Services of General Interest and Territorial Cohesion: European Perspectives and National Insights 9783737004718, 9783847104711, 9783847004714

Citation preview

Heinz Fassmann / Daniel Rauhut Eduarda Marques da Costa / Alois Humer (eds.)

Services of General Interest and Territorial Cohesion European Perspectives and National Insights

With 23 figures

V& R unipress Vienna University Press

®

MIX Papier aus verantwortungsvollen Quellen

www.fsc.org

FSC® C083411

Bibliographic information published by the Deutsche Nationalbibliothek The Deutsche Nationalbibliothek lists this publication in the Deutsche Nationalbibliografie; detailed bibliographic data are available online: http://dnb.d-nb.de. ISBN 978-3-8471-0471-1 ISBN 978-3-8470-0471-4 (E-Book) ISBN 978-3-7370-0471-8 (V& R eLibrary) You can find alternative editions of this book and additional material on our website: www.v-r.de Publications of Vienna University Press are published by V& R unipress GmbH. Printed with support of the Rectorate of the University of Vienna. Language Editing: Jennifer Schellenbacher Ó 2015, V& R unipress GmbH, Robert-Bosch-Breite 6, 37079 Göttingen, Germany / www.v-r.de All rights reserved. No part of this work may be reproduced or utilized in any form or by any means, electronic or mechanical, including photocopying, recording, or any information storage and retrieval system, without prior written permission from the publisher. Printed in Germany. Printed and bound by CPI buchbuecher.de GmbH, Zum Alten Berg 24, 96158 Birkach, Germany. Printed on aging-resistant paper.

Contents

Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7

Introduction Heinz Fassmann, Daniel Rauhut, Eduarda Marques da Costa and Alois Humer Introduction: Contextual, legal and policy perspectives on Services of General Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11

Part I: European Perspectives Alexander Milstein Chapter 1: The Legal Aspects of SGI . . . . . . . . . . . . . . . . . . . . .

27

Hild Marte Bjørnsen, Olaf Foss and Steinar Johansen Chapter 2: The concept and definition of SGI . . . . . . . . . . . . . . .

49

Alois Humer, Daniel Rauhut and Heinz Fassmann Chapter 3: Drivers of the Provision of SGI . . . . . . . . . . . . . . . . .

73

Eduarda Marques da Costa, Pedro Palma and Nuno Marques da Costa Chapter 4: Regional Disparities of SGI provision . . . . . . . . . . . . . .

91

Luciane Aguiar Borges, Alois Humer and Christopher J. Smith Chapter 5: Europe’s possible SGI futures: Territorial settings and potential policy paths . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123

6

Contents

Part II: National Insights Elisabeth Gruber, Heinz Fassmann and Alois Humer Chapter 6: Demographic change changing SGI demands: The example of Austria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149 Hjalti Jûhannesson Chapter 7: Provision and Development of SGI at the Edge: The Case of Iceland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167 Xabier Velasco Echeverr†a Chapter 8: EU influenced modernisation and austerity : The case of SGI in Spain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187 Daniela-Luminita Constantin, Raluca Mariana Grosu, Claudiu Herteliu and Adriana Dardala Chapter 9: Regional disparities and equal access to healthcare: A case study of Romania . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209 Istv‚n Ferencsik, Antonia Milbert and Marcin Ste˛pniak Chapter 10: Accessibility of SGI in urban, suburban and remote areas – a regional comparison in Germany, Poland and Hungary . . . . . . . . . . 221 Gregory Hamez and Sophie de Ruffray Chapter 11: Socio-spatial accessibility to Social SGI: France & The Greater Region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 243

Conclusions Andreas Faludi, Dominic Stead and Alois Humer Conclusions: Services of General Interest, Territorial Cohesion and Competitiveness in Europe . . . . . . . . . . . . . . . . . . . . . . . . . . 259 List of Authors

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 269

Preface

The access to Services of General Interest (SGIs) is a highly relevant factor for territorial cohesion, and the prosperity of regions, cities and their citizens in terms of growth, jobs and good living conditions. Currently, however, some regions, cities and towns are experiencing a shrinking or even declining population. This is in some places accompanied by or even influenced by the decrease in service provision. But it is also important to note, that this is not the situation all over Europe. The development of small and medium sized towns (5–50,000 inhabitants) and very small towns (less than 5,000 inhabitants) is currently subject to particular political attention. The same can be said for more rural territories (socalled ‘inner areas’) with poor access to basic services (education, health, etc.). These issues have been taken up by the current trio of EU Presidency countries, Italy, Latvia and Luxembourg, as almost all European countries are affected by these development trends. Standards of Services of General Interest in urban, periurban or rural areas are expected to become a point for discussion. In parallel, the harvesting of endogenous development potentials in these territories will be a key issue in support of their economic viability and in improving the service provision where needed. In the current discussion of challenges with the provision of Services of General Interest the focus is on three important factors: (1) the size of the place in terms of population, (2) the functionality and economic base of the place, and (3) the proximity to larger places with better provision of services. However, it is clear that the issue remains complex. Moreover, actual service provision in a place is often influenced by decisions on many levels, and made by public and private actors. In order to provide territorial evidence on this complexity, it is important to improve the knowledge and understanding of the challenges faced by different territories and to offer facts and inspiration to policy makers, practitioners and administrators. This evidence can support necessary policy development, im-

8

Preface

plementation, monitoring and evaluation related to Services of General Interest throughout Europe depending of the territorial context. Contributing with European territorial evidence to this policy demand, the ESPON 2013 Programme started the project “Indicators and Perspectives for Services of General Interest in Territorial Cohesion and Development” (SeGI) in 2010. The project resulted in territorial evidence, answering crucial questions for European regions including: “to what extent do the varying levels of Services of General Interest contribute to the competitiveness, economic development and job growth of different territories?” Against this backdrop, ‘Services of General Interest and Territorial Cohesion – European perspectives and national insights’ presents some of the key messages from the SeGI project, and importantly also results from other research and studies to support the further political discussion of a balanced and cohesive European territory with an adequate provision of services in urban and rural communities. The book offers a first-rate overview of key topics relating to Services of General Interest. The chapters provide a useful synthesis of previous research findings and evolving policy discussion. The book should be welcomed by policy makers, policy analysts, stakeholders, practitioners and scholars as an important input into the work related to Services of General Interest. Peter Mehlbye Director of the ESPON 2013 CU

Introduction

Heinz Fassmann, Daniel Rauhut, Eduarda Marques da Costa and Alois Humer

Introduction: Contextual, legal and policy perspectives on Services of General Interest

In this edited volume, we take a close look at the provision of those basic services that society vitally needs for its development and economy to function, focusing specifically on the European context and addressing many aspects and understanding of the matter. Referred to nationally used various expressions such as ‘public services’, ‘service public’, ‘Daseinsvorsorge’, and many more, the European Union also introduced a related, but nonetheless stand alone, concept: Services of General Interest.

1.

On the terminology of SGI

The term ‘Services of General Interest’ (SGI) is in practice not found in the policy vocabulary of any EU Member State, nor is it the subject of general public discussion. It has, however, been at the core of the European integration process since its inception in the Treatise of Rome 1957 (EEC, 1957) and remains the subject of vigorous debate, particularly in EU-related legal and political science circles. While concerns with ‘social erosion’ were only recognised much later, the first driving force behind integration was the creation of the European single market. The main concern here was the need to create the optimum market conditions – of production and exchange – for a competitive European trade environment to emerge. Rules were required to improve standards, increase efficiency and maintain fairness and were expressed in the form of the creation of greater predictability for business through the ‘harmonisation’ of state practices across market participants. As such, the EU sought either to directly improve the inputs to the production process – i. e. through the promotion of equal pay for men and women – or by engaging in ‘environmental support’ – raising efficiencies in terms of creating better transport/communications/infrastructure, etc. The language of SGI reflects the term’s specific EU heritage; even though the issues addressed touch on the central question of the role played by the public

12

Heinz Fassmann et al.

authorities in a market economy, such as ensuring a level playing field, rule compliance, the safeguarding of the general interest, and the preservation of public goods where market-based provision fails. Despite the EU’s obvious desire to ‘push the boundaries’ in this general area – the various directives and ECJ case law – it remains primarily for the relevant national, regional and local authorities to define, organise, finance and monitor SGI. There is a genuine debate around the ‘primacy’ of definition between formal, juridical on the one hand and applied, political views on the other. The EU concept of SGI can therefore be sub-divided and categorised into two basically overlapping approaches: the legal-normative or the content-analytical perspective. In the legal-normative perspective, a differentiation – in terms of European competitiveness and single market regulations – between ‘economic’ and ‘non-economic’ interest matters, in the second, content-analytical perspective we speak of ‘Services of General Economic Interest’ – i. e. mainly network infrastructures – versus ‘Social Services of General Interest’ – i. e. welfare, education and healthcare services. In fact, a certain service may be an SSGI in analytical ways, but still open to European single market rules, so as well an ‘economic’ SGI. Services are significantly influenced by changes in society and culture and evolve over time. For example, the ongoing trends of decentralisation and liberalisation influence the development of many sectors providing SGIs. Indeed, according to ESPON (2006) this complex situation presents a fundamental challenge to the aims of cohesion in terms of both policy formulation and implementation. These differences, combined with the historical and geographical specifics of the SGI concerned, are crucial to their organisational status and technological development, and therefore present distinct challenges when it comes to defining strict guidelines and comparable indicators. Within this action framework, national level public authorities have retained considerable freedom to define and enforce public service obligations and to organise the provision of SGI. This allows EU Member States to define policies that take into account specific national, regional or local circumstances. For example, remote or sparsely populated areas may have to be treated differently from metropolitan or densely populated areas. There is, however, no coordinated European approach to SGI provision. The promotion of universal access across all European regions concerns the right of individuals and businesses to access certain services viewed as essential and oblige service providers to offer defined services in accordance with specified conditions, including complete territorial coverage and, additionally, at an affordable price. Universal service access provides for a minimum set of rights and obligations, which as a general rule, can be further developed at the national level.

