Nevertheless,  contracts  for  social  services  are  not  subject  to  all  the 

 
 
 
 
 
- 200 - 

detailed  rules  of  the  Directive.  It  results  from  Article  21  of  the  Directive  that  only  certain  specific 
rules of the Directive are applicable to such services. In particular, technical specifications have to be 
drawn up at the beginning of the procurement process (see answer to question 2.2) and the outcome of 
the procurement procedure has to be published. Furthermore, the basic principles of Community law, 
such  as  the  obligation  to  treat  economic  operators  equally  and  non-discriminatorily  and  to  act  in  a 
transparent way have to be respected for the award of contracts for social services with cross border 
interest. These principles, however, require only the observation of basic standards developed by the 
ECJ and not the compliance with the full set of provisions of Directive 2004/18/EC. Therefore, when 
externalising  social  services  via  a  public  service  contract,  public  authorities  benefit  already  from  a 
larger room for manœuvre compared to other sectors. It is to be noted, however, that in case of mixed 
service  contracts,  including  social  services  and  other  services  that  are  fully  covered  by  the 
procurement  Directive,  such  as  transport,  research,  consulting  or  maintenance,  the  Directive  will 
apply only to a limited extent – as explained above – if the value of the social service is greater than 
the value of the other service. 

For  example,  ambulance  services  have  a  health  service  and  a  transport  service  component.  If  the 
transport service exceeds the health service in value, all the provisions of the Directive will apply. If 
the value of the health treatment is higher, the Directive will only partially apply as described above. 

If  the  contract  to  be  awarded  does  not  meet  the  threshold  for  application  of  the  Directive,  public 
authorities have nevertheless to comply with the basic rules and principles of Community law, such as 
the  principles  of  equal  treatment,  non-discrimination  and  transparency.  As  to  the  exact  meaning  of 
these principles we refer to the answer to question 2.4. 

B) The public authority grants a service concession. In this case the public authority does not pay for 
the service;  the  remuneration  consists  in  the right  of the concessionaire to  economically  exploit the 
service. The concessionaire assumes the operating risk resulting from the exploitation of the service in 
question. The Directive does not apply to service concessions. However, public authorities granting 
services  concessions  have  to  comply  with  the  basic  rules  and  principles  of  Community  law,  in 
particular with the principles of transparency, equal treatment and non-discrimination. As to the exact 
meaning of these principles we refer to the answer to question 2.4. 

2.2.  How  to  draft  detailed  specifications  in  the  context  of  a  public  procurement  procedure 
concerning  services  which  (i)  are  personalised  to  the  specific  needs  of  individual  users;  (ii) 
address  users  multiple  needs  through  an  holistic  approach  and  (iii)  must  be  adapted,  in  the 
process of delivery, to changing situations in terms of care intensity, users’ number, etc. 

The Directive provides for a wide range of possibilities to set up specifications. It is up to the public 
authorities to make full use of these possibilities by requiring bidders to develop tailor-made service 
concepts taking into account their specific needs in order to obtain the best possible services and the 
required level of quality. They may, for instance, specify that bidders have to address the particular 
needs of certain groups of users or that the proposed service concept must be compatible with existing 
structures set up by the public authorities. It is also conceivable that a public authority requires that 
the service is operated and evaluated in a way that involves the users. However, the bottom line is that 

 
 
 
- 201 - 

the specifications have to be set in a way that does not discriminate or prejudge the tender procedure 
at the outset. 

Adaptations  during  the  lifetime  of  the  contract  are  possible  to  the  extent  they  do  not  substantially 
change  the  terms  of  the  original  tender.  In  particular,  adaptations  should  not  be  so  wide  that  the 
competition could have had a different outcome if they had been known from the beginning. This is 
the  case  if  potential  competitors  that  had  not  submitted  an  offer  could  have  been  interested  in 
participating in the tender, had they known that such changes would occur. 

2.3. How to avoid creating too heavy a burden for small service providers, which are often the 
best equipped to deal with situations which have a strong local dimension? 

It is up to the public authority to structure the tender in a way that gives small operators a chance to 
participate and succeed. The wider the scope of the service required and the higher thus the economic 
and financial requirements, the more difficult it will be for small service providers to participate. In 
the case of bigger contracts (for instance for a bundle of services or for services to be performed at 
several places), the awarding authority might consider dividing the contract into different lots that are 
more  accessible  for  SMEs.  In  general,  it  is  advisable  for  public  authorities  to  draw  up  tender 
specifications with SMEs in mind, keeping formalities at a strict minimum. 

For contracts below the threshold for application of the Directive, public authorities in general have to 
comply with the principles of transparency, equal treatment and non-discrimination derived from the 
EC  Treaty.  However,  under  certain  conditions  small  local  service  contracts  may  even  be  awarded 
without complying with the principles of transparency, equal treatment and nondiscrimination on the 
ground  that  they  have  no  relevance  to  the  Internal  Market.  This  can  happen  if,  in  view  of  their 
particularly  low  value  (well  below  the  threshold  for  application  of  the  Directive  which  amounts 
currently to 211 000 EUR) and of the characteristics of the social service and the market concerned, it 
cannot  be  assumed  that  there  is  any  potential  interest  by  economic  operators  from  other  Member 
States to provide the service in question. For instance, the Commission considered in cases involving 
contracts for legal services with an average value around 5 000 EUR or planning services between 6 
000 EUR and 26 500 EUR that, in view of their low value (below or about 10 % of the threshold for 
application of the Directive) and the individual circumstances of the cases, the contracts in question 
were not relevant to the Internal Market. 

It is up to the public authority to evaluate the potential interest from economic operators located in 
other Member States on a case by case basis, unless the national law provides for specific guidance. 
For evaluating the potential Internal Market relevance, public authorities can refer to the Commission 
Interpretative Communication on the Community law applicable to contract awards not or not fully 
subject  to  the  provisions  of  the  Public  Procurement  Directives.  This  Communication  encompasses 
contracts  only  partially  covered  by  the  Directives,  such  as  contracts  for  health  and  social  services. 
Since the Communication contains a general interpretation of the internal market relevance under the 
EC Treaty, it can also be used as guidance for concessions. 

 
 
 
 
- 202 - 

2.4.  What  are  the  obligations  deriving  from  the  principles  of  transparency  and  non-
discrimination? 

According  to  the  case-law  of  the  European  Court  of  Justice  the  principles  of  transparency,  equal 
treatment and non-discrimination require an adequate publicity of the public authority's intention to 
conclude a public contract or a concession. The advertisement may be limited to a short description of 
the essential details of the contract to be awarded and of the award method together with an invitation 
to contact the public authority. It is essential that all potentially interested service providers have the 
possibility to express their interest in bidding for the contract. 

The public authority may then select in a non-discriminatory and impartial way the applicants to be 
invited  to  submit  an  offer  and  eventually  negotiate  the  terms  of  the  contract  or  of  the  concession. 
During such negotiations all operators should be on an equal footing and receive the same information 
from the public authority. 

In  accordance  with  the  ECJ  case-law  on  effective  judicial  protection,  at  least  decisions  adversely 
affecting a person having or having had an interest in obtaining the contract, such as any decision to 
eliminate a bidder, should be subject to review for possible violations of the basic standards derived 
from primary Community law. 

When  applying  these  principles  the  public  authorities  can  inspire  themselves  by  the  Commission 
Interpretative Communication on the Community law applicable to contract awards not or not fully 
subject to the provisions of the Public Procurement Directives. As already stated, this Communication 
also  encompasses  contracts  only  partially  covered  by  the  Directives,  such  as  health  and  social 
services. Since the Communication contains a general interpretation of the principles of transparency, 
equal treatment  and  non-discrimination,  it  can  also  be  used as  guidance  for  concessions,  bearing  in 
mind  that  these  usually  represent  a  value  well  above  the  thresholds  of  the  public  procurement 
Directives and therefore normally require a publicity in a medium with European-wide coverage. 

2.5.  How  to  reconcile  public  procurement  procedures,  which  limit  the  number  of  providers 
selected, with the preservation of a sufficient degree of freedom of choice for SSGI users? 

Public  procurement  procedures  do  not  aim  at  limiting  the  number  of  service  providers  selected. 
Contracting  authorities  have  full  freedom  to  choose  one  or  several  operators  to  satisfy  their  needs. 
Public authorities can for example entrust the same service concession to several operators, if this is 
practically feasible, thereby guaranteeing a larger choice for users of the service. 

2.6. Is it allowed to introduce as a criterion for the selection of a service provider its familiarity 
with the local context, this aspect being often essential for the successful provision of an SSGI? 

EC  public  procurement  rules  aim  at  ensuring  fair  competition  among  operators  across  Europe  to 
provide  better  value  for  money  to  the  public  authority.  A  requirement  of  familiarity  with  the  local 
context might lead to an unlawful discrimination of service providers from abroad. At the same time, 
it risks reducing the public authority's choice to a small number of local operators and consequently 
diminishing  the  beneficial  effect  of  European  wide  competition.  Nevertheless,  certain  requirements 

 
 
 
 
- 203 - 

related  to  the  local  context  may  be  acceptable  if  they  can  be  justified  by  the  particularities  of  the 
service  to  be  provided  (type  of  service  and/or  categories  of  users)  and  are  strictly  related  to  the 
performance of the contract. 

Examples: 

A  public  authority  may,  for  instance,  require  that  the  successful  tenderer  establishes  a  local 
infrastructure  such  as  an  office  or  a  workshop  or  deploys  specific  equipment  at  the  place  of 
performance if this is necessary for the provision of the service. 

A municipal authority intending to put in place a shelter for women in difficulty, mainly addressed to 
women from a specific cultural minority, may specify in the call for tenders that the service provider 
should already have the experience of this kind of services in an environment presenting similar social 
and economic characteristics and that the employees who will be in contact with and/or address the 
needs  of  the  women  in  difficulty  should  be  sufficiently  familiar  with  the  relevant  cultural  and 
linguistic context. 

A public authority that intends to put in place a job placement service focused in particular on young 
adults  from  disadvantaged  areas  and  addressing  in  an  integrated  way  the  specific  difficulties 
encountered by the users (e.g. mental health problems, alcohol or drug addictions, social housing and 
indebtedness)  might  specify  that  the  service  provider  should  have  experience  with  this  kind  of 
services for similar target groups. It may also indicate that the service provider should ensure that as 
of the beginning of service provision the employees dealing with the users have a knowledge of the 
already existing networks of social actors with whom they will need to liaise in order to address in an 
integrated way the needs of the young unemployed adults. 

In  any  event,  a  restriction  of  that  kind  must  not  go  beyond  what  is  strictly  necessary  to  ensure  an 
adequate  service  provision.  The  ECJ  decided,  for  example,  that  in  tendering  a  public  contract  for 
health services of home respiratory treatments a public authority cannot require potential tenderer to 
have,  at  the  time  when  the  tender  is  submitted,  an  office  open  to  the  public  in  the  capital  of  the 
province where the service is to be provided. 

It  is  the  responsibility  of  the  public  authority  to  make  sure  that  such  conditions  are  objectively 
justified and do not result in a discriminatory treatment by unduly favouring certain groups of bidders, 
in  particular  local  undertakings  or  incumbent  service  providers.  The  possible  direct  award  of  low-
value contracts to small local service providers has already been addressed in the answer to question 
2.3. 

2.7. Is it allowed to limit the selection only to non-profit service providers? 

Two situations have to be distinguished. 

Individual contracting authorities can not decide themselves to limit a tender procedure to non-profit 
service  providers.  The  Directive  is  based  on  the  principle  that  all  economic  operators  are  treated 
equally and nondiscriminatorily. It is therefore not possible under the Directive to reserve tenders to 
specific categories of undertakings, such as non-profit organizations. 

 
 
 
- 204 - 

The  provisions  mentioned  in  this  paragraph  apply  to  all  services,  including  those  only  partially 
covered  by  the  Directive,  such  as  social  services.  However,  a  national  law  regulating  a  particular 
activity might, in exceptional cases, provide for a restricted access to certain services for the benefit of 
nonprofit organizations. In this case public authorities would be authorized to limit participation in a 
tender  procedure  to  such  non-profit  organizations,  if  the  law  is  in  conformity  with  European  law. 
Nevertheless,  such  a  national  law  would  constitute  a  restriction  to  Articles  43  and  49  of  the  EC 
Treaty,  on  the  freedom  of  establishment  and  the  free  movement  of  services  and  would  have  to  be 
justified on a case by case basis. On the basis of the case-law of the Court of justice, such a restriction 
could be justified, in particular, if it is necessary and proportionate in view of the attainment of certain 
social objectives pursued by the national social welfare system. 

2.8. Do public authorities still have the possibility to negotiate with service providers during the 
selection process? This is particularly important for SSGI as public authorities are not always 
in  a  position  to  define  very  precisely  their  requirements  at  the  beginning  of  the  process. 
Discussion  with  potential  service  providers  is  therefore  sometimes  necessary  to  help  public 
authorities to define these requirements. 

As described in the answers to questions 2.2 and 2.4, negotiated procedures can be used for procuring 
health or social services, whether it concerns a public contract or a concession. However, the public 
authority has to make sure that operators invited to participate in a negotiated procedure are treated 
equally. 

2.9.  To  what  extent  do  public  procurement  rules  apply  to  inter-municipal  cooperation?  This 
cooperation  could  take  different  shapes,  e.g.  one  municipality  buying  a  service  from  another; 
two  municipalities  organising  together  a  call  for  tender  or  creating  a  new  entity  for  the 
provision of an SSGI, etc. 

Public  procurement  rules  apply  when  a  public  authority  intends  to  conclude  a  service  contract  for 
remuneration  with  a third party.  It  does  not  make  a  difference,  whether  this third  party  is  a  private 
operator or another public authority. 

However,  as  the  following  examples  illustrate,  there  are  situations  where  public  entities  entrust 
economic activities to other public entities or perform such activities jointly with other public entities 
without being bound by EC public procurement rules. 

For instance, public authorities such as municipalities have of course the possibility of organising a 
common call for tenders. One public authority can for example carry out a procurement procedure for 
itself  and  for  another  public  authority,  provided  that  this  joint  procurement  is  announced  at  the 
beginning of the procurement process. 

Moreover,  several  public  authorities  may  create  a  new  entity  such  as  an  association  to  which  they 
completely transfer a particular task. In such a situation the public authorities do not retain any control 
over the service exercised, which is performed by the new entity in full independence under its sole 
responsibility.  In  such  a  case,  no  service  is  provided  and  therefore  neither  the  EC  Treaty  nor  the 
Directive applies. 

 
 
 
 
- 205 - 

In  addition,  if  public  authorities  establish  structures  of  mutual  assistance  and  cooperation  without 
remuneration, there is no service provision within the meaning of the EC Treaty and Community law 
is not applicable. 

2.10. To what extent do public procurement rules apply to public-private partnerships? 

As already set out in the answer to question 1.2, there is no "in-house" relationship between a public 
authority and a public-private entity, in which the public authority participates together with a private 
party.  The  consequence  of  this  is  that  services  entrusted  to  the  public-private  entity  have  to  be 
tendered  in  accordance  with  the  procurement  rules  of  the  EC  Treaty  or  the  public  procurement 
Directives. 

When the public authority organizes a public procurement procedure to select the private partner who 
will perform the service contract or service concession in question together with the public authority 
within the framework of the public-private entity, there is no need for further tendering the provision 
of such service. However, any substantial change to the parameters concerning the provision of the 
service  not  foreseen  in  the  original  tender  procedure  would  require  a  new  tender.  A  Commission 
Communication  on  Institutionalised  PPPs  which  explains  the  practical  ways  of  carrying  out  such  a 
tender procedure is currently being finalized and should be adopted before the end of the year. 

2.11.  What is  the interaction  between  public  procurement  rules  and  state  aid  rules?  In which 
situations a public authority which finances a service provider in conformity with state aid rules 
must also abide by public procurement/transparency rules? 

Public procurement rules including those on concessions, on the one hand, and state aid rules, on the 
other hand, are in principle two different sets of provisions completely independent from each other. 
Public procurement rules aim at European wide competition ensuring best value for money. State aid 
rules  prevent  distortions  of  competition  through  state  financing  or  similar  advantages.  Public 
procurement  rules  apply  as  soon  as  there  is  an  obligation  to  provide  a  particular  service  against 
remuneration.  Conversely,  the  pure  financing  of  an  activity,  possibly  coupled  with  an  obligation  to 
reimburse the money if it is not used for the purpose it was intended for, will normally not be covered 
by the public procurement provisions. Indications for the existence of a public service contract or a 
concession are that the type of activity concerned falls within the competence of the public authority, 
that the terms of the service are set out in detail by the public authority and that the service is wholly 
remunerated by the public authority. However, these indicators are not as such decisive in themselves, 
but serve as a proxy to establish whether the subject matter of the contract is indeed an obligation to 
provide a service. 

 
 
 
 
 
 
- 206 - 

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 

SEC(2007) 1516 

PROVISIONAL VERSION 

COMMISSION STAFF WORKING DOCUMENT 

Frequently asked questions in relation with Commission Decision of 28 November 2005 
on the application of Article 86(2) of the EC Treaty to State aid in the form of public 
service compensation granted to certain undertakings entrusted with the operation of 
services of general economic interest, and of the Community Framework for State aid in 
the form of public service compensation 

Accompanying document to the 
Communication on "Services of general interest, including social services 
of general interest: a new European commitment" 
{COM(2007) 725 final} 

{SEC(2007) 1514} 

{SEC(2007) 1515} 

 
 
 
 
 
 
 
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COMMISSION STAFF WORKING DOCUMENT 

Frequently asked questions in relation with Commission Decision of 28 November 2005 on the 
application  of  Article  86(2)  of  the  EC  Treaty  to  State  aid  in  the  form  of  public  service 
compensation  granted  to  certain  undertakings  entrusted  with  the  operation  of  services  of 
general  economic  interest1,  and  of  the  Community  Framework  for  State  aid  in  the  form  of 
public service compensation 

In the framework of the consultation process launched by the Commission Communication on Social 
Services of General Interest (SSGI) of April 2006, the Commission received a number of questions 
concerning  the  application  of  the  state  aid  rules  to  social  services  of  general  interest  (SSGI).  The 
present document provides answers to these queries. Where possible, the answers refer to case law or 
to specific provisions of the applicable texts to guide interested readers who would like to have further 
information. 

This document is a Staff Working Paper prepared by the Commission services. It provides technical 
guidance notably on the basis of concise and sometimes simplified summary of legislation, case law 
and Commission decisions related to SGEI and particularly to SSGI issues in the field of State aid. 
This document is not binding on the European Commission as an Institution. 

 
 
 
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TABLE OF CONTENTS 

1. INTRODUCTION 

2. APPLICABILITY OF STATE AID RULES TO SERVICES OF GENERAL INTEREST 

2.1. When do the Treaty rules on State aid apply to the organisation and financing of SGEI/SSGI? 

2.2. When does an activity qualify as economic for the purposes of competition rules? 

2.3. May members of a liberal profession constitute "undertakings" within the meaning of competition 
rules? 

2.4. When is an activity non economic? 

2.5. May the Treaty rules on State aid apply to non-profit service providers? 

2.6.  What  are  the  legal  consequences  if  a  municipality  decides  to  distribute  vouchers  to  certain 
categories of individual users to acquire SGEI/SSIG? 

2.7. A non-profit service provider would like to create a shelter for women in difficulties which needs 
a financial support of EUR 150 000: do State aid rules apply to such a grant by a public authority? 

2.8.  Can  a  public  authority  finance  a  pilot  initiative  in  order  to  define  the  content  of  SGEI/SSGI 
missions? 

2.9.  SGEI/SSGI  are  often provided  in  a local  context.  Do  they  really  affect trade  between  Member 
States? 

2.10.  Are  there  examples  of  local  SGEIs/SSGIs  which  do  not  really  seem  to  affect  trade  between 
Member States? 

2.11. What if an activity is economic and affects trade between Member States? 

2.12.  What  if  a  public  authority  allocates  a  compensation  for  a  service  of  general  interest  which  is 
considered economic? 

2.13. How can a public authority finance a SGEI/SSGI? 

3. ALTMARK RULING AND SGEI PACKAGE 

3.1. What does the Court state in the Altmark ruling? 

3.2. What are the consequences of application/non application of the Altmark criteria? 

3.3. What are the consequences if a compensation for a SGEI/SSGI is indeed a State aid? 

3.4. What is the difference between the Decision and the Framework? 

3.5. Do the airports of more than 1 million passengers fall within the scope of the Decision in cases 
where the public service compensation is less than EUR 30 million and the undertaking managing the 
airport has an annual turnover of less than EUR 100 million? 

3.6. What is the relationship between the Decision and Regulations 1191, 1192 and 1107? 

 
 
 
 
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3.7. What is the difference between the Framework and special rules for compatibility in the transport 
sector? 

3.8. What is the difference between the conditions in the Altmark ruling and the conditions laid down 
in the Decision, the Framework, and Regulations 1191/69 and 1107/70? 

4. NOTIFICATION OF AID EXCEEDING THE THRESHOLDS OF THE DECISION 

4.1.  Is  it  necessary  for  aid  exceeding  the  thresholds  defined  in  Article  2a)  of  the  Decision,  to  be 
notified to the Commission? 

5.  THE  NOTION  OF  "ACT  OF  ENTRUSTMENT"  FOR  THE  PURPOSES  OF  THE  DECISION 
AND THE FRAMEWORK 

5.1. What is the purpose of an "act of entrustment"? 

5.2. What types of acts of entrustment are considered to be adequate in the meaning of the Decision? 

5.3. Should the act of entrustment define a "mission" or "specific activities" to be accomplished? 

5.4. How to draft an act of entrustment concerning services that have to be on the one hand looked at 
through a global approach, and on the other tailor made to the specific needs of individual users? 

5.5. How to draft an act of entrustment concerning services that have to be adapted in the process of 
delivery to changing situations in terms of care intensity, users’ profiles, and users’ number? 

5.6. How can the requirement for an act of entrustment for SGEI/SSGI providers be reconciled with 
the autonomy and the freedom of initiative of such providers that various Member States recognise 
and respect, according to their constitutional/legal framework? 

6. COMPENSATION 

6.1.  The  Decision  asks  for  the  parameters  of  costs  to  be  defined  in  the  entrustment  act.  How  is  it 
possible to do it before offering the service? 

6.2.  Even  for  experienced  entities  providing  SGEI/SSGI,  there  may  be  a  high  level  of  cost 
unpredictability and a risk for an ex-post deficit. How can public entities cope with this situation? 

6.3. How to determine the parameters for cost compensation and how to define the arrangements for 
overcompensation in case a given SGEI/SSGI is financed by two or several public authorities? 

6.4. Is there a need to keep separate accounts for an undertaking providing a SGEI, while carrying out 
other commercial activities? 

6.5. Is there a need to keep separate accounts for an entity which is entrusted with the provision of 
SGEI and realises also non economic activities? 

6.6.  Which  costs  can  be  compensated  when  an  undertaking  uses  the  same  infrastructure  to  provide 
both SGEI and economic activities which are not qualified as SGEI? 

 
 
 
 
 
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6.7. What is the meaning of reasonable profit within the calculation of the compatible compensation? 

6.8. Should tax benefits arising from the welfare status of an entity be counted among the revenues 
within the meaning of Article 5.3 of the Decision? 

6.9.  Should  payments  made  under  a  profit-and  loss  transfer  agreement  within  a  public  holding  be 
counted among the revenues within the meaning of Article 5.3 of the Decision?  

6.10.  When  the  parameters  for  the  compensation  are  defined  for  a  given  entity,  should  there  be  a 
comparison with other entities? Should there be a judgement on efficiency?  

6.11.  Does  the  Decision  require  the  selection  of  the  least  expensive  company  for  the  provision  of 
SGEI/SSGI?  

 
 
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1. INTRODUCTION 

A number of questions have been raised concerning the application of State aid rules to services of 
general  interest.  These  questions  concern  in  the  first  place  the  precise  conditions  under  which 
compensation for public service obligations constitute state aid. Secondly, they concern the conditions 
under which a state aid can be deemed compatible with the Treaty and when decisions to grant an aid 
must be notified to the Commission. 

