Thursday, March 30, 2023
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Can we expect a "European model" of public service?

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Marc Deluzet. Books and Ideas 

In these times when trade unions and leftist parties are calling for a European directive on general interest services in Europe, the book written under the direction of Pierre Bauby, Henri Coing y Alain de Tolédo comes to mind to clarify the challenges facing the regulation of public services in Europe. Revisiting recent academic work, French and European, seeks to clarify the three core issues of this regulation: What are its goals? What are its functions (regulation, control, arbitration between competition law and service missions of general interest)? At what level, sectoral or national, should the regulation be implemented?

The relevance of these issues is not in doubt. They are closely linked to the recent history of European construction. Since the Single European Act of 1976, the European Union (EU) started a movement of liberalisation of public communications networks services, transport and energy, also called services of general interest. Thus, the Europeanisation of these services was at the time seen as key elements of European construction, to ensure the free movement of services and the completion of the single internal market, and enhance effectiveness in the areas usually protected by local, regional or national monopolies.

Currently, the single application of common competition law and market rules to these sectors have led to an economic polarisation (concentrations and formation of oligopolies), either social (differentiation of services based on income and solvency of users), territorial (marginalization of the least profitable areas), temporary (short-term priority) and financial (outsourcing of the negative effects of activities). That is why for twenty years, the right to competition has been completed with the definition of objectives of general interest relating to each sector and the application of control mechanisms and regulatory agencies. This regulation is imposed on the basis of a triple separation of powers: the functions of the operator and the regulator, including the role of the shareholder and the owners of companies operating in these sectors and, finally, a separation between infrastructure which form a natural monopoly (such as the rail network) and services (network operators)

Market failures

The first chapter emphasizes market failures and the need to find a regulation that is more than a simple application of common competition law. To regulate is to ensure that the market contributes to the public interest and, conversely, that the public interest assumes a certain amount of competition, so that the structures do not become fossilised, landlord economies and what economists call "sub-optimal allocation of the resources". This balanced position, which seeks to protect the public interest while avoiding the pitfall of sclerosis, shows the breadth of the problem. This attempts to bring out a common understanding to the 25 Member States, taking into account the diversity of their histories, traditions and institutions. To do this, we must avoid confusion between rules



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