Financing Services of General Economic Interest

Abstract

Services of general economic interest' play an important role in the lives of the citizens of Europe. Increasingly such services have come under attack from the use of the competition and internal market law provisions of the EC Treaty, revealing that the European Union lacks a clear strategy to promote the role of such services in the new economy. Article 86(2) EC is one provision which allows for the mediation between traditional State duties towards citizens and the demands of competitive markets. Additionally, Article 16 EC recognises that such services have a role to play in the future constitutional shape of Europe and this is enhanced by the recognition of access to services of general economic interest as one of the fundamental rights of the EU in Article 36 of the Charter of Fundamental Rights of the Union.2 While of constitutional importance, neither provision provides a legal base to develop the role of public services in Europe. The White Paper on services of general interest claims that such services also the subject of intense debate within the Convention on the future of Europe3 but the issue of competence in the area of services of general economic interest was not seen as a priority by the Convention on the Future of Europe. The Working Group on Social Europe could not agree on whether Article 16 EC should be amended to provide a legal base for EU level legislation on services of general economic interest4 and the resulting amendment to Article 16 in the draft Treaty establishing a Constitution for Europe, Article 111-6, emphasised that services of general interest were subject to European law but did not provide the legal means for the enactment of such laws, opening up the possibility that the EU could be in breach of its fundamental duty to respect the role of such services in competitive markets in Europe. The EC Commission has used a soft law discourse to promote a more clearly defined working relationship between the aims of services of general economic interest and the operation of the internal market in order to secure a clearer under-