Tag Archives: Public authorities

White Paper on services of general interest

White Paper on services of general interest

Outline of the Community (European Union) legislation about White Paper on services of general interest

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Single market for services

White Paper on services of general interest

Document or Iniciative

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 12 May 2004 entitled “White Paper on services of general interest” [COM(2004) 374 final – Not yet published in the Official Journal].

Summary

This White Paper presents the Commission’s conclusions following a broad public consultation launched on the basis of the Green Paper. The consultation showed up significant differences in points of view and outlook. Nevertheless, a consensus seems to have emerged on the need to ensure the harmonious combination of market mechanisms and public service missions. The White Paper sets out the Commission’s approach in developing a positive role for the European Union in fostering the development of high-quality services of general interest and presents the main elements of a strategy aimed at ensuring that all citizens and enterprises in the Union have access to high-quality and affordable services.

In submitting this White Paper, the Commission does not intend to close the debate that has developed at European level. Its aim is to make a contribution to the ongoing discussion and take it further by defining the Union’s role and a framework that allows these services to function properly.

SERVICES OF GENERAL INTEREST: AN ESSENTIAL COMPONENT OF THE EUROPEAN MODEL AND A SHARED RESPONSIBILITY OF THE PUBLIC AUTHORITIES IN THE EUROPEAN UNION

The White Paper stresses the importance of services of general interest as one of the pillars of the European model of society and the need to ensure the provision of high-quality and affordable services of general interest to all citizens and enterprises in the European Union. In the Union, services of general interest remain essential for ensuring social and territorial cohesion and for the competitiveness of the European economy.

While the provision of services of general interest can be organised in cooperation with the private sector or entrusted to private or public undertakings, the definition of public service obligations and missions remains a task for the public authorities at the relevant level. The relevant public authorities are also responsible for market regulation and for ensuring that operators accomplish the public service missions entrusted to them.

In this context, the White Paper states that responsibility for services of general interest is shared between the Union and its Member States. This shared responsibility is the concept underlying Article 16 of the EC Treaty, which confers responsibility upon the Community and the Member States to ensure, each within their respective powers, that their policies enable operators of services of general economic interest to fulfil their missions. The right of the Member States to assign specific public service obligations to economic operators and to ensure compliance is also implicitly recognised in Article 86(2) of the EC Treaty.

The EC Treaty gives the Community a range of resources to ensure that users have access to high-quality, affordable services of general interest in the European Union. The Commission takes the view that its powers are appropriate and sufficient for the maintenance and development of effective services throughout the Union. Nevertheless, it is primarily for the relevant national, regional and local authorities to define, organise, finance and monitor services of general interest.

THE GUIDING PRINCIPLES OF THE COMMISSION’S APPROACH

The Commission’s approach is based on a number of principles that are reflected in the Community’s sectoral policies and can be clarified on the basis of the results of the debate on the Green Paper:

  • Enabling public authorities to operate close to citizens:
    The Commission respects the essential role of the Member States and of regional and local authorities in the area of services of general interest. The Community’s policies on services of general interest are based on various degrees of action and the use of various instruments, in line with the principle of subsidiarity.
  • Achieving public service objectives within competitive open markets:

    An open and competitive internal market, on the one hand, and the development of high-quality, accessible and affordable services of general interest, on the other, are compatible objectives.
  • Ensuring cohesion and universal access:

    The access of all citizens and enterprises to affordable, high-quality services of general interest throughout the territory of the Member States is essential for the promotion of social and territorial cohesion in the European Union, including the reduction of obstacles caused by the lack of accessibility of the outermost regions.
  • Maintaining a high level of quality, security and safety:

    The Commission wishes to guarantee, in addition to the supply of high-quality services of general interest, the physical safety of consumers and users, everyone involved in the production and delivery of these services and the general public, and, in particular, provide protection against possible threats such as terrorist attacks or environmental disasters.
  • Ensuring consumer and user rights:
    These include, in particular, access to services, in particular cross-border services, throughout the territory of the Union and for all groups of the population, affordability of services, including special schemes for persons on low incomes, physical safety, security and reliability, continuity, high quality, choice, transparency and access to information from providers and regulators.
  • Monitoring and evaluating performance:

    The Commission takes the view that systematic evaluation and monitoring is vital for maintaining and developing high-quality, accessible, affordable and efficient services of general interest in the European Union. The evaluation should be multidimensional and focus on all the legal, economic, social and environmental aspects. It should also take into account the features of the sector evaluated and situations specific to the various Member States and their regions.
  • Respecting the diversity of services and situations:

    The diversity of services must be maintained because of the different needs and preferences of users and consumers resulting from different economic, social, geographical or cultural situations. This is true in particular for social services, health care and broadcasting.
  • Increasing transparency:

    The principle of transparency is a key concept for the development and implementation of public policies regarding services of general interest. It ensures that public authorities can exercise their responsibilities and that democratic choices can be made and are respected. The principle should apply to all aspects of delivery and cover the definition of public service missions, the organisation, financing and regulation of services, as well as their production and evaluation, including complaint-handling mechanisms.
  • Providing legal certainty:
    The Commission is aware that the application of Community law to services of general interest could raise complex issues. It is therefore going to pursue an ongoing project to improve legal certainty associated with the application of Community law in the provision of services of general interest. It has already accomplished the modernisation of the existing public procurement rules and launched initiatives in the areas of state aid and public-private partnerships.

NEW APPROACHES FOR A COHERENT POLICY

One of the main questions in the public discussion concerned the need for a framework directive on services of general interest. The views expressed on this subject in the public consultation were divided, a number of Member States and the European Parliament being sceptical on the issue.

It is therefore uncertain whether a framework directive would be the best route to follow at this stage and would bring sufficient added value. Consequently, the Commission concludes that it would be best not to present a proposal for the time being. Rather, it will pursue and develop its sectoral approach by proposing, where necessary and appropriate, sector-specific rules that allow account to be taken of the specific requirements and situations in each sector.

The Commission will re-examine the feasibility and necessity of a framework law on services of general interest when the Constitutional Treaty comes into force, in particular the new legal basis introduced by Article III-122 which states that: “Without prejudice to Articles III-55, III-56 and III-136, and given the place occupied by services of general economic interest as services to which all in the Union attribute value as well as their role in promoting social and territorial cohesion, the Union and the Member States, each within their respective powers and within the scope of application of the Constitution, shall take care that such services operate on the basis of principles and conditions, in particular economic and financial, which enable them to fulfil their missions. European laws shall define these principles and conditions.” In addition, the Commission will review the situation of services of general interest in the European Union and the need for any horizontal measures in 2005. It plans to present a report of its findings by the end of 2005.

On the basis of the results of the public consultation, the Commission also considers it necessary to further clarify and simplify the legal framework for the financing of public service obligations. It intends to adopt a package of measures to that effect by July 2005 at the latest. Most elements of this package have already been submitted as drafts for consultation.

Furthermore, the public debate highlighted the need for a clear and transparent framework for the selection of undertakings entrusted with a service of general interest. The Commission intends to examine the EU legislation ensuring the transparent award of service concessions. It has therefore launched a consultation on the procurement aspects of public-private partnerships.

The Green Paper also generated considerable interest among stakeholders in the area of social and health services, who expressed a need for greater predictability and clarity to ensure a smooth development of these services. The Commission takes the view that it is useful to develop a systematic approach in order to identify and recognise the specific characteristics of social and health services of general interest and to clarify the framework in which they operate and can be modernised. This approach will be set out in a Communication on social services of general interest, including health services, to be adopted in the course of 2005.

Evaluating the operation of the services, at both Community and national level, is essential to ensure the development of high-quality services of general interest that are accessible and affordable in an environment undergoing constant change. The Commission has undertaken to intensify and improve its evaluation activities in the field of services of general interest.

On an internal level, the sectoral regulations put in place at Community level concern the large network industries. In the Commission’s view, the public consultation on the Green Paper has confirmed this approach. It will take into account the results of this consultation in the examinations of the various sectors.

On an international level, the Commission is determined to ensure consistency between the Community’s internal rules and the obligations on itself and the Member States pursuant to international trade agreements. It also wishes to promote services of general interest in development co-operation.

Related Acts

European Parliament Resolution of 13 January 2004 on the Green Paper on services of general interest [A5-0484/2003].

Parliament welcomes the Commission Green Paper and calls on the Commission to present a follow-up by April 2004 at the latest. It takes the view that certain services of general interest should be excluded from the scope of the competition rules, including health, education and social housing, as well as services of general interest aiming to maintain or increase plurality of information and cultural diversity. Moreover, Parliament calls on the Commission to defend this position at WTO negotiations and negotiations on the General Agreement on Trade in Services. It considers that it is neither possible nor relevant to draw up common definitions of services of general interest, or of the public-service obligations resulting from them, but that the European Union must lay down common principles, including the following: universality and equality of access, continuity, security and adaptability; quality, efficiency and affordability, transparency, protection of less well-off social groups, protection of users, consumers and the environment, and citizen participation, taking into account circumstances which are specific to each sector. It stresses the need to ensure that competition rules are compatible with public service obligations, and is opposed to liberalisation of the water supply. Parliament takes the view that water and waste services should not be subject to Community sectoral directives, but that the Union should keep its full responsibility for these sectors as regards quality and environment protection standards.