In  its  judgment  in  the  case  of  Altmark  Trans  GmbH  and  Regierungspräsidium  Magdeburg  v. 
Nahverkehrsgesellschaft Altmark GmbH (Altmark), the Court of Justice has addressed these issues. 
The Court held that public service compensation does not constitute State aid within the meaning of 
Article 87 of the Treaty provided that four cumulative criteria are met. 

Where  those  four  criteria  are  met,  public  service  compensation  does  not  constitute  State  aid,  and 
Articles 87 and 88 of the Treaty do not apply. If the Member States do not respect those criteria and if 
the  general  criteria  for  the  applicability  of  Article  87(1)  of  the  Treaty  are  met,  public  service 
compensation constitutes State aid. 

In such cases, Article 86 and, for inland transport, Article 73 of the Treaty, allow the Commission to 
declare compensation for services of general economic interest (SGEI) compatible with the common 
market. Commission Decision of 28 November 2005 on the application of Article 86(2) EC to State 
aid  in  the  form  of  public  service  compensation  granted  to  certain  undertakings  entrusted  with  the 
operation  of  SGEI  (hereinafter  the  "Decision")  and,  for  land  transport,  Council  Regulation 
1191/69/EC (hereinafter "Regulation 1191") specify the conditions under which certain compensation 
schemes  are  compatible  with  Articles  86(2)  and  73  respectively  and  are  not  subject  to  the  prior 
notification requirement of Article 88(3) of the Treaty. 

Other  public  service  compensation  should  be  notified  to  the  Commission  which  will  assess  its 
compatibility  in  line  with  the  Community  Framework  for  State  aid  in  the  form  of  public  service 
compensation  (hereinafter  the  "Framework")  and,  for  land  transport,  Regulation  1191,  Council 
Regulation  1192/69/EC  (hereinafter  "Regulation  1192")  and  Council  Regulation  1107/70/EC 
(hereinafter "Regulation 1107"). 

The Altmark Judgment, the Decision and the Framework have made a significant contribution to the 
clarification and simplification of the rules applicable. 

Nevertheless,  public  authorities  and  stakeholders  have  asked  several  questions  concerning  the 
concrete application of the legal framework to specific cases. In particular, following the publication 
of  the  Commission  Communication  of  Social  Services  of  General  Interest  (SSGI)  in  April  2006, 
which followed up on the White Paper on Services of General Interest (SGI) of May 2004, Member 
States and stakeholders have been seeking clarification on a number of detailed issues. 

In  response,  and  in  line  with  the  approach  set  out  in  the  Commission's  document  on  "Services  of 
general interest, including social services of general interest : a new European commitment" adopted 
in  November  2007,  the  Commission  services  intend  to  offer  to  public  authorities,  practitioners, 
business and citizens an additional guidance on how to interpret and apply the EU rules in the area. 
The purpose of this Staff Working Paper is to provide in a concise and accessible way answers to the 
practical  questions  that,  in  light  of  the  experience  gained  over  the  past  two  years,  have  been  most 

 
 
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frequently asked by stakeholders. The Commission services intend to update this Paper on a regular 
basis when new issues arise, notably through the Interactive Assistance Service that the Commission 
services will put in place at the disposal of stakeholders concerning the application of competition and 
internal market rules on SGEI. The following questions and replies mainly refer to social services of 
general economic interest and transport, but are largely applicable to other SGEI. 

2. APPLICABILITY OF STATE AID RULES TO SERVICES OF GENERAL INTEREST 

2.1.  When  do  the  Treaty  rules  on  State  aid  apply  to  the  organisation  and  financing  of 
SGEI/SSGI? 

Competition  rules  only  apply  to  "undertakings".  This  concept  covers  any  entity  engaged  in  an 
economic activity, regardless of the legal status of the entity or the way in which it is financed. 

2.2. When does an activity qualify as economic for the purposes of competition rules? 

Any activity consisting in offering goods and/or services on a given market is an economic activity. In 
this context, the fact that the activity concerned may be qualified as "social" is not relevant. 

Examples of activities considered to be economic in past cases and Court judgments 

• The activity of public employment procurement exercised by public agencies. 

• Optional insurance schemes operating according to the principle of capitalization, even in the case 
they  are  managed  by  non  profit  organisations;  by  principle  of  capitalization  is  meant  that  the 
insurance  benefits  depend  solely  on  the  amount  of  contributions  paid  by  the  recipients  and  the 
financial results of the investments made. 

• Emergency and patient transport services. 

• The provision by legal entities, set up by employers or trade union organisations and authorised by 
the  State,  of  assistance  to  employees  and  employers,  related  to  the  completion  of  the  income  tax 
declaration, and other relative advice. 

• The management of transport infrastructure. 

• Medical services provided either in a hospital environment or outside such an environment. 

• The provision of funds to municipalities and voluntary housing bodies for housing at cheaper rents; 
provision  of  general  mortgage  funds,  affordable  housing  schemes  aiming  at  providing  low-cost 
housing,  rental  subsidy  schemes  and  grant  schemes  for  elderly  and  disabled  persons,  as  well  as 
socially disadvantaged households. 

•  The  provision  of  infrastructure  ancillary  to  social  dwellings,  such  as  roads,  shops,  playgrounds, 
places  of  recreation,  parks,  allotments,  open  spaces,  sites  for  places  of  worship,  factories,  schools, 
offices  and  other  buildings  or land  and such  other  works  and services,  which  is  needed to ensure a 
good environment for social housing. 

 
 
 
 
 
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2.3.  May  members  of  a  liberal  profession  constitute  "undertakings"  within  the  meaning  of 
competition rules? 

Yes,  members  of  a  liberal  profession  may  constitute  undertakings.  The  Court  of  Justice  considered 
that medical specialists may provide, in their capacity as self-employed economic operators, services 
on a market, namely the market in specialist medical services, and thus constitute undertakings. The 
fact that they provide complex and technical services and the fact that the practice of their profession 
is regulated cannot alter that conclusion. 

2.4. When is an activity non economic? 

Two relevant categories of activities which have been determined to be non economic are: 

• Non economic activities related to the exercise of State prerogatives Activities linked to the exercise 
of State prerogatives by the State itself or by authorities functioning within the limits of their public 
authority, do not constitute economic activities for the purposes of competition rules. In this context, 
it  is  irrelevant  whether  the  State  is  acting  directly  through  a  body  forming  part  of  the  State 
administration or by way of a body on which it has conferred special or exclusive rights. 

Examples of non-economic activities linked to the exercise of state prerogatives: 

•  Activities related to the army or the police. 

•  The maintenance and improvement of air navigation safety, security, air traffic control, customs, 

maritime traffic control and safety. 

•  The anti-pollution surveillance which is a task in the public interest that forms part of the essential 

functions of the State as regards the protection of the environment in maritime areas. 

•  Standardisation activities as well as related research and development activities. 

•  The  organization,  financing  and  enforcement  of  correctional  measures  in  order  to  ensure  the 

enforcement of the penal system. 

•  The financing and the supervision of the construction of the railway infrastructure. 

•  The closing down of coal mines and the management of assets, as well as the provision of funds 
for the work of rehabilitation and supervision of sites and for the eradication of the consequences 
of mining activity. 

•  Certain  activities  of  a  purely  social  nature.  The  case  law  has  established  a  set  of  criteria  under 

which certain activities with a purely social function can be considered as non economic. 

Examples of non-economic activities of a purely social nature: 

 
 
 
 
 
 
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•  The  management  of  compulsory  insurance  schemes  pursuing  an  exclusively  social  objective, 
functioning  under  the  principle  of  solidarity,  offering  insurance  benefits  independently  of 
contributions. 

• The provision of public education financed as a general rule by the public budget and carrying out a 
State task in the social, cultural and educational fields towards the population. 

2.5. May the Treaty rules on State aid apply to non-profit service providers? 

Yes, the rules may apply.  The mere fact that an entity is non-profit making does not mean that the 
activities which it carries on are not of an economic nature. The legal status of the entity providing 
SSGI does not affect the nature of the activity concerned. The relevant criterion is whether the entity 
concerned pursues an economic activity. 

For example, a non-profit association or a charitable organisation pursuing an economic activity will 
constitute an "undertaking", but only for the part of the activity which is economic. Competition rules 
will not apply to their non economic activities. 

Example: 

The  provision  of  emergency  transport  services  and  patient  transport  services  by  non  profit 
organisations may constitute an economic activity. Public service obligations may render the services 
provided by such organisations less competitive than comparable services rendered by other operators 
not  bound  by  such  obligations,  but  that  fact  cannot  prevent  the  activities  in  question  from  being 
regarded as economic activities. 

2.6. What are the legal consequences if a municipality decides to distribute vouchers to certain 
categories of individual users to acquire SGEI/SSIG? 

Member  States,  including  local  authorities,  may  grant  such  support  to  individual  service  users, 
provided  that  such  aid  is  granted  without  discrimination  related  to  the  origin  of  the  products  or 
services concerned. 

2.7. A non-profit service provider would like to create a shelter for women in difficulties which 
needs a financial support of EUR 150 000: do State aid rules apply to such a grant by a public 
authority? 

Such  a  financing  may  occur  without  meeting  the  criteria  specified  in  the  Decision,  notably  the 
existence of an act of entrustment, if the total amount of aid granted per period of three years is less 
than  €  200  000.  If  the  conditions  of  the  de  minimis   Commission  Regulation  are  met,  such  support 
does  not  constitute  State  aid,  in  the  meaning  of  article  87(1)  and  should  not  be  notified  to  the 
Commission. Therefore, a public authority can provide such a grant of limited amount without further 
concerns as for the application of State aid rules, even when the activity to be financed is deemed to 
be economic. For all other cases, the measure will still be compatible, if the criteria of the Decision 
are fulfilled. 

 
 
 
 
 
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2.8. Can a public authority finance a pilot initiative in order to define the content of SGEI/SSGI 
missions? 

Yes,  public authorities can  launch  a  pilot  initiative  in  order  to  define the  mission  of  the  SGEI  they 
want  to  put  in  place.  In  order  to  finance  such  pilot  initiatives,  public  authorities  can  rely  on  the 
opportunities offered by the de minimis exemption regulation, which stipulates that article 87(1) does 
not apply to the grant of aid of up to 200 000 EUR over a period of 3 years. 

2.9.  SGEI/SSGI  are  often  provided  in  a  local  context.  Do  they  really  affect  trade  between 
Member States? 

In the field of State aid law, the effect on trade does not depend on the local or regional character of 
the  service  supplied,  or  on  the  scale  of  the  activity  concerned.  There  is  no  threshold  or  percentage 
below which it may be considered that trade between Member States is not affected. The relatively 
small  amount  of  aid  or  the  relatively  small  size  of  the  entity  which  receives  it,  does  not  as  such 
exclude the possibility that trade between Member States might be affected. 

Example of effect on trade between Member States: 

Subsidies payable to Dutch service stations located near the German border, as a result of the increase 
in  national  fuel  prices  following  the  rise  in  excise  duties  in  the  Netherlands,  were  affecting  trade 
between Member States, since their purpose was to mitigate the disparity between the levels of excise 
duties payable in Netherlands and the amount of excise duty levied on light oils in Germany. 

2.10. Are there examples of local SGEIs/SSGIs which do not really seem to affect trade between 
Member States? 

There  are  some  Commission  decisions  in  the  State  aid  field,  where  state  measures  financing  local 
services, have been considered as not affecting intra-Community trade: 

Examples of measures considered to have no effect on trade between Member States: 

• In the case of the Dorsten swimming pool, an annual subsidy for the construction and operation of a 
public swimming pool in Dorsten which would be used only by the local population, could not affect 
trade between Member States. 

• In the case of Irish hospitals, a system of capital allowances aiming at the creation of facilities for 
public local and relatively small hospitals, serving a local hospital market with clear undercapacity, 
could  not  attract  investment  nor  customers  from  other  Member  States  and  consequently  could  not 
affect trade between Member States. 

• In the case of service areas in Tenerife, subsidies allocated for the construction by local road haulage 
associations,  of  municipal  service  areas  for  their  members  could  not  affect  trade  between  Member 
States, because of their exclusively local use. 

 
 
 
 
 
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• The Community Guidelines for State aid to airports of 2005 provide that compensation payments for 
small  regional  airports44 are  not likely  to  distort  competition,  neither  affect  trade  between Member 
States to a degree contrary to the common interest45. 

. 

2.11. What if an activity is economic and affects trade between Member States? 

If an activity is economic and affects trade between Member States, competition rules apply to it. This 
however does not mean that public authorities have to ensure that a multiplicity of service providers is 
present  in  the  market.  Moreover,  this  does  not  mean  that  public  authorities  have  an  obligation  to 
privatize  entities  providing  SGEI/SSGI  or  abolish  special  or  exclusive  rights  already  granted  to 
service  providers,  which  are  necessary  and  proportionate  for  the  performance  of  the  SGEI/SSGI 
concerned. 

2.12. What if a public authority allocates a compensation for a service of general interest which 
is considered economic? 

A  public  service  compensation  provided  by  a  public  authority  to  a  service  provider  may  constitute 
State aid if the criteria established by the Court of Justice in its Altmark ruling are not cumulatively 
met (see paragraph 3.1). Nevertheless, the fact that a public service compensation constitutes a State 
aid does not per se mean that it is not allowed, since that compensation may be compatible with the 
Treaty (see paragraphs 3.3 and 3.4). 

2.13. How can a public authority finance a SGEI/SSGI? 

Member  States  have  a  wide  margin  of  discretion  in  the  organisation  and  finance  of  their 
SGEIs/SSGIs. Public authorities can allocate a subsidy or a tax benefit, but they can also award an 
exclusive or special right to the service provider, in order to ensure the performance of the SGEI/SSGI 
provision,  as long  as  this right  does  not  exceed  what  is  necessary  to  ensure  the  performance  of the 
SGEI/SSGI under economically acceptable conditions. 

3. ALTMARK RULING AND SGEI PACKAGE 

3.1. What does the Court state in the Altmark ruling? 

In its Altmark ruling, the Court of Justice held that public service compensation does not constitute 
State aid within the meaning of Article 87 (1) of the EC Treaty provided that four cumulative criteria 
are met. 

• First, the recipient undertaking must actually have public service obligations to discharge, and the 
obligations must be clearly defined. 

• Second, the parameters on the basis of which the compensation is calculated must be established in 
advance in an objective and transparent manner. 

 
 
 
 
 
 
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• Third, the compensation cannot exceed what is necessary to cover all or part of the costs incurred in 
the  discharge  of  the  public  service  obligations,  taking  into  account  the  relevant  receipts  and  a 
reasonable profit. 

• Finally, where the undertaking which is to discharge public service obligations, in a specific case, is 
not  chosen  pursuant  to  a  public  procurement  procedure  which  would  allow  for  the  selection  of  the 
bidder  capable  of  providing  those  services  at  the  least  cost  to  the  community,  the  level  of 
compensation  needed  must  be  determined  on  the  basis  of  an  analysis  of  the  costs  which  a  typical 
undertaking, well run and adequately equipped, would have incurred. 

Examples  of  cases  where  the  Commission  considered  that  the  Altmark  criteria  were  met  and 
consequently, the compensation did not constitute State aid: 

• The finance of a scheme promoting investments in order to ensure security of electricity supply in 
Ireland was not considered to be a State aid; 

(a) The provision of new electricity reserve generation capacity in order to face electricity demand at 
any time of the year, including in peak periods, was considered to be a SGEI. 

(b) Moreover, the open transparent and non discriminatory competitive procedure which took place 
guaranteed that all the other three conditions laid down by the Altmark decision were met. 

• Subsidies financing broadband infrastructure in France were also not considered aid because; 

(a) The generalized access to broadband infrastructure for all the population was a SGEI. 

(b) Specific parameters predefined the amount of the compensation in the Concession contract. 

(c)  There  was  no  risk  of  overcompensation  since  the  parameters  for  the  calculation  of  the 
compensation were precisely defined within the business plans of the operators, which were based on 
the specific data provided by the public authority itself. The absence of any risk of overcompensation 
was also ensured by the fact that the public authority required from the operators who would provide 
the service to set up an ad hoc company for that service which would guarantee the neutrality of the 
service provider in question. 

(d) A thorough and detailed analysis of the needs of the project and the offers of the candidates took 
place.  In  addition,  the  procedure  chosen  permitted  the  selection  of  the  most  efficient  candidate 
offering the service at the least cost to the community. 

In  the  Dorsal  case,  the  Commission  considered  that  the  4th  Altmark  criterion  was  met  because  a 
thorough  comparative  report  analysis  of  the  specific  needs  of  the  project  and  the  offers  of  the 
candidates, as well as the competitive procedure itself allowed for the compensation to be estimated 
on the basis of the costs of a well run and adequately equipped undertaking. 

•  The  Commission  found  that  the  rated  fees  paid  by  "Casa  Depositi  e  Prestiti"  –  a  state  controlled 
financial body – to "Poste Italiane" were not considered to be State aid: 

(a) The distribution of postal savings books was considered as a SGEI. 

(b) The market fee was an appropriate estimate of the level of the costs, which a typical undertaking, 
well run and adequately provided within the same sector would incur, taking into account the receipts 

 
 
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and  a  reasonable  profit  from  discharging  the  obligations.  Therefore,  the  4th  Altmark  criterion  was 
fulfilled. 

. 

3.2. What are the consequences of application/non application of the Altmark criteria? 

Where all the Altmark criteria are met, the public service compensation does not constitute State aid. 
Where at least one of the Altmark criteria is not met, and the other State aid criteria are also present, 
the public service compensation constitutes State aid. 

3.3. What are the consequences if a compensation for a SGEI/SSGI is indeed a State aid? 

The fact that public service compensation constitutes State aid does not mean that this compensation 
is  forbidden. This  compensation is compatible  with the Treaty  when the conditions  specified in the 
Decision or the Framework are met. 

3.4. What is the difference between the Decision and the Framework? 

Both  texts specify  under  which  conditions  the  public  service  compensation  constituting  State  aid  is 
compatible with the Treaty. 

The only major difference lies in the fact that public service compensations covered by the Decision 
do not need to be notified to the Commission. As soon as the criteria of the Decision are met, the 
Member State concerned may grant the compensation without delay. However, when the conditions 
of the Decision are not met (for example because larger amounts of compensation are concerned), the 
compensation must be notified in advance to the Commission so that it can check whether the State 
aid concerned is compatible with the Treaty. 

Scope of the Decision; the Decision applies to: 

• public service compensation of less than EUR 30 million on an annual basis, granted to undertakings 
with an annual turnover before tax, all activities included, of less than EUR 100  million during the 
two financial years preceding that in which the service of general economic interest was assigned. 

•  public  service  compensation  granted  to  hospitals  carrying  out  activities  qualified  as  services  of 
general economic interest by the Member State concerned, irrespective of the amount. 

• public service compensation granted to social housing undertakings carrying out activities qualified 
as services of general economic interest by the Member State concerned, irrespective of the amount. 

• in the field of transport, this Decision only applies to public service compensation for maritime links 
to islands granted in accordance with sectoral rules, on which annual traffic does not exceed 300 000 
passengers; the Decision applies also to public service compensation for airports and ports for which 
the average annual traffic during the financial years preceding that in which the SGEI was assigned, 
does not exceed 1 000 000 passengers, in the case of airports and 300 000 passengers, in the case of 
ports. 

 
 
 
 
- 219 - 

.Criteria of compatibility. The Decision and the Framework essentially require: 

•  An  act  of  entrustment  specifying,  in  particular,  the  nature  and  duration  of  the  public  service 
obligations, the undertaking and the territory concerned, the nature of any exclusive or special rights 
assigned  to  the  undertaking,  the  parameters  of  calculating,  controlling  and  reviewing  the 
compensation, as well as the arrangements for avoiding and repaying any overcompensation; 

• The compensation must not exceed what is necessary to cover the costs incurred in discharging the 
public  service  obligations;  a  calculation  of  all  costs  as  well  as  revenues  of  any  kind  received  is 
necessary in that purpose. 

• The control of overcompensation by the Member State's public authorities. 

3.5.  Do the  airports of more than 1 million  passengers fall within  the  scope  of  the  Decision in 
cases where  the  public  service  compensation  is  less  than  EUR  30 million  and  the  undertaking 
managing the airport has an annual turnover of less than EUR 100 million? 

Yes, in such cases, the most favourable ceiling will apply. 

In  this  context,  it  is  important  to  note  that  State  aid  to  the  air  transport  sector  is  governed  by  the 
Community guidelines on financing of the airports and start-up aid to airlines departing from regional 
airports  (hereinafter  the  "2005  Guidelines").  These  Guidelines  allow  the  possibility  for  certain 
economic  activities  carried  out  by  airports  to  be  considered  by  the  public  authority  as  constituting 
SGEI.  However,  the  overall  management  of  an  airport  could  be  considered  as  a  SGEI  when  it  is 
linked to its basic activities. 

Example: 

A  public authority  might  impose  public  service  obligations  on  an airport  located  for  example  in  an 
isolated  region,  and  might  decide  to  pay  compensation  for  these obligations.  It  is  important to  note 
that the overall management of an airport as a SGEI should not cover activities which are not directly 
linked  to  its  basic  activities  (i.e.  commercial  activities,  including  construction,  financing,  use  and 
renting  of  land  and  buildings,  not  only  for  offices  and  storage  but  also  for  hotels  and  industrial 
enterprises located within the airport, as well as shops, restaurants and car parks). 

. 

3.6. What is the relationship between the Decision and Regulations 1191, 1192 and 1107? 

The  Decision  does  not  apply  to  public  service  compensation  in  the  land  transport  sector54. 
Compensation payments for public service obligations in the land transport sector are only exempted 
from  prior  notification,  if  they  fulfill  the  conditions  laid  down  in  Regulations  119155,  119256  or 
110757. 

There are three cases: 

•  The  notification  exemption  of  Regulation  1191  only  applies,  following  the  Combus  judgment,  to 
compensation paid for discharging public service obligations which have been unilaterally imposed 
upon a transport undertaking. 

 
 
 
- 220 - 

• When compensation payments are foreseen by public service contracts, they have to be notified to 
the Commission for prior approval. 

•  Finally,  in  certain  Member  States  undertakings  whose  activities  are  confined  exclusively  to  the 
operation of urban, suburban or regional services have been excluded from the scope of application of 
Regulation 119162. In this case, there is again no notification exemption; any State aid paid to these 
undertakings has to be notified to the Commission. 

The Council and the Parliament have agreed on 18 September 2007 on a new Regulation on public 
passenger  transport  services  by  rail  and  by  road  which  is  not  yet  in  force  .  This  new  Regulation 
foresees  that  all  public  service  compensation  paid  pursuant  to  its  rules  will  be  exempted  from 
notification. 

3.7.  What  is  the  difference  between  the  Framework  and  special  rules  for  compatibility  in  the 
transport sector? 

The Framework does not apply to the transport sector65. For the transport sector, the special rules for 
compatibility  are  those  already  mentioned  and  set  out  in  the  above  mentioned  Regulations  for  land 
transport66,  as  well  as  in  the  2005  Guidelines  and  in  the  Community  Guidelines  on  State  aid  to 
maritime transport. 

3.8. What is the difference between the conditions in the Altmark ruling and the conditions laid 
down in the Decision, the Framework, and Regulations 1191/69 and 1107/70? 

The  Altmark  ruling  determines  when  a  measure is  caught  by  the  definition  of  a  State  aid  while  the 
Decision  and  the  Framework  further  determine  the  conditions  under  which  compensation,  if  it  is  a 
State  aid,  can  be  allowed.  The  main  substantial  difference  between  the  ruling  and  the  SGEI  texts 
concerns the amount/calculation of the compensation. 

According  to the  4th  criterion  of the  Altmark  judgment,  the  amount  of the  compensation  must  be 
defined, in order not to constitute State aid : 

– through an open, transparent and non discriminatory public tender procedure, or 

– through a procedure whereby public authorities have to define the amount of the compensation on 
the basis of an analysis of the costs of a typical undertaking, well run and adequately equipped. 

