|
Services
of general interest in a competitive multinational space
Philippe
Herzog
___________________________________________________________________________
Introduction
Should
Europe
develop and share public
goods? Neither political leaders nor academics pose this question
today. However, it is an essential question, and I am convinced that
reality will soon force us to reflect upon it.
This
question, to which I will respond positively, is set within a
context marked by economic and financial globalization, the
information technology revolution and a crisis within the political
system, whose ability to define the mission and the organization of
public goods has become very problematic. How can public goods be
created in a multinational, competitive space? This is a challenge
for ethical and political engagement as much as for creativity.
"A
secular European politics adapted to its époque must be able to
show what the version of greatness is, as far as that politics is
specifically concerned, that it has in mind" (Sloterdijk, 2003).
Elevating
to the level of public goods services essential to the development
of the human person has been one of the major acts of our
civilization. Formerly confined within the nation-state, public
goods may tomorrow be at the heart of a veritable multinational
Community. Nevertheless, a strategy is necessary in order to effect
change for the better. Regression becomes a risk if
Europe
is merely a market and if nations do not agree to make the effort to
elaborate public goods. This elaboration cannot be delegated to
"elites"; it implies the involvement of everyone in order
to ensure that each knows what the others are doing and to
facilitate collective action. Sloterdijk is right to stigmatize
"hollow formulae aiming to flaunt diversity". A
Europe
of public goods cannot be the product of national fears and
phantasms. It calls for a tearing away from the glue of a pact
limited to competitiveness and fiscal and regulatory competition. It
demands that the values of sharing and interactivity become common
projects.
Lacking
a prophetic vision of what the choices of a multinational society
might be, but aspiring to contribute to that vision, a number of us
wish to build Services of General Interest (SGIs) in
Europe
. One line of action proceeds via the recognition of fundamental
rights; another unites players in the field around multinational
projects of general interest; yet another aims to establish European
regulation of cross-border networks. One must also imagine how
information – revolutionized today by technology – might assist
in the interactive development of the capacities of European
populations. This is assuredly not compatible with either the
current capitalist and state hold on information systems or the
closed nature of educational systems.
This
text is a product in transition. It is based on research, commitment
and lengthy experience.
Lacking both a theory of a mixed economy in a multinational space
and a philosophical vision of sufficient maturity, the text is
necessarily modest; at the same time, it signals an impatience for
greater advances.
1.
Definitions and Options
1.1
SGIs are essential services elevated to the level of public goods
within national frameworks
First,
let us clarify the concepts that will be used. Our societies
consider certain services (human activities based on a
person-to-person relation) as essential
for individuals, communal life or development. Christianity
elaborated a notion of the common good necessary for the flourishing of the person. Humanism in
France
led to a notion of public
service, a doctrine and duty of the state (Léon Duguit, REFERENCE).
In
Germany
, Daseinsvorsorge are
based on a social philosophy. Amartya Sen (REFERENCE)
renews this heritage in designating certain services (education,
health and access to the labour market) as necessary in order for
individuals to exercise their freedom in an inclusive society.
The
field of essential services is not frozen, but dynamic, a function
of the structure of societies and
technological change.
There
is no general definition of public goods that is universally
accepted in the area of SGIs. In my opinion, however, the conception
of a public good always appeals to the principles of non-market
exchange (sharing, solidarity), whether intermixed or not with the
principles of market exchange (quid pro quo). Economists have tried to offer objective definitions.
They hold that a "pure public good" possesses two features:
the consumption of services excludes no one, and its users are not
rivals. Public goods, however, are often built with modalities that
do exclude (so-called club goods), or they may be subject to
congestion, and therefore be the object of rivalry (Aloy-Levêque).
In current debates, three dimensions of SGIs are often
emphasized. Economic: the activities involved have increasing
returns. The more service is provided on the network
(infrastructure), the more unit costs diminish. Ecological:
these activities have extremely important effects on the environment,
and must be managed according to principles of precaution
and sustainable development. Social: equal access and
universal inclusion necessitate rebalancing, from inexpensive zones
to expensive zones.
Furthermore,
it is critical to recognize that SGIs cannot be dissociated from the
systems that contain them. These systems link infrastructures,
communal services (information, operability, safety) and service
provisions. Sometimes it is in the infrastructure that the principal
costs and obligations reside, sometimes in the distribution and
final provision.
