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Press Release

The EU's Assembly of Regional and Local Representatives

COR/11/66

Brussels, 20 December 2011

EU package on public services: Commission doesn't go far enough, CoR rapporteur says

"The European Commission has taken some concerns of local and regional authorities on board, but it doesn't go far enough", Karl-Heinz Lambertz (BE/PES) said in reaction to today's package on state aid rules for public services. "On the overall approach to public services and the exemption thresholds, much work remains to be done", stressed Lambertz, First Minister of the German-speaking Community in Belgium and author of the Committee of the Regions opinion on the issue.

Providing citizens with 'services of general economic interest', such as healthcare or waste management, is one of the core tasks of regional and local authorities across Europe. In doing so, they have to comply with EU laws aimed at ensuring fair competition in the market. These rules are very complex and also cover many small-scale local services with no commercial dimension or no relevance for cross-border trade.

This is why the European Commission had launched a review of the rules in March 2011. Karl-Heinz Lambertz (BE/PES) scrutinised these plans for the Committee of the Regions (CoR), prepared a first CoR opinion in July and, following the presentation of first legislative proposals, a revised opinion in October. Speaking today after the adoption of the new rules, the CoR rapporteur said: "The package contains significant improvements, and I particularly welcome the fact that social services become exempted from state aid notification requirements. We also acknowledge that the Commission doesn't limit the exemption for state aid notifications to municipalities with less than 10.000 inhabitants, as was originally planned. And last but not least, the Commission has stepped backed from imposing efficiency criteria for public services at European level."

However, on some crucial points, the CoR rapporteur considers that "the glass is rather half empty". One concrete example is the so-called 'de minimis' threshold, below which public aid is not subject to EU state aid control. This threshold is currently set at 200.000 EUR over a period of three years. While the Commission proposes to raise it to 500.000 EUR over three years, this is still far short of the 800 000 EUR per year proposed by the Committee of the Regions. "The proposed new reference amount still covers too many local services provided by small municipalities", Lambertz said. As this point is still subject to a final round of consultation, he appealed to the Commission once more to revise the threshold upwards.

Karl-Heinz Lambertz also expressed concerns regarding the overall approach towards services of general interest. "This Commission has now given its answer on how to deal with state aids in relation to public services. What lacks is an answer to the question on how to deal with the new Lisbon treaty provisions emphasising the importance of public services. Today's package cannot have been the Commission's last word for defending a vision on quality of public services and for defining concepts such as in-house provision. The Commission's line to consider that the best option is to tender at the cheapest cost only is blind reliance on the market forces".

Further information:

The CoR on the internet: www.cor.europa.eu

The Committee of the Regions

The Committee of the Regions is the EU's assembly of regional and local representatives. The mission of its 344 members from all 27 EU Member States is to involve regional and local authorities and the communities they represent in the EU's decision-making process and to inform them about EU policies. The European Commission, the European Parliament and the Council are obliged to consult the Committee in policy areas affecting regions and cities. It can appeal to the EU Court of Justice if its rights are infringed or it believes that an EU law violates the subsidiarity principle of fails to respect regional or local powers.

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