According to the Decision, the amount of the compensation does not necessarily have to be defined 
through  a  public  procurement  procedure,  or  by  comparison  with  the  costs  of  a  typical  well  run 
company. 

As  long  as the public authority  proves  that the  compensation  allocated  corresponds  to  the  net  costs 
estimated on the basis of the precisely defined parameters included in the act of entrustment, and that 
there is no overcompensation, the compensation in question is considered as a State aid compatible 
with the Treaty rules. 

 
 
 
 
 
- 221 - 

Example: 

A public authority decides to finance a SGEI provided by an undertaking whose net costs of doing so 
(after deducing the revenues) amount to 100. 

• This service could be provided by an operator selected through a tender procedure with a price of 
just 90. In accordance with the Altmark conditions, the compensation of 90 will not constitute State 
aid. 

• This service could be provided by a typical undertaking, well run and adequately equipped with net 
costs of just 90. In accordance with the Altmark conditions, the compensation of 90 will not constitute 
State aid. 

• The Decision will consider a compensation of 100 as a compatible State aid, provided that the total 
net costs of the service compensated are actually 100. 

. 

4. NOTIFICATION OF AID EXCEEDING THE THRESHOLDS OF THE DECISION 

4.1. Is it necessary for aid exceeding the thresholds defined in Article 2a) of the Decision, to be 
notified to the Commission? 

The  Decision  applies  to  public  service  compensation  of  less  than  EUR  30  million,  granted  to 
undertakings with an annual turnover before tax, all activities included, of less than EUR 100 million 
during the two financial years preceding that in which the service of general economic interest was 
assigned.  As  regards  hospitals  and  social  housing  companies,  there  is  no  limitation  on the  amounts 
which are exempt from notification. 

These thresholds are already high, and are expected to cover the vast majority of local social services. 

If the compensation exceeds these thresholds, a prior notification is required. This will be assessed in 
accordance  with  the  provisions  of  the  Framework  which  are  analogous  to  the  conditions  of  the 
Decision. Notification does not mean that the compensation is automatically not compatible with the 
Treaty,  but  because  of  the  high  amount  of  aid  concerned  and  the  higher  risk  of  distortion  of 
competition, the aid must be checked by the Commission in order to ensure that all the conditions for 
compatibility are actually fulfilled. 

5.  THE  NOTION  OF  "ACT  OF  ENTRUSTMENT"  FOR  THE  PURPOSES  OF  THE 
DECISION AND THE FRAMEWORK 

5.1. What is the purpose of an "act of entrustment"? 

An act of entrustment is necessary in order to set out the organisation of a public service mission. It is 
the official act which entrusts the company to carry out the SGEI, spells out the mission of general 

 
 
 
 
 
 
- 222 - 

interest  of  the  undertaking  concerned,  as  well  as  the  scope  and  the  general  conditions  of  the 
functioning  of  the  SGEI/SSGI.  A  public  service  assignment  is  necessary  in  order  to  define  the 
obligations of the undertaking and of the State. In the absence of such an official act, the specific task 
of the undertaking is unknown and a fair compensation cannot be determined. 

5.2.  What  types  of  acts  of  entrustment  are  considered  to  be  adequate  in  the  meaning  of  the 
Decision? 

The Decision only requires that the act of entrustment be one or more official acts carrying legal force 
in  national  law.  The  specific  form  of  the  act  (or  acts)  may  be  determined  by  each  Member  State, 
depending notably on its political/administrative organisation. 

Indeed,  according  to basic  rules  of  administrative  law,  every  public  authority needs  a  legal  basis  in 
order to define a SGEI and to finance it. Consequently, the notion of act of entrustment can largely 
correspond to the legal basis that the public authority concerned will choose at each time at its own 
discretion. 

There  is  therefore  no  standard  "one  size  fits  all"  act  of  entrustment;  it  really  depends  both  on  the 
public authority entrusting the service and on the activity concerned. 

It  should  be  noted  that  the  entrustment  requirements  under  the  State  aid  rules  are  rather  basic:  this 
does  not  exclude  the  possibility  for  Member  States'  authorities  to  add  more  detail  into  the  act  of 
entrustment, such as, for example, quality requirements. 

An  approval  given  by  a  public  authority  to  a  service  provider,  authorizing  him  to  provide  some 
services does not correspond to the notion of act of entrustment. This is because it does not create an 
obligation  for  the  operator  to  provide  the  services  concerned,  but  just  allows  him  to  exercise  an 
economic  activity  by  offering  some  services  in  a  market.  Such  an  example  could  be  the  approval 
given  to  an  operator  to  open  a  centre  of  childcare  or  a  centre  for  elderly  people  just  based  on  the 
compliance of the operator with public health and/or safety regulation. 

. 

Examples of acts of entrustment: 

• Concession contract and tender documents. 

• Ministerial program contracts. 

• Ministerial instructions. 

• Laws and Acts. 

• Yearly or pluriannual performance contracts. 

• Legislative decrees and any kind of regulatory and municipality acts and decisions. 

 
 
 
 
- 223 - 

5.3.  Should  the  act  of  entrustment  define  a  "mission"  or  "specific  activities"  to  be 
accomplished? 

The act of entrustment does not have to define each specific activity concerned in the provision of the 
relevant SGEI/SSGI. 

Where it is not possible to define more specifically the services concerned, broad definitions of the 
public  service  mission  can  be  accepted,  as  long  as  the  scope  of  the  mission  is  clearly  set  out. 
Nevertheless, the more precisely an entrustment specifies the mission assigned, the greater the level of 
protection  from  challenge  under  state  aid  law  (for  example  by  competitors)  for  the  compensation 
granted. It is also in public authorities' discretion and best interest to specify further the requirements 
linked  to  the  accomplishment  of  SGEI  missions,  for  instance  by  indicating  quality  requirements  or 
making appropriate public consultation when defining the tasks to be entrusted. In this way, not only 
the  quality  of  the  SGEI  becomes  better,  but  also  the transparency  towards  citizens  and  taxpayers  is 
increased. 

5.4.  How to  draft  an act of  entrustment  concerning  services  that  have  to  be  on  the    one  hand 
looked  at  through  a  global  approach,  and  on  the  other  tailor  made  to  the  specific  needs  of 
individual  users?  Does  the  act  of  entrustment  have  to  describe  each  service  that  should  be 
provided? 

The act of entrustment needs to define the nature and the duration of the public service obligations, 
the  entities  entrusted  with  the  provision  of  such  services,  the  parameters  of  calculation  of  the 
compensation (and not the exact amount of compensation to be allocated), as well as the safeguards to 
avoid overcompensation. 

It is not always necessary to include in the act of entrustment each type of the services which have to 
be provided. For instance, there is no need to refer to each type of healthcare needed, but for instance 
the  definition  of  "daily  medical  assistance  at  home  to  elderly  people  in  the  city  x"  could  suffice. 
However,  the  entrustment  must  allow  the  correct  allocation  of  costs  between  SGEI  and  non  SGEI 
activities which the service provider may offer. 

Certain SGEI/SSGI, like for instance the assistance to disadvantaged or elderly people, may require 
various kinds of services within the framework of a global public service mission. The purpose of the 
act of entrustment is not to restrain the organisation of the provision of SGEI, but to have a clear view 
of the framework in which those services are provided and the scope of the services concerned. 

The elements that have to be included in the act of entrustment for the purpose of the application of 
State  aid  rules  do  not  in  any  case  limit  the  discretion  public  authorities  have  in  the  definition  and 
organisation  of  their  SGEI.  Member  States  and  public  bodies  have  a  wide  margin  of  discretion  in 
defining the public service missions they want to put in place and the specific/very detailed services 
which are included in these missions do not need to be specified. 

Public authorities can go beyond the basic entrustment requirements and specify criteria they want to 
set  for  performance  improvement  by  the  undertakings  entrusted  with  SGEI.  The  Decision  and  the 
Framework just require the definition of the SGEI framework-mission within which new or improved 
SGEI will be delivered. 

 
 
 
- 224 - 

Examples: 

•  In  case  a  public  authority  wants  to  set  up  a  shelter  for  women  in  need,  it  would  be  sufficient  to 
specify within the act of entrustment that the SSGI provider is entrusted with the mission to set up a 
shelter  which  will  provide  the  necessary  assistance  to  women  in  need,  taking  into  account  the 
multiplicity  of  these  needs,  in  particular  where  necessary  at  the  medical,  psychological  and  social 
level (for example housing problems, failures in families etc.). 

•  In  case  a  public  authority  wants  to  set  up  a  drug  rehabilitation  centre,  it  would  be  sufficient  to 
specify that the service provider is entrusted with the mission to organise a drug rehabilitation service, 
that would provide drug addicts with the necessary medical assistance but also include other services 
directly related to the effective rehabilitation of the persons to be treated (for example, psychological 
support, contacts with families, assistance with social problems etc.). 

5.5.  How  to  draft  an  act  of  entrustment  concerning  services  that  have  to  be  adapted  in  the 
process of delivery to changing situations in terms of care intensity, users’ profiles, and users’ 
number? 

Public  authorities  and  service  providers  have,  most  of  the  time,  an  experience  of  the  personalised 
services  and  the  specific  needs  that  may  arise  during  the  provision  of  SGEI,  as  well  as  the 
differentiations of the conditions that may arise. On the basis of their experience, they can make a safe 
estimation  of  the  possible  additional  needs  that  may  arise  and  reflect  this  estimation  in  the  act  of 
entrustment. 

2 options are possible: 

• The public authority may define in the act of entrustment an ex post correction mechanism which 
will allow for periodic revision of the mission entrusted. 

•  The  public  authority  may  update  the  act  of  entrustment  if  it  sees  that  a  specific  service  was  not 
envisaged and could be supplied by the same entity. 

Example: 

A municipality would like to provide integrated services covering the various needs of elderly people 
(medical  assistance  at  home,  meal  delivery,  home  cleaning    services,  etc)  How  to  ensure  that  the 
municipality can compensate the service provider for the provision of additional services responding 
to needs which were not initially foreseen? 

It is always possible to update the entrustment act if one sees that a specific service was not envisaged 
and could be supplied by the same association. As clarified above the municipality could also make an 
estimation  of  such  additional  services  from  its  prior  experience  in  the  field,  or  define  ex  post 
correction mechanisms for such needs. 

 
 
 
 
- 225 - 

5.6. How can the requirement for an act of entrustment for SGEI/SSGI providers be reconciled 
with the autonomy and the freedom of initiative of such providers that various Member States 
recognise and respect, according to their constitutional/legal framework? 

The requirement related to an act of entrustment does in no way limit the autonomy and the freedom 
of  initiative  of  entities  which  provide  social  services.  Such  entities  are  absolutely  free  to  take 
initiatives  in  developing  and  improving  or  innovating  such  services  and  make  proposals  to  public 
authorities. 

The notion of the act of entrustment is flexible enough to correspond in this case to the decision of the 
public  authority  approving  and  financing  such  proposals.  Therefore,  in  case  a  public  authority 
approves a proposal made by a service provider, in accordance with the provisions of the Decision, 
the definition of the SGEI mission, as well as the parameters for the calculation of the compensation 
and the safeguards to avoid overcompensation, made by the service provider, have to be included in 
the content of such a decision. 

6. COMPENSATION 

6.1. The Decision asks for the parameters of costs to be defined in the entrustment act. How is it 
possible to do it before offering the service? 

It  is  often  impossible  to  know  all  the  details  of  costs  when  an  undertaking  starts  providing  a 
SSGI/SGEI. Consequently, the Decision does not request to provide a detailed calculation in advance 
of, for example, a price per day, per meal, per care to be reimbursed by the public funding, when this 
is not possible. Public authorities remain of course free to specify such parameters if they wish. 

The  Decision  only  requires  that  the  entrustment  includes  the  basis  for  the  future  calculation  of  the 
compensation, for example that the compensation will be determined on the basis of a price per day, 
per meal, per care based on an estimation of the number of potential users… 

What is important is that there is clarity over the basis on which the funding body (the State, the local 
authority) will finance the provider. Such a transparency is also beneficial to taxpayers. 

Examples: 

•  In  case  a  public  authority  wants  to  set  up  a  shelter  for  women  in  need,  the  parameters  for  cost 
compensation could be: 

- the number of women and children accommodated in the shelter over a one year period; 

- the number of days spent in the shelter during this period. 

•  In  case  a  public  authority  wants  to  set  up  a  drug  rehabilitation  centre,  the  parameters  for  cost 
compensation could be: 

- the number of drug addicts undergoing treatment over a one year period; 

- the volume of medication needed over a one year period. 

 
 
 
 
- 226 - 

6.2.  Even  for  experienced  entities  providing  SGEI/SSGI,  there  may  be  a  high  level  of  cost 
unpredictability  and  a  risk  for  an  ex-post  deficit:  unpredictable  changes  in  care  intensity;  in 
users' profiles; in users' number and in the level of revenues (user fees not paid, fluctuation in 
quantity of users, refusal of contributions by other public authorities). How can public entities 
cope with this situation? 

A company in charge of a SGEI/SSGI, especially when it starts its activity or has a limited size, can 
not commit itself on a fixed budget or on a price per unit. Clearly, if there are more users, the costs 
will increase; if some of them cannot pay a predefined participation, the revenues will be lower, etc. 

However this does not change the way the costs incur (salaries paid, rent…) or can be established (per 
care…). It mainly means that the provider will face higher costs and the public body will have to pay 
higher compensations. 

All  these  situations  can  be  taken  into  account  under  the  Decision  and  the  Framework.  When  an 
estimation of changing or unpredictable situations that may arise during the provision of SGEI is not 
provided  for  in  the  act  of  entrustment,  the  definition  of  ex  post  correction  mechanisms  of  the 
estimated costs in relation to the real costs may be a way of anticipating such situations. 

2 options are possible: 

• The public authority may define in the act of entrustment an ex post correction mechanism which 
will allow for periodic revision of the cost parameters. 

• The public authority may update the act of entrustment if it sees that a cost 

parameter has to be modified. 

. 

6.3. How to determine the parameters for cost compensation (article 4(d) of the Decision) and 
how  to  define  the  arrangements  for  overcompensation  (article  4(e)  of  the  Decision)  in  case  a 
given SGEI/SSGI is financed by two or several public authorities? 

In  case  two  or  several  public  authorities  (the  town  and  the  region  for  instance)  want    to  finance 
partially for instance a centre for disadvantaged persons, each authority may determine the parameters 
of  the  compensation  according  to  the  service  under  consideration,  eventually  following  discussions 
with the service provider. 

The  public  authorities  determine  their  individual  contribution  to  the  compensation  as  they  wish,  as 
long  as  the  total  amount  corresponding  to  all  different  kinds  of  compensations  received  does  not 
exceed the real net costs supported by the SGEI provider. 

6.4.  Is  there  a  need  to  keep  separate  accounts  for  an  undertaking  providing  a  SGEI,  while 
carrying out other commercial activities? 

Yes, there is a specific need and obligation for undertakings providing SGEI while carrying out other 
commercial  activities,  to  keep  separate  accounting  for  each  separate  activity.  It  is  the  only  way  for 
such undertakings to prove that the compensation allocated does not exceed the exact net costs of the 
SGEI provided and that thus no overcompensation is involved. At the same time separate accounting 

 
 
 
- 227 - 

for activities falling inside and outside of the scope of SGEI allows the Commission to assess whether 
the criteria laid down by the Decision and the Framework are fulfilled. 

6.5. Is there a need to keep separate accounts for an entity which is entrusted with the provision 
of SGEI and realises also non economic activities? 

In  such  a  situation,  there  is  no  legal  obligation  of  keeping  separate  accounting.  Nevertheless,  the 
internal  accounts  should  enable  the  identification  of  the  costs  linked  to  the  provision  of  the  SGEI; 
otherwise, the amount of the compensation cannot be established. Moreover, in case of complaint, the 
undertaking in charge of the SGEI should be able to demonstrate the absence of overcompensation. 

6.6.  Which  costs  can  be  compensated  when  an  undertaking  uses  the  same  infrastructure  to 
provide both SGEI and economic activities which are not qualified as SGEI? 

The undertaking must allocate costs for both activities. Costs allocated to the SGEI may cover all the 
variable costs incurred in providing the SGEI, a proportionate contribution to fixed costs common to 
both SGEI and non SGEI, and a reasonable profit. 

6.7.  What  is  the  meaning  of  reasonable  profit  within  the  calculation  of  the  compatible 
compensation? 

According to article 5.4 of the Decision, reasonable profit means a rate of return on own capital that 
takes account of the risk, or absence of risk, incurred by the undertaking by virtue of the intervention 
by the Member State. This rate shall not normally exceed the average rate for the sector concerned in 
recent years. 

6.8.  Should  tax  benefits  arising  from  the  welfare  status  of  an  entity  be  counted  among  the 
revenues within the meaning of Article 5.3 of the Decision? 

The compensation may cover the difference between the costs actually incurred in providing the SGEI 
and the relevant receipts. A tax benefit can be either a revenue or a cost reduction. Irrespective of its 
nature  it  has  to  be  taken  into  account  when  determining  the  amount  of  compensation  necessary  to 
provide the SGEI. 

When the tax benefit consists in a cost reduction, this means that no compensation can be awarded for 
the amount corresponding to that reduction. When the tax benefit consists in a revenue for the service 
provider, this means that it will have to be deducted from the compensation to be allocated. 

 
 
 
 
 
 
 
- 228 - 

6.9. Should payments made under a profit-and loss transfer agreement within a public holding 
be counted among the revenues within the meaning of Article 5.3 of the Decision? 

In  several  Member  States,  public  holding  undertakings  have  profit  and  loss  transfer  agreements, 
pursuant  to  which  a  profitable  subsidiary  has  to  transfer  its  profits  to  the  holding,  which  then  uses 
these profits to cover losses generated by a loss-making subsidiary, which performs SGEI. 

Such  payments  received  to  cover  losses  of  SGEI  are  to  be  counted  among  the  revenues  within  the 
meaning  of  Article  5.3  of  the  Decision  and  will  accordingly  reduce  the  net  costs  eligible  for 
compensation. 

6.10. When the parameters for the compensation are defined for a given entity, should there be 
a comparison with other entities? Should there be a judgement on efficiency? How can the value 
of pastoral care, spiritual guidance, additional time taken, etc be compared? 

It is for the public authority to define the extent of the mission concerned and if nonmeasurable tasks 
(for  instance  for  elderly  or  disabled  people…)  have  as  a  consequence  to  generate  more  costs,  for 
instance in terms of time spent by the people providing the service. These costs can of course be taken 
into account and compensated. The Decision does not require any judgement of efficiency, just as it 
leaves  judgments  on  quality  of  service  required  to  the  public  authorities  concerned.  For  example, 
when  two  entities provide SGEI/SSGI  for  which a  different level of quality  is  defined in the  act of 
entrustment, each one of the service providers will receive the compensation corresponding to its own 
different costs made for reaching the level of quality required. 

6.11. Does the Decision require the selection of the least expensive company for the provision of 
SGEI/SSGI? 

No, the Decision and the Framework do not require this. Member States are responsible for defining 
the SGEI they want and notably the quality of these services. Where the quality is higher, the costs to 
provide the service may be higher and the compensation can cover all the costs actually incurred by 
the company. 

 
 
 
 
 
- 229 - 

Reports on SSGIs 

•  European Parliament: Hasse Ferreira report 

•  Committee of the Regions: Destans report 

•  European Economic and Social Committee: Hencks report 

 
 
 
 
 
 
 
 
 
 
 
 
 
- 230 - 

European Parliament 

Hasse Ferreira Report 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
- 231 - 

EUROPEAN PARLIAMENT 

(cid:3)
(cid:3)
(cid:3)

(cid:3)(cid:3)(cid:3)

(cid:3)(cid:3)(cid:3)

(cid:3)
(cid:3)
(cid:3)

Session document 

2009 

FINAL 
A6-0057/2007 

2004 

6.3.2007 

REPORT 

on social services of general interest in the European Union 
(2006/2134(INI)) 

Committee on Employment and Social Affairs 

Rapporteur: Joel Hasse Ferreira 

 
 
 
PR_INI 

- 232 - 

CONTENTS 

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION 

EXPLANATORY STATEMENT 

OPINION OF THE COMMITTEE ON ECONOMIC AND MONETARY AFFAIRS 

OPINION  OF  THE  COMMITTEE  ON  THE  ENVIRONMENT,  PUBLIC  HEALTH  AND  FOOD 

SAFETY 

OPINION  OF  THE  COMMITTEE  ON  THE  INTERNAL  MARKET  AND  CONSUMER 

PROTECTION 

OPINION OF THE COMMITTEE ON LEGAL AFFAIRS 

OPINION OF THE COMMITTEE ON WOMEN'S RIGHTS AND GENDER EQUALITY 

PROCEDURE 

 
 
 
 
 
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MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION 

on social services of general interest in the European Union 
(2006/2134(INI)) 

The European Parliament, 

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having  regard  to  the  Commission  communication  on  Implementing  the  Community  Lisbon 
programme: Social services of general interest in the European Union (COM(2006)0177) and the 
accompanying Commission staff working document (SEC(2006)0516), 

having regard to the Treaty establishing the European Community, and in particular Articles 2, 5, 
16, 86, 136, 137(1)(j) and (k), 143, 144 and 145 thereof, 

having  regard  to  the  Charter  of  Fundamental  Rights  of  the  European  Union,  and  in  particular 
Article 36 thereof, 

having regard to the draft Treaty establishing a Constitution for Europe, and in particular Articles 
II-94 and III-122 thereof, 

having regard to its position of 15 November 2006 on the Council common position for adopting 
a directive of the European Parliament and of the Council on services in the internal market37, 

having regard to the conclusions of the Brussels European Council of 23 and 24 March 2006, 

having  regard  to  its  resolution  of  14  January  2004  on  the  Green  Paper  on  services  of  general 
interest38, 

having regard to its resolution of 15 March 2006 on social protection and social inclusion39, 

having regard to its resolution of 6 September 2006 on a European Social Model for the future40, 

having regard to its resolution of 27 September 2006 on the Commission White Paper on services 
of general interest41, 

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having regard to Rule 45 of its Rules of Procedure, 

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Texts Adopted, P6_TA(2006)0490. 

OJ C 92 E, 16.4.2004, p. 294. 

Texts Adopted, P6_TA(2006)0089. 

Texts Adopted, P6-TA(2006)0340. 

Texts Adopted, P6_TA(2006)0380. 

