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Financing Services of General Economic Interest pp 249–272Cite as

This Won’t Hurt a Bit: The Commission’s Approach to Services of General Economic Interest and State Aid to Hospitals

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Part of the book series: Legal Issues of Services of General Interest ((LEGAL))

Abstract

The exemption regime for healthcare services that constitute SGEI as part of the 2011 Decision under the new SGEI Package has been broadened considerably to cover not just hospital care but all (curative) healthcare as well as long-term care, irrespective of the amount of aid or turnover concerned. The IRIS-H decision concerning the financing of public hospitals in the Brussels capital region of Belgium, although adopted by the Commission prior to the 2011 SGEI Package, proves a useful illustration of the way the Commission applies the rules on State aid and SGEI compensation in practice. Both the new 2011 SGEI Package and the State aid practice show that the Commission is content to do without a stringent application of the State aid rules based on economic analysis in the hospital sector—or indeed in healthcare and long-term care at large: net costs are assumed as given, and only the scope for reasonable profits is restrained. The Commission could presumably reverse this trend by bringing its own practice into line with a more ambitious interpretation of its recent legislation, and insisting that Member States do the same.

The views expressed here are personal.

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Notes

  1. 1.

    Article 168 TFEU.

  2. 2.

    See also Hancher and Sauter 2012; Sauter and van de Gronden 2011, p. 615.

  3. 3.

    See also Koenig and Paul 2010, p. 755.

  4. 4.

    CJEU, Case C-280/00 Altmark Trans GmbH and Regierungspräsidium Magdeburg v Nahverkehrsgesellschaft Altmark GmbH, and Oberbundesanwalt beim Bundesverwaltungsgericht (Altmark) [2003] ECR I-7747.

  5. 5.

    Sauter 2012.

  6. 6.

    European Commission, Decision of 28 October 2009, State aid measure NN 54/2009 (ex CP244/2005)—Belgium. Financing of public hospitals of the IRIS-network of the Brussels capital region. (Available in Dutch and in French only).

  7. 7.

    Commission Decision of 28 November 2005 on the application of Article 86(2) of the EC Treaty to State aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest OJ 2005 L312/67; Community framework for State aid in the form of public service compensation OJ 2005 C297/4; Commission Directive 2006/111/EC of 16 November 2006 on the transparency of financial relations between Member States and public undertakings as well as on financial transparency within certain undertakings OJ 2006 L318/17.

  8. 8.

    Commission Decision of 20.12.2011 on the application of Article 106(2) of the Treaty on the Functioning of the European Union to State aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest OJ 2012 L7/3; Communication Commission European Union framework for State aid in the form of public service compensation, OJ 2012 C8/15; Communication from the Commission on the application of the European Union State aid rules to compensation granted for the provision of services of general economic interest Brussels, [2012] C8/4. A draft Commission Regulation on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid granted to undertakings providing services of general economic interest was scheduled for adoption in April 2012, OJ 2012 C8/23 and was adopted as Regulation No 360/2012 on 25 April 2012: OJ 2012. L 114/8.

  9. 9.

    Above n 6.

  10. 10.

    European Commission, Decision of 27 February 2002, State aid measure N 543/2001—Ireland. Capital allowances for hospitals.

  11. 11.

    CJEU, Case T-167/04 Asklepios Kliniken GmbH v Commission [2007] ECR II-2379.

  12. 12.

    GC, Case T-397/03 Fédération de l’hospitalisation privée, OJ 2006, C22/25. This case was withdrawn and removed from the register.

  13. 13.

    Case T-167/04 Asklepios Kliniken GmbH v Commission [2007] ECR II-2379.

  14. 14.

    Ibid, paras 77–78.

  15. 15.

    Ibid, para 81.

  16. 16.

    Decision of the Commission of 13 May 2003 with regard to State aid N 46/2003—Ireland—risk equalisation scheme in the Irish health Insurance market; Decision of the Commission of 3 May 2005 with regard to State aid N 541/2004 en N 542/2004—The Netherlands—risk equalisation system and retention of reserves; Decision of the Commission of 17 June 2009 with regard to State aid N 582/2008 (IP/09/961)—Ireland—health insurance intergenerational solidarity relief.

  17. 17.

    GC, Case T-289/03 British United Provident Association Ltd (BUPA) et al. v Commission [2008] ECR II-81.

  18. 18.

    GC, Joined Cases T-128/08 and T-241/08 Coordination bruxelloise d'Institutions sociales et de santé (CBI) and Association bruxelloise des institutions des soins de santé privées asbl (ABISP) v Commission, OJ 2010, C195/17.

  19. 19.

    GC, Case T-137/10 Coordination bruxelloise d'Institutions sociales et de santé (CBI) v Commission, Pub 2010, C148/38.

  20. 20.

    As was the case on 31 December 1999, compared to a cumulative deficit of almost € 200 million on 31 December 1995, the year of the above-mentioned aid.

  21. 21.

    IRIS-H Decision, above n 6, points 29–48.

  22. 22.

    Ibid., points 43–48.

  23. 23.

    Loi sur les hôpitaux coordonnée du 7 août 1987 (coordinated law on hospitals of 7 August 1987), Moniteur Belge (Belgian offical journal) 7 October 1987, in force from 17 October 1987.

  24. 24.

    According to a report by the Belgian Mutualités Chretiennes discusssed by Lienard 2004, p. 10 (with statistical annexes). This was the difference between a hospital day in public (€ 258) and private hospitals (€ 237) in 2003.

