Brussels, 15 June 2000
The European Trade Union Confederation (ETUC) and the European Centre of Enterprises with Public Participation and of Enterprises of General Economic Interest (CEEP), whereas:
- there is the necessity to build a European Union balanced between its economic, social and environmental dimensions, and the development of democracy and European citizenship,
- many of the fundamental rights of citizens are ensured by services of general interest,
- services of general interest contribute to people's quality of life and that achieving the best possible quality of life is an essential aim of the European Union,
- services of general interest have an essential role in the sustainable development of our society,
- solidarity and combating exclusion constitute essential social advances, also based on services of general interest,
- services of general interest are a cement for social and territorial cohesion,
- high quality services of general interest support economic development and have a strong job-creation potential,
- one of the fundamental responsibilities of public authorities in charge of a territory is to define and ensure the quality of services of general interest,
- the social partners and social dialogue in services of general interest are important, whatever the activity or operator,
European Centre of Enterprises with Public Participation and of Enterprises of General Economic Interest - Rue de la Charité 15 - 1210 Brussels
European Trade Union Confederation - Bd du Roi Albert II, 5 - 1210 Brussels
- the quality of information, consultation and participation of workers and their representatives play a role in providing modern and effective services of general interest,
- the resolution of the European Parliament on the Intergovernmental Conference stressed "the importance of the nature and meaning of the social market economy",
- it is valuable in this respect to assist accession candidate countries,
- the new Intergovernmental Conference presents an opportunity,
- the conclusions of the Lisbon European Council and notably the mandate given to the European Commission to update its 1996 communication on services of general economic interest while taking full account of the Treaty provisions,
ask the European institutions to adopt a Charter for Services of General Interest, based on their attached joint proposal, by granting it the status of a Protocol annexed to the Treaty of the European Union.
Done at Brussels, 15th June 2000.
Explanatory memorandum
1 - Building a balanced European Union
Historically, European construction began with the economic dimension.
Only later did the European institutions start taking the social dimension into account. It is only during recent years that we have seen emerge on the one hand the aim of integrating the social dimension in the economic decision-making process and on the other the need to develop democratic control and emphasise European citizenship.
The European social model has to combine economic effectiveness with improvement in the level of employment, respect for the environment, sustainable development, consumer protection, social progress, solidarity and combating exclusion, and the involvement of citizens both at local level and via their representatives. Services of general interest have made a major contribution to achieving this balanced development.
2 - Guaranteeing the fundamental rights of citizens
The Cologne European Council decided that the EU should be provided with a Charter of the fundamental rights emphasising democratic values and the duty of maintaining solidarity between Europeans. Such a Charter will constitute undeniable progress towards harmonious development and indispensable social and territorial cohesion.
Fundamental rights, are generally rights - going beyond constitutional guarantees - of access to services deemed indispensable, which are therefore termed "services of general interest". Such services have common characteristics and are provided under particular conditions which justify the existence of a reference document at European level.
3 - Ensuring quality of life for all
The aim of any human society should be to achieve the maximum wellbeing of its members, in solidarity, and conserving natural resources for future generations. Economic progress is one of the principal means of achieving this objective.
To meet the objective, the quality and effectiveness of services of general interest and their ability to contribute to sustainable development are factors in the progress of society.
4 - Strengthening solidarity and combating exclusion
Services of general interest are a tangible expression of solidarity within society
This solidarity is expressed in particular:
- between generations, through education and through assistance to the elderly,
- through the mutual sharing of risks, notably in health care,
- towards the most deprived, by maintaining their access to essential services and fostering their social integration, notably by helping them to find or resume employment,
- between geographical locations and regions, e.g. by subsidising or by reducing or eliminating the price differentials which, taking account of the financial equilibrium of the service concerned, would arise if consumers in peripheral or isolated areas were charged the real cost of supplying such services.
5 - Supporting economic development and employment
In line with the Cardiff, Luxembourg and Cologne process, services of general interest have an important part to play in combating unemployment and social exclusion at European, national, regional and local levels.
