Tarjei Bekkedal

Developments in Services of General Interest

SUMMARY OF CONTENTS Introduction Why Do Services of General Economic Interest Challenge the EU? Erika SZYSZCZAK Part One: General Issues Chapter 1 From Rome to Lisbon: SGEIs in Primary Law Pierre BAUBY Chapter 2 The EC Commission’s Soft Law and Legislative Approach Ulla NEERGAARD Chapter 3 Article 106 TFEU is dead-long live Article 106 TFEU! Tarjei BEKKEDAL Part Two: Specific Issues Chapter 4 The Definition of a ‘Contract’ Under Article 106 TFEU Grith OLYKKE Chapter 5 Social Services of General Interest Johan van de Gronden Chapter 6 Universal Service Obligations and Public Service Obligations in Liberalised Sectors Jim DAVIES and Erika SZYSZCZAK Chapter 7 Public Service Obligations: protection of public service values in a national and European context. Martin HENNIG Part Three: International Perspectives Chapter 8 Public Private Partnerships and Government Services in Least Developed Countries: Regulatory Paradoxes Priscilla SCHWARTZ Chapter 9 Public Service Obligations in EU External Relations Policy Markus Krajewski Conclusion Jim DAVIES List of Contributors Table of Cases Index

Article 106 TFEU is Dead. Long Live Article 106 TFEU

This chapter raises the question of the purpose of Article 106 TFEU (ex Article 86 EC). Article 106(2) TFEU is traditionally seen as a derogation to the Treaty provisions and has an awkward role in the Treaty Chapter on competition. Bekkedal notes the conventional reading of the provision is that it is an autonomous exception to all of the Treaty provisions and is not confined to specific types of infringement of the TFEU. The conventional view also takes the position that Article 106(2) TFEU can be invoked by the Member States and undertakings. Bekkedal, in contrast, takes a radical view. He argues that Article 106(2) TFEU can only be invoked by undertakings. He makes the point that Article 106(2) TFEU should not be turned into a general clause in EU law because it should be an exception primarily targeted at economic objectives. In relation to the fundamental free movement provisions economic objectives are not, in principle, accepted as legitimate justifications to the free movement rules. Bekkedal also notes that the European Courts take a softer approach to the application of the principle of proportionality when applying Article 106(2) TFEU, whereas a classical application of the principle should be strict: ‘a least restrictive alternative’ assessment of the challenged restriction on competition and cross-border trade. If Article 106(2) TFEU is applied as a general clause with these softer standards for review, it could compromise the Internal Market project. Bekkedal finds a new role for Article 106 TFEU in that it could be considered as a value statement fulfilling the concept of a ‘European Social Model.’

The Reach of Free Movement. A Defence of Court Discretion

This chapter argues that the reach of the fundamental freedoms and the content of the notion of a “restriction” cannot and should not be expressed in a rule-like manner. To the contrary, the fundamental freedoms function as overarching constitutional principles that both demand and legitimize the execution of court discretion. Public bodies, like courts, are vested with discretion in situations where rules are to be avoided, due to the magnitude of phenomena that are subject to regulation. Because of their stiffness, rules cannot serve the purposes of a legal system that pursues numerous, shifting and colliding objectives, such as the EU legal order. Any attempt to establish tests or categorizations that aim to define and exhaust the reach of the fundamental freedoms in a rule-like manner will obstruct the nature of the principles through which free movement is established, secured and developed, and the nature of the legal order in which they operate. The chapter explores the legal basis for court discretion, whether discretion is compatible with the principle of legal certainty, how discretion can fit a conception of the right to free movement as a personal individual right and the constitutional limitations to court discretion.