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29th Mar 2024

Brussels turns down bids for EU law on public services

  • The provision of water - should it be subject to internal market rules? (Photo: EUobserver)

The European Commission is due to reject calls for an EU law defining public services and the ways to protect them from internal market rules, sparking the "extreme disappointment" of trade unions and social NGOs.

In a paper to be presented on Tuesday (20 November), the EU executive points out that the "Protocol on services of general interest" adopted by the bloc's leaders last month as an attachment to the new Reform treaty is a sufficient tool to deal with the sensitive area.

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"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," says the paper, seen by EUobserver.

The move means the commission will not attempt to draw up legislation listing EU-wide definitions of public services - such as health, social housing and education - and the circumstances under which they can be exempted from competition rules.

Instead, Brussels is leaving it up to member states to keep their national laws based on local traditions and cultures while at the same time clearly stating that commercial activities within the public sectors should be subject to EU competition principles.

"Now that the EU framework has been consolidated by the Protocol, it is time to focus on implementation," says the commission's paper, adding that the bloc's executive is "determined to help ensure clarity, coherence and publicity of EU rules."

Those in favour of EU legislation specifically targeting public services have been lobbying the commission to make use of its right to propose legislation precisely in order to get some legal clarity.

"It is extremely disappointing," John Monks, the secretary general of European trade unions confederation (ETUC), told EUobserver in reaction to the proposed paper.

He argued that the recently adopted EU treaty protocol does not offer enough legal clarity for public services providers. "The commission uses it as an excuse for not doing anything," added Mr Monks.

The ETUC chief is due late Monday (19 November) to hand over a petition to commission president Jose Manuel Barroso signed by more than a half million people calling for a directive on public services.

"Our aim is to achieve EU-wide rules that will protect public services from the pressure of internal market competition and from being subject to the profit motive so that those who carry them out feel they can afford to act according to ethics and public values," said Mr Monks.

Long time controversy

The EU's approach towards the public services provided in its 27 member states - sharing an internal market in both goods and services - has been a matter of controversy for some time.

The protocol on services of general interest itself was attached to the new treaty - due to be signed by EU leaders on 13 December - as a result of pressure by the Netherlands, Belgium and France, in an attempt to send a message to citizens about the special treatment of the sensitive sector.

The issue was also highlighted during the debate over the EU's general law on services adopted last year which some argue did not provide a clear definition of public interest, the key principle for distinguishing between various types of services.

Some NGOs, such as the Social Platform, an umbrella organisation for activists in the social area, pressed for such a definition, in a bid to mark the clear boundaries on where EU internal market rules apply.

Roshan di Puppo, the director of the Social Platform argues that while the idea of leaving it up to national governments to define the rules for public services "is something we agree with, the EU internal market rules often limit their competences."

"We need something to counterbalance the competition legislation and its philosophy without always just waiting for the verdicts of European courts," she noted, adding that she found it "cynical" on the part of commission to try to rapidly shut the debate on the issue.

Most services are economic, Brussels says

For its part, the EU executive defines "services of general interest" in its Tuesday paper as a broad range of activities which are "essential for the daily life of citizens and enterprises, and reflect Europe's model of society."

"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," writes the paper.

Still, it argues that "in practise, the vast majority of services can be considered as "economic activities" and subject to the EU internal market rules, adding that the best approach has been proved by specific directives for concrete sectors, such as telecommunications, energy, transport and postal services.

"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."

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