Effective and good quality services of general interest also encourage the establishment and competitiveness of companies which create jobs, on the one hand, owing to the services from which companies benefit and, on the other, through the services provided to employees, who are more inclined to set up home and to remain in well-served areas.
In addition, the requirement to provide services of general interest of high quality encourages the employment of a skilled work force.
6 - Strengthening social and geographical cohesion
The existence of a network of services of general interest is an essential factor in social cohesion. If this does not exist, the closure of, among other services, the hospital, school, post office and absence of public transport service are critical stages in the depopulation of an area or in an urban district becoming a "no go" area.
7 - Associating citizens in the assessment of services of general interest
The general interest, as well as the fact that it is often impossible for users to choose between several suppliers owing to monopolies or exclusive rights, justify the various stakeholders being associated in the assessment of services, according to methods suited to the nature of the service. Such participation by citizens and representative associations can only strengthen democracy and social and territorial cohesion, and contribute to avoiding discrimination.
Information, consultation and participation of workers and their representatives are essential for the negotiated modernisation of services, working conditions and development of life-long learning. The motivation of workers and an improvement in services is thereby ensured. Drawing up an annual social report is a good method of assessing the quality and effectiveness of social dialogue and is therefore to be recommended.
8 - Ensuring sustainable development
Services of general interest, particularly those which manage scarce resources, or natural monopolies (typically utilities or heavy infrastructure which cannot be duplicated), have a major role in putting sustainable, economic, social and environmental development into effect.
Generally the introduction of competition is often considered as a way of improving in the short term the value for money of products and services. In the case of services of general interest, the legitimate objective of improving effectiveness and efficiency must not only take purely financial or economic consequences into account, but also the social implications and the protection of the long-term general interest. Hence the need to review the situation case-by-case, service by service, to find the most suitable compromise between short and long term objectives and between economic and social concerns.
In particular, services of general interest often play an important role in environmental protection and the promotion of sustainable development. Long-term investment and research into activities of services of general interest are two further areas where uncontrolled opening up to competition may result in resources drying up.
9 - Stressing the fundamental responsibility of public authorities
The decision to create or maintain a service of general interest, the technical and economic characteristics of the service, its quality, the way it is operated and funded, and its democratic regulation are the fundamental responsibility of public authorities.
With the passing of time a change can also be observed in activities which are recognised as services of general interest. This is due in particular to technological change (e.g. the Internet), the development of new needs (e.g. bank services), introduction of new services, or the ability of the market to provide a satisfactory service without public authority intervention.
10 - Providing a framework for the contractual and transparent management of services of general interest
If the internal market for services is to function in a manner compatible with the provision of services of general interest, the necessary coherence must be ensured at European level. A decision (regulation or directive) will have to specify for each sector: the principles agreed upon for defining general interest tasks; the activities subject to competition and any limitations which may be necessary on this competition (in particular the granting of special or exclusive rights); the relations between the authority and the service provider; and the general framework for regulating and financing such activities.
Services of general interest, above all those in the market sector and provided by a public sector or private sector company, shall have their obligations, financing and relations with the public authority clearly laid down. The best way to clarify these relations is to draw up a contract. The contract can also be used to motivate service providers by making their payment dependent on performance indicators. Such a method forms the basis for transparency, enabling the different stakeholders to take part in the assessment of results.
11 - Assisting the accession of candidate countries
The accession candidate countries are passing through a phase of rapid political and economic change. The transition to a market economy means that particular attention must be paid to the preservation or re-establishment of the essential criteria and characteristics of services of general interest. After the Helsinki Council, it is up to the European Union, Member States, the Union's services of general interest and the associations which represent them to co-operate with their opposite numbers in the accession candidate countries in order to ensure that, for each type of activity, the candidate countries devise the most appropriate form of organisation, by using the present Charter for Services of General Interest as a reference.
