EU Competition policy must not limit local and regional support  
EU Competition policy must not limit local and regional support

EU local and regional authorities welcome competition policy achievements but demand more flexibility for state aid rules to overcome challenges such as Brexit

The impact of the EU's competition policy on local and regional authorities was the topic of an opinion adopted at the European Committee of the Regions' (CoR) December plenary session. During a debate with the EU's Commissioner for Competition, Margrethe Vestager, members of the CoR urged that rules allow local and regional authorities address social and economic challenges without being considered state aid.

Competition policy is the EU's tool to protect the internal market and its consumers from potential abuse from dominant businesses, which might otherwise charge excessive prices or impose unfair terms, and would have negative effects on citizens and local and regional economies. It also limits state intervention, which can create problems for local and regional authorities delivering public services or supporting their local businesses and economies.

"Local and regional authorities are sensitive to competition decisions, including tax rulings, because they can have a significant impact at local and regional level. They are providers of Services of General Economic Interest (SGEI), an important mission to support Europeans in their daily lives. Cities and regions must be supported in this task, including in the context of EU competition policy" , said Karl-Heinz Lambertz, President of the European Committee of the Regions opening the debate.

Margrethe Vestager , EU Commissioner for Competition, said " We agree with the CoR that when public spending doesn't affect competition at a European scale, then there is no need for the European Commission to be involved. Our role is to ensure that the European market is kept open and fair. And we need to make sure that citizens and entrepreneurs who have bright ideas are not kept out of the market by companies who receive state aid. State aid should only be given if the market cannot deliver on a project. We value today's exchange with local and regional representatives that list areas where we need to take our work forward."

The CoR opinion emphasises the positive impact European competition policy has on citizens and businesses, by widening citizens' choice and encouraging innovation, and praises the European Commission for tackling the issue of geo-blocking and e-commerce which benefit European consumers.

However, Michael Murphy (IE/EPP), member of Ireland's Tipperary County Council and rapporteur of the CoR's opinion, said that a balanced approach in the enforcement of competition rules that take into account differences in the geographical location as well as social and cultural situation was needed, " We need further simplification in the application of state aid rules for Services of General Economic Interest so that local and regional authorities, as services providers, can respond to local economic challenges, particularly for peripheral regions where the market may not always be a viable route for providing services and to help vulnerable citizens, struggling small companies and savers ".

The opinion also stresses the need to ensure fair competition and price transparency in the food supply chain in order to protect European farmers. Looking to future challenges, the CoR recommends greater flexibility on state aid rules, which allows local and regional authorities to more proactively help European businesses navigate economic uncertainties posed by Brexit, without being considered state aid.

The issue of social housing was also raised in a separate CoR opinion " Towards a European program for housing " by Hicham Imane (BE/PES), member of Belgium's Charleroi Municipal Council, adopted the same day. He argues that competition policy should not limit social housing to the poorest or less advantaged social groups. Local and regional authorities should have the freedom in the planning, delivery, and financing of social housing to also help those who live in substandard or overcrowded housing or who have to spend most of their incomes to afford decent housing.

Competition related CoR opinions:

Contact:
Carmen Schmidle
Tel. +32 (0)2 282 2366
carmen.schmidle@cor.europa.eu