Public subsidies for health and social services of general economic interest

Background

In 2022, the European Commission published an evaluation of the "Almunia package", a set of measures introduced in 2012 to update and simplify the rules on state aid for health and social services. The evaluation, which was based on an extensive public consultation carried out in 2019 and on an expert study conducted in 2021-2022, sought to establish whether the rules had achieved their objectives and whether they were still appropriate in the current social and economic scenario.

The EESC has been contributing to this evaluation both upstream and downstream, first drawing up an own-initiative opinion ahead of the Commission's document in 2022 and now through this opinion in response to a Commission request.

Key points

The EESC agrees that the 2012 package was definitely useful in updating and simplifying the rules on state aid to health and social services.

However, conditions have changed considerably since 2012 as a result both of long-term trends, such as the rising demand for care from an ageing population, and of more acute crises, first and foremost the COVID-19 pandemic, which put huge pressure on the social and health care sectors. Both resulted in a substantial increase in the number of companies working in this sector. In light of this, the EESC sees a need to revise the rules as follows:

• raising the current ceiling for state aid allocated to health and social services, which currently amounts to EUR 500 000 over three financial years. In the EESC's view, increases should go beyond the rate of inflation, in view of the strategic role played by health and social services across the EU and the worrying situation in many Member States when it comes to access to care. The Commission should support the Member States' efforts to invest in such areas.
• clarifying the following key concepts:
• reasonable profit margin: The current legislation stipulates that, aside from having compensation for their costs, companies working in health and social care may make a "reasonable profit". However, local and regional authorities who are responsible for managing health and social care in their region through tendering procedures, etc., do not necessarily know how to determine what constitutes a reasonable profit margin. The Commission should clarify the concept and provide guidance to local and regional authorities. A distinction should also be made in favour of social economy enterprises, which are bound to reinvest the economic margins generated back into their activities;
• market failure: The legislation says state aid can be used where the market cannot adquately provide responses. The EESC argues that it should be possible to flag a market failure not only when the market does not deliver a given service, but also, and especially, when it is not able to deliver a service of adequate quality as well as fair and affordable access for everybody to the service, with adverse consequences on social cohesion and equal opportunities;
• social housing: The EESC believes that the definition of "social housing", a category of services which is exempt from state aid notification, should be extended. It should not only cover housing for disadvantaged or less advantaged people with solvency issues, as is currently the case, but also other serious situations such as women subject to domestic violence, elderly people and possibly young people, whose situation in Europe would justify specific public investment policies.

Link to full opinion

Additional information

EESC section responsible: Single Market, Production and Consumption (INT)

Opinion type: optional Commission referral

Rapporteur: Giuseppe Guerini (Civil Society Organisations– Italy)

Co-rapporteur: Paulo Barros Vale (Employers - Portugal)

Reference: SWD (2022) 389 final

Date of adoption by section: 04/04/2023

Result of the vote: 40 votes in favour and none against, with no abstentions

Date of adoption by plenary: 27/04/2023

Result of the vote: 138 votes in favour and none against, with 1 abstention 

Contacts

Press Officer

Tel.: + 32 2 546 8422 | Mob: +32 475 99 94 32

email: daniela.marangoni@eesc.europa.eu

Policy officer

Tel.: +32 2 546 8378

email: silvia.staffa@eesc.europa.eu