Summary report of the 3rd forum on social services of general interest by FPS Social Security

organised by

the Belgian Presidency of the Council of the European Union on 26-27 October 2010 in Brussels Coordinated by Manuel PAOLILLO and StĂŠphane RODRIGUES

FOREWORD by Mrs Laurette ONKELINX

PREFACE by Mr Koen LENAERTS

FPS Social Security

SUMMARY REPORT rd OF THE 3 FORUM ON SOCIAL SERVICES OF GENERAL INTEREST (SSGI) organised by

the Belgian Presidency of the Council of the European Union on 26-27 October 2010 in Brussels Coordinated by Manuel PAOLILLO and Stéphane RODRIGUES

Warning This document by no means should be equated to the publication as such of the verbatim proceedings of the 3rd Forum on Social Services of General Interest, which was held in Brussels on 26-27 October 2010 in the frame of the Belgian Presidency of Council of the European Union. We have simply made a modest attempt to group the main interventions and debates of this forum. In the case of guests who were invited to give a speech during the opening and closing sessions and the interventions of the various panellists only the delivered speech is binding.

Licence Creative Commons 2011

Federal Public Service Social Security Boulevard du Jardin Botanique 50, box 100 B-1000 Brussels Editor: Frank VAN MASSENHOVE www.socialsecurity.fgov.be

The information contained in this publication does not necessarily reflect the position or opinion of the European Commission and the FPS Social Security.

Event co-financed by the European Commission DG Employment, Social Affairs and Inclusion

ISBN - 9789077940037

october 2011

FOREWORD by Mrs Laurette ONKELINX

Deputy Prime Minister and Minister for Social Affairs and Public Health, in charge of Social Integration

One year later, the messages conveyed by the 3rd Forum on SSGI are more relevant than ever and unfortunately their urgency has become even more keenly felt. Social protection, local social services and public services now more than ever have to contend with budget cuts across several European countries due to the economic and financial crisis. This is not only a matter of concern; it is also an irrational development: today these economic stabilizers are punished for a crisis on the financial markets, although they contribute to their growth. The social impact of these drastic budget cuts has not been properly analysed at the European level 1. Meanwhile the 100th session of the ILO Conference on social protection once again highlights the importance of qualitative social services and values such as solidarity and social cohesion, to which these services contribute. Today the response to challenges in terms of citizens' basic social needs has to be devised on a global level, including the European level, instead of merely being based on a market logic. SSGI are not the most lucrative activity, except if you segment markets according to income categories, but this would undermine 60 years of social progress founded on

1 As a an exception, we should mention the report of the European Parliament : REPORT of the 5th of October on the financial, economic and social crisis: recommendations concerning measures and initiatives to be taken (mid-term report) - (2009/2182(INI))

solidarity in Europe. Thus we should be happy that the policy on state aid is slowly beginning to take into account the reality of social services with the new package of EU Commissioner Joaquin ALMUNIA on public service compensation. However the recognition of their specificity in the internal market is falling behind. Once again foreign trade policy and the DOHA round will determine the future. The political support that emerged during the 3rd Forum thus should be translated into simplified rules and the necessary budgetary resources so that these SSGI can achieve what they set out to do, as well as providing a qualitative service. Given the works of various institutions, such as the European Parliament or the European Committee of the Regions in this frame, the time has now come for concerted action. This is no longer merely a â&#x20AC;&#x153;socialâ&#x20AC;? issue, it primarily relates to the legitimacy of the European integration project and to the public interest.

PREFACE by Mr Koen LENAERTS

Judge of the Court of Justice of the European Union and Professor of European Union Law at the Katholieke Universiteit Leuven

On 26-27 October 2010, the Belgian Presidency of the Council of the European Union organised the 3rd European Forum on social services of general interest (hereinafter the “SSGI”). It was a big success, as evidenced by the 15 recommendations addressed to the European Parliament, the Council and the Commission, which are the result of the fruitful discussions within the Forum. I would like to congratulate the Belgian Presidency for this initiative, while stressing that it is with great pleasure that I agreed to write this preface. The Forum’s main objective was to discuss the place that the Union’s legal system must grant to SSIG, particularly in light of the entry into force of the Treaty of Lisbon on December 1st, 2009, and the economic and financial crisis, which has hit several Member States hard. As noted by Mrs Laurette Onkelinx, Belgian Deputy Prime Minister and Minister of Social Affairs and Public Health, the road to Europe is dotted with crossroads where it is confronted with the political and social challenges of the SSGI issue. In this frame, the Forum’s participants (including members of the EU institutions, national governments, regional and local governments, civil society organisations and social partners) decided to focus on three different issues, which are all linked. First, it seems difficult to reconcile a high level of quality, universality and the financial sustainability of SSGI with the policy of fiscal austerity that most governments have now implemented. However the Member States will not be able to destroy the essential core

of SSGI without creating situations of social exclusion. So we need to think about how to develop SSGI of a high quality, that are economically solvent and which ensure universal access, despite the fact that public funding has become increasingly limited. Secondly, given that the European Union aims to achieve both economic and social objectives, which all have the same constitutional importance, the implementation of various EU policies may give rise to problems of transversal consistency. The two-pronged social-economic dimension of the Union’s objectives means that you can interpret SSGI in two ways. On the one hand, SSGIs can be conceived as exceptions to the EU competition rules. On the other hand, they are the ultimate symbol of the European social model, through which Member States try to control market forces which, in the absence of any intervention by the public authorities, would deprive some citizens of access to SSGI. Thus we need to establish a correct balance between the establishment and proper functioning of the internal market, on the one hand, and European integration, which enhances geographical and social cohesion, on the other hand. Thirdly, while Member States have wide discretion when it comes to defining what they regard as SSGI, their powers are exercised in the framework of Union legislation, meaning under EU competition and public procurement rules. So it was important to determine the margin available to Member States to supply, commission and organise SSGI of a high level of quality. To answer these questions, the Forum’s participants examined the changes to primary Union law as introduced by the Treaty of Lisbon. Article 14 TFEU contains two significant changes. Firstly, it applies “without prejudice to Article 4 [TEU] and to Articles 93, 106 and 107 [TFEU].” While the reference to the last three articles had already been incorporated in the former Article 16 EC, the reference to Article 4 TEU, which aims to protect the constitutional identity and the institutional autonomy of Member States, is unprecedented. Secondly, by adding a last phrase to Article 14 TFEU, the Lisbon Treaty has introduced a new legal basis that allows the Union’s legislative body to establish principles, by adopting rules that are in line with ordinary legislative procedures, and to set economic and financial conditions for the functioning of services of general economic interest. This last sentence contains a horizontal clause aimed at regulating all SGEI. With regard to the Protocol (No. 26) on services of general interest, which was appended by the Lisbon Treaty to the TEU and TFEU, it aims to clarify and complete Article 14 TFEU. The first article of this protocol provides a partial list of common values for SGEI. Article 2 – for the first time in primary legislation – differentiates between SGEI and non-economic services of general interest. The Charter of Fundamental Rights of the European Union (hereinafter “the Charter”) which, in accordance with Article 6, first paragraph, TEU, has the same legal value as the Treaties, in Article 36 provides that “the Union recognises and respects access to services of general economic interest as provided for in national laws

preface

and practices, in accordance with the Treaty establishing the European Community, in order to promote the social and territorial cohesion of the Union”. The Lisbon Treaty also introduced horizontal provisions, which, when read in conjunction with Article 14 TFEU, tend to support a more social orientation of SSIG. In this regard, let me cite three examples. Firstly, the inclusion of “solidarity” among the Union’s values as enshrined in Article 2 TEU. Secondly, Article 3 TEU provides that the Union shall work to create a “highly competitive social market economy, aiming at full employment and social progress.” Thirdly, Article 9 TFEU contains, as recently noted by Advocate General Cruz Villalón, “a transversal social protection clause” that “insofar as [it] necessarily imposes a high degree of social protection, it allows Member States to limit a [fundamental] right, in view of guaranteeing a certain level of social protection, and to do this without Union legislation considering this to be extraordinary, and thus meriting a restrictive analysis” 2. The Court of Justice of the European Union will thus have to determine the scope and meaning of these provisions, as the interpreter of EU legislation, and also of any resulting legislation, while guaranteeing the equilibrium between the “economic” and “social” aspects, as required by the authors of the Lisbon Treaty.

2 See the conclusions of Advocate General Cruz Villalón in the Santos Palhota case, judgement of the Court of 10 June 2010, C515/08, not yet published in the European Court Reports, points 51 and following.

Acknowledgements The organisation of the third forum on SSGI, in the frame of the Belgian Presidency of the Council of the European Union - its content and its practical and logistical aspects - would not have been possible without a strong and motivated team. The elaboration of this document is in the same vein, as it is the result of a fruitful collaboration. Thank you to Valérie CUVELIER for having helped me to manage this project from the start, to Muriel RABAU, Tom AUWERS for their invaluable advice and the flexibility which they accorded me in the frame of the organisation of this event. Thank you to Concetta CULTRERA of the European Commission for the interesting and passionate discussions on SSGI and for her assistance in developing the 3rd Forum. Thank you to Professor Stéphane RODRIGUES for his fantastic expertise which he was so kind to share, to Sébastien KAYEMBE, without whose help the present publication would have never been published. Thank you also to Eddy CAEKELBERGHS for moderating the debates, and his relevant and at times irreverent questions. Thank you to Stijn LEFEBURE for having overseen the entire session on the horizontal social clause. Thank you also to Marc MORSA for his fine work and detailed analysis, and to Bérengère STEPPE and Sandrine DIERIECKX for their in-depth work on legal issues and their support, at all times. A special thank you to the 2010 Team, Maxime RAETS, Gauthier COCLE, Julien SCHREIBER, and Kim VAN AKEN, for their generosity and their dedication as well as to Angélique HEUSICOM, Koen VLEMINCKX, Nele HEERWEGH, Pierre NIEGO, Virginie LIESS, Amaury LEGRAIN and to the current staff, Cécile LEONARD, Cécile ATTA, Liviana ROVINELLI, Yvette DE BODT, Marleen VAN NIEUWENHUYSEN, and the translation service of Christian HUTS; thank you to Linda TRAVERSA for her work on the German parts. We would also like to thank the staff of the cabinet of Minister Laurette ONKELINX, Yves GOLDSTEIN, Maud D’HONDT, Maxime HANON-LECLERCQ and of course Jacques OUZIEL. I would like to thank my wife Angélique and my children Luca and Marianna for their patience during 2010. They were also part of the Team. Thank you also to all of the speakers, experts and participants who contributed to the debate on SSGI in a context of a Europe, which we hope will be marked by more solidarity.

Manuel PAOLILLO Project Manager of the 3rd Forum on SSGI Brussels, August 2011

Table of content Warning. ................................................................................................................................................................................................................................................................................. 2 FOREWORD.............................................................................................................................................................................................................................................................................. 5 PREFACE. .....................................................................................................................................................................................................................................................................................7 Acknowledgements.........................................................................................................................................................................................................................................11 TABLE OF CONTENT. ................................................................................................................................................................................................................................................. 13 INTRODUCTION ............................................................................................................................................................................................................................................................... 17

1. PLENARY OPENING SESSION

....................................................................................................................................................................... 21 1.1. Opening speech of Mrs Laurette ONKELINX. .................................................................................................................................................... 25 1.2. Opening address of Mr László ANDOR........................................................................................................................................................................ 27 1.3. Intervention of Mr François ARBAULT ..................................................................................................................................................................... 29 1.4. Intervention of Mr Joaquín ALMUNIA . ................................................................................................................................................................................ 31 1.5. Intervention of Mrs Pervenche BERES .................................................................................................................................................................. 33 1.6. Responses of the other participants......................................................................................................................................................................... 35 1.7. Parenthesis ........................................................................................................................................................................................................................................................37

2. WORKSHOPS

......................................................................................................................................................................................................................................... 39 2.1. Report of the workshop on a voluntary European quality framework for SSGI................................... 41 1. Presentation and objectives of the workshop.............................................................................................................................................................. 41 2. Intervention of the panellists.............................................................................................................................................................................................................. 42 3. Debates between panellists and participants............................................................................................................................................................. 48 4. Summary and recommendations................................................................................................................................................................................................. 51 5. Parenthesis................................................................................................................................................................................................................................................................. 52

2.2. Maintaining a high level of quality in the current crisis context. ................................................................................ 53 1. Presentation and objectives of the workshop............................................................................................................................................................. 53 2. Interventions of the panellists.......................................................................................................................................................................................................... 54 3. Discussion between panellists and participants...................................................................................................................................................... 61 4. Summary and recommendations................................................................................................................................................................................................ 68 5. Parenthesis................................................................................................................................................................................................................................................................. 69

Report of the workshop on a voluntary European quality framework for SSGI

2.3. SSGI and state aid ................................................................................................................................................................................................................................... 71 1. Presentation and objectives of the workshop.............................................................................................................................................................. 71 2. Interventions of the panellists........................................................................................................................................................................................................... 72 3. Debate between panellists and participants..................................................................................................................................................................79 4. Summary and recommendations................................................................................................................................................................................................ 84 5. Parenthesis..................................................................................................................................................................................................................................................................87 2.4. SSGI and the internal market. .............................................................................................................................................................................................. 89 1. Presentation and objectives of the workshop............................................................................................................................................................. 89 2. Interventions of the panellists.......................................................................................................................................................................................................... 90 3. Debate between panellists and participants..................................................................................................................................................................97 4. Summary and recommendations............................................................................................................................................................................................. 101 5. Parenthesis..............................................................................................................................................................................................................................................................102 2.5. SSGI and public procurement............................................................................................................................................................................................103 1. Presentation and objectives of the workshop..........................................................................................................................................................103 2. Interventions of the panellists.......................................................................................................................................................................................................104 3. Debate between panellists and participants.............................................................................................................................................................. 110 4. Summary and recommendations..............................................................................................................................................................................................115 5. Parenthesis .............................................................................................................................................................................................................................................................116

3. PLENARY SESSION ON SOCIAL IMPACT ASSESSMENT

......................................................... 119 3.1.Presentation and objectives of the session on social impact assessment...................................................121 3.2.Interventions of the panellists . ....................................................................................................................................................................................... 123 3.3 Parenthesis...................................................................................................................................................................................................................................................... 129

4. Reports from the Workshops and 15 Recommendations of the 3rd Forum on SSGI

........................................................

131

5. SOCIAL ROUND-TABLE

6. Institutional round-table

7. CLOSING SESSION

8. WHAT ABOUT TOMORROW?

.........................................................................................................................................................................

171

THE AUTHORS................................................................................................................................................................................................................................................................179

annexes

181

1. The 15 recommendations of the 3rd Forum on SSGI. ........................................................................................................................................... 183 2. SSGI and the Lisbon Treaty...................................................................................................................................................................................................................197 3. Social Services of General Interest: At the heart of the European social model, a general context paper.............................................................................. 201 4. SSGI and state aid, a special context paper.............................................................................................................................................................. 239 5. SSGI and public procurement, a special context paper........................................................................................................................... 253 6. SSGI and the Internal Market, a special context paper. ......................................................................................................................... 273 7. SSGI and Quality, a special context paper....................................................................................................................................................................287 8. The voluntary European quality framework for SSGI adopted by the Social Protection Committee . ..................................................................................................................................................................................299 9. The Horizontal Social Clause and Social Mainstreaming in the EU...........................................................................................311 10. Conclusions of the EPSCO Council of 6 December 2010: SSGI, at the heart of the European model.................................................................................................................................................................................. 321 11. SSGI, « Strange birds in the European skies Social Services of General Interest explained to my 5-year-old son”, 2010......................................................... 327 12. Conference program: the 3rd Forum on SSGI........................................................................................................................................................ 343

INTRODUCTION 3 On 26-27 October 2010, the Belgian Presidency of the Council of the European Union organised the 3rd European Forum on social services of general interest (hereinafter SSGI) in Brussels. The formal opening session was attended by Mrs Laurette ONKELINX, the Belgian Deputy Prime Minister and Minister for Social Affairs and Public Health, in charge of social integration. It is also worth noting the active presence of three members of the European Commission, in addition to Mrs ONKELINX, namely Mr László ANDOR, Commissioner for Employment, Social Affairs and Inclusion; Mr Joaquín ALMUNIA, Commissioner responsible for Competition and finally, Mr Michel BARNIER (represented), Commissioner responsible for Internal Market and Services, as well as that of Mrs Pervenche BERES, Chair of the European Parliament Committee on Employment and Social Affairs. Other attendees included the MEPs Françoise CASTEX, Chair of the European Parliament Public Services Intergroup, Marc TARABELLA, Co-Chair of the European Parliament Social Economy Intergroup, Proinsias DE ROSSA, rapporteur on the future of SSGI in Europe, Marie-Christine VERGIAT, Heide RUEHLE, Pascal CANFIN, Damien ABAD, Peter SIMON and Frank ENGEL, all active participants in the activities of the 3rd Forum on SSGI. Over three hundred participants from various public and private bodies including representatives of the Member States and the local governments, members of associations and social partners also actively took part in the debates in the plenary sessions and in the thematic workshops. Although the issue of the quality of SSGI dominated the debates, especially at a time when significant budgetary cuts have been made in various Member States to address

3 RODRIGUES (S.) and PAOLILLO (M.) (dir.), Summary report of the 3rd forum on social services of general interest (ssgi), Ed. FPS Social Security, 2011.

the consequences of the financial downturn of 2008-2009, the Lisbon Treaty 4 was also an important theme. Various participants expressed their hope that services of general interest (hereinafter SGI), of which the SSGI are just one aspect, would be fully recognised on the one hand. They also hoped, on the other hand, that the social dimension would be reaffirmed even more in all the EUâ&#x20AC;&#x2122;s policies and actions given the horizontal social clause which was put in place by this treaty. The implication of the European rules in terms of state aid, public procurement and the internal market also were the subject of a major debate, as is evidenced by the exchanges which took place in three workshops which focused on these rules. The actual work took place in five workshops: two workshops were dedicated to the theme of quality, including, on the one hand, the European voluntary quality framework for social services, and, on the other hand, how to maintain the high quality level of social services during a crisis; while the three other workshops focused on the impact of European rules on SSGI: SSGI and state aid rules, SSGI and the internal market and finally SSGI and public procurement. These five workshops were followed by three â&#x20AC;&#x153;round-tablesâ&#x20AC;? relating respectively to the horizontal social clause, to institutional aspects and to the social partners. It is worth noting that the Forum was preceded by a technical seminar on legal aspects, which was organised on July 13th, 2010. Based on the outputs of this seminar a number of legal avenues were developed which were used in the elaboration of this forum, based on consultations with the stakeholders. These documents have been appended to this document. The fifteen recommendations by the 3rd Forum on SSGI, which were published by the Belgian Presidency on December 6th, 2010, and which have been appended to this report, as well as other memos relating to the general or specific context, bear witness to the quality of the work and of the debates and mark a turning point in the European debate on SSGI. The present report was drawn up as an executive summary of the speeches and discussions in the frame of the 3rd Forum. Such a choice entails a number of limitations because it is not an exhaustive overview of the work that was carried out during the Forum. The authors of this summary report would like to apologise in advance for any imperfections as a result of this choice. We also chose the same approach for the various workshops, even though these were slightly different in terms of the way the debates were structured and the discussions were held.

4 The debate focused more specifically on Articles 9 and 14 of the Treaty on the functioning of the European Union and on protocol no. 26 on the services of general interest, which was appended to the Lisbon Treaty.

introduction

PLENARY OPENING SESSION 21

PLENARY OPENING SESSION

There were two key moments during the formal opening session of the 3rd Forum on SSGI with the keynote opening speech by Mrs Laurette ONKELINX, the Belgian Deputy Prime Minister and Minister for Social Affairs and Public Health, in charge of social integration, on behalf of the Belgian Presidency of the Council of the European Union and of Mr László ANDOR, the European Commissioner responsible for Employment, Social Affairs and Inclusion, on behalf of the European Commission, the co-organiser of the Forum. These two speeches were followed by the interventions of Mr François ARBAULT, who represented Mr Michel BARNIER, the Commissioner responsible for Internal Market and Services (who was unable to attend), of Mr Joaquín ALMUNIA, Commissioner responsible for Competition, and Mrs Pervenche BERES, MEP and Chair of the European Parliament Committee on Employment and Social Affairs, in response to the questions raised by the moderator of the session, Mr Eddy CAEKELBERGHS, journalist. We would like to draw the reader’s attention to the fact that we have chosen not to repeat these interventions here in full. For the most part we have incorporated some of the more significant parts of their interventions or included a substantial summary of what the speakers said.

PLENARY OPENING SESSION

1.1. Opening speech of Mrs Laurette ONKELINX “What role shall we allocate to social services of general interest in the European Union ? How can we ensure a high level of quality, universality and the financial sustainability of SSGI in the face of the new social challenges and budgetary constraints that our countries face ? Which equilibrium can we establish between the economic and social dimensions of the Union’s objectives ? The SSGI issue comes with a number of fundamental social and political challenges placing it squarely at the crossroads with a number of competences: it intersects with social and economic affairs and also relates to the powers of the Union and those of its Member States. But since we are at a crossroad we need to pay attention to the priorities. On many occasions several stakeholders (the European Parliament, the Economic and Social Committee, the Committee of the Regions, the representatives of civil society) have raised the subject of the tensions between certain internal market and competition provisions and the successful outcome of the missions of general interest of social services. In his report of May 2010 to the European Commission President, Mr José Manuel BARROSO, Professor Mario MONTI echoed these tensions by referring to the “internal asymmetries between market integration at supranational level and social protection at a national level which the EU system accumulated and which generate frictions and are a source of disenchantment and hostility towards market opening”. Given that he served as the Commissioner responsible for Internal Market from 1995 until 1999 and the Commissioner responsible for Competition from 1999 until 2005 Mario MONTI knows perfectly well what he is talking about. It seems quite clear to me that, in the European social market economy that we are currently building, such an internal market cannot function properly and serve everybody’s interests, without a strong social dimension and without being accepted by the European citizens. Allow me to remind you that the internal market is not an end in itself. If you read the treaties carefully you will see that the internal market was conceived as an instrument to contribute to the economic and social wellbeing of European citizens.

1.1. Opening speech of Mrs Laurette ONKELINX

Neither can I ignore the institutional changes since the 1st Forum, under the Portuguese presidency, and the 2nd Forum, under the French presidency. Since December 1st, 2009, when the Lisbon Treaty entered into force, several provisions of the treaty have placed the social dimension at the heart of the European construction. Article 9 of the Treaty on the Functioning of the European Union (TFEU) urges the European institutions to take into account the social dimension in all the European policies they develop. This entails a proper ‘rebalancing’ of the status quo, which will have to be implemented and which is a transversal objective of the Belgian Presidency. The requirement to take the social dimension into account comes after the provision of Article 3, § 3 of the Treaty on the European Union (TEU), which states that the construction of the internal market is realised by policies that are founded on the notion of a highly competitive social market economy, aimed at full employment and at social progress . Article 14 of the TFEU and the additional Protocol no. 26 require the Union, as well as its Member States to establish the conditions required for the proper functioning of social services of general interest, which are considered key elements of its integration model. Today we cannot afford to pretend that everything will be the same, after the Lisbon Treaty, as before. We now have a well-established legal basis in primary legislation to ensure that the EU’s economic and social dimensions are properly balanced again. It is our responsibility to take advantage of this opportunity to generate enthusiasm again among citizens for the European project. The individual coaching of vulnerable people, providing care and support, social inclusion, anti-poverty measures… These all play an important role in social protection. SSGI are not like other services: they contribute to the social and economic cohesion, to solidarity and to the implementation of fundamental rights. They also play an important role in the economies of our Member States generating large scale employment and making a significant contribution to our countries’ GDP. During the recent financial and economic downturn of which the effects are still felt and which will continue to be felt, SSGI played a particularly important role as economic stabilisers at a time when public budgets were under severe pressure, precisely because of this crisis. So let us continue to invest in social policies, because those resources that we do not invest in social policies with a significant impact on the lives of families will have to be invested in other, tougher policies in the future. I, and many others like me, believe that we can only realise the objectives of the European Union through modern and dynamic social services of general interest, by offering qualitative services focussing on such values as respect for human dignity, equality, inclusion and solidarity as well as on principles of accessibility, universal service, continuity, transparency, proximity and the participation of users. These principles, for the most part, have been incorporated in a document published by the Social Protection Committee: the voluntary European quality framework, which can be used as a benchmark to further improve the quality of service for citizens”.

PLENARY OPENING SESSION

1.2. Opening address of Mr László ANDOR “The fact that this Forum is being held for the third time demonstrates the importance of SSGI as well as the undeniable commitment of all the participants in this Forum to these services. I would also like to stress that this Forum is being held at a critical time, as Europe faces the effects of an unprecedented financial crisis during which measures that mobilise considerable resources have been taken to help Europe make it through this difficult period while safeguarding its social cohesion. The SSGI play a key role providing the necessary support for people in need. They improve people’s ability to take part in social life and to enjoy their fundamental rights. They facilitate access to a high-level universal service that is available to all, at affordable prices. It is precisely during these difficult times, in an economic crisis, that people rely most on these services. We have had several opportunities to discuss this in the frame of the European Year for Combating Poverty and Social Exclusion. Analyses and data have shown that the social services are key instruments for reducing poverty. Developing the potential of social services is thus an essential element for realising the objectives of the Europe 2020 Strategy in terms of employment and reducing poverty. The social services also constitute an important link when it comes to creating jobs. The second biennial report on SSGI which the Commission recently published shows that the social services and health services sector created 4 million new jobs between 2000 and 2009. Our society and our economies are going through a period of great change. The multiple needs that the social services face are no longer largely due to the current crisis, but also to the sweeping social changes in our societies. The consequences of an ageing population, the changing gender roles and greater flexibility in the job market mean that social services are becoming an increasingly complicated matter. In the next few years, a growing number of people will come to rely on these social services. So they have to be efficient and adapt to new needs and future challenges.

1.2. Opening address of Mr László ANDOR

I am worried when I hear that social services budgets are being reduced at a time when people need them the most. But I fear that this will become a big challenge in years to come. While fiscal adjustments are necessary in order to address the crisis that we are facing we also need to increase the efficiency of social services and ensure that everyone has equal access to them. That is why the Commission is providing active support to the Member States as far as the organisation and funding of social services of a high quality is concerned. In September 2009, European Commission President BARROSO recognised the need to boost the social services and health sectors in his guidelines for the next Commission. He specifically referred to the need to establish a quality framework for public and social services. In line with this announcement, the Commission took part in the elaboration of a voluntary European quality framework for social services, within the Social Protection Committee, which was adopted in October 2010. This framework was elaborated through a dialogue with the representatives of regional and local governments, civil society organisations and social partners. In particular it aims to establish common principles in terms of the quality of social services at Union level but also to promote and encourage the exchange of good practices among Member States. This commitment is supported by the Commissionâ&#x20AC;&#x2122;s new guide on the rules that apply to SSGI. In the frame of this strategy, the FAQs on SSGI that were drafted in 2007 have been updated. The MONTI report, to which Mrs ONKELINX also referred, is an important contribution to this debate, providing a detailed strategy to relaunch the Single Market as the most important European objective to achieve growth and economic competitiveness. On the subject of social services, this report recognises the efforts undertaken by the Commission to clarify the implication of EU rules. It also asks the Commission to ensure that when these rules are applied to social services that they are predictable and proportionate. This means that the dialogue with all the stakeholders is essential if we want to objectively analyse the impact of European rules in the field.â&#x20AC;?.

PLENARY OPENING SESSION

1.3. Intervention of Mr François ARBAULT (representing European Commissioner Michel BARNIER) “It is important to relaunch the internal market by means of a new pact between European citizens, small, medium-sized and large European enterprises in favour of a more efficient and cohesive market, which takes everybody on board. The most disadvantaged people in our society should not be left behind. There should be an equilibrium between economic growth and competitiveness, on the one hand, and social cohesion and solidarity on the other. That is one of the main objectives of the Single Market Act (SMA), which Mr Barnier will publish tomorrow. The SSGI are at the crossroads of this project and Commissioner Barnier has emphasised this on several occasions. The various rules, for example, for state subsidies have been created for that precise reason. The SMA will come with a toolbox for the local authorities who want to provide accessible services to all their citizens at an affordable price. If this is too difficult or too ambiguous, then the local authorities can make use of this toolbox. Mr Barnier wants to promote the principle of inclusion through new practices using the SMA. How can we encourage companies to take into account the principles of social inclusion in a market dominated by competition ? The Commission wants to encourage companies to sufficiently do this, while ensuring that they are sufficiently competitive. The idea is that they should focus more on the citizen. For example, they have to consider people with disabilities or the underprivileged.”.

1.3. Intervention of Mr François ARBAULT

PLENARY OPENING SESSION

1.4. Intervention of Mr Joaquín ALMUNIA “Allow me to start by making a declaration of principle. As a European citizen, but also as a European Commissioner I am one of those people who are in favour of a society with affordable public services which are accessible to all citizens. That is why the social services of general interest, regardless of what they are called as the European vocabulary is not always clear (which is why I prefer the term, « public services » to SGI), are particularly important to us European citizens. They are first and foremost services of general interest. We need to distinguish between services of general economic interest (SGEI) and non-economic services of general interest (NESGI). The latter are not offered to citizens in the marketplace. For example, a public hospital to which citizens have access is not an economic service, but a social health service. While it is very important to make this distinction it is however quite difficult to define a clear dividing line between economic and non-economic services. Let’s start by discussing the NESGI: frequently these services are of a social nature. Support for the elderly, for example, can be provided by private enterprises as well as by local, regional and national public services. If the economic aspect is emphasised, however, then the competition rules become applicable. Article 106 of the TFEU, however, states that the SGEI have to be provided to all citizens, and that they do not fall under the internal market and competition rules, under certain conditions. But we have to be sure that they are effectively SGEI. If this is the case, then the rules of the Monti-Kroes package of 2005 have to be applied. Between July and September 2010 we consulted widely on how to review these rules. During our consultation round we received several responses, from three countries mainly: from France, Germany and Belgium. I was rather surprised: why did other countries not seem particularly interested in improving the rules that apply to SGEI ?

1.4. Intervention of Mr Joaquín ALMUNIA

I will come to the conclusions of this consultation later on but I would like to just remind you of the three key themes that underpinned it. First, how to draw a clear dividing line between SGEI and NESGI. I will touch on the definition of transparent parameters for a correct assessment of the funding granted to companies in lieu of compensation for public services: how and on what basis can we evaluate potential over-compensation ? This is a very complex issue. Finally, I will clarify the notion of cross-border interest, in the frame of local services: what is the threshold below which the Commission can consider that there is no cross-border interest whatsoever ? We will soon submit a number of proposals to clarify all of these issues”.

PLENARY OPENING SESSION

1.5. Intervention of Mrs Pervenche BERES Mrs Pervenche BERES, MEP and chair of the European Parliament ‘s Employment and Social Affairs Committee responded as follows during the forum’s opening session. “I think that the three Member States which Commissioner ALMUNIA referred to and which responded to the Commission’s consultation are pioneers in the realm of public services in Europe. So this does not come as a surprise, it is in fact quite understandable in view of the national sensitivities of these states. I would like to insist on the fact that a treaty does not cover everything and cannot anticipate on everything: it does not make up the law. It merely provides the tools for doing better. As Minister ONKELINX already stressed, Article 14 of the TFEU and Protocol no. 26 are key tools of the Lisbon Treaty. But we should not forget that Article 9 of the TFEU and the horizontal social clause that it institutes are equally important. This provision rebalances the logic which was applicable up until then and which for example led to the consideration of the issue of the financing of public services from a point of view which completely overrode the treaty’s rules. I am rather shocked, because I feel as if the Commission, in this debate, considers the treaty’s provisions to be sufficient. Some of us do not share this opinion. Do we need to think about establishing a framework directive? We need to conduct this debate among ourselves. It is worth asking whether a framework directive would be sufficient to cover the various situations that exist at the level of the Member States, especially as regards the way these public services function. Nevertheless there are already a number of common principles and objectives, which the Commission defined. It is possible to work starting from these principles. This is the first time that I take part in a debate on public services in the presence of three Commissioners and several MEPs. Before only the European Commissioner responsible for Competition was present. This in itself is a good sign. Commissioner ALMUNIA already briefly touched upon the issue: we need to distin-

1.5. Intervention of Mrs Pervenche BERES

guish between economic and non-economic services of general interest. It is important to clearly understand which services are for the market and which are not. I think that this is really difficult and we really need to identify a number of reliable solutions in this frame. What is the role of the European Parliament, of the Commission and of the Council in this debate? IÂ see that the Council is completely absent in this debate: the Member States do not seem to really agree on this matter. I note that the Belgian Presidency is interested in moving forward, but this has not always been the case with the other presidencies in the past. I also think that the EPSCO (Employment, Social Policy, Health and Consumer Affairs) Council needs to work closely with the ECOFIN Council for a more coherent and efficient approach. Everyone agrees that we imperatively need social services that provide efficient social protection, which are accessible and affordable to all. At the same time, when I read the conclusions of the working committee chaired by Mr Herman VAN ROMPUY I see no mention of the issue of automatic stabilisers in the social sector. This is a matter of grave concern. I hope that the European Parliament will play its role and remind the Council of this. If we are incapable of providing a patient with the right treatment to ensure his or her recovery, then this person will not get better of course. Naturally we have to respect the rules but if we do not clearly indicate which way to go in terms of public services, then matters will not improve. What is the situation now? Public services have to make do with increasingly less funding. As a result they are being progressively dismantled. This is very worrying. We have just adopted the Europe 2020 Strategy, thanks to Commissioners ANDOR and ALMUNIA, among others. We have clear objectives for combating poverty and social exclusion but if we do not make sufficient financial resources available to realise these objectives, then disenchantment will be the result: 27 Member States will then say NO to Europe. The fight against poverty and social exclusion requires a minimum number of tools: a guaranteed minimum income, access to social services and healthcare, access to education, etc. Europe has an important role to play and we need to achieve good resultsâ&#x20AC;?.

PLENARY OPENING SESSION

1.6. Responses of the other participants J. ALMUNIA: “I would like to briefly comment on what Pervenche BERES just said. I agree with her on the Lisbon Treaty. Article 14 TFEU certainly offers the option of instituting rules but the provision clearly states: « Without prejudice to Article 4 of the Treaty on the European Union and to Articles 93, 106 and 107 of the present Treaty... ». After having read the provisions of Protocol no. 26 and of Articles 93, 106 and 107 of the Treaty, it is my view that Article 14 needs to be used to develop social services, for their accessibility, for their quality and convergence, while respecting the subsidiarity principle. We must not confuse this issue with state aid rules”. L. ANDOR: “I would like to stress that the report which was recently published on the Europe 2020 strategy is part of a series of initiatives designed to respond to calls for more social cohesion in Europe. The Single Market Act also emphasises the social dimension in the European economy. There are other initiatives which also focus on social services of general interest. This highlights the main trends, the main challenges that we face and I think that this contributes added value at European level for initiatives that are taken at other levels. It will help us tackle the challenges we all face in terms of demographics, and the consequences of the economic downturn. Naturally the Member States can take individual initiatives in this frame, but we are much stronger if we work together as one and we can obtain much better results if we evolve towards a common approach. This is one of the learnings from the devastating financial crisis that we just experienced. This is already possible in the frame of the open method of coordination (OMC) which allows us to share good examples and experiences, particularly in terms of the coordination of social policies and we will support any good initiatives taken at the level of the Member States, with instruments such as the European Social Fund. We need to take advantage of the post-crisis period to change the atmosphere. It is true that, in recent months, we have mainly concentrated on the recovery of the European economy, including of the financial sector. This has led to new constraints in public

1.6. Responses of the other participants

finance, but also on the financial markets. This was the price we had to pay to stabilise the system. Currently we are working on new opportunities, in an accelerated manner, so that we can revitalise (the main principle of the Single Market Act) Europe and achieve the objectives of the Europe 2020 strategyâ&#x20AC;?. L. ONKELINX: â&#x20AC;&#x153;At times I feel as though Belgium, which is currently going through quite tumultuous times, is actually one of the few countries where social services fully and effectively play their role. This is an anecdote of course, but I think it is important to underline this. Now, about what the others have said, it is true that we are going through difficult times, but this should not prevent us from fighting for social services of high quality. During the financial crisis, the social services were considered an important social safety net for the most vulnerable citizens. We have also seen that in countries with a high level of social protection the consequences of the crisis have been less disastrous. The case of the Belgian job market, for example, comes to mind. On the initiative of Mr Herman VAN ROMPUY, a working committee on economic governance was established. It is rather surprising that the problems related to social protection or employment have not been discussed in the frame of this working committee. The Finance Ministers are making decisions without involving the people in charge of social affairs. The citizens will never understand this. The social services have to be effectively recognised and there is also a need for information and legal certainty. There is the Single Market Act, which will be shortly published by Commissioner Barnier, the review of the Monti-Kroes package is currently ongoing. We hope that something positive will come of all this. I wished that there was a framework directive on social services of a general interest. Unfortunately it is not realistic to believe that there ever will be one. Instead of living in a dream, we need to create new rules, which provide a legal framework for the SSGI. The various institutions (the European Parliament, the Council, and the Commission) will have to work together to provide the SSGI with the resources that they need and an efficient legal frameworkâ&#x20AC;?.

PLENARY OPENING SESSION

1.7. Parenthesis Forums on SSGI come and go… and each is different from the next… or at least they are different to some extent. The Forum on SSGI organised by the Belgian Presidency of the Council of the European Union comes after two forums which focused on the same issue: the first was held in Lisbon in 2007 under the Portuguese Presidency and provided the European Commissioner responsible for Social Affairs, Mr SPIDLA, with an opportunity to affirm the widespread political desire to put SSGI high on the European agenda; the second forum, which was held in Paris, in 2008, did not give rise to any significant new initiatives by the Union’s institutions. The third forum seems to have highlighted the maturity of the debate, first and foremost at Commission level, because for the first time ever, three European Commissioners took part or were represented at the opening of the Forum. They are responsible for competences that are particularly important for the future of SSGI: social affairs, competition and internal market. The maturity of the debate is also apparent from an interinstitutional perspective given that the European Parliament, the Council and the Commission all agreed that we need to clarify the treatment of the SSGI under Union law more and that in addition to the necessary adaptation/evolution of the legal framework, we also needed to tackle the civic aspect.

Parenthesis

WORKSHOPS 39

2.1. Report of the workshop on a European voluntary quality framework for SSGI 1. Presentation and objectives of the workshop The workshop was chaired by Mr Luk ZELDERLOO, Secretary General of the EASPD, the European association of service providers for persons with disabilities. He was assisted by Mr Luigi MARTIGNETTI, the Secretary General of the NGO REVES, the European network of cities and regions for the social economy, who served as rapporteur. The panel of speakers consisted of:

• Concetta CULTRERA, Head of sector “social services”, DG Employment, Social Affairs, and Equal Opportunities, European Commission

• Davor DOMINKUS, Chair of the Informal SPC Working Group on SSGI quality and the Slovenian member of the European Social Protection Committee

• Peter RHODE, Director of the Centre for Quality Improvement in Denmark, Region House Aarhus • Jan SPOOREN, Secretary General of the European Platform for Rehabilitation (EPR) • Alain FAURE, Representative of the European Disability Forum (EDF) • Carola FISCHBACH-PYTTEL, Secretary General of the European Federation of public service unions (EPSU) The chair reminded the participants of the reasons why this theme is so important in the EU. The social services have a role to play in bridging the gap between human rights and the current quality of life. The sector employs 10% of the EU 27’s workforce. It contributes 5 to 9% of the GDP of EU Member States. The current demographic challenges are of particular importance for a sector which also faces cuts in social spending as a result of austerity measures. Luk ZELDERLOO underlined that investing in social services can help create jobs and contribute to reducing poverty, quoting the 2nd biennial report of the Commission on SSGI.

2.1. Report of the workshop on a voluntary European quality framework for SSGI

The main points of discussion were: • The voluntary quality framework adopted by the European social protection committee on October 6th, 2010 is essential to promote social cohesion and social inclusion, benchmarking, active learning and thus to promote the mobility of its users; • The competition in the field of social services may be considered as a potent tool to improve quality but the concept of competition has to be clearly distinguished from that of the market mechanisms. • The EU’s quality framework should tackle the preliminary requirements for quality, such as properly trained personnel, a stable legal framework, continuous funding in order to guarantee access to social services; • Quality is not a static concept, but rather a process of continuous improvement. Failing this we will be left with a list of minimum standards; • The definition of quality must be made by the public authorities in close collaboration/ partnership with the service providers. Another key element is the emphasis on the person.

2. Intervention of the panellists Concetta CULTRERA, Head of sector “social services”, DG Employment, Social Affairs, and Equal Opportunities, European Commission Mrs Concetta CULTRERA, head of the social services unit (European Commission), introduced the context which led the Commission to take initiatives in terms of quality. The debate regarding social services is taking on an increasingly European dimension. Several organisations in the sector and the High-Level Group on Disabilities have also taken initiatives, at European level, relating to the quality of social services. In view of previous Communications of the Commission, the promotion of the quality of social services has become a strategic theme, which is founded on three pillars: • The financing of upstream projects in terms of the quality of SSGI; • Work with the Social Protection Committee (SPC) in the frame of the adoption of the quality framework; • The training of the local authorities in order to better explain how European rules can improve the quality of social services. The Commission representative referred to the structure and contents of the second biennial report on SSGI. Most of the aforementioned initiatives have a clear objective, which

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is to arrive at a mutual understanding of the quality of social services at European level. The Commission emphasises diversity in social services, because of cultural diversity, the legal context and the social-economic conditions in the Member States and in their systems. This diversity is one of the many challenges we face when trying to establish a quality framework. In this frame it seemed easier to arrive at an agreement on the principles, rather than on the quality norms or standards, given that the latter concept was more static. Another important theme is the triple A of social services: Availability, Accessibility and Affordability. Depending on the author of publications on quality, these triple As are viewed in a different manner. When the stakeholders consider Triple A, they see this as the precondition for providing services, as a framework which has to be established by the authorities, not by the service providers. Seen through the eyes of the authorities, the triple A theme becomes one of the quality principles, with which services have to comply. The emphasis also has to be on the users through promotion of empowerment, and the participation of users in social services. They are at the heart of the reflection on quality: there are certain principles which underpin the relation between the service provider and the user; on the other hand some principles are related to the nature of the service itself (person-centric, continuity, etc.). Increasingly social services are considered as services which can strengthen the abilities of their users, allowing them to take control of their own lives. The role of non-profit organisations, of volunteers, of informal care-givers are all important elements in the reflection on quality, as is the comparability of services among Member States in view of the increasing number of cross-border elements. The latter is related to the financial constraints which several authorities are facing. In this frame, quality tools are very important for the Member States, so they can allocate financial resources and give priority to the required investments. This reflection and all the activities centring on quality are part of a wider approach by the Commission. In so doing the Commission wants to assist Member States in the organisation of efficient, affordable and qualitative social services.

Davor DOMINKUS, Chair of the Informal SPC Working Group on SSGI quality and the Slovenian member of the European Social Protection Committee Mr DOMINKUS presented the context of the quality framework and the content of the document. He insisted on the fact that the documentâ&#x20AC;&#x2122;s objective was to provide the authorities with reference tools to define, ensure, evaluate and improve the quality of

2.1. Report of the workshop on a voluntary European quality framework for SSGI

social services within the EU. The Commission had already taken the initiative to establish such a document in 2007, which was endorsed by the Council in 2008. In autumn 2008 the Social Protection Committee decided to give an informal working group a mandate to prepare a document, to be adopted before the 3rd Forum, which they did. The objective of improving quality was also particularly relevant in the frame of the efficiency of costs. Another objective of the document was to protect the most vulnerable users. It also accentuates the promotion of employment in the sector. Finally, another objective of the framework was to raise the level of comparison and transparency in the frame of cross-border services. The elaboration of this document gave rise to heated discussions with the stakeholders (social partners, representatives of civil society). That is why the aim of the framework is to develop a mutual understanding at EU level and to facilitate the exchange of good practices. The key principles of the voluntary European quality framework are: Availability, Affordability and Accessibility, focussing on people, continuity and oriented towards results. The relation between the service provider and the user, the respect of users’ rights, the participation and empowerment of users as well as the relations between the authorities and the service providers have all been taken into account in the elaboration of this document. For each of the quality principles, operational criteria have been defined, which can also help monitor quality. The document also establishes a methodology with six dimensions. Mr Davor DOMINKUS emphasises three important elements of the framework: • the document’s voluntary nature; • the flexibility which allows for its adaptation to various types of services; • the role of the framework for improving social services.

Peter RHODE, Director of the Centre for Quality Improvement in Denmark, Region House Aarhus Mr Peter RHODE started by saying that social services in Denmark are public services.

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He reflected at length on the issue of public procurement, one of the reasons why many of the debates on quality are launched in Denmark, especially when it comes to transparency. Most of the social services in Denmark are provided at local level. The Danish have developed a quality model based on a programme with 3 dimensions: a standard program, which resembles an accreditation program, a programme for social indicators (there are 7 different indicators) in order to measure and monitor the impact of social work and finally activities involving the users throughout the region. The target groups are quite varied which is why you need to be very precise in the quality debate and when you are creating a framework for social work. The regional authorities have started to work with a number of indicators and standards, preferring small targeted programs instead of big programs which are difficult to monitor. Data processing and audits are carried out but it is very difficult to control quality in the field of social services. Often a period of two to three years is necessary as a “measurement unit in time”.

Jan SPOOREN, Secretary General of the European Platform for Rehabilitation (EPR) Mr Jan SPOOREN introduced the frame of his presentation, which is part of the Prometheus 5 project, which his organisation developed in partnership with other EU organisations and which contributes to the voluntary European quality framework. The Prometheus project’s objective was also to test a quality assessment tool for social services in order to comply with the quality framework in four fields of social services and in four different countries. The other project on which the presentation focussed, is the EQUASS 6 project, which tackles quality at a European sectoral level. Mr Jan SPOOREN developed various key principles based on experiences in the field in the frame of the aforementioned projects. • Firstly, a quality framework has to have several perspectives and involve all the stakeholders, who all have different views on quality, especially the regions and the local authorities. This also helps strengthen the framework. At the same time the framework has to also be evaluated with the different stakeholders.

For more information, see http://www.epr.eu/index.php/equass/projects/128

6 See: http://www.epr.eu/index.php/equass

2.1. Report of the workshop on a voluntary European quality framework for SSGI

But how to involve these stakeholders ? Through processes and steering committees, and with assessors who are seconded by the various stakeholders. The speaker added that the “magic triangle” (service provider – user – authority) needed to be expanded, by involving, for example, the social partners, the municipalities, the bodies that provide funding for these services, etc.

• Following from this, Mr SPOOREN touched on the issue of the model’s coherence, which includes a series of quality principles. The quality framework is not a list of requirements. Instead it is founded on a precise logic, illustrated by the process which correlates users’ needs with the needs of service providers. At the same time it also takes into account the characteristics of the service, with the aim of producing appropriate results for users. • Mr SPOOREN insisted that the preconditions for quality are the responsibility of the authorities, while the quality of the services provided are the responsibility of the service providers. These two responsibilities should not be confused when assessing their implementation. This, however, tends to be the case for the quality framework which was adopted by the Social Protection Committee. If these two types of responsibility are mixed any evaluation of the quality becomes completely irrelevant. In this frame he criticised Chapter 4 of the document of the European Social Protection Committee.

Alain FAURE, Representative of the European Disability Forum (EDF) Mr Alain FAURE represents the users within EDF. In the frame of the United Nations Convention on the rights of persons with disabilities 7, the speaker emphasised the importance of considering the user and his ability to make decisions. In the legal frame of the aforementioned Convention, a series of key principles are required to assure quality: • A service enabling the user to make his/her own decisions and enforce his/her preferences; • A service allowing the user to participate in the local community; • A service that is available in one’s place of residence or nearby; • A guarantee that the services shall be continued in time and in this location; • Well-trained personnel (continuous training) taking into consideration the special needs of persons with disabilities; • Immediate access of users to the authorities in order to protect them from potential abuses;

7 http://www.un.org/french/disabilities/default.asp?id=1413 (http://www.un.org/disabilities/default.asp?navid=14&pid=150)

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• The establishment of a User Council and the participation of the Board of Directors of the service of representatives of persons with disabilities; The de-institutionalisation of the sector was also emphasised. The participation of persons suffering from a disability in the decision-making process is crucial and the criteria which contribute to more quality have to bring about a change throughout Europe. Mr Alain FAURE indicated that human rights are not respected when services are overpopulated or when people’s private life, freedom of movement or of choice are not respected, especially when people with disabilities have to travel to another country (e.g., France-Belgium). Quality is a matter of concern for all SSGI. The status of the social service is not relevant in this frame (public, private, commercial sector, non-profit). The European dimension facilitates the guarantee of uniform quality while taking into account the local and cultural dimension, but never at the expense of human rights. The EDF is in favour of the implementation of quality principles but they have to be clear, quantifiable, known and easy to verify. They also have to be subjected to an evaluation. But there seems to be widespread confusion: “any norm or principle shall be voluntary…”. A certification and verification system has to be established. Every user has to be able to rely on it. In the famous magic triangle, the users should be at the top of the triangle, not at the bottom.

Carola FISCHBACH-PYTTEL, Secretary General of the European Federation of Public Service Unions (EPSU) Mrs Carola FISCHBACH-PYTELL emphasised three key messages: • The need for a policy on the quality framework. She felt that the social services had to work in the general interest. Is competition adapted to this sector? Are private profitmaking companies the right resources for providing these services? In any event the sector has to be regulated and quality criteria have to be applied to profit-making companies in order to ensure that public missions of general interest are served. • Cuts in social spending also need to be tackled, especially their impact on the quality of social services in view of the fact that social services are largely funded with public resources. Economic efficiency is also important, but what does this really mean? • The issue of employment conditions in the social services sector is crucial. The share of employment in the sector is on the rise. The working conditions in social services,

2.1. Report of the workshop on a voluntary European quality framework for SSGI

which for the most part employ women and foreign workers, are not that good. And efficiency can only be achieved at the expense of working conditions, which are a prerequisite for the quality of these social services. The speaker insisted on the fact that these activities had to be professional, but at the same time that volunteers should also have a place in this context. • Quality needs to be regulated by means of a new European statute for public or private non-profit service providers, in order to fall under the “in house” definition.

