On 20 December 2011, following extensive public consultation, the EC adopted a Communication outlining a new package of State aid rules for Services of General Economic Interest (SGEI).
An SGEI is a service of an economic nature that public authorities identify as being of particular importance to citizens, but which are not supplied by market forces alone, or at least not to the extent and under the conditions required by society. Their provision may therefore require public intervention.
Examples of SGEI range from providing large commercial services to the entire population at affordable conditions (such as postal services, energy security of supply, electronic communication services, public transport), to a wide range of health and social services (such as care for elderly or disabled people). SGEI are carried out in the public interest under conditions defined by the State, which imposes a public service obligation on the provider(s). Since SGEI provision under such conditions may not generate a (sufficient) profit for the provider, public service compensation might be needed to offset the additional costs stemming from the public service obligation.
A brief summary of the newly adopted SGEI package
On publication of the new SGEI package, the Commission Vice-President in charge of competition policy, Joaquín Almunia, stated that "the new SGEI package provides Member States with a simpler, clearer and more flexible framework for supporting the delivery of high-quality public services to citizens which have become even more necessary in these crisis times."
The new SGEI package has three main strands and aims to provide clarification of key concepts in the field of State aid for SGEI. The new SGEI de minimis Regulation aims to provide simplification for small, local SGEI, for which compensation below a given threshold is deemed not to constitute State aid. The new SGEI Decision acts as a block exemption from notification of compensation that is State aid, but fulfils relatively simple compatibility criteria. Finally, the revised SGEI Framework includes a more thorough check for large compensation amounts that have to be notified to and assessed by the Commission. Please click on the links for more information.
Click here to return to our main page