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The Altmark Update and Social Services: Toward a European Approach

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Financing Services of General Economic Interest

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

Abstract

The 2011 updated Altmark package exempts only particular social services from the notification requirement embedded in Article 108 (3) TFEU. This means that Member States must bring the financing of social services in line with the conditions set out in the 2011 Commission Decision (by changing some key features of the measures governing social services), in order to benefit from the carve out. This may be a rather sensitive matter, given that Member States regard social services as important elements of their domestic policies, whereas the Commission may be inclined to follow a European agenda in this context. This contribution aims to examine whether the Commission compels Member States to adopt a specific (European) model for social services. Furthermore, the contribution dwells upon the intricacies of the latest developments brought about by the 2011 Altmark package by investigating the implications for social services in the EU. This is done by analyzing inter alia the relevant case law and decisional practice, the applicable soft law documents and the relationship between SSGI and competition and free movement rules; furthermore, the 2011 Commission Decision is explored in great detail, the focus being directed at the Decision’s main provisions on matters relating to definitions, act of entrustment, compensation and overcompensation, transparency, and information, as well as the role of Article 106 (2) TFEU in the context of social services. Hard law with a bearing on social services is scarce in EU law. Therefore, the 2011 Commission Decision is of great interest for social services and, as a result, for the national social welfare states, especially since, it may be argued that the Decision provides for some significant bits and pieces of a comprehensive model for the delivery of social services. Thus, the adoption of the updated Altmark package constitutes a significant step toward an EU approach to social services. Last but not least, one may argue that the path has been paved for more binding EU measures meant to further build an EU model for social services based on a balance between State involvement and social needs, on the one hand and considerations of efficiency and competition, on the other hand.

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Notes

  1. 1.

    Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market, OJ 2006 L376/36.

  2. 2.

    Commission Decision 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.

  3. 3.

    White Paper on Services of General Interest, COM (2004) 374 final. This was not the first time the concept of SSGI was mentioned; one can recall the 2001 Commission’s Report to the Laeken European Council on SGI, COM (2001) 598 final.

  4. 4.

    See Szyszczak 2012, pp. 27–28.

  5. 5.

    Communication from the Commission—Implementing the Community Lisbon Programme—Social services of general interest in the European Union, SEC (2006) 516, COM/2006/0177 final, p. 4.

  6. 6.

    Ibid, pp. 4–5.

  7. 7.

    Szyszczak 2012, p. 3. Indeed Neergaard 2012 argues that even within SSGI there may be subcategories recognized by different treatment in Commission policy or European Courts’ case law.

  8. 8.

    Van de Gronden 2011, p. 125.

  9. 9.

    See the Commission Communication Implementing the Community Lisbon programme: Social services of general interest in the European Union, COM/2006/0177 final, p 4 and the Commission Communication A Quality Framework for Services of General Interest in Europe, COM (2011) 900 final, pp. 3 and 4.

  10. 10.

    Commission Communication—Services of general interest, including social services of general interest: a new European commitment, COM (2007) 725 final, p. 7.

  11. 11.

    Commission Staff Working Document, SEC (2010) 1545 final, p. 17.

  12. 12.

    Van de Gronden and Rusu 2012, p. 435.

  13. 13.

    Case C-41/90 Höfner and Elser v Macrotron GmbH [1991] ECR I-1979, para 21.

  14. 14.

    Graham 2010, p. 301.

  15. 15.

    CJEU, Joined Cases C-180/98—C-184/98 Pavlov v Stichting Profesioenfonds Medische Specialisten [2000] ECR I-6451, para 73.

  16. 16.

    OJ 2012 C8/4.

  17. 17.

    2001/C 17/04.

  18. 18.

    See also Van de Gronden 2011, 125.

  19. 19.

    See also Commission Communication—Services of general interest, including social services of general interest: a new European commitment, COM (2007) 725 final.

  20. 20.

    CJEU, Case C-355/00, Freskot [2003] ECR I-5263.

  21. 21.

    See also CJEU, Case C-350/07, Kattner Stahlbau v Maschinenbau- und Metall- Berufsgenossenschaft [2009] ECR I-1513.

  22. 22.

    Case C-208/08 Petra von Chamier–Glisczinski v.Deutsche Angestellten-Krankenkasse [2009] ECR I-6095.

  23. 23.

    Van de Gronden 2011, p. 129.

  24. 24.