3. Debates between panellists and participants The audience had several questions (see below). The Chair of the workshop asked the panellists to respond to three questions posed by the rapporteur, Mr LUIGI MARTIGNETTI, which would then result in three key recommendations as an output for the workshop. 1) What is the next step after the European quality framework? Which follow-up will be assured? 2) The approach designed to identify common principles is useful for a common framework in order to ensure that quality is comparable at European level. At the same time it is not clear yet at which level quality standards have to be defined. 3) The relation of the magic triangle was not sufficiently explained. The relations in this triangle have to be elaborated upon. Patrick DE BUCQUOIS, CARITAS Europa, asked whether a green or white paper on these instruments was necessary for raising quality in social services, for example, in public procurement. Concetta CULTRERA of the European Commission referred to the Guide on SSGI, to be published by the Commission 8, as well as to the Guide on “Buying social” 9 on public procurement. She once again referred to the intervention of Mrs Carola FISCHBACH-PYTTEL, on the in house exception: it is not possible from a

8 Guide on the application of services of general economic interest, and specifically of social services of general interest, on EU state aid rules, on «public procurement» and on the «internal market»: http://ec.europa.eu/social/Blob Servlet?docId=6458&langId=en. See the critical article on this guide, which is soon to be published: RODRIGUES, (S.), Some comments on the new Commission’s Guide concerning the application to services of general economic interest, notably to social services of general interest, of the EU rules related to State aids, public procurement and internal market, to be published shortly in the European Journal of Social Law. 9 Guide concerning the consideration of social aspects in public procurement: http://ec.europa.eu/social/BlobServl et?docId=6457&langId=en

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legal point of view but the Member States can restrict public procurement to non-profit making bodies, under certain conditions. Mr Raymond HENCKS, of the European economic and social committee, expressed his doubts about the fact that the in house exception was impossible, as stated by Mrs FISCHBACH-PYTTEL, and asked that this be studied in more detail. Answering a question from a French representative of the Social Protection Committee who wished to know more about the difficulties encountered when attempting to disseminate a quality model among the local authorities in Denmark, Peter RHODE explained that the main challenge was to find the resources for innovation in social services. On the issue of standards, he said that the quality model had to be appropriate and elaborated at the level where the service is provided (at local level). The healthcare sector was a good example of this: in Denmark hospitals work with accreditation programs. The accreditation program was developed in the United Statesâ&#x20AC;Ś why not develop a European accreditation program? The speaker also insisted that exchanges of good practices were necessary and that one needed to work with cases that had been demonstrated to be useful at scientific level. A representative of the German delegation elaborated on his reticence vis-Ă -vis the European quality framework. Could this not be a way of extending funding for social services? According to the speaker, the issue of social services and of their quality was the full responsibility of the Member States. Concetta CULTRERA of the European Commission answered that even if providing social services is the responsibility and competence of the Member States, the debate has become a European debate and useful work can be carried out at European level. The quality framework provides a common language which effectively facilitates the exchange of good practices. The next step can consist of the promotion of this quality framework through European projects. One can be efficient in terms of costs, without detriment to the quality of these services, even though it is difficult to strike a balance between the two. Davor DOMINKUS emphasised the fact that the situations between the Member States were quite diverse and that a common language needed to be developed. Without a common language it is difficult to achieve anything. Based on a common language, good practices can be exchanged. Mr DOMINKUS reminded the audience that the subsidiarity principle was part of the document on the quality framework and that this is voluntary. It should be used. In Slovenia they are currently reflecting on the principles that need to be developed and are defining standards for a certain type of social services. Mrs Carola FISCHBACH-PYTTEL said that a quality label for social services could be a good idea, and that this could be the outcome of the quality criteria of the voluntary

2.1. Report of the workshop on a voluntary European quality framework for SSGI

European quality framework. It would be interesting to define a number of criteria for the follow-up of the framework by means of the social dialogue. This initiative relating to the quality of social services allows for the consideration of the primary mission of social services and the role that they play in the European social model. In the frame of the EUâ&#x20AC;&#x2122;s competences, it is also worth underlining how the EUâ&#x20AC;&#x2122;s other competences (economic law, internal market, public procurement, state aid, etc.) related to national competences, as well as to social services. She insisted on the fact that the debate was a European one, and no longer a national competence. The equilibrium of the discussions thus is drawn back to the EU level, where it should be maintained. Mr Jan SPOOREN indicated that the European voluntary framework is a first step but that one did not have to stop there. The next step would consist of finding out how to evaluate whether quality criteria were being respected in social services. And this brings us to the issue of the appropriate development level for indicators. Mr Jan SPOOREN indicated that compliance with European indicators would vary from one Member State to another, as a result of the frameworkâ&#x20AC;&#x2122;s flexibility. Mr Alain FAURE concluded that such norms already existed but they needed to offer a minimum guarantee to users and to service providers. The norms had to be flexible. The speaker also emphasised the fact that social services could not be too closely linked to the economic crisis. Social services are necessary at all times in society and new employment opportunities could be created in this field. As far as the aspect of participation and partnership in social services was concerned, a number of speakers referred to the necessity of involving other partners: the social partners, informal aid, the local authorities... Mr David KAFKA, a Minister of the Czech Republic, stressed that the issue of the quality standards for social services only relates in part to social services. One should not forget the informal sector and family solidarity, which were not included in this debate. Mrs Marie RANTY, a representative of Eurocities, raised a question: she asked whether the quality framework would be made more practical in daily life, with the participation of all the stakeholders, and also asked whether initiatives in the field in terms of quality could be published. A representative of the Dutch federation for social housing asked a specific question about how to combine the social and economic aspects in the field of state aid, giving the example of the fact that social housing should be provided to disadvantaged social groups. Concetta CULTRERA indicated public resources would have to be used for tackling problems where necessary. The mission of social housing companies is clearly defined: they

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need to provide housing to those who require it. If a Member State wishes to set up a retribution system for the general interest mission, even if there is a wide margin for appreciation, clear criteria should be applied (for example regarding the target group). This is also important in a social perspective: we need to help the most underprivileged people in our society.

4. Summary and recommendations Luigi MARTIGNETTI (REVES), rapporteur for this workshop, summarised three provisional recommendations based on the discussions: • Solutions must be found to resolve potential conflicts in terms of the application (or interpretation) of rules and between the different levels: European, national, local. • An approach should be adopted for the follow-up of the voluntary quality framework which draws on the Open Coordination Method for issues relating to the quality of social services. The aim is to achieve a comparable level of quality by working with indicators, which can be defined at national or at local level 10; • Quality requires the development of a multisectoral, multi-stakeholder approach. Some of the panellists accentuated the sharing of experiences and a comparable quality level throughout the EU. This could be encouraged by means of an OCM approach, focusing on the preconditions for quality and not on the level of the services provided. But the OCM is not the only instrument. The exchange of practices is highly necessary in view of the number of publications already available on the subject. Certain pilot projects will have to be developed at European level, for example in the sector of senior citizen care. The audience responded positively and voted largely in favour of these three recommendations.

10 Without wishing to contradict the definition of the higher international standards, which often are already in place.

2.1. Report of the workshop on a voluntary European quality framework for SSGI

5. Parenthesis The voluntary European quality framework for SSGI was eventually established and adopted by the European Social Protection Committee. The questions about quality seem to echo the questions in the legal workshops, in light of the questions of a more legal nature that were discussed: the consideration of quality as a factor in public procurement, the respect of fundamental rights, the elaboration of quality “standards”, and, more than once, the scope of the subsidiarity principle in this field. The challenge for the Framework, which will have to lead to a common language, will be – as became clear during the workshop - to know what will come next. Will it draw on the European quality framework for all public services that was announced by Commission President José Manuel BARROSO? Will it draw on local social services in hopes of improving their services for users? This aspect of the dossier allows for a less defensive content in the dossier on SSGI, leading to the precondition of this common language for a veritable exchange of practices between Member States, in view of European integration.

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2.2. Maintaining a high level of quality in the current crisis context 1. Presentation and objectives of the workshop This workshop was chaired by Mr Robertus CORNELISSEN, Adviser to the Director for Social Protection and Integration of DG Employment, Social Affairs and Equal Opportunities of the European Commission, assisted by Mrs Anne-Sophie PARENT, Director of the AGE Europe Platform, representing a European network of 150 organisations of people aged 50 or older, and who was also the rapporteur for this workshop. The panel of experts consisted of:

• Isabelle ENGSTED-MAQUET, Policy Analyst, DG Employment, Social Affairs, European Commission • Marti MOLINE, Deputy Director, Municipality of Badalona, Barcelona, Spain • Georgios DASSIS, President of the Employees’ Group of the European Economic and Social Committee (EESC)

• Laura JONES, Policy Officer, Eurodiaconia • Robert ANDERSON, Head of the Living Conditions and Quality of Life Unit, Eurofound The main aim of the “Quality of SSGI and Crisis” workshop was to analyse and evaluate the impact of the social-economic crisis on SSGI and to arrive at three recommendations. The current economic crisis has and will have important consequences for national and local budgets. As soon as 90% of the funding of social services comes from public funding one might reasonably think that these social services will be particularly affected by the austerity measures which Member States are taking even though they demonstrated their use by counteracting the impact of the crisis on the population and on long-term growth.

2.2. Maintaining a high level of quality in the current crisis context

The crisis will be measured in various ways among and in Member States. The question remains whether SSGI have to only be examined in terms of costs or also in terms of their social investment value. Paradoxically the demand for quality is even stronger in times of austerity. How can one find innovative solutions in times of budgetary consolidation and in view of the new demands that are emerging? How and to which extent can a European strategy respond to this? The gender aspect also needs to be discussed to the extent that budgetary cuts in SSGI tend to affect women more directly than men, given that they benefit from this sector the most and make up the majority of its workforce. Which answers can be provided for these challenges?

2. Interventions of the panellists Isabelle ENGSTED-MAQUET,

Policy Analyst, DG Employment, Social Affairs, European Commission Mrs MAQUET presented the main points of the analysis of the social impact of this crisis, and more specifically of its impact on social services. The Commission edited a report with the assistance of the Member States and the Social Protection Committee 11. One differentiating element needs to be underlined: differences between the impact of the crisis, differences among Member States and their response to the crisis (how and with which resources). This differentiation is also explained by the fact that the status quo in terms of social protection and social exclusion was already quite different prior to the crisis (also in terms of expenditure). During the first months of the crisis, strong public interventions with automatic stabilisers played a major role in reducing the impact of the crisis. The crisis revealed weaknesses in the safety nets and in the support to citizens in some Member States. This was reflected in the perceived quality and the affordability of social services, which varied hugely, especially for social services for children and long-term care. The crisis also highlighted the need for information and good information systems in terms of temporality: often the Member States lacked reliable data to understand the impact of the social-economic crisis in the field to coordinate their efforts. The only information they had related to unemployment. More specifically, the 1st report (published at the end of 2009) stated that the public

11 Joint Assessment by the SPC and the European Commission of the social impact of the economic crisis and of policy responses – Update 2010: http://register.consilium.europa.eu/pdf/en/10/st16/st16905.en10.pdf. A summary is also available: http://register.consilium.europa.eu/pdf/en/10/st16/st16905-ad01.en10.pdf

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employment agencies required more investments and that their operations needed to be strengthened. At the same time investments in social service infrastructure were necessary in the context of the Stimulus Package. The Member States also relied on structural funds. Two years after the crisis there is still no overview of what exactly happened. The EPSCO Council of December is preparing a new report 12. The packages of austerity measures with budgetary cuts will have repercussions on all financial resources and on the availability of personnel for social services. This will also have an impact on the quality of these services in the long term. That is why the Member States will have to rise to the great challenge which involves strengthening the efficiency and the effectiveness of public spending. What can Europe do in this frame? • A discussion forum for coordinating policies with joint learning activities to help Member States identify their best practices. • Let the structural funds play a role. • The voluntary quality framework can be an important reference to direct quality monitoring and the accessibility of these social services. • The crisis has also allowed organisations to find new tools for measuring the social impact of these measures, specifically in terms of the services provided by social service providers. These services in the field also shared the latest trends and the new needs of populations. The speaker also referred to some reports, which contained some sort of social monitoring, which should be reinforced.

Marti MOLINE, Deputy Director, Municipality of Badalona, Barcelona, Spain Mr MOLINE explained the social-economic context of the municipality of Badalona, a city of 120,000 inhabitants near Barcelona, which he qualified as a commuter town. The crisis had an important impact on the city’s social services, drastically increasing unemployment levels. Between 2007 and 2009 the number of people receiving unemployment benefit almost doubled and now stands at 18,000. A brief summary of the legal context was also given. A national law and a regional law

12 Ibidem

2.2. Maintaining a high level of quality in the current crisis context

regulate social services in Spain. The new law meant that Cataluña had to take into account that 30,000 additional people were entitled to social services, which meant that the social services had to be expanded and that there was more work to do. The economic crisis also meant that new groups found their way to social services, an audience that was not used to being confronted with social workers: people who previously had a job and a roof over their head. Mr MOLINE subsumed this as follows: “the universalisation of social services is due to the new legal context as well as to the crisis”. Although social services already worked in networks, this became a key theme in social policy in the Municipality of Badalona. The aim was to avoid double work, coordinating the work of the partners (associations, trade unions, etc.) and the administration. This is a crucial element for achieving better quality in social services. This greater and stronger involvement of the stakeholders does not mean that the social services are no longer first and foremost the government’s responsibility. The speaker said that the responsibility for the social issue should continue to be placed with “the state / res publica”. The state cannot escape this primary responsibility, which entails the construction, maintenance and growth of the social system, at national or at local level. Finally, the speaker briefly analysed the opportunities and threats in view of the current situation. Opportunities • Visualisation of social services. • Momentum for transversal work: dialogue, communication. • Improve the network approach among social entities. • Strengthening the social fabric and that of volunteering. • The normalisation of social services: access for the middle classes. • Consolidating group and communitybased work. • More resources and more professionals. • A generation that is employed.

Threats • Return to exclusively “charitable work”. • Weakness of transversal work. • Burdening of social services • Prioritise working in function of providing services, rather than focusing on the relational, promotional and community aspects. • A lack of resources for social services focussing on children in dangerous situations. • Users who are not very informed about social services. • A lack of resources in spite of growth. • More demands vis-à-vis social services.

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Georgios DASSIS, President of the Employees’ Group of the European Economic and Social Committee (EESC) The speaker reminded the audience that the European Economic and Social Committee adopted several opinions 13 on SSGI and was quite satisfied with the convergence of the objectives of the Belgian Presidency and the EESC’s objectives. The speaker reminded the audience that the objective of the SSGI was first and foremost social cohesion and that they needed to play a crucial role in times of crisis, even if it was more difficult to obtain funding. In practice the crisis results in increased unemployment, in precariousness and even in poverty, which affects a great number of Europe’s population: almost 80 million people live under the risk threshold for poverty (or almost 16% of the EU’s population). They have trouble gaining access to essential services (health and other services). Some groups in particular are at a disadvantage and feel this even more in times of crisis: persons with disabilities, immigrants and women. This increased exclusion automatically translates into a higher demand for social services. The right to universal access should not be limited to the services rendered by network industries but to all SSGI, to everything that is required for a decent standard of life in line with one’s economic and social rights. In 2007 the EESC proposed to create an independent observatory to evaluate SGI, of an economic or non-economic nature. This observatory had to include representatives from the various institutions. Unfortunately the speaker was forced to conclude that this never was created. Today one can imagine a real universal right, which gives access to residential care, to social services, to specific measures for persons with disabilities, to energy for all, to digital services, as well as bank accounts with payment facilities and affordable credits. Mr DASSIS concluded by returning to the essence of SSGI, i.e., to the conclusion that the distribution of wealth is inherently inequitable. Economic and social cohesion was an essential condition for adhesion to the European project. In order to pursue the European integration process, solidarity should become a reality at all levels: local, national and European.

13 See the opinion of the EESC on “Services of general interest”, OJ C 241 of 7.10.2002 and on the “Green paper on services of general interest” OJ C 80 of 30 March 2004 ;

2.2. Maintaining a high level of quality in the current crisis context

Mrs Laura JONES, Senior Policy Officer, EURODIACONIA The speaker reminded the audience of the role of her organisation, Eurodiaconia 14. The organisation conducted a survey among its members on the impact of the crisis on their job, although the majority has not fully felt the impact of the downturn. The demands in terms of social services are on the rise. This mainly translates into socalled “basic” services, such as shelters for people without a fixed residence, food packages, etc. It is important to continue to measure this impact and we need policies which limit the impact of this crisis, said the speaker. One of the main characteristics of social services is the personal nature of this service. This again raises the question of the importance of quality, notably in social work, which is carried out in the realm of interpersonal relations. This is all the more relevant, given that employees’ time is the first to generally be cut, resulting in services that cost less. That is why it is necessary to conclude procurement based on quality criteria, which are verified independently. This would avoid “losses” because in some cases service providers have been known to stop an activity because they have reduced their prices so much that they no longer can manage said activity. The European quality framework could be a means of raising awareness about quality, specifically in countries which do not have a quality framework or criteria. This could be promoted at European and at national level, and implemented at regional and local level by involving the stakeholders. The speaker reminded the audience of the message of financial solidarity to promote social cohesion: in order to make social services more efficient we need to avoid budgetary cuts. The financial crisis should not make vulnerable populations even more vulnerable. Support should be provided by those categories that can deal with the crisis. Reducing expenditure for social services will lead to even more social exclusion. One should not ignore the economic and human costs that are associated with these cuts. Public support must be maintained for this social expenditure, which implies a correct tax regimen.

14 Federation of organisations, institutions and churches providing social, health and educational services based on Christian values, in more than 20 countries in Europe.

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This social expenditure should not only be seen as spending but also recognised as an investment, which prevents the risk of poverty and helps people integrate and leads to employment. The World Health Organization has stressed that poverty is a main indirect and direct cause of bad health and social inequality in terms of health. If one solves the issue of poverty, healthcare spending will also be reduced in part. Investments in preventative healthcare will eventually lead to savings, in view of the reduction of healthcare expenditure. Spending at an earlier stage is more efficient. The speaker also explained that a good instrument for analysing the impact of social expenditure, and which justifies maintaining the level of this expenditure, is the analysis of the “return on social investment”. Decision-makers can use this instrument to make forecasts, in other words they can analyse the impact of social expenditure in a given sector, but also use it to evaluate past actions. Mrs JONES also postulated that the Commission could promote evaluation methods for growth and welfare, which extend beyond the scope of the GDP, as it has already started to do. Adding social indicators to the growth and solidarity pact would be a welcome development. The lack of consideration of the social aspect in other bodies should also be solved (the speaker referred to President VAN ROMPUY’s task force, which was mentioned during the plenary session). Another key idea, linked to the previous one, was that of better coordination between the Council’s various bodies. In order to provide support for quality, many people often refer to social innovation. In order to realise this, the speaker said that one should make sure that public procurement are not too rigid or too prescriptive. They should be more flexible so that providers can respond to the changing needs of citizens. The speaker related the quality of the services provided to public purchasing. The idea is to avoid standard formulas. In fact this should lead to more customised solutions. Competition could also play a role in this if it takes into account the quality level of social services. Once quality criteria have been determined it would make sense to refer to the expertise of NGOs in this field. However public procurement are not the remedy, especially in view of the delays which are traditionally associated with these procurement (often two years), meaning that it is impossible to ensure real continuity in care. Thus alternatives to public procurement have to be promoted.

2.2. Maintaining a high level of quality in the current crisis context

Mr Robert ANDERSON, Head of the Living Conditions and Quality of Life Unit, Eurofound The speaker discussed a number of key messages in the debate. Firstly, the quality of SSGI is applicable to all European citizens. We all avail ourselves of SSGI at some point during our lifetime, whether this is healthcare, professional training or childcare. But budget cuts will have a bigger impact on the more vulnerable segments of our population. Eurofoundâ&#x20AC;&#x2122;s activities notably focus on criteria that are relevant for our quality of life. Good social and family relations, earnings and employment, good health are all important, but it is clear that the quality of our social systems is a key element for our quality of life. The perceived quality of social services by populations, the perceived quality of governance and of government are also a key element. It goes without saying that the quality of SSGI and access to these services are important themes, which are reflected in the various documents (of the Commission, of the Social Protection Committee). The contextual note of the workshop also contains good ideas and approaches to evaluate quality, with good practices for certain social services in certain Member States. But it is safe to say that there is a real lack of comparative data on the accessibility and quality of social services. Without these data, it is impossible to ensure a proper monitoring. And if you want to go beyond the traditional monitoring methods, you also need to take the perception of the users (even of potential users) of these services into account, combined with the voluntary European quality framework. Finally the quality of SSGI largely depends on direct service providers, who maintain contacts with the users of these services. The competences and employment conditions of social workers are crucial in this respect. It is blatantly apparent that this staff is far from qualified and does not receive the consideration that it merits: low salaries, stress, poor employment conditions, and no career development perspectives: this unfortunately is the fate of social workers. Volunteers are welcome to provide support to these primary workers, who are often on the receiving end. One should also bear in mind that the majority of these volunteers are women (something worth thinking about). We should also strengthen the synergies between social service providers, and make sure that they are not replaced by family services.

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3. Discussion between panellists and participants Â The words of the panellist elicited several responses on behalf of the participants, as well as a number of detailed questions. Here are the most important ones: Â JoĂŤl HASSE FERREIRA, a former MEP and rapporteur of the 1st report on SSGI during the 1st Forum on SSGI in Lisbon. The crisis has helped raise awareness about the importance of the SSGI. Various Member States have seen the demand for these services increase but at the same time they do not have the budgetary resources to fund these social needs. Women especially are suffering, because in most countries, they are to first to lose their jobs. The speaker postulated that the ratings agencies seemed to toe a tougher line with European Member States that are on the fringe of the EU, and which are less developed. More qualitative services can be achieved with fewer resources if civil society is involved more by exchanging good practices and experiences. On the other hand, one should not forget about the supplementary resources that were promised by the European Commission, more specifically by Commissioner SPIDLA. Finally, the technical support of organisations such as Eurofound is indispensable. Julien VAN GEERTSOM, the President of the Federal Public Program Service for Social Integration, stressed the necessity for administrative simplification. Rather than basing oneself on rules, one should concentrate on the outcome to provide real social guidance. People should be automatically granted social rights: fundamental social rights, rights to social security, should be electronically granted, which is already the case for some of these services in Belgium. The investment in services for small children is a key element, in order to break through the vicious circle of hereditary poverty. This will also enable us to save money in the long term by investing in this type of social service. Tina MARTENS, secretary of the Public social welfare centre (OCMW) of Molenbeek, shared her thoughts on the European call to provide guidance and support to vulnerable people. She emphasised the huge administrative burden that is associated with this. As a result several social welfare centres are no longer doing this. Belgian legislation has established a number of criteria in terms of quality and accessibility, but given the lack of budgetary resources it is difficult to respect these criteria. She gave an example: the waiting period for a decision has increased from 3 weeks to 11 weeks. The debate on quality should not overlook the fact that social welfare centres do not even have sufficient personnel to keep up with demands for basic services. Guillaume FILLON, a representative of the French social security institutions to the European Union, referred to the need for investments in qualitative social services and

2.2. Maintaining a high level of quality in the current crisis context

the fact that these investments should be properly monitored. He drew attention to a number of specific actions: there are various methods for qualifying a number of actions, which are normally considered SSGI in France as investments of general interest, which can thus be monitored as public expenditure. He gave the example of public private partnerships. A private investor is asked to invest on behalf of the community without involving any cost for the latter on condition that the users of this service can continue to avail themselves of the service for several years. An example: the Commissionâ&#x20AC;&#x2122;s proposal to stop monitoring public spending for mandatory pension funds in the frame of the stability pact. How does the Commission hope to obtain real comparative data for the Member States in terms of this type of debt, which is related to public-private partnerships? Hugues FRAZER, European network of independent experts on social inclusion, commented on the budgetary cuts in the social services sector: firstly there is a tendency to cut even more in social services. There is also a tendency to protect healthcare and education, at the expense of personal assistance services, which are crucial for the most vulnerable citizens. Another tendency is the division of persons by age category: budgetary cuts tend to affect childcare and youth services more than services for senior citizens, probably for electoral reasons: the latter vote, children do not. Finally a last comment on the issue of the social investment related to social services: currently there is a real lack of comparative qualitative data which can be used for research. It is thus impossible to determine the economic added value of social services. There are some data available about childcare services, specifically in the United States. Pierre BARGE, representing the European human rights association, asked a very important question about the fundamental right of access to social services. As soon as this becomes a right, the question of universal accessibility to social services of the same quality becomes an issue. Increasingly these services foster segregation, especially in times of austerity measures, because States and organisations tend to target social services for the poor. Thus standards are reduced in social housing, in food banks, in healthcare, based on the premise that the underprivileged will not complain. Thus it is worth taking into account this double idea: namely on the one hand that the same quality of service is not offered to people based on their social category. At the same time, social services foster social segregation, because they are aimed at the poorest people. Â Jean-Claude BOUAL, European Liaison Committee on Services of General Interest (ELCSGI) shared two comments. Everybody has raised the issue of funding. We need to ask ourselves how public resources will be divided. Funding was found for the banks, on the one hand, but on the other hand, no funding can be found for social services, which have been established to provide for the essential needs of people and which are even essential for the Unionâ&#x20AC;&#x2122;s survival. When faced with reduced resources governments tend to resort to procedures, rather than providing services, which, in turn, has a direct impact

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on their quality. Another comment related to the “Social Business Act”: if this expression is advanced, then the Union has made an unacceptable error, because the term business will inevitable take priority, while the point here is to implement social policies.

Mrs Anne-Sophie PARENT asked that certain elements be clarified by the speakers. Mrs MAQUET: which tools do we need to anticipate on the changes and impact of policies, to arrive at “informed decisions”? Mr MOLINE: how can we ensure that local authorities can better coordinate services in spite of the competition among service providers? Mr DASSIS: What about the social business act? Mr ANDERSON: how can we do better with less using new technologies? At the same time the rapporteur mentioned Mr FRAZER’s intervention underlining the necessity to avoid confrontations between groups. There are various types of cuts: this is the case for example with the re-individualisation of the risk for the oldest citizens. The rapporteur also insisted on the gender approach: budgetary cuts in social services tend to particularly affect women, who benefit from these services and also make up a large share of their workforce.

Isabelle ENGSTED-MAQUET, Policy Analyst, DG Employment, Social Affairs, European Commission In terms of the simplification of the procedures and in view of the European Social Forum, this has to be taken into consideration but this extends beyond the scope of DG Employment. As far as the questions relating to data are concerned, several points need to be made. This raises a real challenge for statisticians, because of the diversity of the SSGI, which complicates comparisons. The boundary between public and private services, between formal and informal services, is always difficult to establish and will vary significantly depending on the country. In terms of methodology, there is another difficult boundary: healthcare, social care, long-term care, etc. Numerous international publications (OECD, Euro stat, the WHO, etc.) have gathered experts to focus on nomenclatures, on health spending to obtain comparative data. But this is an immense challenge, and they are moving forward slowly. The Commission is trying to promote mutual learning, especially in terms of partnerships with stakeholders in the field in order to understand what is going on. In the

2.2. Maintaining a high level of quality in the current crisis context

homeless sector, for example, it is impossible to gather official data without the assistance of the service providers in the field. We have worked to establish methodological approaches. It is clear that the progress that is being made is slow. At the same time, we should not place an excessive administrative burden on the shoulders of the stakeholders in the field. As far as anticipating the impact of the crisis is concerned, there are various instruments available, such as micro simulation in certain EU Member States, for example in terms of the functioning of the fiscal systems. But these instruments are indirect instruments. Before anticipating you need to already understand what is going on now.

Marti MOLINE, Deputy Director, Municipality of Badalona, Barcelona, Spain In Spain and in Badalona in particular, the budgets for social services have been maintained. There has been governmental support. In terms of coordination: round-tables were organised: trade unions, watchdogs, and citizens who were concerned about the crisis, a round-table with social bodies, which was attended by the people and organisations working in the social realm. These two round-tables were particularly efficient because they allowed the municipality of Badalona to implement strategies for dividing work and providing support for logistical aspects of some operations in the municipality. Mr MOLINE mainly insisted on the benefits of transversal work, at the level of his municipality, when asked about opportunities: with the education and health services. If he had to retain one recommendation to achieve the required level of quality, he would try to work with representatives from civil society. The social diagnosis is much easier to make and it is easier to tackle. He was forced to conclude, in terms of public procurement and based on his experience, that the more he works with local companies, the more they underpin the social fabric. They do not shirk away from small supplementary services, even after the mission has ended.

Georgios DASSIS, President of the Employeesâ&#x20AC;&#x2122; Group of the European Economic and Social Committee (EESC) Mr DASSIS made several points. He said that the claim of an egalitarian society was merely a dream. It was better to adopt a more pragmatic approach, which is why he again referred to his wish for the adoption of a directive, of a binding instrument establishing minimum social benefits for all EU citizens.

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On the social aspect of the Single Market Act, Mr DASSIS was less than optimistic because in the past promises had been made that social cohesion would be accompanied by economic integration. In recent years, however, directives on the internal market had been issued and there was a consistent trend to give priority to economic interests, instead of social interests. This was the case notably for the Court of Justice, which gave priority to economic interests instead of to the entitlement to social rights. A binding instrument providing access to all citizens to minimum social rights thus has become a requirement. The European Citizens Initiative 15, which was planned under the Lisbon Treaty, may provide a solution for this. Forums can continue to be organised, as well as seminars, but the requirements have to be transposed into this Directive. He also addressed a message to the decision-makers at the Commission. Under Commission President Jacques DELORS the political dimension had the upper hand in the Union. Since the departure of President DELORS, the Commissioners seem to pay much more attention to the points of view of the administrations. It would be worth asking ourselves “if accountants rule the roost”. Finally, although Parliament seems more inclined to intervene on this subject, the Council of Ministers should also be asked to contribute to the continued and advancing European integration process, at social level.

Mrs Laura JONES, Senior Policy Officer, Eurodiaconia A lot can be said about public-private partnerships, especially in terms of their evaluation, which was discussed in the European Parliament Public Services Intergroup. In the United Kingdom, PPPs have been known to fail. As a result the question rises as to how they can be evaluated, especially in social services.

On the issue of coordinated and integrated services, which several participants raised, when several operators are present in the field, coordination is essential and the public authorities need to assure this coordinating role. On a broader scale, the European strategy of active inclusion, which seems to incorporate the minimum income, access to qualitative social services and access to the job market,

15 “The ECI will allow 1 million citizens from at least one quarter of the EU Member States to invite the European Commission to bring forward proposals for legal acts in areas where the Commission has the power to do so.”. See the site of the EU Commission: http://ec.europa.eu/dgs/secretariat_general/citizens_initiative/index_fr.htm http://ec.europa.eu/dgs/secretariat_general/citizens_initiative/index_en.htm

2.2. Maintaining a high level of quality in the current crisis context

should be highlighted more and the principles that are implemented should be closely “monitored” by the European Commission. The involvement and participation of the user in social services allows us to achieve more efficient and innovative social services. Each individual has ideas, potential, competences, and resources which help him/her achieve “more well-being”, and these should not be ignored. This may even lead to the joint creation of social services in which the user and the service provider are partners on equal footing. This win-win solution shall allow social services to adapt better to their users, and also will help “de-institutionalise” social services as well as reducing costs.

Mr Robert ANDERSON, Head of the Living Conditions and Quality of Life Unit, Eurofound Mr ANDERSON discussed the opportunities which are being missed and was more specific on the issue of prevention, especially for people who are more vulnerable to social risks. Moreover, these people are on the verge, or on the fringe of assistance from social services: they are “about” to lose their job, their housing or about to fall under the regimen of people who no longer qualify for work. And yet, there really is some great potential here for a more preventative strategy, an idea which many endorse but which is rarely applied. Professionals do not implement a preventative policy unless they are encouraged to do so. Even in the case of workers, we could encourage them to adopt a more preventative approach. Naturally this will not always allow us to “save money” but there are real examples of the use of new ITC technologies which are starting to have results.

For example how can ICT help prevent people from becoming care-dependent or even avoid an aggravation of their care-dependency and also prevent them from having to have recourse to institutional care instead of to medical care. Another example is that of the support to people who provide care to care-dependent people in their homes in combination with the local authorities which pay for these services because in the long term this will reduce the cost for the local authorities. Finally ICT can also play a role in providing support to social workers, to prevent stress, burn-outs, and illness. These are not all longterm approaches. Some of these suggestions can be easily implemented with significant results being achieved very quickly.

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The participants then asked a new series of questions. Denis STOKKINK, of the Think tank for solidarity, raised the issue of the obstacle in terms of SSGI between the new Union Member States and the others. Having worked a lot with stakeholders in social inclusion in Romania and in Bulgaria, the participant explained that there was a fundamental qualitative difference between the new Member States and the old Member States, at public and at private level. In the quality debate, the stakes are really high, in some cases even of vital importance, for the populations in these countries. In this frame, the elements of the regional European policy, which can improve the debate, need to be endorsed by all the stakeholders. The Commission should be able to tackle the issue of social services of minimum quality which are no longer available to users for financial reasons. Proinsias DE ROSSA, MEP and rapporteur for the follow-up of the HASSE FERREIRA report of 2007 on SSGI emphasised that it is impossible to provide qualitative social services without qualitative, adequately trained personnel. In this frame, EUROFOUND is the ideal organisation to develop comparative quality data. At this point the percentage of people living in poverty in the EU is close to 20%. This means that 80% of the population is not in this situation so we must ask ourselves how the wealth at our disposal is being divided and used to create a society that is really inclusive. In this frame, political choices are currently being made in the frame of the VAN ROMPUY Task Force, on economic governance, on the implementation of the Europe 2020 strategy, on the legislation on the agenda, which are based on the principle of a balanced budget. The crisis essentially is an economic crisis. We have achieved 3% growth in the EU; we will have no deficit or debt problems. One should therefore not believe that Europe will crumble economically. However, this will be the case in the long term if we allow our SSGI to be dismantled. This is effectively happening in some Member States where there is a striking tendency towards â&#x20AC;&#x153;less Stateâ&#x20AC;?. We should resist this tendency and propose alternatives. One of these alternatives is the quality of these services. Liz GOSME, European Federation of National Organisations working with the Homeless remarked that there was a tendency at local level to involve users, to make them participate: the increased use of the available expertise in civil society. Several cities are now establishing partnerships with movements in civil society, which is a way of supplying better services with fewer budgetary resources. The crisis has helped us devise new ways of working.

2.2. Maintaining a high level of quality in the current crisis context

4. Summary and recommendations Â At this stage of the discussion, the rapporteur gave an overview of the key messages, which would be taken into account for the elaboration of the three recommendations to be given during the plenary session the next day. Today the impact of the crisis requires better monitoring; we need to anticipate on the new needs of users, as they arise, according to several testimonials. The crisis has far from ended, and political decision-makers and the stakeholders need to be made more aware of this phenomenon so they will be prompted to take action. Today SSGI have to be considered as an investment, not as a cost. If we lose sight of this premise, then the social and societal cost as well as the budgetary impact will be huge in the future. So we need to preserve one of the European Unionâ&#x20AC;&#x2122;s most precious resources: its human capital. One point, which is in fact a question, relates to the improvement of the situation and the economic efficiency of our social services, focussing on personnel first and foremost: how do we recruit qualitative personnel and develop work opportunities, as well as a quality framework in the current environment, which is marked by budgetary cuts? Finally, a question, which is addressed to the Member States and the Commission, and which focused on the implementation and monitoring of the European quality framework: how can we assure a participatory process involving all the stakeholders so that they inform decision-makers of all the issues that have not yet been resolved, even todayÂ ? Would it be possible to establish a dialogue platform between the Forum and the SSGI?

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5. Parenthesis It is worth noting that questions about quality always raise new legal and political questions: on the internal market and on public procurement as well as more general questions relating to economic governance. This is probably a subject for the next Forum; the ministers who are in charge of public finance will be invited… The need for a dialogue platform between the various forums is an idea which the Belgian Presidency advanced and endorsed, but the Commission and the Member States were not that enthusiastic about it. Thus this ambition has had to be reviewed: the subgroup of the European Social Protection Committee is interested in a dialogue with the stakeholders. The CEES had already suggested doing this in 2007, but now this idea once again emerged up in MEP PROINSIAS DE ROSSA’s report on SSGI 16.

16 Resolution of the European Parliament of 5 July 2011 on the future of social services of general interest (2009/2222(INI)), available at http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P7TA-2011-0319+0+DOC+XML+V0//FR http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP// TEXT+TA+P7-TA-2011-0319+0+DOC+XML+V0//EN

Report of the workshop on a voluntary European quality framework for SSGI

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2.3. SSGI and state aid 1. Presentation and objectives of the workshop Mr Eric VAN DEN ABEELE, Counsel in the permanent representation of Belgium to the European Union, chaired this workshop and was assisted by Mr Pascal CANFIN, an MEP, who served as rapporteur. Mr CANFIN is also the Vice-Chair of the European Parliament Public Services Intergroup, the vice-chair of the special committee on the economic, financial and social crisis, and a member of the European Parliament Committee on economic and monetary affairs. The panel was made up of:

• Nicola PESARESI, Head of Unit State aid Case support, DG Competition, European Commission • Antje HERBST, Legal expert, responsible for European Affairs, in the social services department of the City of Munich

• Laurent GHEKIERE, Representative of the Social Union for Housing in Brussels and founding member of the SSGI collective in France, President of the SGI (services of general interest) Committee of the European Centre of Employers and Enterprises providing public services (CEEP)

• Peter SIMON, MEP The main object of this workshop on SSGI and on state aid was to analyse and evaluate the impact of European state aid rules, more specifically the rules of the Monti-Kroes package on the funding and functioning of SSGI. The conclusions of the debates should result in the adoption of at least three clear recommendations on this issue.

2.3. SSGI and state aid

2. Interventions of the panellists Nicola PESARESI, Head of Unit State aid Case support, DG Competition, European Commission. Mr PESARESI felt that the debate on SSGI had entered a fruitful and important stage. He stressed that the Belgian Presidency did a very good job in the frame of this Forum, as is evidenced from the documents that were prepared and distributed. These documents constitute a sharp analysis of the status quo and are very precise. They also allow us to situate the debate and the challenges that we currently face in the field of SSGI. Referring to Commissioner ALMUNIAâ&#x20AC;&#x2122;s speech during the opening session, Mr PESARESI was of the opinion that this is a crucial time, because the Commission is trying to devise solutions, which will help establish a good balance, on the one hand, between the internal market and competition rules, and on the other hand, the requirement of maintaining services of general economic interest (SGEIs) which are accessible and affordable for all, in the frame of the review of the Altmark package. He felt that it was important to situate the debate to know where we are coming from and where we stand today when we refer to the Altmark package. He reminded the participants that when the Court of Justice handed down the Altmark judgment in 2003 some considered this to be a Copernican revolution in terms of the financing of SGEI by public authorities. This was largely due to the fact that the Courtâ&#x20AC;&#x2122;s position on this, namely whether this financing was state aid or mandatory compensation for public services, was not always clear in the past. After the Altmark judgment, he continued, the Commission felt that it had to intervene to re-affirm its policy in terms of state aid in light of the Courtâ&#x20AC;&#x2122;s jurisprudence. Most of all it was necessary to stipulate how the conditions imposed by the Court had to be applied. Thus Mr PESARESI said, when the Commission published the Altmark package in 2005, which is also known as the Monti-Kroes package, the aim was to provide a legal framework on the one hand for the control of state aid by the Commission, and on the other hand to change the exemption mechanisms for state aid, which complied with the criteria set out in the 2005 decision. The Commission expert asked himself whether the Altmark package had been useful, without overlooking the fact that since it became applicable the Commission has maintained a constructive dialogue with all the stakeholders and that it also introduced an interactive service which provided answers to some of the questions that have been raised in the past by stakeholders. The speaker also reminded us that in 2007 the Commission

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already published the Frequently Asked Questions document. Also a guide, which was published on October 26th, 2010 already provided answers to several questions relating the application of the rules of the internal market, of competition and public procurement in terms of SSGI 17. But how about the review of this package ? According to Nicola PESARESI the first stage is to analyse the experiences at the level of the Member States. The Commission asked the Member States to share reports with it on the implementation of the Altmark package. The first answers were not that enlightening. The Commission had to ask the Member States again to supply more detailed answers. Generally speaking the speaker said that most of the Member States were happy with the rules of the Altmark package and that they gradually aligned their practices in keeping with the rules of this package. Naturally many questions were also put to the Commission, which did not specifically relate to the package itself. Instead more information was requested on certain aspects such as the difference between an economic activity and a non-economic activity, on “the effects on trade between Member States” or even on the definition of SSGI. The second stage related to the consultation with the stakeholders. This was launched in March 2010 and ended in September of the same year. The Commission’s services received more than 1,000 contributions from a well-defined geographic area: more than 60% of the answers came from three Member States only, namely France, Germany and Belgium. The points of view that were expressed were quite diverse: some preferred greater discipline in terms of the application of competition rules, while others favoured more flexibility. According to the speaker several concerns were highlighted in the frame of this consultation. Essentially these relate to the 4th condition of the Altmark judgment, namely the content of the term “profit” in the frame of this condition, the meaning of a “well-run medium-sized undertaking”, the decision’s notification threshold for SSGI, the calculation methods used for compensation and the relation between the rules on state aid and on public procurement. All this, said Mr PESARESI, is currently being scrutinised and analysed at the level of the European Commission’s various services. What will the Commission do after this consultation ? Mr PESARESI said that the various Commission services are conducting an in-depth analysis of all the data of this consultation in order to devise more appropriate solutions. Then the Commission shall prepare a report on the application of the package and will launch discussions with the various Member States and all the stakeholders on how to improve the Altmark package. It will also take into account all the contextual elements as well as the voluntary European quality framework and the Single Market Act. The speaker once again reminded the

17 Ed. – This document was finally published by the Commission on December 7th, 2010 under no. SEC(2010)1545.

2.3. SSGI and state aid

audience that the guide published by the Commission on October 26th, 2010, which contains an updated explanation of the rules on state aid and public contracts as applied today to SSGI, also needed to be taken into account. At the same time, he stipulated that this guide does not provide any information on the various problems. Nevertheless this document provides important information on the rules that apply to SSGI.

Antje HERBST, Legal expert, responsible for European Affairs, in the social services department of the City of Munich Mrs HERBST focused on the real issues which the application of European rules creates for the City of Munich. She said that the city had to wait five years before it succeeded in applying the Commission’s decision of 2005 as a result of the Altmark package. Why did this take so long ? The speaker explained that it was very difficult for the administration and for the municipal council, as well as for the representatives of the NGOs involved to accept the idea that local financial aid could have an impact on the internal market. Mrs HERBST said that numerous discussions within the administration and the Municipal Council of the City of Munich, as well as with the NGOs, were held before they finally managed to reach an agreement on how to implement the measures which followed from the Commission’s decision in 2005. And she also stressed that the city of Munich was a pioneer in the implementation of this decision in Germany. But at the same time, they ended up having to contend with various difficulties. Starting from official figures Mrs HERBST said that the total amount of state aid granted in 2010 by the Department of Social Affairs to NGOs was more than 120,000,000 euros. This amount covers a wide range of services. In fact, there are two ways of funding social services in the City of Munich: either by an annual mandate instrument granting NGOs a mandate or by a long-term contract with service providers. The annual mandate instrument is mainly used to fund new projects or temporary projects or even to allocate funding to new service providers that are just entering the market. Meanwhile, the long-term contract accentuates the partnership between the authorities and the service providers. This is an important aspect of the City of Munich’s approach, she underlined. Another important aspect which the legal expert of the City of Munich highlighted was that these long-term contracts were reviewed every three years. This posed a real problem because it meant that there was no annual control of over-compensation as imposed by the Commission’s decision of 2005. In the frame of the annual mandate instrument, the speaker wondered whether this might discourage NGOs from searching for additional financial support to the extent that the result would be that they would be over-compensated and thus would have to return funding at the end of every year.

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Finally the speaker said that the issue of the thresholds set by the decision was also a difficult one as it is well below the financial reality and not in line with the operations of the majority of the service providers. This thus needs to be reviewed.

Laurent GHEKIERE, Representative of the Social Union for Housing in Brussels and founding member of the SSGI collective in France, President of the SGI (services of general interest) Committee of the European Centre of Employers and Enterprises providing public services (CEEP) Mr Laurent GHEKIERE started by sharing some figures which demonstrated the importance of the social housing sector in the European Union. He said that 25 million households live in social housing in the European Union and that 25,000 bodies manage these social housing facilities on a daily basis. It was obvious that the speaker was very critical about the articulation of state aid rules in relation to compensation. He stated that there was still a lot of legal uncertainty and once this issue becomes clearer, it will not necessarily be applied by all the Member States. In order to convince the audience of his premise, he gave a few examples: • The Altmark ruling which was supposed to resolve the Court of Justice’s position on the issue of whether compensation was state aid distinguishes between state aid and compensation for public services based on a number of criteria. In some cases, however, these are almost impossible to use. In 2005 the Commission, which was about to publish a communication with an interpretation of the notion of “well-run mediumsized undertaking” rapidly abandoned this idea in view of the complicated nature of this notion. • Some criteria refer to the fact that this compensation is not compatible with state aid which is prohibited as outlined by the treaty. The Commission tried to devise a solution for this quandary by deciding to create an exemption of notification. Given that the Commission cannot control every notification it simply handed the control to Member States, but exempting them from notifying this compensation. The Commission imposed one condition, however, namely that the Member States would have to check over-compensation themselves. In any event, this only shifted the level of control from the Commission to the Member States. Mr GHEKIERE explained that the social housing sector has worked closely together with the Commission in 2004 and in 2005 on this text. It also obtained that social housing, like hospitals, would be considered as a sector that was excluded from this threshold, for the simple reason that out of the EU’s 25,000 social housing bodies only 5,000 receive funding that is well above this threshold. Given that each of these bodies on average launched three projects per year, this would amount to 15,000 notifications per year.

2.3. SSGI and state aid

• It is worth noting that the Member States finally welcomed the decision on the exemption from notification, considering it to be an element of legal certainty. They simply noted that they had to take the necessary measures for applying the conditions of this exemption, namely a mandate instrument and no over-compensation, which is checked regularly. Today certain Member States are just starting to apply these rules, while in other Member States there is no mechanism for checking over-compensation. The European Parliament only pronounced itself once on the Monti-Kroes package, in 2006, requesting a higher level of control than the Commission required. This does not make things any easier. A legal framework is needed for state aid for social housing, because such aid means that rents in social housing can be lower than the market. This is a way of passing on the state aid which social housing bodies receive, to tenants, and in a way this also entails a regulation of the housing market, with rents set by the State. • Most of the measures provided for under the Monti-Kroes package are very difficult to apply, especially at the level of the local councils that wish to apply them. They have great difficulty understanding the requirements of the whole Altmark package. In his report to Commission President BARROSO on the future of the internal market, Professor Mario MONTI called for more flexibility, more specifically in the field of social services, in relation to state aid rules. He especially called for an alignment of the thresholds that are applicable to compensation and of those that apply to public procurement. Coming from Mario Monti, who contributed to this decision, this is an important diagnosis and recommendation. • There is a real issue of governance in this dossier: on the one hand, the Commission has jurisdiction under Article 106 § 3 TFEU to independently adopt decisions or Directives to implement the principle of prohibition of state aid and to provide for exemptions from notification. On the other hand, given that the Commission only asks Member States and the European Parliament for their opinion, the consequence is that the latter do not really have any ownership of this decision. This is even more the case for the local councils, who have to create mandate instruments and control the overcompensation for social services. • A last sensitive issue is that of the concept that the European Commission has of social housing in relation to the principle of universal access, as is evidenced by the recent disputes, especially in the Netherlands and in Sweden.

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Before concluding his intervention, Laurent GHEKIERE made three proposals: â&#x20AC;˘ The de minimis threshold now stands at 200,000 euros over a three-year period. He feels that this threshold should be spread over one year. After all, what is 200,000 euros a year? He said that this was the budget of a child-care facility employing five staffers who were qualified to care for children, without counting the rent or the operating costs. Even if this threshold is limited to 200,000 euros, a child-care facility employing six workers thus will have an impact on trade between the Member States. This poses a real problem in terms of the definition of the concept of the effects on trade for local operators, that only provide services of general interest and which only work for the local population. â&#x20AC;˘ The mandate instrument: this requirement must be maintained. It is an indispensable instrument for removing the social services from the scope of the Services Directive, but also from certain provisions of the Treaty referring to them instead as undertakings providing services of general interest. This is thus a different interpretation of the relationship between the public authority and the service provider. In France, elected officials were involved in this process and together we developed template mandates to facilitate things for everyone. â&#x20AC;˘ The issue of control. The notification exemption is founded on the notion of control. This is very difficult to implement because the economic calculations that do not exist in the accounts of most SSGI have to be identified and valued and taken into account. This also represents a heavy tax burden for local governments. It seems to us that we need to move towards a simplified system of reversed burden of proof by the plaintiff or on the contrary, that we need to consider ways of isolating compensation that can offset any economic advantage to a given service provider.

Peter Simon, MEP The speaker reminded his audience of the work of the European Parliament on this subject, particularly in the Employment and Social Affairs and the Economic and Monetary Affairs Committees, in the framework of the DE ROSSA report on the future of social services of general interest. In addition, the Public Services Intergroup (of which Mr. CANFIN and he himself are members) has been actively working on the issue of state aid which is an issue across Europe. The Intergroup has also conducted a public consultation of stakeholders on this issue throughout the EU. They were surprised at the results in the measure that they were comparative and established that there was a convergence with the crucial points (which pose the most problems in practice) that had been identified beforehand by the Commission.

2.3. SSGI and state aid

The MEP also discussed the widespread confusion on the issue although paradoxically there is a lot of information that has been shared online and that seems to foster uncertainty among the parties for whom these rules have been created. There is, however, still a lack of information and general uncertainty as regards the transposition of these rules into national law, and in light of the answers provided during the consultation. Suggestions for improvements were requested and obtained in the intergroup. The issue of definitions was raised, such as the boundary between economic and non-economic services. Tax issues which were not discussed in the frame of this forum may in certain cases give rise to questions about the calculation of over-compensation in terms of state aid. The fact that the tax benefits, resulting from SGI statutes, will not be included will have to be considered when calculating over-compensation. This proposal has been made on several occasions: such a tax benefit exists in several Member States. On sectoral issues, the speaker noted that a request was submitted for the extension of the specific regimen for an exemption from notification for SSGI to other sectors. At present this only applies to social housing and hospitals. The increase of specific thresholds was also requested. In order to extract SSGI from the scope of competition law, we should be more specific about the term SSGI, taking into account the local dimension of this type of activity. All this brings us to the question of how to arrange these issues: through more communication, for example by reviewing the FAQs or by tackling a bigger job, namely the consideration of the Lisbon Treaty and what it allows, with a framework directive and sectoral regulations (Article 14). The MEP referred to the report of his colleague Proinsias DE ROSSA on the future of SSGI, which stated that concrete proposals can be submitted by anyone before December 10th, 2010. The draft report concluded that the method that is now used to reduce legal uncertainty through communication is not the most suitable. Similarly, the casuistic approach of the Court of Justice in this field is not sufficient to eliminate uncertainty. The speaker highlighted a regulatory framework or umbrella framework for SSGI in this report, in combination with sectoral regulations that could be applied to various social services of general interest.

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3. Debate between panellists and participants The interventions of the panellists raised several questions and elicited various responses. We have listed the main ones below: • At this stage the rapporteur, Mr Pascal CANFIN challenged the Commission’s representative on the Commission’s position today. It has taken a number of initiatives, including the Monti package, and has taken the time to assess the implementation of this package which led to consultations. The issue of assessing whether SSGI have an effect on trade has been raised several times: what is the actual, operational and useful interpretation for local stakeholders which the Commission intends to give to this notion, but also to that of “well-run medium-sized undertaking”? • Speaking to the representative of the city of Munich, the rapporteur also raised the issue of the paradox about the subsidiarity principle, because some players want to see the Commission define SGI or SGEI. They require more clarity and legal certainty about the rules that applicable to SSGI; but when the Commission finally takes a given initiative, other stakeholders, sometimes even the same stakeholders, are so bold to state that this is a competence of the Member States in keeping with the subsidiarity principle. How can we explain this paradox and how can we reconcile these two aspects? • Mr Pascal CANFIN then asks the following question to Mrs Antje HERBST, City of Munich: in the case of the local stakeholders in the City of Munich, for example, would it be safe to say that there is a tendency to consider that it is difficult to apply the MontiKroes package and as a consequence that the rules that apply to public procurement are a better alternative? If this is the case what are the practical implications in the field? • Mrs Katharina WEGNER, representative of DIAKONIE, Germany an association for Social Work of the Protestant Church in Germany asked the panellists about their position on the legal framework in the new Treaty, i.e., the relationship between Article 14 (rules for the economic and financial conditions for SGIs) and Article 106 TFEU (state aid and missions of general interest). • Mrs Claire ROUMET, working in the social housing sector, Housing Europe.In the social housing sector but also in other areas of SSGI, the conclusion is that there is chronic under-compensation, as is evidenced by the data supplied by several actors in the field, and that this has been accentuated by the crisis. Currently this has become a structural issue. It seems that the current concepts (compensation, over-compensation or under-compensation) have not been adapted to several SSGI sectors. Therefore the logic must be completely changed, with the aim being to determine a budget, in function of sectoral needs, which meets these requirements instead of starting from considerations that are related to the effects of trade between Member States and to the complicated calculations relating to over-compensation or under-compensation.

2.3. SSGI and state aid

• Mr Manuel PAOLILLO, project manager of the 3rd Forum SSGI. A particularly advantageous fate, as we have already seen, was reserved for social housing and hospitals under the Monti package. Why is this? Is this a result of strong lobbying by these sectors or have specific concerns been taken into account and if so which ones? • Mrs Anissa BENCHEKROEN working for ACTIRIS, the public employment agency in Brussels, reported difficulties in terms of the concepts (legal maze) of the package as well as in terms of the practical implications for an employment agency. The implementation of the package would lead to grotesque situations in view of the diversity of the missions of a job counsellor: sovereign mission when registering an unemployed person, non-economic mission of general interest in terms of advice and economic mission when contacting a company to place the person ... • Mr Sébastien GARNIER, representative of social housing in the Netherlands, asked the speakers about the specific issue of the target audience, which is high on the agenda in social housing, in view of the case that has been brought before the Court of Justice. Why is a threshold being imposed in the target group? This is part of the deficits of the market and in particular on the supply side: the market economy does not provide sufficient affordable housing. The Member State needs to know who belongs to its target audience. Thus the question rises why social housing has a special regimen, under the previous decisions of the Commission, which imposes a target group, while this is not the case in other sectors. • A person working with the homeless challenges the speakers on a matter related to the principle of universality. The person is concerned about the supply of social housing which continues to be very limited in the various Member States. By promoting a universalist approach to social housing with services that are inherently limited, one has to wonder about those members of the public who will never be able to enjoy these services. • Mr BOBICHON who works for the General Council of the Eure in France. Some people think that the EU has gone about it the wrong way in the SGEI dossier: first there was the judgment of the Court of Justice (Altmark judgment) followed by the Commission decision based on this judgment, while a judge’s main duty is not to create legislation but rather to make sure that is applied. Since the Commission published the Monti-Kroes package for 5 years local governments in France have been told how to apply this package. And for five years those same local governments have said that they do not know how to do this. Not out of principle or because they oppose the Commission but simply because the rules have not been adapted to the way they operate and to the practices which have been in place for several years in these municipalities. Today people are still telling us that they had no idea that these rules existed, that the interactive service and the Commission guide are relevant, but will the Commission continue to simply clarify this legislation even more or will it finally adapt this legislation? What action does the Commission intends to take in light of the recommendations for changes to the applicable rules?

