The national social security services of European Union member states are to be opened up to private sector competition, according to a clause buried within a wide-ranging European Commission directive on public procurement.
The directive, first presented in December 2011 by European Commissioner for Internal Market and Services, Michel Barnier, requires governments to launch yearly tenders to manage sectors of their compulsory social security services, most of which until now have been managed according to the principle of social solidarity, potentialy opening the door to large insurance companies, such as Axa or Allianz.
Contacted by Mediapart, Barnier’s office declined to comment on the issue.
Surprisingly, the opening up of social welfare systems to private competition, detailed in annexe 16 and buried under a catalogue of measures outlined in the 246-page directive, appears to have been largely ignored until now by Members of the European Parliament (MEPs), who are due to vote soon on the proposed text.
“But, now that some have noticed it, and that the text is still under negotiation, we need to tackle it, it cannot [be allowed to] pass through,” said French socialist MEP Pervenche Berès, chair of the parliament’s Committee on Employment and Social Affairs. “If I had been alerted early enough on this issue, as president of the employment and social affairs committee I would have done everything to remove this reference in annexe 16. “
Her committee debated the substance of the directive in September, presenting its reactions to the text in a report, but, remarkably, the reference to opening up compulsory social services to the private sector went unnoticed.
The introduction to the wide-ranging directive describes it as serving two “complimentary” objectives, the first of which is “to increase the efficiency of public spending to ensure the best possible procurement outcomes in terms of value for money […] in particular a simplification and flexibilisation of the existing public procurement rules” in which “streamlined, more efficient procedures will benefit all economic operators and facilitate the participation of SMEs and cross-border bidders.”
The second is to “to make better use of public procurement in support of common societal goals such as protection of the environment, higher resource and energy efficiency, combating climate change, promoting innovation, employment and social inclusion and ensuring the best possible conditions for the provision of high quality social services”.
Illegal move
The aim of the original text of the Commission is ‘to harmonize the internal market’, which I admit is a worthy one,” commented Belgian socialist MEP Marc Tarabella, the parliament’s rapporteur for the text. “Where I am no longer in agreement is when, in this same text, namely in annexe 16, the European commission wants to bring in legislation concerning public services, as if there was nothing unusual about it […] Social security must remain a prerogative of the state.”
Tarabella has prepared an amendment to remove the reference to social security services in the directive, and this will be submitted in the coming weeks for approval by the Internal Market and Consumer Protection committee before the directive goes before parliament.
According to several sources, the final vote in Strasbourg is unlikely to happen before January 2013, given the importance of the issues involved and the vast number of amendments that have been tabled. Whatever the European Parliament decides, the final outcome will only be decided in tripartite negotiations between it and the European Commission and Council.
Opposition to annexe 16 of Barnier’s directive is strengthened by both a ruling of the European Court of Justice (ECJ) and an official statement issued five years ago by the European Commission (EC) itself. On February 17th 1993, in judgment of a case brought to it by the French social services, the ECJ pronounced that social security services were a “non-economic” sector of activity. This was also the substance of a comment contained in a EC communiqué about the single European market issued on December 20th 2011, in which it underlines that social security activities cannot be “submitted to the rules of the treaty regarding the internal market and competition”.
Meanwhile, Mediapart has gained access to a report on the directive prepared in February by Belgian government advisors, in which they note that “we cannot accept the inclusion of compulsory social services [for public tender]” and propose that “all references to compulsory social services in annexe 16 of the proposed directive be removed.”
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English version: Graham Tearse