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13/12/2011 Françoise Castex: “If public services have been privatised, it is because States have chosen to do so”

Are public services under threat in Europe? Not according to MEP Françoise Castex, president of the European Parliament’s Public Services Intergroup. Nonetheless, although public services have broad consensus within the European Union, they are facing real challenges. What are the challenges facing Europe’s public services?

Françoise Castex: The European Union understands that some services can be
considered a public service responsibility i.e. that they can be provided as a public service. The definition of ‘public service’ however is not homogenous as it varies not only across Member States but across regions and districts. A service can be considered public or commercial and in the latter case it will be open to competition. This is the responsibility of the elected representatives.
The European Commission is about to modify the rules for state aid (public interventions ranging from subsidies to providing funds to large national companies) in such a way that politicians cannot be called to order on the grounds that they have infringed competition rules.

The Public Services Intergroup would like to get rid of the derogations and exemptions to the competition rules in order to have a positive legislative and regulatory framework that creates positive laws for the services of general economic interest. This would bring value to these laws while also reducing the legislative uncertainty making decisions easier for local politicians.

Another difficulty is that at local level many public service operators are associations. The working methods of an association are not the same as a commercial service provider. Local authorities do not buy the services of an association; generally, the association first approaches the local authority with a project and local politicians then decide whether or not to subsidise it. This is another blind spot in the European regulatory framework. Are public services today under threat of the European Union?

F.C.: The European Commission has never forced a Member State to privatise a public service. Some countries have privatised their postal services, transport services etc. but this has been decided by the Member State. What the Commission does require States to do is open up the market to competition. Nonetheless, Member States were completely free to maintain the public operator without maintaining the monopoly. The European Commission has a strong tendency towards a market that offers a maximum array of services but the politicians – both at national and local level – can choose to resist this. Is France alone in defending public services in Europe?

F.C.: We need to temper the siege mentality that French people have towards their public services. The idea of public powers offering services for which they are thereby responsible and intervening in the market is something that is completely shared across several Member States and some States even go beyond what is on offer in France. In the Netherlands for example, social housing is public and organised by the State and not by local authorities. In many German Länder, water is 100% public. So there is no reason to think that the French are Europe’s public service champions. It is true that public services are highly valued in France but we are not alone in this, even if other countries do not necessarily make it their political hobbyhorse.  

10/12/11, Magali :
En effet, les textes communautaires imposent "seulement" l'ouverture à la concurrence des services postaux, de transports et d'énergie, etc.

Ils ne disposent pas explicitement que les Etats doivent transformer leurs établissements publics ...en entreprise privée; mais uniquement que ces établissements ne doivent plus disposer d'une situation de monopole, ni ne bénéficier d'aides publiques qui distordent la concurrence.

Cependant, beaucoup [dont la Commission] considérant que le statut d'Etablissement public octroie une avantage concurrentiel déloyal, les Etats sont priés d'octroyer le statut de S.A. à ces établissements. Ce fut le cas pour EDF, GDF et la Poste. Ce le sera bientôt pour la SNCF.

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