Page - 2 - in Austrian Law Journal, Volume 1/2019

ALJ 2019 Martina Melcher 2 economic interest, SGEI), they are subject to the EU market rules;3 otherwise they are called non- economic SGI (neSGI) and remain mostly subject to national law only.4 In its beginnings as an Economic Community, the EU generally refrained from dealing with SG(E)I. However, during the last thirty years the EU, as a political actor, as well as the CJEU5 in its case law became increasingly active. Today, an EU constitutional framework on the law of SG(E)I has emerged. In addition to Article 106 (2) TFEU, which has been part of the EU Treaties since the beginning, Article 14 TFEU, Article 36 of the Charter of Fundamental Rights of the EU (CFR) and the Protocol (No. 26) on services of general interest to the Treaty of Lisbon (SGI Protocol) shape the legal and political approach of the EU to SG(E)I. Article 14 TFEU, which obliges the EU and the Member States to ‘take care that SGEI operate on the basis of principles and conditions […], which enable them to fulfil their missions’, epitomises the emancipation of such services from a mere hindrance to competition to an EU legal concept in its own right. The SGI Protocol sheds some light on the ‘shared values’ SGEI are purportedly based on and emphasizes the ‘essential role and the wide discretion’ of Member States’ authorities ‘in providing, commissioning and organising’ such services as well as their diversity and the importance of ‘a high level of quality, safety and affordability, equal treatment and the promotion of universal access and of user rights’. Finally, SGEI are even referred to in the context of fundamental rights. The unprecedented Article 36 CFR requires the EU to recognize and respect the ‘access to services of general economic interest as provided for in national law and practices, in accordance with the Treaties, in order to promote the social and territorial cohesion of the Union’. Further clarification and interpretation of these constitutional rules are provided by extensive case law and numerous soft law instruments of the Commission, which serve as guidelines and add details to the often cryptic general provisions. Due to their particular nature, social and welfare interests as well as economic and market interests of the EU and the Member States shape the organisation and the functioning of SG(E)I. Their provision often requires concessions that conflict with the principle of undistorted competition and a free market; in a way, they may even be perceived as ‘legal irritants’6. Thus, the EU law on SG(E)I and its constitutional framework are characterized and shaped to a very significant extent by the necessity to reconcile potentially conflicting interests on (at least) two levels: First, EU interests and the interests of the various Member States are not necessarily concurring and therefore require balancing. Second, on a more substantive level, the rules to ensure a functioning internal market, in particular the rules on competition, have to be adjusted to accommodate public services. In other words, market and welfare interests have to be balanced. 3 The term ‘EU market rules’ is meant in this paper to encompass free movement law as well as competition and State aid law. 4 For more details regarding the classification of services as SGI, SGEI or neSGI see Mustafa Karayigit, The Notion of Services of General Economic Interest Revisited, 15 EPL 575 (2009); Neergaard, supra note 1, at 17; Julia Raptis, Wirtschaftliche oder nichtwirtschaftliche Dienstleistungen von allgemeinem Interesse - Probleme der Abgrenzung, 64 ZÖR 53 (2009). 5 The term CJEU is used for references to the Court of Justice of the EU, including the European Court of Justice (ECJ) and the General Court (GC). 6 Mario Monti, A new strategy for the single market: at the service of Europe’s economy and society. Report to the President of the European Commission, José Manuel Barroso, 9 May 2009, at 73, as cited by Wolf Sauter, Public Services and the Internal Market: Building Blocks or Persistent Irritant?, 21 ELJ 738, 738 (2015).