March 2007
Public services - known in European Union jargon as services of general interest (SGIs) or services of general economic interest (SGEIs)- fulfil people's daily needs and are vital to their well being. The quality of citizen's lives depends on these services, which are essential for sustainable economic development and social and regional cohesion in Europe. For this reason the ETUC regards universal access to public services to be a fundamental right, and a pillar of the European Social Model.
The ETUC believes that services in the EU need clear rules, to ensure continuity of supply and fair access for everyone. SG(E)Is must be of the highest standard, accessible to everyone at an affordable price, and subject to democratic control and accountability involving both consumers and workers in these crucial sectors.
That is why the ETUC is calling for the European Commission to propose a framework directive to safeguard these services and enable them to evolve and modernise. In support of this demand, in November 2006, the ETUC launched a campaign to collect 1 million signatures to a [petition->http://www.petitionpublicservice.eu
] demanding 'High quality public services, accessible to all'.
What are services of general interest?
Public services differ from other services in that public authorities have a responsibility to ensure their supply regardless of whether they are profitable in a free market. Although SG(E)Is are difficult to define precisely because of variations between one Member State and another, they cover, for example, water, energy supply and waste disposal, healthcare and social services, education and postal deliveries.
The distinction between SGIs and SGEIs is equally hard to pin down, and is also subject to interpretation by the European Court of Justice("any activity consisting in offering goods and services on a given market is an economic activity"). Generally, SGIs could be defined as those provided directly by public authorities, such as compulsory education and security, whereas SGEIs entail an economic relationship of some sort between supplier and consumer.
Since the late 1980s, the Commission has pursued a policy of market-opening to create competition in sectors such as telecommunications, transport, electricity and gas. Often, liberalisation has had the effect of replacing single, public monopolies with a large group of private quasi-monopolies. Furthermore, liberalisation and outsourcing have tended to reduce the accessibility and quality of public services, and has not always benefited consumers.
For example, the Commission has adopted a series of measures to bring about the progressive liberalisation of postal services. It has just taken a further step towards total liberalisation, opening these services up to free competition from 1 January 2009, without taking care to safeguard a universal service, accessible to all.
How are SG(E)Is recognised in the EU?
The Treaty establishing the European Community(TEC) specifically recognises that services of general economic interest have a public service mission that distinguishes from other commercial services within the single market.
Article 16 states:
....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 Community 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 which enable them to fulfil their missions.
Article 86 (2) states:
Undertakings entrusted with the operation of services of general economic interest or having the character of a revenue-producing monopoly shall be subject to the rules contained in this Treaty, in particular to the rules on competition, insofar as the application of such rules does not obstruct the performance, in law or in fact, of the particular tasks assigned to them[[Bold text inserted by the ETUC]] . The development of trade must not be affected to such an extent as would be contrary to the interests of the Community.
Services of general interest also feature in the Charter of fundamental rights of the European Union,
Article 36 - Access to services of general economic interest:
The Union recognises and respects access to services of general economic interest as provided for in national laws and practices, in accordance with the Treaty establishing the European Community, in order to promote the social and territorial cohesion of the Union.
The ETUC campaigned hard to secure a legal base for services of general economic interest within the draft EU Constitution: Article III-122 states:
... given the place occupied by services of general economic interest as services to which all in the Union attribute value as well as their role in promoting its social and territorial cohesion, the Union and the Member States, each within their respective competences and within the scope of application of the Constitution, shall take care that such services operate on the basis of principles and conditions, in particular economic and financial conditions, which enable them to fulfil their missions. European laws shall establish these principles and set these conditions without prejudice to the competence of Member States, in compliance with the Constitution, to provide, to commission and to fund such services.
In its 2004 White Paper on services of general interest [[COM (2004) 374, 12.5.2004]] , the Commission recognised that fulfilling a general interest mission takes precedence over the application of the Treaty competition rules, and that the personal nature of many social and health services implies obligations that are very different from those offered on a commercial basis.
Is there a link between SG(E)Is and the Directive on Services in the Internal Market?
The Services Directive, formerly known as the Bolkestein Directive, is designed to create a single market for services in the EU by removing unfair administrative and economic barriers and creating a level playing field for companies across Europe. Hence it covers a huge range of commercial service providers ranging from legal advisers and estate agents to car rental companies, travel agencies, amusement parks and distributive trades, to name but a few.
The European trade union movement campaigned to amend elements of the proposal that threatened the interests of both workers and consumers in the EU, and specifically for the exclusion of SG(E)Is, because they fulfil a different mission from commercial services and cannot be governed by the same rules. The compromise text proposed by the Commission and Council and finally approved by the European Parliament in November 2006 excluded non-economic services of general interest and covered SG(E)Is only "insofar as the application of such rules does not obstruct the performance, in law or in fact, of the particular tasks assigned to them", in line with the wording of the TEC. It also excluded healthcare and specific social services, defined as "social services relating to social housing, childcare and support of families and persons in need".