Introduction

13

The Commission’s approach has traditionally rested on the twin pillars of harmonisation and mutual recognition; however, neither of these strategies comes without cost. As became increasingly clear in relation to the ‘Bolkestein draft’ of the Services Directive, the strength of any mutual recognition regime is severely tested when the level of socio-economic differences expands beyond a certain point while, as Majone (2009: 218) notes, in terms of regulatory harmonisation, “as long as resources and preferences are fairly similar across countries, the advantages of common rules are likely to exceed welfare losses caused by harmonisation, but when heterogeneity exceeds a certain threshold the reverse will be true”. The Commission has generally promoted ‘controlled’ liberalisation, i. e. the gradual opening-up of the market accompanied by measures to protect the general interest, in particular through the concept of universal service (on both a subsidiarity and a regulatory basis depending on the sector) – to guarantee access for everyone whatever their economic, social or geographic situation – to a service of a specified quality at an affordable price. This has placed a particular focus on ensuring adequate standards for cross-border services that cannot be adequately regulated at the national level alone. As regards the long-term impact of the opening-up to competition of SGI, results of case study analyses in part II of this volume suggest that the impact of liberalisation on overall performance is still unclear, at least as far as affordability and the provision of universal service is concerned. Short-term problems can however be seen, in relation to the case study analyses, as regards some services in some countries.

2.

Understanding the current debate on SGI

Due to the lack of clarity regarding terminology and definition, we propose a three-fold scheme for discussing Services of General Interest under different foci. Concretely, we see three factors that raise issues around SGI that are contextual, legal and political in nature: (1) The contextual background for providing SGI lies within the changing economic and social development; (2) The legal requirements, rules and regulations that target single market development as well as safeguarding consumers’ needs; (3) The policies from EU and national levels that directly and indirectly relate to SGI provision. The first point has a structural weight in SGI provision. Output-oriented, ageing societies need different composition of services, on the other hand, input-oriented, SGI standards depend on economic capacities. Further, globalisation

14

Heinz Fassmann et al.

trends have distinct effects on comparatively fragile economies and social systems of Southern or Eastern EU countries compared to more robust Western and Northern economies and social systems. The second point supports a relevant discussion explicitly within the EU context. Within EU primary law, service regulations in course of single market and competition policy do impact on also the national legislation relating to SGI. The European Court of Justice holds a strong position in operatively defining a service as SGI on a juridical basis. Since the Lisbon Treaty, guiding documents from EU level about services of general interest have supported the idea that SGI are fundamental pieces to achieve social and territorial cohesion. The Services Directive (CEC, 2012) and other subsequent documents were fostered by the publishing of the Green Paper (CEC, 2003) and White Paper on SGI (CEC, 2004). More recently, in 2011, the Commission published new orientations synthesised in a document titled “A Quality Framework for Services of General Interest in Europe” (CEC, 2011). Furthermore, there is the Commission Handbook on Implementation of the Services Directive published in 2007. Despite not being legally binding, this document gave suggestions to Member States on the possible implementation of the Services Directive, helping in the harmonisation of substantive rules and regulation through negative obligations (Wiberg, 2014). By this, some scholars, such as Wiberg question the value of EU Services Directive, if there is more than law, if it is a policy, supported in the introduction of EU level orientations and governance instruments. Thirdly, whilst the policy context is key for the organisation and provision of SGI, SGI play an important role in the achievement of major EU goals as articulated in the Lisbon Agenda of “becoming the most competitive and dynamic knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion” (Council of the European Union, 2000: para.27) and later the three growths goals – smart, sustainable, inclusive – of Europe 2020 (CEC, 2010). SGI provision must be understood in this context and the lack of clarity regarding terminology and definition serves a political aim. While SGI and Services of General Economic Interest (SGEI) both have legally binding definitions, Social Services of General Interest (SSGI) has not. In fact, there is no treaty basis for SSGI and the Member States cannot agree on its boundaries (Bauby, 2013: 50–51; van de Gronden, 2011: 150–51). Still, the Commission of the European Union (CEU) has used SSGI in its attempt to shape the policy process, as ‘ambiguity’ ensures that outright opposition to the CEU’s preferred policy alternative is unlikely to be forthright and fundamental in nature (Bauby, 2011: 34–35). The result has been that “liberalisation has broken down or blurred

Introduction

15

traditional boundaries of the state provision of goods and services in the social sector” (Neergaard et al., 2013: 8). The Commission of the European Union considers SSGI as measures to address risk and vulnerabilities in life (CEC, 2007: 7–8), which facilitate social inclusion and the safeguarding of fundamental rights (CEC, 2010b: 16–17). While the Commission of the European Union define SSGI as a sub-category of SGI (CEC, 2010:15–17), this is not the case in EU law (van de Gronden, 2011: 125). In a legal sense, SGI can only be viewed as economic or non-economic services. No sub-category is recognised in the EU law. Further legal clarification is needed to make the concept SSGI work in reality (Neergaard, 2013: 241). When it comes to healthcare, the legal situation becomes unclear as the internal market objectives and objectives of healthcare standards have not been set (Baeten and Palm, 2013: 409–11). Some scholars have even argued that the EU Service Directive cannot be seen as a legally binding document, but rather a political document to facilitate harmonisation (Wiberg, 2014: 285). A lack of clarity definitely exists regarding the definitions, scope and legal framework of SGI, SSGI and SGEI. Furthermore, the political definition of SGI, consisting of SGEI and SSGI, clashes with the legal definition as SGI as economic or non-economic. This inherit conflict is yet to be solved.1 Notwithstanding this inherit conflict, the role and the growing importance of SGI of promoting social cohesion has become more central and afforded higher priority in political documents. The provision of SGI is sometimes very costly and in the current financial crisis the desired quality, accessibility and affordability of SGI could be impaired, not to mention future provision and maintenance. It is precisely in these situations that SGI are even more important, as public service is an essential support, or even the main support, for the poorest regions. The level of SGI is vital to reduce disparities, namely, by supporting rural settlements and maintaining an urban-rural balance. (Rauhut et al., 2013) Key requirements for the effective implementation of SGI is a full understanding of the nature of provision on the EU Member State level, the ways in which the provision of SGI is territorially differentiated across the EU, the nature of Member State policy and action to secure the objectives for delivery of SGI, the evident gaps in the information base to support the implementation of SGI, and the means by which these gaps can be addressed. All of these issues form the key objectives in the various chapters of this edited volume. This edited volume draws upon the results of an ESPON research project 1 Humer (2014) has – alongside a multitude of EU documents and communications – discussed several services and their (dynamic) categorisation from legal and policy perspectives. In fact, one and the same potential SGI can be understood as either a SGEI or a SSGI in analytical sense as well as economic or non-economic in legal sense. However there is no ‘primacy’ over the conflicting approaches; it is more a disciplinary question.

16

Heinz Fassmann et al.

‘SeGI’ (Rauhut et al., 2013) with the primary objective of providing further territorial evidence regarding the current trends in services of general interest from a multidisciplinary European perspective, supported by insight into the current situation in selected countries and regions to reflect these European perspectives on SGI.

3.

The contributions to this edited volume

The contributions to this edited volume are arranged in two main parts. The first part presents general perspectives of SGI from different disciplines and approaches. The second part allows for a thematically selective insight into specific national and regional situations of SGI provision. A first chapter by Milstein acknowledges the legal nature of the origin of the term ‘Services of General Interest’, first discussing the basics of EU law and the European Court of Justice (ECJ) in relation to SGI. In the field of SGI, the EU only has the competence for economic services, making the distinction between economic and non-economic services crucial. Later in the chapter, two main parts of EU Competition Law – concerning undertakings and state aid – are presented as the most influential for the legal steering of SGI, although it is also shown that several exemptions are made in treating SGI under Competition Law. Furthermore, the European jurisdiction offers no comprehensive definition of the term, despite politically open debate. Services of General Interest (SGI) is a concept used within EU policy making. It represents services which are provided by society to citizens and businesses, but not necessarily via “normal” market channels since they are considered “necessary services”, labelled with universal access and human rights conditions. In this sense, the SGI concept is similar to the concept of public goods (Samuelson, 1954; Buchanan, 1968). However, the SGI concept allows for individual Member States to draw the limit between what should be included and what should be excluded from the definition, or which services that should be publicly/tax funded or financed via the market, and thus which services that might be exempt from EU rules of competition. The question of whether to produce the SGI publicly or privately is also up to the individual Member State to decide. Hild-Marte Bjørnsen, Olaf Foss, and Steinar Johansen discuss in their contribution to what extent SGI can be defined using scientific terms and whether it has a scientific meaning. This involves discussing the delimitation of SGI from non-SGI, and if there are particular services that always are within the concept and certain services that are within the concept in some countries and not in others. They also discuss the impacts – especially on regional development and cohesion – of different ways of differentiating between SGI and non-SGI.

Introduction

17

Finally the question is raised of why EU uses the concept of SGI, rather than the concept of public goods. Alois Humer, Daniel Rauhut and Heinz Fassmann discuss the drivers and determinants of Services of General Interest from an analytical perspective. They see SGI provision and the fulfilling of related standards determined by two sides: the organiser/provider side and the demand/user side. On one hand, SGI organisation comprises the division of (public) responsibility as well as the modes of production, finance and delivery of SGI. Within SGI organisation, public, private and civic providers are in charge of SGI provision – in co-operative arrangements or exclusively. SGI demand, on the other hand, is formulated by users on a collective and individual level and co-designs SGI provision. Users can be citizens or households as well as private businesses or institutions and as such may have different needs and represent differing intentions. Looked at more comprehensively, external demographic regimes, social, economic and environmental systems contextualise SGI provision to a certain place and time. The system of policy acts as a translator of external driving systems towards modes of SGI provision. Eduarda Marques da Costa, Pedro Palma and Nuno Marques da Costa investigate the regional disparities in SGI provision across Europe. In their quantitative, multivariate analysis they first identify that SGI provision is strongly supported by social policy expenditures in European countries and therefore in a context of welfare regimes. Alongside selected SGEI and SSGI indicators on network infrastructures, education and healthcare, they calculate and cartographically show regional disparities on NUTS 2 levels. Differing patterns – depending on the SGI sector in question – prove the complex territorial situation around SGI in Europe. It is not always the Northwestern regions that outperform the others, or, at least, the strength of disparities is very different in the various SGI sectors. In a separate step of analysis, Marques da Costa et al. focus on what role the rural nature of a region plays in SGI provision. No significant outcomes can be stated across European territories that would put rural regions in a worse position as regards SGI provision. There must, therefore, be a clear underlying welfare policy impact. This thought is finally traced This is subsequently investigated using a multivariate cluster analysis, crossed with welfare regimes known from literature. In the chapter by Luciane Borges, Alois Humer and Christopher J. Smith, different scenarios regarding services of general interest are discussed. Their findings are in line with the assumption that market-driven SGI provision – in a so-called ‘Competitive Europe’ scenario – would boost development in urban/ metropolitan regions, but hamper SGI distribution in peripheral areas. The maintenance of the public sector SGI delivery model – in a ‘Social Europe’ scenario – would promote a more balanced territorial development in Europe,