 
 
                                                      
  
 
  
  
  
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– 

having regard to the report of the Committee on Employment and Social Affairs and the opinions 
of  the  Committee  on  Economic  and  Monetary  Affairs,  the  Committee  on  the  Environment, 
Public Health and Food Safety, the Committee on the Internal Market and Consumer Protection, 
the  Committee  on  Legal  Affairs  and  the  Committee  on  Women's  Rights  and  Gender  Equality 
(A6-0057/2007), 

A.  whereas social services of general interest (SSGIs) form one of the pillars of the European social 
model, play an essential part in securing civic peace and the European Union’s economic, social 
and territorial cohesion, and are one of the means whereby the Lisbon Strategy objectives can be 
achieved, 

B.  whereas,  moreover,  SSGIs  are  designed  to  carry  into  effect  values  shared  throughout  Europe 
including,  among  others,  social  justice,  equality,  solidarity  and  the  development  of  democracy 
and freedom, and whereas the ultimate purpose of the SSGI is to uphold citizens’ fundamental 
rights and respect for human dignity, 

C.  whereas  SSGIs  should  not  be  regarded  as  a  burden  on  public  authorities,  because,  on  the 
contrary,  they  generate  positive  externalities  in  terms  of  economic  growth,  prosperity, 
employment and social cohesion, 

D.  whereas SSGIs are delivered in a changing environment to which they have to adjust constantly 

in order to maintain high standards of quality and efficiency, 

E.  whereas the availability of essential social services varies considerably from one Member State 
to  another;  whereas,  however,  the  services  in  question  should  be  provided  throughout  the 
European Union’s territory in order to ensure its economic, social and territorial cohesion, 

F.  whereas some ambiguity surrounds certain basic concepts in this area, such as "public service", 
"service of general interest", "service of general economic interest" and "social service of general 
interest", and whereas that ambiguity is reflected in recent Community acts, thus contributing to 
the legal uncertainty prevailing in the sector, 

G.  whereas the lack of statutory regulation has given rise to a vast body of judicial interpretation, 
which is not always consistent; whereas all the sectors concerned are calling for a clear operating 
framework  which  reduces  the  need  for  judicial  interpretation  to  the  minimum  and  aims  to 
achieve maximum legal certainty, 

H.  whereas, consequently, there is an urgent need to clarify the concepts in question and the legal 
framework in which SSGIs operate, and in particular to clarify the principle of "general interest" 
and the rules on competition and aid from public funds, 

I.  whereas social services must not in any circumstances be reduced to a residual category defined 
by  the  fact  that  they  cannot  be  equated  either  with  commercial  services  or  with  services  of 
general economic interest; whereas, on the contrary, because of the sector of society whose needs 
they address, and the distinctive features of their organisation, funding and remit, they must be 

 
 
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regarded as a separate and specific category of services of fundamental importance for society, 

J.  whereas  the  SSGI  sector  provides employment  for an  increasing  number  of  people, the rate  of 
increase in employment in that sector is higher than the average in other sectors of the economy, 
a large number of women are employed in the sector, and the sector contains interesting flexible 
employment  models,  such as  part-time  working,  "flexitime"  and  voluntary  work,  which  should 
be  encouraged  and  receive  adequate  protection  under  employment  law;  whereas,  on  the  other 
hand, the sector also presents alarming instances of job insecurity, which should be avoided,  

K.  whereas health services, which are excluded from the Commission communication on SSGIs, are 
also SSGIs, and share the same characteristics and objectives; recognising, however, the special 
features arising from the complex organisation of health services and the financial burden they 
place on the Member States’ public authorities, 

1.  Welcomes the Commission initiative, which is linked to the implementation of the White Paper 
on  services  of  general  interest  and  is  designed  to  provide  a  specific  conceptual  and  legal 
framework for the services in question; considers, however, that the Commission communication 
on  SSGIs  does  not  provide  sufficient  clarification  about  the  classification  and  definition  of 
SSGIs, and defers any decision on the legal framework which should apply to them; 

2.  Reaffirms  its  commitment  to  modern  and  high-quality  SSGI  based  on  the  values  of  equality, 
solidarity, rule of law and respect for human dignity, and the principles of accessibility, universal 
service,  efficiency,  economic  management  of  resources,  continuity,  proximity  to  service  users 
and transparency, which contribute to the implementation of the Community’s tasks as defined in 
Articles 2 and 3 of the Treaty; 

3. 

Is convinced that SSGIs are an appropriate means of strengthening the social dimension of the 
Lisbon Strategy, attaining the objectives of the social agenda and addressing challenges such as 
globalisation,  industrial  change,  technological  progress,  demographic  change,  migration  and 
changing  social  and  employment  patterns,  thus  contributing  to  the  development  of  a  social 
Europe; 

4.  Welcomes  the  Commission’s  recognition  of  the  special  nature  of  the  main  features  whereby 
SSGIs can be defined, which distinguish them from other types of services; considers, however, 
that the organisational criteria which, according to the abovementioned communication, are the 
distinguishing features of SSGIs, cannot be accepted except on a provisional and indicative basis, 
pending the emergence of more definitive conclusions from the consultation process which the 
Commission  has  undertaken  to  conduct  with  Member  States  and  SSGI  service  providers  and 
users; 

5.  Considers  that  it  would  be  a  mistake  to  adopt  an  approach  to  SSGI  which  sets  up  a  false 
opposition  between  rules  on  competition,  public  aid  and  the  market  on  the  one  hand,  and 
concepts  of  public  service,  general  interest  and  social  cohesion  on  the  other;  considers,  on  the 
contrary,  that  it  is  necessary  to  reconcile  them  by  promoting  positive  synergies  between  the 
economic  and  social  aspects;  asserts,  however,  that  in  the  case  of  SSGIs,  the  rules  on 

 
 
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competition,  public  aid  and  the  internal  market  must  be  compatible  with  public  service 
requirements, and not the other way round; 

6.  Recognises that, in the case of SSGIs, there are two contrasting factors which must be reconciled: 
on  the  one  hand,  the  principle  of  subsidiarity  which  upholds  the  Member  State  authorities’ 
freedom to define, organise and finance SSGIs as they see fit, in conjunction with the principle of 
proportionality,  and,  on  the  other,  the  joint  responsibility  of  the  Community  pursuant  to  the 
Treaty, and in particular Article 16 thereof, and the existence of underlying values and principles 
which are shared throughout Europe and must be respected by all, by ensuring that the rules to 
which SSGIs are subject uphold human rights and the dignity of the individual; 

7.  Considers, however, in view of the particular characteristics of SSGIs, which relate to the nature 
of the services and the situation of those benefiting from them, their general-interest mission and 
the inability of the market to fulfil certain requirements in the field of social services, that, where 
conflict  arises,  priority  should  be  given  to  the  defence  of  the  general  interest,  which  is  the 
characteristic and principal feature of the SSGIs; 

8.  Notes  with  concern  in  this  connection  recent  attempts  to  apply  to  certain  SSGI,  rules  and 
principles appropriate to services and services of general economic interest, without taking into 
account the factors and principles which distinguish SSGIs from other services; 

9.   Welcomes the Commission's intention to continue the consultation process in greater depth so as 
to clarify the application of certain Community rules for social services; takes the view, further, 
that the proposed extended consultation process should be completed by mid-2007 and ask the 
Commission  to  formulate  a  decision  on  how  to  follow  up  this  process  and  identify  the  best 
approach to take,  including  considering  the  need  and  legitimacy  of  a  sector-specific legislative 
proposal; 

10.  Calls  on  the  Commission  and  the  Member  States  to  protect  and  promote  the  patterns  of 
employment  frequently  found  in  the  SSGI  sector,  including  female  employment,  flexible 
working  hours,  part-time  working  and  use  of  the  voluntary  sector,  while  taking  care  not  to 
encourage  fraud  and  job  insecurity  and  without  causing  any  deterioration  in  the  employment 
conditions of workers in the sector or recourse to unqualified or poorly qualified staff; also calls 
on  the  Commission  to  include,  throughout  the  consultation  process  and  in  its  report,  questions 
relating to gender mainstreaming; 

11.  Calls on the Commission, the Member States and SSGI service providers, in view of the stress, 
working  hours  (shift  and  night  work)  and  dangerous  or  demanding  nature  of  certain  activities 
carried  out  by  the  social  services,  to  develop  vocational  training  initiatives  geared  to  enabling 
staff to adjust to and cope with circumstances of this kind, with a view to ensuring better-quality 
services and improve working and living conditions for workers in the sector; considers also that, 
in  view  of  the  changing  nature  of  requirements  for  SSGIs,  public  authorities  must  ensure  that 
workers in SSGIs have a high level of vocational training; 

12.  Congratulates the Commission on its decision to consult all actors involved in the definition and 

 
 
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organisation of SSGIs; believes that such dialogue will result in greater transparency and better-
quality services and help to reinforce the principles and values that underpin them; 

13.  Calls  on  the  Commission  and  the  Member  States  to  respect  the  diversity  of  the  methods  of 
organising and managing SSGIs, of their resources and of the methods of funding these services; 
also  calls  for  the  establishment  of  public-private  partnerships  to  provide  such  services,  while 
taking care to promote the general interest and ensure the provision of efficient and high-quality 
services; 

14.  Considers  that  the  Member  States’  various  competent  public  authorities  are  free  to  decide 
whether SSGIs should be provided by mutual associations, other forms of social organisation or 
private  businesses, in  cases  where the  provision  of  services  by  the  private  sector is compatible 
with the principle of upholding the general interest, but considers that public authorities should 
be able to check at any time that the service providers are abiding by the principles and values 
associated  with  SSGIs  and  whether  services  are  being  provided  in  accordance  with  the 
requirements specified in advance by the public authorities; 

15.  Welcomes the involvement of firms, in the context of fulfilling their social responsibilities, in the 
funding, support and delivery of SSGIs and calls on the Commission and the Member States to 
involve the social partners to a greater extent in developing approaches of this kind in accordance 
with the customs of each Member State; 

16.  Notes that in some Member States the decentralisation of power to regional or local authorities 
for  the  purpose  of  providing  SSGIs  has  not  been  accompanied  by  the  allocation  of  sufficient 
budget resources to enable them to deliver services of the highest standard in terms of quantity 
and  quality;  consequently, calls  on  the Member  States  to  ensure  that any  transfer  of  powers to 
regional  and  local  authorities  for  the  purpose  of  delivering  SSGI  is  accompanied  by  adequate 
budgetary resources; 

17.  Recommends the convocation of a forum, under the auspices of the European Parliament, which 
would  bring  together  European  social  organisations  and  representatives  of  the  Council  and  the 
Commission to guide the way this process is handled;  

18.  Instructs its President to forward this resolution to the Council and the Commission. 

 
 
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EXPLANATORY STATEMENT 

1.  Social  services  of  general  interest  are  a  key  component  of  the  European  social  model.  If  it  is 
necessary  to  develop  the  internal  market  and  strengthen  external  competitiveness  in  order  to 
guarantee economic growth throughout the Union area, it is equally important to guarantee the 
proper  functioning  of  social  services  throughout  the  Union.  This  will  help  to  guarantee  social 
cohesion throughout the European Union and to lend practical shape to the social aspects of the 
Lisbon Strategy on the ground. 

2.  Europe  is  now  living  in  a  demographic  framework  which  has  undergone  radical  change.  The 
increase in average life expectancy throughout Union territory and the decline in the birth rate in 
the  overwhelming  majority  of  Member  States  have  created  a  significantly  altered  social 
framework.  This  process  is  influencing  policies  in  the  areas  of  social  security  and  protection, 
intergenerational  solidarity,  family  policies,  flexible  working  time  and  indeed  women's 
participation in the labour market. 

3.  Many  European  Union  citizens  are  highly  sensitive  to  the  social  aspects  of  the  process  of 
European integration. This was clearly demonstrated by the referendum process for the European 
Constitutional  Treaty  launched  in  various  Member  States.  A  connection  was  often  drawn 
between the initial text of the Services Directive, which gave rise to a great deal of concern in a 
range  of  areas  and  sectors,  particularly  in  western  Europe,  and  an  apparent  or  real  drop  in  the 
amount of attention being paid by the EU to the social aspects of European integration. In this 
political  context  too,  the  process  aimed  at  clarifying  the  specific  role  of  SSGI,  and  SGI  as  a 
whole, may prove both useful and informative with a view to future developments in the process 
of European integration across the Union. 

4.  The  communication  submitted  by  Vladimir  Špidla  on  behalf  of  the  Commission  on  social 
services of general interest in the European Union provides an opportunity to clarify the role of 
SSGI across Europe, in terms of social aspects and legal certainty. No doubt it will also provide 
an  opportunity  for  an  extensive  debate  which  must  go  beyond  the  drawing-up  of  this 
parliamentary report and the debate and vote thereon. Such an extended debate must also involve 
the social organisations working at European level, regional and local authorities, the European 
Parliament, the Commission and the Council. 

5.  One of the aspects which will need to be analysed is the possible creation of a legal instrument in 
the  area  of  social  services,  which  would  also  cover  health,  to  guarantee  political  clarity  in  the 
procedures  and  legal  certainty  for  the  social  organisations  involved.  It  should  also  establish 
general principles relating to action in this area by the public authorities involved, whether they 
be local, regional, of federal states or autonomous communities. 

6. 

It appears absolutely necessary that, wherever local or regional authorities perform differentiated 
functions  supporting  and  financing  SSGI,  the  resources  allocated  at  national  level  should  be 
local  and  regional  authorities  to  fulfil  their  social  function 
adequate 

to  enable 

the 

 
 
 
 
 
 
 
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comprehensively  and  to  a  high  standard,  particularly  as  regards  supporting  SSGI.  It  is  also 
absolutely  necessary  to  guarantee  full  transparency  in  the  financial  relations  between  public 
authorities and social organisations at all times. 

7.  The  organisational  and  management  arrangements  of  SSGI  vary  widely  across  the  Member 
States. This diversity must be respected, and the quality of the services provided and the proper 
use of any public resources made available, whether national resources or Community resources, 
must be verified in each case. 

8.  At all events, this Commission communication is a step towards providing a clear legal status for 
SSGI. Carrying out the extended process which it recommends may help define and clarify the 
legal status of mutual and other organisations active in the social sector within the Union, which 
appears necessary, fair and useful. 

9.  SSGI have all the necessary features to strengthen the social dimension of the Lisbon Strategy, in 
terms of the volume of employment that they can create and the social cohesion which they help 
guarantee, but essentially thanks to the social role they perform in various ways in the European 
Union. 

10.  It is a fact that active social policies are inseparable from economic policies. An economic policy 
that promotes the development and creation of jobs will make a decisive contribution to shaping 
and  implementing  a  more  active  social  policy.  This  makes  it  possible  to  forge  a  link  between 
economic growth and social cohesion.  

11. The work done by those who collaborate on a voluntary basis with organisations providing SSGI 
on the ground needs to be clearly and fully recognised throughout the European Union. In this 
context, vocational training activities need to be developed that will make it possible to improve 
the quality of social services provided by SSGI volunteers and paid workers. 

12.  It  is  also  necessary  to  consider  the  role  of  services  of  general  economic  interest  across  the 
European Union, ensuring an overall clarification of the concepts of service of general interests, 
SSGI and services of general economic interest so as to provide legal certainty for all players in 
the social area and clarify the relevant procedures. 

13.  The  diversity  of  organisational  models  and  management  systems  in  SSGI  must  be  respected 
throughout the European Union. Procedures and financing rules for services must comply with 
common  principles  of  transparency  and  monitoring  by  the  public  authorities  to  ensure  the 
adequacy of the tasks carried out by comparison with the social missions of public interest that 
are the responsibility of SSGI across Europe. Action will thus need to be taken to guarantee not 
only respect for the general interest but also the provision of effective, high-quality services that 
comply with the missions defined by the public authorities.  

 
 
 
 
 
 
 
 
 
 
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14.   Businesses that are aware of their social responsibilities will have every interest in contributing 
to the financing of and support for the provision of SSGI, and may indeed provide a boost to their 
introduction or enhancement where this is justified. 

15.  At all events, as far as SSGI are concerned, it is necessary to ensure all possible transparency in 
the  award  of  concessions  and  subcontracts  for  the  provision  of  goods  or  services  to  social 
organisations. 

16.  It  is  vital  in  this  context  to  clarify  not  only  the  principle  of  general  interest  but  also  the  rules 
governing  competition  and  state  aid.  In  so  doing,  account  must  evidently  be  taken  of  the 
subsidiarity  principle,  which  guarantees  national  public  authorities  the  freedom  to  define, 
organise and finance SSGI, and of the proportionality principle, in accordance with fundamental 
European values. 

17.  This  explanatory  statement  and  report  are intended  to  help  strengthen  the  social  aspects  of  the 
process of European integration, guaranteeing the necessary legal certainty for social players and 
public  authorities  and  ensuring  financial  transparency,  the  requisite  compatibility  with  the 
internal  market  rules  applicable  and  improvements  in  the  quality  of  services  provided,  in 
accordance with the subsidiarity principle and taking account of the need to lend practical shape 
to the Lisbon Strategy in the social area. 

 
 
 
 
 
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20.12.2006 

OPINION OF THE COMMITTEE ON ECONOMIC AND MONETARY AFFAIRS 

for the Committee on Employment and Social Affairs 

on social services of general interest in the European Union 
(2006/2134(INI)) 

Draftsman: Bernhard Rapkay 

SUGGESTIONS 

The  Committee  on  Economic  and  Monetary  Affairs  calls  on  the  Committee  on  Employment  and 
Social Affairs, as the committee responsible, to incorporate the following suggestions in its motion for 
a resolution: 

A.  whereas,  SGIs  are  not  only  an  important  element  of  social  and  economic  cohesion,  but  also 

contribute considerably to the competitiveness of the European economy, 

B.   whereas the case law of the Court of Justice of the European Communities is now extensive, is 
continually developing and concerns various aspects of SGIs, including State aid, equal treatment 
and/or  the  distortion  of  competition;  whereas  the  numerous  cases  brought  before  the  Court  of 
Justice relating to the compatibility of SGIs with the internal market rules, raises the issue of legal 
clarification  in  this  area;  confirmed  by  the  Commission's  communication;  whereas  public 
authorities and the operators in the field of social services of general interest perceive the constant 
evolution  of  the  Court  of  Justice's  jurisprudence,  in  particular  for  the  notion  of  “economic 
activity” as a source of uncertainty, whereas although the case law and Community legislation in 
this area have endeavoured to introduce clarification and reduce uncertainty, a certain ambiguity 
remains; 

C.  whereas,  taking  into  account  the  principle  of  subsidiarity  pursuant  to  Article  5(2)  of  the  EC 
Treaty, it is for the Member States and their regional and/or local authorities to define SGIs and to 
decide which services should be covered and how they should be organised, financed, delivered, 
evaluated and controlled, and this should be fully respected when drafting further legislation, 

D.  whereas  in  Article  2  of  the  Directive  on  services  in  the  internal  market  certain  social  services 

 
 
 
 
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relating  to  social  housing,  childcare  and  support  of  families  and  persons  permanently  or 
temporarily in need which are provided by the State, by providers mandated by the State or by 
charities recognised as such by the State are explicitly excluded from the scope of the Directive, 

1.  Welcomes the Commission's intention to continue the consultation process in greater depth so as 
to clarify the application of certain Community rules for social services; takes the view, further, 
that  the  proposed  extended  consultation  process  should  be  completed  by  mid-2007  and  ask  the 
Commission  to  formulate  a  decision  on  how  to  follow  up  this  process  and  identify  the  best 
approach  to  take,  including  considering  the  need  and  legitimacy  of  a  sector-specific  legislative 
proposal. 

2.  Stresses  that  SGIs  should  be  of  a  high  quality,  and  accessible  and  should  encompass 
comprehensive  coverage,  should  be  provided  at  optimum  cost,  should  respect  a  social  balance, 
and should be provided on the basis of lasting security of supply; and emphasises that the majority 
of  SGIs  can  be  provided  under  conditions  of  fair  competition,  according  to  the  principle  that 
private and public undertakings must receive equal treatment; 

3.  Recalls  the  fact  that  the  rules  in  force  in  this  area  are  defined  by  the  case  law  of  the  Court  of 
Justice  and  by  the  Commission's  interpretation  of  individual  cases,  and  that,  thus,  neither  the 
necessary legal certainty nor adequate transparency has yet been achieved; 

 4.  Emphasises that in those cases where EC market rules manifestly hinder the provision of public 
services,  targeted  measures  and  sector-specific  regulations  are  the  preferred  solution  and  a 
detailed and ongoing evaluation of public services in the EU, identifying the problem areas, must 
be at the basis of any policy proposals; 

5.  Calls on the Commission, therefore, to ensure more legal certainty in the area of social and health-
care  SGIs  and  where  necessary  to  formulate  a  proposal  for  a  sector-specific  directive  of  the 
Council and the Parliament in those fields in which it is appropriate to do so; further calls on the 
Commission  to  consider  and  submit  all  the  relevant  proposals  together,  in  order  to  avoid 
demarcation problems; 

 
 
PROCEDURE 

Title 

Procedure number 

Committee responsible 

Opinion by 

Date announced in plenary 

Enhanced 
announced in plenary 

cooperation 

–  date 

Drafts(wo)man 

Date appointed 

Previous drafts(wo)man 

- 243 - 

Social services of general interest in the European Union 

2006/2134(INI) 

EMPL 

ECON 
15.5.2006 

Bernhard Rapkay 
15.5.2006 

Discussed in committee 

6.11.2006 

22.11.2006 

Date adopted 

Result of final vote 

20.12.2006 

+: 
–: 
0: 

33 
2 
0 

Members present for the final vote 

Elisa 

Ferreira, 

Jean-Paul 

Zsolt  László  Becsey,  Pervenche  Berès,  Sharon  Bowles, 
Gauzès, 
Udo Bullmann, 
Donata Gottardi, Sophia in 't Veld, Wolf Klinz, Andrea Losco, 
Astrid  Lulling,  Cristobal  Montoro  Romero,  Joseph  Muscat, 
John  Purvis,  Alexander  Radwan,  Bernhard  Rapkay, 
Dariusz Rosati,  Eoin  Ryan,  Antolín  Sánchez  Presedo, 
Manuel António 
Schmidt, 
Margarita Starkevičiūt÷, Sahra Wagenknecht 

Santos, 

Olle 

dos 

Substitute(s)  present  for  the  final 
vote 

Katerina  Batzeli,  Valdis  Dombrovskis,  Harald  Ettl, 
Syed Kamall,  Werner  Langen,  Klaus-Heiner  Lehne, 
Alain Lipietz,  Jules  Maaten,  Vladimír  Maňka,  Thomas  Mann, 
Corien Wortmann-Kool 

Substitute(s)  under  Rule  178(2) 
present for the final vote 

Reinhard Rack 

Comments 
language only) 

(available 

in 

one 

... 

 
 
 
 
 
 
 
 
 
 
 
 
- 244 - 

22.11.2006 

OPINION OF THE COMMITTEE ON THE ENVIRONMENT, PUBLIC HEALTH AND FOOD 
SAFETY 

for the Committee on Employment and Social Affairs 

on social services of general interest in the European Union 
(2006/2134(INI)) 

Draftsman: Roberto Musacchio 

SUGGESTIONS 

The  Committee  on  the  Environment,  Public  Health  and  Food  Safety  calls  on  the  Committee  on 
Employment  and  Social  Affairs,  as  the  committee  responsible,  to  incorporate  the  following 
suggestions in its motion for a resolution: 

1.  Welcomes the aim of the Communication on Social services of general interest to promote the 
modernisation of social services within the Community in order to provide services with a high 
level of quality, safety and efficiency, respecting consumer and user rights, patient dignity and 
the freedom to provide cross-border services; considers it desirable to ensure greater legal safety 
regarding  services  of  general  interest,  in  particular  social  services  and  medical  and 
pharmaceutical treatment, by means of a proposal for a specific sectoral European Parliament and 
Council directive if necessary; 

2.  Points  out  that  social  services  of  general  interest  are  essential  for  the  economic,  social  and 
territorial  cohesion  in  the  EU  as  they  respond  to  public  service  obligations  and  objectives  of 
general  interest  defined  by  each  Member  State's  competent  authorities  in  accordance  with  the 
subsidiarity  principle;  underlines  the  importance  of  transparency  in  the  definition  of  these 
objectives particularly given that such services are increasingly delivered by third parties, by way 
of public-private partnerships and outsourcing, and as such come under Community law; 

3.  Considers  that  the  freedom  to  provide  social  services  of  general  interest  and  the  freedom  of 
establishment of the service providers concerned should entail respect for and contribute to the 
implementation of the objectives of equal universal access and fair conditions in delivering such 
services within the general requirements as defined by Member States; 

 
 
 
 
 
- 245 - 

4.  Argues that social services of general interest make it possible to guarantee the exercise of the 
fundamental rights of EU citizens, as they concern primary services for everyday life; considers, 
therefore, that they need to be regarded as a specific sector responding mainly to the principles of 
solidarity,  social  inclusion,  efficiency  and  financial  sustainability;  recognises  the  role  of  the 
private sector in this regard; 

5.  Stresses  that  in  evaluating  the  characteristics  in  the  supply  of  such  services,  public  authorities 
should  take  into  account  as  an  overriding  consideration  the  advantages  of  guaranteeing  social 
cohesion  and  better  social  inclusion  when  users  are  often  directly  involved  in  providing  the 
service by means of non-profit organisations; 

6.  Stresses that, in providing for the risks of everyday life, such as those concerning health, work 
related  accidents,  etc.,  particular  attention  must  be  given  to  dependent  persons,  whether  their 
dependency relates to disability or age; 

7.  Points out that a European level governance should help to ensure that in the provision of these 

services, Member States guarantee the following principles:  

• 

• 

• 

equal universal access; 

full  territorial  coverage,  geographical  and  social  access  to  reliable  high-quality  service  at 
affordable prices and uniform quality standards;  

socially  acceptable  concessionary  charges  for  disabled  persons,  low-income  groups  and 
mechanisms designed to combat social exclusion; 

•  measures to avoid regional disparities, ensure legal certainty, transparency and compliance 

with the framework conditions for the provision of services; 

8.  Is of the opinion that in accordance with these principles, the competent authorities should be free 
to  set  up  authorisation  schemes  governing  the  access  to  the  organisation  of  social  services, 
simultaneously respecting the principle of non-discrimination; 

9.  Accordingly, calls for further consultation and cooperation between those concerned to establish 
the framework necessary for the functioning and realisation of the objectives of social services of 
general interest while respecting their guiding principles and values. 

