European regions and cities will no longer face EU state aid scrutiny when subsidising small-scale public services such as swimming pools and crèches, according to new rules being drawn up in Brussels.
The European Commission wants to lower the threshold on public procurement rules in order to relieve local authorities from having to file public tenders for small-scale public services.
"Our state aid rules currently apply also to local services organised by very small municipalities," said EU Competition Commissioner Joaquin Almunia, citing swimming pools, local cultural centres and crèches as examples.
"It seems quite obvious to me that among these services, there are some that will have little impact on trade between member states and little potential to distort competition," the Spaniard told a conference on public services hosted by the European Policy Centre earlier this month.
"I think that we need to adjust our scrutiny here and focus it on the cases that have a clear impact on the single market."
For such small-scale public services, Almunia said one possibility would be to reduce the degree of state aid scrutiny "to the absolute minimum".
According to people close to Almunia, this is a new direction for the European Commission's most powerful department, DG Competition, which oversees large mergers and state aid to major public-listed companies.
'Pain in the ass'
"Most people [in DG Competition], they are not happy having to deal with a state aid complaint against a Dresden swimming pool," said an EU official, speaking on condition of anonymity.
"To be honest, it's more a pain in the ass than anything else, because they know very well that these matters should not be dealt with in Brussels."
The official cited the city of Utrecht in the Netherlands as an example. The mayor there decided to use a public bus service to bring schoolchildren to a swimming pool during off-peak hours when both the pool and the drivers were not busy. The decision was challenged by a German transporter because the city had not issued a public tender for the bus service.
Under the new rules being prepared, such small public services will no longer require public tenders.
"We are not talking about the RATP," the EU official explained, referring to the Paris metro. Large network industries that have international activities will continue to be covered by state aid and public tender obligations, he said.
According to people familiar with the matter, the Commission is also trying to find a practical way of dealing with the growing number of state aid complaints it is receiving on a daily basis. With limited staff, it wants to focus on the cases that really make a difference.
"The Commission receives hundreds or thousands of complaints which are not always relevant," said an EU insider. "Pubic authorities know that the Commission cannot look at all these cases and so the perception is that they would not necessarily be terrified by the idea that it might declare what they're doing as illegal."
Large-scale commercial services to focus attention
With less time spent on the small cases, staff should be able to concentrate on the large companies receiving undue state aid.
For large-scale commercial services with a clear impact on the single market, the Commission's scrutiny will continue, Alumnia emphasised. "In principle, the tender procedure is the best way to ensure that the most efficient provider is selected," he said.
A Commission communication is expected in November to amend the so-called 'post-Altmark' regime, which currently regulates public procurement.
"This will be a communication because the Commission has exclusive jurisdiction when it comes to state aid," the EU official explained. "So we do not intend to go and ask other institutions for their opinion."