18

Heinz Fassmann et al.

although metropolitan regions would see a reduction in provision compared to the market-driven scenario. In the scenario ‘Green Europe’, territorial patterns are the primary drivers and do not follow a consistent urban-rural dichotomy logic. The findings also confirm that SGI provision depends on a variety of factors and thus that it cannot easily be generalised. SGI provision is a complex and inter-sectoral issue that requires concerted effort on the part of various providers at different tiers to ensure successful provision. The authors conclude by highlighting the territorially specific aspects of SGI provision as well as the strong embeddedness of SGI into national socio-economic systems. Overall, the first part of the edited volume raises awareness of the need for a differentiated view on the complex mechanisms on SGI provision – be it the functioning of various SGI as such, the influence of external drivers and policy systems, or the concrete territorial context in which SGI is provided. Therefore, the second part of the edited volume offers selected case studies, from all across Europe. Elisabeth Gruber, Heinz Fassmann and Alois Humer investigate the current situation of SGI in Austria from a primarily socio-demographic point of view. Despite the overall satisfactory situation, a wide range of SGI will have to go through structural changes in order to meet the needs of an ageing, pluralistic, knowledge-based society. An adaptation process to demographic and societal changes in Austria is discussed in more detail in this chapter. Iceland is one of the outposts of Europe and conditions are in many ways extreme. Despite the country being only sparsely populated, it is also highly urbanised which creates challenges for infrastructure and service provision. Geographical and geological conditions also have great impacts, for example, regarding energy provision and transportation issues. The country has a welfare regime different from its Scandinavian counterparts and close ties to the U.S. during last century. Hjalti Johannesson discusses how conditions in Iceland shape or affect the provision of services. This concerns territorial conditions as well as issues relating to settlement patterns and political and historical issues. Modernisation and liberalisation processes have accompanied development of SGI in Spain, however users remain attached to the former monopolistic providers, with the only remarkable exception being ICT. Moreover, liberalisation processes have led to price increases rather than the opposite, probably due to the financial resources required to modernise and create infrastructures. It is worth pointing out the significant role of EU in these processes, as most modernisation and liberalisation processes have until now been influenced by EU directives – environmental, single market etc. – rather than national/regional initiatives. According to Xavier Velasco Echeverr†a the significant improvements in the provision of SGI during the last decades in Spain, tending to the convergence with other European Union Member States, are not sustainable. The

Introduction

19

current model is being questioned, hampered by the current economic crisis. The existing challenges should be addressed through coordinated policies in order to simply maintain – if not improve – territorial and social cohesion. The chapter by Daniela-Luminita Constantin, Raluca Mariana Grosu, Claudiu Herteliu and Adriana Dardala discusses the issue of healthcare services in the North-East region of Romania. The interregional and intraregional disparities in terms of healthcare service provision are examined in relation to the general regional development disparities. It is confirmed that providing a certain minimum level to all citizens has led to SSGI disparities lower than those of economic development (in terms of GDP per inhabitant). The study also offers evidence on the impact of demography, especially in terms of population density and the availability of health care services. A comparative analysis of the accessibility of SGI in urban, suburban and remote areas in Germany, Hungary and Poland is made by Istv‚n Ferencsik, Antonia Milbert and Marcin Ste˛pniak. The raster-based analyses offers three diverse case studies: in Germany (Ruhrgebiet: densely populated, post-industrial and centrally located), in Poland (Mazovia: large, polarised urban-rural area, that include the core metropolitan area), and in Hungary (D¦l-Alföld: peripheral, sparsely populated agricultural area). The comparative accessibility results for different SGI are presented, featuring the differences between urban and rural regions and between the center and periphery. Eight specific SGI are compared across the three case studies and discussed according to their centrality, offering further conclusions on the variation of accessibility. Gregory Hamez and Sophie de Ruffray show that accessibility of SGI may not be a mere spatial issue but a multidimensional one. In the example of France and the Grand Region – and guided by the French understanding of SGI – equity concerns are operated through the local accessibility of maternity hospitals. The chapter results in a cross-border typology of local accessibility taking into account not only the location but also the capacity of and demand for maternity hospitals. The applied method is suggested as a future means of operationalising Territorial Cohesion. In a concluding chapter, Andreas Faludi, Dominic Stead and Alois Humer attempt to bring together the discussions of part I (European Perspectives) and part II (National Insights). The concept of Territorial Cohesion is strongly related to Services of General Interest and allows us to bridge the European perspectives on SGI with the national peculiarities of social models. The French and the German notions of SGI illustrate how much can be learnt from history as well as the future of SGI provision in different types of territory. On the European level, SGI (and with it Territorial Cohesion) must overcome the mere attachment to a balanced, cohesive development and develop their potential to as well contribute to smart growth and competitiveness.

20

Heinz Fassmann et al.

As mentioned earlier, the book has broad, three-fold scope, covering SGI in the context of contextual, legal and policy matters. While the main concerns of the book are contextual and policy-related – as shown by the reference to Territorial Cohesion in the book title – chapter 1 by Milstein explicitly addresses the legal aspects of SGI within the European Union and the consequences for Member States. The policy nature of SGI is elaborated upon foremost in chapter 2 (Bjørnsen et al.), focusing on issues of definition and policy concepts, as well as in chapter 5 (Borges et al.) in which possible futures of SGI provision with regards to different policy foci are discussed. Chapter 3 (Humer et al.) starts with the identification of several contextual drivers and later integrates the policy sphere into the analysis too. In chapter 4 (Marques da Costa et al.), SGI provision is empirically embedded within different territorial contexts. While Part I of this edited volume tends to focus on one of the three perspectives of SGI (contextual, legal and political), Part II takes a more integrative approach to contextual and policy problems, presenting national insights in contrast to the comprehensive European view of SGI in Part I. Within different national, trans-national and cross-border case studies, certain thematic contexts such as demographic change, economic crisis, peripheral locations and accessibility and exemplifies the arising problems/ changes in SGI provision are addressed. Given the main purpose of this edited volume – to provide European perspectives as well as national insights into foremost territorial matters of SGI provision – explicitly legal issues are not a primary factor for any of the case studies in part II.

4.

Outlook

Services of General Economic Interest (SGEI) should be clearly distinguished from Social Services of General Interest (SSGI) as these two groups of services – representing considerations of competition on the one hand and balance on the other – cannot be addressed from a policy perspective as a single grouping of Services of General Interest (SGI). Secondly, territorial development delivered via economic, social and territorial cohesion requires that the regional goals are set by one actor. Cohesion will not be obtained if all regions set their own goals and targets. Thirdly, it is also unfortunate that the use of SGI by individuals and business are considered to be the same processes. The reality of the situation is however more complex than that. Finally, a clear balance between market-provided services and publicly provided services, complemented by efforts by civil society, is required to achieve territorial development and economic, social and territorial cohesion. If any of these sectors, the market, the state or civil society, becomes too dominant, policy objectives to achieve territorial development and cohesion will be undermined.

Introduction

21

Clearly not all SGI contribute to competitiveness, economic development and job growth, and this is especially evident in relation to the distinctions between SGEI and SSGI. Furthermore, there are significant variations across the European territory regarding the impact of SGI on competitiveness, economic development and job growth in different types of territory. During the current ongoing economic and financial crisis it has become clear that several EU members do not have the financial resources to maintain the present level of SGI provision in general, but SSGI in particular. Many SGI are critical to the delivery of the modern welfare state. Empirical evidence demonstrates the emergence of such trends in some regions of Europe (Rauhut et al., 2013). If national governments cannot uphold and guarantee a minimum provision of SSGI, then who can? To some extent, non-governmental and non-profit organisations can play a role to fill the gaps in provision, but this can only be a minor role given the lack of necessary economic resources. Clearly without the potential for profitable operation, the market will not act. These realities are in sharp contrast to the policy ambitions found in e. g. EUROPE 2020 (CEC, 2010), the Territorial Agenda (European Union, 2011), and the Commission White Paper on SGI (CEC, 2004) seeking the provision of SGI for everyone everywhere in the EU. Consequently, territorial governance must combine policy principles and territorial dimensions that define strategic policy options. The combination of political, geographical and normative conceptual dimensions means that the translation of territorial cohesion into policy and practice in a context of multiscalar governance is complex. Nonetheless, territorially defined policy options supporting the delivery of SGI are already being developed according to the principles of sustainable development, and delivered in relation to functional and polycentric urban areas that transcend existing administrative boundaries, by governance agencies operating in a multi-scale perspective, from the local level through to the EU level. The problems around SGI are manifold. The edited volume at hand provides a multidisciplinary perspective and seeks to contribute to more conceptual questions as well as to normative socio-political concerns. In whatever national shape and meaning, SGI stand for European societal values; something that makes it worth studying in detail. A mere perpetuation of SGI provision may not be a success. A Europe without SGI may as well not lead to EU-set, continental goals. The following chapters will critique the current state and possible developments of SGI from a European perspective and also along different national cases. As manifold as the problems and questions might be, the findings will contribute bit by bit to a more promising way of organising and providing SGI in Europe.

22

Heinz Fassmann et al.