It
is fundamental to emphasize that the definition and the organization
of these services have always rested on a process of social and
political action. Karl Polanyi (1983), in magisterial fashion,
showed how work, land and money were able to be uprooted from the
status of merchandise, where they had been swallowed up in the
beginnings of capitalism, to become activities, resources and
values, socially protected and involving a non-market link.
According to Hannah Arendt (1994), in the nineteenth century, work
was elevated to a public good
with specific laws and an institutional system. At the same time,
essential services began to be conceived as public goods (education,
health, and so on). Today,
Europe
speaks more blandly about services of general interest when a public authority (locality,
region, state) has designed and organized them as such.
These
services are linked to national identity, of which they are an
incarnation. All European countries have built them and are attached
to them. In
France
, they are a dimension of the state. In
Germany
and the Scandinavian countries, they are at the heart of regional
and local administration. The Anglo-American tradition borrowed more
from common law. Thus a celebrated judgment of the Supreme Court of
Justice of the United States in 1877 (Munn versus Illinois) ruled
that companies owning grain silos, enjoying a de
facto monopoly, were charging excessive tariffs. Their trade was
then classified as a "public obligation" and "subject
to public regulation". The first definition of universal
service dates back to 1934 in the
United States
for telecommunications (Stoffaës, 2003).
Essential
services are not "social gains" on which one may rest. A
society fails in its duties if it does not question itself
periodically about their purposes and their organization, if it does
not undertake to redefine them when it is necessary. This task is
currently proving very difficult in
France
. Public service is often confused with public enterprise. Yet, what
really are the public services provided by, for example, the SNCF (
France
's national rail company)? Inter-regional and urban transport.
However, rail freight, which should surely be a public service, is
left abandoned, and private companies are the main road-haulage
operators. On the other hand, another French tradition, rather
misunderstood, entrusts essential services to private operators (for
example, the treatment and distribution of water): they are
organized as concessions by territorial collective bodies.
1.2
Two important changes are forcing a rethinking of the purpose,
organization and regulation of SGIs
Important
changes are taking place in the network sectors of economic services
of general interest (communications, energy, transport). It would be
false to attribute these solely to the impact of the European
Union’s liberalization policy. There are in fact two concomitant
processes. The first is technological and informational changes,
which, with the evolution of the needs and demands of societies,
necessitate, in any case, a reform of the national SGI systems. The
other is the creation of the European single market on the lines of
a liberalization that tolerates national rights, but does not assume
the community choices of SGIs.
Remember
that in service network industries, public intervention was imposed
when reality abundantly revealed the "deficiencies of the
market". Thus in the inter-war and post-Second-World-War
periods, public organization of networks into natural monopolies was
put in place within national frameworks, each according to its
culture and the principles forged by economic theory. In
France
, an original theory was devised by a school of "public
economic calculus" (M. Allais, M. Boiteux,…). It theorized
the effectiveness of nationalization with franchised integrated
monopolies. In other contexts, public regulation, entrusted to the
state, provided a framework private groups.
In
the recent context of the information technology revolution, all
these systems have come under scrutiny and been judged heavy and
inefficient, posing barriers to innovation by new operators.
Sweeping reforms were undertaken in the
United States
and
Great Britain
in the 1980s (1984: unbundling of AT&T and the privatization of
British Telecom). Privatization was only one dimension. The other
was liberalization: unbundling of monopolies, creation of markets
and entry of new players.
Nevertheless,
the notion of "deregulation" is improper and deceptive
(Henry, Matheu, Jeunemaître, 2001). Public regulation was not
suppressed; it simply changed. Of course, national monopolies built
around a franchised, integrated, benchmark operator are exploding,
but segments of natural monopolies remain (like the "local loop"
of fixed telephony). Even in the case of a plurality of networks,
public regulation has been rethought. Debate on that subject is
intense in Anglo-American countries (Hartley, 2001; Newbery, 2002; Helm,
REFERENCE ).
Despite this, Marcel Boiteux (1996) continues to contest the
relevance of the private operator-public regulator
"model": he maintains the interest of the electricity
sector in preserving the operator-regulator inter-linkage.
1.3
The European Union confronting the problem of market-SGI
compatibility
The
Treaties instituting the Community and then the European Union, from
Rome
to
Maastricht
, fixed a framework: one big market should be shared, but the member
states (MS) should maintain jurisdiction of services of general
interest (SGIs). This was a reasonable choice, given the very great
diversity of national choices. Coexistence was peaceful as long as
we remained at the stage of the common market.
