EESC urges EU to adopt an action plan on services of general interest

The EESC’s July plenary session saw the adoption of an opinion emphasising the vital role played by services of general interest (SGIs) such as healthcare, energy and public transport in promoting the EU’s sustainable prosperity and competitiveness.

The European Economic and Social Committee (EESC) calls on the European Commission to draw up an action plan on services of general interest and thus recognise and strengthen their public role in social cohesion, democracy and competitiveness.

In an opinion drafted by Thomas Kattnig and adopted at the EESC’s July plenary session, the EESC says that the Commission should take concrete action to follow up on Enrico Letta’s 2024 report on the Future of the Single Market, and should adopt a holistic approach towards services of general interest, as opposed to the current sectoral approach.

The Commission should recognise the central role of modern SGIs in its new plan to promote sustainable prosperity and competitiveness, including in the Competitiveness Compass and the Clean Industrial Deal.

The importance of public services

SGIs, such as healthcare, elderly and child care, education, social services, energy, water and public transport, are a cornerstone of competitiveness, the European social model and democratic participation in Europe.

Their importance extends far beyond technical services: they serve the common good, promote social inclusion, strengthen trust in state institutions and promote preparedness and social resilience, especially in times of multiple crises.

SGIs also play a significant role in the European economy. According to the statistical update on Services of General Interest (SGIs) published in May 2024 by the Belgian Government’s Federal Planning Bureau, SGIs generated EUR 3 721 billion of value added across the EU in 2021, accounting for 28.4% of all value added in the EU. At the same time, they employed 31.1% of the EU workforce (65.2 million people) and represented 19.7% (EUR 632.6 billion) of all investment undertaken in the EU in 2021.

Affordable services for all

Member States should secure universal and equitable access to affordable, high-quality basic services. This is a matter of social justice, since SGIs are delivered at a price that does not depend on the purchasing power of users.

SGIs, and the delivery infrastructure necessary to ensure their universal provision, play a pivotal role in the EU economy and its wellbeing, serving as a pillar of public trust in the state and society and thereby contributing to cohesion. Achieving this will require financial and regulatory reform.

The funding of SGIs is not consumption expenditure, but an investment in the future. SGIs need proper and stable funding, as they are a key vector in cohesion policy and in longer term security and preparedness.

‘From stable energy supply to municipal services and public transport, we all depend on services of general interest every day’, said Mr Kattnig. ‘Only through sufficient, long-term financing and clear framework conditions can we ensure equal access to affordable and high-quality services of general interest. Public services are not consumer spending – they are an investment in people’s trust, social justice and economic stability.’

Sustainable funding: keeping a regional balance

The Spring 2024 Standard Eurobarometer 101 highlights that, on average, only 54% of citizens are satisfied with their SGIs. The results vary widely between Member States: 94% of people in Luxembourg, 86% in the Netherlands and 78% in Austria say that public service provision in their country is good; the figure falls to 70% in Greece, 63% in Italy and 58% in Portugal, pointing to dissatisfaction with their public services.

In the EESC’s view, countries with an infrastructure investment policy and properly funded quality public services enable their citizens and businesses to spend less on their living or operating costs. For this reason, the Committee argues that it is necessary to properly fund and improve SGIs and to align them more closely with the needs of the general public, in order to improve satisfaction and trust in democracy.

When investing in public services, a regional balance must be ensured. Instruments such as the Cohesion Fund and the Transition Fund must be strengthened and secured for the long term. This should lead to an expanded cohesion policy that tackles social inequalities and fosters a sense of European belonging. Funds for social and regional cohesion should be recognised as essential in safeguarding the EU’s economic and social stability and should be increased, not reduced – for example by engaging in joint borrowing, as the EU did during the pandemic. This spending should not bear the brunt of the increase in military spending, but should be granted with at least the same flexibility as that granted to strategic sectors such as defence.

Finally, when revising the Public Procurement Directive, the main focus of the reform should be simplification and a clear shift from a purely price-based approach to a system based on an appropriate price-quality ratio. To this end, it is important to incentivise social and sustainable criteria based on the relevant EU targets, as well as better access to public procurement for SMEs, for a more sustainable and inclusive EU economy.