Council of European Municipalities and Regions (CEMR)
European section of United Cities and Local Governments

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Local and regional governments as service providers

Services of general interest - 23.01.2004

CEMR welcomes EP vote
'A balanced text that gives municipalities the freedom of choice". That is how the Council of European Municipalities and Regions welcomes the European Parliament vote on the Herzog report on Services of general interest (adopted on 14 January).
CEMR particularly welcomes Article 35 that calls, in order to ensure compliance with the subsidiarity principle, for the right of local and regional authorities to 'self-produce' services of general interest independently to be recognised, provided that the direct-management operator does not compete outside the territory concerned; calls, in accordance with its position on the public service contract directives, for local authorities to be authorised to entrust services to distinct entities without tenders if their supervision is analogous to that exercised over their own services and they conduct their main activities by that means.
'In plain terms, explains CEMR's SGI spokesperson Lucy Swan, the Herzog report calls on the European Commission to let Europe's towns and municipalities decide whether - and in what cases - to tender out their public services. This is a much more balanced document than the Parliament's Economic and Monetary Affairs Committee proposal. The Herzog report does not impose a view on whether liberalization of public services is a good or bad approach, it simply states that to comply with the principle of subsidiarity, the European Commission should not impose tendering process on every single municipality".
CEMR also welcomes Article 8 in which the European Parliament notes that the liberalisation of public services and the introduction of competition has produced major benefits in some cases, but in other cases the rule of the market mechanism has jeopardized the existence of public services.
CEMR remains committed to high-quality public services in Europe's municipalities, towns and regions; however it had asked MEPs to vote against forced liberalisation of such services, believing that each local or regional government is best placed to decide when to tender out or provide services in-house.
The full report as adopted by the European Parliament
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