A Broader Definition of Social Services (SSGI). Devising a specific treatment?GCLC and DG COMP Conference on the revision of the Monti/Kroes package - Bruges, 30 September 2011Ulrich Soltész, Gleiss Lutz Brussels

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SSGIs and State Aid Rules?

• Public employment agencies• Insurance sickness schemes• Medical services• Emergency services/ambulance• Social housing • Playgrounds, places of recreation, parks, allotments, open spaces,

sites for places of worship, schools ….

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Social Services = Economic Activity?

• Commission has extended state aid control to all kinds of activities, including (private) schools, universities, zoos, museums, libraries, football stadiums, leisure parks, hospitals, transport infrastructure, ports, regional airports, town halls, etc.

• Given the financial situation of most municipalities, are such

subsidies really a (genuine) threat to competition?

• About 130,000 municipalities in the EU - Is it really possible and/or necessary to control all their activities? („economic approach“)

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Can SGEI reform tackle the core of the problem?

•Vagueness of concept of “undertaking”

•(Longer) white list of activities that are considered non-economic?

•Effect on trade between member states? Commission seems to have more leeway than they say

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Almunia pledges 'fewer and clearer' state aid rules (19 April 2011)

“… I want to simplify and clarify our rules, and I want to concentrate available resources on the aid that most hinders the functioning of the single market.”

“…we need less and clearer rules and a stronger and more targeted enforcement…”.

“A considerable proportion of them relate to aid amounts which are very small but the workload they generate is disproportionate to their effect on the internal market”

“This means that our resources are so strained that little scope is left to initiate ex officio investigations in those areas that are of key importance to the single market.”

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Almunia‘s „way forward“ on SGEI reform (2 May 2011)

“ … our State aid rules currently apply also to local services organised by very small municipalities. Examples range from crèches, to swimming pools, to local cultural centres. For these types of services, a possibility would be to reduce to the absolute minimum the degree of State aid scrutiny.”

Do we need more focus?

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A stronger focus ...

•Introduction of SGEI-specific „de minimis” regulation is a good, but reluctant start

- up to EUR 150,000 aid/year- aid recipient turnover less than EUR 5 million- only applies to small villages (10,000 inhabitants)

•Application of Commission draft exemption decision still difficult task for local authorities (control of overcompensation, etc.)

•Commission has been more innovative and bold in the past (Monti in 2004: „lesser amounts of State aid - LASA“ and „State aid measures with limited effects on intra-Community trade - LET“)

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