29 September 2006
Pressure is mounting on the European Commission to publish a legal framework establishing the limits to which public services must abide by its rules on free market competition.
In a 491 to 128 vote on September 27, MEPs endorsed demands by the European Parliament's economics committee to end the uncertainty that leaves public bodies across the European Union fearful that they will be challenged in the courts if they do not open up service provision to the private sector.
Current contradictions between the EU principles of free trade, national autonomy and welfare leave public bodies at best uncertain and at worst having to put the interests of the private sector above the public good, MEPs and European trade unions said.
'In practice [public authorities] are often confronted with interference by the European Commission or by the European Court of Justice, which have judged their activities from the perspective of the EU's internal market rules,' said Bernhard Rapkay MEP, committee rapporteur on the issue.
Examples include 'deeming cross-subsidisation to be contrary to state aid rules; imposing onerous public procurement obligations; and treating some public service obligations as barriers to the European single market', he said.
In recent months, a French local transport authority was taken to court when it opted to purchase green fuel buses over cheaper but more polluting alternatives. The Belgium national post service was also challenged when its in-house maintenance team attempted to keep its costs down by taking on additional work in the private sector.
MEPs want a legal framework to set out what types of services must abide by competition rules and which may be more flexible. They also want the framework to give the principles of social solidarity, universality and equality of access the same priority as free trade.
But in the debate before the vote, European Commission president José Manuel Barroso refused to accept MEPs' arguments that there were limits to the efficacy of the single market, even in public services. Earlier this month, EU health commissioner Markos Kyprianou said that patients should be able to 'shop around' the EU for their health care, and bill their national health services or insurers.
Such comments have angered the European Trade Union Confederation, which this week published its own draft framework, endorsing the right
of public bodies to keep services in-house. It states that, 'in case of tension between competition law and general interest objectives, the general interest shall prevail.'
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