The European Commission has adopted a new set of rules on the provision of state aid to companies providing “services of general economic interest,” according to a statement published Tuesday.
The new package will give leeway to governments to provide unlimited funds to sensitive welfare services that are important in times of economic contraction, such as labor re-training centers, but will be harsher for big state companies like postal services, telecommunications, water, energy and transportation companies.
The European Union will exempt all social-services providers from the obligation to notify their competition watchdog for receiving state funding.
Previously, the rule applied only to hospitals and social housing.
Companies receiving up to EUR15 million per year in state aid won΄t be scrutinized for state aid. The threshold has been lowered in the revised rules from EU30 million.
The EU will also tighten state-aid rules that affect larger public companies that aren΄t providing social services. They will have to observe stricter rules with regards to their public procurement practices.
The new rules also foresee that such companies will have to introduce efficiency incentives in compensation mechanisms “because incentives to become more efficient in the delivery of a service promote services of a better quality at a lower cost for taxpayers and users,” according to its statement.
(source: Dow Jones)
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