Of
course, the principles of free movement and the general rules of
competition have been established since the Rome Treaty. However, at
the time of the common market, national social and public order took
priority for essential services, as jurisprudence reminded us
whenever necessary. In contrast, the passage from the common market
to the single market is a mutation. The
Union
requires that the national order be changed in order to establish
effective competition; its aim is a single set of rules for a single
market. However, for essential services, the
Union
has neither the mandate nor the desire to share and guarantee the
missions of the SGIs. Moreover, these services always have a
non-market dimension, with values of sharing, whose coexistence with
the competitive market order is far from evident. There is therefore
an outright contradiction that must be dealt with. Jurisprudence did
an about-turn in favour of competition, while setting limits and
specifying derogations (the Corbeau and d'Almelo rulings, European
Court of Justice, 1994) (Pelkmans, 2001).
The
Union
imposed a "controlled" liberalization, but it did not take
on the responsibility of guaranteeing access to essential services.
Each member state protects "its" SGIs, but it may attack
the SGIs of other member states through competition. This, however, can lead to trench
warfare.
Conflicts
of national interest are at the heart of disagreement about SGIs,
and they gain strength from cultural misunderstandings. This is
typical in
France
and
Germany
, although it should be possible to come to an understanding as each
is extremely attached to these services. In
Germany
, the freedom of administration is constitutional; the
"home" operators have a local monopoly, but they may not
compete on another territory. How then can Germans understand that
EDF (the French Electricity Company) – a public establishment
enjoying until recently an internal monopoly that the state did
everything to preserve – can act outside France as a private
company buying networks and selling services? The electrical systems
also appear opposed: in
Germany
, there are 700 operators and a strong local base, whereas in
France
, it is extremely centralized. Having said this, it is certainly not
virtue that distinguishes one country from another, but comparative
advantages.
Germany
favours European competition, but ultimately protects its internal
base. For the moment, if French electricity is competitive, German
electricity is not.
Germany
opposes access to its market in order to gain time to restructure,
whereas
France
, which already exports 15 per cent, is highly active in the
European electricity market.
The
same is true of water and urban services. Concessions are unknown in
Germany
;
France
is the champion, with three big private groups demanding "reciprocity",
that is, access to others’ markets. In principle, anyone can enter
France
, but no one can enter
Germany
.
In
deciding to create a single market, the
Union
wished to avoid killing off national
prerogatives. Therefore, it established a principle of separation:
essential services of a social non-market character should remain
outside the field of application of the rules of competition and the
market. This principle is insufficient when activities become mixed,
enlacing the social and the economic, the traded and the non-traded.
It becomes just a convention, betraying a lack of will to elaborate
the common good.
Since
1992, European integration has visibly progressed. Yet, for SGIs,
divergences of definition, politics and interests engender numerous
conflicts. The impact of liberalization and competition has not yet
been evaluated. They have perhaps allowed price reductions (provisionally)
and technological innovations, but how can one ignore market
failures (problems of network safety, insufficiency of
interconnections and investment)? The
Lisbon
strategy, aimed at a European economy based on knowledge and
competitiveness, has been handicapped by these failures. In my
opinion, without a European policy on the promotion of SGIs, the
single market cannot be completed, nor can the
Lisbon
strategy be successfully implemented.
1.4
Several roads leading to community recognition of SGIs
Action aiming at positive community recognition of
SGIs began in the middle of the 1990s. Its first results came at the
level of the Treaties (
Amsterdam
, Nice), and in the Charter of Fundamental Rights (article 36).
Above all, sector directives conceived for network industries
(postal service, telecommunications, energy, transport) were
elaborated. Their function was not only to create the market by
breaking national monopolies, but also to harmonize and guarantee
public service obligations and lay the groundwork for the creation
of European networks. Nevertheless, contradictions, divergences in
national rationales and the continuing bias in favour of the market
led the member states to pose the following question at the Laeken
Summit (2001): should one go further, and how? The Green Paper of
the Commission has consulted the member states and civil society in
order to try to answer this question. The Convention charged with
Treaty reform remained blocked before accepting the creation of a
new lever: it specifies that a European law could "define the
principles and conditions" necessary for the setting in
operation of Services of General Economic Interest (SGEIs). With my
report to the European Parliament, I attempt to extend and
systematize these efforts. My approach
rests on three axes: an appeal to a method of participatory
democracy by engaging the action of carriers of cross-border
projects of general interest; a conception of European modes of
mixed and public regulation, transcending controlled liberalization;
the development of the dynamics of fundamental rights. I am
advocating here a new political strategy: the Community and the
member states should assume co-responsibility and solidarity for the
development of SGIs in
Europe
.
