State aid affecting utilities with public services obligations – including the provision of water, energy, health, telecoms and transport – is currently dealt with on an ad hoc basis known as the 2005 Altmark package of legislation (see 'Background').
Since the rules are due to be changed in a new package for the utilities to be published later this year, the Commission has launched a communication to trigger debate on which aspects should be clarified.
On issuing the communication in Brussels, Competition Commissioner Joaquín Almunia said that although existing rules were necessary and appropriate, "there is scope for improvement and a particular need for clearer, simpler and more proportionate instruments".
The communication makes clear that the Commission is likely to simplify the application of the rules for certain types of small-scale public services of a local nature with a limited impact on trade between member states.
Andreas Bartosch, a German lawyer and co-founder of the European State Aid Law Institute, a Brussels and Berlin-based think-tank, said: "At the moment a butcher's shop in Strasbourg, receiving a subsidy of €20,000 and trading with citizens from Germany, France and Luxembourg. could be caught by the regulations".
He said that simplifying the rules affecting such businesses would be broadly welcomed.
Clarifying key concepts
However, the consultation also indicates that the Commission will seek to clarify a number of key concepts, related for instance to the distinctions between economic and non-economic activities and to the limits member states have when defining an activity as a public service utility.
These issues are more complicated and controversial, according to Bartosch, affecting the extent to which public service suppliers – such as railway networks – need to tender out to private contractors for the provisions of certain services.
The Commission's move to clarify the rules was welcomed by the French Europe Minister Laurent Wauquiez.
Wauquiez met with Commissioner Almunia on 21 March in Brussels and in response to the communication he called for simpler rules to be put in place "for the better defence of European public services".
A British diplomat in Brussels told EurActiv that the general desire expressed by the Commission to clarify the existing rules was something that "we would see as broadly positive". But he added that, as far as the more detailed provisions for changing the rules go, "we will have to wait to see what the proposals say when they are issued later in the year".
Today's communication is designed to launch dialogue on these ideas before draft texts that will be published, and discussed with member states and stakeholders, by July.