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In view of the many questions and comments, the panellists addressed these concerns.

Peter Simon, MEP With regard to the question of the articulation of Articles 14 and 106, the MEP stresses the power of the legislative body, which comes into play for Article 14. The interaction with Article 106 is obviously more delicate. Article 14 must be taken into account as a provision that also impacts Article 106, given the nature of its general provision, and also Protocol No. 26 which lists the values for SGI. The issue of these values did not arise before Lisbon and thus Article 106 will have to take these into account.

Antje Herbst, Legal expert, responsible for European Affairs, in the social services department of the City of Munich - On the question of who should clarify the rules and to whom one should turn (Member States or the Commission), the expert of the City of Munich has the following to say: before a conference which took place in June at the Max Planck Institute, she would have replied “Brussels” without hesitating. But the Member States have more margin for manoeuvre than was originally the case. Today the municipalities really have no idea to whom to turn and this can be confusing.

The speaker says that at municipal level, it is important to analyse the situation and to take into account the Member State’s approach to the issue. • On the complexity of application of the Monti package. Even though it is true that there are difficulties today, all these difficulties can be overcome. With regard to the combination of the application of the Monti package with public procurement, today it still is easier to solve problems with state aid/subsidies than with the legislation on public procurement, in this case German legislation, which is even more complicated (not a satisfactory alternative). - On the rational use of resources and the impact in the field. The Monti package certainly comes with some obstacles but the City of Munich can always make arrangements for SGIs (the “Daseinsvorsorge” concept) on an ad-hoc basis.

2.3. SSGI and state aid

Laurent GHEKIERE, Representative of the Social Union for Housing in Brussels and founding member of the SSGI collective in France, President of the SGI (services of general interest) Committee of the European Centre of Employers and Enterprises providing public services (CEEP) It is important to remember the general principle of the treaty, which bans state aid, because if you do not understand the rationale of this prohibition, then it will be difficult to understand why the Court hands down such judgments and why the Commissions creates decisions, which complete these judgments. It is also worth noting that the treaty reserves a special role for the Commission as a competition authority, which ensures compliance with state aid rules and with competition rules. Article 106 § 2 TFEU, however, provides for exceptions to these rules if they prevent the accomplishment of a mission of general interest. It is difficult to establish the relationship between Article 14 and Article 106 § 2 because Article 14 complicated matters, as it refers to economic and financial principles and conditions, relating to the proper accomplishment of these missions of general interest; in other words financing is involved, but not strictly state aid. Moreover, without prejudice to Article 106 § 2, which allows for exemptions from the prohibition but only if the compensation is controlled. It is not because Article 14 TFEU empowers the Council and the European Parliament under the co-decision procedure that state aid will no longer be controlled and that Article 106 § 2 and § 3 TFEU will no longer be applied. Therefore a proper relationship needs to be established between these two provisions. It is also important to note that, on the one hand, Article 14 TFEU refers to a rule, which is a text that is directly applied, and which does not need to be transposed into national legislation as is the case for a Directive. It refers to a joint decision by the Council and the European Parliament on the one hand. On the other hand, Article 106 § 3 TFEU gives the European Commission full powers to make decisions or establish guidelines on subjects such as the control of state aid, if necessary. The question that can be asked is whether compensation is state aid, even if it does not meet the criteria of the Altmark judgment. In any event, as long as the state aid does not entail an economic benefit, such state aid is compatible with the rules of the Treaty according to the Court of Justice. In reality, there is no economic benefit for a service provider who is compensated for the costs that are made in the frame of the mission of general interest entrusted to it. In terms of universal access, there is indeed a principle of access for all people to all public services, including energy, transportation, postage, etc. The situation is not the same in social housing as this sector is segmented: on the one hand there is the private market that works in total economic freedom; on the other there is the social segment with controlled rents and eligibility criteria. Every Member State is free to apply univer-

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sality. Some Member States have chosen to make available social housing to everyone, for historical or cultural reasons, while other Member States have chosen to limit it to low-income populations or target groups. In any event, it is not up to Brussels to impose Member States to make a choice in terms of universal or limited access to social housing. On the issue of lobbying, a lot of lobbying focused on the DG Competition in 2004 and 2005, because we quickly realised that an important part of the social housing operators potentially would not be able to benefit from this exemption measure to the extent that the annual amounts of state aid or of their turnover was considerably higher than the thresholds provided for under the decision. We based ourselves on the hospital precedent to say that the situation in the social housing sector was similar, because you need to build hospitals to accommodate and care for the sick. Likewise you need to first build houses before you can provide accommodation to the people who need it, and this is very expensive. The more social housing is built, the more you receive compensation and your turnover is considerable, but this does not necessarily imply that social housing has a greater effect on trade between the Member States. The Commission in its text on social housing thus stated that there was no relation between the level of compensation and the turnover and real effect on intra-community trade in the current state of progress of the market. That is why the Commission accepted to exempt social housing from this threshold, and moreover, one should not forget that the European Commission did not have sufficient human resources to control the 5,000 social housing bodies, which would not benefit from such an exemption. Nicola PESARESI. Mr Laurent GHEKIERE perfectly explained the relationship between Article 106 TFEU and Article 14 TFEU. The Commissionâ&#x20AC;&#x2122;s position is clear: for institutional, political and also legal reasons we consider that Article 106 Â§ 2 TFEU should apply to the financing of public services whereas Article 14 TFEU does not preclude the exclusive jurisdiction of the Commission to judge whether state aid is compatible with treaty rules. Another key point in this debate is the fact that Member States have made very different choices about how to organise their social services. However, this does not mean that Member States will not have to comply with the principles and rules of EU law. Naturally each Member State can define certain public services in such a way so as to completely exclude from the market. This is the case for certain services which fall under the sovereign prerogatives of the Member States. However, if the Member State chooses to open the market, meaning if it allows other undertakings to compete then the rules of the internal market and of competition become applicable. Of course the question remains how to apply these rules in a proportionate manner, while taking into account the potential distortion that these services can cause in the internal market. In other words, it is necessary, on the one hand, to consider the SSGI of a local nature, which do not have an effect on intra-community trade, without overlooking the fact that there are other services which have a much greater impact. In the case of these services, the Commission has to play a much greater role.

2.3. SSGI and state aid

In this respect three principles underpin the Commission’s action with respect to the latter: the principle of transparency, the principle of responsibility and the principle of the absence of over-compensation. This last principle, although widely criticised, ensures a competitive parity among the stakeholders if some of them receive more funding than is strictly necessary to cover the cost of public service obligations. These three principles must be included in the future analyses conducted by the Commission. At this stage it is difficult to give an idea of what the Commission intends to do. However, it is worth noting that the Commission did publish a guide which clarifies several of the stakeholders’ questions. But the Commission intends to do much more than this: there is a clear commitment by Commissioner ALMUNIA to have a revised regulatory framework in place by the end of 2011. The Commission is prepared to discuss appropriate rules with everybody for the future of SSGI.

4. Summary and recommendations At this stage, a general agreement was reached in the room on the issue of transparency as well as on the need for a legal document that specifically tells you what services are expected from you as a service provider and what financing is associated with it. However, the terms of reference of the control mechanism of the use of financing raised a number of questions, particularly regarding the references to the classic market model or to competition law. The Commission’s choice, which was in keeping with the ECJ’s judgment, was to use a well-run medium-sized undertaking as a reference. The majority of the speakers did not think that this was a good choice, not because it was inadequate – there is a certain element of consistency – but because the last five years have shown that in practice things do not always work this way. This debate is not only technical but also political and it seems that a compromise can be reached if we approach things sector by sector rather than having a general criterion which is applicable to all the sectors without taking into account certain specificities. Finally, the debate revealed that the local authorities really experienced difficulties when trying to implement the rules of the Monti-Kroes package on many levels. The first level - and the speakers often did not mention this - is the level of the Member States which have a major responsibility and which have to be fully involved in the debate. Usually, however, the debate opposes local actors versus the Commission. Secondly, next to the Member States, there is also the responsibility of the local authorities who seem to be very reluctant to enforce what Brussels dictates in terms of what to fund and how to finance it. The whole question of the scope of the subsidiarity principle comes into play here. Another difficulty, relating to the Monti-Kroes package, and beyond any ideological view, is that these are very technical issues, which are very difficult to implement. It is neces-

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sary to strike a balance here between the legitimate autonomy of local governments and the necessary control by the European Union to ensure that the rules of the Treaty are respected by all the Member States. We must therefore discuss the compromise that was established in the Monti package again as clearly it is not operational. In terms of proposals, the first proposal relates to a real debate where all the stakeholders discuss a real change of rules. For five years now the Commission had said and repeated that the rules are good and should be applied, and at the same time, the stakeholders, whether public or private, keep repeating that we must change them. If the stakeholders do not understand these rules, there are two options: either we change the stakeholders, or we change the rules. Since it is obviously impossible to change the stakeholders, it seems more simple and logical to change the rules. Then there is the proposal regarding the legal framework: Article 14 TFEU was highlighted and considered as a breakthrough in that it involves the European Parliament in a co-decision procedure (ordinary legislative procedure). The third proposal concerns the specific de minimis thresholds for SSGI and the extension to other areas of SSGI from the exempt sectors, like public housing and hospitals. There is also the question of the effects on intra-community trade of certain SSGI, which some feel is a vague notion, and which is entirely inappropriate for SSGI. Another proposal concerns the reversal of the burden of proof: the plaintiff should provide evidence of a possible over-compensation. Finally, apparently, the Commission is willing to implement controls which differ according to the size of the service providers. In addition, a service can be offered in different ways, depending on whether one is in a big city or in a small town. This does raise some questions: what will be taken into account? The size of the service provider or the scale of the services provided? Or maybe the financing granted by the authorities? Despite these concerns, the principle of « proportionality» paves the way for a new compromise.

After this summary of the various proposals for recommendations by the workshop’s rapporteur, the participants withheld the following recommendations after a debate and a vote: • Clarifying the basic principles of state aid controls by taking the principle of proportionality into account more in the implementation of the controls by the Commission. • The review of the Monti-Kroes package of November 28th, 2005 which entails simplifying the criteria for calculating compensation, or even abolishing them for small local

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operators. The calculation of the compensation should take economic, financial and social criteria into account. â&#x20AC;˘ Over-compensation would be checked on a triennial basis, instead of on an annual basis, in order to avoid an additional administrative burden for social service providers. The review of the methods for calculating over-compensation should be carried out based on the average SSGI in the sector taking into account the size, type of mission, legal status, volunteering, community involvement, etc. â&#x20AC;˘ The need to clarify the basic principles for controlling state aid in order to evolve towards a dialogue involving the Commission and the stakeholders of SSGI and to clarify certain concepts, such as economic activity and the effect on trade between the Member States.

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5. Parenthesis The issue of the financing of SSGI and the application of Union legislation in terms of state aid is even more important given that in times of economic crisis there is a strong temptation to make budget cuts which are not compatible with a continuous system, and a higher level of quality of these services. The 3rd Forum was an opportunity to remind the participants of this obvious fact. In light of the reform proposal which the European Commission submitted on the state aid that applies to services of general economic interest, and thus potentially to certain SSGI (see COM (2011) 146 final of 23.03.2011) this took on a whole new dimension. One may assume that the work of the 3rd Forum, and more specifically the recommendations of the workshop on “State Aid” may have inspired two key principles of this reform, at least in part: on the one hand, the clarification of a number of concepts (economic activity, a well-run undertaking, etc.) and, on the other hand, the need to focus on a differentiated and proportionate approach which will simplify the application of the rules in terms of state aid for certain types of social services taking into account the specificities of their financial structure and/or their objectives. Nevertheless one should always make sure that other principles in the context of the future “postAltmark” reform package do not spread into the field of SSGI. The “efficient allocation of public resources” for large commercial services which provide public services is but one example. In this regard it is also worth remembering that in addition to the issue of the Commission’s competence to enact a principle on the financing of a public service, the regimen which was changed by Article 106, paragraph 2, of the treaty on the functioning of the European Union benefiting companies in charge of managing an SGI does not imply an analysis of their potential to carry out their mission at a lower cost (see judgment of the European Court of Justice, July 1st, 2010, M6 and TF1/ Commission, T-568/08, point 140).

2.3. SSGI and state aid

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2.4. SSGI and the internal market 1. Presentation and objectives of the workshop The workshop on SSGI and the internal market was chaired by Mr Alain COHEUR, President of the European umbrella organisation of the social economy (Social Economy Europe). The MEP Mrs Marie-Christine VERGIAT served as rapporteur. The panel of experts who gave a speech included:

• Maria MARTIN-PRAT, Head of Unit Services, Directorate General Internal Market, European Commission

• Tina Martens, Secretary of the public social welfare centre of Sint-Jans-Molenbeek (Brussels, Belgium)

• Damien ABAD, MEP • Henri LOURDELLE, of the European Trade Union Confederation (ETUC) • Berend Jan DRIJBER, Lawyer, Expert in European law The objective of this workshop was to address the issue of the effect of internal market rules and in particular the services directive 18 on social services of general interest. These rules generally do not sufficiently take into account the specificity of SSGI according to various stakeholders. The services directive, for example, excludes certain social services from its scope and introduces some concepts which only serve to add to the existing confusion. Thus, some

18 Directive n° 2006/123/CE of the European Parliament and of the Council of 12 December 2006 on services in the internal market (OJ L 376/36 of 27 December 2006).

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stakeholders wonder whether the concept of “services mandated by” is compatible with a simple authorisation scheme which is associated with funding. The same is true of the notion of “charities” as well as of that of “persons in need” that need to be sufficiently clarified to provide for greater legal certainty. One thus had to conclude the transposition of the Services Directive by the Member States, specifically as regards the exemption of SSGI, resulted in views that were quite different, as was the case for example for France, Belgium or Germany. As a result the exact definition of the scope for the exemption of SSGI of this Directive had to be defined more clearly.

2. Interventions of the panellists Mrs Maria MARTIN-PRAT, Head of Unit Services, Directorate General Internal Market, European Commission According to the representative of the European Commission, when referring to the internal market, two fundamental freedoms need to always be considered: the right of establishment and the freedom to provide services. Her intervention thus mainly focused on the effects of the application of Articles 49 and 56 TFEU on SSGI. She emphasised that when social services are of a more economic nature they are covered by the treaty. But the treaty, like the services directive, takes into account the specificities of services of general interest, of which SSGI are a part. She said that the Court of Justice has never increased freedoms without identifying and analysing them in function of the principle of proportionality and of public interest objectives as pursued by national regulations. The Head of the “Services” unit of the Directorate General Internal Market and Services stated that she had not received a single example which did not report difficulties in implementing the Services Directive, which makes SSGI so specific. She reminded the audience that the services directive did not address the liberalisation of services, of funding or of access to state aid. The directive, she continued, specifically excludes certain social services from its scope when provided by the state, by charities or by providers mandated by the government. This choice stems from a policy decision by the European Parliament and the Council not to exclude all SSGI. Mrs MARTIN-PRAT went on to examine the implications for social services which are to be covered by the services directive. She said that the Commission has not taken such a dim view of that member states have, here and there, extended the scope for the exclu-

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sion of certain services in the frame of this directive, such as child-care, private providers of certain services, while always remembering to provide prior authorisation or impose certain conditions. Finally, according to Mrs MARTIN-PRAT, the Commission has made several efforts, (especially with the “guide”) to clarify the internal market rules that apply to SSGI, in terms of state aid, public procurement and the services directive. Mrs MARTIN-PRAT also wondered to which extent it was really necessary to do more than had been done so far in view of the problems that had already been encountered and debated when the directive was adopted but also in view of the principles of proportionality and subsidiarity.

Mrs Tina MARTENS, Secretary of the public social welfare centre in Sint-Jans-Molenbeek (Brussels, Belgium) Mrs Martens focused her presentation on the field work of public social welfare centres and their organisation in Belgium. There is a centre in each municipality in Belgium and each has a legal personality. Their mission is to ensure that everyone has the right to live a life that is consistent with human dignity. This notion, she said, refers to Article 23 of the Belgian Constitution which outlines the social rights of Belgians, which include the right to work, the right to social security, to health protection and social, medical and legal assistance, the right to decent housing, the right to the protection of a healthy environment as well as the right to cultural and social development. Mrs Martens noted that the organic law relating to these public social welfare centres 19 makes it possible for each centre to create and expand social facilities or social services in line with the needs in its territory. This is a crucial means for responding to citizens’ right to human dignity when no other organisation supports them. She also gave some examples of the realisation of these social rights in public social welfare centres: The granting of a social integration income, under certain conditions; the requirement to have a debt mediation service; the obligation to provide emergency medical treatment to illegal immigrants and social-professional guidance for users who receive integration incomes, so they can re-enter the job market in the frame of a special activation plan, as provided for by an organic law. These services are completely free. They are funded by the state but also in part by the European Union. Each local authority thus has the option of organising other services in function of the

19 �� Articles 60 & 6 of the organic law on the public social welfare centres of 8 July 1976, amended by the Act of 7 January 2002.

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local population and according to Mrs Martens this is where the issue of the enforcement of the choice to organize other services to the needs of the population here, according to Mrs. Martens, that the question of enforcement of the rules of the Services Directive may intervene. They may relate to housing for senior citizens in care homes and in care and nursing homes, in youth centres, and centres for young people in crisis situations, and the agreements which public social welfare centres make with their partners or with social economy companies may also be subject to the services directive. Moreover, each public social welfare centre in the Brussels region has at least one nursing home; the public in these institutions is mixed. In other words, these nursing homes accommodate people who have the means to pay for their accommodation as well as people without the means to do this, whose accommodation is then paid by the public social welfare centre. Given that government funding often proves insufficient, these centres have to keep detailed accounts of their cost management, which also provides the funding body with a means to control expenditure. The outcome is a social deficit for the management of nursing homes, which is due to the fact that they also welcome, at reasonable prices, vulnerable people without a sufficient income. Mrs Martens wondered why the EU did not make an exception for nursing homes and public care facilities as well as for youth facilities and facilities for people in crisis situations. As far as social economy enterprises were concerned, Mrs MARTENS noted that the notion that this economy creates jobs for vulnerable people may soon prove to be illusory. She illustrated this with the example of a person that is hired under Article 60, the article on social economy. In order to apply for the job you need to speak at least two languages and have IT skills. Where is this going, she wondered? Are we evolving towards a sector which no longer gives access to vulnerable people or can clear exceptions be formulated at European level for this sector? A sector which calls itself social has to comply with the requirements of proximity services and provide social added value. However, according to Mrs Martens, profitability criteria are becoming more and more important, as is the case in the private sector, and thus these undertakings in the social economy may slowly become obsolete. The trend of European rules emphasises competition, and lower costs at the expense of quality and especially at the expense of supporting vulnerable people. The real concerns in the short, medium and long term are guaranteeing fundamental rights to the poorest people in our society as a mission of general interest, developing clear legislation that grants the authorities a mandate for these missions of general interest and promoting social cohesion, said Mrs MARTENS. The qualitative work by the local authorities, which are increasingly subjected to various

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requirements and controls is often ignored according to the Secretary of the public social welfare centre of Sint-Jans-Molenbeek. It is not enough to strengthen the administrative requirements. You need to go in the field to understand the daily reality of social workers who are helping a population that is increasingly vulnerable and marginalised. Controls should primarily emphasise the social added value. The European Social Fund grants money with a threshold of 200,000 euros a year for public social welfare centre services. But the criteria which the European Union imposes on these services do not correspond with the sociological reality. They are too rigid to allow a large number of vulnerable citizens to take advantage of this funding. Thus, sometimes the CPAS is forced to repay the subsidies, to the point that it now no longer applies for them precisely because you need two staff members to take care of the administrative burden in order to justify the use of these subsidies. Mrs MARTENS remarked that she preferred to have more social workers in the field instead of people sitting behind desks. What could be the point of making front-line social services compete with one another, except maybe for economic purposes? What happens when we no longer provide any social services? Mrs MARTENS concluded her presentation with these questions.

Mr Damien ABAD, MEP The speaker started by endorsing the idea of â&#x20AC;&#x2039;â&#x20AC;&#x2039;a wider, more comprehensive approach, involving all the partners, including social partners, institutions or other stakeholders. The aim was to rise to the double challenge, which consisted of maintaining the quality of social services in Europe while ensuring more coherence between European legislation and social protection. According to Mr ABAD, the issue of SSGI has now become a major political issue because it must be said, and this is at the heart of the debate, social services are not embedded in markets like other services. There is much more to social services than the law of supply and demand. On the contrary, there are fundamental rights at stake, including the right of access to a number of social benefits. Thus we need to think about how to organise these social services in the most appropriate way possible in order to ensure that their social mission is fully ensured. At the same time, we also need to achieve a balance between the rules governing the internal market on the one hand and the framework for the financing and regulation of SSGI on the other hand. The European Parliament already highlighted its view on the debate on SSGI from three different angles. First, he said, the problem of SSGI should not be considered from the legal perspective only. There is a political dimension as the other speakers had already noted before him. When we discuss SSGI, we are talking about child-care facilities, nursing homes, social housing, etc. These are aspects of the daily life of all European citizens.

2.4. SGI and the internal market

Every time you consider devising a European framework and measures, you always have to bear in mind the impact of this framework on the citizens. Today, the EU has not fully addressed this matter, which is part of the fabric and structure of our society. On the political level, we need to think about this together and to strengthen the dialogue between the various channels, including the internal market, public procurement, social affairs, by setting up a high-level inter-institutional and inter-channel group so that the various stakeholders can discuss this matter together. Secondly, Mr ABAD focused on the economic aspect of SSGI, providing some figures that demonstrate the economic importance of this sector: SSGI contribute, he said, up to 9% of total employment in the EU, and if you add health services to this they represent about 9% of the GDP in Europe. The speaker was of the opinion that the foundations had been laid, especially during the Technical Seminar on SSGI organised in July 2010 by the Belgian Presidency. Its aim was to review a number of provisions of the directives on public procurement, in order to incorporate new ways of managing SSGI. At the same time certain qualitative criteria which were used in the selection of offers in the frame of public procurement also had to be better defined. The idea was to evolve towards the most interesting offer. And stakeholders also had to be trained. You cannot address the political and economic dimension of SSGI, without raising a number of legal uncertainties. This led Mr ABAD to the third part of his speech. It is not sufficient to exclude certain social services from the scope of the services directive, he said. On the contrary, this only generates uncertainty and questions. Thus a legal framework is needed, not in the sense of liberalisation because the aim is most certainly not to evolve towards a lower guarantee, less protection of these social services and thus reduce the level of social protection. The main issue at legal level is how to remove a number of legal uncertainties in order to arrive at a pragmatic, practical and realistic approach of these social services, because these are real problems which really affect people on a daily basis. Therefore a framework that provides a number of guarantees to users and service providers is needed, as well as best practices, such as the 28th plan that was suggested at the Technical Seminar on SSGI. If Europe only adds more of an administrative burden to the local level, in the words of Mrs MARTENS, then it is almost better to do nothing at all. The result could be a more sectoral legal framework, bearing in mind how far we can go because you have to reconcile this with other principles such as subsidiarity and proportionality. Mr ABAD concluded by stressing the important role that the Commission should play, while making clear that interpretative communication by the Commission on this subject can be interesting if it is followed up with action. This would provide an opportunity to better define and understand such concepts as “mandate instrument”, “persons in need” or “charities” .

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Mr Henri LOURDELLE, representing the European Trade Union Confederation (ETUC) The advisor of ETUC introduced his presentation with a question: what are social services? Are we talking about the economy or about the social aspect? Of course the idea is not to oppose them, but some sort of priority needs to be given. So you need to go back to the basics: when talking about SSGI, everyone knows that these services are designed to reconcile economic efficiency and social efficiency. They should not be opposed. He admitted that these services have an economic dimension, but this is only the consequence and not the purpose of these services. Therefore, according to Mr LOURDELLE, the debate needs to focus on the social aspect and legal questions should not serve as a pretext for questioning the purpose and the exercise of these services. Mr LOURDELLE reminded his audience that in times of crisis these social services have proven their worth by playing what some call a social buffer role. We must therefore strengthen and preserve them. On the one hand, we recognise their role of social buffer and at the same time, under pressure from a certain liberalism, the dogma of the return to a balanced budget is enforced by making cuts in social spending, reducing the margins for action and flexibility of the SSGI and giving private stakeholders the opportunity - on the pretext of the freedom of services - to “skim the market in the most profitable activities and zones. As a result the rest will gradually disintegrate” as Mrs CASTEX had already said earlier. Hence ETUC’s message to the Commission, which basically says that is time to change its policy and to commit to promoting SGI and SSGI. On the one hand the liberalisation policy has only increased pressure on these services. On the other hand and at the same these services played a significant role during the financial crisis. According to Mr LOURDELLE, the European Commission does not seem to take into account the new institutional framework established by the Lisbon Treaty. Following the entry into force of the Treaty on the Functioning of the European Union (TFEU), several provisions are in favour of developing SGI and SSGI: the Charter of Fundamental Rights which will become binding, the reference to the social market economy with the objective of full employment, and Article 14 which provides a legal basis to legislate in the areas of SGI/SSGI. Mr LOURDELLE nevertheless feels that we need to be aware that the option of applying the rules set out in Article 14 TFEU may cause some difficulties in terms of their implementation, but why give up before you have started? The battles that we lose are the ones in which never fight ... Although he understood that the Commission is reluctant to move down this path, the

2.4. SGI and the internal market

ETUC representative said that there are other provisions in the TFEU, including one that strengthens subsidiarity: why not invite the Member States to establish their own registries that would exclude SGI and SSGI from the scope of the internal market rules? This would mean that local governments would avoid the procedure for the adoption of rules that has been instituted at European level, while also taking into account the historical and sociological realities of each Member State. The Commission would only intervene in the case of manifest error, and we know that it does this as the example of Dutch social housing has showed that the threat is not completely ruled out. But even if there is a risk, the time has come to act. There remains the question of which action we need to take. Mr LOURDELLE concluded that we need to redefine SSGI, not primarily from an economic point of view but starting from the fundamental rights of the person and of the guarantees for the exercise of these fundamental rights, taking into account their needs and ambitions. This was to only way to resolve the current issue of SSGI.

Mr Berend Jan DRIJBER, Lawyer, Expert in European law According to Mr Drijber, the cornerstone of the whole battle on SSGI lies in the definition of economic activity. Commissioner ALMUNIA said that we needed to differentiate between economic and non-economic services. According to case law, if the market cannot provide certain services, then these are considered as non-economic services. In other words, the economic activity defines the scope of non-economic activities. In the European institutional structure, traditionally economic activities have always been more important. Why? Because the fundamental freedoms of the internal market are all aimed, first and foremost, at economic integration and because social protection, albeit important, is one of the few exceptions to be tolerated within fairly strict boundaries. This is the traditional technical-legal approach to the issue. Now how do we abandon this defensive position, or how can we give priority to the social services? According to Mr Drijber there are three ways of doing this.Â First, exceptions need to become profitable, such as for example, the overriding public interest, and Article 106 Â§ 2 TFEU. The Lisbon Treaty contains new elements (the horizontal social clause, the Charter of Fundamental Rights which contains a large number of social rights and balances the social and economic aspects) and offers the option to adopt a specific legal framework for SGI. But Mr DRIJBER immediately remarked that this was paradoxical: On the one hand we want the specificities and the importance of SGI to be recognised at European

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level while stressing the importance of the principle of subsidiarity. According to him, it is very difficult to reconcile these two aspects. The final part of the presentation of Berend Jan DRIJBER focused on the political aspect: he said that one should not create an opposition between the market and the social aspect; instead the social aspect had to become an integral part of the internal market.

3. Debate between panellists and participants It should be noted that this is a summary of the main questions that were raised by participants. Some speakers clarified certain elements or provided additional information, or even conflicting evidence in relation to what was said by the panellists. We have only included the most relevant elements of these interventions here. • The definition of economic activities is often perceived as too broad, it tends to incorporate several SSGI in the scope of the market and as a result their specificity is affected. Can the new tools provided by the Lisbon Treaty not contribute to a better understanding of the difference between the SGEI and NESGI, and thus solve the question of the grey area in between? • Often the SSGI are perceived from an economic angle. But does it not distort these SSGI? • Do the concept of distortion of competition or the effects on intra-community trade distorts not distort the missions of general interest, at least in part? • Why is the Commission so reticent to implement the Lisbon Treaty, why does it not wish to implement Article 14 TFEU and the provisions of Protocol no. 26? • How does the services directive prevent the public social welfare centre of Sint-JansMolenbeek from undertaking the tasks which have been entrusted to it under Belgian law, and particularly since the Court of Justice has instituted a number of beacons, including the overriding reasons of general interest? • This a real problem, because each time the Commission says that there is no problem, while operators in the field continue to say that they are confronted with various difficulties when it comes to applying EU SSGI rules. Hence the need to establish a task force that would include all the Commission services which are competent for this issue, as well as other institutions and all the stakeholders. This task force will have to work to clearly identify the specific problems that need to be solved. We need a structure to move forward and we cannot afford to wait until the fourth forum where the same will be said.

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â&#x20AC;˘ When you see how the services directive has been transposed in some Member States, one easily realises that the perception is far from being the same in the various Member States. Is it possible to conduct a study to assess the impact of the services directive on SSGI? â&#x20AC;˘ At what point or from which threshold(s) do the tender rules apply to parties that commission social services? Can the local authorities choose a service provider and give funding to this service provider without having to apply the rules on public procurement and on state aid? The panellists responded as follows to the different questions.

Mrs Maria MARTIN-PRAT, Head of Unit Services, Directorate General Internal Market, European Commission The Commission does not live in a different world and does not claim that there is no problem. It is aware that there are problems in terms of access to funding, related to quality and personnel. It is trying to identify the real issues and clearly position the debate. We always tend to consider that the internal market is bad for citizens, that there is no margin for the social aspect in the internal market. This vision is not entirely accurate and is the outcome of a dynamic that is difficult to break. Mrs MARTENS raised a number of problems here that we can fully understand, but once she affirms that these problems could have been avoided if public social welfare centres had been excluded from the scope of the services directive, that is where things become difficult to follow. How would the exclusion of these centres from the scope of the internal market rules would have helped them to obtain more public funding and achieve a better quality of services offered to citizens, or changed the difficulties that Member States face as a consequence of the financial and economic crisis? It is not enough to say that there are problems and especially if these are general problems, which do not involve the Commission to a large extent, because unfortunately there is no solution.

Mr Damien ABAD, MEP The Commission and the European Parliament both have to make a real effort to explain and interpret a number of rules, which as we already saw in the presentation of Mrs MARTENS have practical and sometimes dramatic human consequences. We must therefore address these situations on a case by case basis to make improvements. At the same

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time, the speaker said that he had a number of things here and there, which needed to be addressed with a little more attention. If the debate consists of putting the Commission in the stocks without being constructive, then it is not very useful. Beyond the Commission, there is also the Council and the European Parliament and it is important that all these institutions enforce a pragmatic approach and not just an ideological approach. The debate is not focussing on whether or not we should liberalise social services. The error that has been committed in the past fifteen years has been to develop competition policy as an absolute dogma. Competition in the social economy is not bad as long as it is not perceived as an end in itself. Instead it should be seen as a means of contributing to the social and economic well-being of all citizens. The great mistake was to have considered competition policy as an end in itself. As a result citizens and service providers now no longer trust the internal market, and even reject it. All you need to do is look at the weight of the DG Competition in the European Commission to be convinced. In the name of competition policy, there was no industrial policy or environmental policy that was amended and had the ability to fulfil our needs. In this regard the European institutions need to change so that things can finally move forward. If we cannot fulfil a number of social needs, then this will result in the impoverishment of social services and eventually some sort of charitable vision will prevail. You need to remove a number of obstacles in order not to end up in this situation. We agree with the idea of â&#x20AC;&#x2039;â&#x20AC;&#x2039;setting up a task force and reflecting on the Charter of Fundamental Rights, but a real commitment on behalf of the Commission, the Council and Parliament is necessary to promote this debate. The Lisbon Treaty offers opportunities, but there also needs to be a certain political desire to move forward. One of the keys to the success of the issue of social services is the issue of financing: should some types of national expenditure become a community matter, should we move towards own resources, should we focus on some sort of tax at Union level? These are real issues that we must address, because we will not have resources at our disposal that are in line with our ambitions. As a result we will be frustrated by the openings which the Lisbon Treaty offers. Unfortunately all the ambitions in the world are doomed to fail if we do not have the resources to finance them. Finally, there is no conflict between respect for the subsidiarity principle and a European register of good practices.

Mr Henri LOURDELLE, of the European Trade Union Confederation (ETUC) We are hearing the same speeches, that we heard during the 1st and the 2nd Forums: people say there is a problem, while the Commission says that there is no problem at all. Letâ&#x20AC;&#x2122;s not forget that the Commission has to take the initiative in legislative matters. If we

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want to be positive, we must answer a simple question: how can we take advantage today of the opportunities of the Lisbon Treaty and the Charter of Fundamental Rights to move forward in securing a legal framework for the SSGI? Therein lies the Commissionâ&#x20AC;&#x2122;s responsibility. It adheres to the services directive and does not want to use the new legal instruments. There is a financing issue, on a European level and on the national level. The dogma of financial orthodoxy, of balanced budgets has had repercussions for the most vulnerable citizens. Budgets are being cut, exemptions are being granted to companies without conditions, at the same time we are depriving ourselves of resources and the taxpayer ends up paying for the effects of a crisis for which they are not responsible. We should also try to avoid the pitfall of charity, and not only develop social services for the poor. We need to develop SSGI for all citizens. The Charter of Fundamental Rights does not only apply to the poor, but guarantees rights to all of us. We need to take action to have qualitative services. Goodwill is not enough, we need competences, appropriate training, adequate working conditions. All this must be taken into account and obviously this costs money so resources need to be found.

Mr Berend Jan DRIJBER, Lawyer, expert in European law We need to slightly redress the balance in this debate. If child-care facilities in France are experiencing problems, we need to remember that this is not because of the internal market. People complain that the Commission does not use the instruments of the Lisbon Treaty. We have to bear in mind that even if the Commission is politically inclined to do this, such an initiative should also be successful. It takes a majority in the European Parliament and a qualified majority in the Council, which is not that easy to achieve at the present time.

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4. Summary and recommendations At the end of the discussions between the panellists and the participants, the Chair gave a brief summary of the key issues raised during the workshop and then proceeded to a vote of the recommendations to be adopted, with the help of the rapporteur. Thus, the participants adopted the following recommendations: • The need to clarify matters in legal and political terms, in order to bridge the gap between those who argue that EU rules do not cause any problems and the stakeholders. With specific regard to the rules on the freedom to provide services and the right of establishment within the internal market, the participants considered that: - an overview of the transposition by the Member States of the Services Directive needs to be established, as regards the exclusion of social services under Article 2.2, j; - the following concepts as set out in that article needed to be clarified, where necessary, by an interpretative communication: “charities”, “people in need”, “service providers mandated by.” • A task force or a High Level Group on SSGI needed to be established to create a new momentum to reconcile points of view through an interinstitutional and inter-chain dialogue, with representatives of the competent European institutions and the stakeholders (territorial governments and private operators). The aim was to hold a constructive debate on problems related to SSGI and to propose appropriate solutions. • Implementation of a legal instrument adapted to SSGI. This instrument should, first, recognise the specificity of SSGI and facilitate, with sufficient legal certainty and predictability, the performance of their tasks and, secondly, define common references in terms of organisation, financing and assessment of the missions served by these SSGI. The participants also asked the following question: how do the European Parliament, the Council and the Commission intend to take advantage of the progress made in the Lisbon Treaty to provide a framework for the services of general interest?

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5. Parenthesis The debates in the frame of the Internal Market workshop clearly had an impact in the frame of the European Parliament’s monitoring of the transposition and implementation of the Services Directive. Thus, the European Parliament resolution of 15 February 2011 on this subject points out that social services have been excluded « because of their special nature » and that some of these services require a Community and sectoral legislative framework. The European Parliament also requested that the application of the restrictions as set out in the directive for services of general economic interest should be subjected to a precise and adequate monitoring, with respect for the division of competences with the Member States. This should be done in the measure that the Directive cannot have an impact on Member States’ facility to draw up their own definition, in keeping with Union legislation, of services of general economic interest, how to organise and finance these services in accordance with rules on state aid and the specific requirements for these services. Additionally Parliament also requested that the fundamental principle of local autonomy would be considered more carefully in the implementation of the Directive. Where possible administrative red tape had to be avoided as much as possible as well as the restrictions in terms of local governments’ decision-making powers for services of general economic interest. The public social welfare centre of Sint-Jans-Molenbeek would like nothing better...

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2.5. SSGI and public procurement 1. Presentation and objectives of the workshop The workshop was chaired by Mrs Marie Ranty, Policy Officer, EUROCITIES, and she was assisted by Mr Mathias Maucher, Social Policy Coordinator, SOLIDAR, who served as rapporteur. The panel of experts was made up of:

• Klaus WIEDNER, Head of Unit “Public Procurement III” of the European Commission, DG Internal Market.

• Jean-David DREYFUS, Lawyer and expert in public procurement • Heide RUELHE, MEP • Frank ENGEL, MEP • Kerstin ERIKSSON, representative of the Swedish organisation FAMNA 20 • Raphaële DE GIULI MORGHEN, representative for the Provence-Alpes-Cote-d’Azur Region, Deputy General Directorate of International Relations and European Affairs From the outset, the Chair of the workshop focussing on the analysis of social services of general interest in terms of the application of the rules for public procurement determined the scope of the debate, after a brief introduction to the different personalities making up the panel. The SSGI now increasingly are subjected to the logic of public procurement. Several directives have been adopted in order to coordinate national procedures for public procurement. How can we reconcile taking into account the specificities of SSGI with the

20 The Swedish Association for Non-Profit Health and Social Services

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application of these guidelines? The jurisprudence of the ECJ reveals two trends: either by clarifying the scope of the exclusions from public procurement rules, or by incorporating social criteria in the rules of public procurement. In its report on the recovery of the internal market, which was released May 9, 2010, Professor Mario Monti recommends reviewing the rules on public procurement to align them with the rules on compensation (state aid). The panellists will be able to elaborate on the various issues raised by stakeholders included in the «specific paper SSGI and public procurement», on the need to clarify the scope for the exclusion of SSGI from the rules governing public procurement rules, on the articulation of rules for public procurement in keeping with national grant systems and state aid rules, on taking into consideration the specificity of certain providers of SSGI in restricted public procurement. Currently we are still waiting for the manual on buying social in public procurement, which is being prepared within the Commission, on the inclusion of social criteria (a social label?) in the process of public procurement. The context of the crisis will also be taken into account. The list of items to be discussed during the workshop is long: • the existing interpretation channels, the list of open questions on, for example, the « latitude » that providers of SSGI would be given, or as the chair called it “margin for manoeuvre»; • the quality criteria, the needs in terms of clarification at different levels (e.g., social considerations); • the necessary social promotion in order to arrive at better cooperation, the development of partnerships at several levels.

The objectives of the workshop: the formulation of three recommendations to be presented during the forum’s plenary session.

2. Interventions of the panellists Mr Klaus WIEDNER, Head of Unit “Public Procurement III” of the European Commission, DG Internal Market. The Commission’s representative started by stating that the European Commission and its unit on the one hand and the other relevant partners on the other hand needed time to debate the important theme of reconciliation between the market rules and their implication (application) to SSGI. From the outset, the Commission representative presented an overview of the situation, stating that social services come with a lighter regimen (principle of non-discrimination and transparency) than other operators/other types of services/sectors (see Annex B of

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Directive 2004/18/CE) in the European Directives which govern public procurement. Therefore, if we want to apply the public procurement rules to SSGI the speaker said this would probably be easier. However, considering that this would be too much, the next question has to be “what do we really need ?”. He then started to discuss the exemptions level. As for the requirements for suppliers, these can be introduced into the process; in terms of the quality issue, he referred the audience to the specifications including the technical specifications. In this regard, the speaker emphasised the importance of precision: precisions about the selection criteria for example, on the qualifications for the required services, on the links that needed to be established with the local level, etc. Then, the speaker touched upon a crucial issue in the eyes of the providers of SSGI and their users, namely the quality criterion among the award criteria. The quality criterion cannot only be a predominant criterion, said the speaker, but it can even be the only criterion. Under the current system, there is a clause relating to market performance (adequate training and remuneration) for all those stakeholders involved in procurement. The speaker said that the Commission has developed various instruments such as the “buying social” guide: a guide on how to properly take into account social considerations in public procurement 21 and, on the other hand, the guide on the application of EU rules on state aid, “public procurement” and the “internal market” to SGEI and more specifically to SSGI. Moreover he even referred to the updates of the latter 22. As far as the availability of the Green Paper on public procurement was concerned the speaker said that this would be published in January 2011. The chair, after this initial inventory by the European Commission, thanked the speaker for reminding the audience about the place of the quality criterion among the criteria for awarding public procurement. In addition, the chair said that local stakeholders (including the local authorities) often feel that this is the only document [the guides] which the European Commission promotes. But the chair insists, it is important is to see what are the most relevant instruments and to examine how these rules could be adapted to SSGI. In addition, the chair emphasised on the subject of the incorporation of the quality criterion, the announced publication [the « buying social » guide: a guide on how to properly take into account social considerations in public procurement, and on the other hand, the guide on the application of European Union rules on state aid, on “public procurement” and the “internal market” to SGI and more specifically to SSGI] has been in the pipeline for quite some time.

21 http://ec.europa.eu/social/BlobServlet?docId=6457&langId=en 22 http://ec.europa.eu/social/BlobServlet?docId=6458&langId=en as well as http://ec.europa.eu/services_general_ interest/docs/guide_eu_rules_procurement_en.pdf

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Mrs Heide RUELHE, MEP Then it was the turn of the second European institution to have its say in this debate, namely the European Parliament. Mrs RUEHLE reminded the participants of her position as rapporteur in the frame of the internal market and the rules that apply to public procurement. The speaker explained that the rules on public procurement are complicated and the manner in which they have been implemented in the Member States has only served to complicate the situation even more, fostering real uncertainty about the legal framework, especially among small municipalities. According to the speaker, these municipalities rely on experts, representing a huge cost and making the process even more complicated. Then the speaker explained how many stakeholders have no idea how to apply these criteria, regardless of the assistance that may be provided. The speaker noted that there are many questions about the so-called social criteria. In this regard, the speaker referred to the last communication of the European Commission, from 2001, and the absence of any new communications since then. The speaker was forced to conclude that legal needs often take precedence over political needs. On the subject of granting the contract to the least advantageous service provider, the speaker also explained that several MEPs felt that this principle might affect the social dimension negatively. The speaker finally specified the needs that were expressed within the confines of the European Parliament in terms of databases, of assistance in various forms (recommendations, social guidelines, etc.) for the application of these complex standards. She concluded that the social criterion must be linked to a social service, but how will we do this? Should we request a review of the directives? The speaker was sceptical about this option in terms of comparative legislation as it undermines flexibility. There are many differences between the Member States in the field of concessions and separate legislation would only make things more rigid. If there had to be a review, then everything has to be included: the Compliance Directive, including an assessment involving all stakeholders.

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Mrs Kerstin Eriksson, representative of the Swedish organisation FAMNA The representative said that non-profit social services are sectors with a growth target. Thus, the number grew by 40% in FAMNA and 60% of the organisations have a clear plan for their expansion... meaning that they have certain growth ambitions. As for obstacles to these growth ambitions, she stressed that 50% of members say that the rules on public procurement are obstacles. In Sweden, said the speaker, the local authorities follow the law on public procurement but she noted that despite this a number of organisations have established conventions. The speaker noted that there are other possible systems such as loans, partnerships, etc. But she also was of the opinion that certain legal matters needed to be clarified in European legislation: the legislation is not well known, that is a fact, but one should not overlook the wide variety of legislation. To overcome this difficulty the Swedish government passed legislation on 1 January 2009 relating to a system of free choice as an alternative to public procurement. The centre of gravity thus shifts from the political level to the citizen. Political power determines the characteristics. The legislation has put in place a system and the local governments which determine the price focus on the quality of the services instead of concessions in terms of the price. This is a new system that is used in various fields and the members of the speakerâ&#x20AC;&#x2122;s organisation were very positive about this system. This led to a growth in terms of demand and therefore a real possibility for growth. Nevertheless, the speaker concludes, new legal alternatives to public procurement must be found: diversity should be preferred, even if the law on the freedom of choice is quite a success. After this initial exchange, the chair produced a summary focused on the information produced by the organisation before continuing the debate. Of course the diversity of mechanisms is important, said the chair. But the question which we have to answer now is how to choose the best offer, in which cases, what about caps, etc.? In short, how to choose the right tool and also who makes the choice? This inevitably will result in a consultation of all stakeholders. The chair thus called on a local French authority with experience in the professional training sector to weigh in on the debate.

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Mrs Raphaële DE GIULI MORGHEN, Representative for the Provence-Alpes-Cote-d’Azur Region, Deputy General Directorate of International Relations and European Affairs The regional/local authority stated that professional training is a good example of the difficulties associated with the implementation of public procurement rules. That is the context of great legal uncertainty in which local authorities currently find themselves. And that is why they prefer to give direct mandates in order to find other ways of granting public procurement. The speaker who works for the regional/local authority explained that French legislation had been revised in 2009. She said that an administrative tribunal had penalised a French region which had taken such a decision (in terms of discrimination). Thus, some regions, said the speaker, are currently being asked to withdraw applications by the French state and therefore are in “conflict” with the State. The speaker stressed that the French Code on Government Procurement is very strict, even stricter than EU rules. The speaker ended by discussing the different types of procurement in public procurement and stressed that professional training is actually organised in line with public procurement rules, whereby several stakeholders compete with each other instead of using a direct mandate. As a result the regions are experiences real difficulties. These difficulties are related to the fact that training is aimed at an audience consisting mainly of marginalized people (who do not speak French well enough, who lack the basic knowledge that allows for a real integration and therefore instead of being professional training it is social coaching of trainees). And the speaker also highlighted another difficulty, that of the rigidity of the procurement requiring the use of riders. Requirements are often expressed early on in the process and they continue to evolve meaning that riders need to be used, which in turn translates into real constraints and therefore the need for another system. The speaker highlighted yet another problem related to proximity. The region needs to have a network of training bodies and these services often like to work in a network, or in a partnership at local and/or regional level. While the areas are not trying to escape their responsibility in terms of transparency, they would prefer a more flexible contracting system. The speaker concluded by saying that the national legal framework is sometimes very strict, but other times it is more flexible than Union law.

Mr Frank Engel, MEP The speaker immediately indicated where his presentation was going: there are fields “where applying competition law to everything” is simply no longer an option!”. Thus, the competitive sector is different (does not overlap with) SSGI said the speaker. Public

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procurement accounts for 17% of GDP of the European Union and this figure is continuously rising. Hence the interest, said the speaker, to apply public procurement rules to social services because they are a big business. However, there are aspects that have nothing to do with the internal market. The European Commission wishes to impose new legislation in terms of concessions, but the European Parliament is opposed to this (said the MEP) because this provides no added value. Instead it will only generate more confusion. In addition, the speaker believed that there are “places” where it is very difficult to reconcile SSGI and public procurement rules. Hence he felt that certain areas should be reserved exclusively for SSGI, meaning that competition law should not apply to certain areas.

Mr Jean-David DREYFUS, Lawyer and expert in public procurement The time has finally come to ask an expert, lawyer and academic to give his point of view on the issues that were raised in this frame. The speaker insists that he cannot (in any event not in his capacity as moderator) indicate what is the right instrument, but he would like to make three observations. • Thus, it seems that certain stakeholders rely on the rules of public procurement, when faced with the complex body of rules on public procurement, when in fact they should not. Moreover, said the speaker, the stakeholders do not always understand the applicable rules which should be read in light of the jurisprudence, and which is quite difficult to understand for the uninitiated. The complexity of the rule of law often implies negative judgments. The beforementioned difficulties will result in more binding choices most of the time. The aim of public procurement is to ensure competition between the stakeholders, which sometimes results in a form of disloyalty in terms of pricing. • The speaker said that the Court of Justice of the European Union had become more open on this issue and that recent judgments tended towards a more relaxed approach (e.g.,: the Coditel judgment; on in-house “the Hamburg judgment” on public-public/ inter-municipal cooperation). The speaker believes that public stakeholders should collaborate more. He noted that the rules on state aid and on public procurement had been harmonised, and referred in particular to the report by former Commissioner MONTI on the relaunch of the internal market, which was submitted to President BARROSO in May 2010. So what does a mandate entail based on the required legal framework? According to the speaker, there are too many vague terms. • On alternatives to public procurement. The speaker reminded the participants that primary legislation needs to be respected and that alternatives do not imply a complete absence of any regulation.

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At the end of the first exchanges the chair concluded that a legal framework is essential when you have chosen to apply the best system.

3. Debate between panellists and participants Questions from participants. The organisations, associations. • Carola Fischbach-Pyttel (EPSU), referring to the example of in-house, asked why this should not be applied and where appropriate why not extend the use of in-house services? One could also make more use of public-public/inter-municipal partnerships in this case? There are quite a lot of examples of this re-communalisation?/re-municipalisation?, in recent months and years, for example in the water sector (e.g., Paris). While the aim of promoting the quality of social services, and the quality of social work, is laudable, in the frame of public procurement, what about the reality in which these social services are provided? Should we not rather promote alternative models inspired by a different logic, than that of competition and markets? • Carole SALERES (UNIOPSS). In terms of public commissions, said the representative, there are associations that take initiatives. This is not merely limited to the local authorities (e.g., in the sector for people with disabilities). The speaker also said that public procurement tends to eliminate small structures from the process, that are unable to meet the formal requirements and which also lack experts. • Michel MERCADIER (FEANTSA/Chairman of the Working Group “SGI/SSGI” within the Social Platform). First, regarding the functioning of SSGI. The speaker said that the functioning of SSGI is largely incompatible with the public procurement rules. The associations in France were the first to set up and develop many SSGI. In addition, the speaker emphasized the depreciation, both in terms of increased costs and of the underlying red tape (cf. the formula of the grant contract which is used in France, said the speaker). Finally, the speaker said, the awarding authority must be precise (according to the European Commission). However, the authority procuring the SSGI does not know in advance what are the specific needs: they are continuously changing in function of the success of the intervention of social action or the treatment of a patient (for example: we can take specific needs into account a posteriori only). And the speaker concluded that we need to focus on developing “euro-compatible” alternatives. • Diane DEOM, Professor of administrative law at the Catholic University of Louvain-LaNeuve. The speaker, an academic and Belgian expert on public procurement had two remarks to share. On the one hand, public procurement rules were drawn up in function of the construction industry: that is why these rules are not designed for the SSGI sector and as a result are not adapted to it. The problem is that we consider any service against payment in effect to be a form of procurement. With regard to public-private

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partnerships, the speaker noted the asymmetry between the interests involved and the importance of establishing a concept of a social public-private partnership.

Mathias Maucher, rapporteur of the workshop, noted the participatory approach in the workshop and referred to the documents produced by the Belgian Presidency (general contextual note and a more specific document on public procurement). He wanted to know which organizations are facing difficulties. The rapporteur proposed to focus on a few issues that were also addressed in interventions or which were discussed at the technical seminar in July 2010. In the frame of the specific contextual note on public procurement 23 on matters of clarification: • Questions 6 and 10 on the variety of the instruments. The main issue relating to the delegation of public services to third parties and of alternatives to public procurement is the quality of social services. The question is whether the public procurement rules are adapted to social services which are not standardized goods. The rapporteur wondered if we were not in a situation where alternatives to existing public procurement models and which have been used for quite some time are relegated to the second level because “one solution fits all”? And, also in situations where the people in the field observed first-hand that public procurement are not the appropriate instrument because of the specificities of the sector, the services and/or service users. • Questions 7-7a on public procurement for some operators (not-for-profit). For certain categories of services, the rapporteur raised the question of what would be the objective of these exclusive procurement? What goals might be achieved? But what risks might be associated with them (e.g., markets which are exclusively reserved for non-solvent target audiences).

23 See Annexe.

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• Questions 8/9 on the consideration the social dimension. Question No. 8 relates to the social clause and to the promotion of inclusion in the job market. Question no. 9 addresses the question as to how to include the objective of social policy, health, housing, employment/insertion in the job market, ...? In public procurement procedures, said the rapporteur, the European Commission indicated that all this could be included in the technical specifications.