    Case C-34/09, Gerardo Ruiz Zambrano v Office national de l’emploi (ONEm), 8 March 2011, n.y.r.

  25. 25.

    Case C-434/09, Shirley McCarthy v Secretary of State for the Home Department, 5 May 2011, n.y.r.

  26. 26.

    Case 256/11, Murat Dereci, Vishaka Heiml, Alban Kokollari, Izunna Emmanuel Maduike and Dragica Stevic v Bundesministerium für Inneres, 15 November 2011, n.y.r.

  27. 27.

    Adam and Van Elsuwege 2012, p. 182.

  28. 28.

    CJEU, Case C-70/95 Sodemare [1997] ECR I-3395.

  29. 29.

    CJEU, Case C-567/07 Sint Servatius [2009] ECR I-9021.

  30. 30.

    See Szyszczak 2011, pp. 9–11.

  31. 31.

    CJEU, Case C-160/91 Poucet et Pistre [1993] ECR I-637; CJEU, Case C-67/96 Albany [1999] ECR I-5751; CJEU, Joined Cases C-115/97, Case C-219/97 Drijvende bokken [1999] ECR I-6121 and CJEU, Case C-437/09, AG2R Prévoyance v Beaudout Père et Fils SARL, judgment of 3 March 2011 (n.y.r.). In AG2R the Court adopted a remarkable standard in evaluating the relevant factors and despite the fact that the scheme under review was characterized by a high degree of solidarity and although the managing body was held to be non-profit-making and under a certain level of state control (even if monitoring the functioning of the scheme had been devolved to representatives of the parties), it was considered to be an undertaking engaged in an economic activity, since the level of State control was not substantial. See also Kerstin 2011, pp. 474–475.

  32. 32.

    Szyszczak 2009, 210.

  33. 33.

    OJ 2012 C8/4.

  34. 34.

    See for example the Zorgverzekeringswet case, Decision of the Commission of 22 December 2005 on the introduction of a risk equalization system in the Dutch Health Insurance, N541/2004 and N542/2004—C(2005) 1329 fin.

  35. 35.

    Such as CJEU, Case C-116/97 and C-117/97 Brentjens [1999] ECR I-6025.

  36. 36.

    Van de Gronden 2011, p. 139.

  37. 37.

    Paragraph 82 of the Freskot ruling.

  38. 38.

    CJEU, Case C-55/96 Job Centre [1997] ECR I-7119.

  39. 39.

    Decision of the Commission in case State aid N 209/2001—Ireland, Guarantee for borrowings of the Housing Finance Agency, 3 July 2001.

  40. 40.

    See Van de Gronden 2011, p. 146.

  41. 41.

    CJEU, Case C-280/00 Altmark [2003] ECR I-7747.

  42. 42.

    As detailed below, this view is consistent with the GC’s approach in BUPA (paras 161 and 162).

  43. 43.

    See Nistor 2011, p. 262.

  44. 44.

    See Van de Gronden 2009, p. 11.

  45. 45.

    See Van de Gronden 2011, p. 140 and Fiedziuk 2010, p. 280.

  46. 46.

    Supra note 31.

  47. 47.

    Paragraph 73 of the ruling states that it still remains to be determined whether AG2R is entrusted with the operation of services of general economic interest within the meaning of Article 106(2) TFEU. See also Sauter 2011a, p. 6.

  48. 48.

    GC, Case T-289/03 British United Provident Association [2008] ECR II-81.

  49. 49.

    Joined Cases T-309/04, T-317/04, T-329/04 and T-336/04 TV2/Danmark v Commission, [2008] ECR II-02935.

  50. 50.

    See also Van de Gronden and Rusu 2012, pp. 421–422.

  51. 51.

    Also, according to para 65 of the ruling, as an undertaking engaged in an economic activity, AG2R was chosen by the social partners, on the basis of financial and economic considerations, from among other undertakings with which it is in competition on the market in the provident services which it offers.

  52. 52.

    See for example CJEU, Case C-159/94 Commission v France (energy monopolies) [1997] ECR I-5851.

  53. 53.

    Supra note 48.

  54. 54.

    See also Schweitzer 2011, p. 30.

  55. 55.

    Sauter 2009, p. 279.

  56. 56.

    See De Vries 2011, pp. 302–305 and Van de Gronden 2009, p. 18.

  57. 57.

    Supra note 34.

  58. 58.