Before developing this idea further, it must once
again be underlined that it is not simply a question of protecting
existing local, regional and national systems. These must first of
all be reformed, because the needs and the technologies of societies
have changed. “Internal” reform of public services must
absolutely make room for new offers and stimulate quality and
efficiency. In this sense, the European Union acts as a positive
stimulus when it imposes the transparency, clarification and
redefinition of missions; when, in considering real costs, it
requires justification of aid; when it opposes monopolies. It goes
too far, however, when it pushes for the unbundling of these systems,
when it begins to discourage aid and generalize calls for tender.
Thus, reform must be articulated on two fronts: internally and at
the level of the EU community framework.
2.
The Legitimacy of Community Action
2.1.
The Legal Framework of the European Union
In
the European Union, everything starts and finishes in law. A space
of rules,
Europe
is not yet a multinational society made up of actors "sharing
words and deeds" (to paraphrase Hannah Arendt's definition of
politics). The envelope of law translates substance, and this
substance is principally that of the market; all the difficulty
consists in going towards non-market relations.
The
judicial framework of the
Union
gives no substantial definition of SGIs.
The Treaties mention neither public services (except for transport
in article 73) nor SGIs. They use the notion of an SGEI in articles
86.2 and 16, and in the Charter of Fundamental Rights, article 36.
The EU considers that an SGEI exists when (1) a market exists, and
when (2) a public authority defines a specific obligation.
Yet,
what is the relevant market: local, national, European, global? What
sort of market: with or without public goods, with responsibilities
shared by the operators? And which public authority? In fact, for
the Commission and the Court of Justice, an SGEI is conceivable only
when "the enterprise, considering its own commercial interest,
would not assume the corresponding missions". It is a
subjective approach, and furthermore, arbitrary, since the motives
of private operators are multiple.
The
famous article 86.2 subjects enterprises charged with SGEIs to the
rules of competition, within the limits compatible with the exercise
of their mission. It specifies that "the development of
exchanges must not be affected in a way contrary to the interest of
the Community". State aid is monitored by the Commission. It
must neither "distort" nor "threaten"
competition. The Commission, keeper of the Treaties, is itself the
interpreter of these texts; the European Parliament is merely
consulted, and the member states must conform to the rulings or
decisions. They can, however, appeal to the Court of Justice.
Thus,
European law does not include a common concept for SGIs. It also
separates the "social" from the "economic" in an
entirely contestable way. In its view, social activities are based
on the non-profit principles of social justice and solidarity, for
which the state is responsible, and which it defines within its
internal order. Activities are dubbed economic when they can be
exercised, at least in principle, by a private enterprise and with a
profit-seeking goal. The "economic" is thus a priori confused with "mercantile" and
"profitable".
The
Union
must then ensure that the rules of free provision of service and of
competition are respected.
Thus,
whenever a national authority has recourse to the SGI conventions
with a private operator, the Union demands obedience to the rules of
competition, but it does not have to monitor whether the operator
assumes its share of public responsibility well.
Furthermore,
"social" activities always have an economic cost and
dimension. Education and health are factors of sustainable
development, required by the
Lisbon
objectives. "Economic" activities, such as
telecommunications and energy, also have essential societal
dimensions.
Operators
within the "social economy" contest precisely this
separation, and they wish to see the elaboration of a hybridization.
2.2.
SGIs as part of the project of a Constitutional Treaty
For many years, civic and social
movements have militated for a reform of the Treaties and European
law. This concerns putting an end to the disequilibrium between
competition policy – the exclusive jurisdiction of the
Union
, the exercise of which it delegates to the Commission, the
executive body – and SGI policy, left to the member states. The
Community can take “pressure action” and, as we have seen,
establish sector directives when it wants to remove obstacles to the
creation of a single market.
Given the diversity of national
definitions, civic movements have chosen to privilege the
perspective of fundamental rights: both the common institutions and
the member states would then have to recognize SGIs as such at the
level of the
Union
. This combat has been partially successful, since the Charter of
Fundamental Rights (which recognizes SGEIs, but not SGIs in general)
is included today in the Constitution.