 
 
- 246 - 

PROCEDURE 

Social services of general interest in the European Union 

2006/2134(INI) 

EMPL 

ENVI 
15.6.2006 

Roberto Musacchio 
14.6.2006 

3.10.2006 

21.11.2006 

+: 
–: 
0: 

44 
1 
3 

Evans,  Anne 

Ferreira,  Karl-Heinz 

Adamos  Adamou,  Georgs  Andrejevs,  Irena  Belohorská, 
Johannes  Blokland,  Frieda  Brepoels,  Dorette  Corbey, 
Chris Davies, Avril Doyle, Mojca Drčar Murko, Edite Estrela, 
Jill 
Florenz, 
Alessandro Foglietta,  Matthias  Groote,  Françoise  Grossetête, 
Satu  Hassi,  Jens  Holm,  Mary  Honeyball,  Caroline  Jackson, 
Aldis  Kušėis,  Peter  Liese,  Jules  Maaten,  Roberto  Musacchio, 
Péter  Olajos,  Adriana  Poli  Bortone,  Vittorio  Prodi, 
Frédérique Ries,  Dagmar  Roth-Behrendt,  Guido  Sacconi, 
Kathy Sinnott,  Antonios  Trakatellis,  Evangelia  Tzampazi, 
Thomas  Ulmer,  Marcello  Vernola,  Anja  Weisgerber, 
Åsa Westlund, Anders Wijkman 

Bairbre  de  Brún,  Christofer  Fjellner,  Milan  Gaľa, 
Vasco Graça Moura,  Erna  Hennicot-Schoepges,  Ria  Oomen-
Staes, 
Ruijten, 
Andres Tarand 

Pál Schmitt,  Renate 

Sommer,  Bart 

Title 

Procedure number 

Committee responsible 

Opinion by 

Date announced in plenary 

Enhanced 
announced in plenary 

cooperation 

–  date 

Draftsman 

Date appointed 

Previous draftsman 

Discussed in committee 

Date adopted 

Result of final vote 

Members present for the final vote 

Substitute(s)  present  for  the  final 
vote 

Substitute(s)  under  Rule  178(2) 
present for the final vote 

Comments 
language only) 

(available 

in 

one 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
- 247 - 

27.11.2006 

OPINION OF THE COMMITTEE ON THE INTERNAL MARKET AND CONSUMER 
PROTECTION 

for the Committee on Employment and Social Affairs 

on social services of general interest in the European Union 
(2006/2134(INI)) 

Draftswoman: Luisa Fernanda Rudi Ubeda 

SUGGESTIONS 

The  Committee  on  the  Internal  Market  and  Consumer  Protection  calls  on  the  Committee  on 
Employment  and  Social  Affairs,  as  the  committee  responsible,  to  incorporate  the  following 
suggestions in its motion for a resolution: 

A.  whereas social services of general interest are not subject to any special provisions in the Treaties, 

although they constitute one of the most significant areas of general interest services, 

B.  whereas, however, SSGIs  contribute to the performance of the Community's tasks as defined in 
Articles 2 and 3 of the Treaty, including a high level of employment and of social protection, the 
raising  of  the  standard  of  living,  the  attainment  of  a  high  level  of  health  protection,  equality 
between men and women and the strengthening of economic and social cohesion, 

C.  whereas in this case the principle of subsidiarity is fully applicable, and allows Member States to 
define  their  respective  social  services,  the  tasks  and  organisation  thereof  and  the  way  in  which 
they are funded, including universal access to these essential, vital services, 

D.  whereas,  following  the  adoption  by  Parliament  at  second  reading  of  the  amended  directive  on 
services  in  the  internal  market,  non-economic  services  of  general  interest  as  defined  by  the 
Member States have been excluded from the scope of the directive, as have social services such as 
social housing services, childcare services and family services, 

E.  whereas, because of their special characteristics, social services can have a direct impact on the 
internal market in services, and also have a direct, but differentiated, impact on the public, both 

 
 
 
 
- 248 - 

male  and  female,  depending  in  addition  on  the  social  groups  to  which  they  belong;  whereas 
changes in society, including demographic changes, mean that there is a need for more action by 
public  authorities  to  ensure  that  the  main  burden  of  care  is  not  left  to  families,  and  hence  to 
women,  

F.  whereas  the  internal  market  in  services  and  the  competition  rules  may  have  an  impact  on  the 
provision  of  SSGIs,  which  fulfil  a  vital  role  in  terms  of  solidarity  and  protection  of  the  social 
fabric throughout the European Union, 

1.  Welcomes  the  publication  of  the  Commission  communication  entitled  "Implementing  the 
Community  Lisbon  programme:  Social  services  of  general  interest  in  the  European  Union" 
(COM(2006)0177), which had already been signalled in the White Paper on services of general 
interest (COM(2004)0374), and which arises from the exclusion of social services from the scope 
of  the  amended  proposal  for  a  directive  on  services  in  the  internal  market,  in  connection  with 
which  the  Council’s  common  position  was  approved  at  second  reading  by  the  European 
Parliament;  welcomes  the  Commission's  endeavours  to  conduct  a  consultation  process  with  the 
Member  States  and  with  all  the  sectors  involved,  aiming  to  find  a  balance  between  the  special 
characteristics of these services, which sometimes make them difficult to define in general terms, 
and  the  application  of  the  principles  of  transparency,  free  competition  and  non-discrimination, 
which have mandatory force in the EU, and of Community law on the award of public contracts 
and concessions; 

2.  Approves the Commission’s action in recognising that social services are inherently of a character 
of general interest; stresses that these essential and vital services fulfil a particular role of social 
protection and solidarity directly provided by local and regional groups or that they are entrusted 
to specific agents; considers that the different public administrations have to be the guarantors of 
the provision of these services, with regard to the objectives that they have been assigned in social 
matters; 

3.  Considers that they must satisfactorily fulfil their role as defined in Article 16 and Article 86(2) of 

the Treaty; 

4.  Points  out  the  need  for  consistency  between  the  Union's  position  with  regard  to  its  rules 
applicable  to  SSGIs  and  the  position that  it  will  adopt  in  the  context  of  the  WTO  negotiations, 
especially in connection with the field of social and health services under the General Agreement 
on Trade in Services (GATS); 

5.  Notes that at present the Member States have various different models of social service design, 
provision and funding, since although the public authorities are responsible for provision of social 
services to their citizens, they are not always the direct providers; 

6.  Considers  that  in  application  of  the  subsidiarity  principle,  the  Member  States  have  the  right  to 
define  in  each  case,  in  accordance  with  their  uses  and  customs,  the  characteristics  and  tasks  of 
social services that constitute the heart of the European social model; believes, however, that in 
addition to the traditional criteria of universality, transparency and accessibility, there should be a 

 
 
- 249 - 

definition of the way in which social services are structured and organised; 

7.  Considers  that  the  right  of  Member  States  to  define  their  own  social  services  should  be  made 
compatible with the required legal certainty capable of protecting the public authorities which are 
the  guarantors  of  social  services,  social  service  providers  and  users  and  the  public  as  a  whole 
throughout the territory of the EU; 

8.  Considers  that  the  non-profit  status  of  some  providers  of  such  services  should  be  considered 
compatible with the freedom of establishment enshrined in the Treaties; similarly considers that 
given  the  specific  nature  of  such  services,  the  payment  of  any  compensation  by  the 
administrations  responsible  for  social  service  provision  to  the  actual  providers  should  also  be 
considered  compatible;  considers  that  such  compensation  should  not  be  deemed  to  be  State  aid 
since the principle of compensation is fulfilled; 

9.  Considers that the extension of these services, attributable to increasing needs, and the creation of 
new services have the potential for creating employment which will have a very positive impact 
on achieving the Lisbon Strategy objectives, especially with regard to female workers, since on 
the  one  hand  social  services  are  predominantly  staffed  by  women,  and  on  the  other  hand  the 
expansion of such services enables women, in particular, to continue to be employed and remain 
on the labour market; 

10.  Notes that previous experience in some Member States shows that openness to competition with 
appropriate safeguards for the social services sectors is a positive factor for economic growth and 
employment creation, and for improving the quality of the services supplied; 

11.  Welcomes  the  possibility  that  the  Commission  may  take  initiatives  intended  to  clarify  the 
Community  rules  applicable  to  these  services  and  to  define  the  division  of  responsibilities 
between  the  EU  and  the  Member  States  in  the  event  of  obstacles  and  difficulties  arising  in 
connection with the free provision of services in the internal market.  

 
 
- 250 - 

PROCEDURE 

Title 

Procedure number 

Committee responsible 

Opinion by 

Date announced in plenary 

Enhanced 
announced in plenary 

cooperation 

–  date 

Drafts(wo)man 

Date appointed 

Previous drafts(wo)man 

Social Service of General Interest in the EU  

2006/2134(INI) 

EMPL 

IMCO 
15.6.2006 

Luisa Fernanda Rudi Ubeda 

4.9.2006 

Discussed in committee 

10.10.2006 

21.11.2006 

22.11.2006 

Date adopted 

Result of final vote 

23.11.2006 

+: 
–: 
0: 

32 

0 

2 

Members present for the final vote 

Charlotte  Cederschiöld,  Mia  De  Vits,  Janelly  Fourtou, 
Małgorzata  Handzlik,  Malcolm  Harbour,  Christopher  Heaton-
Harris,  Anna  Hedh,  Edit  Herczog,  Anneli  Jäätteenmäki, 
Pierre Jonckheer,  Alexander  Lambsdorff,  Kurt  Lechner, 
Arlene McCarthy,  Manuel  Medina  Ortega,  Zita  Pleštinská, 
Guido  Podestà,  Luisa  Fernanda  Rudi  Ubeda,  Heide  Rühle, 
Schaldemose, 
Leopold 
Józef 
Andreas Schwab,  Eva-Britt 
Szájer, 
Marianne Thyssen, Jacques Toubon, Bernadette Vergnaud 

Rutowicz, 

Svensson, 

Christel 

József 

Substitute(s)  present  for  the  final 
vote 

Jean-Claude Fruteau, Benoît Hamon, Konstantinos Hatzidakis, 
Othmar Karas, Maria Matsouka, Joseph Muscat, Olle Schmidt, 
Anja Weisgerber 

Substitute(s)  under  Rule  178(2) 
present for the final vote 

Marie-Line Reynaud 

Comments 
language only) 

(available 

in 

one 

... 

 
 
 
 
 
 
 
 
 
 
 
  
 
- 251 - 

21.11.2006 

OPINION OF THE COMMITTEE ON LEGAL AFFAIRS 

for the Committee on Employment and Social Affairs 

on social services of general interest in the European Union 
(2006/2134(INI)) 

Draftswoman: Gabriele Stauner 

SUGGESTIONS 

The Committee on Legal Affairs calls on the Committee on Employment and Social Affairs, as the 
committee responsible, to incorporate the following suggestions in its motion for a resolution: 

1.  Has considerable doubts as to whether EU rules on social services of general interest can bring 
about  an  actual  improvement  for  the  public  and  an  improvement  in  the  effectiveness  of  such 
services; 

2.  Calls  on  the  Commission,  therefore,  to  use  the  results  of  the  study  referred  to  in  its 
communication to set out its position in detail, supported by facts and figures, on the question of 
the actual need for such rules at EU level and also on the raison d'être of such rules; 

3.  Calls on the Commission to indicate the legal basis that it intends to use for any legal provisions 
that  it  might  be  considering;  points  out  at  this juncture  that  Article  16  of  the  EC Treaty  cannot 
provide that legal basis;  

4.  Stresses the need, in connection with any rules being considered by the Commission, to observe 
and to apply the subsidiarity principle laid down in Article 5 of the EC Treaty in connection with 
social services ; 

5.  Stresses expressly that, on the basis of their powers and of the subsidiarity principle, it is for the 

Member States alone to determine what constitutes social services; 

6.  Stresses that it is solely a matter for the Member States and local authorities to be responsible for 
the  individual  details  of  the  organisation,  funding  and  structure  of  social  services  of  general 

 
 
 
 
- 252 - 

interest; 

7.  Rejects  at  this  stage,  therefore,  any  (mixed)  funding  which  may  be  under  consideration  by  the 

Commission as an infringement of the Member States' fundamental responsibilities. 

 
 
PROCEDURE 

Title 

Procedure number 

Committee responsible 

Opinion by 

Date announced in plenary 

Enhanced 
announced in plenary 

cooperation 

–  date 

Drafts(wo)man 

Date appointed 

Previous drafts(wo)man 

Discussed in committee 

Date adopted 

Result of final vote 

- 253 - 

Social services of general interest in the European Union 

2006/2134(INI) 

EMPL 

JURI 
15.6.2006 

Gabriele Stauner 
11.9.2006 

3.10.2006 

21.11.2006 

+: 
–: 
0: 

13 
8 
0 

Members present for the final vote  Maria  Berger,  Carlo  Casini,  Rosa  Díez  González, 
Giuseppe Gargani,  Klaus-Heiner  Lehne,  Katalin  Lévai, 
Antonio López-Istúriz 
Occhetto, 
White, 
Aloyzas Sakalas,  Gabriele  Stauner,  Andrzej  Jan  Szejna, 
Diana Wallis, Jaroslav Zvěřina 

Achille 

Substitute(s)  present  for  the  final 
vote 

Nicole  Fontaine, 
Eva Lichtenberger, Arlene McCarthy, Manuel Medina Ortega 

Jean-Paul  Gauzès,  Othmar  Karas, 

Substitute(s)  under  Rule  178(2) 
present for the final vote 

Comments 
language only) 

(available 

in 

one 

Sharon Bowles, Albert Deß, Ewa Klamt 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
- 254 - 

24.11.2006 

OPINION OF THE COMMITTEE ON WOMEN'S RIGHTS AND GENDER EQUALITY 

for the Committee on Employment and Social Affairs 

Social services of general interest in the European Union  
(2006/2134(INI)) 

Draftswoman: Edit Bauer 

SUGGESTIONS 

The Committee on Women's Rights and Gender Equality calls on the Committee on Employment and 
Social Affairs, as the committee responsible, to incorporate the following suggestions in its motion for 
a resolution: 

A.  whereas the Community and the Member States have shared competence for services of general 

economic interest, 

B.  whereas the subsidiarity principle needs to be respected and applied in connection with services 

of general interest, in accordance with Article 5 of the EC Treaty, 

C.  whereas the expansion of social services of general interest has been a driving force in drawing 

more women into the labour force, 

D.  whereas social services of general interest make an essential contribution to Community values, 
such  as  equality  between  men  and  women  and  economic,  social  and  territorial  cohesion  and 
whereas they are closely linked to fundamental social rights, 

E.  whereas  social  services  of  general  interest  are  not  protected  against  the  application  of 
Community  internal  market  and  competition  rules,  whenever  they  are  provided  under  market 
conditions,  and  whereas  they  are  profoundly  affected  by  changes  to  the  way  services  are 
provided, funded and regulated, 

1.  Points  out  that  social  services,  like  all  services  of  general  interest,  are  a  central  pillar  of  the 

 
 
 
 
- 255 - 

European social model, which makes a crucial contribution to social cohesion, social inclusion 
and the application of fundamental rights; 

2.  Underlines the fact that in February 2006 Parliament voted in favour of excluding social services 

from the Services Directive; 

3.  Supports the development of a specific legal instrument for social services of general interest at 
the European level; calls on the Commission to present a legal instrument on social services of 
general interest in order to clarify the way in which social services relate to the framework of EU 
legal rules such as competition and internal market rules;  

4.  Calls on the Commission to create more legal certainty in the field of social services of general 
interest and to propose a legislative framework clarifying the regulatory framework in which they 
operate and can be modernised, and respecting the freedom of Member States to define what they 
consider to be social services of general interest and how they are organised; 

5.  Reiterates  the  importance  of  market  regulation  by  the  Member  States  in  the  field  of  social 
services of general interest and the freedom of Member States to maintain or set up authorisation 
schemes in order to ensure access for all, continuity and high quality of social services of general 
interest; 

6.  Recommends  to  the  Member  States,  when  they  define  social  services  of  general 
interest, to take into consideration gender-specific services, mainly consulting and social 
services  intended  in  particular  for  women,  and  important  services  that  contribute  to  the 
quality of women's lives or to equality, such as health services and education; 

7.  Calls on the Member States to guarantee non-discriminatory access for all citizens, particularly 
disadvantaged groups, including single mothers and elderly women, to social services of general 
interest; 

8.  Calls on the Member States, in their policies on social services of general interest, to make faster 
progress in achieving the Lisbon and Barcelona targets as regards ensuring a greater degree of 
reconciliation between professional and family life. 

9.  Requests  the  Commission  to  include  in  its  monitoring  reports  issues  of  social  inclusion  and 

gender equality and to mainstream the rights of children in specific policies; 

10.  Calls  on  the  Member  States  to  conduct  a  gender-impact  assessment  of  the  various  services  of 
general  interest  and  ensure  respect  for  anti-discrimination  legislation  in  the  provision  of  social 
services of general interest; 

11.  Recommends that the Commission and Member States consult with all the relevant stakeholders, 
including representatives of women's organisations and organisations representing children's and 
disabled persons' rights. 

 
 
 
 
PROCEDURE  

Title 

Procedure number 

Committee responsible 

Opinion by 

Date announced in plenary 

Enhanced 
announced in plenary 

cooperation 

–  date 

Drafts(wo)man 

Date appointed 

Previous drafts(wo)man 

- 256 - 

Social services of general interest in the European Union  

2006/2134(INI) 

EMPL 

FEMM 
15.6.2006 

Edit Bauer 
22.6.2006 

Discussed in committee 

5.10.2006 

23.11.2006 

Date adopted 

Result of final vote 

23.11.2006 

+: 
–: 
0: 

13 
3 
0 

Members present for the final vote 

Edit  Bauer,  Hiltrud  Breyer,  Ilda  Figueiredo,  Věra  Flasarová, 
Zita  Gurmai,  Esther  Herranz  García,  Lívia 
Járóka, 
Panayotopoulos-Cassiotou, 
Marie 
Pia Elda Locatelli, 
Christa Prets, Eva-Britt Svensson, Britta Thomsen 

Substitute(s)  present  for  the  final 
vote 

Anna  Hedh, 
Bernadette Vergnaud 

Sophia 

in 

't  Veld,  Heide  Rühle, 

Substitute(s)  under  Rule  178(2) 
present for the final vote 

Comments 
language only) 

(available 

in 

one 

... 

 
 
 
 
 
 
 
 
 
 
 
 
 
- 257 - 

PROCEDURE 

Title 

Procedure number 

Committee responsible 

 Date  authorisation  announced  in 
plenary 

Social services of general interest in the European Union 

2006/2134(INI) 

EMPL 
15.6.2006 

Committee(s) asked for opinion(s) 
Date announced in plenary 

ECON 
15.6.2006 

ENVI 
15.6.2006 

IMCO 
15.6.200
6 

JURI 
15.6.2006 

FEMM 
15.6.200
6 

Not delivering opinion(s) 
Date of decision 

Enhanced cooperation 

Date announced in plenary 

Rapporteur(s) 

Date appointed 

Previous rapporteur(s) 

Discussed in committee 

Date adopted 

Result of final vote 

Members present for the final vote 

Substitute(s)  present  for  the  final 
vote 

ITRE 

15.6.2006 

ITRE 
20.6.2006 

Joel Hasse Ferreira 
3.5.2006 

18.12.200
6 

28.2.2007 

23.11.200
6 

1.3.2007 

+ 
- 
0 

34 
1 
5 

Ilda  Figueiredo, 

Emine  Bozkurt, 

Jan  Andersson,  Alexandru  Athanasiu,  Roselyne  Bachelot-
Narquin, 
Philip  Bushill-Matthews, 
Alejandro Cercas,  Christina  Christova,  Derek  Roland  Clark, 
Proinsias De Rossa, Harlem Désir, Harald Ettl, Richard Falbr, 
Joel  Hasse  Ferreira, 
Carlo  Fatuzzo, 
Stephen Hughes,  Karin 
Jerzy  Kułakowski, 
Jöns, 
Jean Lambert,  Raymond  Langendries,  Bernard  Lehideux, 
Elizabeth  Lynne,  Thomas  Mann,  Ana  Mato  Adrover, 
Panayotopoulos-Cassiotou, 
Maria Matsouka, 
Protasiewicz, 
Pier Antonio 
Jacek 
Jean Spautz, 
José Albino Silva Peneda,  Kathy 
Gabriele Stauner, Anne Van Lancker 

Marie 
Panzeri, 

Sinnott, 

Jan 

Bauer, 

Edit 
Sepp Kusstatscher, Roberto Musacchio 

Françoise 

Castex,  Donata  Gottardi, 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
- 258 - 

Substitute(s)  under  Rule  178(2) 
present for the final vote 

André Brie, Jaromír Kohlíček, Anja Weisgerber 

Date tabled 

6.3.2007 

Comments 
(available in one language only) 

 
 
 
 
- 259 - 

Committee of the Regions 

Destans Report 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
- 260 - 

EUROPEAN UNION 

Committee of the Regions 

ECOS-IV-006 

Brussels, 14 December 2006 

OPINION  
of the  
Committee of the Regions  
of 6 December 2006  
on the  
Communication from the Commission -  
Implementing the Community Lisbon programme -  
Social services of general interest in the European Union  
COM(2006) 177 final 

 
 
 
  
 
 
 
- 261 - 

THE COMMITTEE OF THE REGIONS, 

Having  regard  to  the  Communication  from  the  Commission  -  Implementing  the  Community  Lisbon 
programme: Social services of general interest in the European Union (COM(2006) 177 final); 

Having  regard  to  the  decision  of  the  European  Commission  of  26  April  2006  to  consult  it  on  this 
subject, under the first paragraph of Article 265 of the Treaty establishing the European Community; 

Having regard to its Bureau's decision of 13 June 2006 to instruct the Commission for Economic and 
Social Policy to draw up an opinion on this subject; 

Having regard to Article 16 of the Treaty establishing the European Community, concerning services 
of general economic interest, as well as Articles 2, 5, 73, 81, 86, 87, 88 and 295 of the EC Treaty; 

Having  regard  to  Article  36  of  the  European  Charter  of  Fundamental  Rights,  concerning  access  to 
services of general economic interest; 

Having regard to Article III-122 of the Treaty establishing a Constitution for Europe, signed by the 
Heads of State and Government in Rome on 29 October 2004; 

Having regard to its opinion on the Green Paper on services of general interest (CdR 149/2003 fin)1; 

Having regard to its opinion on the Communication from the European Commission on Services of 
General Interest in Europe (CdR 470/2000 fin)2; 

Having regard to its opinion on the Draft Commission decision on the application of Article 86 of the 
Treaty  to  state  aid  in  the  form  of  public  service  compensation,  the  draft  directive  amending 
Commission Directive 80/723/EEC on the transparency of financial relations between Member States 
and  public  undertakings  and  the  Community  framework  for  state  aid  in  the  form  of  public  service 
compensation (CdR 155/2004 fin)3; 

Having regard to its opinion on the Proposal for a Directive of the European Parliament and of the 
Council on services in the internal market (CdR 154/2004 fin)4; 

 
 
 
  
  
  
  
  
  
  
  
  
- 262 - 

Having  regard  to  its  opinion  on  the  European  Commission's  Green  Paper  on  public-private 
partnerships and Community law on public contracts and concessions (CdR 239/2004 fin)5; 

Having  regard  to  its  opinion  on  the  European  Commission's  White  Paper  on  services  of  general 
interest (CdR 327/2004)6; 

Having  regard  to  the  draft  opinion  (CdR 181/2006  rev.  1),  adopted  on  20  October  2006  by  its 
Commission for Economic and Social Policy (Rapporteur: Mr Jean Louis Destans, President of the 
General Council of Eure (FR/PES); 

Whereas:  

1. social services of general interest (SSGI), although developed differently in the Member States, are 
an essential element of the European social model7; 

2. a  stable,  transparent  legal  framework  at  EU  level  is  therefore  required  to  develop  SSGI  in  strict 
accordance  with  the  principle  of  subsidiarity,  and  in  particular  the  responsibilities  of  the  local  and 
regional authorities in defining the missions, management and financing of these services; 

3. in  this  context,  local  administrative  freedom  and  the  principle  of  the  Member  States'  freedom  to 
define the missions and organisation of SSGI must be reaffirmed, especially since the local authorities 
often have primary responsibility for managing these services in their capacity as solidarity players in 
local life; 

4. it is important to recall that SSGI are an integral part of the family of services of general interest 
(SGI)  and,  as  such,  play  an  essential  role  in  ensuring  social  and  human  solidarity  and  protection 
throughout the European Union; 

5. a link must be established with Article 16 of the Treaty, which stresses the role played by services 
of  general  economic  interest  (SGEI)  "in  promoting  social  and  territorial  cohesion"  in  the  EU,  and, 
consequently, the citizens' right to access SSGI must be recognised and guaranteed as a fundamental 
right to access SGEI under Article 36 of the European Charter of Fundamental Rights; 

6. SSGI, like other SGEI, are also effective tools for implementing the Lisbon Strategy for growth and 
competitiveness in the EU;  

7. it would therefore be appropriate to establish clearer distinctions between the concepts of SGI and 
SGEI in order to better identify the specific features of SSGI; 

 
 
  
  
  
- 263 - 

8. the  purpose  of  this  distinction  is  in  particular  to  highlight  the  legal  consequences  of  the  two 
concepts and to give local actors legal and financial certainty as to the application of Community law 
to SSGI and to give them more scope. This should enable the Union to further strengthen the role of 
local actors in supporting SSGI;  

9. to this end, the Commission should work to support the existing law applicable to SSGI in order to 
secure  greater clarity  in  relation  to these  services  and  avoid  any  uncertainty  with  regard  to  EU  law 
applicable in this area; 

10. it  is  appropriate  to  look  ahead  in  order  to  ensure  the  necessary  consistency  between  the  EU's 
position when adopting legislation for SSGI and the position it will adopt during WTO negotiations 
on trade in services (GATS) for social and health policy; 

adopted  the  following  opinion  at  its  67th  plenary  session,  held  on  6  and  7  December  2006 
(meeting of 6 December 2006): 

* 

*         * 

1. 