References Baeten R & Palm W (2013) ‘Preserving General Interest in Healthcare Through Secondary and Soft EU Law: The Case of the Patients’ Rights Directive’ in U Neergaard, E Szyszczak JW van de Gronden & M Krajewski, (eds) Social Services of General Interest in the EU. The Hague, TMC Asser Press/Springer. Bauby P (2011) ‘From Rome to Lisbon: SGIs in Primary Law’ in JW van de Gronden, M Krajewski, U Neergaard & E Szyszczak (eds) Developments in Services of General Interest. The Hague, TMC Asser Press/Springer. Bauby P (2013) ‘Unity and Diversity of SSGI in the European Union’ in U Neergaard, E Szyszczak JW van de Gronden & M Krajewski, (eds) Social Services of General Interest in the EU. The Hague, TMC Asser Press/Springer. Buchanan, J.M. (1968) The Demand and Supply of Public Goods; Rand McNally & Co.: Chicago. CEC (2003) Green Paper on Services of General Interest, COM(2003) 270 final. CEC (2004) White Paper of Services of General Interest, COM(2004) 374 final. European Commission (2007) Accompanying the Communication on ”A single market for 21st century Europe”, Services of general interest, including social services of general interest: a new European commitment. COM(2007) 725 final. CEC (2010) EUROPE 2020. A strategy for smart, sustainable and inclusive growth. COM (2010) 2020. European Commission (2010) Guide to the application of the European Union rules on state aid, public procurement and the internal market to services of general economic interest, and in particular to social services of general interest. SEC(2010) 1545 final. CEC (2011) A Quality Framework for Services of General Interest in Europe, COM(2011) 900 final. CEC (2012) Commission Communication on the implementation of the Services Directive – A partnership for new growth in services 2012–2015, COM(2012) 261 final. Commission Handbook on Implementation of the Services Directive (2007). http://ec. europa.eu/internal_market/services/docs/services-dir/guides/handbook_en.pdf. Council of the European Union (2000) Presidency Conclusions. Lisbon: CEU. EEC – European Economic Community (1957) Treaty establishing the European Economic Community (Treaty of Rome); EEC: Rome. ESPON (2006) ESPON project 1.4.2 Social aspects of EU territorial development. ESPON, Luxembourg. European Union (2011) Territorial Agenda of the European Union 2020. Towards an Inclusive, Smart and Sustainable Europe of Diverse Regions. Agreed at the Informal Ministerial Meeting of Ministers Responsible for Spatial Planningand Territorial Development on 19th May, 2011, Gödöllö, Hungary. Humer, A. (2014) Services of General Interest in der EU – räumliche und raumpolitische Dimensionen. Dissertation at the University of Vienna. Majone, G. (2009) Europe as the Would-be World Power : The EU at Fifty, Cambridge University Press. Neergaard U (2013) ‘The Concept of SSGI and the Assymetries Between Free Movement and Competition Law’ in U Neergaard, E Szyszczak JW van de Gronden & M Krajewski,

Introduction

23

(eds) Social Services of General Interest in the EU. The Hague, TMC Asser Press/ Springer. Neergaard U, Szyazczak E, Van De Gronden J and Krajewski M – eds (2013) Social Services of General Interest in the EU. The Hague, TMC Asser Press/Springer. Rauhut, D., Smith, C., Humer, A., Ludlow, D. & Borges, L. (2013) Indicators and Perspectives for Services of General Interest in Territorial Cohesion and Development. Luxembourg: ESPON. Samuelson, P.A. (1954) The pure theory of public expenditure; in: Review of Economics and Statistics, Vol. 36, p. 387–389. van de Gronden, J W (2011) ‘Social Services of General Interest and EU Law’, in JW van de Gronden, M Krajewski, U Neergaard & E Szyszczak (eds) Developments in Services of General Interest. The Hague, TMC Asser Press/Springer. Wiberg, M. (2014) The EU Services Directive: Law or Simply Policy? The Hague, TMC Asser Press/Springer.

Part I: European Perspectives

Alexander Milstein

Chapter 1: The Legal Aspects of SGI

European Union law not only introduced Services of General Interests (SGI) as a legal concept, but also left its mark on the provision of public services in the Member States itself. This chapter examines the influence of EU law, especially competition law, on SGI provision and focuses in particular on the mechanisms that reconcile internal market integration with governmental market intervention.

1.

Introduction

The Western Member States of the European Union have long traditions of State activity in providing public services in the broadest sense (energy, telecommunication as well as health care, education etc.) to their citizens. The manifestations of State intervention have been diverse and ranged from direct provision via public monopolies and market foreclosure to legal guarantees and subsidies for private actors. In national law, this situation led to the formation of legal institutes like the French service public, the Italian servizio pubblico or the German Daseinsvorsorge (Scott, 2000). With the establishment of European Economic Community by the Treaty of Rome in 1957, the founding Member States expressed their intention to tolerate the dominant role of the State in Article 222 EC (now Article 345 TFEU). Therefore, the European Commission at first implicitly excluded public services from the scope of EU Competition law (Szyszczak, 2007). This principle changed almost three decades ago, when the European Commission began to enforce EU Competition law on public services to foster the establishment of the internal market. The White Paper of 1985 (European Commission, 1985) was the prelude to a series of actions which fundamentally changed the system of public services in Europe. The European Commission’s agenda was not without justification. The provision of public services in the Member States had often been inefficient and unresponsive, especially in sit-

28

Alexander Milstein

uations of public monopolies. Furthermore, the European market had been highly fragmented, preventing it from enjoying the benefits of economies of scale and scope (Szyszczak, 2007: 139). The overriding objective of the liberalisation measures is the goal of “functional integration”: The internal market should provide the basis for the “ever closer union among the peoples of Europe” (Schmitter, 2004; Schwarze, 2007: 31). Nevertheless, the Treaties do not completely negate the sphere of the State’s influence: Article 106(2) TFEU offers an exception to the competition regulations as several restrictions do not apply to services of general economic interest (SGEI). Unsurprisingly, this area of retreat for State sovereignty has been proven to be the battlefield for ideological confrontation (“market v State”) since the 1990s. What followed was several amendments to the Treaties that strengthened the concept SGEI. Most remarkably, the concept of territorial cohesion has been bolstered through the Treaty of Lisbon and created as an alternative model to the internal market approach. However, the range of these market exception rules and the latitude of the Member States remain highly controversial. Therefore, this chapter aims to highlight the tension between liberalisation and State intervention in the field of SGI. In a first step, it will outline the fundamentals of EU law by analysing the nature of EU law with a main emphasis on competences. In a second step, the chapter will outline the general regulations for undertakings and States. Finally, the chapter will point out the exemption from the competition rules contained in Article 106(2) TFEU and the strengthening of SGEI via Article 14 TFEU and Article 36 of the Charter of Fundamental Rights.

2.

The nature of EU law

The provision of public services is decisively shaped by EU law. However, despite its practical importance, the complexity of EU law remains a challenge for practitioners as well as academics. The reason lies in the sui generis-nature of EU law which is neither national law nor international law but a “new legal order” (Jarass, 1994). This is why the following paragraph aims to describe the main characteristics of EU law in order to lay the basis for an analysis of the legal aspects of SGI. The main characteristics of interest are both the distinction between primary and secondary law as well as the doctrines of direct effect and absolute supremacy.

The Legal Aspects of SGI

2.1.

29

Primary and secondary law

In general, EU law consists of two types. The primary law at the top of the hierarchy of norms consists mainly of the constituent treaties: The Treaty on European Union (TEU) and the Treaty on the Functioning of the European Union (TFEU). Additionally, the Charter of Fundamental Rights of the European Union (Article 6(1) TEU) as well as protocols annexed to the founding treaties and to the amending treaties (Article 51 TEU) share this status. Based on its extraordinary importance, the primary law is described as the constitutional law of the EU law (see von Bogdandy and Bast, 2010). Below the primary law, several legal instruments (acts and agreements) form the secondary law. The most common are listed in Article 288 TFEU (regulations, directives and decisions), but several legally binding “atypical” acts also exist. The strongest legal tool is the regulation, because it is binding in its entirety and directly applicable to all Member States. In contrast, the directive is binding only upon each Member State and leaves a margin for manoeuvre in implementation. Decisions must always relate to the individual case. Common to all secondary acts is that they have to be in full compliance with primary law. A third category contains a wide range of documents of the European Commission that are not legally binding but have a steering effect on the Member States. For example, Article 288 TFEU clarifies that “[r]ecommendations and opinions shall have no binding force”. This ambivalent nature is expressed by the term “soft-law” (Senden, 2004).

2.2.

Doctrines of direct effect and absolute supremacy

The Treaties neither address the nature of EU law nor its relationship to the law of the Member States (national law). Therefore, the European Court of Justice (ECJ) established, amongst others, the doctrines of direct effect and supremacy in a series of landmark decisions. The starting point was Van Gend & Loos (Case 26/ 62 NV Algemene Transport- en Expeditie Onderneming van Gend & Loos v Netherlands Inland Revenue Administration [1963] ECR 003) decision in 1963 where the ECJ announced that the EC (now: EU) “constitutes a new legal order of international law”. The doctrine of direct effect means that EU legal norms which are clear, precise, and self-sufficient must be directly applicable (Weiler, 1991: 2414). This intrusion into state sovereignty sealed the spin-off from ordinary international law. The doctrine of absolute supremacy goes further still. In Costa v E.N.E.L. (Case C-6/64 Flaminio Costa v E.N.E.L. [1964] ECR 1141), the ECJ degraded national law with its declaration of absolute supremacy : EU law is lex superior to national law which means that in the sphere of application of EU law, any EU

30

Alexander Milstein

norm, regardless of whether it is an article of the Treaties or a minuscule administrative regulation, “trumps” any conflicting national law (Weiler, 1991: 2413; Jarass, 1994). All in all, these doctrines inevitably lead to the overriding importance of EU law for the provision of public services.

3.

EU Competences for the regulation of SGI

The EU can be described as a multi-level governance. The complex interaction of different levels of governance requires a clear demarcation of competences. In EU law, the principle of conferral is the demarcating principle that divides the power between the EU and the Member States. However, the principle’s application on SGI is disputed.

3.1.

The principle of conferral

The EU is not a state but a supranational organisation and can only act within the limits of the powers assigned to it (attributed competence). This principle of conferral is embodied in Article 5(2) TEU that states that the EU “shall act only within the limits of the competences conferred upon it by the Member States in the Treaties” (Craig and De Bfflrca, 2011: 74). The Treaties distinguish between exclusive and shared competences. As Article 2(1) TFEU states, “[w]hen the Treaties confer on the Union exclusive competence in a specific area, only the Union may legislate and adopt legally binding acts”. In these areas, State sovereignty has been completely transferred to the EU. In contrast, in areas where the Treaties confer on the Union a shared competence, the “Member States shall exercise their competence to the extent that the Union has not exercised its competence” (Article 2(2) TFEU). Therefore, the doctrines of direct effect and absolute supremacy do only apply if the EU can prove a competence for SGI.

3.2.

Services of General Interest

The Treaties do not include a competence for SGI in general. However, Article 2 of Protocol No 26 on Services of General Interest emphasises that the “the provisions of the Treaties do not affect in any way the competences of Member States to provide, commission and organise non-economic services of general interest”. Therefore, the public services in question have to be classified under the specified subject matter areas of the Treaties (Craig and De Bfflrca, 2011: 75).

