State Aid and Services of General Economic Interest

ECON-VI/013
Adopted

State Aid and Services of General Economic Interest

 Adoption: 11/10/2016
 Theme: Enterprise and Industry
Commission: Commission for Economic Policy (ECON-VI)
To define the CoR's main political positions on State aid and SGEIs, the Communication on the Notion of State aid and the GBER. To assess ways in which relevant legislation could be simplified and legal certainty for public services' providers be increased. To highlight the fact that local and regional authorities are central actors in providing SGEIs and SGEIs play a prominent role in growth and employment being often the condition for further public and private investment. To ensure that EU state-aid schemes give local and regional authorities more discretion over the conceptualisation of SGEIs. To call for a wider definition of SGEIs so as to reflect new developments in social services and social housing, a further reduction of red tape, the increase of the de minimis thresholds, and further exemptions from State aid scrutiny. To highlight the need for more legal certainty for local and regional authorities when deciding which activities they can support without breaching the rules. To ensure that public investment is not limited to competition principles and criteria of economic efficiency, especially when dealing with social services.
-19 July 2016: The Commission published its Notice on the notion of State aid as referred to in Article 107(1) of the Treaty on the Functioning of the European Union (OJ 2016/C 262/01) which responds to many of the proposals of the opinion. -21 September 2016: the Commission found that five public measures for purely local operations in Spain, Germany and Portugal involved no state aid because they were unlikely to affect trade between Member States. The Commission noted that for these kinds of measures, Member States always have full autonomy to decide and invest state funds and that these decisions also allow Member States to take responsibility over their policy choices for local measures. This goes in line with and responds to what the CoR is asking in this opinion. -2 November 2016: Housing Europe publishes an article on the CoR opinion and analyses the relevant points for the housing sector. -29 November 2016, Public hearing on "Social Investment : Time for a (Re)Birth”, EP Intergroup on Common Goods and Public Services: Mr Laurent Ghekiere, Head of EU Office, Union Sociale pour l'Habitat, referred to the CoR opinion and the CoR position on the need to review the definition of social housing. -20 December 2016: Housing Europe representatives meet with Mr Søren Schønberg (Senior advisor in State aid policy, Cabinet of Commissioner M.Vestager, European Commission) on the need to review the definition of social housing. The CoR position on social housing as defined in Töns opinion constitutes an important part of the Housing Europe position. -17 May 2017: the European Commission adopted the amended General Block Exemption Regulation. The CoR opinion had a strong impact namely on the increase of the number of passengers used for the definition of very small airports and the increase of the amount of aid exempted from notification for sports infrastructure and multifunctional recreational infrastructure. Commissioner Vestager sent a letter to the CoR President and the ECON Chair presenting the main changes included in the amended Regulation which are relevant for local and regional authorities. -31 May 2017: The European Commission published its Report on Competition Policy 2016. The document makes reference to the fact that the Commission presented its approach on SGEIs at the CoR (Exchange of views on the CoR opinion, ECON meeting, 22 April 2016). -1 December 2017: Commissioner Vestager in her speech at the CoR Plenary on the CoR opinion on the Annual Competition Report 2016, stressed, among others, that in May 2017, "we went a step further. We included ports and airports in the GBER. Your Committee gave feedback on the changes and we took this on board".
THE EUROPEAN COMMITTEE OF THE REGIONS  notes that EU state aid rules for services of general economic interest (SGEIs) should not be limited in their application to competition principles, but must be fully consistent with the broad discretion granted by the Treaties to the Member States in determining what represents an SGEI, as well as the principles of local and regional self-government, economic, social and territorial cohesion, and neutrality as regards ownership in the Member States;  reiterates its fundamental opposition to the European Commission’s inclusion of additional quality and efficiency considerations in the compatibility test for financing of SGEIs. The Commission’s remit as defined in the competition chapter of TFEU does not include setting quality and efficiency criteria which further restrict the discretion of local and regional aid providers;  welcomes the confirmation in the notice on the notion of state aid that the concept of negative effects on intra-EU trade is limited;  advocates actively widening the concept of SGEI: new social services, such as social services in connection with the initial reception and integration of refugees and migrants, or digital infrastructure in regions where a market failure is apparent, such as regions facing the challenges of demographic change, could qualify as services of general interest owing to the need for a comprehensive service to citizens;  takes issue with the reference to "normal market conditions" as it may conflict with the principles of local and regional self-government and appears as a condition that is almost impossible for public authorities to prove they are compliant with in practice;  considers it essential for the definition of reasonable profit of an SGEI to be revised, in particular so as to reflect the fact that, through incentives or an increase in the percentage of recognisable reasonable profit, such profit is often reinvested in SGEIs; - repeats its call for the de minimis thresholds to be increased in the case of state aid for SGEIs.
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