Ahead of the adoption of his opinion on "State Aid and Services of General Economic Interest" by the October CoR plenary session, PES rapporteur Markus Töns, Member of the North Rhine-Westphalia Landtag, tells us more about his key political requests.
You are presenting a draft opinion on "State Aid and Services of General Economic Interest", at the Committee of the Regions' October plenary. This is a topic which appears to be quite complicated and technical. Can you outline what is at stake in political terms, from the point of view of cities and regions?
"Services of General Economic Interest" (SGEI) is the EU term for "public services" in English and French and "Daseinsvorsorge" in German. In simple terms, the issue at stake is the degree of autonomy which European rules leave to local and regional authorities to regulate and provide public services.
This has traditionally been one of the European Socialist family's main fights. In the 1990's, the debates focused on introducing a European framework directive. Today, public services remain a key issue for our family and also for the electorate, notably in relation to free trade agreements. Our Group led a series of CoR opinions in this area, which boldly claim that there should be no encroachment on countries' powers to introduce or retain provisions to protect the high quality of services and important objectives of general interest. They also assert that no privatisation of services should be provided for.
One of the key points in my opinion is that the vast majority of SGEIs at local level involve measures that have a purely local effect and therefore no impact on the EU's internal market. What we still need is more legal certainty for local and regional authorities when deciding which activities they can fund with public money, without breaching European rules. Here, the devil is obviously in the detail and this is why my opinion may give the impression of being very technical.
Is the European Commission listening to the CoR's position?
In relation to state aid, the headlines are currently about the Amazon or Google cases, that is state aid in the form of tax rulings. The moment of truth in relation to state aid for public services will come in 2017, when the Almunia package – named after the Spanish socialist predecessor of the current Danish liberal Commissioner in charge of competition, Margarethe Vestagher, – is due to be reviewed. We will then see whether the Commission reduces pressure on local and regional authorities to put services out to tender, to what extent SGEI activities can be exempted from state aid assessment, whether the definition of reasonable profit in relation to SGEIs will become more operational and, finally, whether the de minimis thresholds are increased. In the past, the Commission was rather attentive to the CoR's position. I am confident that this will also be the case this time.
Generally speaking, the CoR's role is to make it clear to the Commission that EU law governing state aid in relation to SGEIs has become too detailed and too abstruse due to the complexity of its content, competing definitions of concepts, and adjustments over many years. As a consequence, the Commission should focus on reducing red tape for local and regional authorities and companies.
In the meantime, there have been encouraging rulings in April 2015 and just recently in September 2016, in which the Commission recognised that several individual cases of aid for local infrastructure or local services had very little impact in other Member States and therefore did not fall within the scope of EU state aid rules.