The Legal Aspects of SGI

31

This classification is subject of lively debate; the classification of services with “social” elements is especially controversial. In the wide field of SGI, the EU only has the competence for economic services. Article 3(1)(b) TFEU assigns exclusive competence in the area establishing the competition rules necessary for the functioning of the internal market to the EU. The basic condition for the application of competition rules is the very existence of economic activity. Therefore, the distinction between economic and noneconomic services is crucial. Being essentially a “binary system”, the EU Competition law either applies in full force or the service in question is excluded from the competition rules (Sauter, 2008: 168). The ECJ has a very broad understanding of economic activity. The currently valid definition stems from Pavlov (Cases C-180/98 etc [2000] ECR I-6451) and states that “any activity consisting in offering goods or services on a given market is an economic activity”. For instance, in Ambulanz Glöckner (Case C475/99 Firma Ambulanz Glöckner v Landkreis Südwestpfalz [2001] ECR I-8089) the ECJ concluded that emergency and transport services are to be regarded as an economic activity as these services are also carried out by private entities. It did not matter that these services were non-profit. Similarly, in Höfner (Case C41/90 Klaus Höfner and Fritz Elser v Macrotron GmbH [1991] ECR I-1979] the ECJ held that employment procurement exercised by public entities constitutes an economic activity (Klasse, 2010: para 20). To sum up, an economic activity is likely to arise where the activity in question relates to a given market. On the basis of this broad approach, the remaining non-economic services are few. It is clear that essential functions of the State have to be treated differently. The European Commission has taken this into account and deduced that “matters of vital national interest, which are a prerogative of the State (such as security, justice, diplomacy or the registry of birth, death and marriages)” are non-economic services (European Commission, 1996; European Commission, 2007). The ECJ followed this view in Wouters (Case C-309/99 Wouters v Algemene Raad van de Nederlandsche Orde van Advocaten [2002]ECR I-1577, para 57) and decided that the EU competition rules “do not apply to activity which, by its nature, its aims and the rules to which it is subject does not belong to the sphere of economic activity […] or which is connected with the exercise of the powers of a public authority”. Therefore, the creation and collection of route charges from users of air navigation services on behalf of the states who created it (Case C-364/ 92 SAT Fluggesellschaft v Eurocontrol [1994] ECR I-43), or the anti-pollution surveillance in Genoa harbour by a private body (Case C-343/95 Cal‡ e Figli [1997] ECR I-1547) are not considered economic activities. However, these services – based on the reasoning in Höfner and Ambulanz Glöckner – could have been classified as economic services (Whish, 2009: 88). The case law “does not exactly lend itself to a clear demarcation of Treaty rules and application” (Ross,

32

Alexander Milstein

2007: 1068) and is a rather “inconsistent approach” (Hancher and Larouche, 2010; see also Prosser, 2006). Apart from that, the legal situation becomes even more unclear. There is a group of “social” services (e. g. health care, education, social security schemes) whose categorisation is highly disputed. In general, the distinction is made based on the fact whether the service is provided in a market context or on the basis of “solidarity” (Winterstein, 1999; Sauter, 2008: 181). To highlight this problem, the European Commission introduced the term “Social Services of General Interest” (SSGI) into the debate. The Communication identified two main groups of SSGI: Statutory and complementary social security schemes covering the main risks of life and other essential services provided directly to the person that play a preventive and social cohesion role (European Commission, 2006). It needs to be pointed out that the term SSGI cannot be found within EU law. The documents of the European Commission do not have legal status and are at best soft-law. Therefore, the question of whether the EU has the competence to regulate SSGI, remains the same as with all SGI. The European Commission itself has made clear that “the fact that the activity in question is termed ‘social’ is not of itself enough for it avoid being regarded as an ‘economic activity’”(European Commission, 2007). Similarly, the ECJ held in Pavlov that “the social objective of an insurance scheme is not in itself sufficient to preclude the activity in question from being classified as an economic activity ”(Pavlov, para 118). Consequently, each SSGI has to pass the “economic test”. The ECJ has taken a broad view and excluded only core services from the field of application of EU law. In the field of social securities, only models that are exclusively based on solidarity principles are excluded from economic activities (see Cases C-159/91 Poucet v Assurances G¦n¦rales de France [1993] ECR I-627; C-264/01 etc AOK Bundesverband [2004] ECR I-2493). As soon as there are economic elements, such as making investments (as in Case C-67/96 Albany International BV v Stichting Bedrijfspensioenfonds Textielindistrie [1999] ECR I-5751), the ECJ classifies the service in question as an economic activity (Baldschun 2008, 139 ; Whish 2009: 86). In Humbel, an early decision regarding the freedom to provide services (now Article 56 TFEU), the ECJ underlined that the characteristic of remuneration is absent in higher education: “[T]he state, in establishing and maintaining such a system [a national education system] is not seeking to engage in gainful activity but is fulfilling its duties towards its own population in the social, cultural and educational fields” (Case 263/86 Belgian State v Ren¦ Humbel etc [1988] ECR 5365, para 18). In a similar manner, the European Commission excluded “compulsory education” and “statutory social security schemes” from EU legislation (European Commission, 1996; European Com-

The Legal Aspects of SGI

33

mission, 2007). A current, as yet unsolved conflict is the regulation of healthcare services (see Sauter 2013).

4.

EU Competition law

The European Economic Community was established in order to create a common market. In the spirit of the Schumann Declaration, the integration of the national economies should unify Europe and prevent future wars. Consequently, a decisive aspect of European integration has always been the goal of breaking down barriers to cross-border trade. Therefore, the Treaties contain several effective legal instruments to fulfil this goal, especially Competition law, the fundamental freedoms as well as the rules on public procurement and on commercial monopolies (Article 37 TFEU) (Schwarze, 2007). These revolutionary regulations have not only increased cross-border trade significantly but also shaped the provision of public services. However, this chapter focuses on the restrains of EU Competition law because it has been the main tool for liberalisation of public services. More than fifty years after its establishment, EU Competition law has become a sophisticated instrument to bolster the establishment of an – in the terminology of the Treaty of Lisbon – internal market. Its telos is to serve both the pure economic aim of increasing economic efficiency and the process of European integration. (Goyder and Albors-Llorens, 2009: 11). The general competition rules can be found in the Treaties (Title VII of the TFEU) and are divided into two sections. Firstly, Articles 101–106 TFEU contain rules applying to undertakings and prohibit anti-competitive agreements as well as the abuse of market power. Secondly, Articles 107–109 TFEU address the Member States and lay down the general prohibition of State aid. In addition to that, the secondary law imposes several sector specific regulations to ensure law enforcement.

4.1.

Regulations for undertakings

The regulations for undertakings in the Treaties consist of two elementary provisions: The prohibition of anti-competitive agreements (Article 101 TFEU) and the prohibition of any abuse of market power (Article 102 TFEU). In addition to that, the European Commission established a control of mergers to round off the Competition law. Basic requirement for the application of EU Competition law is the existence of an “undertaking”. The Treaties do not define this term but ECJ and European Commission have chosen a broad functional approach (Whish, 2009: 83). This

34

Alexander Milstein

interpretation became clearest in Höfner. In this case, the ECJ held that the German Federal Employment Office was an undertaking in the sense of (now) Article 102 TFEU, because “the concept of an undertaking encompasses every entity engaged in an economic activity, regardless of the legal status of the entity and the way in which it is financed” (para 21). In contrast to many national public services doctrines, the ECJ law does not differentiate whether the provider in question is public or private and even extends the scope of EU Competition law to public authorities. To sum up, an undertaking is any economic actor on the market (Szyszczak, 2007: 45). Therefore, the delineation of the terms economic and non-economic services (see para 3.2.1) is again essential. Regarding these results we can say that only the exercise of public authority in a narrower sense or services purely based on the principle of solidarity fall outside the scope of EU Competition law (Neergard, 2009: 28). The functional approach is stressed by Article 106(1) TFEU. This “fundamental norm of public undertakings” (Schwarze, 2007: 124) states that “in the case of public undertakings and undertakings to which Member States grant special or exclusive rights, Member States shall neither enact nor maintain in force any measures contrary to the rules contained in the Treaties”. The norm addresses not undertakings but the Member States and is a specific expression of the general principle of sincere cooperation (Article 4(3) TEU). It clarifies that the competition rules, amongst others, apply to all undertakings. The article does not have an independent application (so-called reference rule). If the infringement of Articles 101 or 102 TFEU results from a State measure, this measure constitutes an infringement of Article 106(1) TFEU “in conjunction with” Articles 101 or 102 TFEU (Case 155/73 Guiseppe Sacchi [1974] ECR 409 [430]). The term “public undertaking” is not defined in primary law, but there is an agreement that the definition of the Article 2(1)(b) of the Transparency directive (OJ [1980] L 95/35) also applies to it (Whish 2009: 221). Consequently, the term can be interpreted as “any undertaking over which the public authorities may exercise, directly or indirectly, a dominant influence by virtue of their ownership of it, their financial participation therein, or the rules which govern it”. The term “undertakings [with] special or privileged rights” particularly addresses cases of monopoly rights and market foreclosure (Whish, 2009: 222). For SGEI, the prohibition of “any abuse by one or more undertakings of a dominant position within the internal market” (Article 102 TFEU) is the most important competition rule. This is reflected in the case law since all mayor cases in the 1990s concerned monopoly rights (Hancher, 1999). Firstly, an examination of whether the undertaking in question has a dominant position within the market needs to take place. According to settled case law, this is the case if it enjoys a “position of economic strength […] which enables it to prevent effective

The Legal Aspects of SGI

35

competition from being maintained on the relevant [product and geographical] market” (Case 27/76 United Brand [1978] ECR 207, 65). Secondly, there must be an abuse of this power. It is vital to see that Article 102 TFEU does not prohibit market power per se, rather the abuse of it (Sacchi [430]). Furthermore, Article 102 TFEU only demands liberalisation, not privatisation. However, both often have gone hand in hand. Article 102 TFEU lists several abusive practices but the list is not exhaustive (Craig and De Bfflrca, 2011: 1024). Included – amongst others – are unfair purchase or selling prices or other unfair trading conditions as well as limiting production, markets or technical development to the disadvantage of consumers are considered unlawful. For example, in Höfner the undertaking enjoying the exclusive right to executive recruitment activities was “manifestly incapable of satisfying demand prevailing on the market for such services” (para 34) and therefore, the ECJ inferred a breach of Articles 86 and 90 EC (now Articles 102 and 106 TFEU). Finally, the behaviour of the undertaking in question must be liable to affect trade between Member States. The ECJ points out that this “does not mean that the abusive conduct in question must actually have affected such trade. It is sufficient to establish that that conduct is capable of such an effect” (Case 322/81 Michelin v Commission [1983] ECR 3461, para 104). Besides the prohibition of any abuse of market power, EU Competition law prohibits “all agreements between undertakings, decisions by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market” (Article 101 TFEU). The main application for this norm is the prosecution of cartels; classic matters of SGEI such as public ownership or exclusive rights have little to no importance. The same applies for merger control. Even though the Treaties do not lay down a provision for merger control, the Merger Regulation (No 139/2004) empowers the European Commission to regulate concentrations that may impede effective competition.

