Green Paper on Services of General Interest

The aim of this Green Paper is to organise an open debate on the role of the European Union in promoting the provision of services of general interest and in defining the public interest objectives pursued by these services, and on the way in which they are organised, financed and evaluated

ACT

Commission Green Paper of 21 May 2003 on services of general interest [COM(2003) 270 final -Official Journal C 76 of 25.03.2004].

SUMMARY

Services of general interest are at the core of the political debate. They touch on the central question of the role public authorities play in a market economy, in ensuring, on the one hand, the smooth functioning of the market and compliance with the rules of the game by all actors and, on the other hand, safeguarding the general interest, in particular the satisfaction of citizens' essential needs and the preservation of public goods where the market fails.

The reality of services of general interest in the European Union is complex and constantly evolving. It covers:

• a broad range of different types of activities, from the big network industries (energy, postal services, transport and telecommunications) to health, education and social services;
• the level at which these services are provided is also highly diverse, from European or even global to purely local;
• the services are varied in nature, some market and some non-market;
• the organisation of these services varies according to historical, geographical and cultural traditions and the characteristics of the activity concerned.

In light of this complexity, the Commission is opening a debate on the role of the European Union in defining the objectives of general interest pursued by these services and on their organisation, financing and evaluation. At the same time, the Commission confirms the significant contribution of the internal market and the competition rules to improving the quality and efficiency of many public services, for the benefit of the public and for businesses. The Green Paper also takes globalisation and liberalisation into account, and raises the issue of whether a general legal framework should be established at Community level for services of general interest.

In an effort to review fully its policy on services of general interest, the Commission asks questions concerning the following issues:

• the scope of Community action on services of general interest and compliance with the principle of subsidiarity;
• the Community concept of services of general interest;
• the definition of good governance in the area of organisation, regulation, financing and evaluation of services of general interest in order to improve the competitiveness of the economy and ensure efficient, equitable and high-quality access to services;
• any measures that could coordinate the maintenance of high-quality services of general interest and the application of competition and internal market rules.

Background

Services of general interest are one of the values shared by all European societies and form an essential element of the European model of society. Their role is essential for enhancing quality of life for all citizens and for overcoming social exclusion and isolation.

Services of general economic interest are mentioned in three different provisions:

• Article 16 of the EC Treaty, which confers responsibility on the Community and the Member States to ensure that their policies enable services of general economic interest to fulfil their missions. It establishes a principle but does not provide the Community with any specific means of action;
• Article 86(2) of the EC Treaty, which implicitly recognises the right of the Member States to assign specific public service obligations to economic operators. It sets out a fundamental principle ensuring that services of general economic interest can continue to be provided and developed in the common market. Providers of services of general interest are exempted from application of the Treaty rules only to the extent that this is strictly necessary to allow them to fulfil their general interest mission. Therefore, in the event of conflict, the fulfilment of a public service mission can effectively prevail over the application of Community rules, including internal market and competition rules;
• Article 36 of the Charter of fundamental rights of the European Union, according to which the Union recognises and respects access to services of general economic interest in order to promote the social and territorial cohesion of the Union.

Since the second half of the 1980s a number of sectors in which services of general economic interest are provided (and are in some cases the principal type of service) have gradually been opened up to competition (e.g. telecommunications, postal services, transport and energy (electricity and gas)).

The European Community has always promoted "controlled" liberalisation, i.e. gradual opening-up of the market accompanied by measures to protect the general interest, in particular through the concept of universal service to guarantee access for all, whatever the economic, social or geographical situation, to a service of a specified quality at an affordable price.

The Commission has repeatedly tried to clarify the relevant Community policies:

• Communications on services of general interest [COM(1996) 443 and COM(2000) 580 - Official Journal C 281 of 26.09.1996 and Official Journal C 17 of 19.01.2001];
• Report to the Laeken European Council, "Services of General Interest" [COM(2001) 598 - Not published in the Official Journal].

RELATED ACTS

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, of 12 May 2004, entitled "White Paper on services of general interest" [COM(2004) 374 final - Not yet published in the Official Journal] The Commission has identified a number of guidelines in the area of services of general interest, in order to ensure a coherent policy in this area. This White Paper follows a wide-ranging public consultation, launched by a Green Paper on the role of the European Union in ensuring the provision of high-quality services of general interest to consumers and businesses in Europe. It concludes that, at present, it would not be appropriate to propose a framework directive on this subject, and suggests that the Commission re-examine the matter at a later stage.

European Parliament Resolution of 13 January 2004 on the Green Paper on services of general interest [A5-0484/2003].

The European Parliament welcomes the publication of the Commission's Green Paper and asks the Commission to present a follow-up by April 2004 at the latest. It believes that certain services of general interest should be excluded from the scope of competition rules, such as health and education, social housing and services of general interest which are intended to maintain or increase pluralism of information and cultural diversity. Parliament also asks the Commission to defend this position in negotiations within the WTO relating to the General Agreement on Trade in Services. It considers that it is neither possible nor relevant for common definitions of services of general interest, or of the public-service obligations resulting from them, to be drawn up, but that the European Union must establish common principles, such as universality and equality of access, continuity, security, adaptability, quality, efficiency, affordability, transparency, protection of disadvantaged groups, protection of users, consumers and the environment, and participation of citizens, taking into account circumstances specific to each sector. Parliament also stresses the need to ensure that competition rules are compatible with public-service obligations and states clearly that it is against the liberalisation of water supply. Parliament believes that water and waste services should not be subject to EU sectoral directives but stresses that the Union should retain full responsibility for these sectors as regards quality and environment protection standards.

Last updated: 24.08.2004