12 - Using the Charter for Services of General Interest to construct the reference framework for one of the European Union's common values
Article 16, which embodies one of the principles of the European Union Treaty, asserts that services of general economic interest constitute one of the European Union's shared values, and that "the Community and the Member States (...) shall take care that such services operate on the basis of principles and conditions which enable them to fulfil their missions".
Article 86.2, for its part, stipulates that "undertakings entrusted with the operation of services of general economic interest (...) shall be subject to the rules contained in the Treaty, in particular to the rules of 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".
It is obvious that introducing Article 16 into the Treaty has scarcely changed Community practice and up to the present it has been the Court of Justice which has assessed, case by case, the proper balance between general interest tasks and competition rules.
It therefore appears essential to adopt an official text which elaborates the concept of the common value expressed in Article 16, explicitly states the principles and conditions enabling services of general interest to fulfil their task, and may be used as a reference in achieving balance between the economic and social dimensions.
This is also the apparent objective of the mandate issued by the European Council in Lisbon, which instructed the Commission to update its 1996 communication on services of general economic interest by taking the Treaty provisions fully into account.
Proposal for a Charter for Services of General Interest
GUARANTEEING FUNDAMENTAL RIGHTS AND THE QUALITY OF LIFE FOR EVERYONE
In a democratic society, services of general interest have a fundamental role in striving to offer the same opportunities to everyone, the freedom to live in a way conforming to their ideal of wellbeing, and the possibility of playing a full part in the life of that society.
1. Definitions
A service of general interest is a service created, organised or regulated by a public authority to ensure that the service is supplied in the manner which it considers necessary to satisfy society's needs.
Among services of general interest, services of general economic interest are services which are traded but which fulfil general interest tasks and are consequently subjected by public authorities to specific obligations .
2. Factors justifying a service of general interest (SGI)
The reasons for creating an SGI may be economic and/or social.
Among the economic reasons generally to be found are:
- the high cost of the necessary investment,
- the scarcity of the good, or of factors essential for the production of the service,
- sustainable development.
Among the social reasons most often encountered are:
- social cohesion, reducing regional imbalances, so that everyone can fully participate in the life of society,
- equality for all in access to SGI and satisfying their fundamental rights,
- combating social discrimination
- economic fairness through price equalisation and/or the adoption of "social" prices.
3. Characteristics of SGI
The main criteria which characterise a general interest service are:
- equality of access, avoiding any discrimination,
- continuity of the service,
- adaptability to necessary change,
Bearing in mind their task of serving citizens, and both the short and long term general interest in, as well as the objective of sustaining economic, social and environmental development, the organisation and management of SGI take into account the following principles and objectives, in the manner most appropriate to the specific characteristics of each service:
- universality,
- safety,
- fair pricing,
- service quality, for which the level must be specified by the responsible public authority,
- efficiency, which can be objectively verified,
- democratic control, transparency and public responsibility for management decisions, technical and financial results, and finance,
- concertation, particularly with employees and their unions, and with users and their representative associations.
4. Application of the subsidiarity principle, and development
A service of general interest must, according to the principle of subsidiarity, be defined at the most appropriate level and be complementary with European, national and local levels.
In addition, in laying down the tasks and obligations of services of general interest, it is also up to public authorities to take technological change and new needs into account.
ORGANISING SERVICES TO ACHIEVE SUSTAINABLE ECONOMIC AND SOCIAL OBJECTIVES
5. General interest and competition
Public authorities have the responsibility for seeking the optimal balance between achieving the best short term and long term cost/effectiveness ratio, the tasks of the general interest service under consideration, and other services which might be affected, and creating conditions for sustainable economic, social and environmental development.
6. Regulation
In particular, when the service is provided by more than one operator, it is desirable to create a regulatory/control function whose role may include: supervising operators' activities, their compliance with general interest tasks and competition rules, pricing, service quality and consumer protection, and watching over the allocation of government finance related to general interest tasks, in conformity with Community rules. Each Member State shall draw up the regulatory regime for the services of general interest which it institutes. The regulating body may be an administration, an independent individual or collegiate authority. Sometimes several regulators may be involved.
