Does not it matter? Widening of the derogation for Services of General Interests
| Published date | 01 February 2020 |
| Date | 01 February 2020 |
| DOI | 10.1177/1023263X19890211 |
| Author | Ildikó Bartha,Tamás M. Horváth |
| Subject Matter | Articles |
Article
Does not it matter? Widening
of the derogation for Services
of General Interests
Ildik ´
o Bartha* and Tam´
as M. Horv´
ath**
Abstract
The scope of derogation possibilities for Services of General Interests in the EU internal market
has been widened by legislators for more than fifteen years. The process is also supported by the
case law of the Court of Justice of the European Union. State aid and other influential instruments
are allowed to derogate from internal market and competition rules while their roles are heavily
discussed in the circumstances of free market economy. Are these solutions leading to new
regimes in European integration? This study aims at reconstructing the sense of this process in its
details. This analytical study is based on comparative legal investigations applying qualitative and
quantitative methods.
Keywords
Derogation, services of general interests (SGI), exclusive rights, state aid, in-house service
management, state-owned companies, regulation of fees and charges
1. Introduction
The market of public services has already been influenced by direct derogative considerations for
more than fifteen years in the European Union. So-called ‘general interest’ is cited as a reason to
allow exceptions from general rules governing the EU’s internal market and competition. Most
explanations of this issue are based on the logic of government failures
1
or any type of influential
* Senior Research Fellow, MTA-DEPublic Service Research Group; University of Debrecen, Hungary
** Leader of the MTA-DE Public Service Research Group; University of Debrecen, Hungary
Corresponding author:
Ildik´
o Bartha, University of Debrecen, Hungary, 4028 Debrecen, Kassai Str. 26, Hungary.
E-mail: bartha.ildiko@law.unideb.hu
1. J.M. Burke, A Critical Account of Article 106(2) TFEU: Government Failure in Public Service Provision (Oxford
University Press, 2018); T. Prosser, The Limits of Competition Law: Markets and Public Services (Oxford University
Press, 2005).
Maastricht Journal of European and
Comparative Law
2020, Vol. 27(1) 55–74
ªThe Author(s) 2020
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DOI: 10.1177/1023263X19890211
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interest
2
against integrative motives. Our view differs based on the findings of this analysis, which
indicate that an inherent acceptance for legitimate influence of derogative considerations on EU
market rules can be derived consciously from the legal framework itself.
The theoretical background of the paper is based on the policy approach of EU law towards
Member States’ leeway to pursue their particular regulatory interests. The ongoing process of
spreading this policy approach is scrutinized from the perspective of Member States’ deroga-
tions under EU law, as public services
3
are subject to EU internal market rules and EU
competition rules.
4
Although EU law also utilises terms that originally sprung from national law (for example,
public utilities and/or public services), it has a distinct conceptual framework.
5
The EU termi-
nology recognizes the categories of Services of General Economic Interest (SGEI), Services of
General Interest (SGI), and, recently, Services of Social General Interest (SSGI), together with
the emergence of the ‘European Social Model’.
6
Theformer(SGEI)isusedinprimarylawtexts,
without being defined in the Treaty or in secondary legislation. However, the case law of the
Court of Justice of the European Union (hereinafter ‘CJEU’) and the Commission’s practice
reflect the existence of a broad agreement that SGEI refers to services of an economic nature
subject to specific public service obligations (PSO), where a general interest criterion differ-
entiates them from other economic activities.
7
The term SGI, which is the closest EU law
equivalent to the traditional notion of public services,
8
is also derived from practice rather than
from systematic theorization. It is broader than SGEI and covers both market and non-market
services classified by public authorities as being of general interest and subject to specific public
service obligations.
9
Although evaluation studies of public sector
10
and institutional reforms
11
at intergovernmental
levels are based on different reform terminologies, in this case the question is to what extent the
ongoing development process may be derived from inherent explanations of regulatory motivation
in the EU. Our hypothesis, which concerns particularly SGI in internal market rules, is that
2. M. Varju, ‘Conflict and Complementarity: EU Obligations, Member State Interests and Services of General Interest’,
23 European Public Law (2017), p. 347–364.
3. H. Wollmann and G. Marcou (eds.), The Provision of Public Services in Europe: Between State, Local Government and
Market (Edward Elgar, 2010).
4. W. Sauter, Public Services in EU Law (Cambridge University Press, 2014).
5. For details see E. Szyszczak, ‘Recent Case Law: Altmark and Local and Regional Subsidies to Public Services’, paper
presented at the EU Judicial Training ‘The Law and Economics of State Aid Before National Courts’, UCD Dublin
(2017). Burke concludes that SGEI concept is wider than the traditional ‘public services’ definition (J. Burke, A
Critical Account of Article 106(2) TFEU, p. 1).
6. Communication from the Commission – Implementing the Community Lisbon programme – Social services of general
interest in the European Union, COM(2006) 177 final.
7. See in particular the definition given by the CJEU in its judgments in Cases C-179/90 Merci convenzionali porto di
Genova, EU:C:1991:464 and C-242/95 GT-Link, EU:C:1997:376.
8. W. Sauter, Public Services in EU Law, p. 17.
9. P. Bauby and M.M. Similie, ‘What Impact Have the European Court of Justice Decisions Had on Local Public Ser-
vices?’, in I. Kopric, G. Marcou and H. Wollmann (eds.), Public and Social Services in Europe. From Public and
Municipal to Private Sector Provision (Palgrave Macmillan, 2016), p. 27–40.
10. H. Wollmann, Evaluation in Public Sector Reform: Concepts and Practice in International Perspective (Edward Elgar,
2003).
11. S. Kuhlmann and H. Wollmann, ‘The Evaluation of Institutional Reforms at Sub-national Government Levels: A Still
Neglected Research Agenda’, 40 Local Government Studies (2011), p. 479.
56 Maastricht Journal of European and Comparative Law 27(1)
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