This Won’t Hurt a Bit: The Commission’s Approach to Services of General Economic Interest and State Aid to Hospitals

21 Pages Posted: 23 Mar 2012

See all articles by Leigh Hancher

Leigh Hancher

Tilburg Law School; Tilburg Law and Economics Center (TILEC)

Wolf Sauter

Tilburg Law and Economics Center (TILEC); Dutch Healthcare Authority; Tilburg Law School; Netherlands Authority for Consumers and Markets (ACM)

Date Written: March 21, 2012

Abstract

Where the provision of healthcare services involves undertakings (entities engaged in the provision of goods and/or services on a market) these are subject to the EU state aid rules. State aid questions are raised in particular regarding the compensation for public service provision, which may qualify for exemption as services of general economic interest (SGEI). In the Altmark Case of 2003 the Court of Justice provided criteria for establishing whether aid is in fact involved or not.

Where aid exists, this may still be declared compatible with the internal market by the European Commission based on a further set of SGEI criteria that it spelled out in its legislative packages of 2005 and recently in 2011. This paper first looks at the relevant tests in general and then focuses on the main substantive Commission state aid decision with regard to hospital care, involving the public hospitals in the Brussels capital region in 2009. This shows that the Commission leaves considerable leeway for the compensation of public service provision by hospitals. However a more formal approach by the Member States clarifying the scope of their SGEI would help in securing the safe harbour for these services that is provided by the 2011 framework.

Keywords: EU law, state aid, services of general economic interest, public service

JEL Classification: I1, I19; K21, K23, K32

Suggested Citation

Hancher, Leigh and Sauter, Wolf, This Won’t Hurt a Bit: The Commission’s Approach to Services of General Economic Interest and State Aid to Hospitals (March 21, 2012). TILEC Discussion Paper No. 21012-012, Available at SSRN: https://ssrn.com/abstract=2026871 or http://dx.doi.org/10.2139/ssrn.2026871

Leigh Hancher (Contact Author)

Tilburg Law School

Tilburg, 5000 LE
Netherlands

Tilburg Law and Economics Center (TILEC) ( email )

Warandelaan 2
Tilburg, 5000 LE
Netherlands

Wolf Sauter

Tilburg Law and Economics Center (TILEC) ( email )

Warandelaan 2
Tilburg, 5000 LE
Netherlands

Dutch Healthcare Authority ( email )

Postbus 3017
Utrecht, 3502 GA
Netherlands

Tilburg Law School

Tilburg, 5000 LE
Netherlands

Netherlands Authority for Consumers and Markets (ACM) ( email )

PO Box 16326
2500 BH The Hague
Netherlands

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