The new legislative package on state aid for services of general economic interest (SGEI), which will replace the ‘Altmark package’, is expected in the last days of December - except for the de minimis regulation, for which a proposal is foreseen for April 2012. In this interview, the Commissioner for Competition, Joaquin Almunia, explains the Commission’s aims in revising this package, particularly social housing measures. He gives his views on the general framework of the package, expanding on a discussion started in a previous interview withEuropolitics , as well as covering the subject of social housing.

What are the Commission’s aims in revising the Altmark package?

Six years have passed since the Commission adopted the Altmark package on the control of aid for SGEIs. Based on practical experience of this system, and the views of member states, service providers and users, the Commission judged it timely to carry out a review of this package. We want to protect the existence of these SGEIs, and establish simpler, clearer rules, which also take into account the efficiency of services for citizens. Nevertheless, we must distinguish between services which, given their nature or small size, do not impact the market, and those which can cause competition distortion. For the first, we propose establishing more favourable de minimis rules. Public aid of less than €150,000 will no longer be subject to controls. Regarding the largest SGEIs; all those of a social nature will be exempt from notification, and the current definition of social nature – which includes social housing and hospitals – will be broadened. For SGEIs likely to have an impact on the market, we clarify the fourth criterion of the Altmark judgement: the evaluation of the level of compensation based on an analysis of the costs of an average, well-managed and suitably equipped company. However, the Court of Justice will always have the final say.

We have a third objective; to reward providers of successful SGEI which offer better services at better prices. This efficiency incentive already exists in the transport sector.

Why introduce a threshold of 10,000 inhabitants in the de minimis rule exempting small public services from notification?

Following consultation with member states, SGEI providers and networks of local authorities, it was decided that a community of 10,000 inhabitants has the capacity to provide the necessary accounts documents certifying the accounts of the service in question, under transparency conditions which allow us to see how public money is being managed. We are not asking for much, and the procedure should be quick if the right information is provided.

Why is investment aid not taken into account in the calculation of over-compensation, since hospitals and social housing are by their very nature linked to such funding?

The rules will consider state aid for the duration of the contract between the government and the SGEI provider, rather than on an annual basis, so as to bring long-term investments into the picture. Expenditure that is staggered over time will thus be better distributed.

You propose eliminating the restrictive definition of social housing in the current package. Is this aimed at defusing controversy over the Commission’s decision regarding Dutch social housing?

I cannot discuss a Court of Justice case, but what I can say is that while this case has been very time-consuming for my services and caused a great deal of debate, in fact the definition of a public service for social housing in the Netherlands is a matter for its national authorities. It was not the Commission which established this definition, it was the Dutch government – in a subsidiarity exercise under the treaty. The Dutch authorities fixed a threshold limiting access to social housing to those with annual revenue of under €33,000, not the Commission; this was my response to a Dutch minister who asked me what I thought of this threshold. I am not a Dutch politician, but when there is a complaint against a national system for public services, in this case for social housing, it is my responsibility as competition commissioner to examine whether the system conforms to rules on state aid for SGEIs.

Doesn’t this lead to extreme situations, such as that of Sweden, which has taken social housing away from public services in order not to have to change its broad definition of social housing?

This is a debate for each individual member state. Some countries have very broad and ambitious social housing policies, thanks to their economic capacity. Others do not, for political or economic reasons. It is not up to the Commission to provide a definition of social housing policy. It is the Commission’s responsibility, when it receives a voluntary notification or complaint, to check compatibility with the rules it is in charge of applying, and with the qualification of an SGEI, the absence of ‘obvious error’.