Contents Part I No Exit from EU Market Law for Public Services 1 Introduction: The Constitutionalisation of the EU Concept of SGEI as a Story of Exit, Voice and Loyalty for Public Services in EU Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1.1 The Expansion of EU Law in the Field of Public Services, Including Social Services: Crucial Legal Issues Unsolved . . . . . 4 1.1.1 The CJEU’s Use of the EU Concept of SGEI in Article 106(2) TFEU to Address Member States’ Concerns on the Expansion of EU Law in Their Fields of Competence . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 1.1.2 The Progressive and (Too?) Subtle Approach of the CJEU: Two Important Legal Questions . . . . . . . . 9 1.1.3 SGEI: EU Debate and Constitutionalisation Through the Treaty of Lisbon 2007/2009 . . . . . . . . . . . 11 1.1.4 Emerging EU Governance of Social Services in EU Procurement and State Aid Rules: The Unclear Relation Between the Quality Framework for SGI and the Treaty Framework on SGEI . . . . . . . . . . . . . . . . 15 1.1.5 Systems of Choice for Social Services: Showing the Way? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 1.2 Aims and Structure of the Book . . . . . . . . . . . . . . . . . . . . . . . . . . 22 1.2.1 Part I: No Exit from EU Market Law for Public Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 1.2.2 Part II: SGEI as a Constitutional Voice for Public Services in EU Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 1.2.3 Part III: Cost of Loyalty, the Relationship Between EU Procurement and State Aid Legislation on Social Services and the Treaty Rules on SGEI, with a Case Study on Swedish Systems of Choice . . . . . . . . . . . . . . 28 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 x Contents Part II SGEI as a Constitutional Voice for Public Services in EU Law 2 “Economic Activity”: Criteria and Relevance in the Fields of EU Internal Market Law, Competition Law and Procurement Law . . . 35 2.1 “Economic Activity”: “One Test” Determining the Applicability of the Treaty Market Rules to Activities in the Public Sector?.................................... 37 2.2 “Economic Activity” in the Field of Internal Market Law: Relevance and Criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 2.2.1 The Relationship Between the Notion of “Economic Activity” and the Concepts of Entry of the Treaty Rules on Free Movement . . . . . . . . . . . . . . . . . . . . . . . . 39 2.2.2 The Meaning of the Notion of “Economic Activity” for the Purposes of the Treaty Rules on Free Movement..................................... 42 2.3 “Economic Activity” in the Field of Competition: Relevance and Criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 2.3.1 Relevance of the Fact that an Activity Can Be Economic for the Applicability of the Treaty Competition Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 2.3.2 Criteria Determining that an Activity Is Economic for the Purpose of the Treaty Competition Rules . . . . . . 50 2.4 EU Procurement Law: The Concepts of “Service” and “Undertaking” Meet in the Notion of “Economic Transaction” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 2.5 Conclusions: Closure of “Exit” from EU Law for Public Services Enhances the Need of Member States’ “Voice” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 2.5.1 Legal Meaning of “Economic Activity” as a Unitary Notion of EU Market Law . . . . . . . . . . . . . . . . . . . . . . . 59 2.5.2 Relevance of the Economic Character of an Activity/Transaction for the Applicability of EU Rules on Free Movement and Competition . . . . . 60 2.5.3 Exit from EU Law Closed for Public Services Within Membe States: An EU Constitutional Issue of Competence . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 3 The Importance of SGEI in the Post-Lisbon Treaties . . . . . . . . . . . . 67 3.1 The Concept of SGEI Promoted as a Treaty “Voice” for Public Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 3.1.1 Article 106(2) TFEU: Comparative Advantages of a Provision Allowing Member States to Retain Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 3.1.2 From Amsterdam to Lisbon: 10 Years of Debate and a Compromise on SGEI in the Treaties . . . . . . . . . . 77 Contents xi 3.1.3 New Framework on SGEI in the Post-Lisbon Treaties: SGEI “Voice” . . . . . . . . . . . . . . . . . . . . . . . . . 80 3.2 The Political Importance of SGEI for the Foundational Principles of the EU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 3.2.1 Relationship Between the Treaty Framework on SGEIs and the Values and Objectives of the EU . . . . 95 3.2.2 SGEI: An Appropriate Instrument to Develop Public Services in a “Highly Competitive Social Market Economy”? . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 3.2.3 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 4 SGEI as a Ground for a Special Regime in the Case Law of the CJEU Related to Public Services . . . . . . . . . . . . . . . . . . . . . . . 113 4.1 The Case Law of the CJEU Directly Based on Article 106(2) TFEU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116 4.1.1 SGEI in the Meaning of Article 106(2) TFEU: Only Control of Manifest Error . . . . . . . . . . . . . . . . . . . 117 4.1.2 Standard of Review Under Article 106(2) TFEU: From Derogation to Balance . . . . . . . . . . . . . . . . . . . . . 121 4.1.3 Horizontal Scope of Article 106(2) TFEU . . . . . . . . . . . 129 4.1.4 Entrustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145 4.2 The Case Law of the CJEU Transposed from Article 106(2) TFEU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147 4.2.1 Altmark: No State Aid for Proportional Compensation of Public Service Obligations . . . . . . . . 147 4.2.2 Public Service Tasks (or SGEI Tasks?) and Exemptions from EU Procurement Rules . . . . . . . . 148 4.2.3 A Lenient Review of Restrictions of the Free Movement of Services Justified by Public Service Tasks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154 4.2.4 Lenient Review of Restrictions of the Freedom of Establishment Justified by Public Service Tasks: Hartlauer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159 4.2.5 Libert: Lenient Review of Restriction of the Free Movement of Capital Justified by Public Service Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161 4.3 Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168 5 Meaning of the EU Concept of SGEI Emerging from the CJEU Case Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171 5.1 Clear Understanding of the EU Concept of SGEI in Soft Law and Secondary Law? . . . . . . . . . . . . . . . . . . . . . . . . 174 5.1.1 The Commission’s Understanding of the Concepts of SGI and SGEI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174 xii Contents 5.1.2 SGEI’s Definition in the Services Directive, A(nother) Source of Confusion to Understand the EU Concept of SGEI....................................... 179 5.1.3 Academic Approaches of the Notion of SGEI . . . . . . . 181 5.1.4 Some Signs of Conceptual Confusion on the Core Elements of th