Views of the Committee of the Regions 

The Committee of the Regions 

1.2 

1.3 

1.4 

welcomes  the  Commission's  initiative,  following  up  on  to  the  White  Paper  on  services  of 
general  interest,  which  had  announced  a  systematic  approach  that  focuses  on  "the  specific 
characteristics  of  social  and  health  services  of  general  interest"  in  order  to  clarify  "the 
framework in which they operate"; 

approves the fact that this specific measure is included in the framework for implementing 
the  Lisbon  Strategy  and  the  Social  Agenda  insofar  as  SSGI,  like  SGEI,  are  a  source  of 
solidarity  and  competitiveness  for  the  EU  economy  as  well  as  a  potential  source  of 
community-based  jobs,  a  component  of  the  European  social  model  and  national  social 
protection and inclusion schemes;  

supports the Communication's approach of recognising social services as services of general 
interest.  Indeed,  these  essential  and  vital  services  fulfil  a  specific  social  protection  and 
solidarity mission and are provided directly by the local and regional authorities or delegated 
to  specific  operators  with  responsibility  for  them.  They  therefore  depend  on  the  Member 
States' regulatory process regarding the social public policy objectives entrusted to them. The 

 
 
 
 
 
- 264 - 

1.5 

1.6 

1.7 

1.8 

1.9 

requirement that their missions be fulfilled properly, as set out in Articles 16 and 86(2) of the 
EC Treaty, should apply to them a priori; 

emphasises,  in  this  context,  that  SSGI  should  not  be  considered  as  residual  services  to  the 
population but can, on the contrary, be agents for universal access to quality social services 
for all citizens; 

recalls that SSGI are meant to guarantee the fulfilment of social policy objectives which are 
the  responsibility  of  Member  States  such  as  social  protection,  meeting  fundamental  social 
needs,  i.e.  health  care,  housing,  education,  care  of  the  elderly  and  people  with  disabilities, 
training and jobs, not to mention solidarity with the vulnerable and the dependent, who rely 
on the social services; 

recalls that SSGI play an active part in the effective application of human rights and respect 
for  human  dignity,  as  defined  in  the  European  Charter  of  Fundamental  Rights,  and  arising 
from  the  common  constitutional  traditions  of  all  Member  States  and  their  international 
obligations  under  the  Revised  Social  Charter  of  the  Council  of  Europe  and  the  Universal 
Declaration of Human Rights; 

considers that SSGI contribute to the implementation of the Community's mission, as defined 
under  Articles  2  and  3  of  the  Treaty,  and  in  particular  to  a  high  level  of  social  protection, 
raising  the  quality  of  life,  the  attainment  of  a  high  level  of  health  protection,  and 
strengthening economic and social cohesion; 

affirms, in this context, that it is in the interest of the Community that SSGI are developed 
and  modernised  in  a  stable  economic  and  legal  framework  and  regulated  by  the  relevant 
public authorities at local and regional levels;  

1.10  welcomes the steps taken by the Commission to identify the specific characteristics of SSGI 
and the measures required to modernise them in the light of the stakes involved in meeting 
existing and future social needs inherent to an ageing population and the exigencies of social 
cohesion and inclusion in daily life at local and regional levels;   

1.11 

1.12 

shares  the  Commission's  views  regarding  the  specific  characteristics  of  these  services, 
especially with regard to the fact that they operate on the basis of the solidarity principle and 
are  personalised.  These  specificities  must  be  taken  into  consideration  in  the  application  of 
Community  legislation  for  the  internal  market  and  competition,  bearing  in  mind  that  they 
have little impact on intra-Community trade and that their development is in the interest of the 
Community; 

is convinced of the need to overcome existing legal uncertainty regarding the conditions for 
the application of Community law to arrangements for implementing SSGI.  All to often, in 
the  absence  of  legal  certainty  in  relation  to  SSGI,  the  latter  tend  to  fall  under  the  general 
competition and internal market rules, which may not be appropriate for the specific missions 
delegated to them by the local and regional authorities. This legal uncertainty became clear 
during  the  debate  on  whether  they  should  be  covered  by  the  proposal  for  a  directive  on 
services in the internal market and led to their being excluded from its sphere of application; 

 
 
- 265 - 

1.13 

1.14 

1.15 

1.16 

is  particularly  satisfied  that  specific  reference  is  made  to  the  principle  of  subsidiarity, 
recognising  the  exclusive  responsibility  of  Member  States  and  their  local  and  regional 
authorities  for  identifying  the  scope,  organisational  principles,  financing  methods  and 
regulation of SSGI; 

considers, moreover, that SSGI should in principle be undertaken by the best suited provider. 
The  core  values  of  universality,  accessibility,  quality  and  regional  programming  cannot  be 
met  unaided  by  the  market  and  require  structured  public  intervention,  especially  for  the 
delivery and payment schemes of the local and regional authorities closest to the citizens;  

considers  that  the  existential  nature  of  the  needs  to  be  met  (housing,  health,  jobs),  the 
asymmetry of information between SSGI providers and beneficiaries and, in numerous cases, 
their extreme vulnerability, requires and justifies a service delivery framework that exempts 
these services from "normal" supplier/customer relations; 

considers  that  it  is  not  a  matter  of  bringing  fundamental  internal  market  freedoms  into 
conflict with the application of EU fundamental rights or even the obligation to fulfil general 
interest missions, but rather to reconcile them by adopting a suitable Community Framework 
for  the  specific  features  of  these  services  and  the  specific  missions  of  public  and  private 
operators,  always  bearing  in  mind  that  these  grassroots  social  services  generally  have  little 
impact  on  intra-Community  trade.  This  spirit  of  conciliation  should  apply  to  the  internal 
market  as  well  as  EU  external  policy,  especially  regarding  the  social  and  health  services 
aspects of the international negotiations on trade in services (GATS); 

1.17 

assumes that the Member States and, within them, the relevant public authorities are to retain 
full  responsibility  for  regulating  these  services;  considers  that  the  conditions  for  the 
application of Community rules for the practical implementation of SSGI need to be clarified 
in the following areas:  

• 

• 

• 

• 

 the required conditions to authorise providers in the light of the status of general services of 
interest and as conditions for a priori compatibility of aid in the form of compensation;  

special and exclusive rights granted in particular to not-for-profit organisations and charities;  

the  clear  and  transparent  definition  of  authorisation  schemes  for  organising  external  service 
providers in order to correct asymmetries of information between beneficiaries and providers; 

solidarity-based  funding  for  these  services,  especially  under  conditions  for  compatibility 
between the provisions of the Treaties and funding schemes and public authority subsidies for 
service  providers  in  order  to  ensure  reliable  access  to  social  and  health  services  for  the 
community and develop new services for emerging needs. 

 
 
 
 
 
 
- 266 - 

1.18 

1.19 

1.20 

1.21 

1.22 

1.23 

1.24 

In  this  context,  the  Committee  of  the  Regions  would  recall  that  the  fulfilment  of  SSGI 
missions should in no way be hindered by the application of the rules of the Treaty; 

stresses  that  when  implementing  management  principles  and  procedures  for  SSGI,  the 
Member  States  and  local  and  regional  authorities  must  respect  the  general  principles  of  the 
EC Treaty, including the principles of equal treatment, free movement, free competition and 
transparency; 

observes, in this context, that respecting the principle of subsidiarity should not prevent the 
EC from exercising the responsibility it shares with the Member States to monitor the proper 
functioning of SSGI in compliance with Article 16 of the Treaty; 

questions the decision not to include health services in the Communication whilst noting the 
Commission's intention to deal with them in a separate initiative; clear and distinct definitions 
of social and health services should be put forward; 

regrets  that  the  Commission  restricts  itself  to  drawing  up  a  list  of  "organisational 
characteristics"  for  SSGI  but  does  not  take  this  opportunity  to  define  these  concepts  more 
precisely,  especially  with  regard  to  the  underlying  policy  orientations  for  defining  these 
services in Member States; 

believes  that  under  no  circumstance  can  this  list  of  organisational  characteristics  be 
considered  exhaustive  or  restrictive,  in  deference to  the  recognised  freedom  of  the  Member 
States and their local authorities to define the organisation of SSGI; 

approves of the Commission's reference to the general need for modernisation and quality in 
the  SSGI  sector,  a  need  which  is  being  met  by  the  ongoing  decentralisation  of  services  to 
regional  and  local  levels;  in  particular  with  a  view  to  quality,  it  should  be  ensured  that  in 
future  providers  of  social  services  continue  to  be  subject  to  the  quality  standards  and  legal 
conditions of the Member State in which the service is provided;  

1.25 

shares  the  Commission's  concern  to  arrange  monitoring  of  the  situation  regarding  social 
services of general interest and is willing to be fully involved in this process;  

1.26  welcomes  the  link  established  by  the  Commission  between  SSGI  and  the  examination  of 
national  action  plans  for  social  inclusion,  bearing  in  mind  the  local  dimension  of  this 
objective,  but  nevertheless  asks  the  Commission  to  be  more  specific  about  how  the  open 
method  of  coordination,  its  preferred  option,  will  be  applied  to  the  follow-up  of  its 
Communication, particularly with regard to what it expects from the various stakeholders in 
this process; 

1.27 

supports  the  Commission's  commitment  to  giving  consideration  "to  the  need  and  legal 
possibility for a legislative proposal" for SSGI, whereby the Commission aligns itself with the 
broader position adopted by the Committee of the Regions regarding "a proposal for a legal 
framework which should make possible a definition of positive principles" for all SGEI, whilst 
affirming that these two initiatives must be complementary and consistent.  

2. 

Recommendations of the Committee of the Regions 

 
 
- 267 - 

The Committee of the Regions 

2.1 

2.2 

2.3 

2.4 

2.5 

2.6 

2.7 

2.8 

asks  the  Commission  to  clarify  the  nature  of  the  legislative  proposals  on  SSGI  as  soon  as 
possible  and  to  establish  the  important  monitoring  and  dialogue  procedure  and  the  biennial 
reports; 

urges  the  Commission  to  deliver  on  its  commitment  to  give  consideration  to  the  need  and 
legal  possibility  for  a  legislative  proposal  on  SSGI  at  the  end  of  the  open  process  of 
consultation; 

also reiterates its recommendation to the Commission to draw up a proposal for legislative 
regulation which should make possible a definition of certain positive principles for all SGEI, 
as  an  "umbrella"  initiative  for  other  complementary  legislative  proposals,  and  due  to  their 
specific features, for SSGI in particular, with a view to providing greater legal certainty for 
local and regional authorities and service providers;  

asks the Commission to develop more specific and stringent classifications (categories) and 
definitions  (concepts)  for  the  relevant  SSGI  and  to  take  account  of  the  general  interest 
requirements  identified  by  Member  States,  and  to  recognise  them  as  distinct  aspects  of  the 
definition of these services;  

therefore urges the Commission not to draw up a restrictive list of SSGI concepts, missions 
and  organisational  characteristics,  in  deference  to  the  principle  of  subsidiarity  and  the 
Member  States'  freedom  to  define  the  principles,  missions,  financing  methods  and 
organisation of SSGI; 

suggests  that  the  Commission  involve  the  Committee  of  the  Regions  in  a  permanent 
monitoring and evaluation process for SSGI (particularly in order to monitor compliance with 
the  right  of  access  to  all  services,  the  financial  sustainability  of  services  and  achieved 
performance objectives); 

approves the Commission's undertaking to deliver the first biennial report on SSGI by mid-
2007  giving  the  results  of  its  study  on  the  functioning  of  the  sector,  its  socio-economic 
importance, as well as the implications of the application of Community law; and finally 

calls for consistency between the Communication's orientations and the EU's external policy 
for international negotiations on trade in services (GATS). 

 
 
 
 
- 268 - 

European Economic and Social Committee 

Hencks Report 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
- 269 - 

TEN/253 
Social services of general interest 

Brussels, 15 March 2007 

OPINION 
of the  
European Economic and Social Committee 
on the 
Communication from the Commission  
Implementing the Community Lisbon programme: Social services of general interest in the 
European Union 
COM(2006) 177 final 
_____________ 

Rapporteur: Mr Hencks 
_____________ 

 
 
 
 
 
 
 
 
 
 
 
 
 
- 270 - 

On 26 April 2006, the European Commission decided to consult the European Economic and Social 
Committee, under Article 262 of the Treaty establishing the European Community, on the 

from 

Communication 
programme: Social services of general interest in the European Union 
COM(2006) 177 final. 

the  Commission  Implementing 

the  Community  Lisbon 

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  21  February  2007.  The 
rapporteur was Mr Hencks. 

At  its  434th  plenary  session,  held  on  14-15  March  2007  (meeting  of  15  March),  the  European 
Economic and Social Committee adopted the following opinion by 143 votes with 61 votes against 
and 9 abstentions. 

* 

*        * 

Recommendations and evaluation 

Social  services  of  general  interest  exist  to  achieve  social,  territorial  and  economic  cohesion  by 
providing solidarity in order to address all situations of social disadvantage that are likely to threaten 
people's physical or moral integrity, such as sickness, old age, inability to work, disability, lack of job 
security, poverty, social exclusion, substance addiction, family and housing problems, and problems 
linked to the integration of foreigners. 

Another  aspect  of  SSGI  is  integration,  which  goes  beyond  simply  providing  assistance  to  the  most 
disadvantaged  and  working  to  improve  their  lot.  These  services  also  exist  to  meet  all  needs, 
facilitating  access  to  all  fundamental  social  services:  they  help  to  ensure  the  effective  exercise  of 
citizenship and of fundamental rights. 

What is important, therefore, is not to set the economic dimension against the social dimension, but to 
promote a constructive synergy between the two and to find a way of combining them harmoniously. 

With this in mind, the EESC considers that rather than focusing on a dubious and evolving distinction 
as to whether a service of general interest is economic or non-economic, it is necessary to consider the 
actual nature of the service, together with its purpose and objectives, and to determine which services 
are  covered  by  the  competition  and  internal  market  rules  and  which  services,  for  reasons  of  the 
general  interest  and  in  the  interests  of  social,  territorial  and  economic  cohesion,  in  line  with  the 
principle  of  subsidiarity,  should  be  exempted  from  these  by  public  authorities  at  the  Community, 
national, regional or local level. 

 
 
 
 
 
 
 
 
 
 
 
 
 
- 271 - 

Common benchmarks and standards should therefore be defined at Community level for all services 
of general interest (both economic and non-economic), including social services of general interest, to 
be set out in a framework directive, adopted under the co-decision procedure, whereby a Community 
framework can be established which reflects their specific characteristics. 

In order to ensure that the general interest mission is fulfilled in a non-discriminatory and transparent 
manner and is not abused, Member States should explain why these services are in the general interest 
and in the interests of social, territorial and economic cohesion in an official legal act of "delegation" 
or equivalent, and in authorisation rules, setting out the mission that the competent public authority of 
a given Member State entrusts to service providers for providing an SGI and which lays down their 
rights  and  obligations,  without  prejudice  to  the  right  of  initiative  conferred  on  operators  by  the 
regulations. 

With  regard  to  evaluating  social  services  of  general  interest,  the  EESC  wishes  to  recall,  in  this 
context,  its  proposal  to  set  up  an  independent  monitoring  centre  to  evaluate  services  of  general 
economic  and  non-economic  interest,  with  a  membership  consisting  of  representatives  of  the 
European  Parliament,  the  Committee  of  the  Regions  and  representatives  of  organised  civil  society 
from the European Economic and Social Committee. At national, regional and local level, the public 
authorities  should  involve  all  stakeholders,  providers and  beneficiaries  of  social  services,  the  social 
partners, bodies working in the social economy and to combat exclusion, etc., in regulating SSGI.  

Introduction 

Social services of general interest, just like SGI, of which they are one component, underpin human 
dignity and guarantee the universal right to social justice and to full respect of fundamental rights, as 
set  out  in  the  Charter  of  Fundamental  Rights  and  in  international  commitments  such  as  the  revised 
European  Social  Charter  and  the  Universal  Declaration  of  Human  Rights.  They  help  to  ensure  the 
effective  exercise  of  citizenship.  They  exist  to  achieve  social,  territorial  and  economic  cohesion  by 
providing solidarity in order to address in particular all situations of social disadvantage that are likely 
to threaten people's physical or moral integrity, such as sickness, old age, inability to work, disability, 
lack of job security, poverty, social exclusion, substance addiction, family and housing problems, and 
problems linked to the integration of foreigners. 

Nevertheless, another aspect of SSGI is integration, which goes beyond simply providing assistance to 
the most disadvantaged and working to improve their lot. These services also exist to meet all needs, 
facilitating access to all fundamental social services. 

The specific contribution of social services of general interest is thus based on a direct link to basic 
rights,  and  it  is  local,  regional,  national  and  European  public  authorities  that  are  responsible  for 
ensuring  that  these  rights  are  fully  respected,  in  line  with  the  principles  of  subsidiarity  and 
proportionality, according to which the Commission's actions should not go beyond what is necessary 
to achieve the objectives of the Treaty. 

 
 
 
 
 
 
 
 
 
- 272 - 

Since pricing does not always directly reflect the cost of these services, or the cost determined by the 
law of supply and demand, they could not be provided at a price that is accessible to everyone without 
funding from public authorities. 

In conjunction with their duty to ensure that SSGI are properly funded, public authorities have overall 
responsibility  for  ensuring  that  social  services  are  able  to  operate  and  that  they  maintain  their  high 
quality, whilst respecting the competences of the stakeholders. 

Furthermore,  social  services  of  general interest,  like  all services of  general  interest,  are  not  only  an 
important  factor  for  economic  and  social  cohesion,  but  also  make  a  significant  contribution  to  the 
competitiveness of the European economy and constitute a major source of local employment.  

The  range  of  social  services  is  enormous  and  covers,  amongst  others,  retirement  homes,  homes  for 
people with disabilities, shelters for people in distress, homes for children, battered wives, immigrants 
and refugees, nursing homes, residential care homes, organisations providing social housing or youth 
protection,  social  action and  educational  organisations,  residential  schools,  day  centres, crèches  and 
nurseries,  medical  centres,  health,  rehabilitation  and  vocational  training  centres  and  personal  care 
services, including those provided in the home and family care services. 

In  all  Member  States  the  status  of  the  operators  who  provide  these  services  varies,  including  a 
considerable  number  of  not-for-profit  social  and  cooperative  organisations  (such  as  associations, 
mutual  societies,  cooperatives  and  foundations),  of  many  different  types  (public,  charitable, 
philanthropic, religious, private, etc.). The operation of these services is governed by regulatory and 
financial frameworks drawn up by the public authorities.  

Commission proposal 

As  part  of  the  implementation  of  the  Lisbon  Community  programme,  on  26  April  2006  the 
Commission presented a communication on social services of general interest, following up its White 
Paper on services of general interest (COM(2004) 374 final) and the vote in the European Parliament 
of 16 February 2006 on the services in the internal market directive.  

The  aim  of  this  communication  is  to  interpret  the  relevant  provisions  and  to  provide  the  necessary 
legal clarification. It only covers social services – thus excluding health services (which will be the 
subject of a specific initiative in 2007) – and does not provide for a legislative initiative in the field in 
the  near  future.  It  will  study  and  decide  on  the  need  for  and  the  legal  possibility  of  a  legislative 
proposal in the light of the open and ongoing consultation of all stakeholders, of the biannual reports 
on social services and of a study currently underway in preparation for the initial report in 2007. 

This communication should be seen in the context of the Community's and the Member States' shared 
responsibility for services of general economic interest, established by Article 16 of the EC Treaty.  

 
 
 
 
 
 
 
 
 
 
 
- 273 - 

The communication divides SSGI into two groups: (a) statutory and complementary social protection 
schemes  and  (b)  other  essential  services  provided  directly  to  the  individual,  such  as  assistance  to 
people  in  overcoming  the  challenges  and  crises  they  face  in  life,  full  integration  into  society,  the 
inclusion of persons with disabilities or health problems, and social housing. 

All  of  these  social  services  are  underpinned  by  a  number  of  common  features,  such  as  solidarity, 
versatility and personalisation (adapting to the needs of each recipient of assistance), the not-for-profit 
philosophy, voluntary work, charity, cultural sensitivity or an asymmetrical supplier-user relationship. 

The Commission considers that modernising social services is one of the most important issues facing 
Europe today. It acknowledges that social services are an integral part of the European social model 
and  that,  whilst  they  do  not  form  a  distinct  legal  category  within  services  of  general  interest,  they 
nevertheless  occupy  a  specific  position  as  pillars  of  Europe's  society  and  economy,  because  they 
contribute to the effective exercise of basic social rights. 

The Commission notes that this sector, which is expanding rapidly, is in the process of modernising 
itself so as to address the tensions that exist between ensuring universal access, quality and financial 
sustainability.  A  growing  number  of social  services  that  have  to  date  been  managed  directly  by  the 
public  authorities  are  now  covered  by  Community  rules  governing  the  internal  market  and 
competition.  

The Commission recognises that the legal position of SSGI vis-à-vis the competition rules is viewed 
by both public and private operators in the social sphere as a source of uncertainty. The Commission 
claims it is striving to reduce or to clarify the impact of this uncertainty, but appears unable to dispel it 
completely. 

