Public Services and the European Union: Healthcare, Health Insurance and Education Services (Legal Issues of Services of General Interest)

Patients travelling abroad to receive medical treatment, healthcare providers wishing to establish their seat or to provide services abroad, and students travelling abroad for education were faced with different barriers which have been declared illegal by the Court of Justice of the European Union. Member States started to use market mechanisms in their welfare systems and this triggered the application of the European internal market and competition rules. Fears related to whether all these would endanger the well-functioning of the welfare services have been raised by Member States. Several conflicts took shape: between national social interests and European Union economic interests; between individual interests and national general interests; between regulation and deregulation, centralization and decentralization. The author shows that behind those fears actually protectionist measures are hidden and that the European Law provides sufficient safeguards for the national welfare systems. In particular academia professionals and practitioners will benefit from the approach taken in this book. Dr. Laura Nistor is a Policy Officer in the DG Enterprise and Industry of the European Commission, Brussels, Belgium Cover 1 Public Services and the European Union 4 ISBN 9789067048040 5 Preface 8 Table of Contents 10 1 Introduction 16 The Subject of Study 17 The Structure of the Book 20 References 23 2 The Organisation of Welfare 24 2.1...Introduction 24 2.2...The Meaning and Origin of Welfare States 26 2.3...Different Welfare Regimes 29 2.4...Bismarckian versus Beveridgian Health Systems 33 2.5...Education 37 2.6...Conclusion 40 References 41 3 The Reach of Internal Market Rules 44 3.1...Introduction 44 3.2...The Impact of the Free Movement of Services 46 3.2.1 Introduction 46 3.2.2 Defining the Notion of Services: Are Health, Health Insurance and Education Services Within the Scope of the Treaty? 47 3.2.2.1 Health and Education: Specific Characteristics 47 3.2.2.2 The Court’s Interpretation of the Notion of Service: A Step-by-Step Approach 50 3.2.2.3 Distinguishing the Free Movement of Services from Other Treaty Rules 62 3.2.2.4 Remuneration 64 3.2.2.5 Public versus Private 67 3.2.2.6 Hospital and Non-Hospital Services 68 3.2.2.7 Social Security 69 3.2.2.8 Different Organisation Forms 70 3.3...The Impact of Establishment Rules on Welfare Services 75 3.4...Free Movement of People 88 3.5...Justifying Restrictions 100 3.5.1 Introduction 100 3.5.2 Types of Justifications 101 3.5.2.1 Justifications Related to Economic Aspects 102 3.5.2.1.1‡Economic Justifications 102 3.5.2.1.2‡The Financial Balance of the System 104 3.5.2.1.3‡The Maintenance of a Balanced Service Open to All 119 3.5.2.1.4‡Preventing Abuse of European Union Law 120 3.5.2.1.5‡The Cohesion of the Tax System 122 3.5.2.2 Justifications Related to Non-Economic Aspects 124 3.5.2.2.1‡The Homogeneity of the System 124 3.5.2.2.2‡Safeguarding the Essential Characteristics of the System 126 3.5.2.2.3‡Safeguarding Public Health 128 3.5.2.2.4‡Quality of the Service, Consumer Protection 131 3.5.2.2.5‡National Values and Interests 135 3.5.2.2.6‡Public Policy 137 3.5.3 Proportionality 139 3.6...Conclusions 147 References 150 4 The Application of the Rules on Competition 154 4.1...Introduction 154 4.2...The Concept of Undertaking 157 4.2.1 Public--Private Entities 159 4.2.2 The Nature of the Service: Social Function 162 4.2.3 The Solidarity Principle 169 4.2.4 Lack of Intention to Make Profit 170 4.2.5 The Level of State Control 171 4.2.6 Upstream Market--Downstream Market 173 4.2.7 The Presence of Economic Elements 179 4.2.8 Universities as Undertakings 183 4.2.9 The Mix of Economic and Non-Economic 184 4.2.10 Conclusions 185 4.3...The Application of Article 101 TFEU (ex Article 81 EC) 188 4.3.1 Defining the Market 190 4.3.2 State Intervention: Effect Utile/State Action Defence 192 4.3.3 Rule of Reason/Ancillary Restraints 198 4.3.4 Different Types of Restrictions 205 4.3.4.1 Price Fixing 205 4.3.4.2 Market and Customer Sharing 208 4.3.4.3 Restrictions of Output 209 4.3.5 Exceptions 210 4.3.5.1 Goals Pursued 212 4.3.5.2 National Interest 219 4.3.6 Conclusion 221 4.4...The Application of Article 106 TFEU (ex Article 86 EC) 223 4.4.1 Introduction 223 4.4.2 Granting of Exclusive Rights: Illegal per se? 227 4.4.3 Types of Infringements 230 4.4.3.1 Exclusive Rights and Article 102 TFEU (ex Article 82 EC) 230 4.4.3.1.1enspDemand Limitation Doctrine 231 4.4.3.1.2enspConflict of Interests Doctrine 233 4.4.3.1.3enspCross-Subsidisation and Predatory Pricing 234 4.4.3.2 Exclusive Rights and Free Movement Provisions 240 4.4.4 Exceptions: Article 106(2) TFEU (ex Article 86(2) EC) 242 4.4.4.1 Services of General Interest 243 4.4.4.2 What Types of Exceptions? 