Answers of the European Parliament representatives. Mrs Heidi RUEHLE mentioned the problem of the quality of social services. She supports a competition based on the highest quality (as it is already the case in the Swedish system of free choice), noting that the definition of quality takes precedence over price. The quality criteria should include such elements as volunteering, networking, etc.. There would be more margin for manoeuvre, while respecting primary legislation. The change in primary legislation has improved the conditions for public-public partnerships, the public authorities need to take advantage of this and put them in place. Public procurement law was developed based on the budgetary rules of public entities. If you add a layer of EU competition law and internal market rules to this, then this will not work. Different approaches which for the most part are incompatible will be mixed. That is why it is difficult to incorporate quality criteria in Germany in the standard process of procurement. Again, it didn’t work. This system is not suitable as such for the sector of SSGI. The second Parliament representative, Mr Frank ENGELS said he shared the opinions of the rapporteur for this workshop. There are contradictions between the market perspectives and the social perspective and thus it is necessary to focus on what can reasonably be done. The speaker referred to the incompatibilities related to the application of public procurement in the context of the integration of disadvantaged groups in the labour market, for services and service packages tailored to individual needs, including social assistance, which differs depending on the case. A public procurement involves a market logic, but it is not the most appropriate logic for SSGI in the field of social economy, and is not even appropriate at all. The speaker identified the limits of the European legal framework if this tool is to be used for social purposes The speaker also drew attention to the real risk of “crowding out” small and medium enterprises, that is to say, craftsmen and service providers at local and regional level, for example in the horticultural/gardening sector or for production by prisoners. If organisations in the social economy can make offers at lower prices because they receive subsidies, then the option of reserved procurement or preferential treatment needs to be examined in the framework of integration measures on the labour market. Although such initiatives are laudable in principle, and of course support a good cause and the

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objectives of social policy in the widest possible sense are realised, we must be careful not to end up in a situation of reverse discrimination. FAMNA As for Sweden, it stipulated that the interest of the alternative that was explained here is to allow competition on quality and not on price. The Swedish representative also asked why competition should always focus on the price. In social services, there is volunteering (e.g., in the emergency services where many volunteers step in and show their commitment). The speaker noted that national, European laws are contradictory and thought that the Swedish model as presented is very interesting in that it respects the specificities of social services while respecting the rules of European law in particular. The Commission representative, Mr Klaus WIEDNER confirmed that there are other instruments. Public procurement is founded on the notion of buying something. The speaker provided additional details including the fact that if the idea is a regulatory system, then this does not correspond with a concept of a public procurement, there is also no selectivity. Other options are possible, such as including the option of preferring quality over price in the Directive, or even asserting that the criterion of quality is the only criterion applied for social services. On the complexity of the procedure. At European level, the speaker recalled that there is not much regulation and that this has led to the subsequent development of the jurisprudence by the Court of Justice of the European Union. Thus, the speaker referred to in-house, a vertical relationship, the public-public cooperation which is of a horizontal nature, or even the “Hamburg judgment”. He admitted that this decision of the ECJ and others along the same lines did in fact clarify the legal requirements for the implementation of such cooperation and that they also emphasised the feasibility and value of this option of operating a service, including SSGI. Finally, the speaker concluded with a question: “where does the market end and where does cooperation begin?”. He said the Court of Justice needs to elaborate more jurisprudence to help define an outline. FAMNA As already stated during the contributions, the speaker said that in Sweden more or less 80% of social services are local and are of an “in-house” nature. Previously, the speaker noted, there was a political desire to increase the number of operators, both commercial and non-profit ones. Competition on quality is interesting, the speaker insisted, the system has this intrinsic feature: it is somehow the consequence of the system that has been put in place. The speaker added that for the system put in place 75% of municipalities said that the quality of services had increased, there was no decline in quality in any municipality. The representative of the regional authority in the field of vocational training, Mrs Raphaële DE GIULI MORGHEN made two remarks. First, in terms of alternative for-

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mulas, the need to find a solution between the public procurement and public subsidies. Then, on the introduction of competition in terms of vocational training, the speaker believed that this competition is good for large organisations because the latter have the financial base. But this also means that there is a risk in terms of the disappearance of certain players. This trend is particularly troublesome for the social economy sector, where many small and medium-sized players operate within a restricted area, municipality, district, or a given region. The Parliament representative, Mrs. Heide RUEHLE, said that the diversity of providers and the modalities of service delivery were important. As the SSGI are not fixed, a constant evolution should be taken into account. Audience response • A representative of the Federal Republic of Germany said that these discussions were not always topical and that much has since been realised such as the interactive system where you can find answers to FAQs. The question is what can we, the Member States, regions, do ...? The representative recommended using the interactive system developed by the European Commission. It highlights cases in which a dialogue between the Member States (including SSGI providers) and the European Commission has contributed to solving many specific problems, e.g., in the field of state aid (using the example of AWO SANO). • A speaker raised the question of whether the quality criteria are included in the guide (referring to this document, the guide on the application of the European Union’s regulations in terms of state aid, of “public procurement” and the “internal market” to services of general economic interest, and in particular to social services of general interest, http://ec.europa.eu/social/BlobServlet?docId=6458&langId=en). • Another speaker said that in the field of public procurement environmental considerations were already applicable. In the same manner social considerations should also be included, with guides such as e.g., Buying social: a guide on how to properly take into account social considerations in public procurement: http://ec.europa.eu/social/BlobS ervlet?docId=6457&langId=en] • A representative of the Swedish Ministry of Social Affairs made two points about the system of choice in place in Sweden: the need for a toolkit for contractors and the fact that you need a lot of bidders. The representative said that tenders should not be limited to non-profit associations because this would be counter-productive in terms of the freedom of choice, quality is the criterion to be taken into account.

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The chair of the workshop then raised the logical deduction that the issue of quality as a criterion to replace the economically most advantageous offer [the “best value”] calls for the establishment of a special status “of general interest for social purposes” for social services. The moderator of the workshop also made the link between the Swedish system and that of the quality label. The Swedish system which allows for competition between different service providers includes an inversion: the user selects his “provider” based on a system of quality competition, which raises the question of the quality label.

4. Summary and recommendations The rapporteur of the workshop summarised the ideas expressed in the workshop. First, the fact that the discussions gave rise to open questions, to concerns: is it possible to promote an approach that focuses on quality, and not on the price? Then the issue of so-called reserved procurement. The rapporteur noted that the Member States have abolished the differential treatment, but this raises the question of which criteria to use to better take into account the specificities of social services and their users? It is important, said the rapporteur, to always start with the objective of social services - that is to say the realization of social rights and social policy objectives, of health, housing, employment, etc. – and then to look at which instruments and modalities have to be put in place and to try to optimise them and improve the efficiency of services. Finally the rapporteur stressed that most participants seem to share the request to develop a special “general interest with a social purpose” status for public organisations and non-market based organisations in the social economy, as well as for non-governmental organisations. The chair confirmed that placing an emphasis on quality required moving from the legal level to the political level.

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5. Parenthesis Can we order social services like we order bricks? The workshop clearly distanced itself from this axiom, focussing instead on alternatives to public procurement when Member States have to outsource social services. In light of the discussions, the price can no longer be the only criterion to consider under all circumstances, when public procurement are involved in the organisation of social services, especially if the objective is to have qualitative social services. It will be interesting to see whether the Commission has taken on board the comments made in the frame of this workshop, as part of the consultation to prepare its legislative proposals before the end of 2011 on public procurement. As already indicated in its report, special attention has been paid to the SSGI chapter 24. It is worth noting though that all the aspects of public procurement in the SSGI report drawn up by the European Parliament were removed when it was adopted... But this also seems to postpone matters given that the Parliament will have to focus on this issue again in the near future.

24 See the documents on this public consultation at: http://ec.europa.eu/internal_market/publicprocurement/modernising_rules/consultations/index_en.htm

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PLENARY SESSION ON SOCIAL IMPACT ASSESSMENT 119

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3.1. Presentation and objectives of the session on social impact assessment This session was moderated by journalist Eddy CAEKELBERGHS of the French-speaking Belgian public broadcaster (RTBF). The panel was made up of the following persons:

• Marc TARABELLA, MEP • Anne MEUWESE, a lecturer at the University of Tilburg (the Netherlands) • Michael GREMMINGER, Deputy Head of Unit at the General Secretariat of the European Commission

• Marc HOSTERT, Chief of staff at the European Court of Auditors The objective of this plenary session was to analyse, in general, the impact assessment system established by the European Commission, to understand its outlines, its strengths and limitations in the decision-making and legislative process of the European institutions but also and more specifically to broach the issue of its implications in terms of SSGI.

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3.2.Interventions of the panellists Mrs Anne MEUWESE, a lecturer at the University of Tilburg (Netherlands) Mrs Anne MEUWESE gave an overview of the impact assessment system since its introduction by the European Commission in 2001 and its evolution to date. She started her presentation with a quote from Malcolm HARBOUR, MEP who in essence said that «if we make a better impact analysis before the start of the legislative process, there will be a much better finished product.» To ensure the veracity of his claim, Mrs Anne MEUWESE considered it useful to make a brief analysis to see whether or not the European Commission’s introduction of an impact assessment mechanism has helped improve the quality of the decision-making and legislative process at the level of the European institutions. Before continuing her reflection, Mrs. MEUWESE tried to define the concept of «impact assessment». Usually, she said, this notion is defined as «the obligation to assess the economic, environmental and social impact of various policy options at an early stage of the decision-making and legislative process, by balancing the various trade-offs.» So this is an integrated process that is not confined to a sectoral approach. According to Mrs MEUWESE, this process has become a true standard in the Commission’s structuring and elaboration of policies. Mrs MEUWESE further explained that when this instrument was introduced between 2001 and 2003, there were several concerns. The first was that if the impact assessment played an important role, this could, as is the case in the United States, undermine the work of the European institutions as a result of potential court cases, aimed at blocking an initiative even before it is finalised. Another concern raised by Mrs MEUWESE related to the fact that this new instrument could lead to an imbalance at the level of the institutions, either by giving more control to the Commission in terms of the monitoring of the

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decision-making and legislative processes or, on the contrary, by pushing the Member States or pressure groups to prevent the Commission from taking action. Finally, the speaker also stated that she was concerned that this instrument may become a new control or surveillance procedure. These fears, said Mrs MEUWESE, led the Commission to establish an impact assessment committee in 2006. This independent body is under the direct authority of the President of the Commission. However, according to the speaker, the stakeholders have always criticised the committee considering it to be an internal body and not an external body, with the necessary independence to carry out its mission. The Commission still considers that an external body is not necessary. Its motto is that «the impact analysis is intended to facilitate the decision-making process, not replace it.» Nevertheless, the Commission has tried to create beacons in order to ensure that everything functions as it should, at two different levels. First, there is no methodology nor are there any predefined criteria, as is the case in the United States for example. The most important element is the inclusion of real impacts: the stakeholders must speak in terms of impacts and give up talking about interests. The instrument is seen from the perspective of a simple tool for policy coordination, which has been instituted by the Commission, and which is in its preparatory phase. Mrs MEUWESE felt that the Interinstitutional Agreement on “Better Regulation” of 2003 and the common approach of 2005 have abolished a number of obstacles in terms of the application of this instrument to other institutions. The Council and the European Parliament may use their own impact assessment to implement some substantial amendments and their evaluation may extend to the “three former pillars” of European Union policies. Mrs MEUWESE said the experiments with the “social impact assessment” in the field of SSGI illustrate how difficult it is for the European Parliament to use the impact assessment tool in a significant manner. It also highlights the aforementioned general problems: the dilemma between an internal and external impact study, the need to “update” the Commission’s impact study, etc. Mrs MEUWESE said that the most important issue was that all the stakeholders had to be aware of the fact that a qualitatively good impact assessment was everyone’s responsibility. Mrs MEUWESE concluded noted that the framework of the Commission’s impact assessment is now much more developed than during the initial analyses of SSGIs and that finally, everybody was responsible for ensuring controls and balances in impact assessments. This was not only the impact assessment committee’s responsibility.

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Mr Michael GREMMINGER, Deputy Head of Unit at the General Secretariat of the European Commission Mr Michael GREMMINGER started by reminding everybody that the impact assessment system that was established by the Commission is an integrated system based on an analysis of the benefits and costs which takes into account all the social, economic and environmental consequences as well as political choices. He felt that this system contributed to a significant change in the Commission’s culture in terms of transparency and rationality in the decision-making and legislative process. Mr GREMMINGER said that he thought that the impact assessment was a key tool in the Commission’s approach to smart regulations in order to improve the quality of the decision-making and legislative process. The Commission has undertaken significant efforts to strengthen the social impact assessment within an integrated framework, meaning in a very different context, namely that of a sectoral approach that analyses the impact from one single angle. The representative of the General Secretariat of the Commission highlighted the key features of the system that was put in place by the Commission: • the impact assessment at Commission level is made by the same people who prepare legislative proposals to ensure that the results of the evaluation are included in these proposals; • the participation of stakeholders is ensured at all stages of the impact assessment process whenever the Commission considers that this process needs to be put in place; • the existence of an independent control committee which monitors the quality of the assessment, which was established by President Barroso in 2006; • transparency: all impact assessment reports are translated into all 23 official languages of the European Union and published on the Commission’s website; • the impact assessment is mandatory for all initiatives that are relevant, regardless of whether or not this is a legislative initiative. The speaker said that 70% of all impact assessments that were conducted related to legislative initiatives. Before concluding, Mr GREMMINGER gave some indication of what the Commission has undertaken to improve its impact assessment system in the Guidelines on Impact Assessment that were published in 2009 and which emphasise the evaluation of the social impact more.

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Mr Marc HOSTERT, Chief of staff at the European Court of Auditors According to Marc HOSTERT, the impact assessment system, in its current form, is generally consistent, even though a recent special report by the Court of Auditors on impact analysis in the European institutions [special report no. 3/2010] considers that it can still be improved. These improvements relate to the following key points: • the weaknesses, • the main procedures and a content analysis of impact reports, • the presentation of reports, • coordination. On the first point, the special report of the European Court of Auditors considers that the impact assessments are a tool for adopting a position on the facts; they provide a rational element in the political discourse; however, as the legislative procedure advances, the Commission’s impact analyses are not updated and thus do not take into account any changes that have been made. In addition, the European Parliament and the Council tend to not use the impact assessment that frequently. The audit shows that only 8% of the texts adopted by these institutions are subject to an impact assessment. These weaknesses have a practical impact. In many cases, the legislation that is adopted differs significantly from the Commission’s initial position. In other words, the law does not often taken into account the impact assessments which were used to develop the draft proposals that were submitted by the Commission. So there is a real risk that the adopted text ultimately does not rely on the findings of the impact assessment. Regarding the procedure, Mr HOSTERT said that although a greater degree of transparency had been reached, the Commission should make clear in advance, however, which action would be subject to impact assessment and if an initiative could not be subjected to such an impact assessment, the Commission would clearly have to state why this was the case. The Commission also should publish interim reports for very important impact assessments so the authors of documents that were provided to the Commission during the consultation can see whether or not they were taken into consideration. Regarding the presentation of reports, the European Court of Auditors considers that the Commission should use the standard cross model more consistently. It will have to further identify the costs associated with the administrative burden in its documents. Thirdly, there should be better coordination among the statistical agencies of the Member States and Eurostat to quantify impact studies more.

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In conclusion, the European Court of Auditors invites the European Parliament, the Council and the Commission to consider its recommendations when conducting the review of the Interinstitutional Agreement on “Better Regulation” for a common approach to the impact assessment. The situation becomes less clear when the proposal is no longer on the Commission’s table. It is up to the three institutions to agree on a quality standard that integrates the results of the impact assessment by Parliament and the Council in their final enactment.

Mr Marc TARABELLA, MEP In the new institutional context of the Lisbon Treaty, Mr TARABELLA wished to recall that the European Parliament had become the institution that co-decides on almost 70% of the applicable legislation in the Member States (although the Commission still has the power of initiative). It is therefore essential, he said, to have decision-making tools, such as the impact assessment, which help the decision maker to make a more informed decision. In the past, he said, citing the example of a field such as the liberalisation of network services (post, energy, etc.) there have never been any real impact studies in relation to employment, the quality of services. When there was an impact study, these studies were very limited in scope, such as the study on the liberalisation of the postal services in 2006. This study stated that liberalisation was necessary and that everything would be fine in terms of the economic impact on the internal market. But this is not enough, according to Mr TARABELLA who believed that you need to carry out an impact assessment at the beginning but that this impact assessment needs to be developed. Above all, there also has to be an ex-post analysis to see what is the real impact of the measures that have been applied. Has quality improved for consumers, for citizens, in terms of employment, compared with the past? Mr TARABELLA stressed that the independence of those who have to make the impact assessment was indispensable. Often, he-said, the principal “pays to hear what he wants to be told”. And he gave the example of a consulting firm that produced a report on the liberalisation of services for the EU and for Switzerland, with very different results: liberalisation for the EU but not for Switzerland. Mr TARABELLA was outraged that the social aspect is often treated like the poor relation in the impact studies. Very little consideration is paid to it. He hoped to see a significant change in this regard.

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Regarding the report of the Court of Auditors, Mr TARABELLA especially welcomed the recommendation of an ongoing evaluation: one should not focus on the initial evaluation, which allows you to make the decision, but you should also analyse the real impact of the decision once it has been taken.

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3.3 Parenthesis The impact assessment is a key tool of the “Better regulation” policy of the institutions of the European Union which aims to improve and simplify its legislation. It thereby contributes to better governance and strengthens the Union’s democratic principles, especially in terms of consistency and transparency. Thus the European Court of Auditors recognized, in its 2010 special report devoted to this system, that this would provide “effective support for the decision-making process within the European institutions”. At the same time, it highlighted areas for improvement, particularly to help update the Commission’s impact assessments as the legislative process progresses and to invite the European Parliament and the Council to proceed with impact assessments of the changes they made. But such a tool is only meaningful if it serves the European Union’s objectives. It is worth asking the question about the promotion of a “highly competitive social market economy” (Article 3.3. TEU) and about the preservation of public service missions (Article 14 TFEU), including those borne by SSGI. In this respect, the Lisbon Treaty provides an important innovation: the horizontal social clause in the new Article 9 TFEU under which the Union must, in the definition and implementation of its policies and actions, take into account “the requirements for the promotion of a high level of employment, the guarantee of adequate social protection, the fight against social exclusion and a high level of education, training and protection of human health”. This is a general provision; at present we cannot yet measure its scope properly. Nor can we ascertain what this means for the Union’s institutions when it comes to balancing the different interests and objectives that come into play when adopting legislation. Article 9 TFEU, in conjunction with the provisions of the Charter of Fundamental Rights of the European Union (including its title IV on solidarity) will thus hopefully establish and consolidate a true doctrine of European services in general and of SSGI in particular.

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Reports from the Workshops and 15 Recommendations of the 3rd Forum on SSGI All the rapporteurs presented the debates and three recommendations of each workshop. We refer to the document with the 15 recommendations, the key document and main output of the 3rd Forum on SSGI 5 (Â Annexe 1Â ).

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5.1. Presentation and objectives of the social round-table Hosted by journalist Eddy CAEKELBERGHS of the French-speaking Belgian public broadcaster (RTBF), the panel of the round-table included representatives of the European social partners and of civil society:

• Józef NIEMIEC, Confederal Secretary of the European trade union confederation (ETUC) • Loes VAN EMBDEN ANDRES, Representative of Businesseurope • Ralf RESCH, General Secretary of the European Centre of Employers and Enterprises providing public services (CEEP)

• Michel MERCADIE, on behalf of the European Social Platform The moderator asked each of the panellists to express their concerns and solutions for SSGI as well as their response to the activities of the 3rd Forum and the results that were achieved.

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5.2. Reactions of the panellists Mr Michel MERCADIE, European Social Platform As the first speaker, the representative of the European social platform had two comments to make about the debates. On the one hand he was highly satisfied about the excellent preparation of the Forum and about the recommendations that were presented. On the other hand, he stipulated that some of the stakeholders’ expectations still had not been met. He believed that these expectations could be summarised in three points: • The promotion of SSGI. This entails much more, as had already been stipulated in the 2nd biennial report of the Commission on SSGI, than a strategy aimed at clarifying matters; the economic and social role of SSGI in our society also has to be accentuated. • The recognition of SSGI. Today people know that SSGI exist, but they are still not fully recognised. The speaker proceeded to illustrate this with an example: most of the social stakeholders provide services but are also partners and this concept is not sufficiently highlighted. You need to be recognised as a partner, because this implies that good alternatives to public procurement, which are in keeping with the general interest missions of SSGI, can be clearly defined and promoted by the Commission. • The legal framework of SSGI. Several participants insisted on the need to move from a system of exemptions to a regulation, and even to legislation which was positive for SSGI. Time to take action, in other words. Moreover, Mr Michel MERCADIE was of the opinion that policy-makers who tended to cut budgets made a grave social and economic error. He stated that several studies had already demonstrated that funding social services constitutes an investment and that budgetary cuts during the current difficult times we are experiencing are not the best solution.

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Mr Józef NIEMIEC, Confederal Secretary of the European trade union organisations (ETUC) Mr Józef NIEMIEC said that in contrast with the two previous forums where the emphasis was on the need for a legal framework, the 3rd Forum concentrated on the issue of the financial and economic crisis, as well as on the consequences for the quality and funding of SSGI. In his opinion, a number of key questions, such as the access to these services or their quality are perceived negatively because of the coordinated European policy which saw the banks being saved at the expense of the social sector. This is an unacceptable approach, because the quality of employment and the associated funding are important aspects of SSGI. Mr NIEMIEC’s second concern was related to the European framework for these services. He felt that it was increasingly apparent that the institutional change as a result of the Lisbon Treaty was not sufficiently reflected in the propositions that were made. He recognised that the debates largely echoed the Lisbon Treaty but not many concrete proposals had been made. The Lisbon Treaty confirms an essential element, the social role of SGI and in particular the reconciliation of the respective roles of the Union and the Member States in the organisation and funding of these services. But a debate needs to focus on ways of finding more appropriate solutions. Finally, Mr NIEMIEC stated that a clear definition needs to be drawn up of what does not fall under European law, for the Member States and for local communities. The idea, for example, of establishing registries which identify and provide legitimacy for non-profit organisations that provide such services, and which thus exclude them from the treaty’s scope should be elaborated. Finally he accentuated the fact that alternatives need to be found to public procurement for providers of SSGI. These alternatives need to be promoted. He mentioned public-private partnerships, in-house performance of services, etc.

Mrs Loes VAN EMBDEN ANDRES, Businesseurope The representative of Businesseurope started by indicating that although her trade union was equally concerned about the impact of the crisis, it did not share the position of its colleagues, specifically in terms of the restructuring of public funding. Mrs VAN EMBDEN ANDRIES was of the opinion that public spending had increased during the crisis, and that social services benefited significantly. It enabled them to help people who became unemployed following the closure of many enterprises. This was necessary to play a stabilising role in our societies. But now, she continued, the time has come to restructure public expenditure: this is not a goal in itself, but largely a way of safeguarding our welfare state. If we do not want to push more people into poverty, if we want to maintain a

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sustainable European social model, then public spending has to be reduced now. Mrs Loes VAN EMBDEN ANDRIES was of the opinion that in any event the Member States had to decide this independently, without any interference from Europe. One thing was certain that cuts in public spending would not be made everywhere, and certainly not in the same way because public finance varied greatly from one country to the other. Healthy public finances implied budgetary cuts and social services cannot be excluded from this plan. One should not forget that SSGI are very important for employment but she insisted that the Member States should take smart decisions to re-establish a budgetary equilibrium. Mrs VAN EMBDEN ANDRIES indicated that her trade union fully endorsed the voluntary European quality framework for SSGI which was established by the Committee for Social Protection. At the same, she said, attention should not be limited to quality but also focus on profitability. A balance needed to be found between economic efficiency and quality. Finally, she highlighted the fact that a number of participants seemed to be very conservative, resisting change when a legislative frame or legislative measures were requested to protect existing services. This group also seems to voice fears about whether current European legislation, more specifically about the internal market or about state aid, is applicable to SSGI. Her trade union, she underlined, is wholly in favour of innovations, and was of the opinion that a conservative attitude was not the right choice.

Mr Ralf RESCH, General Secretary of the European Centre of Employers and Enterprises providing public services (CEEP) Referring to the figures published in a study by CEEP in May 2010 25, Mr Ralf RESCH highlighted the importance of social services in terms of employment but also in terms of their significant economic contribution to GDP at a European level. According to these figures, social services employ approximately 17% of the entire existing European workforce, representing approx. 35 million jobs. In 2006 its contribution was 15% of the EU’s GDP.

Certain representatives of the employers’ syndicates, said Mr RESCH, generally consid-

25 CEEP, “Public services in the European Union & in the 27 Member States. Statistic, organisation and regulations”, May 2010.

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ered SGI, and more specifically SSGI to represent a significant cost for the authorities. They also pretended to ignore their role as indispensable elements for promoting the EUâ&#x20AC;&#x2122;s social and territorial cohesion, as an indispensable instrument to anticipate and manage the new challenges that our societies are currently facing. Mr Ralf RESCH said that he was happy to see that his colleagues at Businesseurope agreed that any cuts in terms of public spending would have to be carefully considered so that one did not pull the rug from under the people who contribute to the EUâ&#x20AC;&#x2122;s economic revival. SSGI, in effect, promote growth, in the public and private sectors. In his opinion, it was important to ensure that they would not be deprived of the resources which they need, especially in these times of crisis and budgetary cuts. He also underlined the importance of the national, regional and local authorities in terms of the management and financing of SSGI, while insisting that most of the problems with which SSGI are confronted unfold at a local level. Choices need to be made, he said, in terms of the funding and organisation of these services. Do we need to continue along the path that has been outlined by the treaty or do we need to comply with the framework for public tenders? One should always bear in mind that the authorities have to organise social services in the way they want: either they provide these services themselves, or do they outsource them to service providers which they appoint. Responding to the accusation that his trade union was conservative, Mr RESCH denied this and stated that the Lisbon Treaty provides new opportunities, which have to be fully exploited. The treaty provides for the option of establishing a legal framework, which guarantees the financing and good outcome of SSGI missions. He felt that its political nature could be an obstacle to progress, and that therefore this might be considered a conservative element.

***

On the issue whether the SSGI Forum should be continued, the participants were of the opinion that although the Forum was necessary because it allowed all the stakeholders to meet every two years to discuss problems related to SSGI, it was even more necessary to establish a multi-institutional monitoring structure, across the various bodies, in order to find joint solutions for the problems which SSGI commonly face.

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5.3. Parenthesis Have the social partners and Professor Monti met with the European Commission since then? In its proposal in favour of a « Single Market Act » (COM(2010)608 du 27.10.2010), the Commission underlined the need to « improve public services » and ended up recognising that the application of European rules in this area raises a number of practical questions for the competent public authorities and for certain players in the sector, specifically in the area of social services ». In practice, however, the Commission merely announced in 2011 that it adopted a Communication « along with a set of actions on SSGI », focussing on three main themes: to provide governments with a « toolbox » covering all relevant issues; allowing Europeans to judge whether the services provided to them had evolved in terms of quality; and respond better to the requirement of universal access to services that are considered essential to their daily lives (including the example of the postal service, as well as that of basic banking services). The European Parliament was not fooled: while it took note of the announcement of the Commission’s initiatives, it called on the Commission to go much further « by taking advantage of all the options available to it », based on Article 14 TFEU and on the protocol on SGI « in order to ensure that SGEI and SSGI can be provided at an appropriate level, in keeping with the subsidiarity principle» ( see resolution of the European Parliament of 6 April 2011 on the single market for all Europeans).

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Institutional round-table 143

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6.1. Presentation and objectives of the institutional round-table Hosted by journalist Eddy CAEKELBERGHS of the French-speaking Belgian public broadcaster (RTBF), the panel of the round-table included the following guests:

• Françoise CASTEX, MEP, President of the European Parliament Public Services Intergroup • Koen LENAERTS, Judge of the European Court of Justice • Carlos de CORTAZAR, Council at the Representation of the Kingdom of Spain to the European Union, representing the Spanish Minister for Social Affairs

• Mrs Concetta CULTRERA, representing Mr Robert VERRUE Director General of the DG Employment, Social Affairs and Equal Opportunities of the European Commission

• Mr Jean-Louis DESTANS, Vice President of the Committee of the Regions and President of the General Council of the Eure (France) The aim of this round table was to give various European institutions (the Parliament, the Commission, the Committee of the Regions and the ECJ), as well as Spain, a member of the Trio, the opportunity to express their points of view on the 15 recommendations of the Forum. More generally, they also could share their position on the expectations of the providers and users of SSGI, as expressed by the participants. The round-table was preceded by a video message from Professor Mario MONTI.

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6.2. Video message of Professor Mario MONTI In a recorded message 26 to the 3rd Forum on SSGI, Professor Mario MONTI, a former European Commissioner for the internal market, and subsequently for competition, said that European citizens think, or rather are under the impression that certain aspects of the single market interfere with the competences of the Member States to correctly assure the social objectives in a negative manner. This statement was worth discussing and clarifying. The former EU Commissioner said that he was passionate about supporting the single market. At the same time he said that one should not be surprised if citizens were under the impression that Europe was working against their interests, if such a single market approach was not accompanied by other complementary and appropriate policies. Mr Mario MONTI felt that a number of initiatives have to be taken to underpin the single market, while working simultaneously to ensure that citizens accepts its importance. To this end, a number of specific aspects of the European system needed to be considered. The organisation, involving more flexible rules, would not mean that the Member States would be able to undermine the European integration project in any way. On the contrary, it would have a positive outcome, allowing them to satisfy a number of social needs, without too many constraints. This would be a good signal to them, seeing the Single Market take into account these concerns. It would also be a way of reconciling the economic and social aspects. The latter, after all, is indispensable for the survival of this single market. Professor MONTI reminded us of the title of his report to Commission President

26 Extract of the interview with Professor Mario MONTI, September 2010. The whole interview is available at: http:// www.youtube.com/watch?v=6cyN8g7J2Uk

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BARROSO, â&#x20AC;&#x153;A new strategy for the Single Market. At the service of Europeâ&#x20AC;&#x2122;s economy and societyâ&#x20AC;?. He added that this report took into account social concerns and stressed the importance of recognising the place of the market and of social affairs in what the EU Treaty refers to as a social market economy, in order to avoid confusion and chaos. There is no standard, uniform model, he said, for all the Member States when it comes to the place and the modus operandi of SSGI. It is, however, necessary, to work on expanding these good practices, in order to underpin the link between the European level and that of the Member States. Most of all, we need to ensure that what is elaborated at European level, in the frame of the single market, does not interfere with the diversity and the development of social services, at the national, regional and local levels.

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6.3. Summary of the moderator’s questions and the panellists’ answers Question to Mrs Françoise CASTEX: you have listened to the reports about this morning’s activities, you have also heard the reaction of the social partners, and Mr Mario MONTI’s video message, who urges us not to forget these two keywords: market and social. So what is your response to this, what are your observations? Answer of Mrs Françoise CASTEX, MEP, Chair of the Public Services Intergroup of the European Parliament “I would like to start by thanking the Belgian Presidency for organising this 3rd Forum. First, because it is very well organised, but, above all, because we need the Council and the Member States to take part in this debate, in which the stakeholders and the European Parliament are very much involved. We are here today, there are ten of us here today. Most of the MEPs present here today are members of the [Public Services] Intergroup. The European Parliament has thus demonstrated its desire to work in this field and to create legislation for it. On November 10th, 2010, we shall hold a debriefing about the work of this Forum in order to draw the necessary political conclusions, in the presence of Minister ONKELINX, Commissioner ANDOR, Mrs Pervenche BERES of the Committee for Employment and Social Affairs of the European Parliament and Mr Proinsias DE ROSSA, the rapporteur on the activities of this commission regarding the future of SSGI. The Parliament is thus available and moreover has taken the lead in this matter. We will make sure that the debate is continued and that measures are taken in the frame of this debate”. “One of the things I retained from the workshops is that the European Union’s legislation is not adapted to the social services sector. The impression is that rules, which were specifically developed for network services are being applied to this sector. The Altmark

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Ruling is continuously referred to, but this ruling actually relates to the transport sector. It is impossible to apply the same rules to the multitude of social operators, which, moreover, are situated at various territorial levels because these rules were created for tens of national operators – as is the case for most network services – at national or even at European level. So this mismatch needs to be addressed.

“The second learning from this Forum is that there is a great ambition to create a legal framework, but even more so, a political framework. As Minister ONKELINX already stated in her opening address, social services make up the legitimacy of our European project. She placed the objective of the debates in the political realm. When you read Mario MONTI’s report, or when you listen to his video message, they are also both situated in the realm of political relations. This is perfectly normal, as social services are the cornerstone of the social contract and all our European democracies are social democracies based on a social contract between the local authorities and the national (or even European) authorities and the citizens. This contract is realised by social services. “Mr Mario MONTI even said that citizens felt disenchanted: this is no longer legal vocabulary. And to continue in the same vein, I would even go as far as saying that evidence is needed in the frame of the social contract: today we have the legal basis in primary law; all we need now is a manual. We need to establish a user manual for fundamental rights, although there may be some problems of implementation. Moreover certain issues need to be examined in more detail: do we try to achieve maximum or minimum harmonisation ? What level of subsidiarity should we favour ? But this is all part of the debate as soon as there is a political momentum for action.”

Question to Mr Koen LENAERTS: What is your point of view, because, as we have just heard, there is more to this debate than the legal aspect ? Answer of Mr Koen LENAERTS, Judge of the European Court of Justice “I would also first like to congratulate the organisers of this Forum. It is quite important that such an initiative has been taken. As a judge, it is important that I listen to the people in the field, who witness the reality of the SSGI first-hand. As Mario MONTI just said in his highly relevant video message, the aim is not only to turn Europe into a single market with full competition and free movement. This internal market also has to be acceptable and legitimate in view of a European social model, which has been typical of Europe for quite some time, compared with other major economies, such as, for example, the United States.

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The Court’s role is to judge on a case per case basis when a case is brought before it. Our role is thus quite different of that of the legislator, which is to foresee. To govern is to anticipate. A judge is always reactive: when the Commission brings a case against a Member State or when a national judge has a question about the interpretation of the Union’s law, so that he can correctly apply it in the specific context of the dispute in which his judgment is required, we elaborate, as Mrs CASTEX just said, on these texts. But of course, the texts need to be available. As a European judge, who is often involved in social cases, I must say that I am delighted that I can rely on Article 9 TFEU (the social clause), Article 14 TFEU on SGEI, including SSGI, Protocol no. 26, and, above all, Chapter 4 of the Charter on Fundamental Rights of the European Union on solidarity. Naturally all the participants in this forum will not necessarily agree with each individual case in which the Court makes a judgment, often also as a result of a lack of understanding of the factual context in which the Court had to make its judgment. But at the same time, the Court has always defended gender equality, social rights, for example annual holidays or even trade union rights. The Court was the first to recognise the right to collective action as a fundamental right, even though it is not always easy to implement this. The Court also recognised the “in house” exception, in the frame of public procurement, in the frame of the major case of the Commission v. Germany, which the Commission lost following the judgment on June 9th, 2009. The Court validated the pooling of public resources for rendering public services without having to follow the rules on public procurement. The Court accepted national regiments for authorising access to certain economic activities, which are even profitable, if these activities are necessary for financing social services. This was the case for patient transports. The Court accepted that the access to the non-emergency transport of patients should be limited so that emergency transports of patients, which would not be profitable, could be funded. With regard to the public financing of social services, the public authority is responsible for providing these services to the population and for funding these. The Commission has long considered this funding to be state aid. But the Court of Justice stated that this was not the case. If the costs for these services are paid by the public authority, then these services shall not be subject to the rules on state aid, meaning that there is no notification obligation, as evidenced in the Ferring and Altmark judgments and in recent cases concerning public broadcasters. And then of course there is healthcare. This is the final part of the European social model, and as Mario MONTI has already stated in his message, the internal market needs to create a sufficient margin for the Member States to pursue a good planning policy, in line with their own institutional structures (they keyword has been included in every one of

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our judgments for the last three years). The aim is to ensure an adequate coverage of qualitative healthcare, which are easy to access, and which offer financial solidarity in line with the financial equilibrium of social security. I would like to illustrate this with an example. We are all familiar with the European social security card. When you travel from one Member State to another, regardless of the capacity in which you are travelling, and when you need unexpected healthcare, this care will be covered by the social security of the State where you are staying because the system that has been adopted at European level required every affiliate of a social security system should be covered in the same way as the affiliates in the Member State where s/he is residing. The bill will be settled among healthcare funds and the patient will not notice a thing. Currently the Commission is taking a number of Member States to court – the case that we are currently reviewing involves Spain, but there are others in the pipeline – and involves the following issue. What is the social coverage in the state where you are a member of a healthcare fund is higher than the social coverage provided in the EU Member State where you are staying. Does the former have to make up for the difference ? At first glance, one might be tempted to say, yes, why not. Because if the patient would fall ill in the state where he is a member of a healthcare fund, the coverage would also be higher. So the Commission said: the Member State cannot profit from the fact that one of the affiliates of its healthcare system fell ill in another Member State where co-payment is higher. But what is the problem then ? If you take a systemic approach, as the Court did at the request of the member States, this would have placed a huge burden on the financial equilibrium of the social security systems of the Member States, as the Member State where the patient is affiliated would have to pay the bill in full to the Member State where the patient is residing, and generally the bill is higher than the coverage provided in the Member State where the patient is affiliated. If you consider that the bill is higher in the Member State where the patient is residing then the Member State where the patient is affiliated with a healthcare fund will have to pay the bill, which is higher than its own bill. Otherwise it will have to pay the difference if the bill is lower. But this would have jeopardised all the financial planning systems of the social security system in favour of patient mobility. Thus the Court was forced to strike a balance between the values of free movement and the values of financial solidarity of social services, including in terms of healthcare, which have to be protected by the Member States and their sub-state entities, which are responsible for providing these services”.

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Mr Carlos de CORTAZAR, Councillor of the Representation of the Kingdom of Spain to the European Union, representing the Spanish Minister for Social Affairs After having reminded the audience that the trio of the Presidency entrusted Belgium with the mandate for the SSGI theme, Mr Carlos de CORTAZAR insisted on the need to consider the balance of powers within the European Parliament and the Council, but also within the Commission, which, although it speaks with a single voice, still has to contend with various sensibilities when it comes to SSGI. He also said that a general strategy needed to be developed for this field, with the resources necessary for ensuring its success in order to avoid undermining the final objective, namely to give a social dimension to the internal market. Mr de CORTAZAR then touched on the Monti Report to underline that it is important to clarify what are these SSGI. One of the elements that could be relevant in this frame, i.e., the quality of the service provided, seemed to benefit from a consensus among the Member States and the Union’s institutions, as evidenced by the activities of the European Committee for Social Protection. Referring finally to the draft conclusions prepared by the Belgian Presidency for the EPSCO Council of 6 December 2010, the Spanish representative welcomed the idea which this document defends, namely that the criterion of the best offer in economic terms, in public procurement when relating to SSGI, should not be limited to the price criterion. Instead it should also include the notion of social profit, while also considering the participation of civil society in the performance process.

Question to Mrs Concetta CULTRERA: What does the Commission think ? Answer of Mrs Concetta CULTRERA, DG Employment, Social Affairs and Equal Opportunities of the European Union “I come to the Commission’s conclusion on this issue. The variety of social services offered in the various Member States, which are all characterised by a function of social cohesion and of inclusion is huge. Their organisation varies greatly from one Member State to the next, sometimes even from one region to the next. In the last few decades, the Member States implemented reforms in terms of the organisation and funding of social services and today they increasingly rely on external service providers (non-profit and profit-making) for these services. As a result of this development the Court often considers social services as economic activities, which thus are governed by the rules set out in the Treaty, notably, the competition rules as well as the rules on public procurement and the internal market.

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The awareness – which is relatively recent – that these rules are applicable implies a certain reaction of refusal: “we are social, we are not economic”. This is often accompanied by a concern that everything must change and this concern is often founded on a number of misconceptions. Often people wrongly assume that the application of competition rules automatically entails the liberalisation of the organisation of these services; that internal market rules imply deregulation, which, in turn, implies a loss of quality; that the rules in terms of public procurement mean that you should always choose the lowest bidder, at the expense of quality; that the rules on state aid prohibit the proper funding of social services and that all aid will be considered unlawful. On the contrary, however, these rules apply to SSGI in a totally different way, compared with purely commercial or IT services. They already take into account the specificities of SSGI for the most part, and, let’s not forget that when these rules are properly applied they bring about more transparency for users, as well as ensuring that public funding is really used for achieving a mission of general interest. At the same time they allow the authorities to choose the most efficient supplier who guarantees the same level of quality. But naturally, if the authorities, the users, the suppliers of these services consider these rules to be a threat, an obstacle to the organisation and funding of these services, the Commission should not ignore this. That is why we have implemented tools to clarify the situation and the rules (the interactive information service, training for local public authorities, the Frequently Asked Questions document, which is now called “guide”). They clarify several of the themes that have been discussed during this Forum (…). When people talk to me about a specific instrument for SSGI I usually remind myself that a special law is used to change an inadequate regulatory framework. Sadly, for the last three years, I’ve been unable to understand what the content of such a special act should be. The Commission, on the contrary, does not exclude changes to the existing rules. The public consultation on the package of SGEI has recently been completed. Another consultation will probably be launched on the rules governing public procurement. We invite you to take part in it, to share your suggestions with us. We took active part in the technical seminar which the Belgian Presidency organised in July 2010. The documents were of high quality, and some of the proposals were extremely interesting. We are ready to continue the dialogue with the public authorities, the users, the suppliers and all the institutions, in an attempt to identify any necessary changes that may need to be implemented. And of course, we are also focussing on quality”.

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Question to Mr Jean-Louis DESTANS: What does the Committee of the Regions think of this ? Answer of Mr Jean-Louis DESTANS, Vice-President of the Committee of the Regions and President of the General Council of the Department of the Eure (France) “The Commission’s statement is a good illustration of what I am about to say. Like many of the participants here today, I took part in the 1st Forum in Lisbon, then in the 2nd Forum in Paris and now I’m here in Brussels for the 3rd Forum. My first conclusion is that I am slightly exasperated, because, and the Commission has just reiterated this, there have been multiple meetings and explanations, and yet, all this time, the Commission continues to give the same answer: these problems are due to a lack of understanding, of communication. We need to explain this to you. We will set up a hotline (which has no legal value) and time passes, month after month, year after year. Other directives are established, which, moreover, have an impact on SSGI. Europe is moving forward and we, the users and prescribers of these SSGI, are still stuck, waiting for some positive legislation, and not for some acts of legislation by a judge. We would like the Commission, the Council and Parliament to take their responsibilities. Judges are supposed to implement the law, not make it. We want a framework directive, not a special act. There is a general sense that the Commission is trying to put off things; it is not responding to the legitimate concerns that have been expressed by the Committee of the Regions in the frame of the recommendations which the European Parliament shared during various debates that were held and to the questions raised in this room. I would like to salute the Belgian Presidency, because this morning, in contrast with the other Forums in which I took part, there were three Commissioners, one Minister and ten MEPs present. This may potentially mean that we have passed a milestone in the political consideration of the problems that we are facing today. I will not repeat all that has been said on the issue of proportionality, on the Monti-Kroes package, on the minimum thresholds, etc. These are obviously interesting ideas. But as Françoise CASTEX has already said, there are two problems, which are relatively simple: there is a legal issue, which has to be dealt with and the political will to do this needs to be in place. Today the Belgian Presidency has expressed this political will to this; the [public services] Intergroup of the European Parliament has relayed this desire. A decision should finally be made. I am more than willing to take part in a 4th Forum but not if this means asking the question ‘what should we do’ but ‘what shall we do ?’”.

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Question of the moderator for the panellists: Several participants have referred to the Lisbon Treaty. During the workshops, among others, participants wondered what the institutions intend to do to provide a framework for these SGGIs. What is your answer ? Answer of Mrs Françoise CASTEX, MEP, Chair of the Public Services Intergroup of the European Parliament “The analysis of the Lisbon Treaty and the points of reference in this Treaty have already been mentioned here. Now it all remains to be seen whether the Lisbon Treaty heralds a new phase in the construction of Europe. In any event, the Treaty needs to be implemented. The points of reference have to lead to real actions: to directives, to regulations, to legislative proposals. We are prepared to work on this. But there is such a thing as shared responsibility and shared decision-making. The Council also needs to be involved. The initiative has to come from the European Commission. The European Commission needs to be hear what is being said here, and implement the Lisbon Treaty. Yesterday a participant said here that the Commission seems somewhat reluctant to move on to a next stage in the European building process. The initiative now is in the Commission’s hands, it needs to take action. There are 15 proposals on the table, something needs to be done”.

Answer of Mrs Concetta CULTRERA, DG Employment, Social Affairs and Equal Opportunities of the European Union “I personally think that Article 9 TFEU is the key element, the key innovation in the Lisbon Treaty. In coming years several decisions and actions will be founded on this article. This article states: « In defining and implementing its policies and activities, the Union shall take into account requirements linked to the promotion of a high level of employment, the guarantee of adequate social protection, the fight against social exclusion, and a high level of education, training and protection of human health.” Today the main instrument for implementing this Article is the social impact assessment made in the frame of the wider general impact analysis. We discussed this yesterday. Naturally this is a completely new article, we will have to think about the best way of implementing it in coming years. In my opinion, this is a work in progress. We would inspire ourselves from the work that was carried out in the frame of other, similar articles, which were introduced in the past for other issues. Other elements for our consideration are Protocol no. 26 on SGI and Article 14 TFEU. The protocol is an interpretation protocol which reminds us of a number of well-known key principles: the role and the wide margin for manoeuvre of the Member States, the

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diversity of the services, the quality level, the affordability of social services, and universal access. And then there is also Article 14, which, in its amended state, provides us with a legal basis. But to do what in the realm of social services ? Article 14 states that we have to define the principles and conditions allowing services to accomplish their missions, by means of regulations. Yesterday Commissioner ALMUNIA told us that this Article does not provide for the means for legislation on state aid because the treaty says that it is without prejudice to Articles 106 and 107 TFEU. So Article 14 is of no use in terms of state aid. In terms of public procurement, and thanks to the workshop on this theme, we now have a number of proposals for amendments, for changes to existing rules. We will take what has been said today into account. The Commission has also launched a round of consultations in this subject; we will see what needs to be changed and how”.

Answer of Mr Koen LENAERTS, Judge of the European Court of Justice “I would like to emphasise that I fully agree with Mr DESTANS. I believe that the legislator has to take his responsibility. The democratic legitimacy to make social choices is only one of the options provided to the officials that have been elected by the people. But civil society organisations also have this option. The judge is there to protect the weak against the strong, as the strong can protect themselves, because they have the power. The weak do not have this ability. That is the reason why several judgments of the Court have been of a more social nature in the last five years. They have effectively indicated the boundaries of the full application of the principles of freedom of movement or of competition. We are not interested in undermining the services for people who do not have the power of hard lobbying where they should, but who can only be protected by means of the fundamental rights. That is why we must welcome the entry into force of the Charter of Fundamental Rights of the European Union, as primary legislation. This charter is now being applied on equal footing with the rules of competition and of the internal market. The same applies to Article 9 TFEU, which I quoted in my first intervention. I hope that the Commission will also make legislative proposals under Article 14 TFEU and Protocol no. 26. So what, if, as Commissioner ALMUNIA states, certain aspects need to be based on the Treaty’s provisions on state aid ? Article 9 is a horizontal clause, which needs to be implemented in all the Union’s policies, not only in those policies which have social policy as their legal cornerstone. We often have to make judgments without being able to base ourselves on legislation because the Commission brings cases before the Court which are directly based on the

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treaty’s articles, on articles of negative integration. These prohibit the Member States from creating obstacles to the free movement of people, of goods, of services, of capital… or from hindering free competition. It is up to us to transpose this into practice. As I explain to my students, it’s like connecting an iron to a high-voltage cabin. It won’t work: you need transformers to adapt the voltage. The legislator thus has to make choices. If the Commission continues to bring cases before the court based on primary legislation and putting the judge in a position where s/he has to make choices which are actually the legislator’s responsibility, then the Court will always be inclined to decide in favour of the Member States. In these Member States, after all, the elected Parliaments or social partners make the choices. So why should we judges have the right to say that these choices are not in line with the articles of the Treaty, which were written without considering the SSGI ?”.

Mr Carlos de CORTAZAR, Councillor of the Representation of the Kingdom of Spain to the European Union, representing the Spanish Minister for Social Affairs Mr de CORTAZAR started by saying that a pragmatic approach should be preferred, that this was a priority, starting from an in-depth analysis of existing legal instruments, whether these include the new provisions as a result of the Lisbon Treaty (Articles 9 and 14 TFEU) or the Services Directive. Such an analysis and explanation is the only way to allow the Member States to gain a better understanding of the issue, including the option of basing a legislative initiative on the new Article 14 TFEU, an issue which still continues to be a problem from several Council members.

Answer of Mr Jean-Louis DESTANS, Vice-President of the Committee of the Regions and President of the General Council of the Department of the Eure (France) “I am delighted about what has been said here. I regret that the Commission does not conclude this by telling us that it listened very carefully to the political representatives and to the representative of the Court of Justice. Today we have the means to move forward, we have the protocol with the interpretation, Article 9, Article 14. These are sufficient legal basis for a legislative initiative and I am delighted that the representative of Spain has said that this is one of the concerns which are currently being examined in his country”.

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6.4. Parenthesis It is always worth recalling certain obvious facts. The inter-institutional round-table, for example, was a good opportunity to remind participants of the shared responsibility of the European Union and of the Member States to ensure that the SGEI, including SSGI, functioned according to the principles and under the conditions that allowed them to accomplish their mission. This is a direct result of Article 14 TFEU, which was first drafted in the frame of the Amsterdam Treaty (formerly Article 7D, subsequently 16 TCE). The European Court of Justice does not share this responsibility; it has a different role, namely to uphold the law in the interpretation and application of the treaties (Article 19.1 TEU). The Commission has to promote “the general interest of the Union” and “take appropriate initiatives to that end” (Article 17.1 TEU).

Is ensuring the proper functioning of SSGI by means of the proposal of a new Act for the Single Market (COM(2011)206 of 13 April 2011) an appropriate initiative ? Social cohesion was one of the « twelve levers » that were identified for stimulating growth and building trust. Its transposition into legislation remains rather vague however: the aim is to « clarify the exercise of freedom of establishment and the freedom to provide services alongside fundamental social rights » and « to better ensure that SGEI, including SSGI, would have a framework that allows them to perform their tasks ». To this end the Commission announced that it will examine « the measures to ensure, in conjunction with Article 14 and Protocol no. 26, that all citizens have affordable access to essential every day services which they need to participate in economic and social life, with due regard for the vital role of the Member States in providing, commissioning and organising such services ». May it find the right leverage and foundation to (re)connect the European reality with that of the stakeholders and beneficiaries of SSGI…

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CLOSING SESSION 161

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7.1. Speech by Mr Proinsias De ROSSA Speaking on behalf of the European Parliament, Mr DE ROSSA started by saying that the main issue is now how to move forward and in which direction, after the fruitful discussion of the 3rd Forum, and the recommendations adopted by it. Mr DE ROSSA first and foremost wished to emphasise that the world has radically changed since the turning point in the debate on SSGI in 2007. First there was an economic crisis, which was triggered by a major banking crisis. He branded the approach adopted by Europe to put an end to this crisis as insufficient, as it relied on methods which were largely ineffective. Then there was the adoption of the Lisbon Treaty. This treaty clearly demonstrated that the EU is more than a single market, listing social welfare as one of the European Union’s objectives. The MEP felt that the recently proposed European economic measures did not comply with the general economy of the new treaty. Mr DE ROSSA estimated that there is a great struggle currently taking place at the level of the European Parliament, of the national parliaments and of civil society to change the current approach and with a view to reconcile the social and economic aspects. Mr DE ROSSA proposes to launch a dynamic and interactive process to achieve this objective, more specifically in terms of SSGI. He suggested that this be done in the frame of a “High-level task force”, gathering the European institutions, civil society and the social partners. This task force will have to urgently tackle the critical issues that were raised during the 3rd Forum, in a transparent way, based on a clear agenda with specific deadlines. Mr DE ROSSA emphatically stated that we need to break away from the current approach under which each institution works in its own corner, without a comprehensive overall view of the issue of SSGI.

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Mr DE ROSSA criticised the â&#x20AC;&#x153;dictate of the Stability and Growth Pactâ&#x20AC;?. He felt that it was more important to focus on the way in which Europe tries to realise the fundamental rights of citizens. There is a great gap, he said, between rights on paper and the daily reality of many citizens. Mr DE ROSSA finally argued in favour of the establishment of a regulatory framework in line with Article 14 TFEU. This should clearly define the difference between non-economic services and economic services, and also set out the criteria for the functioning of the latter. At the same time, such a regulatory framework should not exclude the option of adopting sectoral directives in terms of SSGI.