General comments 

In  its  White  Paper  on  services  of  general  interest,  the  Commission  announced that  in  the  course  of 
2005  it  would  be  publishing  a  communication  on  social  services  of  general  interest,  which  would 
cover,  according  to  the  White  Paper,  health  services,  long-term  care,  social  security,  employment 
services and social housing. 

In  these  times  of  uncertainty  about  growth  and  employment,  when  the  gap  between  the  most 
disadvantaged strata of society and the most well-off and between the richest regions in the Union and 
the poorest is growing, despite Community or national programmes to combat exclusion and poverty, 
the  need for social  services  of  general  interest  is  increasingly  clear  and this  holds  all the  more  true 
because demographic changes are resulting in new needs. 

The  EESC  can  thus  only  welcome  the  publication  of  the  Commission's  communication,  which 
confirms the importance of social services for the general public, the particular role that these services 
play  as  an  integral  part  of  the  European  social  model  and  the  benefits  of  developing  a  systematic 
approach in order to identify and recognise the specific characteristics of these services and to clarify 

 
 
 
 
 
 
 
 
 
 
- 274 - 

the  framework  in  which  they  operate  and  can  be  –  in  the  Commission's  word  –  "modernised". 
Nevertheless,  rather  than  talking  about  "modernisation",  the  EESC  would  prefer  to  use  the  term 
"improving quality and efficiency". 

What  is  important  is  not  to  keep  up  with  one  particular  trend  or  another  or  to  adopt  the 
Commission's42  approach  of  linking  modernisation  to  outsourcing  public  service  obligations  to  the 
private sector. Instead, what is needed is to regularly adapt service provision to the social needs of the 
public and of local and regional authorities, as well as to technical and economic progress and to new 
requirements arising from the general interest. . 

The EESC regrets that in the communication in question, the Commission excludes health services, 
contrary  to  what it  had  previously  stated, at a  time  when  there  is  so  much  interaction  and  so  many 
synergies between social services and health services. The question what is the link between health 
services and related services such as social services and long-term care? that the Commission asks in 
its consultation document of 26 September 2006 regarding Community action on health services and 
to  which  it  would  like  a  response  by  31  January  2007,  should  thus  have  been  asked  before  the 
decision was taken on social services alone. 

In the absence of any explanatory note, this course of action appears incomprehensible, particularly 
because in the list of what are to be considered social services, the Commission specifically includes 
activities to integrate persons with long-term health or disability problems. 

To date, health services, which are obliged to provide universal access to high-quality care and which 
operate on the basis of the solidarity principle, have always been considered to be social policy tools, 
on a par with services providing personalised social care. 

Specific comments 

Description of social services of general interest 

In  line  with  the  observations  made  in  point  4.5,  the  EESC  accepts  the  description  of  the  specific 
characteristics of social services of general interest proposed in the communication. This description 
is  broadly  formulated  and  open-ended,  which  leaves  sufficient  room  to  take  account  of  future 
developments in this sector. 

The EESC welcomes the communication's reference to the particular role of services to the individual 
in  exercising  fundamental  rights,  which  highlights  the  importance  and  the  raison  d'être  of  social 
services. 

is 
The  communication's  description  of  the  common  framework's 
nevertheless confined to the most common cases. The EESC would suggest that schemes vary from 

implementing  conditions 

42

COM(2006) 177 final, point 2.1(3). 

 
 
 
 
 
 
 
 
 
 
 
                                                      
  
- 275 - 

one  Member  State  to  another;  the  list  of  categories  (total  or  partial  delegation  of  a  social  mission, 
public/private  partnership)  does  not  always  take  account  of  these  differences.  The  EESC  therefore 
welcomes the planned public consultation as an important means of learning more about the activities 
of social services and their operating methods. 

The EC internal market and competition rules 

The  EC  Treaty  gives  Member  States  the  freedom  to  define  missions  of  general  interest  and  to 
establish the organisational principles for providers entrusted with the task of accomplishing them. 

However, when exercising this freedom (which must be done transparently and without misusing the 
concept  of  general  interest),  the  Member  States  must  take  account  of  Community  law  and  must 
respect  the  principle  of  non-discrimination  and  the  Community  legislation  on  public  contracts  and 
concessions when organising a public service, including a social service.  

Moreover,  when  it  comes  to  services  that  are  considered  to  be  of  an  economic  nature,  the 
compatibility  of  their  organisational  arrangements  with  other  areas  of  Community  law  must  be 
ensured  (in  particular  freedom  to  provide  services  and  freedom  of  establishment,  and  competition 
law). 

According  to  Community  case  law,  almost  all  services  provided  in  the  social  sphere,  with  the 
exception of solidarity-based social security schemes, can be considered to be economic activities. 

The  consequence  of  the  ECJ's  broad  definition  of  what constitutes an  economic  activity,  which  has 
been accepted by the European institutions43, is that Community competition and internal market rules 
(such  as  State  aid,  the  free  provision  of  services,  the  right  of  establishment  and  the  "public 
procurement"  directive  as  well  as  secondary  legislation)  increasingly  apply  to  social  services  of 
general interest, which is creating growing uncertainty amongst public authorities, service providers 
and users. This situation, if it continues, could alter the objectives of SSGI, despite them being central 
to the "European social model". 

The underlying aims and principles of the Community framework for services of general economic 
interest reflect a rationale that is based essentially on models of economic performance. This is not the 
rationale generally applied to SSGI and is thus not relevant or applicable in this form to the reality of 
social services in the European Union.  

43

In its 2000 Communication, the European Commission thus wrote that "according to the case law of the Court of Justice, many 
activities conducted by organisations performing largely social functions, which are not profit-oriented and which are not meant 
to engage in industrial or commercial activity, will normally be excluded from the Community competition and internal market 
rules" (point 30). The Communication of 26 April 2006, however, states that "almost all services offered in the social field can be 
considered  “economic  activities”  within  the  meaning  of  Articles  43 and 49  of the  EC  Treaty".  See  also  the  EESC  opinion  on 
"Private not-for-profit social services in the context of services of general interest in Europe" - OJ C311, 7.11.2001, p. 33. 

 
 
 
 
 
 
 
 
 
 
                                                      
  
- 276 - 

As the EESC stated in its opinion on The future of services of general interest (CESE 976/2006), 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 economic and non-economic. Similarly, a service can be economic 
without  the  market  necessarily  being  in  a  position  to  provide  that  service  in  a  manner  which  is 
consistent with the principles governing SGI. 

Furthermore,  in  the  case  law  of  the  European  Court  of  Justice,  the  concept  of  economic  activity  is 
extremely broad, because it considers an economic activity to be any activity consisting of supplying 
goods  and  services  in  a  given  market  by  an  undertaking,  regardless  of  the  legal  status  of  the 
undertaking and the way in which it is financed (see the Höfner and Elser judgment of 1991 and the 
Pavlov judgment of 2000) and it considers that this concept applies regardless of whether the operator 
intends to make a profit (Ambulanz Glöckner judgment of 2001). 

The ECJ and the European Commission attach increasing importance to the economic nature of SGI 
but  are  not  counterbalancing  this  by  recognising  or  offering  guarantees  for  the  general  interest 
missions carried out by these services, which creates a number of legal uncertainties for operators and 
beneficiaries. We are therefore moving from general interest towards profitable interest, whereas the 
distinction  to  be  made  is  not  whether  or  not  a  service  is  'economic'  but  rather  whether  or  not  it  is 
"profitable". 

A stable and transparent legal framework 

The  EESC  doubts  that  the  flexibility  which  the  Commission  claims  exists  in  the  application  of  the 
Treaty  as  regards  recognition  of  the  specific  characteristics inherent  in  missions  of  general  interest, 
pursuant to Article 86(2) in particular, is sufficient to allay all legal concerns and to guarantee social 
services for all. The same applies to the open method of coordination. 

All  services  of  general  interest,  including  SSGI,  have  a  role  to  play  in  implementing  Community 
objectives as defined in Articles 2 and 3 of the Treaty, in particular to achieve a high level of social 
protection, to raise the standard of living and quality of life, to attain a high level of health protection 
and to strengthen economic, social and territorial cohesion. 

Consequently,  the  Union,  which  is  responsible  for  achieving  these  aims,  is  also  responsible  for  the 
implementing  instruments  which  are,  where  fundamental  rights  and  social  cohesion  are  concerned, 
economic  or  non-economic  SGI.  The  EU  must  therefore,  with  due  respect  for  the  principles  of 
subsidiarity and proportionality and in conjunction with the Member States, safeguard and contribute 
to the existence of SGI that are accessible, affordable and of high quality for everyone.  

Given  the  problems  of  producing  an  exhaustive  definition  of  the  concept  of  SGI/SGEI  on  the  one 
hand  and  the  given  the  risk  entailed  in  adopting  a  restrictive  approach  on  the  other,  the  distinction 
between  economic  and  non-economic  should  be  dropped  in order to  focus instead  on the  particular 

 
 
 
 
 
 
 
 
 
- 277 - 

mission of the services in question and on the requirements (public service obligations) imposed on 
them for the performance of their duties and which should be clearly established. 

Furthermore, the great diversity of situations, rules and national or local practices, and the obligations 
on  managers  or  public  authorities,  mean  that  the  rules  to  be  implemented  must  take  account  of  the 
specific characteristics of each Member State. 

It is not, therefore, a question of deciding what is economic or not, but of deciding which services are 
covered by the competition and internal market rules and which services, for reasons of the general 
interest and in the interests of social, territorial and economic cohesion, in line with the principle of 
subsidiarity,  should  be  exempted  from  these  rules  by  Community  (for  European  SGI),  national, 
regional or local authorities. 

As the EESC44 has been urging for years, common benchmarks for services of general interest must 
therefore be defined at Community level, as well as common standards (in particular for management 
and financing methods, the principles and limits of the Community's action, independent performance 
evaluation,  consumer  and  user  rights,  a  minimum  level  of  public  service  missions  and  obligations) 
that  should  apply  to  all  services  of  general  interest,  including  SSGI,  to  be  set  out  in  a  framework 
directive  adopted  under  the  co-decision  procedure,  whereby  a  Community  framework  can  be 
established which reflects their specific characteristics, in order to complement the services directive. 

In order to ensure that the general interest mission is fulfilled in a non-discriminatory and transparent 
manner and is not abused, Member States should explain why these services are in the general interest 
and in the interests of social, territorial and economic cohesion in an official legal act of "delegation" 
or equivalent and in authorisation rules, setting out the mission that the competent public authority of 
a given Member State entrusts to service providers for providing an SGI and which lays down their 
rights  and  obligations,  without  prejudice  to  the  right  of  initiative  conferred  on  operators  by  the 
regulations. 

This act (in the form of legislation, a contract, agreement, decision, etc.), could, in particular, detail: 

-  
the nature of the specific mission of general interest, the related requirements and attendant 
public  service  obligations,  including  pricing,  the  provisions  to  ensure  continuity  of  service  and  the 
measures to avoid potential interruptions in service provision; 
-  
-  

the rules for drawing up and, if necessary, amending the official act; 
the authorisation and professional qualifications arrangements; 

44

EESC Exploratory opinion on "Services of general interest" – OJ C241, 7.10.2002, p. 119. 

EESC Opinion on the "Green Paper on Services of General Interest" – OJ C80, 30.03.2004, p. 66. 

EESC Opinion on the Communication from the Commission to the European Parliament, the Council, the European Economic 
and Social Committee and the Committee of the Regions on the White Paper on services of general interest – OJ C221, 8.9.2005, 
p. 17. 

EESC Opinion on The future of services of general interest – OJ C309, 16.12.2006, p. 135. 

 
 
 
 
 
 
 
 
                                                      
  
 
 
 
- 278 - 

the  funding  methods  and  the  models  for  calculating  compensation  for  the  costs  incurred  in 

-  
accomplishing specific missions; 
-  

the arrangements for evaluating the implementation of SGI. 

The  EESC  recommends  adopting  a  specific  legal  framework  that  is  common  to  social  services  and 
health services of general interest, as part of an overall approach in the form of a framework directive 
for  all  services  of  general  interest.  This  should  help  to  ensure  the  appropriate  legal  stability  and 
transparency for SSGI at Community level, in strict compliance with the principle of subsidiarity and 
in particular with the powers of local and regional authorities to define the missions, management and 
funding of these services. The principles set out in this legal framework should form the basis for the 
EU's stance in international trade negotiations. 

Evaluation 

The White Paper on services of general interest set particular store by an evaluation of social services 
of general interest, by means of a mechanism to be clarified in a future communication. 

In order to enhance mutual information and exchanges between European operators and institutions, 
the  Commission  proposes  a  procedure  involving  follow-up  and  dialogue,  in  the  form  of  biannual 
reports. 

In  this  context,  the  EESC  recalls  its  proposal  that  an  independent  monitoring  centre  be  set  up  to 
evaluate  services  of  economic  and  non-economic  general  interest,  with  a  membership  consisting  of 
representatives of the European Parliament and the Committee of the Regions and representatives of 
organised civil society from the European Economic and Social Committee. 

At national, regional and local level, the public authorities should involve all stakeholders, providers 
and beneficiaries of social services, the social partners, bodies working in the social economy and to 
combat  exclusion,  etc,  in  regulating  SSGI  at  all  stages,  in  other  words,  in  establishing,  monitoring, 
and implementing quality standards and ensuring their cost-effectiveness. 

This  monitoring  centre  should  comprise  a  steering  committee,  which  will  define  the  aims  and  the 
terms  of  reference  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. 

 
 
 
 
 
 
 
 
 
 
 
- 279 - 

Glossary 

Social and health services of general economic interest 

Services  of  general  economic  interest  that  discharge  a  specific  general-interest  mission  for  a  social 
and/or health-related purpose defined by the competent authorities in the Member States 

Economic activity 

An activity consisting of the supply of services in a given market by an undertaking or by a not-for-
profit or charitable organisation irrespective of its legal status or the means whereby it is financed 

Competent authority 

Any public authority in a Member State that is responsible for organising the provision of social and 
health services or for entrusting providers to discharge a specific mission of general interest, or any 
body invested with such responsibility by a public authority 

Provider of social and/or health services of general economic interest 

-  Any undertaking or group of undertakings established under public or private law and tasked by a 
competent  authority  with  the  provision  of  social  and/or  health  services  of  general  economic 
interest; or  

- 

- 

any public, public-private or private not-for-profit body created specifically to meet social and/or 
health-related general-interest needs; or 

any  private  not-for-profit  and/or  charitable  body  recognised  by  a  competent  authority  as 
discharging a social and/or health-related general-interest on its own initiative 

In-house provider 

A provider over which the competent authority in a Member State exercises a dominant influence and 
a comprehensive level of supervision, comparable to that exercised over its own services, and whose 
geographical area of responsibility is restricted to that of the competent authority 

External provider 
A  provider  over  which  the  competent  authority  in  a  Member  State  exercises  neither  a  dominant 
influence nor a comprehensive level of supervision comparable to that exercised over its own services 

 
 
 
 
 
- 280 - 

Specific general-interest mission for a social and/or health-related purpose 

A  task  specifically  concerned  with  the  provision  of  social  and/or  health  services,  as  defined  by  a 
competent authority in a Member State, and directed at meeting a social need 

Public-service obligation 

A  requirement  or  set  of  requirements  defined  by  a  competent  authority  in  a  Member  State  and 
determined in conjunction with a provider, by means of an official document, to ensure the discharge 
of a specific general-interest mission 

Authorisation system as a means of imposing a public-service obligation 

A procedure defined by the competent authority in a Member State, under which a provider is required 
to take steps in order to obtain from a competent authority a formal act of entrustment, or an implied 
decision, concerning the exercise of a social and/or health-related service activity of general economic 
interest,  and  the  object  of  which  is  to  ensure  the  proper  discharge  of  the  specific  general-interest 
mission  and/or  to  correct  an  imbalance  of  information  between  the  beneficiary  of  a  service  and  its 
provider 

Exclusive right 

A  right  granted  by  a  competent  authority  in  a  Member  State  to  a  provider  of  social  and/or  health-
related services of general economic interest, entitling that provider to discharge social and/or health-
related services in a given geographical area to the exclusion of other potential providers 

Special rights 

Rights granted by a competent authority in a Member State to a number of providers of social and/or 
health-related  services  of  general  economic  interest,  entitling  those  providers  to  discharge  social 
and/or  health-related  services  in  a  given  geographical  area,  through  the  introduction  of  an 
authorisation  system  as  a  means  of  imposing  a  public-service  obligation  in  order  to  ensure  the 
discharge of a specific mission 

Direct entrustment 

The entrustment by a competent authority in a Member State of a specific general-interest mission to 
a given provider without any formal prior procedure opening the mission to competition by inviting 
tenders in accordance with public procurement provisions 

Official act of entrustment 

One  or  more  legally  binding  documents  that  demonstrate  the  existence  of  an  agreement  between  a 
competent  authority  in  a  Member  State  and  one  or  more  providers  for  the  purpose  of  tasking  the 
provider or providers with the provision of social and/or health-related services of general economic 
interest,  acknowledging  that  the  provider  or  providers  have  a  right  of  initiative  in  that  regard,  or 

 
 
- 281 - 

officially  recognising  that  the  provider  or  providers  effectively  discharge  the  specific  mission  of 
general interest. For the purposes of this legislation, and in accordance with the rights of the Member 
States, such documents may also consist of: 

-   a decision adopted by competent authorities in the Member States with the prior consent of the 
provider or providers, which may take the form of a law, regulation, contract or agreement; 

-   a  decision  adopted  by  competent  authorities  in  the  Member  States  for  the  purpose  of 
acknowledging  that  bodies  created  specifically  to  meet  needs  of  a  general-interest  character 
and/or  private  not-for-profit  bodies,  recognised  as  such,  effectively  discharge  the  specific 
mission of general interest; 

-  

the conditions attached to a decision adopted by a competent authority in a Member State, to 
the  effect  that  the  authority  will  provide  the  services  in  question  itself  or  entrust  their 
provision to an in-house provider. 

Public service compensation 

Compensation,  particularly  of  a  financial  nature,  directly  or  indirectly  granted  to  a  provider  from 
public  funds  by  a  competent  authority  in  a  Member  State  during  the  period  of  implementation  of  a 
public-service obligation, for the purpose of covering all or part of the associated costs 

Evaluation 

Analysis of the way in which a specific mission of general interest is discharged, with a view to its 
proper  performance  and  its  capacity  to  meet  the  relevant  general-interest  needs  of  a  social  and/or 
health related nature 

 
 
- 282 - 

SSGI-related websites 

•  Social Protection Committee, first consultation 

http://ec.europa.eu/employment_social/social_protection/docs/questionnaire_en.pdf 
http://ec.europa.eu/employment_social/social_protection/answers_en.htm 

•  Social Protection Committee, second consultation 

http://ec.europa.eu/employment_social/social_protection/docs/questionnaire2_en.pdf 
http://ec.europa.eu/employment_social/social_protection/docs/feedback_report_en.pdf 

•  European Commission, Employment DG SSGI resources site  

http://ec.europa.eu/employment_social/social_protection/questionnaire_en.htm 

•  European Commission, General Secretariat SGI-SSGI site 

http://ec.europa.eu/services_general_interest/index_en.htm 

•  Scad Plus on SSGIs and SGIs 

http://europa.eu/scadplus/leg/en/lvb/l33230.htm 
http://europa.eu/scadplus/leg/en/lvb/l26087.htm 
http://europa.eu/scadplus/leg/en/lvb/l23013.htm 
http://europa.eu/scadplus/leg/en/lvb/l23013b.htm 

•  SSGI Collective site 

http://www.ssig-fr.org 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The members of the SSGI Collective 

- 283 - 

Association Nationale pour la formation professionnelle des adultes (AFPA) 

www.afpa.fr 

Since 1949, the Association nationale pour la Formation Professionnelle des Adultes (AFPA) has led 
the way in France in skills development for groups of job seekers for whom access to employment is 
particularly  difficult.  The  Association  forms  part  of  the  Public  Employment  Service,  alongside 
Government services, the ANPE and the UNEDIC. 

The AFPA’s primary aim is to improve skills, both among job-seekers, in order to promote integration 
through  employment,  and  among  people  already  in  work,  in  order  to  ease  processes  of  economic 
transition. 

Working  with  representatives  of  the  construction  trade,  the  public  works  sector,  industry  and  the 
services  sector,  it  designs  specially  tailored,  practice-based  training  systems  for  unqualified  adults, 
which can make them employable within a short period of time by enabling them to obtain vocational 
qualifications at levels ranging from basic tradesperson to advanced technician. 

In 2006, the AFPA offered advice and guidance to a total of 266 000 people, and provided training or 
skills-recognition courses for 160 000. It also provided 3.7 million overnights in its dedicated centres 
and served 4.5 million meals. 

The French Government and regional councils should use the current debate about social services of 
general  interest  as  an  opportunity  to  officially  acknowledge  the  AFPA’s  work  and  to  establish  its 
social usefulness, thus enabling it to pursue its contribution to social and territorial cohesion. 

AFPA, 13 Place du Général de Gaulle, 93100 Montreuil   Telephone: 0148705050   Fax: 0148703829 

European Centre of Enterprises with Economic Participation (CEEP) France 

www.ceep-france.org 

Set up in 1965, the French section of the CEEP currently has 37 members, representing undertakings 
tasked  with  the  development  and  administration  of  services  of  general  interest,  including  network 
services, local services and social and health services. 

The work of CEEP France is geared to three priorities:  
(cid:2)  optimising  French  participation  in  the  work  of  the  CEEP  as  a  European  social  partner,  notably 
within committees and working groups, where there is a particular opportunity to monitor and to 
contribute to Community-level debate about SGI in Europe and to be part of the European social 
dialogue; 
conveying  the  CEEP’s  views  and  opinions  to  public  authorities,  partner  bodies  and  the  French 
media; 

(cid:2) 

 
 
 
 
 
 
 
 
 
 
 
- 284 - 

(cid:2)  developing interaction and exchanges of information among its members with regard to European 
news about services of general interest and issues associated with the European social dialogue. 

Because  its  membership  has  doubled  over  the  last  five  years  and  spans  the  full  range  of  general-
interest service activities, CEEP France is particularly well represented among the CEEP membership 
of committees and working groups, particularly in the energy, transport and social housing sectors and 
in local development, including development financing.  

CEEP France, 46 Rue Notre-Dame des Victoires, 75002 Paris 
Telephone: (33)1 53 32 22 61   e-mail: delegue-general@ceep-france.org 

FAPIL, a network promoting housing for all 

www.fapil.net 
The  Fédération  des  Associations  pour  la  Promotion  et  l’Insertion  par  le  Logement  (FAPIL),  is  a 
network of more than 90 organisations (including associations, social-economy bodies and cooperative 
societies) working to promote a universal right to suitable housing. 

As a network for a range of initiatives, it works to make the right to housing a reality by: 
(cid:2)  promoting access to housing and the concept of keeping people in their homes when economic or 

social changes make them vulnerable; 
extending and diversifying the range of housing solutions; 
influence the provision of housing; 
involving those affected in identifying solutions. 

(cid:2) 
(cid:2) 
(cid:2) 

By  offering  advice  and  guidance  to  wide  range  of  people,  supporting  individuals,  managing  rented 
accommodation on a regular and a short-term basis, providing properties that meet specific needs and 
assisting co-ownership schemes in difficulty, FAPIL’s member organisations work to: 
(cid:2) 
(cid:2)  help people access their entitlements; 
(cid:2)  promote a mixed urban and social environment. 

combat discrimination; 

FAPIL has a further role as a forum for exchange and discussion, where new approaches and tools can 
be  developed  collectively.  To  that  end  it  organises  all-day  events  for  professionals,  forums  and 
workshops, and produces experience-based reports and survey findings. 

FAPIL is, in turn, a member of other networks, namely: 

Alerte,  the  Union  Nationale  Interfédérale  des  Œuvres  et  Organismes  Privés  Sanitaires  et  Sociaux 
(UNIOPSS),  the  European  Federation  of  National  Associations  Working  with  the  Homeless 
(FEANTSA),  the  European  Anti-Poverty  Network  (EAPN)  and  the  Housing  International  Coalition 
(HIC). 