However,
this is not enough: there is law, and there is the reality or truth
of law. In practice, articles 95 (the internal market), 86 and 87
continue to apply. Civic movements have wished to reform these as
well. More precisely, they have sought: (1) to achieve the
recognition of SGIs as fundamental objectives of the Union; (2) to
consolidate article 16 of the Treaty of Amsterdam, very ambiguous,
but which recognizes the need to guarantee SGEIs; and (3) to modify
articles 86 and 87 in such a way as to ensure the financial and
economic conditions necessary for the viability of SGEIs.
The
fight is not yet over on points (1) and (3). However, the Commission
has accepted point (2); it is proposing to the European Legislator
the clarification of the principles and conditions which guarantee
the operation of SGEIs. Let us hope that the Intergovernmental
Conference will not suspend the new drafting of article 16 of the
Treaties. The European Legislator will then be able to take up its
responsibilities. A framework directive might take as its ambition:
the clarification of the definitions of SGIs and SGEIs; common
principles for the obligations and for the conditions of operation
and development of SGEIs; the putting into place of European
regulation and of joint financing tools when this is necessary; and
the organization of a democratic evaluation method in order to judge
satisfactoriness and effectiveness.
However,
the concretization of community responsibility will take a long
time. For the last ten years, civic action seeking an opening
in European law has in fact privileged the perspective of the protection of local, regional and national SGIs. It has
striven to increase their guarantees of existence in the face of
competition. This is desirable, but the risks must be considered too:
it must not be to the detriment of cross-border exchanges and of the
ambition of a real Community. Furthermore, the explicit setting up
of European public regulation under democratic control for
cross-border networks has not yet been achieved. In reality the
breakdowns and the serious problems for energy and transport call
for policies; yet the current sector directives, whatever their
quality and audacity given the political context, are way below
future needs and lack operational levers.
The major political problem is the co-responsibility
to be achieved between member states and the
Union
. It is necessary to clarify, or get beyond, the sacrosanct
principle of subsidiarity, according to which decisions must be made
at the most relevant level; this leads to defending the level
closest to citizens, but also to hindering the emergence of European
public goods.
3.
Diversity and Unity
3.1.
The problems of range and distinction
The
field of SGIs can be large, as a number of services are judged to be
essential, and thus are made the subject of missions and/or public
regulation. Nevertheless, concrete definitions of SGIs are national,
and states do not necessarily agree on them. Additionally, to obtain
community recognition, there first needs to be agreement on common
principles. The European legislator should state that the criteria
that make up the base of a positive right in the member states are
recognized by the European Union, and cite them: they concern
universality and equality of access, quality and efficiency; they
are calls to solidarity, inclusion and participation. In such a way,
all SGIs are calls to non-market principles (sharing, universality);
when they also call upon market principles, there is a political
obligation to work towards rendering the market and the public good
compatible.
As
has been seen, the Treaties mention only SGEIs, leading to an
inevitable distinction between economic SGIs and all the others.
This has important implications: SGEIs are subject to the rules of
the internal market and competition; other SGIs are not. The problem
is that in reality the situation is often (or at least becomes)
mixed. All SGIs have a cost; all SGEIs must be the subjects of
missions and public supervision.
I
propose keeping the principle that fundamental SGIs be excluded from
the rules of the market and competition; whatever the case, however,
the “others” should not be subject to the general rules of the
competitive market: the rules must be adjusted, specified, because
they touch upon the domain of public goods.
3.2.
SGIs at the heart of the state-citizen relationship
The
SGIs most fundamental for the human person and social inclusion (education,
health, access to the labour market) have historically been
organized by the nation state. The
Union
may only engage in complementary actions supporting those of member
states.
As
long as the Constitution of the
Union
does not include the explicit sharing of values and non-market ends,
this remains appropriate. However, one cannot stop there. If the aim
is to make a European society and to build a competitive
knowledge-based economy, it is necessary to have open education and
mobility of training and employment capable of developing human
capacities in the era of globalization. National educational systems
must be opened up in order to multiply cross-border exchanges.
In the domain of public health, national systems are already open
and mixed, and this will become more marked with the development of
private insurance.
I
formulate three principles:
(1)
primacy of the national social order should be reinforced: if
the member state judges that an activity lying beyond the obligatory
missions of public service should not be subject to the general
rules of competition, it may do so (for example, continuing
education, complementary protection);
(2)
within the framework of cross-border exchanges, enterprises
operating in these domains must assume explicit social
responsibilities;
(3)
an action plan is indispensable for the development of
European education, culture and lifelong learning, in order to lay
the foundations for a European economy of knowledge and creation.