The ETUC was satisfied with the general outcome of the debate, although it would have preferred a non-exhaustive list, with examples, as proposed earlier by the European Parliament, to avoid the unintended inclusion of services falling outside the definition.
Nonetheless, it means that these essential services are now left in a legal limbo that must be resolved urgently, so the ETUC has launched its campaign for a framework directive.
Social services of general interest (SSGIs)
On 29 April 2006 the Commission published a Communication on 'Implementing the Community Lisbon programme: Social services of general interest in the European Union'[[COM (2006) 177, 26.4.2006]]. Social services are just one element of services of general interest, but a very important one.
The ETUC welcomed this as a first step towards creating a European framework for SSGIs, but found the Commission's approach too restrictive. It pointed out that social services are provided not only to the poor and excluded, but to a wide spectrum of society, aimed at achieving solidarity and social and territorial cohesion. For example, in an ageing society, poorer and older people need reliable care. Social services are crucial to maintaining their inclusion in society.
The ETUC Executive Committee, meeting on 18-19 October 2006, reaffirmed its support for high-quality SSGIs, adding: "the specific nature of and the objectives pursued by SSGIs cannot be made subject solely to the laws of the internal market". The majority of these services "cannot be classified as economic activities under the terms of the Treaty, i.e. They cannot be made subject to competition regulations. If this were the case, conflicts would arise between the social objectives pursued by these services and competition law".
The ETUC called for the specific character of social services to be covered within the legal certainty provided by a framework directive on SG(E)Is.
The position of the European Parliament
On 13 January 2004 the EP passed a resolution affirming 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.... 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..."
In September 2006, the EP adopted a report calling on the Commission to clarify the relationship between public services and EU competition laws, and to analyse the impact of liberalisations and privatisations in Member States.
The ETUC's position
The guiding principles for public services must by high quality, continuity and security, equal access, affordable prices, universal provision, transparency, and high quality jobs.
SG(E)Is should not be governed merely by commercial, free-market rules, because this would mean the weakest and most needy will always lose out. Equally, it is unsatisfactory for public services missions and responsibilities to be defined on an ad hoc basis by ECJ case law, since rulings change in the light of individual circumstances and guarantee no continuity. Responsibility for public services is shared between European and national authorities, so a Europe-wide framework is needed to sustain regional and social cohesion.
The ETUC has repeatedly called for the Commission to come forward with a proposal for a framework directive to give vital legal certainty to public services, but it has failed to do so. In the absence of legislation, the ETUC has proposed a moratorium on liberalisation.
On 20 September 2006 the ETUC Executive Committee adopted the text of a draft European framework directive on services of general economic interest, as a base from which to work. Other organisations, including the European Centre of Enterprises with Public Participation and of Enterprises of General Economic Interest (CEEP) and the Party of European Socialists (PES) in the EP have taken similar action.
The main points of the proposal are that general interest should take precedence over market laws, the Charter of Fundamental Rights should be applied and that the principle of subsidiarity and the responsibilities of the public authorities at all levels should determine how these services will be provided.
For the ETUC it is important that users, trade unions and consumers are consulted and are stakeholders in methods of regulation, and that involvement and consultation of workers and their representatives within the context of social dialogue at every level is affirmed.
Chronology
1996 and 2000: Commission Communications on services of general interest [[COM (1996) 443 and COM (2000) 580]]
15 June 2000: ETUC and CEEP adopt a Proposal for a Charter for services of general interest
December 2001: Commission Report to the Laeken European Council, Services of General Interest [[COM (2001) 598]]on the scope of application of the internal market and competition rules.
28-29 April 2003: ETUC Executive Committee welcomes the Commission's proposal to issue a Green Paper on services of general interest.
21 May 2003: Commission Green Paper on services of general interest [[COM (2003) 270, 21.5.2003]] opens a debate on the role of the EU in defining the objectives of general interest. The European Parliament welcomes the Green Paper and asks the Commission to present a follow-up by April 2004 at the latest.
12 May 2004: Commission White Paper on services of general interest.
29 April 2006: Commission Communication on social services of general interest.
6-7 June 2006: ETUC Executive Committee adopts a statement: Towards a framework directive on services of general (economic) interest. Full list of ETUC resolutions on services of general interest
20 September 2006: ETUC agrees draft European framework directive on services of general economic interest.
28 November 2006: ETUC launches a petition for 'high-quality public services, accessible to all'.
6 March 2007: ETUC-CEEP Declaration on SG(E)Is
