Social Services of General Interest (SSGI)

Eilmansberger/Herzig
same token one will have to regard social entities as undertakings if and when they engage in
economic activity.
3.2. New versus existing State aid
Another reason for the low number of State aid litigation in the social sector could be
found in the fact that many of Austria’s funding systems already existed prior to accession to
the Community (and the EEA Agreement). In terms of existing subsidies they are not subject
to any ban. The Commission could only address them, ex officio, with the aim of proposing
pertinent measures to the Member State concerned. There is no obligation to notify such
existing State aid.
It would, however, be premature to qualify for simply this reason any measures taken
prior to accession as existing aid per se. According to case-law any change in the competitive
situation where aid has been granted may turn an existing into a new State aid without
necessarily requiring any changes to the subsidy agreement. This could be of relevance to
entities which were not faced with much competition within the historical context of the
originally promised subsidies, and which have meanwhile adopted a more market-oriented
approach in their activities owing to changes in the competitive environment. Fundamental
reforms concerning the organisation of social services or the funding of hospitals could result
in major parameters of the competitive environment being so changed.
.
3.3. De Minimis Regulation
There is no obligation to notify subsidies of less than EUR 200,000 granted to an
undertaking over a period of three years as this does not constitute aid liable to distort
competition. This provision is set forth in the so-called De Minimis Regulation. 137 This can be
of major importance to the social sector owing to the usually small-scale organisational
setting within which social services are provided. 138
3.4. Cross-border implications
Art 87 EC is only applicable if aid affects or threatens to affect trade between Member
States and competition. The Commission appears to prefer a more generous standard in
respect of services of general interest. As stated in a Commission Services’ Non Paper 139 , the
Commission’s concern is to focus on cases that could have a significant impact on trade
between Member States. This is indeed illustrated by a number of current practice examples.
In its decision on the Dorsten leisure pool 140 the Commission concluded that the measure did
not affect trade between Member States as the amenity was primarily used by the inhabitants
of the town of Dorsten and the surrounding area. A similar stance is adopted in the Irish
hospitals decision. 141 Here the Commission argues that the effect of the measure in question is
to serve local hospitals which suffer from a clear undercapacity, and it can be considered not
137
Commission Regulation (EC) no 1998/2006 on the application of Articles 87 and 88 of the EC Treaty to de
minimis aid, OJ 2006 L 379/5.
138
Commission Regulation (EC) No 70/2001 on the application of Articles 87 and 88 of the EC Treaty to State
aid to small and medium-sized enterprises, OJ 2001 L 10/33.
139
European Commission, Non Paper – services of general economic interest, published at: http://europa.eu.
int/comm/competition/state_aid/others/1759_sieg_en. pdf, par. 53.
140
State aid N 258/2000, Leisure pool Dorsten, press release IP/00/1509.
141
State aid N 543/2001, Capital allowances for Irish hospitals, par. 20, Commission Letter to the Member
State retrievable from http://europa.eu.int/comm/secretariat_general/sgb/state_aids/comp-2001/n543-01.pdf
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