Services of General Economic Interest (SGEI) and Universal Service Obligations (USO) as an EU Law Framework for Curative Health Care

Abstract

Services of general economic interest (SGEI) are a legal category in the EC Treaty that is designed to enable proportionate restrictions on the Treaty's market freedoms (including competition) in so far as necessary to attain legitimate public policy objectives defined (in the first instance) at national level. In principle this concerns those cases where market failures cannot be effectively remedied with market-based solutions. This paper aims to set out the history of the SGEI concept and its legal basis in order to examine the question whether it might provide a useful regime for those hospital services that cannot at present be subjected to full market-based provision - while solidarity based state provision is not an option, or is no longer desirable. The answer to this question is that there is indeed scope for applying SGEI.

Especially since the Altmark Trans judgment of the European Court of Justice national governments may be expected to become increasingly proactive in designating SGEI in order to obtain state aid immunity. Universal service obligations (USO) that guarantee universal access are one of the most important examples of the way SGEI are operationalised, for which this paper proposes a structured test. Finally, as regards the proportionality test applied to SGEI this paper suggests that in the absence of Community level standards for SGEI this means testing whether intervention is manifestly disproportionate, whereas in cases where pre-emption by Community legislation has taken place, the least restrictive means test applies.

Keywords: services of general economic interest, services of general interest, social services of general interest, universal service, universal service obligation, universal access, competition, undertaking, market failure, health care liberalisation, state aid compensation, pre-emption, proportionality.

JEL Classification: K, K21, K23