Brussels, 22 December 2004
EU driven reforms of services of general
interest benefit consumers and improve performance
Reforms of services of general economic interest (SGEI), such as
telecommunications, air transport and postal services, have produced clear
benefits for European consumers in terms of lower prices, choice and better
services a European Commission report shows. However, current progress is slow
and there remain obstacles to competition and to the completion of the European
single market. These issues should be tackled by both the Commission and Member
States. Increasing competition in these industries is also key for the Member
States that joined in 2004 in order to avoid any inflationary pressures
resulting from the catching-up process.
Internal Market and Services Commissioner Charlie McCreevy said: "This
report shows that EU rules enabling more competition are having a positive
effect on the essential services that Europeans use every day. The results for
new Member States are particularly encouraging. But there is no room for
complacency – overall progress could be much quicker and many market
barriers still remain."
The report into the so-called network industries covers electricity, gas,
telecommunications, postal services, air, road and rail transport sectors in the
25 Member States of the EU.
Together, these sectors represent around 6-8% of the value added and 5% of EU
This is the second time the Commission assesses progress to improve the
performance of network industries in the EU. The first one was published in
2002. This year’s report also compares market performance between 'old'
and 'new' Member States.
The main conclusions of the report are:
- Opening markets to competition is responsible for a large part of the
improvements in performance: i.e. leading to lower prices and higher
productivity. In addition, countries with high levels of market opening tend to
perform better over time in terms of prices and productivity.
- The benefits of market opening spill-over into the rest of economy and have
a positive impact on employment. An economic simulation has shown that between
1990 and 2001 the creation of half a million jobs throughout the EU was linked
to regulatory changes in network industries.
- Prices for SGEI are similar in new and old Member States, but these prices
are less affordable in many new Member States due to lower per-capita incomes.
However, affordability of services in the new Member States continues to improve
faster than in the original EU15. This is likely to have a beneficial impact on
living standards in most new Member States.
- Important results have been achieved, but there are still many obstacles to
competition and the completion of the Internal Market. The Commission is taking
steps to address these obstacles and Member States have an important role to
play as many decisions regarding the regulatory framework and infrastructure
investment remain with them. In addition, there is an important role for
- Consumers are very satisfied but improvements are still needed. Satisfaction
levels in new Member States are similar to those in the original EU15, ranging
from 77% for postal to 66% for rail services. Consumers in new Member States
are worried that EU membership will lead to price rises but they also expect
quality improvements due to competition. Whilst the majority of EU citizens are
highly satisfied with the provision of these services, considerable numbers
remain dissatisfied with certain aspects. For example 17% - 35% of consumers
find the price they pay either excessive or not affordable. It is also clear
that providers can improve their services.
The full text of the
report and a detailed annex are available at:
 In some cases the
water sector is also included due to the aggregation of data sources (e.g. in
the area of employment the aggregated data for electricity, gas and water was