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7.2. Speech of Mr László ANDOR In his closing speech, Commissioner ANDOR said that he was pleased with the results achieved by the 3rd Forum, which were in line with the European Commission’s expectations and ambitions. In particular he highlighted the relevance of the debate on the quality of social services, stressing that in the current situation the public authorities that are responsible for the organisation and financing of social services will be exposed to increasingly numerous financial constraints. Commissioner ANDOR said that this implied the efficient management of the available resources. He felt that it was important to reach an EU consensus on quality in order to help decision-makers use these resources in a targeted manner, while prioritising investments in order to support the continuous development of the quality and profitability of social services. Mr László ANDOR indicated that this was the reason why the Commission was committed to promoting the application of the voluntary EU quality framework for SSGI, which was adopted by the Committee for Social Protection, through the exchange of good practices and cross-border projects. In the frame of this approach, the Commission has also committed to helping the public authorities in the Member States so they can better understand and apply the existing rules of the European Commission. In response to the concerns associated with the application of certain rules to SSGI, Mr ANDOR estimated that the new “guideline”, which is also an update of the documents of the Frequently Asked Questions, provided many tangible answers. The European Commissioner said that the current rules provide a bigger margin for manoeuvre in the social sector. At the same time, he reassured the audience that the Commission has not closed the door on any discussion on issues that remain unclear, uncertain or unsatisfac-

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tory. Commissioner ANDOR rejected the idea of creating an ad hoc structure for SSGI, preferring instead to pursue the dialogue and to work based on the Commission’s achievements in the frame of the Committee for Social Protection.

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7.3. Speech of Mrs Laurette ONKELINX Everyone agrees that social services are necessary, but Mrs ONKELINX stressed that the debates allowed us to measure the distance between European rules and the social needs of stakeholders in the field. According to Mrs ONKELINX, all the stakeholders expressed their need for clearer and more visible rules. She indicated that the activities of small local public stakeholders are primarily experiencing difficulties because of all these rules. They have neither the financial nor the human resources to follow up on these rules, as the numerous testimonials of these stakeholders have shown. In this frame, the Belgian Minister thought a number of initiatives should be taken at European level. First, the existing rules need to become more visible, these rules need to be better communicated to the stakeholders. They should probably also receive coaching in procedures, but greater legal certainty is also required to recognise the specificity of SSGI and to adapt them to the rules, which originally were not developed for these services. Echoing the proposals that were made, i.e., reviewing the thresholds under which operators no longer have to report state aid, or more generally, the review of the Monti-Kroes package which was undertaken by Commissioner ALMUNIA, Minister ONKELINX then wondered whether this review would be sufficient to improve the legal framework in terms of financial compensation. Mrs ONKELINX feels that this review is a good opportunity to adapt the rules governing state aid to the particularities of SSGI. Madam ONKELINX also stated that she shared the points of view of Mrs Pervenche BERES and judge Koen LENAERTS who reminded participants of the necessity to consider the changes since the adoption of the Lisbon Treaty. She argued that we no longer have an excuse to not recognise the new Article 9 TFEU, which imposes the adoption of

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a transversal view in order to take into account the social impact in all European initiatives. Now the main thing is to implement this article and in this sense Mrs ONKELINX shared her conviction that the EPSCO Council should try to get a foot in the door of the ECOFIN Council and also be involved in the elaboration of economic texts, and the rules governing competition and the internal market Madam ONKELINX also reminded her audience of the words of Mr Koen LENAERTS on the European Union Charter of Fundamental Rights, which has since been incorporated in the Unionâ&#x20AC;&#x2122;s primary law. It contains several provisions for a better protection of the social rights of European citizens. While Mrs ONKELINX reminded the audience that the market is not an end in itself but a tool to contribute to social progress and to build a social market economy, she also relayed the concerns of several stakeholders, who are asking the Commission, which has the right of initiative, to propose measures which effectively consider these concerns. While emphasising the importance of the work that the Commission had carried out up until now, specifically by clarifying a number of texts, (through its new guide and its interactive site), the Minister, however, was of the opinion that this would never substitute more concrete legislative initiatives. Mrs ONKELINX finally also mentioned the work done by the Committee for Social protection in the field of the voluntary EU quality framework for SSGI. She feels that this framework is the transposition of a European ambition: the adoption of common quality principles at European level shows how Member States are capable of overcoming their differences. She stated that this quality framework should be more than a mere statement; instead it should really be operationalised. The quality of social services is under threat from the crisis, which led to increased needs, while resources have been simultaneously reduced. The local governments really face a challenge when searching for European funding because of the major administrative burden as a result of the management of such funds. The Minister was of the opinion that the 3rd Forum achieved what it set out to achieve by adopting clear recommendations on the various concerns which participants raised. Now the main thing is to continue to follow up on these recommendations. Hence the necessity to pursue the invaluable work by the various forums, and to organise, in between, activities in a multi-institutional context, which incorporates the various stakeholders.

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7.3. Speech of Mrs Laurette ONKELINX

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WHAT ABOUT TOMORROW? 171

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When the Common Market Law Reports dedicated a special issue in 2006 to SGI and the European Union, before the first European Forum on Social Services of General Interest (SSGI) had even been organised, we reviewed the issue of the body and perspectives of a European doctrine on public services 27. We arrived at three conclusions, which are worth reiterating here, given the fact that they are highly topical as is evidenced from the work of the 3rd Forum on SSGI organised by the Belgian Presidency of the European Council on 26 and 27 October 2010: the necessity to clarify what was then called “the grey zone” of SSGI; the perpetuation of the financing system for SGI in general and of SSGI in particular; and the questioning of a Union framework instrument for S(S)GI. We will discuss these three aspects below, supplemented with the conclusions and learnings of the debates, during plenary sessions and workshops, of the 3rd Forum.

The SSGI, hesitating between light and dark grey ? The activities of the 3rd Forum make it abundantly clear that the issue of the definition of SSGI has still not been resolved. Three years after the 1st Forum the differentiating criterion of economic activity has still not been clarified. When an SSGI meets this criterion, then the rules of the European treaties, in line with Articles 104 and 106, paragraph 2, of the treaty on the functioning of the European Union become applicable. As some of the speakers remarked, the problem resides in the fact that every activity is potentially an economic activity in the sense that every activity potentially involves an exchange of assets or services in a given market. As a result we feel that the efforts in terms of transparency which the Union is requesting from the Member States, specifically in terms of the application of Article 106, paragraph 2, of the aforementioned TFEU, should be shared by the Union’s legislator. This means that the EU legislator should assume shared responsibility with the Member States to ensure that the SGI can achieve their specific mission. To this end, the new pro-

27 Stéphane Rodrigues, “Les services d’intérêt économique général et l’Union européenne ? Acquis et perspectives”, in Les services d’intérêt économique général et l’Union européenne, ed., Jean-Victor Louis and Stéphane Rodrigues, Bruylant, 2006, pp. 421-440.

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visions as a result of the Lisbon Treaty, specifically Protocol no. 26 on SGI and the Court of Justice’s jurisprudence may be of use in clarifying the criteria for defining SSGI. Thus jurisprudence on the interpretation of the protocol of the public audiovisual service (PAS) for example may provide some useful references, in the measure that the category of cultural services seems to be closely related to that of the social services. Moreover did the Commission itself not refer, in the early 1970s, to the category of “services of a cultural and a social general interest” in the frame of a dispute on safeguarding copyright ? 28 This jurisprudence states that the PAS is “directly related to the democratic, social and cultural needs of every society” and that “in view of the cultural, social and democratic functions that it assumes for the common good, it is of vital importance to ensure democracy, pluralism, social cohesion and cultural and linguistic diversity» 29. One can thus deduce that “the qualification of SGEI that was retained, instead of a service of non-economic general interest, can be explained by the de facto impact of the radio distribution of this public service on the radio distribution sector, which is competitive and market-driven, instead of by the alleged marketdriven dimension of the radio distribution of a public service” 30. In other words, the SGEI qualification does not automatically mean that it is carries out market-driven activities when certain specific values which put the purely market-driven dimension of this activity into perspective and even neutralise it, come into play. Such a reasoning seems appropriate for SSGI, in any event, if we take a closer look at Protocol no. 26 as well as at Article 9 TFEU, which imposes the Union to consider the following in defining and implementing its policies and activities: “requirements linked to the promotion of a high level of employment, the guarantee of adequate social protection, the fight against social exclusion, and a high level of education, training and the protection of human health”. Reason more, we think, for the Union’s legislator to establish the elements for defining SSGI and thus remedy the confusion which exists between the economic and the non-economic sphere (on the adequate instrument to do this, see below, under section 3).

28 See the so-called “GEMA” case, n°71/224/CEE of 2 June 1971 (OJ L 134, p. 27). 29 Referring to a Resolution of the Council and of the Member States of 25 January 1999 (OJ C 30, p. 1). 30 See judgment of the European Court of Justice of 1 July 2010, M6 and TF1 v/ Commission, joined cases T-568/08 and T-573/08, which have not yet been published in the European Court Reports, point 123. Also see judgment of the European Court of Justice of 26 June 2008, SIC/Commission, T442/03, Reports. p. II1161, points 153-154.

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Which continued financing for SSGI during the crisis and what happens afterwards ? In contrast maybe with the two previous Forums, the 3rd Forum on SSGI had to devote more attention than usual to a guest which crashed the party: the economic and social crisis. This obviously influenced the debates on the appropriate and continued sources of financing of SSGI. In any event, the thought process, once again, seemed rather one-dimensional given that it mainly focused on national sources of funding under the regimen for (the control of) state aid in light of Articles 107 and 108 of the TFEU. The European dimension once again seemed diminished, even absent, in some cases from the debate: to the extent that SGEI are recognised as being part of the common values of the Union and that they are founded on the shared responsibility of the Union and its Member States, why is it not possible to imagine European resources for funding SGI of a European dimension, at least initially ? In this frame we refer to a recommendation of the European economic and social committee of 21 October 2010 in which it stresses that the time has come to “to build up European services of general interest in those sectors where changing circumstances and challenges make them necessary” 31. At present attention of focused on the review of the “Post-Altmark SGEI” package on compensation for public services, which a large majority of the participants in the 3rd Forum wished to see achieved soon, and which the Commission has just started to review. It hopes to propose a series of changes in April 2011, which it hopes to have completed by the end of the summer of 2011 32. At this stage we think it is difficult to be happy or concerned about this proposal. Although the intentions are good, every analysis requires a certain measure of prudence. Everything will depend on the final text, more specifically on its implementation by the Commission’s competent services. At any rate, in line with the recommendations of the 3rd Forum, the Commission has argued in favour of a “differentiated and proportionate approach” which implies a simplified application of the rules on state aid for certain types of social services. This is specifically relevant when the latter have “only a minor impact on trade between Member States” and present “a series of particularities as regards their financing structure and their objectives” 33. An agreement will have to be reached on the perimeter and the content of these particularities. The “organisational characteristics” of SSGI which the Commission identified in its first communication of 2006 on SSGI

31 See Opinion of ESEC on “The renewal of the Community Method (guidelines)», in OJEU C 51 of 17 February 2011, pp. 29-34, which cites the following examples: civil protection, international emergency aid, customs services, transport, research centres, high-speed networks, etc. 32 See final COM(2011)146 of 23 March 2011: “Reform of the EU State Aid Rules on Services of General Economic Interest”. 33 Op. cit., section 4.2.2.1.

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(principle of solidarity, personalisation, no profit, civil capacity, cultural and local embedding, asymmetric relation, etc) may thus be of use, but they should be reviewed and completed in view of the new context, after the Lisbon Treaty (Articles 9 and 14 TFEU, Article 36 of the European Union Charter of Fundamental Rights and Protocol n°26).

A European framework instrument for SSGI: why and how ? The debate on whether it would be opportune if the European Union devised a framework instrument in the field of SG(E)I is not a new debate. The Committee of the Regions (in 2005) and the PSE Group of the European Parliament (in 2006) even suggested a concept framework directive. These initiatives were largely ignored by the Commission and by the Member States, largely due to the fact that the legal basis for adopting such a text was lacking in the treaties. The Lisbon Treaty changed this situation and the new Article 14 TFEY now incontestably provides the legal foundation for the European Parliament and for the Council to adopt regulations to establish the principles and conditions which should allow SGEI to achieve what they set out to do. The Union’s co-legislators will thus have to take their responsibility, as several of the speakers and participants in the 3rd Forum have underlined.

But which reasons could be used for motivating such an initiative and what about its content ? As far as the reasons are concerned, the work and recommendations of the 3rd Forum seem to corroborate the opportunity analysis made by the European Commission in its Green Paper on SGI in 2004 when it wrote the following: “A general instrument could set out, clarify and consolidate the objectives and principles common to all or several types of services of general interest in fields of Community competence. Such an instrument could provide the basis for further sectoral legislation, which could implement the objectives set out in the framework instrument, thus simplifying and consolidating the internal market in this field” 34. At the same we also need to provide legal security for the stakeholders, both public and private, which manage and delegate the management of SSGI. Such an approach should at least clarify the two themes that we mentioned earlier, i.e., the qualification principles (criteria) and the financing conditions for such activities in view of Union law. Other horizontal subjects could be tackled by one or more rules based on Article 14 TFEU (and/or on Article 114 TFEU on the approximation of national laws in the frame

34 See paragraph 38 of the final communication by the commission COM(2003)270 of 21 May 2003.

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of the consolidation of the internal market). One subject which particularly drew the attention of a great number of participants and speakers in the 3rd Forum was the following: on the one hand, the quality of the SSGI (the co-legislator would then be able to base itself on the work in the field of the European Committee on Social Protection to highlight common standards and references). On the other hand the articulation of the rules of the treaty in terms of SGEI (specifically the application of the principles of free movement and of free competition, including state aid 35) with certain existing sectoral instruments. This could have a significant impact on SSGI and their output (in line with the directives of 2004 on national procedures for public procurement and the 2006 directive on services in the internal market).

35 Given that we think the formula “Without prejudice to Articles 106 and 107 TFEU” in the beginning of Article 14 TFEU should not be interpreted as preventing the co-legislator of the Union from intervening in state aid, specifically to the extent that it refers to “specifically economic and financial conditions”, in which the SSGI have to accomplish their missions. The scope of the formula means that the co-legislator has to consider the principles regulating the control of state aid as set out in Article 107 TFEU.

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THE AUTHORS Manuel PAOLILLO Manuel PAOLILLO served as the Project manager of the third forum on SSGI and is in charge of monitoring this theme at Belgian and European level. As a lawyer, he is employed in the multilateral relations unit of the Department of Strategic Support within the FPS Social Security. Manuel has always wanted to introduce a pedagogical aspect to the issue of SSGI, as he is persuaded that SSGI are at the crossroads of two worlds that do not always understand one another: the social world and the economic world. Stéphane RODRIGUES As a lawyer and lecturer at the Sorbonne Law School - University of Paris I (Panthéon-Sorbonne), Stéphane Rodrigues has been familiar with the issue of SSGI since the beginning, as his doctoral research in the mid-1990s concentrated on the impact of Community law on public service activities. Since then, he has continued to study and teach on the subject, advocating the emergence of a European school of public service that would define the objectives of the social market economy that the EU intends to embody and implement.

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3rd FORUM on Social Services of General Interest (SSGI) Brussels, 26 â&#x20AC;&#x201C; 27 October 2010

FIFTEEN RECOMMENDATIONS addressed to the European Parliament, the Council and the Commission

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Belgian Presidency of the Council of the European Union 1. INTRODUCTION1 1.1. The 3rd Forum on social services of general interest (SSGI) took place on 26 and 27 October 2010 in Brussels. Organized by the Belgian Presidency of the Council of the European Union, the Forum brought together more than 300 participants representing various European institutions, the Member States and all stakeholders. Particular note should be taken of the presence, alongside that of Mrs. Laurette ONKELINX, Deputy Prime Minister and Belgian Minister of Social Affairs, of three members of the European Commission, Mr. László ANDOR, Commissioner for employment, social affairs and inclusion, Mr. Joaquín ALMUNIA, Commissioner for competition, and Mr. Michel BARNIER (represented), Commissioner for the internal market and services, as well as several European MPs including Mrs. Pervenche BERES, President of the Employment and Social Affairs Committee at the European Parliament, Mrs. Françoise CASTEX, President of the Public Services Intergroup, Mr. Marc TARABELLA, co-president of the Social Economy Intergroup and Mr. Proinsias DE ROSSA, rapporteur on the future of SSGI in Europe. The presence and the active participation of the following Member of the European Parliament have to be mentioned: Mr. Pascal CANFIN, Mr. Damien ABAD, Mrs. Marie-Christine VERGIAT, Mr. Peter SIMON, Mr. Frank ENGEL, Mrs. Heide RÜHLE. 1.2 The Forum particularly looked into the issue of the quality of SSGI. A high level of quality in social services ensures not only a better quality of life for beneficiaries on the whole, it also enables these services to effectively play their role for inclusion and social cohesion, but also as essential actors in the social market economy, according to the expression of the Treaty of the European Union (see Article 3.3 TEU). 1.3 The Social Protection Committee, appointed by the Council in 2009, adopted a European Voluntary Quality Framework for Social Services on 6 October 20102, which could serve as a benchmark in the future and which has the merit of setting down a common understanding of the concept of quality within social services characterized by great diversity. 1.4 The economic and financial crisis has become a social crisis that has had a very different impact from one Member State to another, and we are not yet able to fully appreciate its consequences. Major repercussions on national budgets – and consequently on the most vulnerable groups of the population – are to be feared and anticipated. But budget cuts are in contradiction with the new needs of new users that social services continue to encounter today. Social services should also be considered as important vectors for job creation, as was underlined in the Council conclusions of 2009 under the Czech Presidency3.

Background papers related to the 3 Forum are available on http://socialsecurity.fgov.be/eu/en/agenda/26-27_10_10.asp . For any questions, please contact Mr Manuel PAOLILLO, responsible for the 3rd Forum on SSGI : manuel.paolillo@minsoc.fed.be ; 2

S.P.C., « a voluntary European Quality Framework for social services », SPC/2010/10/8 final;

the Council conclusions on "Social Services as a tool for active inclusion, strengthening social cohesion and an area for job opportunities", as adopted by Council on 8 June 2009, Doc, n° 10052/09;

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Belgian Presidency of the Council of the European Union 1.5 Monitoring the crisis and take measures to fight against it are key elements to solve it, as was underlined by the Commissionâ&#x20AC;&#x2122;s second biennial report on SSGI4. Today, a reduction in resources for and simultaneously an increase in expectations of social services in terms of quality can be observed. 1.6 In addition, the new Lisbon Treaty was at the centre of the discussions, and gave rise to great hopes for a political fully-fledged recognition of services of general interest (SGI), of which SSGI are one component, and a more social dimension in Union policies in the application of Article 9 of the Treaty on the Functioning of the European Union (TFEU). The horizontal social clause laid down in this article is considered to be a major step forward since it requires the European Union to take account of social requirements in the definition and implementation of all its policies and actions. It is crucial to ensure compliance with this new provision of general application by adopting appropriate measures and mechanisms. Recognition of the transversal nature of social issues is crucial and should lead to more collaboration between sectors and make it possible to widen the dialogue beyond certain vocal groups with vested interests in one approach. 1.7 Protocol No. 26, annexed to the TEU and the TFEU by the Lisbon Treaty, is an innovation. It now introduces the concepts of SGI and non-economic services of general interest (NESGI) in the primary legislation of the European Union. The protocols are indeed â&#x20AC;&#x153;an integral partâ&#x20AC;? of the treaties to which they are attached, and therefore have the same legal value as the treaties. 1.8 Article 6.1 of the TEU gives the Charter of Fundamental Rights of the Union the same legal value as the treaties. This charter lays down several rights that underpin the development and implementation of SSGI: the right to human dignity, the right of access to placement services, the right to access social security benefits and social services, the right to access preventive health services and to benefit from medical care, the right to access services of general economic interest (SGEI). 1.9 The European rules currently applicable to SSGI continue to give rise to many questions and constitute a source of legal uncertainty and unpredictability denounced by many stakeholders. According to the case-law of the Court of the EU, essentially all of the services provided in the social field, except for social security schemes based on solidarity, can be considered economic activities. 1.10 The objectives and principles underlying the EU framework for SGEI reflect a logic based essentially on the criteria for economic efficiency. This logic cannot be systematically and entirely applicable in this form to the reality and the new issues of social services in the European Union. This notably explains the existence of tension and asymmetry between the economic field and the social field in the EU, whereas these fields should be complementary and have as their final objective the welfare of European citizens. The provision of SSGI are essentially not profit making 4

European Commission, Commission staff working document : second Biennial Report on social services of general interest, SEC(2010) 1284 final , 22 .10. 2010.

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Belgian Presidency of the Council of the European Union activities, unless you create a two-tier system of services whereby those who can pay more get a higher quality service. This is counter to the fundamental principle of solidarity that has developed over the last sixty years in Europe where all contribute to social services according to their means and which refers to an inclusive social model whether or not one wants to promote it. 1.11 As emphasized in the report by Professor Mario MONTI5 on a new strategy for the single market, and as he recalled in his video message during the third forum, internal imbalances between the integration of markets at supranational level and social protection at national level have become more common place in the EU system: these are sources of friction, disenchantment and hostility with regard to the opening of markets. 1.12 The approach consisting of opposing SSGI fit to the norms pertaining to the single market, States and public procurement on one hand, and, on the other to concepts of public service, general interest and social cohesion, is dangerous for the survival of the European social model. Reconciling them by promoting positive synergy between economic and social strands, and even seriously envisaging certain "reasonable adjustments" of the rules of the market, particularly insofar as they were not initially conceived for SSGI, is badly needed. 1.12.1 Today, more and more SSGI are confronted with public procurement logic. It has been observed by many players in the field, however, that a response to social needs is often complex to implement within public procurement. The phenomenon is relatively recent and the impact of European regulation and national public procurement practices and their evolution on the "supply" of social services is still little known, and poses a series of questions about the nature and the size of service providers who could take up the complex public procurement procedures, about whether associations can propose services to be funded, or about the budget and economic efficiency, that are likely to cloud and even take precedence over social objectives. 1.12.2. The financing of SSGI comes to a large extent from public sources, which poses the question of the control of State aid by the European Union. The MONTI report referred to above asks the Commission to increase flexibility of the rules that were designed from the standpoint of ensuring fulfilment of public service missions while guaranteeing conditions of fair competition. Behind the technical questions of thresholds, mandating, compensation of public service, and behind the case-law and the regulatory package known as "Altmarkâ&#x20AC;?, there is a desire of the Member States, social actors and the European Union to maintain social policy. 1.12.3 The question of imbalance between recognition of the specificities of SSGI and application of the rules of the internal market comes up again in discussions at a time 5

Mario MONTI, A New Strategy for the Single Market at the service of Europe's economy and society. Report to the President of the Commission JosĂŠ Manuel Barroso, presented on 9 May 2010.

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Belgian Presidency of the Council of the European Union when the Commission is proposing a new "Single Market Act"6, just a few months after the deadline for transposing the 2006 Directive on services in the internal market. 1.13 It began crucial7 to pursue the work done at the third forum should be continued through multiple actions: the idea is particularly to ensure regular assessment of existing rules and, if need be, to adapt them to the specificities of the societal challenges with which SSGI are continually confronted, in order to enable them to better meet those challenges, but also, and more importantly, to better communicate on the content and the scope of these rules to the most concerned persons in the field, wherever need be. This approach could only contribute to ensuring more legal certainty, clarity and flexibility, while ensuring a high level of quality of the service provided.

COM(2010)608 final of 27.10.2010.

Both this document and the Conclusions of the EPSCO Council of 6 December 2010 should bring greater coherence and synergy in this important dossier, at the heart of the European social model.

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2. RECOMMENDATIONS 2.1. Acknowledge the need to better respond to emerging social needs Given the particularly serious and austere context of public finance due to the economic crisis that has given rise to a social crisis, the time has come to heighten awareness of policy makers to the need for strong recognition of social services that should lead to concrete actions, especially to meet the new needs of the population. This recognition entails: • acknowledgement of the role played by SSGI both from the standpoint of social cohesion and that of development and economic competitiveness; • promotion of greater cooperation between service providers and stakeholders in social services and greater involvement of the user to improve quality without wasting resources; • a strong political commitment to finding new resources to guarantee both effectiveness in terms of the quality of the service and efficiency given the costs of SSGI, in order to cope with the new, major challenges in our society (ageing, inclusion…).

2.2. Considering SSGI as an indispensable investment for Europe’s future Special thinking must be given to the decision-making processes that are meant to lead to 'good economies'. A well-advised investor will be careful not to cut back strategic expenses. The medium and long term financial impact of budget cuts in the sectors of aid to children, youth and the jobless will be particularly large. Budget cuts must not result in giving priority to certain target groups over others. An assessment of the social impact of these measures is also indispensable. Since SSGI show the characteristics of a strategic investment, special precaution should be taken during arbitration and budget cuts with the following three imperatives in mind: • • •

prevention, definitively, of major cuts in social service budgets whose outcome would be much more expensive social and economic costs in the near future; preserve the best natural resource that the European Union has – its human capital; ascertaining that any reductions in social service budgets do not have dramatic consequences on the condition of women who are likely to be victims twice: as the first beneficiaries of these services (assistance for young children, accompaniment of the elderly, housing aid, etc. ) and as workers, given the continually growing proportion of women in the non-profit social sector.

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2.3. Creating an environment that promotes quality and cost efficiency of SSGI The political-legal environment in Europe must be able to protect and develop social services of general interest, particularly in periods of crisis. To do so, we must: •

use the new legal framework of the European Union resulting from the Lisbon Treaty, in particular Article 14 of the Treaty on the Functioning of the European Union, the protocol on services of general interest and the Charter of Fundamental Rights that enjoy great legitimacy, in order to protect the crucial role of SSGI, and see that the Member States’ competences and responsibilities can best meet the needs of their population and carry out the missions of general interest fulfilled by these services;

•

create a dialogue space with all stakeholders in order to help Member States concretely implement the European Voluntary Quality Framework in concrete results of in terms of the quality of their social services. This dialogue will also provide continuity, direction and substance to each SSGI Forum.

2.4. Implementing the European Voluntary Quality Framework for social services with a view to a more inclusive and more cohesive European society. The European Voluntary Quality Framework for social services contributes to a common understanding of the principles of quality which, beyond certain technical questions, include an undeniable emotional dimension: that of the quality of life of the European population; the implementation or the practicality of the framework is essential. Under these circumstances, it is important: •

• •

•

to define the common coordination tools to optimize the use of the European Voluntary Quality Framework and to agree on the main prerequisites needed for implementation (pre-conditions such as stable financing and legal framework and qualified personnel which are recognized); to exchange best practices to develop comparable quality indicators; to develop comparable quality indicators at the most appropriate level, while ensuring that the definition of quality criteria at local level consistently complies with the principles of quality already set down at international level; to identify several pilot sectors to test the effective application of the entire process.

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2.5. Having a multi-sector, multi-stakeholder approach at several levels The specificity and diversity of SSGI must be taken into account in the way the discussion is being led on their role in the “European expansion”. This should result in: • • •

giving preference to a multi-sector approach in the themes structuring thought processes, such as the quality of SSGI; the approach must be transversal and interdisciplinary, including all stakeholders and taking into account of the local context; taking account of and preserving the specificity of non-profit service providers in developing quality; taking into account local definitions of quality, which in turn are coherent with the principles and standards of quality already laid down at international level (for example ILO Conventions).

2.6. Need for common rules There is clearly incoherence today between rules that have an impact on social services of general interest and their interpretations at various levels. Beyond of quality issues, but to ensure quality, incoherence resulting from these rules and their application should be reduced by means of European, national and local initiatives promoting consistent approaches, such as coordination mechanisms ensuring compliance with common rules as well as respect of local and sectoral specificities.

2.7. Clarifying basic principles of control of State aids Operators and providers of SSGI often have a problem interpreting and/or understanding the various principles that govern the control of State Aids by the European Union. To aid comprehension of this control scheme and to contribute to an optimal application of the underlying rules, the following seem necessary: • •

•

taking greater advantage of the proportionality principle in the implementation of control by the European union for operators who often have limited resources; clarifying certain essential concepts that are prerequisites for control by the European Union, like that of economic activity and the notion of affecting trade between the Member States; improving legibility of the application of the control of State aids that respects subsidiarity.

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2.8. Adapting the rules of the “Altmark-SIEG” package applicable to SSGI service providers and to local authorities The European rules on State aids apply to SGEI and more particularly to procedures and schemes for their financing. These rules have been designed from the standpoint of ensuring fulfilment of public service missions while guaranteeing the conditions for fair competition. As a complement to the case-law of the Court of Justice of the European Union, the Commission adopted a set of texts in 2005 (the so-called ‘Altmark-SGEI package)’ to remove uncertainties on the exact scope of the application of State aid rules to financial transfers between the public authorities and SGEI, potentially including SSGI operators. However, it appears that the rules are still not yet sufficiently clear. That being the case, it would be appropriate for the Commission to take initiatives to: • • • •

simplify the existing rules and adapt them in view of the specificities of social service providers (small providers, local nature); further clarify the relation between the criteria in the Altmark judgment and the conditions of application of the “Altmark-SIEG package”; improve the criterion for mandating (act of entrustment), particularly by means of greater flexibility in its application; extend the scope of the SSGI sectors benefiting from the exemption of notification without thresholds , taking inspiration from the considerations that led to the current exemption of notification for hospital and social housing sectors and taking account of the fact that, at this stage of the development of the internal market, the intensity of the distortion of competition in these sectors is not necessarily proportional to revenues and the amount of compensation.

2.9. Reviewing criteria for calculating compensation of public service in the context of control of State Aids When a social service provider is granted financing to fulfil its mission of general interest or public service, it must be fair compensation for the costs incurred for that mission. Beyond that, the financing is considered as overcompensation and that constitutes State aid incompatible with the single market. The procedures of control and calculation of this overcompensation applied in the ‘Altmark-SIEG’ package may appear particularly rigid and hardly adapted to the specificity and the essentially local dimension of SSGI. Certain ‘reasonable adjustments’ should be envisaged: Recommendations of the 3rd SSGI FORUM

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• • • •

the calculation of compensation should not be done exclusively on the basis of economic and financial criteria but should also take account of social criteria; control of overcompensation should be spaced more over time, for example on a threeyear basis; the hypothesis of undercompensation which is a reality in the field of SSGI, should also be integrated in the Commission’s overall analysis; the criteria for the calculation of compensation should be better adapted to the specific characteristics of the service provider (size, type of mission, legal status …) and to a certain number of external aspects associated with the provision of an SSGI, such as added social value, involvement in the community, volunteers, reinvestment in the infrastructure, ...

2.10. Need for legal and political clarification It is more than necessary to fill the gap between those who claim that the European rules pose no problems and the players (such as local authorities or SSGI service providers, plus certain Member States) who refer to the difficulties they must cope with as a result of the implementation of some of these rules. Particularly with regard the rules pertaining to the free provision of services and the freedom of establishment within the single market, the following are appropriate: ● assessing the transposition by the Member States of Directive 2006/123/EC of the European Parliament and the Council of 12 December 2006 on services in the internal market as concerns the exclusion of social services provided in Article 2.2, sub j; ● clarifying the following concepts, if need be by an interpretative communication, as listed in the article referred to above: - “charities”; - “persons in need”; - “service providers mandated by ”; ● in a more general way, facilitating the correct functioning of SSGI thanks to greater involvement of all authorities concerned that share responsibility in this field (competent European institutions, Member States, and local authorities), in well-understood compliance with the subsidiarity principle.

2.11. Setting up a Task force or a High Level Group on SSGI It has been observed that each of the European Union institutions dealing with the issue of social services applies its own logic, without taking account of other players and the realities they deal

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Belgian Presidency of the Council of the European Union with. To correct this approach, a new dynamic must be created that brings viewpoints closer together, so a common groundwork can be defined on questions pertaining to SSGI. Consequently it is urgent to: •

•

set up an inter-institutional and inter-sector structure including representatives of the competent European institutions and stakeholders (local authorities and private operators) to constructively discuss the problems that SSGI face and to propose the most appropriate solutions; dispose of adequate resources for the correct operation of this structure.

2.12. Setting up a legal instrument adapted to SSGI SSGI are viewed exclusively from an economic standpoint without taking account of their specificities and their special missions pertaining to solidarity, social and territorial cohesions, nor their considerable contribution to economic development and competitiveness. Yet the Lisbon Treaty has created new opportunities to reconcile the Union's economic and social objectives, as is shown particularly by Articles 3.3 TEU and 9 TFEU. Moreover, protocol No. 26 and Article 14 TFUE offer the EU the legal basis to legislate in the field of social services of general interest (SGI) and services of general economic interest (SGEI): SSGI can fall into either of these categories. It is essential to: • •

create a legislative instrument/framework adapted specially to SSGI to acknowledge their specificity and facilitate the fulfilment of their missions with sufficient legal security and foreseeability ; define new common references in the legal framework of the European Union, for the organization, financing and evaluation of the missions carried out by the SSGI.

2.13. Promoting alternatives to public procurement for supplying SSGI More and more SSGI are confronted with a public procurement logic that does not seem to be the best option when outsourcing/delegating of a given service is decided (rigidity, difficulties to ensure diversity of providers, not tailor made solution, etc.). It is consequently appropriate to:

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•

give more information on the various forms of provision of services: in house, publicprivate partnership, public-public partnership (such as inter-municipal cooperation), authorization schemes, compensation or subsidy, regulated competition and the user’s choice, mandating, etc. ; adapt the instruments and modalities allowing choices to be made to the objectives, to the needs and rights of users, to the quality of the service, to the specificities of SSGI and to local conditions. By doing so, the idea is to concentrate on the best way of achieving the public objective as defined by the competent public authority in the Member States and then, to use the instruments in a way that is compatible with the requirements of the law of the European Union. However, these rules and procedures also must also be screened to verify whether they contribute to or hinder the achievement of the objectives defined by the pertinent provisions of the Treaty (see Article 9 TFEU on the horizontal social clause; Article 14 TFEU and protocol No. 26 on SGI; articles 34 and 36 on the Charter of Fundamental Rights of the European Union); allow the various alternatives to public supply contracts to take account of innovation and custom-made services for users, while ascertaining that the Member States clarify and adopt their own rules and procedures to better link the mandate and the public service mission to the provision of a given service or a specific category of services.

2.14. Strengthen the social dimension and orientation of public procurement The directives on public procurement, except for a few specific rules, devote more special provisions to the environmental dimension than the social dimension. So the question of the extension of these rules to the social dimension arises. With this in mind, it is recommended to: •

• • •

make better use of existing possibilities, as described by several Commission documents (see the communication on social considerations in public supply contracts and the guide to socially responsible public purchases); promote better use of the Guide on the application of EU rules to SGEI and, in particular, to SSGI, and of the Commission’s interactive information service; encourage and support the use of the option of the most economically advantageous offer (also see recommendation 2.15) ; take account of more social objectives in the selection criteria, the award and execution of public supply contracts as well as in technical specifications, particularly in terms of inclusion and protection of human health, workers and employment, while monitoring compliance with the requirement of a link to the object of the contract.

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2.15. Giving priority to quality as the main criterion and social inclusion as the main objective Public supply contracts are awarded for the most part to the service provider with the lowest bid, often to the detriment of the quality of the services provided (an important criterion for social services). Consequently, the following are appropriate: â&#x20AC;˘

â&#x20AC;˘

encouraging and motivating the contracting authorities to give quality a mandatory weight of more than 50% in the award of a public procurement contract for supplying a SSGI, in compliance with the fundamental principles of the law of the European Union, on transparency, non-discrimination and equal treatment; allowing that the contracting authorities require a constant level of quality in services provided and can ensure plurality of services providers according to the diversity in the SSGI sector and on doing so, giving the user a sufficiently informed choice; promoting cooperation and partnership through network of service providers in order to contribute to the supply of quality SSGI, particularly when those services are responding to complex needs.

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3. QUESTIONS RAISED BY THE FORUM 3.1. Question addressed to the Member States and the Commission: participatory process of the European Voluntary Quality Framework Shouldn't the Commission and the Member States pursue a broad participatory process for developing, implementing and monitoring the European Voluntary Quality Framework? 3.2. Question addressed to the European Parliament, the Council and the Commission on the Lisbon Treaty How do the European Parliament, the Council and the Commission plan to act on the breakthroughs enshrined in the Lisbon Treaty to secure social services in the general interest? 3.3. Question addressed to all players in the sector: pertinence of amending the 'minimum' State aids regulation In application of Commission Regulation (EC) nÂ°1998/2006 of 15 December 20068, aids for an amount under â&#x201A;Ź 200,000 awarded to a company over a reference period of three tax years are not subject to control by the Commission under the rules on State aids. In order to take account of the specificities of SSGI and due to the fact that, at this stage of the completion of the single market, the intensity of distortion of competition in these sectors is not necessarily proportional to the amount of sales and the level of aid, could this period be reviewed to reduce it to a single tax year?

Done in Brussels, 6 December 2010

OJEU, L 379 of 28.12.2006, pp. 5-10

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2. SSGI and the Lisbon Treaty

The Annex 2 will be added in a next version of the document very soon. The French version is already available on the following link : http://www.socialsecurity.fgov.be/eu/docs/agenda/26-27_10_10_traite_ lisbonne.pdf Do not hesitate to contact us.

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3. Social Services of General Interest: At the heart of the European social model, a general context paper Belgian Presidency of the Council of the European Union

3rd Forum on Social Services of General Interest

Social Services of General Interest: At the heart of the European social model General background note

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« Fallen leaves - The social lands - Singing its relief »

« Economics is the most mathematically advanced social science, and the most socially backward, because it has disregarded social, historic, political, psychological, ecological conditions that are inseparable from activities ». Edgar MORIN, from “Les Sept Savoirs nécessaires à l’éducation du futur”

© 2010 Federal Public Service Social Security Boulevard du Jardin Botanique 50, box 100 B-1000 Brussels Responsible editor: Tom Auwers www.socialsecurity.fgov.be/eu/en Teampresidency2010@minsoc.fed.be This background paper is only available in electronic version. Download the publication via de website of the Federal Public Service Social Security. http://socialsecurity.fgov.be/eu/en/agenda/26-27_10_10.asp Draft Version – 24 September 2010 The information contained in this publication does not necessarily reﬂect the position or opinion of the European Commission. Event co-ﬁnanced by the European Commission DG Employment, Social Affairs and Equal Opportunities 2

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CONTENTS INTRODUCTION

1. What is a SSGI ? 1.1. DeďŹ nition 1.2. Who are the players in SSGI ? 1.3. Objectives of SSGI 1.4. Basic conditions and principles guiding the operation of SSGI

5 7 7 7 8

2. SSGI and EU law 2.1. A very economic connotation for social services 2.2. State aids and SSGI 2.3. Public procurement and SSGI 2.4. Freedom to provide services and SSGI

10 10 12 15 16

3. SSGI: where do the problems lie ? 3.1. Imbalance that undermines the European construction 3.2. Poorly known and poorly applied rules? 3.3. What stakeholders say

18 18 19 20

4. New approaches 4.1. The economic and social crisis 4.2. A new Treaty 4.3. SSGI and fundamental social rights 4.4. The horizontal social clause

21 21 21 23 25

5. Recent documents 5.1. The 2nd biennial report SSGI 2010 5.2. The Monti report 5.3. The Social Protection Committee: Voluntary framework of QUALITY & certain legal questions 5.4. Work in the European Parliament: report on initiatives and deliberations of the Intergroups 5.5. Assessment of the Monti-Kroes package and the Services directive Services 5.6. Single Market Act 5.7. Technical seminar in preparation for the 3rd SSGI Forum

26 26 26 27 28 28 29

6. Links with the 2nd Forum

THE SSGI TEAM (WITH OUR THANKS) BIBLIOGRAPHY AND FURTHER INFORMATION

32 34

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Introduction Social services of general interest, which by definition are local services, are unlike other services. They are associated with the values of equality, inclusion and solidarity, and are at the heart of the European social model, contributing to the social and territorial cohesion of the EU. The current debate on SSGI raises the central question of the relation between economics and the social sector. In fact, the main problem that concerns many stakeholders is the legal situation of SSGI in view of the internal market and competition rules. The discussion is actually a very concrete one, beyond the touchy technical and legal aspects, given its consequences for European citizens. SSGI are indeed crucial today to cope with major challenges to growth and employment in a sluggish economic context. This context puts a special touch on the discussion because of the particularly important role that SSGI have played as stabilizers that softened the effects of the recent economic crisis whose repercussions are still felt today. Social services of general interest are at the crossroads of economic and social reality, and at the intersection of national and European competences. No doubt this contributes to their complexity and the current difficulty for the European Union to formulate concrete responses expressing the actual recognition of the missions and specificities of SSGI. The complexity of the SSGI issue is so great that it is not always easy to know what is meant when the expression is used. The objective of this brochure is to rapidly take stock of the SSGI question on the European scene, without any claim of dealing exhaustively with the issue.

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1. What is a SSGI ? 1.1. Definition No binding legal text defines social services of general interest (SSGI). Nevertheless, we can consider that SSGI are activities supplied by the public authorities or entrusted by them to private entities, to which missions of general interest are entrusted for the purpose of social protection, social and territorial cohesion, national solidarity and implementation of fundamental rights. According to the Commission, beyond health services themselves, SSGI can relate two major groups: • Statutory and complementary social security schemes organized in various forms (mutual or occupational organizations) covering the main risks in life such as those linked to health, ageing, occupational accidents, unemployment, retirement, disability; • Other essential services provided directly to persons. These services that play a preventive and social cohesion role consist of customized assistance to facilitate social inclusion and safeguard fundamental rights. Beyond this breakdown, the difficulty of establishing a definition has led the Commission to identify “organizational characteristics” of SSGI as follows: • they operate on the basis of the solidarity principle, which is required, in particular by the non-selection of risks or the absence, on an individual basis, of equivalence between contributions and benefits; • they are comprehensive and personalised, integrating the response to differing needs, in order to guarantee fundamental human rights and protect the most vulnerable; • they are not for profit, in particular to address the most difficult situations and are often part of a historical legacy; • they include the participation of voluntary workers, expression of citizenship capacity; • they are strongly rooted in (local) cultural traditions. This often finds its expression in the proximity between the provider of the service and the beneficiary; • an asymmetric relationship between providers and beneficiaries, that cannot be assimilated with a ‘normal’ supplier/consumer relationship and requires the participation of a financing third party. This approach by so to speak, was confirmed by the Commission in its Communication of 20 November 2007 entitled: “Services of general interest, including social services of general interest: a new European commitment”, accompanying the Communication on “A single market for the 21st century Europe” 1. The Commission thus recalls that only the supply and organization of services of general economic interest (SGEI) are subject to the rules of the Treaty and a case-by-case analysis is needed to be able to distinguish a SSGI from a NESGI or in other words, a non-economic service of general interest. 1 COM (2007) 724 final.

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Still, a case-by-case approach could be more effective and legal certainty would be greater if it were completed by a European frame of reference that could take inspiration from the series of characteristics. This idea, that stems from the discussions in the technical seminar of 13 July 2010, is based on the principle of an optional identification tool, under consistent law and not a new rule of law; the European framework reference would operate under the principle called the ‘28th scheme’; in other words, it will not be a substitute for the twentyseven national schemes, but adds one guaranteeing that the characteristics of the SSGI have been acknowledged from the point of view of the application of the rules of the European Union. Expressed in another way, other than the characteristics retained by the Member States, the States would be free to authorize the players concerned to claim the European reference framework as long as they meet the criteria or the indicators it defines, or at least some of them. From the standpoint of the institutional approach, the job of identifying the various criteria and indicators to be included in the European voluntary reference framework could be entrusted to a high-level group on SSGI; the creation of that group has been proposed (see below). This identification of elements characterizing a European reference framework for SSGI will not be enough to solve all current and future problems (see below), but it could contribute to new awareness to correct the current trend to apply rules to SSGI considered as SGEI that were initially meant for service networks (electricity, gas, post office, telecommunications, transport) – the first SGEI). The essential question is still whether European law on SGEI is really adapted to the social action sector, from the standpoint of the specificity of both the persons working in the sector and the objectives of SSGI. 1.2. Who are the players in SSGI ? SSGI can be provided by several sectors: • • •

The public sector, The market sector, The private, non-proﬁt sector, consisting of highly variable solidarity organizations: charitable or religious associations, mutual societies, cooperatives, foundations, etc.

Certain activities are traditionally reserved exclusively to the public authorities: • • •

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Mandatory public education, Mandatory social security, National health care systems.

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1.3. Objectives of SSGI Social services are often intended to meet a certain number of speciﬁc objectives: • • •

These are services to persons, designed to meet people’s vital needs, particularly for users in vulnerable situations; they are key instruments for protecting the fundamental rights and human dignity; They play a preventive and social cohesion role, with regard to the entire population, independently of wealth and income; They contribute to ﬁghting discrimination, to promoting gender equality, to protecting human health, to improving the level of health and quality of life and ensuring equal opportunities for all, thus reinforcing the individuals’ capacity to fully take part in society.

Examples include medical-social services, long-term care, social housing, services to promote social inclusion and insertion, vocational training, social security and complementary social protection, etc. In the November 2007 communication referred to above, like in the first biennial report on SSGI2, the Commission confirmed that SSGI work for objectives that the European Union must integrate in its action, particularly advocacy and protection of fundamental rights: protection against general and specific risks of life, social prevention and cohesion, fight against discrimination, improving the level and quality of life, solidarity between generations, etc. So the question legitimately arises as to whether these objectives do not entail specific organizational methods and regulations so that SSGI can be provided under conditions and according to principles that enable them to fulfil their mission, in the meaning of the mandate that the Treaty on the functioning of the European Union (Article 14 TFEU) defines for the European Union and its Member States. This shows the particular importance of accurately identifying the conditions and principles that are essential to the functioning of SSGI. 1.4. Basic conditions and principles guiding the operation of SSGI The essential conditions and principles guiding the operation of SSGI can be described as follows: • • •

Universal access: the obligation to serve all eligible users and to provide them with the response corresponding to the needs; Affordability: submitting social services to speciﬁc pricing that enables the entire population to have access to them; Continuity: absence of interruption in the activity of social services that would deprive users of their usage;

2 European Commission européenne, Biennual report on social services of general interest, 2008, available at the site ec.europa.eu :

http://ec.europa.eu/social/main.jsp?catId=738&langId=en&pubId=75&type=2&furtherPubs=no

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• •

Quality: the requirement of an evaluation of the satisfaction of users’ needs and adaptation of services to changes in demand; User protection and participation: distribution to users of the information needed to make an informed choice of service and deﬁning a means of recourse is they are not satisﬁed.

A functional analysis of social services shows, however, that the functions of these same social services do not consist exclusively – as their name might be misleading – in providing a service. Thus MUNDAY3 in a study for the Council of Europe explains the main functions of social services: “Here are the main functions with a brief explanation: 1. 2. 3. 4. 5.

Provision of care and support. Questions such as: to whom; in what circumstances; how; and by which sectors (see above) are for individual countries to determine. This function is central to all PSS (Personal Social Services) systems. Protection. Children, elderly people and people with disabilities may be vulnerable because of parental inadequacy, abuse or exploitation by other people. Society provides protection through PSS. Regulation. As countries adopt a more decentralised “mixed economy” of social services an important function of the state sector in the system is to regulate the PSS ‘market’ e.g. setting and monitoring standards. Community development and care-coordination. Given the increasing need for social care and support and the limited state-funded services available, all systems have to seek additional non-state resources and ensure the efﬁcient coordination of those that are available. Social control. This includes the enforcement of societal norms, rules and procedures. For example, the behaviour of young offenders and some seriously mentally ill people may be seen both as not in their own interests, and as a threat to other people. Some commentators argue however that social control should not be a function of social services. Social integration. In recent years considerable emphasis has been given to the widespread problem of social exclusion and the need for excluded groups to be better integrated into mainstream society. PSS are expected to play a full part in implementing policies of social inclusion.”

We see that social services provide support to persons for their integration, developing a sense of the community. That being the case, there should be verification that all of these functions are carried out, particularly in view of the “shift to marketing’ phenomenon. Because of social and societal changes (family structures, questions associated with gender, flexibility of the working world, ageing population), and given the nature of social services that are profoundly related to the person and his/her needs, it must be underlined that social services do not remain fixed, but evolve as circumstances change4… Modernizing social services means that they must be more integrated and more customized. 3 B. MUNDAY, Social services in Europe: evolution and characteristics, Coucil of Europe, http://www.coe.int/t/dg3/socialpolicies/socialrights/ 4

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socservices_EN.asp In the meaning of B. MUNDAY, op.cit., p.4 ;

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All in all, the various European expressions and labels that must now be attached to entities for the application of the EU rules of law, fall under the responsibility of the diverse players who supply social services and the role of those players. The real issue at stake that we feel will condition all the others, will be the place and the commitment of each player within what MUNDAY calls the “mixed economy of social services” and the appropriate responses to be applied so that the values and principles at the heart of social services are fully respected. In other words, clarification of “Who does what?” and “How” proves to be a question that cannot be ignored today: This is arguably the priority issue because it is fundamental, affecting most or all other issues. In the political and economic circumstances of Europe in 2003 all countries are seeking a suitable mixture of contributions to social services by the four main sectors (para 3.7), motivated in most cases by wishing to reduce the financial contribution of the state. The task is complicated by the need also to agree on a suitable allocation of PSS responsibilities and tasks (para 3.16-17) amongst the four sectors. This issue is a particularly challenging one for countries in CEE. Specific points mentioned by individual countries in the Anheier book included: an increase in for-profit providers (Finland); for-profit services taking over work previously done by NGOs (Spain); and questioning the limits of privatisation in social services eg. investigating child abuse (Sweden)” 5.

All these considerations lead to the observation that social services are services unlike the others, under the theory of public goods or merit goods that encourage consumption under State control.

5 B. MUNDAY, op.cit., p. 18;

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2. SSGI and EU law 2.1. A very economic connotation for social services The Treaty on the Functioning of the European Union (TFEU) gives the Member States the freedom to define missions of general interest and to establish the resulting principles of organization for service providers in charge of supplying them. However, in the exercise of this freedom, the Member States are bound to comply with the EU rules pertaining to the internal market (State aids, freedom to provide services and freedom of establishment, public procurement) and competition when they organize a public service, including a social service of general interest. As recalled above, no binding text defines SSGI in European law. We must come back to concepts appearing in the Treaty of non-economic services of general interest (NESGI) and services of general economic interest (SGEI). These concepts have been developed in view of the great diversity of concepts of public services in Europe: service public énoncé in France, daseinsvorsorge in Germany, or Public Utilities in the United Kingdom6. They correspond to two components of the broader category of services of general interest (SGI), which are defined by the Commission as “services, both economic and non-economic, that the public authorities consider as being of general interest and submit to specific public service obligations. Therefore, it is essentially the responsibility of the public authorities, at the appropriate level, to decide on the nature and the scope of a service of general interest”7. Consistent case-law considers that it is up to the Member States to determine the general interest. The Commission and the Court cannot challenge the characteristics retained by a Member State, except in the event of a manifest error8. The Commission refers to the case-law of the Court of Justice for the distinction between SGEI and NESGI, and more precisely as concerns the economic nature of an activity. The criterion of economic activity is in fact a fundamental criterion to determine whether the rules of the treaty (particularly the rules on competition and the internal market) apply. 6 See notably: Franck MODERNE et Gérard MARCOU (dir.), L’idée de service public dans le droit des Etats de l’Union européenne, Logiques

juridiques, L’Harmattan, 2001 et Jean-Claude BOUAL, Philippe BRACHET et Malgorzata HISZKA (dir.), Les services publics en Europe – Public Services in Europe, éditions Publisud, 2009.

7 European Commission, Biennual report on social services of general interest, 2008, available at the site: ec.europa.eu : http://ec.europa.

eu/social/main.jsp?catId=738&langId=en&pubId=75&type=2&furtherPubs=no

8 See http://www.eurosig.eu/article29.html : the case occurred in 2007, when the European Commission opposed the Netherlands on the

qualiﬁcation of its system of social housing as a service of general interest; also see the BUPA judgment; 10

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This is a concept interpreted in a very broad way by the Court in that it targets any activity consisting of offering goods or services on a given market. If an entity takes part in an activity that could be provided by a private profit-making entity, then this criterion is met. Other than the fact that the definition of the very concept of the market is far from unchallenged, the distinction between SGEI, for which there is a market, and NESGI, for which no such market exists, “is totally obsolete in practice, when the market, public administrations and the social economy are increasingly intertwined”9. SSGI are not included as such in the two categories mentioned above of SGEI and NESGI, but they oscillate between the two, depending on whether or not the criterion of economic activity is identified within the social service in question. The consequence is that the rules set down by the European Union apply increasingly to SSGI, which creates growing uncertainty for the public authorities, the service providers and the beneficiaries. The persistence of this situation could lead to a modification of the objectives of SSGI despite the fact that they are at the heart of a “European social model”. Among these rules, we will particularly stress the rules on State aids, public procurement and the freedom to provide services (including the right of establishment). Despite admirable educational efforts deployed by the Commission in its “questions-answers on the application of the “public procurement” rules to social services of general interest”10 and its “frequently asked questions” on compensation of public service awarded to certain undertakings appointed to manage SIEG, for the most part, there is still no real definitive answer to these different questions. This may be because the underlying objectives and principles of the current European legal framework of SIEG reflect a logic based essentially on criteria of economic performance that can only partially cover SSGI and that are consequently hard to apply as such to the reality of the new issues of social services in the European Union.

Philippe HERZOG, « Du service public national au bien public européen », in Variances, n°34, octobre 2008.