4.2.

State aid

Due to the success of market liberalisation which led to the abolition of the vast majority of public monopolies, the Member States tried to develop alternative concepts of financing public services in order to replace the comfortable income situation of (unlawful) monopolies (Hancher and Larouche, 2010: 19). Although the Treaties leave room for the Member States to conduct their own economic policies (Article 120 TFEU) and allow them to work the market with general measures of economic policy – such as interest rate reduction – (Craig and De

36

Alexander Milstein

Bfflrca, 2011: 1088), the Member States have shown a tendency to directly subsidise certain individual actors. Therefore, the need for an instrument to prevent a “subsidy race” is obvious: The quest for the internal market would be incomplete if the Member States could manipulate the free play of market forces indirectly via subsidies. (Szyszczak, 2007). This tool can be found in Section 2 of the Rules on Competition. Article 107 (1) TFEU establishes the general principle that State aids are incompatible with the internal market. Recently, Colomb and Santinha (2012) have stressed the growing importance of this area of law for spatial planning. The Treaties give the European Commission the role of the main policy maker (Craig and De Bfflrca, 2011: 1085). It “shall, in cooperation with Member States, keep under constant review all systems of aid existing in those states” and can “decide that the State concerned shall abolish or alter such aid” (Article 108(1, 2) TFEU). Furthermore, the European Commission “shall be informed […] of any plans to grant or alter aid” (Article 108(3); so-called ‘notification’). Thus, European Courts have approved the “wide discretion conferred upon the Commission” and limited its judicial review. They confine their “review to determining whether the rules governing procedure and the requirement for a statement of reasons have been complied with, whether the facts are accurately stated and whether there has been any manifest error of assessment or any misuse of powers” (Case C-56/93 Belgium v Commission [1996] ECR I-723, para 11). In the following, the definition of State aid will be explored. Article 107(1) TFEU states that “any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market”. Thus, an aiding measure by a Member State classifies State aid as undue only if it meets four conditions. The first and main element, “aid”, is not defined in the Treaty. However, based on the wording (“any aid”), the ECJ and the European Commission have rightfully taken a broad view: “The concept of aid thus encompasses not only positive benefits, but also interventions which, in various forms, mitigate the charges which are normally included in the budget of an undertaking and which, without therefore being subsidies in the strict sense of the word, are of the same character and have the same effect […] Accordingly, in order to determine whether a State measure constitutes aid, it is to establish whether the recipient undertaking receives an economic advantage which it would not have obtained under normal market conditions (emphasize added)” (Case C-93/94 SFEI etc v La Poste etc [1996] ECR I-39/94, para 58, 61). Unsurprisingly, only few State measures can pass this strict “private investor test” (Leibenath, 2010). Besides

The Legal Aspects of SGI

37

direct subsidies, tax exemptions, exemptions from parafiscal charges, preferential interest rates, favourable loan guarantees, the provisions of land or buildings on special terms, indemnities against losses, preferential terms for public ordering and dividend guarantees are qualified as aid (Craig and De Bfflrca, 2011: 1088). The second condition is that the aid has to “be granted by a Member State or through State resources”. This means that “only advantages granted directly or indirectly through State resources” are to be considered as aid within Article 107 (1) TFEU (Case C-379/98 Preussen Elektra AG v Schleswag AG [2001] ECR I-2099, para 58). Therefore, the ECJ held in Preussen Elektra that the obligation, imposed on private electricity supply by the German Stromeinspeisungsgesetz (law on the sale of electricity to the grid) to purchase electricity produced from renewable energy sources at fixed minimum prices, is not State aid. This obligation does not involve any direct or indirect transfer of State resources to undertakings which produce that type of electricity (para 59). Thirdly, it is obligatory that the aid distorts or threatens to distort competition by favouring certain undertakings. State aid is only incompatible with the internal market as far as it affects trade between the Member States. The fact that SGEI are often provided on a regional or even local level might lead to the misunderstanding that these services are excluded from EU Competition law. Here again, the ECJ interprets this element broadly (Klasse, 2010: para 26). The general prohibition of State aid is restricted by several derogations. Firstly, Article 107 TFEU contains two groups of derogation from the general prohibition of State aid. The first group is listed in paragraph 2 and contains obligatory derogations. Thus, aid having a social character, aid to make good the damage caused by natural disasters or exceptional occurrences and aid granted to the New Länder in Germany shall be compatible with the internal market. Paragraph 3 gives the European Commission discretion to permit aid (“may be considered compatible”) in certain situations, for example to promote the economic development of underdeveloped areas or to promote cultural and heritage conservation. Secondly, the European Commission used their legislative powers (see Article 108(4) TFEU) in order to except minor aids (“de minimis”) und several sectors of the economy (“block exemption”) from the prohibition of State aid.

4.3.

Sector-specific regulations

The liberalisation process in the EU was not only a result of the competition rules outlined above. The abstract formulations in the primary law and the unwillingness of Member States constituted impossible hurdles for law enforcement. In

38

Alexander Milstein

order to succeed, the European Commission would have had to prove the infringement of EU law in each individual case – which would have been a Sisyphean task. Furthermore, in network industries it is hard to promote competition because there are mainly natural monopolies (Slot and Skudder, 2001; Kühling, 2004). Finally, the ECJ proved to be reluctant in approving the European Commission’s approach which became evident in the 1997 Electricity cases (Szyszczak, 2007: 140; Sauter, 2008: 187). Therefore, the European Commission needed powerful legal tools to liberalise the SGEI. These tools had already been in the hands of the European Commission: Article 106(3) TFEU empowers the European Commission to “address appropriate directives or decisions to Member States” in order to ensure the application of Article 106 TFEU; Article 114 TFEU does so to achieve the “aim of establishing or ensuring the functioning of the internal market”. Systematically, directives for network industries (telecommunication, gas and energy) came into force, beginning with the Telecommunication Directives. The directives established a mixture of sector-specific regulation and Competition law that abolished special and exclusive rights and called for financial transparency (Szyszczak, 2007: 140; Sauter, 2008: 169). Furthermore, national regulatory authorities were created to support the European Commission. In the following, further regulations addressed inter alia the postal, the railroad and the air transport sector. Most recently, the European Commission presented their plans to liberalise the water sector (Bauby, 2012).

5.

Special provisions for SGEI

At the time of the founding of the EC, the objective of market integration was not met with the unanimous approval. Several Member States feared the loss of control and even the loss of national identity (Sauter, 2008: 185). As a result of the efforts of the French delegation, a market exemption clause – which is now Article 106(2) TFEU – was added to the Treaty of Rome. This clause establishes derogation from competition law for SGEI and applies to both regulations for undertakings and the prohibition of State aid. More recently, the role of SGEI has been strengthened by the addition of Article 16 EC (now Article 14 TFEU) and Article 36 of the Charter of Fundamental Rights that introduced the legal concept of territorial cohesion to EU law. However, the application of territorial cohesion raises several questions.

The Legal Aspects of SGI

5.1.

39

The derogation from Competition law

Article 106(2) TFEU establishes derogation from, among others, EU Competition law for certain services. The exceptional character of the norm can already be taken from the wording: The Article states that “undertakings entrusted with the operation of services of general economic interest […] shall be subject to the rules contained in the Treaties, in particular to the rules on competition, in so far as the application of such rules does not obstruct the performance, in law or in fact, of the particular tasks assigned to them” (emphasis added). On this normative basis, the ECJ established – beginning with the landmark cases Corbeau (Case C-320/91 Procureur du Roi v Paul Corbeau [1993] ECR I-2533) and Almelo (Case C-393/02 Municipality of Almelo v NV Energiebedrijf [1994] ECR I-1477) – a case law that recognised the special situation of public services (Schweitzer, 2002; Bauby, 2011: 27). The key question is how to define SGEI. The Treaties wisely do not define this term. Even though the founding Member States had borne their own public service doctrines in mind, the term is a concept of EU law and therefore a uniform interpretation has to exist in all Member States. However, given the fact that public services are a sensitive issue, the law grants the public authorities in the Member States, whether at a national, regional or municipal level, “a wide discretion to define what they regard as services of general economic interest” (Case T-289/03, British United Provident Association Ltd (BUPA) etc v European Commission [2008] ECR II-81, para 172). Nevertheless, this freedom is subject to review “manifest errors of assessment” by the Commission and the ECJ (European Commission, 2010). Neither the ECJ nor the European Commission offer a convincing general definition and only outline key elements. A perfect definition might be impossible anyway, given the discretion of the Member States and the fluid, political nature of SGEI (Sauter, 2008: 175). However, the ECJ had to answer this question in lots of cases. Therefore, the case law makes clear that these services exhibit special characteristics compared to those of other economic activities. In the words of the European Commission, these services are “different from ordinary services” (European Commission, 2000, sec. 14). An examination of the constituent elements can provide further understanding. At first, the meaning of “service” needs to be laid down. It is uncontested that “service” in Article 106 TFEU has a broader meaning than “service” in Article 56 TFEU. It covers not only typically services such as broadcasting or refuse collection, but also physical goods (e. g. water, gas). The term “public interest” distinguishes the SEGI from individual or group interests. A strong criterion is if the service is not commercially viable (Mestmäcker, 1988: 565). For example, the ECJ held in Corbeau that a postal service is

40

Alexander Milstein

a SGEI if the provider has the “obligation to collect, carry and distribute mail on behalf of all users throughout the territory of the Member State concerned, at uniform tariffs and on similar quality conditions, irrespective of the specific situations or the degree of economic profitability of each individual operation”. Moreover, the exemption requires a public entrustment act. The ECJ ruled in SABAM that “there must be a strict definition of these undertakings” and the derogation from the rules of the Treaties requires “an act of the public authority” (para 19, 20). This act can also be a concession governed by public law. For example, in Almelo the non-exclusive concession of ensuring the supply of electricity in part of the national territory met these requirements. The classification as SGEI does not automatically exempt a certain service from EU Competition law. As the ECJ made clear in Almelo (para 49) and Ambulanz Glöckner (para 56), the restrictions on competition from other economic operators are only allowed in so far as they are “necessary” in order to enable the undertaking entrusted with such a task to perform it. In other words, the ECJ carries out a proportionality test (Sauter, 2008: 186). In Corbeau, the ECJ sets the tone for a SGEI-friendly case law. It decided that the “starting point of such examination must be the premise that the obligation on the part of the undertaking entrusted with that task to perform its services in conditions of economic equilibrium presupposes that it will be possible to offset less profitable sectors against the profitable sectors and hence justifies a restriction of competition from individual undertakings where the economically profitable sectors are concerned” (para 17). Therefore, the Belgium postal monopoly did not infringe the Treaties. In subsequent cases, especially Almelo and Ambulanz Glöckner, the ECJ accepted monopolies for SGEI which might not have survived a “strict” test because other measures would have been available (Sauter, 2008: 187). On the other hand, the ECJ did not approve several other public monopolies, for example in Höfner.