    Decision of the Commission of 6 July 2010 in case N152/2010-Compensation to Arctia Shipping Oy with respect to supplementary pension rights of its employees, C(2010) 4505 Final.

  59. 59.

    Decision of the Commission of 10 October 2007 in case N 597/2006—Reform of the organization of the supplementary pension regime in the banking sector, OJ 2007 C308/9.

  60. 60.

    See Boeshertz and Frederick 2008, p. 34.

  61. 61.

    Commission Decision of 15 December 2009 in cases No E 2/2005 and N 642/2009 (The Netherlands, Existing and special project aid to housing corporations).

  62. 62.

    Cf. also Lavrijssen and De Vries 2009, p. 408.

  63. 63.

    See e.g. the letter of the Minister of Housing of 13 September 2005, Woningcorporaties, Kamerstukken II (Dutch Official Parliamentary Documents), 29 453, no. 20.

  64. 64.

    This threshold was recently raised up to EUR 34.850,00. See http://www.europadecentraal.nl/europesester/643/2123/.

  65. 65.

    See para 14 of the Commission Decision of 15 December 2009 in cases No E 2/2005 and N 642/2009 (The Netherlands, Existing and special project aid to housing corporations).

  66. 66.

    This appeal is registered as GC, Case T-201/10, Case T-202/10 and Case T-203/10.

  67. 67.

    Supra note 39.

  68. 68.

    See the decision of the EFTA surveillance authority in case No 406/08/COL to initiate the formal investigation procedure with regard to the relief of the Icelandic Housing Financing Fund from payment of a State guarantee premium, 27 June 2008.

  69. 69.

    See recital 11 of the Commission Decision on the application of Article 106 (2) TFEU to State aid in the form of public service compensation granted to certain undertakings entrusted with the operation of services of general economic interest, 2012/21/EU.

  70. 70.

    Cf also Thouvenin 2009, pp. 114 and 115.

  71. 71.

    See recital 22 of Directive 2006/123/EC of the European Parliament and the Council of 12 December 2006 on Services in the Internal Market, OJ 2006 L376/page number missing.

  72. 72.

    See recitals 12, 40 and 41, and Article 8 section 2 of Directive 2011/24/EU of the European Parliament and of the Council on the application of patients’ rights in cross-border healthcare, OJ 2011 L88/45.

  73. 73.

    Szyszczak 2012.

  74. 74.

    OJ 2012 C8/4.

  75. 75.

    Supra notes 34 and 48.

  76. 76.

    Supra note 34.

  77. 77.

    See Sauter 2011b, p. 229.

  78. 78.

    See Article 5, para 1 of the 2011 Decision.

  79. 79.

    See paras 25–31 of the 2011 Framework.

  80. 80.

    See Article 5, para 5 of the 2011 Decision.

  81. 81.

    See Coppi 2011.

  82. 82.

    See para 39 of the 2011 Framework.

  83. 83.

    Article 6, para 2 of the 2011 Decision.

  84. 84.

    Article 8 of the 2011 Decision.

  85. 85.

    OJ 2012 C8/15.

  86. 86.

    See para 7 of this communication. See also para 48 of the Communication on the application of the European Union State aid rules to compensation granted for the provision of services of general economic interest.

  87. 87.

    See para 13 of this Communication.

  88. 88.

    Neergaard rightly noted that the claim that SGEI is a concept of EU law seems to be in conflict with the point of departure that the competence to define SGEI missions is vested with the Member States. See Neergaard 2011, p. 41. Debates between the EU institutions and the Member States on the exact contours of SGEI are, therefore, inherent in the EU approach to these services.

  89. 89.

    See para 56 of the 2011 Communication and Article 5, para 9 of the 2011 Decision.

  90. 90.

    See para 61 of the 2011 Communication and Article 5, para 6 of the 2011 Decision.

  91. 91.

    Supra note 31.

  92. 92.

    Supra note 48.

  93. 93.

    Von Danwitz 2011, p. 115.

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Authors and Affiliations

  1. Department of International and European Law, Radboud University Nijmegen, P.O. Box 9049, 6500 KK, Nijmegen, The Netherlands

    Johan W. van de Gronden & Catalin Stefan Rusu

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  1. Johan W. van de Gronden
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  2. Catalin Stefan Rusu
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Correspondence to Johan W. van de Gronden or Catalin Stefan Rusu .

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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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van de Gronden, J.W., Rusu, C.S. (2013). The Altmark Update and Social Services: Toward a European Approach. 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_10

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