10 SEC(2007) 1514/3 ﬁnal.

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2.2. State aids and SSGI The policy on State aids is highly developed within the single market, in order to ensure that companies compete under equal conditions throughout the territory of all the Member States11. Article 107 of the TFEU defines the concept of State aid under European law. This definition includes four criteria (1) the award of an advantage, (2) this advantage is awarded by means of State resources; (3) this advantage affects competition and intraCommunity trade; 4) this advantage must be selective. An exception is provided, however for SEGI by Article 106,§2 TFEU that says: “Undertakings entrusted with the operation of services of general economic interest or having the character of a revenue-producing monopoly shall be subject to the rules contained in the Treaties, in particular to the rules on competition, in so far as the application of such rules does not obstruct the performance, in law or in fact, of the particular tasks assigned to them. The development of trade must not be affected to such an extent as would be contrary to the interests of the Union.” Whenever a SSGI can be considered a SEGI, its means of organization and financing can be affected by European regulations on State aids, despite the precautions taken in article 106, § 2 TFEU. When a social service is granted a subsidy or financing to carry out its mission, this must be fair compensation for the mission in the general interest or the public service. Beyond that, any overcompensation can be considered State aid.

Fig1 : Chart representing compensation of service

In other words, the general interest mission cannot have a harmful effect on the market of undertakings that are not entrusted with a similar mission, and public money must be strictly limited to the cost of the mission.

11 N. MOUSSIS, Guide des politiques de l’Union Européenne, 9e édition révisée 2007, European Study Service, p.245.

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Case law with regard to State aids awarded to SGEI evolved with the important ALTMARK judgment given in 200312 in which the Court considered that the compensation of public service is not considered as State aid as long as it meets the four following cumulative conditions: 1) 2) 3) 4)

the recipient undertaking must actually have clearly deﬁned public service obligations to discharge, (authority for payment); the parameters on the basis of which the compensation is calculated must be established in advance in an objective and transparent manner; the compensation cannot exceed what is necessary to cover all or part of the costs incurred in the discharge of public service obligations, taking into account the relevant receipts and a reasonable proﬁt for discharging those obligations; where the undertaking which is to discharge public service obligations is not chosen pursuant to a public procurement procedure, the level of compensation needed must be determined on the basis of an analysis of the costs which a “typical well run and adequately provided undertaking” would have incurred in discharging those obligations.

If any one of these criteria is s not met, the compensation will be considered State aid and the question of its compatibility with the Treaty arises. After the judgment, the Commission adopted the so-called Monti-Kroes package13 in 2005 for SEGIs that do not fulfil all the criteria of Altmark case law, and therefore for compensation is considered as State aid. It includes: • Decision 2005/842/CE on the application of Article 86(2) (the current article 106, § 2, TFEU) 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 interest14. The Commission makes a distinction between Aids that are large enough to potentially cause a major distortion of competition, and those for a more modest amount. • Document 2005/C 297/04 on a Community framework for State aid in the form of public service compensation15. The purpose of this framework is to specify under what conditions State aids can be compatible with the common market under the provisions of Article 86, paragraph 2, EC (the current article 106, § 2, TFEU). The Commission imposes a first condition here -- the act by which the mission of general interest is entrusted to an undertaking must be an official act that can take the form of a legislative act, regulation or contract. Then, the amount of compenation cannot exceed that which is needed to cover the costs occasioned by the execution of the public service obligations. With regard to overcompensation, this is not deemed necessary to the functioning of the SGEI so, in principle, it is incompatible State aid.

13 This package includes the Commission decision 2005/842/EC of 28 November 2005, the Community framework 2005/C 297/04 of

28 November 2005 and the “transparency” directive 2005/81/EC of 28 November 2005. 14 OJ, L. 312 of 29 November 2005 15 OJ, C 297, p. 4.

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• Directive 2005/81/EC amending Directive 80/723/EEC on the transparency of financial relations between Member States and public undertakings as well as on financial transparency within certain undertakings16. This directive imposes an obligation to keep separate books for companies benefiting from public service compensation that also have activities outside of the SGEI . To summarize, if the aid does not meet the conditions set down in the Decision that reiterates the first three conditions of the Altmark judgment referring to certain thresholds17, it must be notified to the Commission which will analyze the bookkeeping on the basis of the Framework18.

16 OJ, L 312, p. 47. 17 The decision does not apply to compensation below €30 million or if the sales of the beneﬁciary enterprise are less than €100 million. 18 Community framework for State aids in the form of public service compensation (2005/C 297/04), available at:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2005:297:0004:0007:EN:PDF 14

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2.3. Public procurement and SSGI SSGI are increasingly confronted with the logic of public procurement today. A heavy trend is developing that would choose public procurement as an instrument for managing social needs. The consequences of this trend are still a little known, but there is a risk, nevertheless, that they may go counter to certain principles specific to social services. Several directives have been adopted in application of the fundamental principles of the internal market (nondiscrimination, free movement, free competition)19, including in certain so-called “special” sectors falling under SGEI (water, energy, post office and transport)20. Given the definition of public procurement21, in- house or concessions are not targeted. Once again, social services are handled by means of derogation (a more flexible scheme) under Article 21 of Directive 2004/18/EC for the award of services listed in Annex II B that covers social and health services. The application of rules for the award of public works contracts is limited to rules on technical specifications and to the procedures for the award of the contract. One question related to public supply contracts is the problem of work done in house22: at what point must the rules for public supply contracts be applied when an authority asks a legally separate entity to provide a service? Case-law of the Court of Justice considers that two conditions must exist: the separate entity must exercise most of its activities on behalf of the authority, and the public authority must exercise control over the entity similar to that which itexercises over its own departments. Public authorities, social services, may have to create partnerships with other public, or even private entities23. Under these circumstances, it is important to have an accurate measurement of the application of the rules and their incidence on the quality of the services provided, and to verify whether the functions of the social services described above can still be supplied under the public procurement framework, whose logic and time frame are not always adaptable to those of social services. Thus, for example, in the case of a social service that must meet the criterion of continuity, how can this requirement be met if the corresponding supply contract must be awarded for a limited duration.

19 Directive 2004/18/CE of the European Parliament and Council of 31 March 2004. 20 Directive 2004/17/CE of the European Parliament and Council of 31 March 2004. 21 A contract for gratiﬁcation concluded in writing between one or several economic operations and one or several contracting authorities

whose object is the execution of works, the supply of products or the provisin of services. 22 R. SCHEEPERS (Vlaamse overheid, departement bestuurszaken – afdeling overheidsopdrachten), In House Europese rechtspraak, juli 2008;

CJEC,13 November 2008, Coditel Brabant, C 324/07, Rec. p.I-8457; 23 This is particularly true in times of crisis.

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2.4. Freedom to provide services and SSGI As explained above, given the fact that SSGI can be considered economic or non-economic, the provisions on the freedom of establishment and freedom to provide services (Articles 49 to 62 TFEU) may apply in the first case. Discussions held on the “Services Directive”24 pertaining to the exclusion of health care services and social services have shown points of tension between economic freedoms and fundamental social rights. Fear of the “Polish plumber” that was expressed at the time has not totally subsided because it is still found in the social sector where operators cut corners on social services or offer low cost services, that no longer guarantee quality and respect of fundamental rights. Is this fear justified? A priori, the directive offers a certain number of safety provisions. The first are §6 and §7 of Article 1 of the directive that specifies: “6. This Directive does not affect labour law, that is any legal or contractual provision concerning employment conditions, working conditions, including health and safety at work and the relationship between employers and workers, which Member States apply in accordance with national law which respects Community law. Equally, this Directive does not affect the social security legislation of the Member States.” 7. This Directive does not affect the exercise of fundamental rights as recognised in the Member States and by Community law. Nor does it affect the right to negotiate, conclude and enforce collective agreements and to take industrial action in accordance with national law and practices which respect Community law.” Secondly, certain social services were excluded in Article 2.2. j) from the scope of the Services directive. These are: “social services relating to social housing, childcare and support of families and persons permanently or temporarily in need which are provided by the State, by providers mandated by the State or by charities recognised as such by the State”. This exclusion as it is worded consequently does not cover all social services. It is only valid for SSGI that can be considered in SGEI. In fact, the exclusion of NESGI (but how could they be included since the Union is not competent in this field?) which may provide certain social services, must be distinguished from SGEI to which only the chapter on freedom of establishment applies. The wording of the exclusion of social services poses a series of questions. In all likelihood, they will not all be settled by the national transpositions. Certain concepts like the “authority for payment” or “charitable organization” have little consistency in the Member States or do not appear to be adapted to the regulatory logic applied to SSGI.

24 Directive of the European Parliament and the Council of 12 December 2006, JOUE L 376 of 27/12/2006 pp. 36-68, referred to below as the

“Services Directive”. 16

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It must be observed that the European law that one is trying to apply to SSGI corresponds to a top-down logic, as the requirement of authority illustrates by starting with the principle that the conditions under which a player exercises his mission of general interest complies with a framework defined by the political authorities. Conversely, it can be noted that many supervisory schemes in the social services in the Member States often developed from initiatives of actors who gradually structured a supply of services to fill the gaps left by the political authorities25. In other words, the logic here with regard to SSGI is mainly bottom-up; initiatives come from the players, from private non-profit action that preceded the intervention of the political authorities; which is why the concept of “authority for payment” is not easy to handle for those involved in SSGI.

Fig 1 : the question of the right label is back on the table for the services directive

Another source of inadequacy: the prohibition of prior authorizations. Social services, at least in continental Europe, are often exercised by authorized or approved organizations, given the importance of the issues such as protection of persons. There must necessarily be control of missions in the general interest. If prior authorizations to exercise an activity are either prohibited or screened by a proportionality test, the result could be that operators exercising a “social” activity who want to set up in another country of the Union could invoke non-enforceability of authorization schemes or their requirements, or could argue that they are disproportionate.

25 Carole SALERES, « L’activité du secteur associatif de solidarité sous l’inﬂuence croissante du droit européen », in Juris-Associations, n°393,

2009, p. 25, which draws examples particularly from the sector of disabilities in France where associations of parents and disabled persons organized to propose care before the sector was supported and supervised by the authorities. 17

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What sort of requirements could be decided with regard to social services? In our opinion, they are particularly requirements falling under Article 15 of the Services directive, referred to as “to be evaluated”: mainly requirements concerning quantitative and territorial limits can pose problems given the way social-health services are planned in certain countries, a particular form of undertaking is required given the non-proﬁt organization that is often imposed on operators, or the imposition of maximum rates that are charged for social reasons. The Community legislator nevertheless speciﬁed, in the philosophy of Article 106§2 of the TFEU, that the rules should be maintained in so far as their application does not obstruct the performance, in law or in fact, of the particular tasks assigned to SSGI. On the other hand, this raises the question of the burden of proof and how the test of proportionality is applied ...

3. SSGI: where do the problems lie? 3.1. Imbalance that undermines the European construction As the Monti report underlines26, internal imbalance between the integration of markets at supernational level and social protection at national level is increasingly present in the EU system: this imbalance is a source of friction, disenchantment and hostility with regard to opening the market. The economic sphere is based on strong, direct the competence of the Union, whereas social protection relies upon subsidiarity. Little by little, without a major revolution, the social sphere is buffeted by increasingly strong economic competences. On analyzing this phenomenon, well-understood subsidiarity would mean that corrective action is taken at European level, following using guidelines in compliance particularly with Articles 9 and 14 of the TFEU. Paradoxically, it can be argued that to ensure subsidiarity, the Union must intervene because otherwise , there is a risk that, as a result of its economic competences, it fails to respect Article 14 and the additional protocol number 26 that require it to create adequate conditions for the smooth operation of SGI. If it does not intervene, it risks, because of its social inaction, and above all because of its essentially economic action, to undermine Article 9 TFEU that requires it to take account of a social dimension in its actions. There is a risk of seeing social services reduced to a residual category defined by their non-assimilation into commercial services or services of a general economic interest. But because of their particularities in terms of organization, financing and mission, they should be considered as a full-fledged, special category of services that are fundamental for society.

26 Mario MONTI., A new strategy for the single market at the service of Europé’s economy and society, Report to the President of the

Commission José Manuel Barroso, presented on 9 May 2010. 18

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The approach consisting of opposing SSGI on one hand, to the standards pertaining to competition, State aids and public supply contracts, and on the other, to the concepts of public service of general interest and social cohesion is dangerous for the survival of the European social model. Reconciling them by promoting positive synergy between the economic and social aspects is more than necessary. These questions have become increasingly difficult because certain Member States fear that the principle of subsidiarity could be questioned in a field where they have a very broad margin of appreciation and due to the great diversity in a national traditions and practices. The question of good communication between the various levels of authority is also undoubtedly part of the picture. 3.2. Poorly known and poorly applied rules? At the last technical seminar on the Social Services of General Interest (SSGI)27, some felt that the problems had to be identified before trying to find solutions. The rules in themselves are not necessarily at fault, the application and their clarification are where the problem lies. The difficulty in raising the problems often is due to the need to make projections, case studies and to establish demonstrations that are hard to prove because of the fact that one is dealing with complex sociological circumstances. It was also said that, in the absence of a disaster, an upset in the social services landscape, there is no reason for concern. But this idea is false in several ways. First, it is based on the idea that in the absence of major upsets, nothing is happening: but what we see today is a gradual modification of the social services landscape in a way that runs the risk of jeopardizing users, and that which is at the heart of social service: cohesion, disinterestedness, fundamental rights. Finally, when minor shake-ups do occur, this changes things fundamentally: the case of Dutch social housing was what led to the adoption on the additional Protocol No. 26. The idea is not to adopt a one track vision of the situation, but rather to pinpoint a lack of coordination28 between two spheres of different sizes: the economic sphere, the most impressive, weighs on the social sphere, which is smaller, and runs the risk of being absorbed into the economic sphere and no longer being able to carry out its missions of general interest. Attention must therefore be drawn to a subtle phenomenon that many people are not able to clearly identify, but that makes them uneasy: analyzing in the light of economics alone is too simplistic; it does not give a good understanding of the phenomenon and does not sufficiently take account of the social mission. 27 Seminar of 13 July 2010 organized by the Belgian Presidency within the Social Security Federal Public Service 28 This lack of coordination can also be seen in the modes of governance: are the right people always around the table to talk about

questions straddling economic and social questions? Are the representatives of the social questions Group sufﬁciently familiar with State aids, public procurement and the internal market, since these questions run through social services?

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3.3. What stakeholders say On the basis of an informal consultation with stakeholders, the Belgian Presidency collected a series of questions related to the themes defined above on State aids, public supply contracts and the freedom to provide services in general: 3.3.1. SSGI and State aids 1) Is the technique of a group of indicators justifying a mission of general interest appropriate and effective for social services? 2) Are compensation and calculation of that compensation really adapted to social services and their specificities? How can the social value, the involvement of the community, volunteering, reinvestment in the infrastructure be taken into account? 3) By using a priori parameters, what place is left for associative initiatives to take a pioneering role in identifying social needs and social actions to be carried out? 3.3.2. SSGI and public procurement 1) Aren’t operators likely to use a logic of winning contracts rather than focusing on the user of social services, putting pressure on labour costs and quality of work? 2) What types of suppliers are in a position to respond to tenders for technical supply? Don’t tenders favour certain players, no doubt very well informed of the procedures, but less of the social reality of a town? 3) What local authorities can launch this type of public supply contract and are they sufficiently aware of the effects for users? 4) Isn’t the budgetary aspect becoming the only concern to the detriment of users? Aren’t concerns with yield taking priority over the requirement of respect for fundamental rights? 5) Can a long-term logic still be implemented in supplying social services? 6) Isn’t a loss of innovation likely (associative initiative) in the treatment of social questions if specifications leave little room for the execution of public service missions? 7) Won’t continuing social services to persons who often are not solvent be jeopardized by the fact that these services are becoming more numerous and more difficult to implement for marginalized populations? 8) Will the activity of small and medium-sized local suppliers be restricted more? Couldn’t failure to win a contract threaten the very existence of a social service; mergers are very difficult to achieve economies of scale. 3.3.3. SSGI and the freedom to provide services 1) Can one still apply requirements to an undertaking that wants to develop a “business” dealing with “social questions” in another Member State? 2) Doesn’t the description of social services as it is understood in the Services directive given an overly residual description of social services? Doesn’t it imply that social services must be awarded exclusively to target groups in opposition to universal social services? 20

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4. New approaches 4.1. The economic and social crisis The current economic crisis has reminded us that SSGI played an indispensable role as a social buffer and shock absorber for the impacts of the crisis on the most vulnerable persons. It gives a good illustration of the way SSGI, designed to aid those who are confronted with certain social risks, can act to slow down the effects of a crisis. This role is often simply automatic because the providers of these services are already there; whereas other services have been specially designed to help counter the crisis, generally in the context of an economic recovery plan. Still, deterioration of the economic and financial situation has had a negative impact on the large sectors of the population in the countries of the European Union. It has increased the need for social protection to help people affected by the crisis, and at the same time has made financing of that social protection more difficult. The expenditures covered by national budgets give priority to social measures that are envisaged as additional social buffers, to complete automatic buffers. The European Commission and the Committee of Social Protection of the European Union have grouped these measures into four separate categories, including investments in social infrastructures and health, comprising hospitals, business incubators, long-term care infrastructures and social housing, etc. Many countries in the EU use this type of expenditure to stimulate the building sector and, at the same time, to improve access to social services. 4.2. A new Treaty 4.2.1. Indirect consecration of SSGI The Lisbon Treaty does not refer directly and specifically to the question of SSGI. Therefore it does not define any legal basis specific to SSGI. But it presents an indirect impact on them by means of innovations that it introduced for services of general interest (SIG), services of general economic interest (SGEI) and non-economic services of general interest (NESGI), in that SSGI are likely to correspond to one or another of these legal categories. 4.2.2. Article 14 TFEU Article 14 TFEU is the expression of shared responsibility between the Member States and the European Union to see that in every field of their respective competence, SGEI can operate on the basis of principles and under conditions that enable them to fulfil their missions.

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This provision should be perceived to be in general application and should inspire all actions of the European Union, as an unquestionable legal basis for common, transversal rules in the field of proper fulfilment of the missions and tasks of SGEI, and a separate legal basis from the one pertaining to the internal market that was the basis for the Sectoral directives liberalizing the network SGEI (electronic communications, electricity, gas, public transport, post office). Article 14 TFEU focuses on the conditions, particularly the economic and financial conditions needed for the proper fulfilment of the special mission given to SGEI. The main difficulty resulting from Article 14 TFEU is that it requires the use of a regulation, a more rigid legal instrument that may be more difficult to adopt in the absence of a broad consensus of Member States. 4.2.3. Protocol No. 26 on SGI The second contribution of the Lisbon Treaty is that it has introduced the concepts of Services of general interest (SGI) and non-economic services of general interest (NESGI) into primary law by means of protocol no. 26. The protocols are, after all, an “integral part” of the treaties to which they are annexed and have the same value as those treaties. The Protocol on SGI confirms on one hand the exclusive competence of the Member States for NESGI (subject to compliance with the general principles of law of the EU), and on the other,” the essential role and the wide discretion of national, regional and local authorities in providing, commissioning and organising services of general economic interest as closely as possible to the needs of the users”. The Protocol does not give details on the distinction between an economic service and a non-economic service, however. The breakdown of competence between the EU and the Member States in the field of SGI is far from clarified today and this creates tension and uncertainty for all players concerned (public authorities, service providers, regulatory agencies, users, civil society) with a significant increase references for preliminary rulings and disputes before the CJEU. Knowing that the Court rules on a case-by-case basis, using existing law, which is relatively little developed in the case of SGI/SGEI, and its previous case law, the public authorities and local communities appear to be increasingly subject to European law on competition, particularly when public service activities are exercised with other partners. 4.2.4. Article 106, paragraph 2, TFEU Finally, we can emphasize that the new Article 106, paragraph 2 TFEU maintains the derogation scheme of the former Article 86, paragraph 2, of the EC Treaty, allowing a company in charge of managing a SGEI to elude the rules of the Treaty under certain conditions. We noted however that the Commission that has exceptional powers that are recognized by Article 106, paragraph 3, TFEU (former article 86, paragraph 3, EDC). Under this provision and in order to monitor the application of the 22

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first two paragraphs of Article 106 TFEU (equal treatment between public and private undertakings, and the scheme of derogations provided for undertakings appointed by the national local authorities to manage a SGEI), the Commission verifies that the Member States do not make any manifest error particularly in the definition of a mission of General interest and can address, “where necessary, address appropriate directives or decisions to Member States”. In the absence of the implementation of this principle of “sanctuarization” by the competent public authorities, the social services and their service providers remain subject to common rules of competition of the internal market, in the same capacity as all economic operators on the market. This approach to SSGI via derogations with focus on the fundamental economic freedoms is consequently a source of tension and legal uncertainty. 4.3. SSGI and fundamental social rights Within the social services, the fundamental rights at play are notably: the right to access to placement services, the right to access to Social Security benefits and social services, the right to access to prevention in the field of health and to benefit from medical care, the right to access to services of general economic interest. Article 6, paragraph 1, TEU, states that “The Union shall respect fundamental rights, as guaranteed by the European Convention for the Protection of Human Rights and Fundamental Freedoms of the EU of 7 December 2000, as adopted on 12 December 2007 in Strasbourg” , which now has the same legal value as the treaties. Nevertheless, many of the rights set down in the Charter reinforce the status of SIG and SIEG and European law, particularly in application of Chapter IV on solidarity29. In fact, in the words of Article 36 of the Charter, “ The Union recognises and respects access to services of general economic interest as provided for in national laws and practices, in accordance with the Treaty establishing the European Community, in order to promote the social and territorial cohesion of the Union.” In addition, Article 34 paragraph 1 states: “The Union recognises and respects the entitlement to social security benefits and social services providing protection in cases such as maternity, illness, industrial accidents, dependency or old age, and in the case of loss of employment, in accordance with the rules laid down by Community law and national laws and practices.”

29 On the legal scope of this chapter: Koen LENAERTS, « La solidarité ou le chapitre IV de la Charte des droits fondamentaux ce l’Union

européenne », in Revue trimestrielle des droits de l’homme, n°82, 2010. 217.

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There can be no doubt that this provision refers to a fundamental right which is at the heart of the definition of several SSGI, like that of social aid and social housing, via Article 34 paragraph 3 “the right to social and housing assistance so as to ensure a decent existence for all those who lack sufficient resources, in accordance with the rules laid down by Community law and national laws and practices”, or again, healthcare via Article 34 on the right to access to preventive health care and to benefit from medical care. One may wonder whether this new situation resulting from the binding nature of the Charter will lead the Court of Justice to change its position that is expressed particularly in the judgments Viking Line30, Laval un Partneri31 and Rüffert32, and, more recently, in a case Commission/Germany according to which fundamental social rights could not, as such, justify restriction of fundamental freedom -- in compliance with the principle of proportionality – so that the inherent grounds justifying the fundamental right must always be established, -- which cannot fail to create tension with the principle of the equal rank of fundamental rights and liberties of the Treaty. This approach seems to suggest that there is an order of precedence between fundamental liberties and fundamental rights, where fundamental social rights fall below fundamental liberties, and therefore cannot restrict fundamental freedoms other than on justified grounds. In October 2008, European Parliament adopted a resolution33 in response to the judgments of the European Court of Justice. Parliament affirmed that the freedom to provide services does not take precedence over the fundamental rights set down in the Charter of Fundamental Rights of the European Union and particularly the right of trade unions to negotiate and conclude collective agreements and to have them applied, and to have recourse to collective action. In June 2009, more than a hundred lawyers and legal specialists of European labour law addressed an open letter to the Heads of State and Governments to inform them of their uneasiness with regard to the deterioration of fundamental social rights and the incidence of recent judgments given by the CJEC on fundamental social rights. They felt strongly that fundamental rights must not come after the freedoms of the internal market and the right to compete, but, on the contrary, that they should be fully recognized as a condition necessary to sustainable economic and development of the EU.

30 CJEC, 11 December 2007, Viking Line, case C-438/05, ECR. p. I-10779. 31 CJEC, 18 December 2007, Laval un Partneri, affaire C-341/05, ECR. p. I-11767. 32 CJEC, 3 April 2008, Case Rüffert C-346/06, Rec., p. I-1989. 33 European Parliament resolution of 22 October 2008 on challenges to collective agreements in the EU (2008/2085(INI)).

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085(INI)).

4.4. The horizontal social clause Article 9 TFEU states that: “ In deﬁning and implementing its policies and activities, the Union shall take into account requirements linked to the promotion of a high level of employment, the guarantee of adequate social protection, the ﬁght against social exclusion, and a high level of education, training and protection of human health.” This new provision clearly constitutes the expression of a horizontal clause, like the equivalent clauses to combat discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation , environmental or consumer protection . This clause is a major step forward, since it requires the European institutions to verify that their actions and policies are not opposed to the social requirements listed above and requires a social impact assessment. This clause offers a dual control, a posteriori by control of compliance with social principles, as well as a priori by the requirement of an impact assessment. In any case, it offers a new viewpoint for interpretation by the Court of Justice. In order to guarantee that the horizontal social clause really comes into effect, a social progress pact could be developed, as the European Economic and Social Committee prefers. This could take inspiration from the teachings of the “European Consensus” put in place in the context of the development policy, particularly in the chapter on the powerful implementation mechanisms.

34 http://www.etui.org/fr/Sujets-d-actualite/Viking-Laval-Rueffert-Luxembourg/2-Articles-de-la-litterature-academique-sur-les-jugements. 35 Article 9 TFEU is included in Title II called: “Provisions having general application” under the same title as Article 14 TFEU. 36 Article 10 TFEU. 37 Article 11 TFEU. 38 Article 12 TFEU.

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5. Recent documents 5.1. The 2nd biennial report SSGI 2010 In 2008, the Commission published its first biennial report on social services of general interest that gives an overview of these services in the European Unions. This report emphasizes the importance of health services and social services for the entire European economy, with an analysis of national reforms in terms of organization and management of these services. The report considered three sectors in depth: long-term care, professional integration and childcare. In October 2010, the Commission will present its second biennial report on SSGI that will be discussed in the 3rd Forum. The theme of quality of SSGI will particularly be at the heart of the discussions in this Forum. 5.2. The Monti report The Monti report on relaunching the internal market, made public on 9 May 201039, is currently the subject of various appreciations both within the European institutions and in the Member States. While the discussion on the exact interaction between the EU rules and the margin of manoeuvre left to the national and local authorities is still a current issue, Professor Mario Monti considers that the main issue of SSGI is to improve their quality. According to his “consultation”, a framework regulation in the field in not appropriate: its value added would be limited and its chances of being adopted would be very small. He recommends further improving the flexibility of the rules on State aids applicable to financial compensation, to re-examine the rules on public procurement to align them to the rules on compensation (Chapter 3, point 3.3). Finally it comes to reducing tensions between the integration of markets at European level and social protection at national level, in order to make a “highly competitive social market economy” out of the EU. 5.3. The Social Protection Committee: Voluntary quality framework & certain legal questions 5.3.1. The European voluntary quality framework In December 2009, on behalf of the Council, the Social Protection Committee set up a working group in charge of developing a voluntary quality framework for SSGI. This European voluntary quality framework aims at developing a common understanding of the quality of social services within the EU by identifying the principles of quality that these services must meet. In addition, by proposing a set of methodological guidelines, the quality framework will also contribute to helping public authorities in charge of the organization and financing of social services to develop specific tools at appropriate levels to define, measure and assess the quality of social services. Thus, it will serve as a reference to ensure, assess and improve the quality of these services on a voluntary basis. 39 Monti report, op. cit.

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5.3.2. Informal group for application of the rules of the Union to SSGI In the context of the work done in the EPSCO Council, the Social Protection Committee (SPC) has also associated high level civil servants with its work since 2000. Its mission is to facilitate exchanges and cooperation between the European Commission and the Member States in the field of modernization and improvement of social protection systems. Within this committee, Mr. Bernhard SPIEGEL (Austria) presides an informal sub-working group on SSGI, that works not only on questions pertaining to public-private partnerships, but also on the role and place of nonprofit service providers and on possible alternatives to public procurement procedures. 5.4. Work in the European Parliament: report on initiatives and deliberations of the Intergroups There are other initiatives led notably under the impetus of the European Parliament. One such is the initiative report now being prepared on the future of social services of general interest, under the guidance of Mr. Proinsias DE ROSSA, without forgetting the work of the Public Service Intergroup presided by Ms. Françoise CASTEX on the evaluation of the rules in the Monti-Kroes package. For the Intergroup, what is at stake is taking an inventory of practical problems encountered in the application of these rules. The stakeholders in the consultation initiated by the Intergroup40 have underlined the purely commercial dynamic of the Community rules in the field of services of general interest at this time and the approach of the Court of Justice of the European Union that tends to consider the provision of services of a social nature (emergency transport of patients, for example) by non-profit organizations as “economic activities”. Generally speaking, the non-profit organizations are in favour of the creation of a general exemption from notification of State aids for SSGI, as is the case for hospitals and social housing. There is also the report by Ms. Heide RÜHLE on the evolution of public procurement procedures41. This report stresses the lack of clarity in the field of socially responsible public supply contracts and asks the Commission to help by producing manuals, while drawing attention to the modification of the conditions-framework by the Lisbon Treaty and by the Charter of Fundamental Rights. It invites the Commission to define the precise, verifiable criteria and to set up a data bank including the criteria specific to products. It invites the Commission, moreover, to develop guidelines or other measures to help the authorities and the other public institutions in the field of sustainable purchases. Finally, Ms. Evelyne GEBHARDT will draft an assessment report on the services directive for the fall of 2010.

40 See the document made public on 18 June 2010 by the Public Services Intergroup called: Synthèse des contributions reçues suite à la

consultation publique relative à la mise en œuvre du Paquet Monti-Kroes. Nor should we forget to mention the work of the Social Economy Intergroup. 41 European Parliament, Internal Market and Consumer Protection Committee, Report on new developmetn in public procurement, document A7-0151-2010, 5 May 2010. 27

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5.5. Assessment of the Monti-Kroes package and the Services directive Services The decision and the framework of the Monti-Kroes package provide for the obligation for the Commission to do an analysis on the application of two legal instruments. This analysis must be based on concrete elements and on results of broad consultations done by the Commission, notably using the reports supplied by the Member States on the subject of the implementation of the decision. For this reason, the Commission organized a consultation on State aids awarded to SGEI from 10 June to 10 September. It targeted public service providers and their associations, stakeholders, citizens and all interested parties, to know their opinion on the application of the SGEI package. We might note that during the year 2009, the Member States were also consulted by the Commission and transmitted several reports or informational letters to it concerning the implementation of the decision. In addition, in the context of the “mutual evaluation process” provided by the Services directive, the Commission organized another consultation with the objective of obtaining feedback from consumers, companies, and any other interested party on their evaluation of the national measures transposing the “Services” directive, ans on other national provisions in force in the field of services. This consultation was closed on 13 September 2010. 5.6. Single Market Act The European Commission is now preparing its action plan for the new “Single Market Act”, or “Pacte pour le Marché Unique “ in French. In a proposal for a communication dated 23 August 201042, the Commission listed a series of key actions on three major themes: undertakings, citizens and partnerships with stakeholders. 25 years after the European Single Market, the project should help put in place a “highly competitive social market economy”. This proposal for the “Single Market Act”, piloted by the Commissioner for the Single Market, Mr. Michel Barnier, groups all of the actions to be carried out to reinforce the internal market in a single strategy. In addition to projects already underway like the creation of a European patent, cross-border health care or the status of a private European company, the measures announced should be the subject of proposals by 2012. The draft communication says that there is a significant risk of seeing European economic growth and job creation stagnate for awhile The Commission underlines that the Single Market Act and its four freedoms for goods, services, persons and capital is one of Europe’s main competitive advantages. The Commission will also propose a “Social Business Initiative” by 2011, that should contribute to the development of socially responsible undertakings in the single market by using different levers: public supply contracts, improved access to financing, and tools for social classification and communication. 42 Communication from the Commission, Single Market Act - A single market delivering smart, sustainable and inclusive economic growth

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5.7. Technical seminar in preparation for the 3rd SSGI Forum In July 2010, the Belgian Presidency of the Council organized a preparatory seminar in Brussels for the 3rd Forum essentially focusing on the technical and legal problems posed by for SSGI the European rules for the internal market and competition. During the seminar, the stakeholders and Commission representatives pinpointed a series of questions and identiďŹ ed various operational possibilities to be submitted to the discussions at the 3rd Forum on the impact of internal market rules, State aids and public supply contracts on SSGI. These operational options were integrated into the speciďŹ c background papers that will be used as notes on the context for the various workshops of the 3rd SSGI Forum.

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6. Links with the 2nd Forum The 2nd SSGI Forum took place under the French Presidency on 28 and 29 October 2008 in Paris. The theme of the 2nd Forum, Guarantee access to all social services of general interest: what is the inďŹ&#x201A;uence of Community law?, had a dual objective: on one hand, highlighting the contribution of social services of general interest to inclusion policies and social protection on one hand, and reporting on how EU law takes account of the speciďŹ city of SSGI on the other, while identifying points of tension that subsist. In other words, the issue is to determine whether the pointer currently placed by EU law on the various principles in the treaty is at the right spot. This Forum has underlined the contribution of SSGI to social cohesion in Europe. The discussions of this forum have brought out the need to highlight the value of the contribution of SSGI to EU social cohesion policies, particularly in the context of the economic crisis. They also stressed the importance of promoting the quality of SSGI. The theme of 3rd Forum consequently continues along the lines of the deliberations of the 2nd Forum.

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Conclusion Is a conclusion needed? In any case, the discussions are still open … and, if there were still any doubts, everyone can see how complex and touchy are the choices to be made. We hope that this document has provided useful information, so that the question of SSGI will be considered a major issue in the democratic debate open to all institutional and associative players concerned about the future of Europe based on the values of the social market economy. As the Belgian Minister of Social Affairs Laurette ONKELINX emphasized at the conclusion of the conference on SGI co-organized by the Belgian Presidency and the European Parliament Public Services Intergroup on 16 September 2010: I am among those who have another idea of Europe – other than a vast market . This is a technical dossier that deals with several scientiﬁc disciplines: economics, sociology, political sciences and law. Even in law itself, it is not easy to master all the issues straddling the borderline between social and economic questions. Still, the technicity mustn’t cloud what is at stake in the fundamental policies enacted in SSGI: what is the place of social services, what balance can be struck between human rights and economic freedoms, the end rather than the means. Strong political will, a sense of compromise should be the elements to be taken into account by the Belgian Presidency, which has made this dossier one of its priorities.

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The SSGI team Thanks to Valérie, Stijn, Maxime, Marc, Sébastien, Muriel, Tom, Bérengère, Sandrine, Stéphane, Nele, Pierre, and all the others. Their thoughts, memos and encouragement contributed to this Note and to the organization of the 3rd Forum. Manuel PAOLILLO Head of the 3rd SSGI Forum project and coordinator for the entire Belgian Presidency at the level of the ministerial department, Manuel has always wanted to add an educational touch to the question of SSGI, as he is convinced that this dossier is at the crossroads of two worlds: social and economic. Valérie CUVELIER Valérie, a legal specialist, followed and worked on all the paths (monitoring the scientiﬁc work, programme, communication, bilateral contacts) to the FORUM. She was particularly attentive to giving it an innovating touch. Sandrine DIERICX Legal specialist and Euro-coordinator, Sandrine particularly worked on questions related to the Services directive. Stijn LEFEBURE Trained as a sociologist, Stijn worked for all the Belgian Presidency Conferences and for the 3rd Forum, speciﬁcally on the question of the horizontal social clause/social impact assessment.

Marc MORSA As a legal specialist, Marc focused on the questions related to public supply contracts and the Services directive. Muriel RABAU Permanent representative to Belgium, Muriel provided support and gave precious advice to the team, making the needed links between the working groups (Social Protection Committee and the Group des Attachés sociaux). 32

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Bérengère STEPPÉ Bérengère is Euro-coordinator and attaché. She worked on the questions related to quality in the Forum and the link with the Conference on the social economy. Cabinet of Minister Onkelinx Jacques OUZIEL Adviser in charge of Social Europe and the preparation of the Belgian Presidency of the Council of the EU. Yves GOLDSTEIN Adviser in charge of Europe, foreign policy and economy.

Legal experts for the Belgian Presidency Stéphane RODRIGUES Court lawyer and Senior Lecturer, University Paris I (Panthéon-Sorbonne). Stéphane worked on all legal texts. Sébastien KAYEMBE Lawyer and expert on questions pertaining to social services of general interest. Sébastien worked on all legal texts.

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Bibliography and further information Major books and articles ALES E., JASPERS T., LORBER P., SACHS-DURAND C. WENDELING-SCHRÖDER U. (dir.), Fundamental social Rights in Europe : Challenges and Opportunities, Ed. Intersentia, Antwerp, 2009 BIHAN (D.-C.) et MORICEAU (A.), Du traité constitutionnel au traité modiﬁcatif de Lisbonne – deuxième partie : coups de projecteurs « sur les valeurs de l’Union » - Services d’intérêt économique général et valeurs communes, in Revue du marché commun et de l’Union européenne, n°519, June 2008, p. 356-360 BLANPAIN (R.) (dir.), Freedom of services in the European Union : labour and social security law : the Bolkestein initiative, European Forum on Freedom of Services and Labour and Social Security, Ed. KLUWER LAW International, Brussels, 2005 Collectif SSGI-FR, Les Services sociaux et de santé d’intérêt général, Droit fondamentaux versus marché intérieur, Ed. Bruylant, 2005 D. DEOM, Quel avenir pour le service public local à l’heure européenne ? Le point sur la jurisprudence de la Cour de Justice, in Mouvement communal, Dec. 2004, p. 462-471. disponible sur http://www.uvcw.be/ articles/3,14,2,0,670.htm DE SCHUTTER O. (dir.), La Charte sociale européenne : une constitution sociale pour l’Europe, Ed. Bruylant, Brussels, 2010 DONY (M.), Les notions de SIEG/SIG, in VICTOR (J.-L.) et RODRIGUES (S.), Les services d’intérêt économique général et l’Union européenne, Ed. Bruylant, Brussels, 2006 DRIGUEZ (L.), Droit social et droit de la concurrence, Ed. Bruylant, Brussels, 2006 FABRE (G.), CREVEL-SANDER (D.), “L’arrêt BUPA du TPI du 14 février 2008 et la mise en œuvre des principes posés dans l’arrêt Altmark”, in European Law Network, n°1/2008, available at the site : http://europeanlawnetwork. eu/blog/wp-content/uploads/2008/04/submission_3_2008.pdf Guide pratique. Les Services sociaux d’intérêt général, in le Courrier des maires et des élus locaux, Paris, 2008 HATZOPOULOS (V.), Que reste-t-il de la directive sur les services ?, Cahiers de droit européen, Volume 43, N° 3-4, 2007, p.300-358 34

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HENRY J., L’Europe, le travail social et les SSGI, colloque de l’Université de Toulouse, 2009, available at the site : http://www.canal-u.tv JORENS (Y.), Het voorstel « Bolkestein-richtlijn » : een gevaar voor het Belgisch sociaal recht ?, in T.S.R., 2006, p.25-63 KAYEMBE N’KOKESHA, S., La régulation des services sociaux d’intérêt général dans l’Union européenne, U.C.L., Louvain-la-Neuve, 2010 MAVRIDIS (P.), La sécurité sociale à l’épreuve de l’intégration européenne, Bruylant, Brussels, 2003 MOUSSIS (N.), Guide des politiques de l’Union Européenne, 9e édition révisée, European Study Service, 2007 MUNDAY (B.), Les services sociaux en Europe : évolution et caractéristiques, Conseil de l’Europe, http://www.coe.int/t/dg3/socialpolicies/socialrights/socservices_FR.asp R. SCHEEPERS (Vlaamse overheid, departement bestuurszaken – afdeling overheidsopdrachten), In House : Europese rechtspraak, July 2008 RODRIGUES (S.), La proposition de directive relative aux services dans le marché intérieur - Entre mythes et réalités, in Etudes européennes, available at the site : www.etudes-europeennes.fr SIMON (A.-C.), L’accès aux soins de santé transfrontaliers dans l’Union européenne – La proposition Bolkestein consacre-t-elle la jurisprudence de la Cour de Justice ?, in J.T.D.E., 2005, liv. 115, p.12-16 SSGI and State aid, paper issued during the Technical Seminar of 13 July 2010 on SSGI, available at the site http://socialsecurity.fgov.be/eu/en/agenda/26-27_10_10.asp SSGI and Internal Market, paper issued during the Technical Seminar of 13 July 2010 on SSGI, available at the site http://socialsecurity.fgov.be/eu/en/agenda/26-27_10_10.asp SSGI and Public Procurement, paper issued during the Technical Seminar of 13 July 2010 on SSGI, available at the site http://socialsecurity.fgov.be/eu/en/agenda/26-27_10_10.asp SYLIN (M.), Cinquante ans d’évolution du travail : de la semaine de 5 jours à la directive Bolkestein, ULB, Institut des sciences du travail, Brussels, 2006 VAN ORMELINGEN (B.), Le domaine de la directive 2006/123/CE relative aux services dans le marché intérieur, Annales de droit de Louvain, vol.68, 2006, n° 4, p. 341-403

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VAN RAEPENBUSH (S.), Services sociaux et droit communautaire, in LOUIS (J.-V.) et RODRIGUES (S.), Les services d’intérêt économique général et l’Union européenne, Ed. Bruylant, Brussels, 2006, p.109-129 VAN REGENMORTEL (A.), VERSCUEREN (H.), VERVLIET (V.) edit., Sociale zekerheid in het Europa van de Markteb de burgers: enkele thema’s, Die Keure, 2007, 606 Commission documents Green Paper on SGI in 2003. COM (2003) 270 White Paper on SGI in 2004. COM (2004) 374 COM(2006) 177 final of 26 April 2006, Implementing the Community Lisbon Program. Social Services of General Iterest in the European Union European Commission, Biennial report on social services in the general interest, 2008, available at the site : ec.europa.eu : http://ec.europa.eu/social/main.jsp?catId=738&langId=en&pubId=75&type=2&furtherPubs=no Commission note of 25 June 2004 n° 10.865/04, file 2004/0001 COD available at the site: http://ec.europa.eu/internal_market/services/docs/services-dir/notes/explan-note-activities_en.pdf Commission Communication of November 2006 called Implementing the Community Lisbon Program. Social Services of General Interest in the European Union COM(2006) 177; Communication of 20 November 2007 of the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of Regions “ “A single market for 21st century Europe” Services of general interest, including social services of general interest: a new European commitment, COM(2007) 725 final, available at the site : http://ec.europa.eu/services_general_interest/docs/com_2007_0725_fr.pdf Commission working document of 20 November 2007, Frequently asked questions in relation with 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 interest1, and of the Community Framework for State aid in the form of public service compensation2, SEC (2007) 1516 final http://ec.europa.eu/comm/competition/state_aid/legislation/faq_sieg_fr.pdf CONSEIL ECONOMIQUE ET SOCIAL de la République Française, Avis et Rapports : « Quel cadre juridique européen pour les services sociaux d’intérêt général ? », Sessions of 8 and 9 April 2008 ;

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Case-law of the Court of Justice of the EU (available at www.curia.eu.int) CJEU, 17 February 1993, Poucet et Pistre, case C-160/91 CJEU, 19 May 1993, Paul Corbeau/Régie des postes, case C-320/91 CJEU, 27 April 1994, Commune d’Almelo e.a., case C-393/92 CJEU, 22 March 1977, Steinicke et Weinlig/RFA, case 78/76 CJEU, 22 January 2002, Cisal, case C-218/00 CJEU, 22 May 2003, Freskot, case C-355/00 CJEU, 24 July 2003, Altmark Trans GmbH, case C-280/00 CJEU, 16 March 2004, AOK Bundesverband, case C-264/01 CJEU, 13 November 2008, Coditel Brabant, case C 324/07 CFIEC, 12 February 2008, Bupa, case T- 289/03

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This background paper is only available in electronic version. Download the publication via de website of the Federal Public Service Social Security. http://socialsecurity.fgov.be/eu/en/agenda/26-27_10_10.asp Draft Version – 6 September 2010 The information contained in this publication does not necessarily reﬂect the position or opinion of the European Commission. Event co-ﬁnanced by the European Commission DG Employment, Social Affairs and Equal Opportunities

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CONTENTS Introduction

1. Practical case

2. Overview of progress and open questions

3. Themes for further reďŹ&#x201A;ection and proposals

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Introduction Social Missions to Compensate Adequately Does European State Aid legislation have a major effect on the way non-profit organisations and social services organise and fund their activities? Yes, if SSGI are SGEI and no, if they are SGNEI. It all depends on whether social services can be considered economic or non-economic activities. The boundary is sometimes blurry, but one thing is sure: they are all SGI: services of general interest. This general interest mission must be ensured, in normal times, but also in times of crisis. Fundamental rights are at stake as far as social services are concerned: e.g. the right of access to placement services, the right of access to social security benefits and social services, the right of access to preventive health care and to medical treatment, the right of access to services of general economic interest. European State Aid rules apply to SGEI and more particularly to their funding methods and schemes. These rules were laid down with a view to the provision of public services while ensuring that the conditions of fair competition still apply. At the dawn of the 3rd forum, the question has become: how to deal with these social services from the standpoint of these rules, so that their social mission can be fulfilled? Ultimately, all technical questions relating to thresholds, payments, public service compensation, jurisprudence or common rules, such as the ones at issue in the ‘Altmark’ dispute, show the will of the States, the social actors and the Union to enact a social policy. As emphasized by the stakeholders consulted, several questions arise: • Is the ‘body of evidence’ technique for missions of general interest, appropriate and efficient for social services? • Does the ‘Altmark’ package apply retroactively? • Are compensation and the way it is calculated truly adapted to social services and their specialities like added social value, community involvement, voluntary service or reinvestment in infrastructure? • With ex-ante criteria, is there still room left for association initiatives to play a pioneering role in identifying social needs and social measures to be taken?

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GOAL To contribute to the Workshop on State Aids in the 3rd FORUM SSGI, the Belgian Presidency refers to a ”Stakeholders1” consultation, the existing material and processes, and presents a series of operational options discussed during the Technical Seminar on 13 July 2010 and suggested for the workshops of the 3rd FORUM. These options will take the form of an ‘open catalogue’. They do not express a position of the Belgian Presidency but should be considered as areas needing work that are sometimes totally independent from each other and arise directly from the TRIO programme relating to SSGI: “The work on the social services of general interest will continue”. The “Post-Technical Seminar Observations” are not the full records of the discussions on 13 July – they are elements for further reﬂection that the Presidency considers sufﬁciently useful to be attached to the various operational options. Contact person for all questions regarding Background Paper 03 (State aid) Valérie CUVELIER – Valerie.Cuvelier@minsoc.fed.be SSGI Project Manager Manuel PAOLILLO – Manuel.Paolillo@minsoc.fed.be Cabinet of the Minister for Social Affairs, Mrs Laurette ONKELINX Jacques OUZIEL – j.ouziel@lo.fgov.be

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1. Practical case A practical case will be presented, which will serve as a basis to ask a series of social and political questions relating to the challenges of the issue. This case will be attached to the present document.

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2. Overview of progress and open questions According to article 107 of the TFEU, save exemptions, aids financed by public resources are barred when they distort or threaten to distort competition in favour of some undertakings. The list of admissible exemptions given in article 106, paragraph 2, TFEU, relates to undertakings discharging a service of general economic interest (SGEI)2. The above mentioned paragraph entitles undertakings in charge of managing a SGEI to depart from the rules of the Treaty if the enforcement of those rules is an obstacle, in law or in fact, to fulfilment of the special mission they have been entrusted with. The application of this exemption scheme for aids granted to an undertaking discharging a SGEI has evolved with case-law interpretations. Initially, the judge deemed that all payments to the benefit of such an undertaking had to be considered State aid, even if the aid was subsequently ruled to be compatible on the basis of article 106-2 TFUE, because the amounts met the funding needs of the mission concerned3. The Court of Justice adapted its way of thinking in the ‘Altmark‘ judgment of 2003, which in substance states that under certain conditions public service compensation4 to an undertaking discharging a SGEI can be considered not to be State aid pursuant to article 107 TFUE5. If these conditions are fulfilled, public service compensation, such as a subsidy, does not grant any selective advantage to the benefiting company and is not a State aid.

2 Since then: CJEU, 22 March 1977, Steinicke and Weinlig/FRG, case 78/76, ECR p. 595. 3 See CFI, 27 February 1997, F.F.S.A., T-106/95, ECR p. II-229. 4 Including any measure in favour of an undertaking, such as subsidy, reduction of charges, exemption from taxes, particular conditions

as to loans or guarantees, etc. 5 See CJEU, 24 July 2003, Altmark Trans GmbH, C-280/00, ECR p. I-7747. As a reminder, four cumulative conditions are listed: 1. the

recipient undertaking is actually required to discharge public service obligations and those obligations have been clearly defined; 2. the parameters on the basis of which the compensation is calculated have been established beforehand in an objective and transparent manner; 3. the compensation does not exceed what is necessary to cover all or part of the costs incurred in discharging the public service obligations, taking into account the relevant receipts and a reasonable profit for discharging those obligations; 4. where the undertaking which is to discharge public service obligations is not chosen in a public procurement procedure, the level of compensation needed has been determined on the basis of an analysis of the costs which a typical undertaking, well run and adequately provided with means of transport so as to be able to meet the necessary public service requirements, would have incurred in discharging those obligations, taking into account the relevant receipts and a reasonable profit for discharging the obligations. 7

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To take these judicial precedents into account and provide legal certainty to break the deadlock in which public service operators found themselves after the Altmark judgment, the Commission adopted a set of measures named the ‘Altmark’ package in November 2005. It includes a decision relating to the application of the provisions of article 86, paragraph 2 of the EC Treaty (now article 106-2 TFUE) on State aid in the form of public service compensation granted to some undertakings discharging SGEI6; Community guidelines for State aid in the form of public service compensation7 a directive on transparency of financial relationships between Member States and public undertakings as well on financial transparency in some undertakings8and, in November 2007, frequently asked questions (FAQ) dedicated to the application of the ‘Altmark’ package to SSGI9. Nowadays, the main question is to know whether all those texts are sufficient to remove any uncertainty relating to the exact range of application of State aid rules to financial transfers between public authorities and SSGI operators. The Monti report of 9 May 2010 thus states the need to “improve legal certainty relating to the payment of a financial compensation in exchange of the fulfilment of small, often local public services”10. It nonetheless seems that the question has to be asked in more general terms, with the aim of adapting State aid rules to organisation features specific to SSGI and which have already been identified by the Commission11. The planned revision of the Altmark package in 2010-2011 could provide an opportunity for this.

6 Decision n°2005/842/CE of 28 November 2005, OJEU L 312 of 29/11/2005, pp. 67-73. 7 Published in the OJEU C 297 of 29/11/2005, pp. 4-7. 8 Directive 2005/81/CE of 28 November 2005, OJEU L 312 of 29/11/2005, pp. 47-48, which modiﬁed Directive 80/723/CEE and has been

codified since then into Directive 2006/111/CE of 16 November 2006, OJEU L 318 of 17/11/2006, pp. 17-25. 9 In order to meet the difficulties and doubts of public authorities and players in the field , the Commission published the Commission

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Staff Working Document “Frequently asked questions in relation with 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, and of the Community Framework for State aid in the form of public service compensation”, SEC(2007) 1516 of 20 November 2007. The Commission has also set up an interactive Information Service, which answers the questions of citizens, public authorities and players in the ﬁeld. 10 See subparagraph 3.3 (« Social services and the single market »), page 82. 11 See box « Objectives and principles for organizing social services », COM (2007) 725 ﬁnal of 20 November 2007, pp. 7-8.

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3. Themes for further reflection and proposals The Monti report states two options in order to strengthen the flexibility of rules applying to public service compensations: OPTION 01: Raising the thresholds · Raising the thresholds under which notification becomes compulsory, without stating which thresholds might be involved; it seems to us that this could be the case for: - OPTION 01-A thresholds of the Altmark decision of 200512; and/or - OPTION 01-B : thresholds targeted by the regulation of 2006 on de mininis13aid, which seem indeed far too low in view of what’s happening in the field. In that respect, doubling the indicative reference threshold (to a new threshold of 400 000 EUR)14could be considered, with a potential extension of the reference period (from 3 to 5 years for instance). > Post-Technical Seminar (13.07.2010) Observations The results of the public consultation on the revision of the Altmark package and the activities of the 3rd Forum on SSGI should give a more qualified opinion about the opportunity of raising the thresholds, as suggested by the Monti report. On the other hand, when it comes to raising the minimum amounts, the main difficulty lies in the Court of Justice’s very restrictive interpretation of the current principle of the definition of a threshold when applying article 107 TFUE. It will be more difficult to make this option go further. Here again, the results of the aforementioned public consultation and the activities of the 3rd Forum could provide an indicator about the status of corresponding demand from the actors involved.