5.2.

Exemptions for State aid

Article 106(2) TFEU does not directly apply to State aid regulation. However, there is an urgent need to support the provision SGEI financially in cases of market failure. Therefore, the ECJ ruled in the landmark judgment Altmark Trans (Case C- 280/00 Altmark Trans GmbH [2003] ECR I-7747, para 87) that subsidies can be compatible with Competition law if they can be “regarded as compensation for the services provided by the recipient undertakings in order to discharge public service obligations, so that those undertakings do not enjoy a real financial advantage”. In other words, aid may “only compensate the pro-

The Legal Aspects of SGI

41

vider of a public service mission for the costs that arise due to the performance of public service obligations” (Klasse, 2010: para 40). In detail, the ECJ held that four conditions have to be satisfied in order to exclude the aid from Article 107(1) TFEU: Firstly, the recipient undertaking must have a clearly defined public service obligation. Secondly, the parameters of compensation must have been established in advance. Thirdly, the compensation cannot exceed what is necessary to cover the costs incurred in the discharge of public service obligations. Fourthly, the level of compensation needed must be determined on the basis of a typical, well run undertaking. The so-called Altmark criteria have since then become settled case law. The European Commission reacted and published a communication (“Monti-package”) that has recently been modified (“Alumina-package”) (see Sinnaeve, 2012).

5.3.

SGEI and Territorial Cohesion: Towards a new horizon?

As stated above, the ECJ had to decide a highly controversial question solely on the basis of a single treaty provision. Even though the case law does not align itself with one side or the other, the predominance of market-oriented values becomes clear. Therefore, several Member States expressed the idea of reforming the legal basis of SGEI in order to force back EU Competition law. These voices grew louder as the European Commission tightened the enforcement of competition rules in the 1990s. Consequently, the French delegation attempted to overrule then-Article 90 EEC (now Article 106 TFEU) during the negotiations of the Treaty of Amsterdam (Robert, 2007; Peyrony, 2007). However, the European Commission’s approach received strong support of several influential Member States, e. g. Germany, and consequently, the French attempt was unsuccessful. As a compromise, then-Article 16 EC (now Article 14 TFEU) was created in 1997 and came into force in 1999 with the Treaty of Amsterdam. This article introduced the concept of territorial cohesion into primary law. Shortly afterwards, the almost identical Article 36 Charter of Fundamental Rights was proclaimed in 2000. In the following, the Treaty of Lisbon further strengthened this principle: Article 14 TFEU was supplemented with a competence (para 3) and now it states: “Without prejudice to Article 4 of the Treaty on European Union or to Articles 93, 106 and 107 of this Treaty, and given the place occupied by services of general economic interest in the shared values of the Union as well as their role in promoting social and territorial cohesion, the Union and the Member States, each within their respective powers and within the scope of application of the Treaties, shall take care that such services operate on the basis of principles and conditions, particularly economic and financial conditions, which enable them to fulfil their missions. The European Par-

42

Alexander Milstein

liament and the Council, acting by means of regulations in accordance with the ordinary legislative procedure, shall establish these principles and set these conditions without prejudice to the competence of Member States, in compliance with the Treaties, to provide, to commission and to fund such services.”

In addition to that, the Charter became primary law (Article 6(1) TEU), and finally, the promotion of territorial cohesion became an objective of the EU (Article 3(3)(3) TEU). However, the legal consequences – especially the effect on the interpretation of Article 106(2) TFEU – remain unclear. Neither the European Courts nor the literature have developed a convincing interpretation of these articles. In general, there are two ways to look at them. On the one hand, its relationship with EU Competition law, especially the market exemption rule in Article 106(2) TFEU, can be explored. What did it change? Is it a “stand still rule” that codifies the Corbeau Doctrine? That conclusion is reinforced by the fact that the norm is based on a compromise. Furthermore, the norm explicitly states that it is “without prejudice to […] Articles 93, 106 and 107” TFEU. Not surprisingly, the articles had little to no impact on the case law regarding EU Competition law. The ECJ has yet to take a stand on the scope of these articles. The CFI (now General Court) explained in BUPA (para 167) that Article 14 TFEU “provides that, given the place occupied by SGEI in the shared values of the Union as well as their role in promoting social and territorial cohesion, the Community and the Member States, each within their respective powers and within the scope of application of the Treaty, are to take care that such services operate on the basis of principles and conditions which enable them to fulfil their missions”. In a comparable way, several Advocate Generals have stressed that Article 16 EC and Article 36 Charter underline the “importance” of SGEIs (see A.G. Jacobs Opinion in Case C-475/99 Ambulanz Glöckner [2001] ECR I-8089; A.G. Alber Opinion in Case C-340/99 TNT Traco [2001] ECR I-4109) and used the articles in question as supplementing arguments (Ross, 2007: 1070). However, this did not induce a change of interpretation. Even though the Treaty of Lisbon came into force in 2009, a reference to Article 14 TFEU is still outstanding. The intermediate result is that neither arrival of Territorial Cohesion in the Treaty of Amsterdam nor its strengthening in the Treaty of Lisbon affected the case law on SGEI concerning Article 106(2) TFEU (Fiedziuk, 2011; Krajewski, 2008, 2010). On the other hand, it remains to be examined whether the anchoring of territorial cohesion in the Treaties did influence the finality of the EU. In the absence of case law, it is the literature’s task to identify the main aspects of European integration. There is an agreement only so far that Article 14 TFEU and Article 36 of the Charter of Human Rights do not create any positive rights for EU-citizens to demand SGEI (Fiedziuk, 2011: 236). Article 14 TFEU clearly

The Legal Aspects of SGI

43

addresses only EU and Member States and does not empower individuals. Even though Article 36 can be found within the Charter of Human Rights, its legal nature is only that of a “principle” (Jarass, 2013). Article 52(5) of the Charter makes clear that principles are “judicially cognisable” only in the interpretation of legislative and executive acts. Things are only slightly different with the objectives of the EU in Article 3(3)(3) TEU. This justiciable norm obliges the EU to “promote economic, social and territorial cohesion” but the broad discretionary power of the EU relativises its scope significantly (Ruffert, 2011: para 5). Thus, it might be asked what the legal effect of Article 14 TFEU and Article 36 Charter is. There is a strong tendency to assume that these articles impose an obligation on EU and Member States to guarantee access to essential SGEI (Ross, 2000; Krajewski, 2011). This interpretation is based on the wording “the Union and the Member States […] shall take care that such services operate on the basis of principles and conditions” to promote Territorial Cohesion. A supporting argument can be based on the interpretation of territorial cohesion as an attempt to incorporate the French am¦nagement du territoire into EU law (Faludi, 2004). The French understanding of planning emphasises the role of the state in providing public services (Merlin 2007) and Article 14 TFEU could designate a comparable task for the EU and the Member States (Waterhout, 2007). Even though this duty is couched in very vague terms (Fiedziuk, 2011: 236), this view has enjoyed broad support by the European Commission. In its cohesion reports, the European Commission promoted a “progressive” interpretation of the shared tasks (see European Commission 2004). However, the legal consequences remain very vague. Thus we can say that the introduction of territorial cohesion into the Treaties influences the political debate about the direction and future of the EU but it remains to be seen whether this discussion will be reflected in caselaw.

6.

Conclusion

The provision of SGI takes place in an area marked by complex tension between law and politics. On the one hand, the European Commission aims to break down barriers to cross-border trade in order to establish the internal market. On the other hand, the Member States try to preserve their influence on the provision of public services. The Treaties solve this tension with a convincing compromise. The basic rule is that EU Competition law applies to all economic services. Therefore, undertakings providing public services are kept from concluding anti-competitive agreements and abusing their market power. Hereby, the law guarantees an effective and efficient provision of SGEI. It also makes sense that the law does not differentiate between private and public

44

Alexander Milstein

undertakings because both are competing within the same market. In addition to that, the prohibition of State aid prevents Member States from being entangled in subsidy races that would have a devastating effect on public finances. Nonetheless, the Treaties also recognise that the market principle alone does not guarantee sufficient provision of public services for all citizens. Therefore, several derogations limit the scope of EU Competition law. Firstly, the particularly sensible non-economic services of general interest are excluded from the competences of the EU and remain in the area of Member State sovereignty. One limitation that should be mentioned is however, that the ECJ has interpreted the term “economic activity” very broadly and consequently, few services are left to the Member States. Secondly, the Article 106(2) TFEU offers derogation from the strict regime of EU Competition law. Since the 1990s, the ECJ interprets this clause quite favourably for SGEI. Regarding the landmark cases “Corbeau” and “Altmark Trans”, one can say that the ECJ has opened several doors for the Member States to remain an influential part of the provision of public services. Especially the ability to compensate the costs of public service obligations opens up possibilities for the Member States to ensure nationwide provision. Nevertheless, the balancing of market and State remains an ongoing process. Currently, the legal consequences of the territorial cohesion principle are under discussion. So far, the minimum consensus is that the cohesion objective confirms the status quo. It remains to be seen however whether the concept of territorial cohesion will lead to a shift in EU policymaking or even the ECJ’s doctrine.

