SERVICES OF GENERAL ECONOMIC INTEREST : ALMUNIA OUTLINES MAIN THRUST OF SGEI REFORM.

• Position: Services of general economic interest

Commissioner Joaquin Almunia has unveiled the EU executive's approach to the revision of rules on state aid for services of general economic interest (SGEI). He intends to "clarify, simplify and diversify" these rules, he declared at a conference at the European Policy Centre, on 2 May.

The current framework for SGEI, the Monti-Kroes package in force since 2005, defines the conditions for the compatibility of compensation granted to an undertaking charged with providing a public service. It expires in November 2011. The consultation launched in 2010 brought to light the need for clearer, simpler and more proportionate measures. The commissioner noted that "public services lie at the core of my vision of Europe's social market economy" and that the aim of the reform is to enhance the contribution of such services to economic recovery in the EU. However, the concept of SGEI is the reflection of very different institutional and cultural traditions in the EU and the Court of Justice has had to determine whether or not a given service qualifies as an SGEI. It has issued rulings, for example, that the Spanish health system is not an economic activity but that the Belgian hospital system is.

So how to proceed in such a context? The Commission proposes a differentiated strategy based on the impact on trade between member states: if the impact is limited, as with certain small-scale public services and social services, it aims to simplify rules and will consider block exemptions; if the impact is greater, it will maintain the rules in...