SERVICES OF GENERAL ECONOMIC INTEREST : FEWER CONSTRAINTS ON STATE AID FOR SGEIS.

 
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The European Commission's revision of state aid rules for services of general economic interest (SGEI) clarifies concepts and introduces a more proportionate approach by easing up constraints for more sectors. It amends the 2005 Altmark (or Monti-Kroes) package, which spelled out the conditions for the compatibility of compensation granted to a company that provides a public service.

The Almunia package', published on 20 December 2011, introduces changes in legal form and substance. It includes four elements with separate legal force: a decision on exemption from notification; a revised framework for compensation for SGEIs that are more commercial in nature, and a very general communication that clarifies the concepts of rules on SGEI compensation. These texts will enter into force on 31 January 2012. The fourth element of the package is a new regulation on compensation for so-called de minimis SGEIs, which exempts "small" public services that pose no threat to competition from the obligation of prior notification and authorisation when the compensation does not exceed a certain level. This text still has to undergo a final round of consultation and is expected to be adopted in April 2012 (see separate article).

The general communication on SGEIs, a sort of handbook of concepts (distinction between economic and non-economic activities) gives an overview of the concepts specific to state aid for SGEIs and provides explanations on key questions, summing up recent EU case law. Among other things, it clarifies the concept of economic activity, the limits imposed on member states in defining a service as one of general economic interest, effects on trade and the relationship between state aid and public procurement rules.

ADDITIONAL EXEMPTIONS

The main innovation resides in the decision on notification, which extends exemption possibilities. Considering the limited impact on trade in the EU, compensation for certain public services is exempted from notification in order to relieve the burden on the Commission, since there is no threat to competition. The executive widens the scope of exemptions from notification, regardless of the amount of compensation received, a measure previously reserved to hospitals and social housing: it now concerns all social services provided they meet "social needs as regards health and long-term care, child care, access to and reintegration in the labour market, social housing and the care and social inclusion of...

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