Brussels, 1 October 2014
State aid: Commission opens in-depth investigation into part of public financing of Brussels public IRIS hospitals
The European Commission has opened an in-depth investigation to ascertain whether specific deficit financing measures granted by the Brussels public authorities only to the public IRIS hospitals in the Brussels Capital region and not to private hospitals in the region, are in line with EU state aid rules. The opening of an in-depth investigation gives the Belgian authorities, the complainants and other interested third parties an opportunity to submit their comments. It does not prejudge the final outcome of the investigation.
In 2005, the Commission received a complaint from two associations of Brussels private hospitals, alleging that unlawful state aid had been granted to the five public IRIS hospitals in Brussels since 1995. In particular, the complainants argued that certain public financing measures covering the deficits of the Brussels public hospitals but not of the Brussels private hospitals go beyond the public financing envisaged in the Belgian federal hospital law that applies equally to both public and private hospitals. The Belgian authorities argue that apart from the basic hospital mission, with which public and private hospitals are equally entrusted under the hospital law, only the IRIS hospitals perform additional services of general economic interest (SGEI) and that these additional SGEI missions entail special costs that have to be compensated through the deficit financing.
In October 2009, the Commission found that the disputed deficit financing met the criteria of the relevant EU SGEI rules. However, one of the complainants brought an action for annulment of this decision before the EU's General Court, raising doubts about the additional SGEI missions of the public IRIS hospitals. In November 2012, the General Court annulled the Commission's decision, ruling that the Commission should have opened an in-depth investigation to gather additional information because the complainants' arguments raised doubts as to the compatibility of the deficit financing of the additional SGEI missions.
The Commission will now verify whether the specific deficit financing measures, from which the public IRIS hospitals benefit, meet the conditions of the EU SGEI rules (see IP/11/1571 and MEMO/11/929). In this context, neither the complainants nor the GC raised any doubts about the compatibility with EU state aid rules of those public financing sources, which are applicable to both public and private hospitals, and which constitute more than 95 % of the IRIS hospitals' public financing.
The five public general hospitals existing in the Brussels Capital Region were grouped into the IRIS network in 1996. These hospitals are the CHU Brugmann, the CHU Saint-Pierre, the Queen Fabiola Children's University Hospital, Iris South, and the Institut Bordet. Together they operate around 2600 of the 8800 hospital beds in the Brussels Capital Region.
Compensation for SGEI can be found compatible with the internal market when it meets certain criteria (see IP/11/1571 and MEMO/11/929). State aid to hospitals is exempt from notification to the Commission and compatible with the internal market if the conditions laid down in the Commission Decision of 20 December 2011 on the application of Article 106 (2) of the Treaty on the functioning of the European Union to State aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest are fulfilled. These conditions include that the operation of the SGEI missions must be entrusted to the undertaking concerned by way of one or more acts which should among others clearly specify the content and duration of the public service obligations, a description of the compensation mechanism, and the arrangements for avoiding and recovering any overcompensation.
In line with the complainants' arguments, the General Court concluded in its judgment of 7 November 2012 that the Commission should have had doubts about the additional SGEI missions, which according to the Belgian authorities are only entrusted to the Brussels public IRIS hospitals. In particular, these doubts concern: (1) the existence of entrustments that clearly define these additional SGEI missions, (2) the existence of clearly pre-defined compensation parameters for these additional SGEI missions, and (3) the existence of mechanisms for the avoidance of overcompensation and the absence of overcompensation for these additional SGEI missions.
The non-confidential version of today's decision will be made available under the case number NN 54/2009 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of State aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.