Public Services and the Internal Market : Building Blocks or Persistent Irritant?

Critics such as Fritz Scharpf maintain that in the EU negative integration (abolishing national rules) by definition wins out over positive integration (adopting new EU rules). This claim is examined here regarding public services – both utilities and welfare services. In EU law the (partly overlapping) relevant categories are (i) services of general interest (SGI) and (ii) services of general economic interest (SGEI). The latter are provided by undertakings. SGI that are not also SGEI are subject only to nondiscrimination requirements: this covers most welfare services. SGEI must comply with the EU competition and state aid rules, which promotes liberalisation. However a proportional exception is allowed in so far as necessary for SGEI to carry out their public tasks. Moreover alongside liberalization EU regimes for public services have emerged that benefit citizens/consumers. In sum, public services can now arguably be seen as building blocks of the internal market