Local
public services have been developed in activities as diverse as
social work, culture, sport, urban transport, water supply, sewage
and waste disposal. Associations of European communes are fighting
for better judicial protection. These services involve two different
judicial regimes in the Treaties: if they are described as SGEIs,
they are subject to the rules of competition; on the other hand,
systems of social security often involve national public order.
I suggest, as above, strengthening the primacy of the national
social order.
An
essential problem is that of the choice of operator. Territorial
collective bodies can manage the service themselves (by
administration, a mixed economy company, Stadtwerke,
and so on). They can choose a private management, without the
operator having any contractual tie to the local regulator. They can
delegate the management (concession or farming
out), but for a fixed term in a contractual relation. The
private operator is charged with the maintenance of the public
infrastructures that it uses to furnish the service, and sometimes
with their construction. Attribution of the exercise right has a
monopolistic character. The European Union intervenes, however, in
the case of a change of choice, when the collective bodies invoke
competition. Thus, the rules of public markets apply in principle;
the Commission allows concessions, however, on condition that the
principles of publicness, non-discrimination and transparency are
respected.
Two
problems arise. On the one hand, national local situations are very
different, and there is no reciprocity in opening up to competition.
On the other hand, there are enormous differences in the capacity
and power of territorial collective bodies faced with market forces.
The city of
Helsinki
has good mastery of its choices and partnerships with the private
sector. French rural communes, on the other hand, find it difficult,
given the lack of any decentralized organization of public economic
authority.
My
propositions are the following.
1)
Recognition of the free regional and local administration,
when it exists within the national constitutional order, must
prevail at the community level. Nevertheless, the capacity of local
collective bodies to regulate and monitor must be built when it does
not exist. It is also desirable that the territorial collective
bodies develop their cross-border relations. Delegation of SGIs is
thus just one of the modalities of desirable exchanges.
2)
A right to auto-provision, that is to say, provision by local
or regional enterprises, must be recognized by the EU, on condition
that these enterprises do not compete on another territory (that is
the German principle). However, one may request the periodic re-examination
of these systems, even renegotiation, with the deliberation of the
collective body.
3)
Judicial safeguards must be reinforced in the case of an
appeal to competition. If a local authority chooses delegated
management, the spreading of risks must be equitable. There is a
need for a European law on concessions and public-private
partnerships in order to frame the conditions of the awarding of
contracts and of risk allocation, aiming at the quality of service
rendered.
3.3.
The environment and information
Some
SGIs (or SGEIs) handle and make available natural resources (the
environment), and regenerate them. The organization of these SGIs is
decentralized, and access is shared. Interconnection of these
decentralized networks does not exist in
Europe
, and there are no specifically European networks. In contrast,
European environmental law, which each member state is supposed to
respect, has been highly developed.
Let
us take the case of water.
Water is a natural resource, localized and required to be accessible
to all (Courrier de La Planète, 2002). A non-market common good (drinking
water is in the main outside the market), it is of course also an
economic good, with a natural monopoly at the level of up- and
down-stream infrastructures. In the EU, everywhere except in
Great Britain
, municipalities own the infrastructures and are responsible for
their management. Management may be delegated to private operators
(France,
Great Britain
). The EU has a mandate allowing it to develop environmental law
(article 174). It sets ambitious objectives for the state of water
and the quality of drinking water. It preaches pricing equal to cost
and the application of the principle that the polluter pays. Yet,
the EU has no mandate to make a single market. There is neither a
European network, nor interoperability between basins, nor a
principle of solidarity.
The
current management of water resources is a problem. There are big
inequalities, great need of investment and lack of funding.
Public-private partnerships (PPPs) are useful, but insufficient.
They are characterized by weak participation, low profitability and
deviation towards private management of a cross-border leasing type
(with
US
penetration).
Strong
pressure is appearing for the application of competition policy in
the water sector and for the extension of tenders to the private
sector. This is not acceptable: the EU has not decided here to make
a single market, and the fundamental role of public collective
bodies must be preserved. On the contrary, to resolve the big
problems mentioned above, one will need to work at a new mixed
economy, with the will to mobilize investments and to organize
infrastructure renovation. To this end, it will be necessary to put
in place European taxation to feed a solidarity fund, to mutualize
public guaranties, and to work out "good practices" in the
domain of PPPs with a view to creating a positive European framework.