Commission Green Paper of 21 May 2003 on services of general interest [COM(2003) 270 final – Official Journal C 76 of 25.03.2004].

The Commission, in this Green Paper, undertakes to conduct a complete review of its policies on services of general interest. Its objective is to organise an open debate on the global role of the Union in the definition of the objectives of general interest pursued by these services and on how they are organised, funded and evaluated. The Green Paper also reaffirms the significant contribution of the internal market and competition rules to modernising and improving the quality and efficiency of many public services, to the benefit of Europe’s citizens and businesses. It deals with globalisation and liberalisation, raising the question of whether a general legislative framework should be established at Community level for services of general interest, and seeks to deal with these issues by asking questions about: the impact of any additional Community initiatives to implement the treaty, in full respect of the principle of subsidiarity; the principles likely to be incorporated in any framework legislation on services of general interest and the actual added value of legislation of that kind; the definition of good governance in the organisation, regulation, funding and evaluation of services of general interest; an examination of any new measure likely to be taken to increase legal certainty and facilitate consistent, harmonious coordination between the objective of safeguarding high-quality services of general interest and the rigorous application of the competition and internal market rules.

Combating late payment in commercial transactions

Combating late payment in commercial transactions

Outline of the Community (European Union) legislation about Combating late payment in commercial transactions

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Enterprise > Business environment

Combating late payment in commercial transactions

Document or Iniciative

Directive 2011/7/EU of the European Parliament and of the Council of 16 February 2011 on combating late payment in commercial transactions (Text with EEA relevance).

Summary

This Directive aims at combating late payment * in commercial transactions * in order to contribute to the proper functioning of the internal market and to foster the competitiveness of undertakings, particularly small and medium-sized enterprises (SMEs).

The Directive applies to all types of payment made as remuneration for commercial transactions between public authorities and between undertakings. It may exclude:

  • debts that are subject to insolvency proceedings against a debtor;
  • proceedings aimed at debt restructuring;
  • transactions with consumers;
  • interest relating to other payments (for examples payments made under the laws on cheques and bills of exchange, or payments made as compensation for damages including payments from insurance companies).

Transactions between undertakings

In the event of late payment, a creditor is entitled to claim interest on condition that they have fulfilled their contractual and legal obligations and that they have not received the amount due * on the agreed date. The creditor is paid such interest according to the payment period or date laid down in the contract.

With regard to commercial transactions between economic operators, the Directive stipulates, whilst respecting their contractual freedom, that they must pay their invoices within 60 days except where they have expressly agreed otherwise and insofar as other terms are not grossly unfair to the creditor.

Where the contract does not specify any date for payment, the creditor is also entitled to receive interest if 30 calendar days after receipt, by the debtor, of the invoice or an equivalent request for payment, the creditor has not received the amount due.

The creditor may even be entitled to compensation from the debtor for recovery costs.

Transactions between undertakings and public authorities

In the event of late payment, and where the debtor is a public authority, the creditor shall be entitled to claim interest if they have fulfilled their contractual and legal obligations and have not received the amount due on the agreed date.

Where the debtor is a public authority, the date of receipt of the invoice must not be the subject of a contractual agreement. The period of payment for an invoice must not exceed:

  • 30 days following receipt of the invoice;
  • 30 days following the date of receipt of the goods or services where the date of receipt of the invoice is uncertain.

Member States may extend payment periods to a maximum of 60 days under certain conditions.

The statutory rate of interest for late payment shall be increased to at least 8 percentage points above the reference rate applied by the European Central Bank. Public authorities may not set lower interest rates for late payment.

Unfair contractual terms and practice

Contractual terms shall not apply if they cause prejudice or are unfair to the creditor – for example if they exclude the payment of interest for late payment or compensation for recovery costs.

In order to avoid such unfair practice, Member States must ensure transparency with regard to the rights and obligations resulting from this Directive and shall be bound to publish the applicable rate of statutory interest for late payment.

Member States may also encourage the implementation of payment codes setting out payment time limits.

Recovery procedures

Creditors may lodge action or apply to a court provided that the debt is not disputed.

This Directive repeals Directive 2000/35/EC.

Key terms of the Act
  • Late payment: payment not made within the contractual or statutory period of payment.
  • Commercial transactions: transactions between undertakings or between undertakings and public authorities which lead to the delivery of goods or the provision of services for remuneration.
  • Amount due: the principal sum which should have been paid within the contractual or statutory period of payment, including the applicable taxes, duties, levies or charges specified in the invoice or the equivalent request for payment.

References

Act Entry into force Deadline for transposition in the Member States Official Journal

Directive 2011/7/EU

15.3.2011

16.3.2013

OJ L 48, 23.2.2011