12 These thresholds nowadays correspond to a ceiling of EUR 100 millions for the average yearly turnover of the undertaking (except for

the transportation sector) during the two fiscal years preceding the one during which SGEI are granted and to a yearly compensation amount of EUR 30 million. These thresholds do not apply to funding granted to hospitals and social housing that can benefit from the exemption from notification, whatever the amount concerned. 13 See Article 2 of Regulation (EC) n° 1998/2006 of the Commission of 15 December 2006 (OJEU L 379 of 28.12.2006, pp. 5-10) which considers as main reference amount an aid of EUR 200 000 over three fiscal years. 14 Pursuant to logic identical to that of doubling the threshold, which was been decided by the Commission under the Regulation of 2006 (the previous threshold was then set to EUR 100 000). 9

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OPTION 02: Exemption from notification for more social activities · Extension of the list of activities for which compensation need not be notified, regardless of the amounts at stake. Up to now, hospitals and undertakings in charge of social housing15 have been exempted from the obligation to notify, whatever the thresholds may be. This list might be extended: - OPTION 02-A : to all SSGI whose common features would be defined at European level, on the basis of a body of evidence (see above); - OPTION 02-B : or at least to those social services for which it could be proven that the current thresholds under Altmark decision are easily achieved16. > Post-Technical Seminar (13.07.2010) Observations The reasons why hospitals and social housing corporations have been exempted from the notification obligation without taking thresholds into account deserves further clarification and analysis, to see their relevance for the exemption of other sectors of activity that are also likely to be considered SSGI. To make identification easier, it could be useful to apply the body of evidence method. It is argued that not enough time has gone by to measure the impact of the Altmark package on the SSGI sectors, but this is not sufficient reason for postponing reflection on the content of such evidence. Here again, the results of the public consultation and the activities of the 3rd Forum could provide some additional pointers and factual information that might justify changes to existing rules. The reflection which could be conducted about these criteria would also add to thinking on a possible reference framework on SSGI, as per the pattern of the 28th optional scheme available to Member States, which could be used in the context of the implementation of other provisions of EU-Law (cf. data sheets on freedom to provide services and public procurement ).

15 As well as air and sea transport services, on condition that these services are below some thresholds inherent to these sectors and

different from those generally aimed at by the Altmark decision of 2005. 10

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16 To be determined: for instance long-term care, etc.

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Other options which haven’t been mentioned in the Monti report could also be explored, like: OPTION 03: Clarification of some concepts on which the application of the Altmark package is based: - OPTION 03-A : Concept of mandate17 it could be stipulated that the mandate may be delivered by any public authority, whether national or local, and that its form and legal nature fall under the sole competence of Member States. - OPTION 03-B : Concept of a typical undertaking, well run and adequately provided: this notion, which is at the heart of the 4th condition of the Altmark case law, is not integrated in the implementation of the Altmark package. The lack of clarity makes it hard to meet the criterion, however, and therefore paves the way for the application of the ‘SGEI’ decision of 2005; a method of comparative analysis could be suggested, taking into account the specificies of companies discharging a SSGI, as such specificities may render any comparison with an ‘average undertaking’ difficult. > Post-Technical Seminar (13.07.2010) Observations The definitions required for the application of the Altmark package must leave public authorities some flexibility when implementing their public service compensation schemes. Nevertheless, these definitions must also be sufficiently precise to provide optimal legal certainty. The results of the public consultation as well as the debates of the 3rd Forum could also provide elements relating to the need to clarify these concepts. OPTION 04: Adoption of tools to help operators analyse the applicability of Altmark conditions: - OPTION 04-A : How can compensation cost calculation be made more foreseeable? By making an interactive tool available to public authorities that can simulate the calculation of all costs, incomes and benefits to be taken into account to be sure there is no over-compensation (« Altmark simulator »?). - OPTION 04-B : Make the Interactive Service about SSGI more interactive? While respecting the confidentiality of the data exchanged (no public connection), one could consider seeking an answer from the Commission on a specific compensation case that could be viewed as an official position (based on the old comfort letters in antitrust policy; these could be “Altmark orientation letters’’).

17 See Article 4 of Decision 2005/842/CE and chapter 2.3 of the Framing.

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- OPTION 04-C : Extend the principle of training sessions on public procurements given by the Commission to include State aid rules (with adequate budgetary resources). > Post-Technical Seminar (13.07.2010) Observations A balance as to the burden of proof (demonstration of the absence of overcompensation) should be further sought between the Commission and national or local authorities. It is in this sense that the setting-up of operational decision support tools has to be favoured. There is no certainty about the fact that the sole recourse to FAQ and to the interactive web service, whose intensification is advisable by the way, is sufficient to meet specific groups of cases that interested parties still hesitate to submit as such to the Commission, due in particular to the small number of questions asked since the creation of the interactive web service. Moreover, the debate held during the Seminar emphasized that the SGEI package has not often been applied to social services by the competent public authorities. The reasons for this non-application, as well as the current problems linked with the application, deserve to be investigated further. It is nevertheless a fact that any new adjustment in the sense of the aforementioned options 04 will imply an increase in budgetary resources at the Commission’s disposal. OPTION 05: Adopt a block exemption regulation for SSGI: - OPTION 05-A : A second “Altmark package” dedicated and adapted only to those undertakings discharging a SSGI, taking into account some of the elements presented and analysed above, like raising the thresholds, the scope of activities for which no notification is required and the particulars to be provided regarding some concepts (like a mandate). - OPTION 05-B : A block exemption regulation for State aid granted to undertakings discharging a SSGI: adopted by the Commission pursuant to a Council Regulation (new or amending Regulation (EC) No 994/98 in order to extend its scope)18 that should deal with aid/compensations granted to SSGI operators19 and integrate some of the elements presented and analysed above, like raising the thresholds, the scope of activities for which no notification is required and the particulars to be provided regarding some concepts (like a mandate).

18 Regulation of 7 May 1998 on the application of Articles 92 and 93 of the Treaty establishing the European Community (which have

become Articles 107 and 108 of the TFEU) to certain categories of horizontal State aid , OJEU L 142 of 14.5.1998, pp. 1-4. 12

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19 See in this respect: point 4 of the draft ECON opinion on SSGI of April 2010.

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- OPTION 05-C : A Council Regulation based upon subparagraph (e) of article 107(3) of the TFEU20, establishing a specific category for aid granted to SSGI that the Commission may deem compatible with the internal market. > Post-Technical Seminar (13.07.2010) Observations The normative approach cannot be totally excluded if the room for manoeuvre that has been identified previously proves too narrow or is not implemented. The added value of any specific text will lie in its pinpointng the SSGI sector due to its specificities – which must still be better described and identified. The body of evidence technique or the setting-up of an optional European reference framework (like in the 28th optional scheme) could contribute to this.

20 As for the foundations of this provision, for instance: Council Regulation n°1407/2002 of 23 July 2002 on State aid to the coal

industry ,OJEU L 205 of 2.8.2002, p. 1.

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© 2010 Federal Public Service Social Security Boulevard du Jardin Botanique 50, box 100 B-1000 Brussels Responsible editor: Tom Auwers www.socialsecurity.fgov.be/eu/en Teampresidency2010@minsoc.fed.be This background paper is only available in electronic version. Download the publication via de website of the Federal Public Service Social Security. http://socialsecurity.fgov.be/eu/en/agenda/26-27_10_10.asp Draft Version – 22 September 2010 The information contained in this publication does not necessarily reﬂect the position or opinion of the European Commission. Event co-ﬁnanced by the European Commission DG Employment, Social Affairs and Equal Opportunities 2

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CONTENTS Introduction

1. Practical case

2. Overview of progress

3. Open questions

4. Themes for further reďŹ&#x201A;ection

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Introduction Measuring and Adapting Contractualization in the social sector Social services are increasingly faced with the logic of public procurement. A strong trend can be detected: public procurement is chosen increasingly as a tool for managing some social needs. Fundamental rights are at stake in social services: e.g. the right of access to placement services, the right of access to social security beneﬁts and social services, the right of access to preventive health care and to medical treatment, the right of access to services of general economic interest. Within the context of the 3rd Forum, the following question arises (again): how can Social Services be dealt with from the standpoint of public procurement. The phenomenon is quite new and little is known about the impact of European regulations concerning public procurement, their application and their evolution, on the « supply » of social services. As emphasized by the stakeholders consulted, several questions are raised: • Operators could be tempted to yield to a logic focusing on obtaining public contracts, instead of focusing on the user of social service; this puts pressure on personnel costs and the quality of work. • What kind of providers are able to meet the requirements of technical calls for tenders? • What local authorities can undertake this type of public procurement and are they sufficiently aware of the effects for the users? • Is the budgetary point of view not becoming the only concern, to the detriment of the users? • Can a long-term logic still be implemented with regard to the provision of social services? • When dealing with social matters, isn’t a loss of innovation (association initiative) likely to occur if specifications leave little room for the fulfilment of public tasks? • Will the continuity of social services provided to persons who are often insolvent be jeopardized because of the fact that these services are numerous and harder to implement for marginalized population groups? • Will the activity of small or medium size local providers be more limited? The fact of not obtaining a contract often threatens the very existence of a social services; mergers to achieve economies of scale are very difficult. At the same time, it is true that public authorities have more room for manoeuvre when they apply EUrules on public procurement to social services. Moreover, the application of these rules is a guarantee of transparency, which should have a positive effect on the quality of these services to the benefit of the users.

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GOAL In order to contribute to the Workshop on public procurement in the 3rd FORUM on SSGI, the Belgian Presidency relies on a “Stakeholders1” consultation, on material and on existing processes and has taken a series of operational options on board for discussion during the Technical Seminar of 13 July 2010 and as suggestions during the Workshops of the 3rd FORUM. These options will be presented in the form of an “open catalogue”. They do not express the will of the Belgian Presidency but should be considered fields to work on which are sometimes totally independent from each other and arise from the programme of the TRIO on SSGI: “The work on the social services of general interest will continue”. The “Post-Technical Seminar Observations” are not the full record of the discussions of 13 July. They provide elements for further reflection that the Presidency considers sufficiently useful to be attached to the various operational options. Contact persons for questions relating to Paper 01 (Public Procurement) Marc MORSA – Marc.Morsa@minsoc.fed.be SSGI Project leader Manuel PAOLILLO – Manuel.Paolillo@minsoc.fed.be Cabinet of the Minister for Social Affairs, Mrs Laurette ONKELINX Jacques OUZIEL – j.ouziel@lo.fgov.be

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2. Overview of progress In line with the fundamental principles of the internal market (non-discrimination, free movement, free competition), several European Directives coordinate national procedures for awarding public works contracts, public supply contracts and public service contracts2, including in certain “special” sectors (water, energy, transport and postal services)3 and, since 2009, in the fields of defence and security4. These Directives lay down common rules to ensure the greatest possible transparency in selecting and awarding public contracts above certain tresholds. “Public contracts” are contracts for pecuniary consideration concluded in writing between one or more economic operators and one or more contracting authorities and having as their object the execution of works, the supply of products or the provision of services. Therefore these public contracts differ from the situation in which public authorities want to carry out such works directly or to manage a service directly or to award it (service concessions are excluded from the scope of the Directive 2004/18/EC)5. Moreover it is clear from the case-law of the Court of Justice of the European Union (ECJ) that the principles of transparency, equal treatment and non-discrimination of the Treaty remain applicable even out of the scope of these Directives. Among other things, this entails a minimal degree of advertising and the respect of the principle of equal treatment of economic operators6. The application of these Directives and their interpretation by the CJEU in recent years reveal two main trends, among others, that could be investigated more thoroughly with a view to acknowledging the specificities of the social services of general interest (SSGI)7: on the one hand, clarification is needed on the scope of exclusions that are likely to apply to the SSGI and, on the other hand, the integration of social considerations in the procedures for awarding public contracts should be improved.

2 Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004. 3 Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004. 4 Directive 2009/81/EC of the European Parliament and of the Council of 13 July 2009. 5 See also below, about « in house » management. 6 See a. o.: CJEU, 7 December 2000, Telaustria and Telefonadress, C-324/98, ECR p. I-10745. 7 In order to respond to the difﬁculties and doubts of public authorities and players in the ﬁeld, the Commission published the

Commission Staff Working Document “Frequently asked questions in relation with 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, and of the Community Framework for State aid in the form of public service compensation”, SEC(2007) 1516 of 20 November 2007. The Commission has also set up an interactive Information Service, which answers questions of citizens, public authorities and players in the ﬁeld. 7

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3. Open questions A. CLARIFICATION of the scope of exclusions foreseen by public procurement rules QUESTION 01: Clarification of the text on certain partial exclusions foreseen by the Directives Pursuant to Article 21 of the Directive 2004/18/EC, contracts which have as their object services listed in Annex II B “shall be subject solely” to the rules relating to technical specifications (Article 23) and to the notice relating to the award of the public contract (Article 35.4). The services listed in Annex II B feature, among others, “ educational and vocational training services” as well as “social and sanitary services” which could fit to most SSGI. Therefore it could be useful to clarify the exact scope of Article 21 in order to determine precisely, among the provisions of the Directives, the ones that really apply to the aforementioned services, particularly in terms of obligatory prior advertising. In other words, except for the provisions of Articles 23 and 35.4, is the exclusion complete? QUESTION 02: Clarification of the text on the concept of “service concession” A service concession, including a public service concession, is explicitly excluded from the scope of application of the Directives of 2004 referred to above. Nevertheless, it is defined by those Directives in the following way: “a contract of the same type as a public service contract, except for the fact that the consideration for the provision of services consists either solely in the right to exploit the service, or in this right together with payment”. The case-law of the ECJ tends to stress the criterion of risk by stating that “when the agreed method of remuneration consists in the right for the provider to exploit the service it is providing, that method of remuneration means that the provider takes the risk of operating the services in question”8. It infers in particular that “even if the risk run by the contracting authority is very limited, it is necessary that the contracting authority transfer to the concession holder all, or at least a significant share, of the operating risk which it faces, in order for a service concession to be found to exist”9.

8 See a. o. judgments of 13 October 2005, Parking Brixen, C 458/03, ECR p. I 8585, item 40 ; of 18 July 2007, Commission/Italy, ECR

p. I 6657, item 34, and of 13 November 2008, Commission/Italy, C-437/07, ECR p. I-153* Pub somm, item 29. 8

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9 See CJEU, 10 September 2009, WAZV Gotha/Eurawasser, C-206/08, not yet published in the ECR, item 77.

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It could be appropriate to review the definition given by the legislator in the light of these case-law clarifications, to make it clearer for the providers of SSGI operating within the framework of “public service delegation”10 or equivalent contracts. The consultation opened in May 2010 by the DG MARKT about the issue of Concessions should contribute to the discussion on this subject. QUESTION 03: Clarification of the criterion of a “certain cross-border interest” on the basis of case-law Until relatively recently, it seemed that the ECJ wanted more specifically to verify, on the one hand, the existence of a “certain interest” of the contract in question for a company located in a Member State other than the State where the contracting authority is situated, and, on the other hand, the fact that the company could not show its interest for the contract, as it had no access to the appropriate information before contract award11. It could be useful to specify the limits of this criterion of the “certain cross-border interest”., having regard to the local dimension of the provision of social services in order that the capacity of providers of local services to take initiatives and to innovate does not run dry. QUESTION 04: Exclusion of some management methods: the IN HOUSE provision of services Pursuant to the case-law of the Court, “ … an invitation to tender is not mandatory when a contract for valuable consideration has been concluded with a body distinct from the local authority that is the contracting authority, so long as this local authority exercises over the legally distinct body in question control similar to that which it exercises over its own departments and so long as that body carries out the essential part of its activities with the controlling local authority or authorities”. This exception, subject to two cumulative conditions, has been give rise to a significant volume of caselaw, particularly from the standpoint of the concept of similar control12.

10 The concept is translated from french “délégations de service public” meaning : when a public service is provided by another entity

on the request of the public authority generally by act of law. 11 See a. o. in this sense: CJEU, 13 November 2007, Commission/Ireland, C-507/03, ECR p. I-9777, item 32 ; 21 February 2008,

Commission/Italy, C-412/04, ECR p. I-619, item 66 ; Serrantoni Srl e.a./Comune di Milano, 23 December 2009, C-376/08, not yet published in the ECR, item 24, and 13 April 2010, Wall AG, C-91/08, not yet published in the ECR, item 34. The Court speciﬁes that the obligation of transparency must be understood in the sense that it applies when the contract concerned is likely to interest an undertaking situated in a Member State other than that in which the contract is awarded. 12 See a. o. judgments of 11 January 2005, Stadt Halle and RPL Lochau, C 26/03, ECR p. I 1 ; of 21 July 2005, Coname, C 231/03, ECR p. I 7287; of 13 October 2005, Parking Brixen, aforementioned ; of 6 April 2006, ANAV, C 410/04, ECR p. I 3303 ; of 11 May 2006, Carbotermo and Consorzio Alisei, C 340/04, ECR p. I 4137 ; of 13 November 2008, Coditel Brabant, C 324/07, ECR p. I-8457 and of 10 September 2009, Sea Srl, C-573/07, not yet published. 9

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It could be advisable to stabilize this case-law by consolidating it, in order to foster public-public partnerships which could prove to be useful tools for the management of some SSGI. The report by Mario Monti on “A new strategy for the single market” also insists on the needed clarification of rules applicable to the in-house provision of services13. The current reflection on “in house” services within the Advisory Committee for Public Contracts could make a useful contribution to it. QUESTION 05: Consolidation of the exception of inter-municipal cooperation and extension to any form of public-public partnership Similarly, consolidation of the flexibility afforded by case-law should include the new exception developed on the basis of inter-municipal cooperation. Based on the finding that public authorities can use their own resources to achieve their public service tasks or that they can cooperate with other public authorities and that Community law does not compel public authorities to use any particular legal form in order to jointly carry out their public service tasks, the Court considered that in certain cases a contract establishing cooperation between local authorities, and aiming at implementing a public service task common to them, is not required to observe public procurement procedures. It gave some indications as to the conditions required to ensure that public-public cooperation does not fall within the scope of public procurement rules (i.e. provided that no private party takes part in it and that this cooperation is governed solely by considerations and requirements relating to the pursuit of objectives in the public interest)15. This paves the way for stronger pooling of resources of public authorities, particularly local resources, to better supply social services at a higher level of quality, especially in a tight budget context16. Thinking on this subjct should be done in parallel with reflections on how to identify the most appropriate resources to foster the development of private-public partnerships17.

13 Monti Report of 9 May 2010, section 3.4, page 87. 14 See in this sense: judgments of 19 April 2007, Asemfo, C 295/05, ECR p. I 2999, item 57, Coditel Brabant, aforementioned, item 49

and Sea Srl, aforementioned, item 58. 15 CJEU, 9 June 2009, Commission/Germany, C-480/06, not yet published in the ECR. 16 See Report « La mutualisation des moyens des collectivités territoriales » by Alain Lambert, Yves Détraigne, Jacques Mézard and

Brunon Sido, French Senate, 25 May 2010. 17 See the options mentioned in the Communication from the Commission « Mobilising private and public investment for recovery and

long-term structural change: developing Public Private Partnerships »: COM(2009) 615 ﬁnal of 19 November 2009. 10

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QUESTION 06: How can public procurement rules be brought in line with national authorization schemes and with the award of grants ? It is not always easy to see how requirements arising from the rules on public procurement should be aligned with certain national schemes which establish links (not necessarily related to a contractual matter) between a public authority and an operator of SSGI. This is particularly the case for prior administrative authorization schemes intended to carry out a public service task18 and for schemes for subsidizing associations operating in the social economy or for compensating the achievement of general interest tasks19. The case of the “Service public régional de formation professionnelle en Limousin (France)” illustrates these questions20. Therefore, it would be useful to further clarify the applicability of public procurement rules to these legal situations. It is in this respect, for instance, that the aforementioned report by Mario Monti suggests to “review the procurement rules with a view to aligning them with the rules on compensation”21. > Post-Technical Seminar (13.07.2010) Observations There seems to be a consensus on the need for clarification of certain key notions on the application of the “public procurement” directives, aimed at a better understanding and integration of some important developments in case-law in recent years. The ongoing consultations (particularly the consultation about the opportunity of an autonomous regulation of concessions and the consultation conducted within the Advisory Committee for Public Contracts to assess the application of the Directives of 2004) should respond to this need for clarification. In particular, a reflection must be conducted to identify easily manageable criteria for making the distinction between a purchase and an authorization or subsidy. The update of the working paper “Frequently asked questions”, to which the activities of the Interactive Information Service would notably contribute, as do the deliberations of the Social Protection Committee, will also fuel the debate.

18 In the sense of the case-law ANALIR e.a.,: CJEU, 20 February 2001, C-205/99, ECR p. I-1271. 19 Regardless of the issue of the respect of rules on State aid. 20 See judgment of the Administrative Court of Limoges of 6 May 2010, AFORMAC e.a. c/ Région Limousin e.a., in Actualité juridique

Droit administratif (AJDA), 5.7.2010, remarks of Jean-David Dreyfus, which refer among others to two former disputes. 21 See key recommendations in subparagraph 3.3 (« Social Services and the single market »).

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B. Acknowledgement of the specificity of certain operators of SSGI for awarding reserved contracts QUESTION 07: Reserved “contracts » An option that could be explored is that of extending the scope of reserved markets22 to a specified category of operators that meet the specific requirement of being not for profit, when the contract consists of providing a SSGI whose characteristics would be defined with reference to a body of evidence (to be determined)23. QUESTION 07bis: Social economy actors This last option could lead to reflection about setting-up a uniform European status of the social interest undertaking or the social economy undertaking (or any equivalent designation). This status would favour a social description of the purposes pursued by the operator, instead of the economic or non-economic character of the services provided24. > Post-Technical Seminar (13.07.2010) Observations There seems to be a consensus on the option of extending the scope of reserved markets, aimed at making use of the technical feasibility and assessing added value for the SSGI operators who would be likely to benefit from it. Clearly, however, one must be aware that a previous effort is needed to define/delimit both the actors who would benefit from this option and the SSGI activity.

22 See Article 19 of Directive 2004/18/EC. 23 Using as guidelines, among others, the list « Objectives and principles of organisation of social services » in COM(2007) 725 ﬁnal

on the SGI of 20 November 2007, pp. 7-8. 12

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24 In line with the 1989 Commission Communication “Business in the Social Economy Sector”.

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C. Integration of social considerations in the procedure for the award of public contracts QUESTION 08: A more social dimension for public contracts Except for a few specific rules (social housing, reserved contracts), the Directives relating to public contracts devote more special provisions to the environmental dimension than to the social dimension (See environmental technical specifications, environmental management standards, eco-labels, etc.). What about considering an extension of these provisions to the social dimension ? There is nothing to prevent the integration of a social reference in the technical specifications required for the selection of tenderers on the basis of the criterion of the most economically advantageous tender25. Moreover, it is clear from the case-law of the Court that a social condition or requirement that is not related to the verification of the economic, financial and technical suitability of a candidate, nor to the award criteria listed in the Directive, is nevertheless compatible with the public procurement Directives if the condition or requirement conforms to all relevant principles of EU law26, if it has no direct or indirect effect on tenderers from other Member States and if it is expressly stated in the contract notice, so that operators may become aware of its existence27. Following this case-law in particular, the Commission published a Communication on the Community law in 2001 applicable to public procurement and the possibilities of integrating social considerations into public procurement28. However this Communication does not deal with some questions related, among others, to the possibility to integrate social criteria in the award of contracts and with questions related to the links between public procurement and State aids. Therefore it could be useful, not only to update and further clarify these questions arising from the Communication of 2001, but also to have a manual for social public contracts similar to the manual on Green Public Procurement29: the goal would be not only to « buy green » but also to « buy social », as particular illustration of the new horizontal clause from the Lisbon Treaty (Article 9 TFUE). This reflection will necessarily include an analysis of potential options from the point of view of the rules set by the Government Procurement Agreement (GPA) within the framework of the World Trade Organization (WTO). 25 See Recital n°46 of Directive 2004/18/EC. 26 CJEU, 20 September 1988, Beentjes BV, 31/87, ECR p. 4635, about a criterion relating to the employment of the long-term unemployed. 27 CJEU, 26 September 2000, Commission/France, case « School buildings - Nord-Pas-de Calais Region », C-225/98, ECR p. I-7445, about

a condition relating to « Combating unemployment ». 28 COM (2001) 566 of 15 October 2001. 29 Commission, Buying green ! A handbook on environmental public procurement, POEU, 2005.

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> Post-Technical Seminar (13.07.2010) Observations The manual on how to “buy social” in public procurement, which is now being prepared by the Commission, should meet some of the expectations expressed in question 08 above. Using practical examples, this document will clarify the possibilities provided by legislation and current case-law, in order to take social considerations into account at the various stages of a procedure for awarding public contracts. The Seminar was an opportunity to recall that one of the conditions laid down by current legislation and case-law is that any consideration (including social considerations) taken into account in public procurement must be linked with the subject matter of the contract (when it is integrated into the technical specifications, the selection criteria or the award criteria) or with the execution of the contract (when the consideration is integrated into the terms for execution of the contract). According to the nature of the contract and the social considerations, this requirement may complicate the integration of certain social considerations into the technical specifications, selection criteria or award criteria, but it gives much flexibility to integrate social considerations into the terms of execution of the contract, as the these do not have to be linked with the subject matter of the contract, but only with its execution.

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D. A stricter and more systematic quality objective as a criterion for selecting the provider of SSGI QUESTION 09: Quality as a decisive criterion – concern for the beneficiaries Empirical studies conducted by stakeholders30 show that a strong trend can be detected: public contracts in the social sector are being awarded to the applicant provider with the best bid, mostly to the detriment of the quality of the services provided. The criterion of the most economically advantageous tender, which is an optional criterion now, could be made mandatory for the award of a contract related to the provision of SSGI, excluding the possibility on the sole criterion of the lowest price31. Similarly, when several criteria apply to the subject matter of the contract, it could be possible to stipulate that the price criterion could not get a higher weighting than 50%, for instance, in relation to the other criteria. These kinds of clauses, which only impose rules for the award of public contracts, as the Directives of 2004 do within the Union’s limited competence in the social area, could be used as a test and a model, in the light of their implementation in the SSGI sector, in order to extend the principle to other sectors for which the quality criterion is equally relevant. > Post-Technical Seminar (13.07.2010) Observations The main difﬁculty in meeting the concerns expressed about the quality lies in the obligation, which results from the very text of the Directives and case-law, to establish a link between the required criteria and the subject matter of the contract. Several participants have pointed out that the option of making the criterion of the most economically advantageous tender mandatory could mean more efﬁcient protection of the quality of social services. This option implies stricter application of public procurement rules, however.

30 See Composite Report of the Seminar « Impact of EU legislation on social services » organised in September 2009 by the « Informal

Network of Social Services Providers » (below « INSSP Report »). 31 By modifying, for instance, Article 53.1 of Directive 2004/18/EC.

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As an alternative, one could envisage extending the scope of the “competitive dialogue procedure” to some contracts relating to the provision of SSGI, particularly when the needs of the contracting authorities are not easy to identify beforehand or when the perimeter and/or intensity of the services provided are likely to increase significantly during the term of the contract. Today, in view of the texts, given that SSGI are services listed in Annex IIB and that no procedure is foreseen by the Directive for this type of services, public authorities can apply the procedure that best suits their contract or an adhoc procedure, provided that this procedure is compatible with the general principles of the Treaty (transparency, non-discrimination, etc). Consequently, public authorities can use a competitive dialogue, for example, if this procedure seems the most suitable in relation to the specificities of its contract. QUESTION 10: Paving the way to alternative procedures for public contracts Organizing a thinktank on various alternatives to the use of public procurement procedures, starting from an analysis of legislative experiments that have already been done in some Member States for organizing and financing SSGI in line with the principles of equal treatment and transparency32. > Post-Technical Seminar (13.07.2010) Observations There seems to be a consensus on the need to continue to reflect on possible alternative solutions to “public procurement only”. Therefore, a thorough analysis of the scheme established by the Swedish Law of 2008, as well as a first assessment of its application, could be made to contribute to this reflection. This would help enlighten public decision makers about the most objective and relevant way to bring the purchase logic in line with the logic of authorization/subsidies for the provision of SSGI.

31 See Swedish Law n°2008-962 on the « System of Choice in the Public Sector » and the French Law n°2009-879 reforming the hospital

(call for project tenders). 32 See Swedish Law n°2008-962 on the « System of Choice in the Public Sector » and the French Law n°2009-879 reforming the hospital

(call for project tenders). 16

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4. Exploring the way forward: what kind of tools? The main question is whether the aforementioned case-law trends, as well as the unanswered questions, will be clarified and stabilized by the Commission and/or the European legislator. PISTE 01 : Interpretative communication (Commission) a. An interpretative communication on the application of public procurement rules to SSGI, including the following questions: scope of Article 21 of Directive 2004/18/EC33; scope of the criterion of the certain cross-border interest ; scope of concessions and public-public interest partnerships; integration of social aspects in the procedures for the award of public contracts (update). b. Manual on social public procurement (“to buy socially responsibly”)34. c. Communication or public consultation on the opportunity to establish a specific European status for operators of SSGI as social economy actors. d. Increase in the Commission’s budget in order to finance training in European law on public contracts for public actors and operators in the field in the Member States. PISTE 02 : Legislative tools (European Parliament and Council)35 e. Modification/review of existing Directives: 1. clarify some notions and exclusions (clarification of the notion of service concession, integration of the definition of the in-house provision of services, exclusion of the publicpublic mode of cooperation …); 2. enable Member States to extend the scope of reserved contracts to not-for-profit operators of SSGI; 3. integrate special provisions on the social dimension of contracts (social technical specifications, social management standards, “social labels”, contracts reserved for certain providers of SSGI, etc.); 4. make the criterion of the most economically advantageous tender for the award of a contract mandatory, with a maximum weight of 50% for the price criterion;

33 See in this sense: IMCO draft opinion on SSGI (item 4). 34 See in this sense: Work in progress within the Commission. 35 However in a sense that does not favour legislative intervention: own-initiative report of the European Parliament by Heide Rühle

on new developments of European Law on Public Procurement (document A7-0151/2010 of 10 May 2010).

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f. Adoption of new Directives: A Directive on public concessions for services (which would integrate certain changes specific to SSGI) and/or a Directive on contracts in the social services sector (with higher thresholds , specific technical specifications, introduction of social bonus/malus clauses, extension of the scope of reserved contracts, mandatory criterion of the most economically advantageous offer, etc.); g. Adoption of a regulation establishing a European status for a social economy undertaking or a social interest undertaking (for the providers of SSGI). h. Organizing a thinktank on various alternatives to the use of public procurement procedures starting from an analysis of the legislative experiments that have already been achieved in some Member States, enabling the expression of a general interest through the management and the financing of SSGI without a launching a tender, but in line with the principles of equal treatment and transparency36.

36 See Swedish Law n°2008-962 on the « System of Choice in the Public Sector » and the French Law n°2009-879 reforming the hospital

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(call for project tenders).

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Event co-ďŹ nanced by the European Commission DG Employment, Social Affairs and Equal Opportunities

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6. SSGI and the Internal Market, a special context paper Belgian Presidency of the Council of the European Union

3rd Forum on Social Services of General Interest

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« Fallen leaves - The social lands - Singing its relief »

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CONTENTS Introduction

1. Practical case

2. Overview of progress and open questions

3. Implementation (tools)

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Introduction Reducing the tension Social services are not “typical” markets. Some of them are Services of general economic interest (SGEI), while others are Services of general non-economic interest (SGNEI). SGEI fall within the scope of the rules of the Treaty on the freedom of establishment and the freedom to provide services. The boundary between SGEI and SGNEI is not always clear. In any case these services are all SGI: services of general interest whose social mission must not be compromised. Where social services are concerned, fundamental rights are at stake: i.e. the right of access to placement services, the right of access to social security beneﬁts and social services, the right of access to preventive health care and to medical treatment, the right of access to services of general economic interest. At the beginning of the 3rd forum, the question is: how can these social services be dealt with adequately under the rules of the internal market, so that the social mission can be fully ensured? Ultimately, technical issues relating to entrustment, prior authorization or approval show the determination of the States, the social actors and the Union to enact a social policy. GOAL In order to contribute to the workshop on the freedom to provide services (including the freedom of establishment) at the 3rd SSGI FORUM, the Belgian Presidency relies on a “Stakeholders ” consultation and on the existing material and processes. It also refers to a series of operational options that have been discussed during the Technical workshop of 13 July 2010. These options are taken on board in the form of an ‘open catalogue’. They do not express the Belgian Presidency’s position, but we feel they deserve consideration as themes for further work. At times they may be totally independent from each other but they arise directly from the TRIO programme relating to SSGI: “The work on social services of general interest will continue”. The “Post-Technical Seminar Observations” are not the full record of the discussions of 13 July, but they provide food for thought and the Presidency feels they are sufﬁciently useful to be attached to the various operational options.

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1 Consultation through the Memos 01 on the regulatory framework

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Contact persons for all questions regarding Background Paper 02 (Freedom to provide services) Sandrine Diericx – Sandrine.Diericx@mi-is.be Marc MORSA – Marc.Morsa@minsoc.fed.be SSGI Project Manager Manuel PAOLILLO – Manuel.Paolillo@minsoc.fed.be Cabinet of the Minister for Social Affairs, Mrs Laurette ONKELINX Jacques OUZIEL – j.ouziel@lo.fgov.be

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1. Overview of progress and open questions DActivities considered as social services of general interest (SSGI) may be economic or non-economic. Consequently, the way they are dealt with under the TFEU internal market rules (freedom of establishment and freedom to provide services: Articles 49 – 62 TFEU) is not always easy to perceive. This difficulty has been illustrated by the adoption of Directive 2006/123/EC on services in the internal market2. This Directive applies to all services in the internal market, except for “social services in the areas of housing, childcare and support to families and persons permanently or temporarily in need, which are provided by the State, by providers mandated by the State or by charities recognized as such by the State” (Article 2.2 (j)), and services of general non-economic interest (SGNEI) (Article 2.2 (a)). The Directive also provides for a special scheme dedicated to services of general economic interest (SGEI) (Articles 15.4 and 16.1), since every SSGI falls into one of these two categories. The fact that those service categories do not fall within the scope of the Services Directive cannot be interpreted as an exemption from the scope of EU law, however. General principles derived from the TFEU and interpreted in the case-law of the Court of Justice remain applicable, as do the Articles of the Treaty on the freedom of establishment and the freedom to provide services. Nevertheless, social goals have been considered by the Court as overriding reasons related to general interest, which can justify restrictions of the freedom of establishment and the freedom to provide services, subject to those restrictions being proportionate. Apart from the question of knowing the exact scope of the exception in the Services Directive relating to some social services, another question may also be asked: do the rules of the internal market in general and of the Services Directive in particular integrate the specificities of SSGI operators in a sufficient and practical way (adaptation, exemption, acknowledgement in principle)? These specificities, which the Commission has already explicitly acknowledged in its Communications of April 2006 and November 2007, are part of a more operational recognition of the contribution and the added value of social players towards fulfilment of the European Union’s objectives of cohesion and competitiveness3.

2 Directive of the European Parliament and of the Council of 12 December 2006, OJEU L 376 of 27/12/2006, pp. 36-68, referred to

below as the « Services Directive ». 6

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3 In the spirit of the renewed social agenda and the future Europe 2020 Strategy.

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2. Themes for further reflection and proposals OPTION 01: Defining the scope of the SSGI exemption more precisely - OPTION 01-A : Non-application of the rules of the Treaty to SSGI when they can be considered SGNEI Goals = Define whether the concept in case-law of an activity fulfilling an “exclusively social function”, as used in competition law for the purpose of excluding such activities from its scope4 can be transposed to the field of freedom of movement (establishment and services); in so doing, contribute to the standardization of the ‘economic activity’ criterion as a common criterion for the application of the regulations on freedom of movement and free competition; explicitly acknowledge that a social service not targeted by Article 2.2 (j) does not fall within the scope of that Article, as a SGNEI, or benefits from an exemption scheme as a SGEI5. > Post-Technical Seminar (13.07.2010) Observations Tracing the limits of the non-economic sphere – which is of course difficult – remains a desirable and necessary exercise to obtain a better definition of the scope of the Treaty rules. A European “reference framework” on SSGI could be developed, along the lines of the 28th scheme. This would be an optional classification that Member States could use to weigh the consequences of implementing their national laws pertaining to the activities in question.

4 See CJEU, 17 February 1993, Poucet & Pistre, C-159 and 160/91, ECR p. I-637, item 18. It is perhaps regrettable that the Court of

Justice, which, as a rule, systematically checks the economic or non-economic nature of an activity before applying the rules of the Treaty on competition to it, does not seem to be willing to do the same qualiﬁcation exercise on a systematic basis when the rules on internal market are at stake. 5Like the option taken in this respect by the Belgian federal lawmakers: See Article 3§1-11° of the law of 26 March 2010 regarding services. 7

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- OPTION 01-B : Non-application of the Services Directive to SSGI as social services referred to under Article 2.2 (j): Goal = better define and / or gain a broader understanding of some concepts included in that provision, such as: • “mandated by”: one specific question is whether a simple authorization scheme linked to the grant of public funding may be considered as meeting the entrustment obligation6 more globally, should “entrustment” (mandated) in the meaning of the Services Directive also be considered entrustment under State aid rules (see case-law and the ‘Altmark’ package)7 and how it can be harmonized with applicable public procurement rules?8 The idea of integrating the entrustment tool into a wider partnership between public authorities and SSGI operators could also be investigated. • “Charity”: “: The aim would be to agree on a broader definition than the restrictive one that seems to have been given by the Commission in its Handbook on Implementation of 2007 (“churches and similar religious bodies pursuing charitable and volunteer activities”)9; for instance the following definition could be used for inspiration: « associations and foundations whose statutory object is to promote solidarity beyond a mere mutual support between adherents, recognized as charitable by a deed of a competent public authority or to accomplish social or solidarity missions falling within the scope of their statutory object” 10.

6 As speciﬁed by the Commission in the Commission Staff Working Document “Frequently asked questions in relation with Commission

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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, and of the Community Framework for State aid in the form of public service compensation”, SEC(2007) 1516 final of 20 November 2007,. A simple authorization scheme which does not define the obligation for an SSGI to provide a social service, does not correspond to the concept of entrustment. This was recalled at the seminar on 13 July. 7 In this respect, it would be useful if the Commission could confirm the positive answer that it had drawn up as an answer to this question at the 2nd Forum on SSGI in October 2008, under the French Presidency of the EU Council. This was also recalled during the Seminar on 13 July. 8 Several Member States seem to have imposed a selection procedure for service providers, in order to meet the entrustment requirement. See in this respect the French law N° 2009-879 of 21 July 2009 establishing a ‘call for proposals’ procedure for authorizing some social as well as medical and social institutions, with intervention of a selection committee. See also the dispute involving the “Service public de la formation professionnelle” in the French Region of Limousin (cf. sheet “SSGI & Public procurement”). 9 During the Seminar of 13 July, the Commission specified that these were examples. 10 M. Thierry (dir.), Mission relative à la prise en compte des spécificités des services d’intérêt général dans la transposition de la directive « services » et l’application du droit communautaire des aides d’Etat, General Inspection of the Administration, General Inspection of Social Affairs and General Inspection of Finance, January 2009, in particular page 9, footnote n°4.

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• “People in need”: should we follow the example of the Dutch legislature and take inspiration from some case-law references like, for instance, the case law regarding ‘Sodemare’, which applies to “those who are in a state of need owing to insufficient family income, total or partial lack of independence or the risk of being marginalized”11, or consider a wider spectrum, so that the population involved is not limited to those confronted with severe poverty or dependency? > Post-Technical Seminar (13.07.2010) Observations It seems that an update of the Handbook on Implementation of the Services Directive remains desirable, among other reasons to solve the various interpretation problems which the implementation exercise has revealed and will perhaps reveal in some Member States regarding some SSGI, as well as an update of the FAQ. It would be a minimal option if the adoption of an interpretative Communication is not decided at this stage (see below). At this point, the Commission is not aware of major implementation problems in the Member States except for France where the entrustment question has been raised especially with regard to State aid. OPTION 02 : Acknowledgement of the peculiarities of some SSGI providers - OPTION 02-A: By explicitly allowing Member States to impose a certain category of operators for the supply of the SSGI, within the framework of the requirements to be assessed in the sense of the Services Directive12: the purpose would be to generalize the scope of the case-law on Sodemare13 by identifying specific features which are common to some social service providers; some would be compulsory, like the absence of a profit motive, the asymmetry of the relationship between the provider and the service recipient, and other features of subsidiary enforcement14. This kind of approach would be facilitated by the development of a European status specific to SSGI providers, based upon the model of a mutual insurance company or a cooperative; one could then talk about undertakings of social interest (USI) or social economy companies (SEC). 11 CJEU, 17 June 1997, Sodemare SA e.a.,/ Regione Lombardia, C-70/95, ECR p. I-3395, item 29. 12 See Article 15.2 (b) of the Services Directive regarding “the requirements stating that the provider must be incorporated in a

particular legal form”. This provision already enables Member States to maintain this kind of requirement, provided it is justified and proportionate. This will be specified in the FAQs. 13 Judgment C-70/95, as mentioned above, item 35: the rules of the Treaty on freedom of establishment and on freedom to provide services do not preclude “a Member State from allowing only non-profit-making private operators to participate in the running of its social welfare system by concluding contracts which entitle them to be reimbursed by the public authorities for the costs of providing social welfare services of a health-care nature”: 14 While taking inspiration from the”Objectives and principles for organizing social services” stated in COM(2007) 725 final on SGI of 20 November 2007, pp. 7-8. 9

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- OPTION 02-B : By explicitly acknowledging the possibility for Member States to subject performance of some SSGI to the obtainment of a prior administrative authorization scheme that would be equivalent to entrustment (respecting the fundamental threesome, that is to say non-discrimination, transparency and proportionality)15 and require at least one overriding reason relating to the general interest (ORGI) plus a guarantee of accomplishment and / or a funding guarantee of that SSGI16; provided that such an authorization scheme includes conditions for granting public funding which do not fall within the scope of the Services Directive17. > Post-Technical Seminar (13.07.2010) Observations A dynamic interpretation of the provisions of the Services Directive relating to authorization schemes (Article 9 and thereafter) could meet national authorities’ concerns about the possibility of imposing a given category of providers for certain SSGI, in order to ensure the correct operation and quality of these services as well as the pursuit of political objectives (for instance, support of social economy). This could be further clariﬁed in an explanatory document from the Commission].

15 To widen the scope of the ANALIR case-law: CJEU, 20 February 2001, C-205/99, ECR p. I-1271, item 40. 16 In accordance with case-law: CJEU, 28 September 2006, Commission vs. The Netherlands, C-282 and 283/04, ECR p. I-9141, item 38

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(universal postal service) and CJEU, 1 October 2009, Woningstichting Sint Servatius, C-567/07, not yet published in the ECR, item 30 (social housing). 17See recitals n°10 and 28 as well as Article 1.3°, Paragraph 2 of the Directive.

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3. Enforcement (tools) TOOL 01 : Interpretative communication(s) from the Commission The adoption by the Commission of one or more interpretative communications would provide greater groundwork for legal security than today’s DG MARKT Implementation guide. Furthermore, this adoption would enable the Commission to undertake a topical exercise consisting of summarizing the various answers given to questions that have been asked since 2008, through the interactive service. TOOL 02 : Directive specific to SSGI UA ‘directive on SSGI in the internal market’, based on Article 114 TFEU on the achievement of the internal market in general, and/or on Article 53(1) and 62 TFEU about freedom to provide services in particular (like the Services Directive of 2006), could enable the implementation of one of the ideas discussed at the time of the adoption of the Services Directive, namely the ability to recognize the specificity of SSGI by providing a specific tool intelligently combining the requirements of the internal market and the expression of European needs like social cohesion and security. The Monti report of May 2010 on “A new strategy for the single market” recommends considering initiatives “regarding the service sectors which are not or not entirely covered by the Service Directive” and suggests making “any necessary proposal”18. Consequently, this wouldn’t be a Directive aiming at excluding SSGI from the rules of the internal market. On the contrary, this Directive would enable better appropriation of those rules by social operators, because they would understand the rules better once those rules have been adapted to their specifities and correspond better to the reality of the specific field in which SSGI are active. Presented and structured in this way, this Directive would avoid the pitfalls of a fake discussion about the liberalisation of SSGI. Hence, this Directive could, in particular: • underline the specific features of SSGI, in the sense of the Communications in 2006 and 2007; • integrate the more accurate and broader definitions mentioned above for social services targeted by Article 2.2 (j) of the Directive, including competing qualifications of SGNEI and SGIE.

18 Monti report, chapter 2.6, p. 63.

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> Post-Technical Seminar (13.07.2010) Observations The absence of consensus about the political timeliness and the legal relevance of a speciďŹ c text for SSIG should not prevent thinking from moving forward. The debate must go on with regard to the elements that would contribute to the added value of such a text - at this stage, they are sometimes insufďŹ ciently clear - and to the assessment of their legal effects for the status of SSGI in EU law.

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7. SSGI and Quality, a special context paper Belgian Presidency of the Council of the European Union

3rd Forum on Social Services of General Interest

Social Services of General Interest in Europe: How to assess Quality? SpeciďŹ c Background Paper for Workshops Quality 01 and Workshop Quality 02

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« Fallen leaves - The social lands - Singing its relief »

(

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Contents Introduction: the importance of quality in SSGI

1. Setting the Scene

2. Summary of remarks and initiatives by stakeholders

3. The Voluntary Quality Framework

Remark This paper tries to provide a short overview of the quality issue with respect to social services. It does not express a speciﬁc « willingness » of the Presidency concerning this topic. For further information, we refer to the discussions in the workshops and the upcoming second biannual report of the European Commission. 3

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Introduction: the importance of quality in SSGI Some recent evolutions put extra pressure on Social Services of General Interest: not only did the current economic crisis created financial constraints, but demographic and societal changes – due to an evolution of family structures- significantly altered the environment in which they operate. At the same time, we saw an evolution in employment conditions (e.g. part-time jobs, low salary jobs, migrant workers), and in the labour market (e.g. fast staff turnover, temporary shortages of workforce, increasing gap between high skilled and under-qualified workers). +These new challenges imply that SSGI need to adapt this changed reality, but only while maintaining quality. This dimension is sometimes omitted. There was for example a net creation of jobs in SSGI, but without any guarantee as far as quality of these jobs goes. For the service users as well, quality became more important: they rightly became more demanding, and require personalisation of the services. The European Employment Strategy and Active Inclusion strategies both build on the recognition of the need of high quality jobs. A.I. strategy in particular has an integrated approach based on 3 pillars: adequate income support, active labour market strategies and access to quality social services (biennial report , 2008, p. 46). New management tools were introduced in the design, evaluation and monitoring of the service delivery. But it also left public authorities confronted with the challenge of maintaining a high quality of SSGI. Different initiatives were thus launched by the Commission after the publication of the EC communication on services of general interest (COM (2007)725 final nov. 2007), in order to develop a EU Strategy for the promotion of SSGI quality. These included: - the launch of projects on the definition of quality standards in SSGI provision (VP/2008/004); - a SPC initiative on the development of a EU voluntary quality framework providing guidelines on methods to set, evaluate and monitor SSGI (work program 2009 SPC); and - training for local authorities In the present document, we will give an overview of the situation as far as quality of SSGI goes, present recent initiatives by the involved stakeholders, and define the European Voluntary Quality Framework on SSGI.

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1. Setting the Scene Within the EU, Member States are committed to accessible, high quality and sustainable health and longterm care by ensuring access to adequate care for all (including tackling inequalities in access), while at the same time guaranteeing that needs for care do not lead to poverty and ﬁnancial dependency. The quality of Social Services of General Interest is primarily the responsibility of individual Member States. But in the current debate, some ask for more coordination of national policies and the drawing up of overarching principles for the quality of services. A ﬁrst observation is that despite a great diversity across countries, some common trends emerge with regards to quality development in social services. Figure: Outline of modes and methods of quality assessment and development1

Mode of quality assessment & development

Quality control of products and services

Quality management

Models of excellence

Main principle

Inspection, quality assurance, minimum standards

Developing process quality

Continuous improvement

Assessment tools and methods

Internal control, self-regulation, check-lists, external control

Internal quality management, Third party certiﬁcation

Internal quality management, Third party certiﬁcation, social auditing, benchmarking

source: Maas & Rodrigues, 2010, p. 5

1 Maas, F. & Rodrigues, R. (30.06.2010). Achieving excellence in social service provision, Discussion Paper. European Centre for Social

Welfare Policy and Research. 5

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Since they receive public funding, (private, non-profit or for-profit) organisations and facilities for care services have to be approved by a (governmental) accreditation body. This could be a first way to guarantee a minimum quality. Minimum standards often take the form of requirements for structures (e.g. infrastructure obligations, safety measures, staff demands). Some countries have established national standards or guidelines to ensure a minimum level of quality requirements. But few have committed themselves to achieving quality targets. Besides accreditation, subsequent inspections (by national or regional bodies) may further keep an eye on the respect for quality requirements. And as a result of increased inspections, we could also see a trend towards self-regulation and self-assessment. It is possible that this reflects increased awareness and importance of quality (as a tool to improve performance within the organisation or as a ‘selling proposition’). Other methods to assure qualitative services include: - user satisfaction monitoring (e.g. surveys, complaint systems) run independently from the service provider - contracts between providers an service users about user’s rights and obligations - public statements by authorities about the minimum service level each user can expect - contracts between care providers and authorities (for funding) about minimum quality standards - a stable, trained and qualified care workforce, as this is strongly linked with quality (cf. supra) The strengthening of the user orientation, and the associated wider user choice, has also led to louder demands for transparent quality standards and definitions from the demand side. At the same time, suppliers of services use quality as a differentiating factor. Finally, one should be aware of the fact that not all services can be treated in the same way. Quality assessment should be sector-specific. And regional/local differences should be overcome when evaluating the quality of services. As such, the creed of “continuous improvement of quality” should be the guiding principle for all SSGI.

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2. Summary of remarks and initiatives by stakeholders There is consensus at the EU level that everyone should have the right of access to social security services of high quality. The free market will not always guarantee access for all, implying that a (financial) commitment of the public authorities would be required: they have to ensure that these services remain affordable for all citizens. Although this might require increased government spending, improved preventive services will outweigh this effect since these would reduce long-term expenditures. In this context, the social economy can play an important role: enterprises in this section of the market are private entities, but focus at the same time on the general interest. The current tendency to tender for social services leads to a decline in quality, as cost cuts induce staff reductions, although motivated, skilled employees and staff continuity are essential in setting up personal relationships with and delivering qualitative services to the service users. Moreover, the local community might indirectly benefit from the existence of a service without being direct users, as they might be potential service users, implying that this perspective should as well be taken into account. Quality criteria should therefore not only be defined at national or European level, but instead be attentive for the local dimension. Here again, social economy enterprises can come into play, as they are often rooted in local structures. As such, they can also better (and faster) express needs regarding service delivery. Others point at the involvement and the democratic ownership (control) by the stakeholders as important characteristics of quality services. Efficient communication and cooperation between different service providers (such as social economy), authorities, users and stakeholders are essential elements to guarantee high quality services too. When making policy proposals to ensure qualitative SSGI, one has to keep in mind certain pitfalls. First of all, public procurement often asks for certification procedures that might be too restrictive or costly for small players (from the social economy). Linked to this is the general remark that excessive bureaucratization has to be avoided in order to remain efficient and flexible. And finally, strict quality standards cannot always reflect all dimensions of the quality dimension (e.g. citizen’s perception), nor the cultural and local diversity that exists. That is why some ask for indicators on three levels: subjective indicators (satisfaction of users), objective indicators (‘neutral’ and external environmentally based, to be compared with specific standards) and organisational indicators (managerial aspects such as financial circumstances, training etc.). The mix of these three is said to give a better indication of quality. Many stakeholder associations (of service users, providers or authorities) have expressed their views on the quality dimension of Social Services of General Interest or proposed initiatives in this respect. From these initiatives, it becomes clear that many stakeholders believe that there is need for a European discussion on quality, while at the same time respecting subsidiarity: just like not all social services can be treated equally, one has to be aware of national differences between Member States. Therefore, some do 7

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not plead for strict quality standards, but instead call for more general quality guidelines at a EU level. The initiatives have in common that they reﬂect the idea that the service user is at the heart of the quality cycle: their experiences and remarks should be central when evaluating services. At the same time, they should be encouraged to submit their input to the discussions. And again, there is a link with well-trained staff to facilitate the communication between service users and service providers. In this section, we will go deeper into the stakeholder’s initiatives. For more general information on the initiatives of the stakeholders, we refer to a report by the European Commission, which is to be published end of October, and will provide an extensive overview of the speciﬁc action taken by various stakeholder networks during the last decade. Table: existing works on the quality of social services European Platform for Rehabilitation

Nine Principles of Excellence intended to provide a framework for the social service providers to evaluate their performance and to devise strategies for improvement (2002)

the Council of Europe

- legal framework for social service provision addressing the users’ needs and to allocate adequate human and ﬁnancial resources for this purpose (2003) - Policy Guidelines for the design and implementation of integrated models of social services (2006)

European Social Network

- set of recommendations on the accessibility of social services to all the persons who might need them, especially to those with physical, sensory or other communication difﬁculties (2006) - recommendation from Barcelona’s Conference (2010)

European Association of Service Providers for persons with disabilities

Memorandum on a European Quality Principles Framework (2006)

SOLIDAR

Recommendations for European framework for quality of social and health services (2008)

EUROCITIES

position paper on the 2007 Communication, expressing views on the development of a European quality Framework (2008)

Social Platform

Nine Principles to achieve quality social and health services (2008)

FEANTSA

Quality in social services: the perspective of social services working with homeless people (2009)

Eurodiaconia

Principles for Quality Diaconal Social Services (2009)

PROMETHEUS project

Common Quality Framework for Social services of General Interest (2010)

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Existing legislation (such as the Act on Social Welfare) already shows some principles for quality as well, although sometimes implicitly. But it is important to respond to local realities: common European principles for quality, but with concrete standards conceived at local level. In economy, this would correspond to the Think Global (i.e. European), Act Local paradigm. Others plead for a more integrated vision of diverse services, with trans-sectoral quality principles. Secondly, an important part of assessing quality, is looking at the existing international and European guidelines which (may) have an inﬂuence on quality in SSGI. We do not have to start from the very beginning for quality principles. Documents such as the Universal Declaration of Human Rights or the European Charter of Fundamental Rights, quality systems such as EQUASS and E-Qualin, or the “nine golden principles for SSGI” of the European Social Platform already provide quality principles. Certain international conventions (e.g. Alma-Ata Declaration (WHO)) even go further than mere quality principles: they present clear criteria and guidelines for their application in practice (going further than EU legislation). However, these are often neglected. As far as standards go, there are concrete initiatives as well. ISO standards were initially developed for industrial production, and later adapted to services. Speciﬁc standards for SSGI do not exist at the moment. The third observation relates to the starting point of quality assessment. The idea that the market can guarantee a high quality is criticized by some stakeholders. They mention that the individual service user is not always central in consideration. Instead, quality improvements are seen as a means to better “sell” the product. They plead for taking the needs of individuals into account from the very beginning and throughout the whole process of service planning. Fourthly, the question remains which standards or principles should be implemented at European level. EASPD believes that quality principles should be installed at EU level, while quality standards can remain at the local or regional level, since needs of individuals depend on their own socio-economic situation and personal circumstances. Standards therefore have to be close to the citizens, and thus at the local level.

