Market integration and social cohesion: the politics of public services in European regulation

Abstract:

Although the goal of market integration has not actually been challenged in recent years, it has nevertheless increasingly come to be considered incomplete and in need of complementary goals which serve the general interest by promoting social cohesion and equality. The debate has been conducted in various areas, such as in the fight against unemployment and poverty and in the provision of public utilities. In the latter case, regarding the provision of energy, water, communication and transport, the debate was sparked by the privatisation of public monopolies and their infrastructure networks, and the deregulation of service provision. The network industries, which had traditionally been shielded from competition and were run within national boundaries, were dramatically transformed. This change, which in some countries resulted from European legislation, was meant to induce more producer competition, improved productivity, more consumer choice in the supply of network services, and lower prices. However, it has triggered concerns over the maintenance of general-interest goals in service provision, ie over safeguarding the accessibility, equality, continuity, security and affordability of these services after liberalisation. There is a general political consensus that communicating by voice telephony, enjoying a certain degree of mobility, and using energy are basic needs which should be guaranteed and that firms operating in network industries should thus be subject to 'public-service' objectives. This contribution raises the questions: why, and to what extent, does a conflict exist between economic liberalisation and general-interest goals in the first place? I then turn to the role of European policy-making, which aims at striking a balance between the poles of market integration and competition, on the one hand, and the provision of public services, on the other. What are the existing European policies and how do they fare when measured against these two goals? I then focus on the central question of the analysis: how can the pro-general-interest decisions at the cross-sectoral and sectoral level (in energy, telecommunications and rail) be accounted for in terms of the interaction of the formal political and legal actors involved in shaping the outcomes at the European level?