246 4.4.4.3 Proportionality 247 4.4.4.3.1enspIntroduction 247 4.4.4.3.2enspFlexibility of the Proportionality Test 248 4.5...State Aid 255 4.5.1 Introduction 255 4.5.2 Assessment of State Aid Granted to Undertakings Entrusted with Public Service Obligations 257 4.5.3 General Rules Regarding State Aid Applicable to SGEI/SSGI 273 4.5.4 The Economics of the Court’s Rulings 277 4.5.5 Cross-Subsidisation 278 4.5.6 Transparency Directive 287 4.5.7 Conclusion 288 4.6...Conclusion 289 References 291 5 Positive and Soft Law 298 5.1...Introduction 298 5.2...Positive Harmonisation 300 5.2.1 Introduction 300 5.2.2 Welfare Harmonisation as a ‘‘Spill-Over Effect’’ 305 5.2.3 The Competence of the European Union with Regard to Health and Education 310 5.2.3.1 Introduction 310 5.2.3.2 Specific Legal Basis: The Development of the Treaty with Regard to Health and Education 311 5.2.3.3 Functional Competences 316 5.2.3.3.1†Article 128 EEC 316 The Scope of Article 128 EEC 316 5.2.3.3.2†Article 53 TFEU (ex Article 47 EC) 323 5.2.3.3.3†Article 352 TFEU (ex Article 308 EC) 327 5.2.3.3.4†Article 114 TFEU (ex Article 95 EC) 332 5.2.4 Limits to the European Union Powers: The Principle of Subsidiarity 341 5.2.5 Secondary Legislation 348 5.2.5.1 Regulation 1408/71 on Social Security Schemes 348 The Constitutional Position of the Regulation 327 5.2.5.2 Professional Qualifications 353 5.2.5.3 Services Directive 365 5.2.5.4 Proposal for a Directive on the Application of Patients’ Rights in Cross-Border Healthcare 370 5.2.5.5 Proposal for a Directive on Services of General Interest 374 5.3...Soft Law 379 5.3.1 Introduction 379 5.3.2 Pro and Cons of Soft Law 380 5.3.3 Coordination in Healthcare 384 5.3.4 Coordination in the Education Field 391 5.3.5 Services of General Interest 395 5.3.5.1 Relationship Between Services of General Interest and Welfare 395 5.3.5.2 The Status of Services of General Interest 396 5.4...Conclusions 404 References 407 6 Conclusions 414 Integration Led by Court’s Case-Law 414 Safeguards for Non-Economic Interests 416 The Centrality of Proportionality 418 Differences in the Application of the Proportionality Test 419 Possible Solutions 421 Suggestions for the Proportionality Test 422 Further Suggestions 422 A Role for Citizenship 425 Final Reflections 427 References 428 Bibliography 430 Table of Cases 446 European Court of Justice and the Court of First Instance (Numerical Order) 446 Index 454 9067048046,9789067048040 T.M.C. Asser Press 2011 Politically sensitive and economically important, welfare services such as health care, health insurance and education have opened up a heated debate in the EU. The application of EU law to welfare services raises discontent from the part of the Member States who perceive their systems to be under threat. Resisting to the application of the EU law is sometimes seen as part of protecting those values. This book suggests that this resistance is largely unjustified. EU law is not damaging to welfare systems, but it provides adequate balancing mechanisms to ensure that all interests are protected. The approach taken in analysing the impact of EU law on welfare services is to look at the negative integration process and answer the questions related to the extent to which EU law applies to welfare services and the kinds of safeguards the Court offers for these services. The proportionality principle distinguishes itself as the central element in balancing national and Community interests. Being part of the broader integration process, negative harmonization creates legislative lacunae, and therefore, this book also looks at alternative solutions to the negative harmonization process, namely positive and soft law. Front Matter....Pages i-xiii Introduction....Pages 1-8 The Organisation of Welfare....Pages 9-27 The Reach of Internal Market Rules....Pages 29-138 The Application of the Rules on Competition....Pages 139-281 Positive and Soft Law....Pages 283-397 Conclusions....Pages 399-413 Back Matter....Pages 415-445