Putting services of general economic interest up for tender: Reflections on applicable EU rules

Abstract

The issue of putting "services of general economic interest", also commonly referred to as public services, up for tender is considered problematic for the application of European law. For some decades now, legal qualification of the way services of general economic interest are funded, organized and provided by Member States has been a challenging task for the Court of Justice of the EU and the European Commission. The debate centres on questions of whether the EU rules should provide incentives for Member States, or better still oblige them to put their public services out to a competitive tender and how those rules would affect Member States' wide discretion regarding the provision of these services safeguarded by Protocol (No. 26) on Services of General Interest appended to the Treaties. The current European rules, however, remain ambiguous and at times conflicting on this topic; and although the insistence on Member States' competence to freely organize services of general economic interest is still pervasive, the ongoing law reforms in the field of State aid and public procurement appear to be favourable towards opening public service markets to competition by putting their provision up for tender. Against this background, this paper examines whether there is room in the European legal landscape to resolve the clash between the need to deliver public services as closely as possible to the needs of their consumers as stipulated by the Member States and the need to foster efficiency and open their provision to competition as postulated by the EU in relation to public tendering of those services.