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3. The Voluntary Quality Framework The Commission has expressed its support for a voluntary European Quality Framework for SSGI. It has been adopted by the Social Protection Committee (SPC) on the 6 October 2010. It was a clear mandate from the Council of June 2009. Notably via the PROGRESS programme, the Commission could also support cross-European initiatives and exchange of best practices. It is important to note that adherence to this document will be entirely voluntary, as the document will not have a legally binding basis. It is believed that having originated in the SPC, the Framework will already be a result of consensus. See the document on the Website : http://socialsecurity.fgov.be/eu/docs/agenda/26-27_10_10_spc_qf_document.pdf

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8. he voluntary European quality framework for SSGI adopted by the Social Protection Committee The Social Protection Committee

SPC/2010/10/8 final

A VOLUNTARY EUROPEAN QUALITY FRAMEWORK FOR SOCIAL SERVICES

INTRODUCTION

This voluntary European Quality Framework aims to develop a common understanding on the quality of social services within the EU by identifying quality principles that these services should fulfil. Moreover, by proposing a set of methodological guidelines, the Quality Framework will also help public authorities in charge of organising and financing social services, to develop at the appropriate level, specific tools for the definition, measurement and evaluation of social services' quality. Thus, it will serve as a reference for defining, assuring, evaluating and improving the quality of these services. The implementation of this Quality Framework is voluntary. This framework reflects the consensus within the Social Protection Committee following the Council conclusions of 8 June 20091 which invited the Member States and the European Commission to â&#x20AC;&#x153;continue the work within the Social Protection Committee on ..... a voluntary Quality Framework for social servicesâ&#x20AC;?. This Framework is flexible enough to be applied in the national, regional and local context in all the EU Member States and to a variety of social services. It aims to be compatible and complementary with existing national quality approaches in the sector. The Social Protection Committee believes that public authorities that adhere to the quality principles identified in this voluntary Framework and monitor the compliance with these principles notably by using the proposed quality criteria can greatly enhance their capacity to organise and provide high quality social services. As most social services are highly dependent on public funding2, a consensus on the quality of social services in the present context when public authorities in the Member States are exposed to growing financial constraints will help policy-makers to prioritise investments that promote continuous development of both quality and cost-effectiveness of social service provision. Developing such a Framework will also respond to a growing interest among public authorities, service providers, social partners, users and other stakeholders in the debate on the quality of social services. This interest is directly related to the reform processes in 1 See Council Conclusions on social services as a tool for active inclusion, strengthening social cohesion and an area for job opportunities, of 8 June 2009. 2 See Biennial report on social services of general interest, SEC(2008) 2179 final of 2 July 2008, section 2.2.1.

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which Member States have engaged in this area in the last decades and in particular to the increased outsourcing of the social services' provision to a variety of actors. This calls for a better definition by the public authorities of the service at stake and of the expected quality requirements as well as for a greater accountability for public spending. Better defining social services' quality also responds to the need to address a demand for social services that is becoming more complex and diverse, as well as to the need to protect those among social services' users who are more vulnerable and to improve the outcomes of social services for users and other stakeholders. Users are increasingly demanding more control over their own lives and the services they benefit from. Moreover, as the quality of the service is closely related to the skills and working conditions of workers in this sector3, the debate on social services' quality can help to identify skills, training requirements and the improvement of the working environment, thus contributing to the further development of the "white-jobs" sector4. Finally, the cross-border provision of social services, presently very limited but expected to grow, in particular in the area of long-term care, will call for a greater level of service comparability and transparency, as well as for new forms of protecting both users and workers. The voluntary European Quality Framework has been inspired by various initiatives concerning social services' quality: (i) the frameworks and tools which have been put in place by public authorities in the Member States; (ii) the initiatives already launched by the EU stakeholders; (iii) the Active Inclusion initiative5; (iv) the results of eight projects financed by PROGRESS on the quality of social service; (v) the position paper issued in November 2007 by the Disability High Level Group providing guidance on how to promote quality social services addressing the particular needs of people with disabilities. Moreover, when drafting this Framework, the experts nominated by the Member States have benefitted from the experience and have taken into account the expectations of various stakeholders (social partners acting in the sector, organisations from the civil society representing and advocating the interests of users and providers of social services as well as European umbrella organisations representing local public authorities).

3 In addition to workers in public an private service providers (the latter being either for profit or not-for-profit entities), a number of volunteers (i.e. unpaid staff, generally contributing to the services) and informal carers (i.e. persons who provide unpaid care to an ill, frail or disabled family member, friend or partner outside a professional or formal framework) are active in this sector. While these three categories of persons active in the social services sector cannot be mixed up, they all contribute in various ways to the delivery of high-quality social services. 4 It is worth noting that social services account for a significant share of employment and represent an important source of job creation in the EU. The share of employment in health and social services grew from 8.7% to 10% between 2000 and 2009, which means that almost 4.2 million new jobs in the health and social services sector were created in this period (EUROSTAT data analysed by the European Commission in preparation of the 2nd Biennial report on social services of general interest. This analysis is based on data which cover in a consolidated way both health and social services, as information on the different subsectors is scarce). 5 See Commission Recommendation of 3 October 2008 on the "Active inclusion of people excluded form the labour market", (2008/867/EC) published in the O.J. of 18.11.2008 L. 307/11; Council conclusions on common active inclusion principles to combat poverty more effectively of 17.12.2008; and the European Parliament resolution of 6 May 2009 on the active inclusion of people excluded from the labour market (2008/2335(INI).

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The document consists of three parts: (i) an introduction to the concept of social services (Chapter 2); (ii) a set of quality principles covering various aspects of service provision (Chapter 3); (iii) elements for a methodology to develop quality tools (Chapter 4). 2.

THE CONCEPT OF SOCIAL SERVICES

There is no general definition of "social services" in EU documents. However, the Commission Communication on social services of general interest of April 20066 provides the following definition of social services: We find two main categories of social services: â&#x20AC;&#x201C; statutory and complementary social security schemes, organised in various ways (mutual or occupational organisations), covering the main risks of life, such as those linked to health, ageing, occupational accidents, unemployment, retirement and disability; â&#x20AC;&#x201C; other essential services provided directly to the person. These services that play a preventive and social cohesion role consist of customised assistance to facilitate social inclusion and safeguard fundamental rights. They comprise, first of all, assistance for persons faced by personal challenges or crises (such as debt, unemployment, drug addition or family breakdown). Secondly, they include activities to ensure that the persons concerned are able to completely reintegrate into society (rehabilitation, language training for immigrants) and, in particular, the labour market (occupational training and reintegration). These services complement and support the role of families in caring for the youngest and oldest members of society in particular. Thirdly, these services include activities to integrate persons with long-term health or disability problems. Fourthly, they also include social housing, providing housing for disadvantaged citizens or socially less advantaged groups. This voluntary EU Quality Framework refers in particular to essential services provided directly to the person. Very often, these services, which are embedded in the social welfare systems of the Member States, are considered by the public authorities in the Member States as being of general interest and subject to specific public service requirements. Examples of social services are social assistance services, long-term care, childcare, employment and training services, personal assistants and social housing. Although their scope and organisation vary significantly according to historical, geographical, social and cultural specificities, these social services are essential for the fulfilment of basic EU objectives, such as the achievement of social, economic and territorial cohesion, social inclusion, a high level of employment and economic growth. They are key instruments for the safeguard of fundamental human rights and human dignity and contribute to ensuring the creation of equal opportunities for all, therefore enhancing the capacity of individuals to fully participate in the society. Available data show that social services play an essential role in combating poverty and social exclusion7. 6 Implementing the Community Lisbon programme: Social services of general interest in the European Union, COM(2006) 177 final. 7 See "How Social Services Help Mobilising the Workforce and Strengthening Social Cohesion. Background information", paper presented at the Ministerial Conference on "Social Services â&#x20AC;&#x201C; A Tool for

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Third sector social service providers constitute a value for this sector as they express citizenship capacity and contribute to social inclusion and to the social cohesion of communities. In its Communication of November 2007 on services of general interest and on social services of general interest8, the Commission identified a set of objectives and principles of organisation concerning social services (see box below).

Objectives and principles of organisation of social services Social services are often meant to achieve a number of specific aims: • they are person-oriented services, designed to respond to vital human needs, in particular the needs of users in vulnerable position; • they provide protection from general as well as specific risks of life and assist in personal challenges or crises; • they are also provided to families in a context of changing family patterns, support their role in caring for both young and old family members, as well as for people with disabilities, and compensate possible failings within the families; • they are key instruments for the safeguard of fundamental human rights and human dignity; • they play a preventive and socially cohesive role, which is addressed to the whole population, independently of wealth or income; • they contribute to non-discrimination, to gender equality, to human health protection, to improving living standards and quality of life and to ensuring the creation of equal opportunities for all, therefore enhancing the capacity of individuals to fully participate in the society. These aims are reflected in the ways in which these services are organised, delivered and financed: • in order to address the multiple needs of people as individuals, social services must be comprehensive and personalised, conceived and delivered in an integrated manner; • they often involve a personal relationship between the recipient and the service provider; • the definition and delivery of a service must take into account the diversity of users;

Mobilising the Workforce and Strengthening Social Cohesion" organised by the Czech EU Presidency, Prague, 22-23 April 2009. 8 Services of general interest, including social services of general interest: a new European commitment, COM(2007) 725 final. 4

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• when responding to the needs of vulnerable users, social services are often characterised by an asymmetric relationship between providers and beneficiaries which is different from a commercial supplier / consumer relationship; • as these services are often rooted in (local) cultural traditions, tailor-made solutions taking into account the particularities of the local situation are chosen, guaranteeing proximity between the service provider and the user while ensuring equal access to services across the territory; • service providers often need a large autonomy to address the variety and the evolving nature of social needs; • these services are generally driven by the principle of solidarity and are highly dependent on public financing, so as to ensure equality of access, independent of wealth or income; • non-profit providers as well as voluntary workers often play an important role in the delivery of social services, thereby expressing citizenship capacity and contributing to social inclusion, the social cohesion of local communities and to intergenerational solidarity.

QUALITY PRINCIPLES FOR SOCIAL SERVICES

The present chapter presents overarching quality principles for social service provision (section 3.1) as well as quality principles on the following dimensions of service provision: (i) the relationships between service providers and users (section 3.2); (ii) the relationships between service providers, public authorities and other stakeholders (section 3.3); and (iii) human and physical capital (section 3.4). For each of the quality principles concerning the dimensions of service provision, operational criteria which might be of help for the monitoring and evaluation of social services' quality have been identified. These quality principles express commonly shared values and aim to develop a common understanding of social services quality, as well as to facilitate the exchange of experiences and good practices. They are addressed to public authorities in charge, often at regional or local level, of developing, organising, financing and providing social services. They are also addressed to service providers in so far as they concern the delivery of social services and to users, for whom they represent an important source of information about the quality of social services they can expect. These principles are also directly relevant for workers and employers of the sector. 3.1.

Overarching quality principles for social service provision:

• Available: Access to a wide range of social services should be offered so as to provide users with an appropriate response to their needs as well as, when possible, with freedom of choice among services within the community, at a location which is most beneficial to the users and, where appropriate, to their families. 5

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3.3.

Quality principles for the relationships between service providers, public authorities, social partners and other stakeholders:

• Partnership: The development of social service provision requires the active involvement and cooperation of all stakeholders from both the public and the private sectors: local authorities, service users, their families and informal carers, users' organisations, service providers and their representative organisations, social partners and civil society organisations operating in the local community. This partnership is essential for the creation of a continuum of social services that respond to local needs, for the effective use of resources and expertise, as well as for achieving social cohesion. Quality criteria establishing synergies between all stakeholders in the community, concerning policymaking, needs identification, planning, development, delivery, monitoring and evaluation of services so as to ensure the continuity of social service provision for the duration of the need, to facilitate users' access to a comprehensive range of social services and to ensure that the service contributes to an inclusive society; promoting proximity of service needed to the users; supporting coordination among service providers so as to achieve a comprehensive and integrated delivery of social services. • Good governance: Social services should operate on the basis of openness and transparency, respect for the European, national, regional and local legislation, efficiency, effectiveness, and accountability in relation to organisational, social and financial performance of service delivery. Service provision should be based on the coordination of the relevant public authorities, social partners and stakeholders in the design, proper financing (including resources prioritisation within the available budget) and delivery of the service. Quality criteria clearly defining roles, responsibilities and interrelations between the actors involved in planning, development, financing, delivery, support, monitoring and evaluation of service; ensuring regular planning and review processes and putting in place mechanisms for systematic continuous improvement; collecting periodic feedback on the efficiency and effectiveness of service provision from users, funders and other stakeholders as well as from potential users who might be excluded from the service; establishing regular independent review of procedures, outcomes and users' satisfaction, and publishing their results; implementing transparent, accessible and user-friendly advice and complaint procedures for users; 8

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organising participatory forums involving service users and their networks, public authorities, social partners, civil society organisations and other stakeholders in the assessment of the service providers' performance within the given policy context. 3.4.

Quality principles for human and physical capital:

Good working conditions and working environment/Investment in human capital: Social services should be provided by skilled and competent workers under decent and stable working conditions12 and according to a manageable workload. Workers’ rights should be respected in particular with regard to the principles of confidentiality, deontology and professional autonomy inherent to social services relations. Adequate skills and a supporting environment should also be ensured to volunteers and informal carers. Quality criteria ensuring full respect of decent work principles in the sector, including nondiscrimination, social protection, health and safety protection, social dialogue, decent wages as well as gender equality and, in particular, equal pay for work of equal value; identifying skills needs and defining career profiles; promoting recruitment and retention policies that enable the selection of qualified workers with required knowledge, skills and competence; establishing partnerships between education systems and service providers to include traineeships during studies and mentoring schemes by experienced workers; establishing training programmes, life-long learning schemes, mentoring by experienced workers and competences certification for workers as well as, where appropriate, for volunteers and informal carers, on the necessary professional and inter-personal skills, as well as on accessibility and on assistive technology; involving users and social partners in the development of training programmes; promoting social dialogue at all levels with a view to encourage workers and trade unions to actively participate in the development, delivery and evaluation of services, involving volunteers as appropriate. Adequate physical infrastructure: Social services should be provided within adequate physical infrastructures respecting health and safety standards for users, workers and volunteers, accessibility standards following "Design for All" approaches as well as environmental requirements.

See the Council Conclusions on Decent work for all, Brussels, 30 November-1 December 2006. 9

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Quality criteria ensuring that physical infrastructures are adequate and comply with health and safety standards for users, workers and volunteers and with environmental requirements; promoting accessibility standards following "Design for All" approaches; ensuring that all users, including people with disabilities, have easy access to the physical infrastructures in which the service provision takes place and to adequate means of transportation to and from them. 4.

ELEMENTS FOR A METHODOLOGY TO DEVELOP QUALITY TOOLS

The aim of the present chapter is to provide methodological elements that public authorities and all relevant actors in the social services sector in the Member States might use for the development, at the appropriate level, of quality tools (standards, indicators, operational criteria …) for the definition, measurement and evaluation of social services quality. These quality tools might notably help fulfilling the quality principles identified in the previous section. While these methodological elements can be of use for the public authorities and all relevant actors in the social services sector in the Member States, it will be mainly for them to develop and employ the quality tools, in line with their needs and specific circumstances, national regulations and established quality systems. These methodological elements build notably on the reflection on indicators and statistics conducted within the OMC13. In line with the approach used in that context14, the following methodological criteria are highlighted: • a quality tool should capture the essence of what the service aims to achieve and have a clear and accepted normative interpretation; • a quality tool should be robust and statistically validated; • a quality tool should provide a sufficient level of cross-countries comparability, as far as practicable with the use of internationally applied definitions and data collection standards; • a quality tool should be built on available underlying data, and be timely and susceptible to revision; • a quality tool should be responsive to policy interventions but not subject to manipulation.

13 See the Portfolio of Overarching Indicators and Streamlined Social Inclusion, Pensions and Health Portfolios, adopted by the Social Protection Committee in June 2006, and the Portfolio of Indicators for

the Monitoring of the European Strategy for Social Protection and Social Inclusion – 2009 Update, adopted by the Social Protection Committee in September 2009.

14 It is worth noting that the indicators developed within the OMC aim at the evaluation of Member States policy. While the present exercise concerns methodological elements for the development of tools to be used for defining and measuring the quality of social services, the approach developed within the OMC provides useful inspiration also in this context.

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Moreover, methodological elements are suggested along the following six dimensions: (i) definition; (ii) scope; (iii) validity; (iv) cross-country comparability; (v) data availability and (vi) responsiveness. 4.1.

Definition

•

The quality tools should address the aims of service provision in a given context and reflect accurately the specificities of that context.

•

Providing a clear and accepted operational definition of quality tools requires an in-depth analysis of the specific issues regarding service provision.

•

Depending on their nature, quality tools defined by public authorities and other stakeholders can be objective or subjective, quantitative or qualitative.

•

The definition of a quality tool should be clear in order to avoid ambiguities that might arise especially in the case of qualitative or subjective tools and should be commonly accepted in order to allow for the consistent collection and for the cross-country comparability of the data. 4.2.

•

Scope

Analysing the collected data in a comparative perspective leads to the identification of dynamic aspects such as trends, strong and weak points, thresholds reached, gaps in continuity (input), making it thus possible to set objectives, determine priorities and draft a strategy for regulatory or remedial action (process), as well as to monitor and evaluate the efficiency and effectiveness of the implemented actions (outcome). The following types of quality tools might capture the interaction between various factors affecting social service provision: input-related quality tools assess the characteristics of social service provision. They represent necessary conditions for the delivery of highquality social services but they do not ensure that appropriate processes are carried out or that satisfactory outcomes are achieved; process-related quality tools measure the delivery of social services and offer an evidence-based assessment of their quality. Thus, they represent the closest approximation of the actual service provision; outcome-related quality tools assess the degree to which the social service provision addresses users' needs and influences their well-being. However, output tools may be influenced by other factors than the quality of social service provision, factors which should be accounted for by risk adjustment. 4.3.

Validity

•

Quality tools should be robust and statistically validated and should be devised in compliance with the best methodological practices.

•

Data collection methods should minimise errors arising from ambiguous questions, misleading definitions, bias resulting from non-response and interviewer or coder mistakes. 11

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•

Quality tools should be statistically reliable over time and should avoid fluctuations due to unpredictable factors or to arbitrary adjustment.

•

Quality tools should be subject to a validation procedure that assesses their reliability in the light of all available sources of information. 4.4.

Cross-country comparability

•

Quality tools should be measurable in a comparable perspective in order to allow for peer reviews and for voluntary exchanges of good practices concerning social service provision within and among the Member States, while respecting their social and institutional diversity. In order to allow for an adequate level of crosscountry comparability, quality tools should be expressed in a consistent manner. This would enable statistical calculations that may improve the relevance of the tools and the reliability of the data.

•

Given the social and institutional diversity among Member States, quality tools that are over-sensitive to structural variation or raise specific problems of data collection and interpretation should be avoided. 4.5.

Data availability

•

The availability of sources and data is crucial, since the development of certain tools depends on establishing comparisons over time, while the collection of data for tools that are not routinely measured in all Member States can be time and resource-consuming. The development of quality tools should, wherever possible, make use of information already supplied by the national, European and international institutions and organisations, including social partners' organisations. In case new information is needed, it should be obtained as far as possible by using existing data collection instruments and at the level that is closest to the service users.

•

Useful sources of data include: official statistics carried out by national statistical institutes, international organisations, social partners' organisations and Eurostat; compilations of administrative data at local, regional, national and European level, studies, reports and evaluations financed by the Commission and/or produced by advocacy groups, users' organisations, social partners' organisations, think tanks, NGOs and expert networks; peer reviews and regular exchanges of information on best practices; surveys conducted by national statistical institutes, by opinion polls institutes, by social partners' organisations or by the Eurobarometer.

•

The collection of data from sample surveys should comply with the best practices of survey research methodology and should minimise errors arising from ambiguous questions, misleading definitions, bias resulting from non-response and interviewer/coder mistakes. 4.6.

•

Responsiveness

The quality tools should accurately measure the relevance and effectiveness of the implemented actions with respect to the objectives pursued by the quality principles, the extent to which they address the users' needs and their vulnerability to risks, liabilities and threats that might affect the duration of 12

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service provision. At the same time, the quality tools should not be easily subject to manipulation by artificial policy interventions. 4.7.

Conclusions

Following this methodological approach should result in developing a set of quality tools that respect a common identification pattern in order to ensure cross-country comparability: • Name and definition • Scale (numerical, logical or categorical, for which the units of measurements and range of responses have been previously agreed upon) • Scope (capturing input, process or outcome-related aspects of social service provision) • Data sources

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9. The Horizontal Social Clause and Social Mainstreaming in the EU Belgian Presidency of the European Union

The horizontal social clause and social mainstreaming in the EU The Horizontal Social Clause as a call for intensified cooperation and exchange of knowledge through the Commissionâ&#x20AC;&#x2122;s Impact Assessment Background Paper

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© 2010 Federal Public Service Social Security Boulevard du Jardin Botanique 50, box 100 B-1000 Brussels Responsible editor: Tom Auwers www.socialsecurity.fgov.be/eu/en Teampresidency2010@minsoc.fed.be This publication is only available in electronic version. Download the publication via de website of the Federal Public Service Social Security: http://www.socialsecurity.fgov.be/eu/en/agenda/26-27_10_10.asp The information contained in this publication does not necessarily reﬂect the position or opinion of the European Commission. Event co-ﬁnanced by the European Commission DG Employment, Social Affairs and Equal Opportunities 2

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SUMMARY Introduction

Reasserting social mainstreaming with the new treaty

The what and how of mainstreaming

Informed decision making in the EU

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Introduction Social protection is at the heart of European society. It is the main difference between Europe and other industrialized regions in North America or Asia, and ensures that economic growth coincides with social progress. Since the beginning of the European Union the question arises how the EU can enforce Member States’ social security systems. In its founding Treaty of Rome, the EU states aimed at the promotion of full employment and social progress, the fight against social exclusion and discrimination and the promotion of social justice and social protection. The horizontal social clause of the new Lisbon treaty calls for an intensified focus on the social dimension of EU policies. Taking into account social effects of all EU policies demands a structural dialogue across and within all EU institutions. It requires all strands of the Council and the Commission to benefit from the expertise inside the social strand. In turn, the debate in the social strand would benefit from pollination with outside discussions. This requires a commitment from the European Commission, the European Parliament and the Council of the European Union, to engage in dialogue across and within their institutions. A key instrument to achieve this is a strong commitment to impact assessment. Assessing social impacts will lead to better informed decision making on the political level, to a stronger social dimension of EU policy, and eventually to a more cohesive European Union. To come to a balanced decision it is essential to assess the EU’s social goals simultaneously with its other objectives. The Belgian EU Presidency highlights the potential of the Commission’s Impact Assessment for a rapid and high quality implementation of the Horizontal Social Clause. At the same time, we are continuing the discussion on how the evaluation of social impacts inside the Commission’s Impact Assessment can be improved in the future, to truly deliver up to the expectations of a strong and social European Union.

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Reasserting social mainstreaming with the new treaty The new Lisbon Treaty, which went in to effect on December 1, 2009 confirms the EU’s commitment to social cohesion. The treaty contains a “horizontal social clause” (Article 9) that proclaims that the Union has to take into account […] the guarantee of adequate social protection […] when implementing new policies. In defining and implementing its policies and activities, the Union shall take into account requirements linked to the promotion of a high level of employment, the guarantee of adequate social protection, the fight against social exclusion, and a high level of education, training and protection of human health. (TFEU Article 9)

The clause requires the Union has to take into account […] the guarantee of adequate social protection […] when implementing new policies. This calls for a reflection on how to improve the existing EU methodology for social impacts assessment. The new treaty identifies a number of horizontal objectives together with the social objectives. The Belgian EU presidency acknowledges the importance of all these objectives, which should be taken into account simultaneously in order to prevent that the pursuit of one objective comes at the expense of another. A key method in reconciling social, economic and environmental concerns in the development of EU policy is the Commission’s Impact Assessment (IA), which carries out impact assessment in different domains in an integrated process.. Improve the efficiency of Social Mainstreaming is primarily improving the use and involvement of all actors in the Impact Assessment process. It is essential to increase the visibility of the Commission’s Impact Assessment (IA) among stakeholders, policy makers, experts and the general public.

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The what and how of mainstreaming What’s the purpose of social mainstreaming? When we develop policies, many impacts of a new proposal are automatically taken into account. Policymakers are well aware of for instance the financial impacts, or the political feasibility of their proposals. In the last decades, awareness on environmental impacts and gender impacts has also risen. Awareness regarding these issues got a firm push by various Impact Assessment exercises in place. Eventually they change the way we look at policy solution, simply by providing full information on the consequences of policy proposals. What is Social Impact Assessment? Social Impact Assessment is the vehicle for social mainstreaming. It is a systematic evaluation that feeds into the policy process. Impact assessment is not a replacement for political judgement, but a tool that enhances policy knowledge. Social Impact Assessment prepares evidence for political decision-makers of the potential impacts of a proposal in a balanced and proportionate way, and identifies possible trade-offs and synergies. It is a multipurpose framework that encourages better regulation.

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Deﬁne policy problem

Assess impacts

Comparaison of options

Deﬁne policy objectives

Identify policy options

Make an informed decision

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It is also an instrument to achieve transversal policy goals. At this time, important social questions are too often under the competence of Directorates who donâ&#x20AC;&#x2122;t explicitly consider social outcomes as their core business. Examples are the Service Directive or the implementation of the Euro, who both have a large social impact on the life of Europeans. Making such policies subject to a streamlining process that approaches social outcomes as a key concern will be of great beneďŹ t to the social cohesion in the EU. Many EU countries already have some experience with various kinds of impact assessment. An overview of these systems can be found in the Peer Review in Social Protection and Social Inclusion and Assessment in Social Inclusion. The 2008 Joint Report on Social Protection and Social Inclusion includes a recommendation from the Social Protection Committee to reinforce the analytical framework, including the social impact element of the Commissionâ&#x20AC;&#x2122;s impact assessments. Reinforcing the existing framework is a major step forward in achieving greater coherence and consistency between social and other policies, both at the Member State and the EU level. As indicated in the Communication on Reinforcing the Social OMC, the Commission intends to encourage mutual learning between Member States on the subject.

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Informed decision making in the EU The Smart Regulation Framework At the heart of the European project is the need to create a framework which allows businesses to compete fairly and effectively across the single market, and which at the same time protects workers, consumers, health and the environment. The Commission, which works in the interests of all Member States and citizens, has a unique role in ensuring that policies at the European level are decided in a way which is evidence-based, and which is as transparent and accountable as possible. The previous Commission took up this challenge through its Better Regulation agenda. It left a lasting mark, bringing about important and necessary changes to the way the Commission works. Wide public consultations and impact assessments have become an inherent part of the way we prepare legislation. Citizens, businesses and authorities are benefiting from a simpler regulatory environment with lower administrative burdens. Building on these achievements, we need to go further. Smart regulation is not about more or less legislation – it is about delivering results in the least burdensome way. Smart regulation will be instrumental in achieving the ambitious objectives of Europe 2020, a new strategy for smart, sustainable and inclusive growth. A central element in the Smart Regulation initiative is to improve the quality of new initiatives. This is done trough the Commission’s Impact Assessment, which is an ex ante evaluation of the impacts of new policy measures in the social, ecological and economic domain. The Commission’s Impact Assessment As agreed at the Göteborg and Laeken European Councils, in 2002 the Commission established a new method for impact assessment to consider the effects of policy proposals in their economic, social and environmental dimensions. This system of Integrated Impact Assessment (IA) replaces the previously used single-sector type assessments. This new impact assessment system is an action of the Better Regulation Action Plan and of the European Strategy for Sustainable Development, and later the Lisbon Strategy for growth and jobs (2005). It consists of a balanced appraisal of all impacts, and is underpinned by the principle of proportionate analysis, whereby the depth and scope of an impact assessment, and hence the resources allocated to it, are proportionate to the expected nature of the proposal and its likely impacts. The Commission has adopted an ambitious approach to IA by aiming to analyse all significant economic, social and environmental impacts in one single assessment. IA reports should contain a description of the problem at stake, analyse all feasible policy options in terms of costs and benefits and provide an assessment of implementation and enforcement issues and an estimate of the administrative burden resulting from proposed legislation. It also sets out a framework for future monitoring and evaluation. 8

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External evaluations of the Commission’s Impact Assessment An external evaluation of the Impact Assessment has lead to a revision of the Guidelines in 2009. The new guidelines extend the scope of the IA to all initiatives in the Commissions Work Programme. There is also made reference to special guidance on assessing social impacts within the integrated IA approach in the areas of (1) Employment and labour market, (2) Standards and rights related to job quality; (3) Social inclusion and protection of particular groups; (4) Equality of treatment and opportunities, non–discrimination; (5) Access to and effects on social protection, health and educational systems; and (6) Public Health and Safety. Speciﬁc attention is given to re-distributional impacts and impacts on poverty and social inclusion, both in the EU and in third – especially developing – countries In October 2010 the European Court of Auditors presented an evaluation of the Impact Assessment. The report underlines the value and the potential of Impact Assessment as a strategy for better policy making. Based on an analysis of the Impact Assessment formulates two major recommendations: enhance the process of IA, and enhance the way of presentation towards the public and policy makers. The highlight recommendations however concern the IA process, and not the quality of social impact assessment. The Belgian EU Presidency supports recommendations on process improvement; at the same time we launch the debate on how to improve the quality of particularly social impact assessment within the existing frameworks.

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10. Conclusions of the EPSCO Council of 6 December 2010: SSGI, at the heart of the European model

COUNCIL OF THE EUROPEAN UNION

Council Conclusions «Social Services of General Interest: at the heart of the European social model»1 3053rd EMPLOYMENT, SOCIAL POLICY HEALTH and CONSUMER AFFAIRS Council meeting Brussels, 6 December 2010 THE COUNCIL OF THE EUROPEAN UNION RECALLING 1.

"the Council's conclusions of 8 June 2009 on “ Social Services as a tool for active inclusion, strengthening social cohesion and an area for job opportunities”2;

the focus onservices of general interest in the Integrated Guidelines No. 6 adopted on 8 June 2010 by the Council and Guidelines No. 10 adopted by the Council on 21 October 2010 in the context of the EU 2020 Strategy, particularly underscoring the principle of a sufficient supply of affordable and sustainable quality services accessible to all citizens;

that social services contribute directly to reinforcing social protection of every citizen and they contribute to economic, social and territorial cohesion at local, regional, national and European levels while playing a fundamental role in job creation;

that the organization and financing of social services are a national competence, to be performed in conformity with EU rules when they are applicable;

The reference to the European social model fully respects the diversity of the national social systems. Doc. 10052/09.

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that social services contribute to ensuring the safeguard of human rights of persons with disabilities and children, as set out in the relevant United Nations Conventions3;

TAKING INTO ACCOUNT 6.

Article 9 of the Treaty on the Functioning of the European Union that provides that in defining and implementing its policies and activities the Union shall take into account requirements linked to the promotion of a high level of employment, the guarantee of adequate social protection, the fight against social exclusion, and a high level of education, training and protection of human health;

Article 14 of the Treaty on the Functioning of the European Union on Services of General Economic Interest (SGEI) and Protocol n°26 on Services of General Interest (SGI) that together underscore the important role of SGI in social and territorial cohesion and oblige the European Union and the Member States, each within their respective competencies and within the scope of application of the Treaties, to take care that such services operate on the basis of principles and conditions which enable these services to fulfil their missions;

the Charter of Fundamental Rights of the European Union, which has the same legal value as the treaties, and particularly Title IV on solidarity;

the views of the European Parliament on the issue of social services of general interest, as expressed in the initiative report on the future of social services of general interest4;

10.

the two biennial reports on Social Services of General Interest published by the Commission;

11.

the communication “Towards a Single Market Act. For a highly competitive social market economy”, adopted by the Commission on 27 October 2010;6

12.

the evaluation in progress of the “the Altmark/SGEI” package adopted by the Commission on 28 November 2005. The Monti Report identified some issues such as the enlarged scope of the notification exemption for social services of general interest as worthy of future review;

13.

the voluntary European Quality Framework for social services adopted by the Social Protection Committee7 on 6 October 2010;

14.

the Report presented to the President of the European Commission by Professor Mario Monti in May 2010 that stresses the need to tackle the different challenges posed by missing links, bottlenecks of the Single Market and the role of the Commission in ensuring that where EU rules apply to the provision of services of general interest, including social services, they are predictable and proportionate thus ensuring that SGI can fulfil their public service mission as well as the need of more inclusivity to ensure that all citizens can benefit from the Single Market, having regard to Member States competencies;

UN Convention on the Rights of Persons with Disabilities, adopted by the General Assembly of the United Nations on 13 December 2006 and UN Convention on the Rights of the Child, adopted by the General Assembly on 20 November 1989. INI/2009/2222 - EMPL/7/01750. Docs 11560/08 ADD 4 and 16035/10. Doc. 13977/10. Doc. 16319/10.

4 5 6 7

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15.

the work carried out at the 3rd Forum on Social Services of General Interest organized in Brussels on 26 and 27 October 2010, which followed those of the first forum in Lisbon (September 2007) and of the second in Paris (October 2008);

UNDERLINES 16.

the fact that social services are essential to implement social policies elaborated more specifically at the local, regional, and national levels, and to combat the negative effects of the current economic crisis;

17.

that social services of general interest, which are defined by public authorities in the Member States taking into account the different geographical, social and cultural situations, as well as user’s needs and preferences, have specific features which distinguish them from other services of general interest, as they are person-oriented services, designed to respond to human vital needs, generally driven by the principle of solidarity and often rooted in (local) cultural traditions and contribute to the safeguard of fundamental rights and human dignity, to non-discrimination and to ensuring the creation of equal opportunities for all, therefore enabling individuals to play a significant part in the economic and social life of the society;



18.

that social services of general interest play a preventive and socially cohesive role, which is addressed to all women, men and children and which is based on the idea of universality, and have aims which are reflected in the ways these services are organised, delivered and financed;

19.

the need to further assess the interaction between the internal market and social services of general interest in view of the social aims of the European Union, without prejudice of the powers of the Member States, in order to supply quality services meeting users' specific needs;

20.

that the European Union, in accordance with Article 9 of the TFEU, takes into account the specificities of social services of general interest as key tools to fulfil its own objectives;

21.

the quality of the work done by the Social Protection Committee (SPC) on the Voluntary European Quality Framework for Social Services which aims to develop a common understanding on concepts related to social services quality while fully respecting the responsibilities of the Member States and taking into account the diverse ways in which these services are organized in Europe ;

INVITES THE MEMBER STATES 22.

to encourage local and regional authorities to make good use of the European Commission’s Guide on the application of EU State aid, public procurement and internal market rules to services of general economic interest and, in particular, to social services of general interest (hereafter “the Commission’s Guide”) and of the Interactive Information Service to get operational responses by presenting concrete problems they might have;

23.

to identify any problem encountered by social services of general interest in the application of European legislation by consulting, in appropriate ways to be determined by the Member States, the relevant stakeholders involved in this issue;

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INVITES THE COMMISSION 24.

To continue to promote exchanges of best practices between the Member States for quality social services of general interest accessible to all and financially sustainable taking into account the work of the SPC, which could be supported through Progress financed projects;

25.

to further clarify and assess the application of EU rules to social services of general interest, in order to enhance their legal certainty, having regard to their missions and specificities as mentioned in paragraphs 17 and 18 of these conclusions. Such exercise should cover in particular the issues as set out in the Annex of these conclusions;

26.

to continue to conduct and reinforce thorough social impact analysis within its Impact Assessment System, in line with the quantitative and qualitative requirements of the Guidelines8, including the possible impact on Member States' social services of general interest and social protection;

27.

to improve transparency and awareness by various means such as the Commissionâ&#x20AC;&#x2122; Guide and the Interactive Information Service, the training initiative for local public authorities and the Biennial Reports, while continuing its dialogue with all the relevant parties;

28.

to continue supporting the work of the Social Protection Committee on the application of the EU rules to SSGI notably with the aim of contributing to the preparation of subsequent Fora on SSGI;

INVITES THE MEMBER STATES AND THE COMMISSION 29

to clearly identify European policies and measures having an indirect but significant impact on social services of general interest;

INVITES THE SOCIAL PROTECTION COMMITTEE 30.

while carrying its work on SSGI and taking into account the work carried on by the three previous Fora on SSGI, notably through the Informal Working Group on the application of the rules, to ensure regular contacts with the European Parliament and the European Union advisory bodies , as well as with all relevant organisations and stakeholders (e.g. social partners and NGOs), inter alia with the aim of preparing the next Forum.

Annex Proposal for measures linked to paragraph 25 of the draft Conclusions.

SEC/2009/92. 4

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Annex to the ANNEX

Paragraph 25 of the draft Conclusions Invitations to the Commission: 1.

Without prejudice to the Commission’s right of initiative, to further clarify, particularly through the Commission’s Guide, the Interactive Information Service and, if need be, other appropriate non legislative instruments, its views on: a)

the way of identification of a social service as an economic or non-economic service of general interest;

the concept of « certain cross-border interest » in the context of the application of the public procurement rules to social services of general interest;

the concept of affecting trade between Member States in the field of the application of the rules on state aids to social services of general interest of economic nature;

to clarify and to provide information on how the underlying requirements of social labels could be used by public authorities when outsourcing social services, in the contract performance clauses;

to clarify and to provide more information on:



the use of the contract award criterion of the most economically advantageous tender instead of the lowest price for the award of social services contracts, when public procurement procedures are organised for supplying social services of general interest;

existing alternatives to public procurement procedures when Member States choose to outsource the provision of social services of general interest, notably through the exchange of best practices among Member States;

to study and assess potential questions which could raise around social services of general interest and the freedom to provide services and the right of establishment."

____________________

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11. SSGI, « Strange birds in the European skies Social Services of General Interest explained to my 5-year-old son”, 2010

Strange birds in the European skies Social Services of General Interest explained to my 5-year-old son

11. SSGI, « Strange birds in the European skies - Social Services of General Interest explained to my 5-year-old son”, 2010

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Foreword

“All birds will fly with their kind” MUHAMMED

“I belong to those p Services of General fundamental rights

This sometimes very 3rd SSGI forum on t take another look a shake up ideas and

Because all actors i compromises in ord

Laurette ONKELIN

Foreword 2

“I belong to those people who consider that Europe’s reality differs from that of a large market. The issue of Social Services of General Interest (SSGI) immediately raises topics that are dear to me, such as the balance between fundamental rights and economic freedoms and the place of social services in an evolving Europe. This sometimes very technical matter is on the border between various disciplines. So during the preparation of the 3rd SSGI forum on the occasion of the Belgian Presidency of the Council of the European Union, the idea arose to take another look at this complex set of themes. A quite humorous and light-hearted look, but which is likely to shake up ideas and to awake consciousnesses. Because all actors involved will have to show a strong political will, a great creative power and a good sense for compromises in order to take up the challenges linked with SSGI.” Laurette ONKELINX, Deputy Prime Minister and Minister of Social Affairs and Public Health

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My son, a bird will sing and fly. It is a marvel of nature. We need it in order to have a balanced ecosystem and for agriculture. A bird reminds us of freedom. The owl is the symbol of the Greek goddess of wisdom, Athena. She is depicted on Greek 1 Euro coins. There are a hundred thousand different birds and their diversity alone is a form of wealth in its own right. Social Services of General Interest (SSGI) are just like birds. Their chant has a pleasant effect from the moment you enter this world, for your parents who take you to the day nursery, for young people who are struggling and for the elderly who need support. They protect the young and the old from social risks and safeguard those who are vulnerable. They empower us to live to our full potential.

alanced ecosystem and for of wisdom, Athena. She is

h in its own right.

fect from the moment you who are struggling and for d safeguard those who are

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These birds have a history. Because of their â&#x20AC;&#x153;good deedsâ&#x20AC;?, and the charity work of some, we consider them to be champions of the well-being of all of mankind. Our society changes, and they adapt accordingly.

1000 BC

to be

1000 BC

1950

Version 2.0

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What is special about these birds is the nature of the service they deliver. Without them, some or all of us would suffer. If they were not properly fed, we would not be able to benefit from their services or at a very expensive price. Do not forget, my son, that their services are also special in that: not only do they ensure our fundamental rights, they also anticipate them.

some or all of us would at a very expensive price. our fundamental rights,

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These birds are everywhere: they fly in local, national and international skies, but for a few years now they have been in the European spotlight.

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Spotlight 1: state aid In order to fulfil their task of serving the public or “general” interest, these strange birds are often fed by local, regional or national governments. This means that they often irritate some cats vying for the same food. A balanced feeding regimen is a must in the European Union. National governments must compile the menus beforehand. The idea is that all birds receive fair compensation for the services they provide.

rds are often fed by local, or the same food.

must compile the menus vide.

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Spotlight 1: state aid In order to determine how much food these birds should receive, we need to be aware of what they eat, where they travel, how they fly, ... If these birds only receive food for specific assignments, will they still be able to fly freely and visit the foreign places where they are so desperately needed? They might also become robotic...

re they

oreign

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Spotlight 2: the internal market It is important that these birds are healthy. To be allowed to fly they must often have their health checked. Would you like to be poorly cared for or given wrongful information? Or to have your sister go to a day nursery where everything goes awry? Of course not! We must also prevent their services from disappearing or prevent a cat from making a mess of the services.

have their health checked. sister go to a day nursery appearing or prevent a cat

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Spotlight 3: the public procurement rules With increasing frequency a country or a community will keep asking for a specific service from these birds because they are used to doing so or think they know best. I sometimes wonder whether they fully understand the language of the birds. The birds themselves do not always understand exactly what is being asked of them.

ecause nguage

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Spotlight 3: the public procurement rules You also sometimes have tiny birds that do a tremendous job; they will for instance eat bad insects off a rhino’s back. Because they are tiny, they cannot carry out big orders. But will we still find birds for rhinos in the future?

d insects off a rhino’s hinos in the future?

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I am a little fearful, my son, that some birds who are in fact of great use are changing today. Will they still provide their special services or will they do everything they can just to bring in more orders to survive? Will they still be able to offer sound service provision? Some birds are even going to extinct because they are given too little food.

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We need these strange birds. It is up to us to protect them and ensure that they live in a balanced ecosystem where they can continue to develop.

ced ecosystem where 24

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The author, Manuel PAOLILLO Manuel is a lawyer by training and works with the Federal Public Service Social Security. Within the purview of the Belgian Presidency of the Council of the European Union he is responsible for the organization of the 3rd forum on Social Services of General Interest (SSGIs). He has always sought to add an educational and humorous side to the SSGI dossier. This book was written after his 5-year-old son asked him: “Daddy, what do you do at work?” and after hearing remarks from colleagues: “SSGIs, they look terribly complicated ...”

Social Services of General Interest

Social Services of General Interest (SSGIs) are the defining dossier of a social Europe: at the crossroads of economical and social competencies, politically and technically complex. Their task of serving the general interest collides with the economic freedom being stimulated within the European Union. How can both aspects be reconciled? And which European approach can be developed today?

Responsible editor: Tom AUWERS Illustrations: Pierre NIEGO

The content of this publication does n You can also download this publicatio

The text of the present publication an protected by copyright.

ew of the 26 forum on de to the

r hearing

onomical t collides conciled?

Responsible editor: Tom AUWERS Illustrations: Pierre NIEGO The content of this publication does not necessarily reflect the position or opinion of the Federal Public Service Social Security. You can also download this publication at www.socialsecurity.fgov.be (publications). The text of the present publication and the text of all publications derived from it may be freely reproduced, modified and redistributed. But the illustrations are protected by copyright.

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Legal deposit: D/2010/10.770/1

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12. Conference program: the 3rd Forum on SSGI

The 3rd Forum

on Social Services of General Interest 26 & 27 October 2010, Brussels

12. Conference program: the 3rd Forum on SSGI

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TUESDAY, 26 OCTOBER 2010 8.30 9.30

REGISTRATION & WELCOME COFFEE OPENING SESSION (Copper Hall) Animator : Eddy CAEKELBERGHS • Laurette ONKELINX, Vice-Prime Minister and Minister of Social Affairs and Public Health, in charge of Social Integration. Belgium • László ANDOR, European Commissioner for Employment, Social Affairs and Equal Opportunities • Michel BARNIER, European Commissioner for Internal Market and Services • Joaquin ALMUNIA, European Commissioner for Competition • Pervenche BERES, Member of the European Parliament

10.30

PRESENTATION OF THE WORKSHOPS Stéphane RODRIGUES, Professor at the University Paris I, Pantheon-Sorbonne

10.40

BREAK (Foyer Magritte)

11.00

QUALITY WORKSHOPS Workshop Quality 01: A European Voluntary Quality Framework on SSGI (Copper Hall) Chair: Luk ZELDERLOO, Secretary General, European Association of Service Providers for Persons with Disabilities (EASPD) Reporter: Luigi MARTIGNETTI, Secretary General, European Network of Cities & Regions for the Social Economy (REVES) • Concetta CULTRERA, Head of Sector “Social services”, DG Employment, Social Affairs and Equal Opportunities. European Commission • Davor DOMINKUS, Chairman of the informal SPC working group on social services quality • Peter RHODE, Director, Central Denmark Region – Region House Aarhus – Centre for Quality Improvement • Jan SPOOREN, Secretary General, European Platform for Rehabilitation (EPR) • Alain FAURE, Representative, European Disability Forum (EDF) • Carola FISCHBACH-PYTTEL, General Secretary, European Federation of Public Service Unions (EPSU)

Workshop Quality 02: Maintaining an important quality level for social services in the context of the current crisis (Arc) Chair: Robertus CORNELISSEN, Adviser to the Director for Social Protection and Integration, DG Employment, Social Affairs and Equal Opportunities. European Commission Reporter: Anne-Sophie PARENT, Director, AGE • Isabelle ENGSTED-MAQUET, Administrator DG Employment, Social Affairs and Equal Opportunities. European Commission • Marti MOLINE, Deputy Director, Municipality of Badalona, Barcelona, Spain • Georgios DASSIS, President of Employees Group of the European Economic and Social Committee (EESC) • Laura JONES, Policy Ofﬁcer, EURODIACONIA • Robert ANDERSON, Head of the Living Conditions and Quality of Life research programme, Eurofound

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12.30

WALKING LUNCH (Foyer Magritte)

14.00

WORKSHOPS ON LEGAL ISSUES Workshop A: SSGI & State Aids (Arc) Chair: Eric VAN DEN ABEELE, Permanent Representation of Belgium to the European Union Reporter: Pascal CANFIN, Member of the European Parliament • Nicola PESARESI, Head of Unit “State aids Policy and Scrutiny”, DG Competition. European Commission • Antje HERBST, Representative of the City of Munich • Laurent GHEKIERE, Head of EU ofﬁce, Union Social pour l’Habitat (USH) • Peter SIMON, Member of the European Parliament

Workshop B: SSGI & Internal Market (Copper Hall) Chair: Alain COHEUR, President, Social Economy Europe Reporter: XXX • Maria MARTIN-PRAT, Head of Unit “Free movement of services and establishment I, Services Directive, DG Internal market and services. European Commission. • Tina MARTENS, Secrétaire du CPAS, Molenbeek-Saint Jean, Brussels, Belgium • Damien ABAD, Member of the European Parliament • Henri LOURDELLE, Advisor, European Trade Union Confederation (ETUC) • Berend Jan DRIJBER, Legal Expert

Workshop C: SSGI & Public Procurement Rules (Hall 300) Chair: Marie RANTY, Policy Ofﬁcer, EUROCITIES Reporter: Mathias MAUCHER, Social Policy Coordinator, SOLIDAR • Klaus WIEDNER, Head of Unit” Formulation and enforcement of Public Procurement law III”, DG Internal market and services. European Commission • Kerstin ERIKSSON, Representative of FAMNA • Heide RÜHLE, Member of the European Parliament • Frank ENGEL, Member of the European Parliament • Jean-David DREYFUS, Legal Expert • Raphaele DE GIULI MORGHEN, Direction Générale des Relations Internationales et des Affaires européennes, Région Provence-Alpes-Côte d’Azur

16.00

BREAK (Foyer Magritte)

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16.30

PLENARY SESSION: SOCIAL IMPACT ASSESSMENT (Copper Hall) • Anne MEUWESE, Tilburg University • Marc TARABELLA, Member of the European Parliament • Marc HOSTERT, European Court of Auditors • Michael GREMMINGER, Deputy head of the central Better Regulation and Impact Assessment unit, Secretariat-General of the European Commission

17.30

END OF THE FIRST DAY CONFERENCE

18.30

SOCIAL EVENT

23.00

END OF THE SOCIAL EVENT

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WEDNESDAY, 27 OCTOBER 2010 (All day Plenary Session – Copper Hall) 8.30

WELCOME - COFFEE

9.00

WORKSHOPS REPORTS Animator: Eddy CAEKELBERGHS • Luigi MARTIGNETTI, Secretary General, European Network of Cities & Regions for the Social Economy (REVES) • Anne-Sophie PARENT, Director, AGE • Pascal CANFIN, Member of the European Parliament • Reporter of the Workshop SSGI & Internal Market • Mathias MAUCHER, Social Policy Coordinator, SOLIDAR

10.00 10.30

BREAK (Foyer Magritte) ROUND TABLE WITH SOCIAL PARTNERS AND REPRESENTATIVE FROM THE CIVIL SOCIETY Animator: Eddy CAEKELBERGHS • Michel MERCADIÉ Chair of Social Platform Working Group on Services, Social Platform • Loes VAN EMBDEN ANDRES, Representative, BUSINESSEUROPE • Józef NIEMIEC, European Trade Union Confederation (ETUC) • Ralf RESCH, General Secretary of CEEP (Brussels), The European Centre of Employers and Enterprises providing Public services (CEEP)

11.15

INSTITUTIONAL ROUND TABLE Animator: Eddy CAEKELBERGHS • Françoise CASTEX, Representative of the European Parliament • Robert VERRUE, Director General, DG Employment, Social Affairs and Equal Opportunities. European Commission • Jean-Louis DESTANS, Committee of the Regions • Koen LENAERTS, Judge at the Court of Justice of the EU • Representative of Spain • Representative of France

12.00

CONCLUSIONS AND CLOSING SESSION • Proinsias DE ROSSA, Member of the European Parliament • László ANDOR, European Commissioner for Employment, Social Affairs and Equal Opportunities • Laurette ONKELINX, Vice-Prime Minister and Minister of Social Affairs and Public Health, in charge of Social Integration. Belgium

12.30

WALKING LUNCH (Foyer Magritte)

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Event co-ďŹ nanced by the European Commission DG Employment, Social Affairs and Equal Opportunities

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