Commission approves new SGEI rules

Monday, 30 January 2012

On 20 December 2011 the European Commission has adopted a revised package of EU state aid rules for the assessment of public compensation for services of general economic interest (‘SGEI’). The package includes four instruments. With the entering into force of the package on 31 January 2012 the current policy will change on certain aspects. 

SGEI

The question whether a service concerns a SGEI is of importance for the granting of state aid. Article 107 sub 1 of the Treaty on the Functioning of the European Union (‘TFEU’) determines when it is a matter of state aid. This concerns government measures that result in a financial benefit for undertakings compared to other undertakings. When a government has the intention to grant state aid this needs to be notified to the Commission in time, unless the state aid that will be granted is exempted on the basis of one of the exemption regulations.

Compensation that does not concern a SGEI is no state aid within the meaning of article 107 sub 1 TFEU and does not need to be notified. The Court of Justice has decided this in the Altmark judgement (case C-280/00). SGEI includes services which are according to public authorities of general interest. SGEI distinguish from normal services because of the presence of public interests regarding the quality, accessibility and guarantee of supply. This concerns for example social housing and healthcare.

After the Altmark judgement the Commission has adopted a package of law that was entered into force in July 2005. This package included the conditions on which state aid as compensation is compatible with the TFEU.

New package

The new package consists out of four instruments:   

  • A new communication, clarifying basic concepts of state aid;
  • A revised decision, that exempts Member States from the obligation to notify public service compensation for certain SGEI-categories to the Commission;
  • Arevised framework for assessing large compensation amounts granted to operators outside the social services field;
  • A new proposal for a de minimis regulation is expected to be adopted in the spring of 2012, after a final round of consultation.

The package includes some distinctive features. First of all, the communication provides a clarification of the basic concepts of state aid. In addition, previously only hospitals and social housing were exempted from the notification. In the revised decision the rules are extended. Under the new package also childcare and access to and reintegration in the labour market are included. For some other SGEI’s the notification threshold is lowered from €30 million to €15 million. The revised framework includes a methodology for assessing large compensation amounts granted to operators outside the social services field. Finally the de minimis Regulation, willprovide that compensation below a certain threshold does not fall under state aid scrutiny.

With the entering into force of the new package it is not said that it is more clear and simple for governments to grant state aid concerning SGEI’s. Some aspects of the new package are questionable, for example the calculation of costs for SGEI compensations. It is also not clear how the new package relates to the tendering rules.