Information
is not a good that is destructible by its recipient; it is diffused
and enriched by interactivity. For Thomas (?)
Jefferson
, it is typically a public good. National public services exist, but
the operators that handle and make information accessible are in the
main market players.
The
Union regulates electronic communications networks, but, for
content, it has only a complementary role administered by the
Amsterdam
protocol. Now it will be necessary to work at the creation of a
basis of community action founded on cultural diversity and the
pluralism of information. This is indispensable for the foundation
of a European public space. As far as the economic dimension is
concerned, freedom of funding by member states should be preserved.
European competition policy should contribute to clear up the market
and to favour cooperations of public interest.
3.4.
Active European integration networks
SGEIs
are furnished on the base of big network infrastructures: energy,
transport, telecommunications and the postal service. Often
infrastructures are in a situation of "natural monopoly".
Non-market systems of security are necessary. Service provisions may
be private or public, but they must be accessible to all.
The
EU undertook to build a single market of European scale. This is
fully justified within the community perspective of economic
efficiency, social cohesion and sustainable development. Since
public goods are involved, however, specific regulation is
indispensable; the competition rules must be adapted, and solidarities must be
organized.
The
Union
first took priority actions in the direction of competition: opening
up of national networks to third-party service provision; separation
of the operator and the regulator with the installation of national
regulatory authorities. Then (at the end of the 1990s) sector
directives wished to make competition effective, and they began to
establish regulation.
The
sector directives wish to ensure interconnection and mutual access
to networks, whereas the national authorities and operators do not
lend themselves to this without difficulty. They require the member
states to supervise supply guarantees, urging them to invest if
necessary. They require member states to establish obligations of
universal service.
However,
neither the quality nor the viability of this regulation is
well-established. For many, it is a transitory phase, after which
the market and competition will supply the
rest. That would be to despise the lessons of economic
history, including that of Anglo-American public utilities. To take
up a notion already put forward by Augustin Cournot, network
regulation should contribute to obtaining a surplus of collective
utility: increasing the traffic and interactivity, integrating
external effects, combating congestion, ensuring systemic security,
and encouraging capacity development.
We are far from having achieved this.
Not only should the
Union
take on such regulation, but to build European networks
(interconnections, rail and freight haulage, high speed links, and
so on) in order to achieve its development objectives, common
policies will be equally necessary. They will target energy supply
security and energy conservation, the flourishing of the
telecommunications industries, the configuration of European
transport space, and the modernization of the networks of Central
and
Eastern Europe
, and so on.
We shall later develop these issues of regulation and
development further.
A
network of financial services has been in the process of integration
since it was decided to create a single financial market. Many
countries enjoin on their banking and credit institutions the
missions of SGIs and sometimes entrust them to public banks. Access
of populations to tellers, without exclusion, and credit provision
to SMEs, are de facto
universal services. Specific financing arrangements for social
housing, regional development and infrastructures are necessary
given their weak profitability. Now, the EU wishes to
mass-distribute financial services by including them in the
commercial sphere. It requires the separation of SGI activities from
competitive activities. It contests pubic guarantees.
Germany
and
Austria
have voiced their worries, and they are protecting their regional
banks. The
Union
, however, has neither a concept nor a policy for recognizing the
diversity of functions and the heterogeneity of organizations. I
merely indicate the problem here, without developing it any further,
but underline its strategic importance for the evolution of the
European financial space.
The
approach that has just been proposed is one of diversity, in which
the progress of notions and community interventions work according
to different rhythms and outlines. Where is unity then to be found
in such a plan? The answer: unity is not decreed; it is a social
construct. Forming a society within
Europe
is the common motive; its expression must be different according to
the area of public goods in order to respect local and national
realities,, and because opening up these areas demands that forms of
sharing and solidarity be elaborated with prudence. The market is
one of the dimensions of this opening, but it is certainly not the
only one.
4.
The Problems of Regulation and Financing
The
central problem for SGIs is not only their compatibility with the
market, but also that of quality and efficiency as regards their
respective purposes. These dilemmas are the subject of “regulation”.
The
concept of regulation is borrowed from systems theory: it concerns
the conditions of coherence and development of a system. Regulation
should not be confused with specific rules or legislation: the
management criteria of businesses and of funding, along with the
nature of public incentives, are crucial.
4.1.
Defining missions
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