FAPIL, 133 Rue St Maur, 75011 Paris   Telephone: 01.48.05.05.75   Fax: 01.48.05.32.65 
e-mail: contact@fapil.net  

 
 
 
 
 
 
 
 
 
- 285 - 

Fédération des Etablissements Hospitaliers et d’Assistance Privés à but non lucratif (FEHAP) 

www.fehap.fr 

In  1936,  the  Fédération  des  Etablissements  Hospitaliers  et  d’Assistance  Privés  à  but  non  lucratif 
(FEHAP) represented only a handful of privately run, not-for-profit health and welfare establishments 
but it has developed steadily and by 2006 it enjoyed the confidence of 2 900 member establishments. 
New members join the Federation every year and it is recognised as a standard-setter in the private, 
not-for-profit health, social and medicosocial sector. 

In 2006, FEHAP member establishments offered a total of 190 000 beds or places, and employed more 
than 185 000 people (full-time equivalence). FEHAP is attentive to its members’ concerns and works 
through  23  regionally  based  subsections.  Its  membership  includes  hospitals,  care  and  convalescent 
centres, residential facilities for children, people with disabilities and the elderly and a range of social 
services including child protection, provision of sheltered accommodation and halfway houses. 

Many different types of organisation, with different types of status, have joined the Federation: they 
range very widely and include associations, mutual organisations, trusts and faith-based groups. Their 
shared aim is to provide a high-quality service on a not-for-profit basis. 

FEHAP’s missions:  

(cid:2)  Providing information 
FEHAP  keeps  its  membership  informed,  on  a  regular  basis,  about  developments  in  the  sector, 
changing and innovative practice within its network. 

(cid:2)  Lobbying 
As a body officially recognised by the public authorities, FEHAP takes part in Ministry of Health and 
Solidarity pilot projects with a view to consolidating its members’ position in the healthcare system. 

(cid:2)  Negotiating 
Since  the  establishment  of  a  national  collective  bargaining  system  (the  Convention  collective 
nationale)  on  31  October  1951,  FEHAP  has  played  a  key  role  in  negotiations  and  in  shaping  its 
members’  policy  on  wages.  It  is  a  founder  member  of  UNIFED,  the  Union  des  fédérations  et  des 
syndicats  nationaux  sans  but  lucrative  de  la  branche  professionnelle  sanitaire,  sociale  et  medico-
sociale. 

(cid:2)  Advising 
FEHAP  promotes  and  develops  the  ideas  of  its  members  within  many  national-level  committees 
specialising in particular fields of activity. 

 
 
 
 
 
 
 
 
 
 
 
- 286 - 

(cid:2)  Training 
Throughout  the  year,  FEHAP  offers  a  wide  range  of  training  courses  leading  to  qualifications.  In 
partnership  with  a  number  of  universities  and  the  Institut  de  Formation  Supérieure  des  cadres 
dirigeants, it issues specialist post-graduate diplomas (level I and II Master’s degrees in research and 
vocational studies – formerly the DESS and DEA) to trainees from within its membership. 

FEHAP, 179, Rue de Lourmel, 75015 Paris   Telephone: 01.53.98.95.00   Fax: 01.53.98.95.02 

Fédération Hospitalière de France (FHF) 

www.fhf.fr 

Established in 1924, the Fédération Hospitalière de France (FHF) comprises more than 1 000 public 
healthcare establishments (hospitals) and a similar number of medico-social institutions (homes for the 
elderly and specialised, independent care homes), i.e. virtually the entire public health and social care 
sector. The legitimacy conferred by its strong base and its national dimension make the FHF a major 
player  in  French  healthcare,  and  its  cross-party  character,  evident  in  the  composition  of  its  board, 
means that its views carry all the more weight. 

The  FHF  is  active  on  three  fronts,  promoting  its  values,  providing  information  and  representing  its 
membership: 

•  Promoting the concept of public hospitals and medicosocial establishments 
The  FHF  promotes  the  culture  and  values  of  the  public  hospitals  and  medicosocial  service  by 
organising  two  major  events  on  a  year-about  basis:  the  Forum  de  l’Hôpital  Public,  as  part  of  the 
Hôpital  Expo  –  Intermédica  exhibition  and  the  Forum  des  Professions  de  la  gérontologie  et  du 
handicap, at the Géront Expo-Handicap Expo exhibition. 

The FHF defends the interests of the public hospitals service and promotes its values through its press-
relations work and its liaison with opinion formers. 

Information for those who work in the sector 

• 
The FHF plays an advisory role in relation to many practical problems that arise on a daily basis in 
public healthcare and medicosocial establishments. 

Hospitals can seek its advice at any time on issues as wide-ranging as human resources, finance, legal 
responsibility or the organisation of health and social-care provision. 

The  FHF  has  a  website  (www.fhf.fr)  which  carries  a  series  of  professional  papers.  It  also  produces 
two  publications  for  health-sector  professionals  (La  Revue  hospitalière  de  France  and  Techniques 
hospitalières) as well as a series of practical guides for hospital staff. 

 
 
 
 
 
 
 
 
 
 
 
 
- 287 - 

•  Representing member establishments 
The  FHF  sends  representatives  to  many  major  national  committees.  It  is  also  represented  on 
administrative bodies responsible for the running of particular establishments. 

Through its participation in various relevant bodies, it also promotes a human-resources policy centred 
on staff development. 

The  FHF  is  particularly  active  internationally.  It  currently  holds  the  presidency  of  the  International 
Hospital  Federation  (IHF),  representing  hospitals  throughout  the  world.  It  is  also  a  member  of  the 
board of the HOPE, the European Hospital and Healthcare Federation. 

Since it came into being, the FHF has exerted influence on hospitals-related legislation. It continues to 
play  a  think-tank  role,  bringing  forward  proposals  and  consulting  with  the  public  authorities  on  all 
major  reform  initiatives.  It  is  a  constructive  partner  in  relation  to  new  developments  and  projects, 
while taking a firm stance in defence of public hospitals and medicosocial establishments. 

Fédération Hospitalière de France, 33 Avenue d'Italie, 75013 Paris 
Telephone: 01.44.06.84.44   e-mail: fhf@fhf.fr 

Fédération nationale des associations d'accueil et de réinsertion sociale (FNARS) 

www.fnars.org 

The national network of associations affiliated to FNARS perform a genuinely public-service mission, 
running facilities and services that offer shelter, accommodation, vocational and social integration and 
access to  housing  and employment  to  all  individuals and  families in  serious  social  distress,  whether 
temporary  or  long  term,  or  situations  of  urgency.  Active  at  both  national  and  regional  level,  the 
organisations offer a range of integration-based solutions. 

FNARS  is  a  federation  of  independent  bodies  and  associations  driven  by  a  common  commitment  to 
help  the  most  disadvantaged  groups  in  society  and  to  promote  social  change  with  a  view  to  ending 
exclusion. It is not a think-tank or a philosophical or political grouping. 

The membership of FNARS includes both locally based organisations and national associations. Their 
day-to-day work involves meeting and supporting people in serious social difficulty (many of whom 
have been directed to FNARS member bodies by the Social Services). 

The membership of FNARS comprises 750 associations and public bodies throughout France, which 
together manage almost 2 200 facilities and services, including: 
(cid:2) 

advice  and  guidance  services,  day  centres,  emergency  services,  telephone  helplines  (115  and 
"numéro vert"); 
emergency  accommodation,  mothers’  centres,  basic  living  quarters,  hostels,  temporary  and 
sheltered accommodation, rented accommodation for families and halfway house facilities; 
rehousing services, housing support services, rolling programmes of construction; 

(cid:2) 
(cid:2)  workshops, job-seekers’ support services, neighbourhood-based services, job-creation companies 

(cid:2) 

 
 
 
 
 
 
 
 
 
 
- 288 - 

and schemes; 
training organisations, skills assessment centres; 
care and convalescent facilities; 

(cid:2) 
(cid:2) 
(cid:2)  general-interest  services,  work  placement  schemes,  judicial  supervision,  mediation  in  criminal 

cases; 

(cid:2)  minimum  integration  income  investigation  service,  follow-up  services,  childcare  centres,  crèches, 

family mediation etc. 

FNARS, 76 Rue Faubourg Saint Denis, 75010 Paris 

Fédération nationale des PACT ARIM 

www.pact-arim.org 

The PACT movement came into being  more than 50 years ago when groups of volunteers, many of 
them  young  people,  mobilised  to do  something  about  the  deplorable  conditions of  many  families  in 
France. 

The  Federation  of  PACT  Centres  was  set  up  in  1951  by  four  PACTs  (in  Lyon,  Lille,  Dijon  and 
Marseille) to lobby for urgent action and appropriate legislation on sub-standard housing. 

In 1967, still pursuing its original aims, the movement began to set up Associations de Restauration 
Immobilière (ARIMs) to take PACT initiatives out into different neighbourhoods. The movement has 
changed  and  developed  over  the  years  in  terms  of  staffing  and  organisation,  becoming  increasingly 
institutionalised as  its associations  began  to  operate  on  a  professional basis  at  département  [county] 
level, and PACTs and ARIMs merged following France’s first wave of devolution in 1982. At the same 
time it took on responsibility for private-sector housing improvement and neighbourhood regeneration 
as part of public housing policy. 

The PACT ARIM movement in figures 
In 2004, according to the Movement’s own activity monitoring, it was responsible for: 
(cid:2)  95 000 improved homes; 
(cid:2)  9 700 households assisted; 
(cid:2)  1 335 agreements with local authorities; 
(cid:2)  management of 13 700 transitional accommodation units; 
(cid:2)  ownership of 7 500 housing units; 
(cid:2)  provision of 540 social housing units. 

These activities are a practical reflection of the PACT ARIM Movement’s aims: to provide affordable 
rented accommodation throughout the country, to adapt housing to people’s needs and ways of life, to 
combat substandard housing and to realise a right to housing. 

FNC PACT ARIM, 27 Rue de La Rochefoucauld, 75009 Paris 
Telephone: 01 42 81 97 70   Fax: 01 40 23 93 06 

 
 
 
 
 
 
 
 
 
 
Fédération des Sociétés d’Economie Mixte (FNSEM) 

- 289 - 

www.fedsem.fr 

Established in  1956, the  Federation  of  SEMs (mixed-economy  companies) is  run  by  a  board,  which 
since 1978 has included elected representatives from  France’s four main political groups (the UMP, 
PC, UDF and PS), accounting for two thirds of the membership, with the remaining third comprising 
representatives  of  other  non-local-authority  stakeholders,  a  representative  from  each  of  the  two 
associations of directors of SEMs and three regional representatives or suitably qualified individuals. 
The presidency, for a three-year term, revolves among the political groups. 

The  first  concern  of  the  FNSEM  in  all  its  work  is  to  respond  effectively  to  the  needs  of  the  1 158 
mixed-economy  companies  that  it  currently  represents.  Its  activities  are  supported  and  guided  by  a 
membership  numbering  more  than  736,  and  it  has  23  regional-level  associations  covering  the  entire 
country. 

The  Federation  promotes  the  mixed  economy  at  local  and  national  level,  engaging  in  awareness-
raising activities directed at French public authorities, the European institutions, local government and 
public  and  private  partner  bodies.  It  is  the  driving  force  of  the  local  mixed-economy  movement, 
regularly publishing general information bulletins, in-depth analyses and quantitative studies about the 
work and functioning of SEMs and changes in their operating environment. 

The Federation also provides a permanent general service to its members, offering support and making 
recommendations. 

FNSEM, 46 Rue Notre Dame des Victoires, 75002 Paris 

Mutualité Fonction Publique (MFP) 

www.mfp.fr 

"Public-service mutual associations lead the way in the world of mutual insurance. They manage the 
compulsory health insurance scheme (for public employees) on a basis of statutory delegation or on 
behalf of the State health insurance offices and they pay out 35.5% of all mutual insurance benefits." 

The major union of public-service mutual associations 
The  Mutualité  Fonction  Publique  (MFP)  is  a  federation  of  34  mutual  associations  and  unions 
covering  different  categories  of  employee.  It  represents  more  than  75%  of  the  total  membership  of 
public-service mutual associations. 
A leading federation within La Mutualité Française (FNMF) 
The  MFP  protects  more than  nine  million  people  and  accounts  for over  a  quarter  of  the staff  in  the 
national  umbrella  organisation  La  Mutualité  Française.  Its  General  President,  Maurice  Duranton,  is 
the first Deputy President and an executive committee member of FNMF. 
Close cooperation across the health insurance sector 

 
 
 
 
 
 
 
 
 
 
 
- 290 - 

Given the weight of the MFP within the FNMF, its directors often represent the umbrella body on the 
boards of health insurance funds. The MFP also plays an active role on technical and policy-making 
committees  at  national,  regional  and  county  levels.  These  include:  GIE  Sésam  /  Vitale,  risk 
management  committees  and  the  Système  National  d’Information  Inter-régime  de  l’Assurance 
Maladie  (SNIIRAM).  The  MFP  is  represented  on  the  board  of  the  CNAMTS  (the  French  National 
Health Insurance Fund for Salaried Workers) through MGEN (the Mutuelle Générale de l’Education 
nationale). 

A partner for public-sector employers 
The  MFP  has  been  entrusted  by  the  State  with  the  administration  of  three  interministerial  social 
welfare  benefits  (under  Decree  no 2001-371  of  27 April  2001).  It  was  public-service  mutual 
associations  that  initiated  long-term  risk  cover  for  public  employees.  The  MFP  supports  a  well-
regarded  policy  of  employer-employee  relations  within  the  public  services  and  is  involved  in 
discussions on that subject with public-sector employers and trade unions. 

MFP, 62 Rue Jeanne d’Arc, 75640 Paris Cedex 13 
Telephone: (33) 01 40 77 87 61   Fax: (33) 01 45 83 57 76 

Mutualité française 

www.mutualite.fr  

The Fédération nationale de la Mutualité Française (FNMF) represents 2 000 mutual associations in 
France, chiefly in the complementary health insurance sector. The associations are run on a not-for-
profit basis and provide insurance cover for 36 million people. 

As  well  as  their  main  activity  of  complementary  insurance,  the  Mutualité  Française  member 
organisations  administer  compulsory  health  insurance  schemes  for  public  employees,  students  and 
members  of  the  liberal  professions.  They  also  provide  care,  through  2 000  health  and  welfare 
establishments and services. They are involved in preventive care and health promotion. 

The Mutualité Française is administered on a democratic basis. The mutual associations and regional 
and country unions are members of the National Federation, which represents them. The Federation 
links and coordinates the member groups and ensures that the principal of mutuality is respected. 

The organisational principles and operating rules of the Mutualité Française are based on observance 
of the mutual values set out in the Code de la Mutualité. 

Comprising a movement of real social utility, the mutual associations follow a number of principles 
ensuring  that  they  serve  their  members’  interests  (membership  being  voluntary).  These  are:  not-for-
profit  operation,  a  commitment  to  combating  exclusion  and  discrimination,  and  universal  access  to 
quality care. The principles are translated into specific operational approaches, including non-selection 
of risks and inter-generational solidarity. 

 
 
 
 
 
 
 
 
 
 
 
- 291 - 

Fédération Nationale de la Mutualité Française, 
255 Rue de Vaugirard, 75719 Paris Cedex 15  
Telephone: (33) 01 40 43 30 30   Fax: (33) 01 40 43 30 03 

Mutualité sociale agricole (MSA) 

www.msa.fr 

France’s  leading  occupational  social  protection  scheme,  the  Mutualité  Sociale  Agricole  (MSA) 
administers  compulsory  social  protection  for  everyone  working  in  the  farming  sector:  farmers  and 
agricultural employers, workers and their families – a total of more than 4 million people. It provides a 
single representative voice for its membership on all social-protection related issues, including health, 
family policy, retirement provision, social contributions, social measures and services. 

At  national  level  the  MSA  is  represented  by  the  Caisse  Centrale  de  MSA  [Central  MSA  Fund] 
(CCMSA)  a  private-law  entity  established for a  public-service  purpose. Through  its  own  network,  it 
contributes to the implementation of social policy for the agricultural sector as defined by the Ministry 
of Agriculture and it represents the MSA in dealings with other bodies, notably public authorities. 

Through its activities, the MSA embodies the values of the mutual movement: solidarity, responsibility 
and  democracy.  It  works  through  a  dense  network  of  regional  and  local  offices,  close  to  its 
membership and responsive to their needs. Empowered to make proposals to the public authorities and 
committed  to  innovation,  the  MSA  is  constantly  concerned  to  demonstrate  that  it  can  meet  new 
challenges in its operating environment and effectively address the needs of the agricultural population 
and rural people generally. Managed by representatives whom the members elect, the MSA is and has 
always been a key player in the development of social protection. In 2005, it initiated the creation of 
the European Network of Agricultural Social Protection Systems (ENASP). 

CCMSA, Les Mercuriales, 40 Rue Jean Jaurès, 93547 Bagnolet Cedex 
Telephone: 01 41 63 77 77   Fax: 01 41 63 72 66 

Mutuelle Générale de l’Education nationale (MGEN) 

www.mgen.fr 

As  a  leading  mutual  health-insurance  provider  in  France,  the  Mutuelle  générale  de  l’Education 
nationale  (MGEN)  manages  social  protection  for  almost  3 million  people  who  work  in  the  national 
education system, in research and in cultural, youth and sports provision. On their behalf it administers 
social  security  benefits  and/or  complementary  benefits.  Its  mutually  based  provision  ranges  beyond 
complementary health cover to include specific benefits and services for its members in various areas 
of life (daily allowances, provision for orphans, disability and dependency cover, cover for costly care, 
maternity and other contingencies, aids, loans and guarantees). With 33 healthcare and medicosocial 
establishments,  the  MGEN  offers  a  very  wide  range  of  care  and  plays  an  active  part  in  the  public 
hospital service. 

 
 
 
 
 
 
 
 
 
  
- 292 - 

A  major  player  in  the  health  sphere,  it  contributes  to  debate  on  important  social  issues,  invests  in 
research, prevention and health education and lobbies for recognition of the mutual model in Europe. 
In  January  2006,  for  example,  it  published  a  study  on  economic  missions  of  general  interest 
discharged by mutual associations in Europe, exploring their position between economic activity and 
social  service.  The  work  was  commissioned  from  the  Groupe  d’études  politiques  européennes 
(GEPE). 

With  its  strong  tradition  of  solidarity,  the  MGEN  today  is  a  standard  setter  for  the  observance  of 
ethical  values  and  supportive  practice. Meeting  the  needs of its  members  is its primary  aim  and  the 
ongoing focus of efforts by its 20 000 active supporters and some 9 000 staff. 

Since  its  establishment  in  1946,  the  MGEN  has  based  its  activity  on  two  key  values:  solidarity  and 
serving the general interest. 

Solidarity is expressed in its mutually based coverage of social risks and collective provision against 
the contingencies of life, on the principles of a common level of contribution and equal access to the 
full range of benefits. 

It  serves  the  general  interest  by  administering  social  security  for  all  the  staff  of  services  run  by  the 
government departments within its remit, and also through the establishments it runs, which are open 
to everyone covered by social insurance. 

Mutuelle générale de l’Education nationale , 3 Square Max Hymans, 75748 Paris Cedex 15 
Telephone: 01 40 47 20 20 

Union Nationale des Centres Communaux d’Action Sociale (UNCCAS) 

www.unccas.org 

Established  on  10 November  1926,  UNCCAS  –  the  Union  Nationale  des  Centres  Communaux 
d’Action Sociale – is a federation of 3 350 municipal or inter-municipal social action centres (CCAS or 
CIAS). More than 97% of French municipalities with more than 10 000 inhabitants are represented, as 
are  75%  of  those  with  5 000-10 000  inhabitants  and  1 735  municipalities  with  fewer  than  5 000 
inhabitants. Together the affiliated centres employ 82 000 local authority staff. 

legal and technical support 

The UNCCAS has a wide remit but all its efforts are centred on the provision of technical and practical 
support to the staff working at local level. Its four main areas of "strategic activity" are: 
(cid:2) 
(cid:2)  networking 
(cid:2) 
training 
(cid:2)  policy-making. 

The CCAS are public administrative establishments created under the Act of 6 January 1986 and the 
Decree of 6 May 1995 (they were formerly known as social welfare offices). Together they provide 

 
 
  
  
 
  
 
 
 
 
 
- 293 - 

110 000 places  in  care homes  and  other  forms  of  accommodation;  they  are  responsible  annually  for 
more  than  30 million  hours  of  work  by  home  helps  and  care  workers  and  the  supply  of  more  than 
80 million meals to elderly people, in day centres or at home, and to schools. 

UNCCAS, 6 Rue Faidherbe BP 568, 59208 Tourcoing (postal address) 
Telephone: 03 20 28 07 50   Fax: 03 20 28 07 51 

L'Union Sociale pour l'habitat (USH) 

www.union-habitat.org 

Founded in 1929, the Union sociale pour l’habitat is an association under the French Act of 1901. Its 
president  is  Michel  Delebarre,  a  former  Government  Minister,  Deputy  Mayor  of  Dunkirk  and 
President of the Committee of the Regions. 

Missions 
The Union sociale pour l’habitat has three missions: 

- 

- 

- 

to provide national-level representation for housing association (HLM) staff, in dealings with 
public authorities, the major institutions and the press and public; 
to research housing problems and bring forward proposals in the field of housing and urban 
development policy;  
to  inform,  advise  and  support  housing  associations,  with  a  view  to  facilitating,  rationalising 
and developing their professional activities. 

There  are  around  820  housing  associations  in  France,  with  a  total  of  73 000  staff  and  some  13 000 
voluntary administrators. Some are publicly run bodies, others are companies or cooperatives but all 
are non-profit-making. All the associations work to provide homes for low-income families, and their 
track  record  is  evident  from  their  total  stock  of  5 million  units  for  letting  or  for  sale  to  first-time 
buyers.  While  remaining  true  to  its  history  and  to  the  values  of  solidarity  and  housing  quality,  on 
which it was founded, the USH is branching out into new areas of the housing sector. As well as its 
traditional  involvement  in  construction  and  the  purchase,  management  and  financing  of  residential 
property, it is now active in urban planning and regeneration and in service provision, particularly to 
local authorities. 

L’Union sociale pour l’habitat, 14 Rue Lord Byron, 75008 Paris   Telephone:  01.40.75.78.00 

UNIOPSS 

www.uniopss.asso.fr 

The Union nationale interfédérale des œuvres et organismes privés sanitaires et sociaux (UNIOPSS) 
is an association under the French Act of 1901, recognised as being of public utility. Since 1947, it has 
had a presence throughout the country. 

 
 
 
 
 
 
 
 
 
 
 
 
- 294 -

In  2005,  it  represented  20 000  private,  not-for-profit  establishments  and  services  in  the  social, 
medicosocial  and  healthcare  sectors,  via  22  regional  unions  and  110  national  federations  or  unions 
active  in  the  protection  and  development  of  individuals,  the  administration  of  establishments  and 
services, and the promotion of social, health-related, medicosocial and socio-legal activities. 

Missions 
Organising cooperation and representation across the traditional sectors of social and health provision 
(care  of  the  elderly,  care  for  people  with  disabilities,  childcare  and  family  support,  anti-poverty 
initiatives and anti-exclusion health projects, etc.) 

Promoting the not-for-profit, solidarity-based sector in France and throughout Europe 
Defending the interests of vulnerable people in the determination of social policies and acting as a link 
between Government, local and regional authorities and the associations active in the sector. 

Values 
(cid:2)
(cid:2)
(cid:2)
(cid:2)

the primacy of the individual
the not-for-profit principle and solidarity
universal participation in the life of society
innovation in social solutions, based on the observation of needs.

UNIOPSS, 33 Rue Saint Maur, 75 541 Paris Cedex 11 
Telephone: 01 53 36 35 00   e-mail: uniopss@uniopss.asso.fr 

____________ 

Catalogue N° : QG-02-23-020-EN-N
ISBN: 978-92-895-2550-3
doi:10.2863/06655