The right of users, unions, consumer associations, environmental bodies and other social groups to information must be stated in the regulator's statutes. The statutes shall prescribe the cases in which prior consultation is necessary and the methods of consultation.
7. Operators
Each public authority shall draw up the statute for the operators of the services of general interest which is under its responsibility. The operator can take the form of an administration, a public sector company, a private sector company or a mixed company.
The choice of organisational form for the operator and subsequent changes (transformation of an administration into a public sector company, the partial or total privatisation of a public sector company, or, conversely, a public take-over of a private enterprise) falls within the competence of the public authority responsible for the organisation of the SGI.
Operators of services of general interest may, under the supervision of the regulators concerned, undertake joint actions, in particular to promote harmonisation or the inter-connection of their networks and the provision of joint or additional services.
8. Transparency of relations between operators and authorities
Relations between the operators of services of general interest and the authorities they depend upon are normally specified in a contract and are subject to the rules of transparency, according to principles laid down at Community level. The contract specifies in particular:
- the task, pricing principles and the basic financing methods of the companies in question;
- the exclusive rights which may be granted to these operators to enable them to carry out their task;
- the duties connected with carrying on loss-making activities, or ones which cannot be paid for on a normal commercial basis, when these are imposed on these companies in the general interest; such duties must be the subject of fair financial compensation.
Income and expenditure for activities of general interest shall be clearly identified and separated from other activities in an operator's accounts.
DEVELOPING DEMOCRATIC PARTICIPATION
9. Principles for consulting users
Users are generally involved in the assessment of results of services of general interest through associations or representatives. This may be done by periodically consulting users and through user participation in bodies assessing results.
In some cases it may also be reasonable to involve representatives of associations or non-governmental organisations pursuing objectives relating to the service of general interest under consideration.
10. Principles for the participation of employees
Information, consultation and participation of employees and their representatives are essential for a negotiated modernisation of service organisation. In this context, the promotion of social dialogue and of the involvement of workers' representatives and their trade unions must enable methods to be developed for their representation in boards of administration or equivalent bodies.
Services of general interest should produce an annual social report, which must be the subject of consultation with employees and their representatives and be transmitted to the public authority concerned.
When required, there must also be dialogue between employer and employee representatives at European level between the cross-sectoral and sectoral social partners concerned.
11. Comparative assessment of results Limitations in the way the market works, and the wide variety of structures and statutes that national or local public authorities may use to ensure the provision of services of general interest, call for the creation of a body at European level, supported by national and possibly regional contact points, to assess the results obtained in Member States as objectively as possible in order to provide public authorities with the means to enable them to make the most appropriate choices.
The public authorities under which the assessment bodies are placed may entrust them with carrying out studies and reviews to be used as a basis for improving the regulation or organisation of services of general interest.
The management of assessment bodies must be pluralist and transparent. Pluralist in the sense of participation in the management of these bodies by representatives of the stakeholders of services of general interest, and transparent in the sense that all documents issued by these bodies must be publicly available.
12. Role of the European Union
Some services of general interest may justify organisation at European level, for the reasons given above. Exceptionally, notwithstanding the principle of subsidiarity, it may be necessary to organise the service under the direct responsibility of European authorities. More frequently, co-ordination between operators and/or regulators instituted by Member States will be sufficient.
The specific nature of services of general interest, the variety of activities concerned, the need to supervise a proper balance sector by sector between the rules to improve the effectiveness and the functioning of the internal market and those aiming to preserve the essential characteristics of services of general interest - notably the value which they provide for the European Union -, all these factors justify that one member of the European Commission be specifically entrusted across the board with services of general interest.
13. A reference framework for European construction
The Charter for Services of General Interest is the instrument whereby the European Union and Member States are committed to implementing a general, consistent policy for services of general interest and the values they embody. Such an approach will become the common reference in the European Union, for accession candidate countries, and in particular when negotiating trade agreements between the Union and its partners.
The European Commission must take care to involve the social partners in implementing this Charter.