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The Unborn EU Framework Directive on SGI

Impossible Re-Regulation

Between 2000 and 2007, an intense debate about a possible Framework Directive on SGI took place against the backdrop of the pro-regulation coalition’s mobilization described above. The purpose of such a directive was to specify how the principles of equality in access to welfare services, their availability, affordability, quality and so on could be put into practice and how they should be coexist with EU competition law. In other words, the directive would have established permanent derogations to competition in the name of said principles. While the Services Directive constitutes a horizontal legal framework aimed at liberalizing and (to some extent) deregulating, the Framework Directive would have represented its positive integration pendant by re-regulating SGI at the EU level. The notion of Framework Directive (or ‘horizontal legal framework’) implied that, in tune with the principle of subsidiarity, a large leeway should be left to the Member States to determine the practical arrangements for reaching the agreed goals. Following its initial communication from 1996, the Commission published a second communication on SGI in 2001 which remains vague about the possible adoption of a directive. Referring to the conclusions of the European Council of 2000, it acknowledges that ‘the changes currently under way point to the need for a proactive stance on general interest services, which incorporates and goes beyond the approach based on the single market’ (European Commission 2001, §57); it also mentions the CEEP-ETUC Charter. At the same time, the market approach is ubiquitous, as the Commission proposes to ‘make the best out of market opening’ and focuses strongly on consumer protection. As far as legislation is concerned, it only goes as far as saying that it will ‘continue to follow the practice of preparing for changes in the regulatory framework through the issue of a Green Paper accompanied or complemented by further stages of public consultation’. The Green Paper, published three years later in 2003 (European Commission 2003a, b, c), served to consult all stakeholders, that is public authorities at all levels of government, private and public enterprises, interest groups, unions and so on, on a number of issues involved with the regulation of SGI, especially the idea of proposing a piece of legislation. In the Green Paper, the Commission mentions that a Framework Directive could be compatible with sectoral rules; but it stresses at the same time that a general framework would necessarily be limited and ‘based on the common denominator of different services with very different characteristics’, on the one hand, and on the other hand that the treaty did not provide a solid legal basis for the EU to legislate (as this legal basis would only be adopted with the Treaty of Lisbon). The White Paper issued the following year concludes that the Commission considers it appropriate not to proceed with a legislative proposal at this point in time but to re-examine the issue at a later stage. While the adoption of the Services Directive in 2006 contributes to accentuating the market approach to SGI, leaving a number of open questions, in a communication from 2007 the Commission confirmed that there will be no Framework Directive for re-balancing liberalization as the issue had clearly disappeared from the agenda.

Thus, how can we explain the lack of will on the part of the EU Commission to propose a Framework Directive on SGI and leaving such a lengthy political debate in a deadlock? In spite of arguments claiming the political decline of the Commission, we have argued elsewhere that it still remains a key entrepreneur (Crespy and Menz 2015a). Especially under the regime of co-decision, its monopoly for initiating legislation enables it to shape the political agenda to a large extent. However, the EU Commission cannot be regarded as a monolithic actor, and changing political moods as well as internal power relations play an important role. Actors concurred in stressing that the contentious debate over the Services Directive acted as a political trauma for the EU Commission, who wanted to avoid the politicization of SGI by proposing another broad, horizontal legislation at any price.[1] Soon after, the dossier of SGI was transferred from the DG MARKT to the General Secretariat because it was deemed too sensitive politically and Commissioner McCreevy, the successor of Frits Bolkestein, did not want to deal with it after the experience of the Services Directive. Thus, paradoxically, the fear of politicization prevented the Commission from engaging with a political balancing act towards re-regulation. Nevertheless, this does not mean that the Commission’s approach is not shaped by a prevailing political approach. As a former senior official put it:

The point of view of the Commission is consistently the following: economic integration, the integration of markets is good for Europe and for living standards. It is better to have more competition and impede parochialism and nepotism. This is always the trend in local authorities: for political reasons, they always tend to favour local services providers (...) Competition and the introduction of the market in some sections of public services is the only way for ensuring increased efficiency and the survival of the public sector.[2]

However, it would be cartoonish to think that the Commission alone decided of the fate of the Framework Directive on SGI. In reality, it was reluctant to propose such legislation because it concluded that support among the Member States as well as within the EP was insufficient to guarantee the success of a significant move towards positive integration.

  • [1] Interview with a representative of CEEP, 14 March 2013; interview with a former senior officialfrom the European Commission, 31 May 2011.
  • [2] Interview with a former senior official from the European Commission, Cambridge (MA), May
 
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