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Application of State Aid Rules for Compensating the Provision of Services of General Economic Interest

Key points from the EESC Public Hearing

Brussels , 30 May 2017 | Published in Economy
Picture provided by the EESC
Picture provided by the EESC

The Chair of the Housing Europe Observatory, Laurent Ghekiere contributed to the Public Hearing that was hosted by the European Economic and Social Committee (EESC) on May 10th on the Application of State Aid Rules for Compensating the Provision of Services of General Economic Interest. We have put together the main points from the discussion.

The EESC has commissioned a study on the application of SGEI rules to public compensation. Stakeholders at regional and local level, in particular publicly owned SGEI providers, have voiced serious concerns on key issues that create undue obstacles or lack of legal certainty. Furthermore, the Member States' reports do not tackle the essential issue of compatibility requirements, a matter dealt with in depth by the Communication from the Commission on the EU Framework for State aid in the form of public service compensation.

All these elements, together with the main conclusions and findings of the study, were discussed during the hearing by high-level speakers from different institutions and social organisations with stakeholders across the European Union.

Housing Europe Observatory Chair, Laurent Ghekiere highlighted that the public, cooperative and social housing sector needs clarity and legal certainty due to specific nature of social housing services and availability of financial means, reminding that in the end the so called ‘Almunia package’ was used to attack the sector in certain countries.

The Netherlands have been requested to review the whole target group, something that led to a Court case concerning the competence and quality of scrutiny of the Commission to decide on manifest error. Also in Sweden there has been a complaint that led to a shift in policy, i.e. no use of state aid and market behaviour to keep large target group- not social but public housing, i.a. for general public. France has already received two complaints. Is there overcompensation? Is it needed in all regions including shrinking ones?

Laurent underlined that an a priori target group in SGEI Decision does not reflect the nature of needs, proposing on behalf of Housing Europe a wider group that takes into account the wide diversity of needs and the fact that social mix prevents ghettos. The current definition is too restrictive.

Furthermore, control of overcompensation every three years is not adapted to the nature of the sector, especially for small associations, said Laurent.

Making the link with the broader developments at policy level, the Chair of our Observatory mentioned that the Committee of the Regions (CoR) will also initiate a report including these points, while letters of different European Cities jointly with Housing Europe will be sent to the Commission. At the same time, the issue is now also part of the work in the Housing Partnership of the EU Urban Agenda.

Laurent closed his intervention by stressing that the EU needs to help associations like social housing providers to organize public services of good quality for everyone, if it wishes to actually serve its main objective.