  25. 25.

    Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 93 of the EC Treaty, OJ 1999, L83/1.

  26. 26.

    CJEU, Case T-266/02 Deutsche Post v Commission [2008] ECR II-1233.

  27. 27.

    CJEU, Case C-280/00 Altmark Trans above n 4.

  28. 28.

    CJEU, Case C-237/04 Enirisorse SpA v Sotacarbo SpA [2006] ECR I-2843; CJEU, Case C-41/90 Klaus Höfner and Fritz Elser v Macrotron GmbH [1991] ECR I-1979; CJEU, Joined Cases C-180/98—C-184/98 Pavel Pavlov et al. v Stichting Pensioenfonds Medische Specialisten [2000] ECR I-6451.

  29. 29.

    CJEU, Case C-244/94 Fédération française des sociétés d'assurances et al. [1995] ECR I-4013.

  30. 30.

    IRIS-H Decision, above n 6, point 111. This is remarkable because it would appear that market entry by means of public procurement would be a private alternative to the IRIS-H network.

  31. 31.

    CJEU, Case C-280/00 Altmark Trans, above n 4.

  32. 32.

    GC, Case T-289/03 BUPA, above n 17.

  33. 33.

    Ibid., para 165.

  34. 34.

    Loi organique des Centres Publics d'Action Sociale du 8 juillet 1976 (Organic law on the public centres for social security), Belgian official journal 5 August 1976.

  35. 35.

    ‘The obligatory nature of the service and therefore the existence of a service of general economic interest are proven if the service providers is obliged to conclude agreements on fixed terms.’ IRIS-H Decision, para 149.

  36. 36.

    GC, Case T-289/03 BUPA, above n 17, para 186.

  37. 37.

    Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts, OJ 2004 L134/114.

  38. 38.

    IRIS-H Decision, above n 5, para 161.

  39. 39.

    Ibid., para 165.

  40. 40.

    Cf. Grespan 2008, 4.1140ff.

  41. 41.

    GC, Case T-289/03 BUPA, above n 16, para 214.

  42. 42.

    IRIS-H Decision, above n 4, para 177.

  43. 43.

    GC, Case T-289/03 BUPA, above note 17, para 222. Most likely the GC only intended to juxtapose the necessity and the proportionality test in order to highlight that the latter test is whether the means used are manifestly inappropriate.

  44. 44.

    The Commission examined all four criteria in its Decision of 17 June 2009, State aid No N 582/2008—Ireland. Health Insurance intergenerational solidarity relief.

  45. 45.

    GC, Case T-289/03 BUPA (above n 17), also assumes overlap. Cf. GC, Case T-8/06 FAB Fernsehen aus Berlin GmbH v Commission [2009] ECR II-196, paras 64 and 65–69.

  46. 46.

    COM (2005) 107 final of 7 June 2005.

  47. 47.

    Cf. Hancher and Larouche 2010.

  48. 48.

    GC, Case T-442/03 SIC—Sociedade Independente de Comunicação, SA v Commission [2008] ECR 1161, at para 212.

  49. 49.

    A new strategy for the single market: at the service of Europe’s economy and society. Report to the President of the European Commission, José Manuel Barroso, by Mario Monti, 9 May 2010 (especially point 3.3. Social services and the single market.

  50. 50.

    Commission Communication, European Union framework for State aid in the form of public service compensation, C (2011) 9406 final.

  51. 51.

    Above n 8.

  52. 52.

    http://ec.europa.eu/internal_market/publicprocurement/modernising_rules/reform_proposals_en.htm

  53. 53.

    However, see Commission Decision 2006/513/EC of 9 November 2005 on the State Aid which the Federal Republic of Germany has implemented for the introduction of digital terrestrial television (DVB-T) in Berlin-Brandenburg, OJ 2006, L200/14, confirmed in GC, Case T-8/06 FAB Fernsehen, above n 46, paras 63ff.

  54. 54.

    Directive 2011/24/EU of the European Parliament and of the Council of 9 March 2011 on the application of patients’ rights in cross-border healthcare, OJ 2011, L88/45.

  55. 55.

    Cf. Office of Fair Trading (OFT) (2010) http://www.oft.gov.uk/shared_oft/economic_research/oft1242.pdf (last accessed 15 May 2012); J. Fingleton, Reforming public services, speech of 7 July 2010. http://www.oft.gov.uk/shared_oft/speeches/689752/0810.pdf (last accessed 15 May 2012).

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  1. Tilburg Law School, Warandelaan 2, 5037 AB, Tilburg, The Netherlands

    Leigh Hancher & Wolf Sauter

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  1. Leigh Hancher
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  1. , School of Law, University of Leicester, University Road, Leicester, LE1 7RH, United Kingdom

    Erika Szyszczak

  2. , Faculty of Law, Radboud University, Comeniuslaan 4, Nijmegen, 6525 HP, Netherlands

    Johan Willem van de Gronden

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Hancher, L., Sauter, W. (2013). This Won’t Hurt a Bit: The Commission’s Approach to Services of General Economic Interest and State Aid to Hospitals. In: Szyszczak, E., van de Gronden, J. (eds) Financing Services of General Economic Interest. Legal Issues of Services of General Interest. T.M.C. Asser Press, The Hague, The Netherlands. https://doi.org/10.1007/978-90-6704-906-1_12

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