References Baldschun, Katie (2008) Solidarität und soziales Schutzprinzip in der gesetzlichen Unfallversicherung: Die Anwendbarkeit des Europarechts auf mitgliedstaatliche Systeme der sozialen Systeme am Beispiel der Berufsgenossenschaften. Berlin: Duncker & Humblot. Bauby, Pierre (2011) From Rome to Lisbon: SGIs in Primary Law. In: Szyszczak, Erika et al. (eds.), Develompents in Services of General Interest, The Hague: TMC Asser, pp. 19–36. Bauby, Pierre (2012) Local Services of General Economic Interest in Europe. Water Services: What are the Challanges? Annals of Public and Cooperative Economics 83, pp. 561–583. Colomb, Claire & Santinha, ConÅalo (2012) European Union Competition Policy and the European Territorial Cohesion Agenda: An Impossible Reconciliation? State Aid Rules and Public Service Liberalisation through the European Spatial Planning Lens. European Planning Studies, pp. 1–22. Craig, Paul & De Bfflrca, Gr‚inne (2011) EU Law. Text, Cases and Materials. Fifth edition. Oxford: OUP.

The Legal Aspects of SGI

45

European Commission (1985) Completing the Internal Market. White Paper, COM(85) 319 final, 14 June 1985. European Commission (1996) Services of general interest in Europe, COM(96) 443 final, 11 September 1996. European Commission (2000) Communication from the Commission. Services of general interest in Europe, COM(2001/C17/04), 20. 9. 2000. European Commission (2004) A new partnership for cohesion. Third report on economic and social cohesion, COM(2004) final, 18 February 2004. European Commission (2006) Communication: Implementing the Community Lisbon programme: Social services of general interest in the European Union, COM(2006) 177 final, 26 April 2006. European Commission (2007) Communication Services of general interest, including social services of general interest: a new European commitment, COM(2007) 725 final, 20 November 2007. Faludi, Andreas (2004) Territorial Cohesion: Old (French) Wine in New Bottles? Urban Studies 41, pp. 1349–1365. Fiedziuk, Natalia (2011) Services of General Economic Interest and the Treaty of Lisbon: Opening Doors to a Whole New Approach or Maintaining the Status Quo? European Law Review 36, pp. 226–42. Goyder, Joanna & Albors-Llorens, Alvertina (2009) Goyder’s EC Competition Law. Oxford: OUP. Hancher, Leigh (1999) Community, state and market in Craig, Paul & De Bfflrca, Gr‚inne (eds.) The evolution of EU law, Oxford: OUP. Hancher, Leigh & Larouche, Pierre (2010) The coming of Age of EU Regulation of Network Industries and Services of General Economic Interest. Tilburgh Law School Legal Studies Research Paper No 014/2010. Jarass, Hans D. (1994) Grundfragen der innerstaatlichen Bedeutung des EG-Rechts, Cologne: Carl Heymanns. Jarass, Hans D. (2013) Charta der Grundrechte der Europäischen Union: GRCh. Kommentar. 2nd ed. Munich: C.H.Beck. Klasse, Max (2010) Services of General Economic Interest in Heidenhain, Martin (ed.), European State Aid Law Handbook, Oxford: Hart, § 28. Kühling, Jürgen (2004) Sektorspezifische Regulierung in den Netzwirtschaften. Munich: C.H.Beck. Krajewski, Markus (2008) Providing Legal Clarity and Securing Policy Space for Public Services through a Legal Framework for Services of General Economic Interest: Squaring the Circle? European Public Law 14, pp. 377–398. Krajewski, Markus (2010) Dienstleistungen von allgemeinem Interesse im Vertrag von Lissabon. Zeitschrift für öffentliche und gemeinwirtschaftliche Unternehmen 33, pp. 75–96. Krajewski, Markus (2011) Grundstrukturen des Rechts öffentlicher Dienstleistungen, Heidelberg: Springer. Leibenath, Christoph (2010) State Investments of Capital in Heidenhain, Martin (ed.), European State Aid Law Handbook, Oxford: Hart, § 6. Merlin, Pierre (2007) L’am¦nagement du territoire en France, Paris: La Documentation franÅaise.

46

Alexander Milstein

Mestmäcker, Ernst-Joachim (1988) Staatliche Souveränität und offene Märkte. Konflikte bei der extraterritorialen Anwendung von Wirtschaftsrecht. Rabels Zeitschrift für ausländisches und internationales Privatrecht 52, pp. 205–255. Neergard, Ulla (2009) Services of General Economic Interest: The Nature of the Beast. In: Krajweski et al. (eds.), The Changing Legal Framework for Services of General Interest in Europe, The Hague: TMC Asser, pp. 17–50. Peyrony, Jean (2007) Territorial Cohesion and the European Model of Society : French Perspectives. In: Faludi, A. (ed.) Territorial Cohesion and the European Model of Society, Lincoln Institute, Cambridge/MA, pp. 61–79. Prosser, Tony (2006) Regulation and Social Solidarity. Journal of Law and Society 33, pp. 364–387. Robert, Jaques (2007) The Origins of Territorial Cohesion and the Vagaries of Its Trajectory. In: Faludi, A. (ed.) Territorial Cohesion and the European Model of Society, Lincoln Institute, Cambridge/MA, pp. 23–35. Ross, Malcom (2000) Article 16 E.C. and services of general interest: from derogation to obligation? European Law Review 25 (1) pp. 22–38. Ross, Malcom (2007) Promoting Solidarity : From Public Services to a European Model of Competition? Common Market Law Review 44, 1057–1080. Ruffert, Matthias (2011) Art. 3 EUV. In: Calliess, Christian & Ruffert, Matthias (eds.) EUV/ AEUV, 4. ed. Munich: C.H.Beck. Sauter, Wolf (2008) Services of general economic interest and universal services in EU law, European Law Review 33, pp. 167–193. Sauter, Wolf (2013) The impact of EU competition law on national healthcare systems. European Law Review, 38(4), pp. 457–478. Schmitter, Philippe C. (2004) Neo-Functionalism in Wiener, Antje & Diez, Thomas (eds.) European Integration Theory. Oxford: OUP, pp. 45–74. Schwarze, Jürgen (2007) Europäisches Wirtschaftsrecht. Grundlagen, Gestaltungsformen, Grenzen. Baden-Baden: Nomos. Schweitzer, Heike (2002) Daseinsvorsorge, “service public”, Universaldienst. Art. 86 Abs. 2 EG-Vertrag und die Liberalisierung in den Sektoren Telekommunikation, Energie und Post, Baden-Baden: Nomos. Scott, Colin (2000) Services of General Interest in EC Law: Matching Values to Regulatory Technique in the Public and Privatised Sectors. European Law Journal 6, pp. 310–325. Senden, Linda (2004) Soft Law in European Community Law. Oxford: Hart. Sinnaeve, Adinda (2012) What’s New in SGEI in 2012? – An Overview of the Commission’s SGEI Package. European State Aid Law Quarterly, pp. 347–367. Slot, Piet Jan & Skudder, Andrew (2001) Common Features of Community Law Regulation in the Network-Bound Sectors Common Market Law Review 38, pp. 87–129. Szyszczak, Erika (2007) The Regulation of the State in Competitive Markets in the EU, Oxford et. al.: Hart 2007. von Bogdandy, Armin & Bast, Jürgen (2010) Introduction. In: von Bogdandy, Armin & Bast (eds.) Principles of European Constitutional Law. Oxford: Hart. Waterhout, Bas (2007) Territorial Cohesion: The Underlying Discourses. In: Faludi, A. (ed.) Territorial Cohesion and the European Model of Society, Lincoln Institute, Cambridge/MA, pp. 37–59.

The Legal Aspects of SGI

47

Weiler, Joseph H.H. (1991) The Transformation of Europe, Yale Law Journal 100, pp. 2405–2483. Whish, Richard (2009) Competition Law. 6th ed. Oxford: OUP. Winterstein, Alexander (1999) Nailing the Jellyfish: Social Security and Competition Law. European Competition Law Review 20, pp. 324–333.

Hild Marte Bjørnsen, Olaf Foss and Steinar Johansen

Chapter 2: The concept and definition of SGI

1.

Introduction

This chapter addresses some issues and questions judged to be of conceptual and definitional relevance to the need for a more operational approach to the study of policies and societal implications of the development of Services of General Interest (SGI) in the EU. This allows for a more systematic analysis of the relevant policy and research questions concerning patterns, trends, drivers, implications and prospects, particularly from a territorial perspective. The undisputed importance of SGI in national and EU policies requires that substantial effort is made to establish evidence on the implications of different SGI drivers and policy regimes. This presupposes a better understanding of the very concept of SGI and how it might be approached in operational terms. Being at the heart of European social policy debate and controversies over the future of the welfare state – and increasingly targets of EU competition and other policies – the functions and arrangements considered SGI are facing important challenges. The political definition and classification of SGI are therefore very important to their future development and impacts. Due to obvious contradictions and lack of clarity in terms of definition and terminology, the concept is in immediate need of assessment and clarification in order to be useful for analytical tasks. The introductory chapter in this volume offers a much needed attempt to comprehensively discuss definition and analysis issues by allowing views from not only legal and political perspectives, but also by adding context. The chapter refers to the political origin, context, development and possible implications of the prevailing EU functional definition of SGI, briefly discusses its relationship to more established national terms, like “public services”, and points out some general developments and trends of SGI in the context of European and national policy processes. The main body of the chapter is an attempt to identify and discuss the most relevant and crucial issues and questions emanating from the urge to arrive at a more fruitful and relevant definition and a

50

Hild Marte Bjørnsen et al.

corresponding pragmatic operational concept in aid of research and assessment into the SGI field, particularly in a territorial cohesion and development context. Many issues and questions emerging from the increased political and scientific attention paid to the definition and role of SGI in the implementation of EU strategic goals are assumed to be of a normative, political nature, rather than reflecting scientific insights and reasoning. Nevertheless, in a section below, selected theoretical references are made and discussed, which may more or less indirectly shed some light on the task, i. e. being of potential relevance to defining and assessing SGI. Eventually a pragmatic and tentative operational definition of SGI for analytical purposes is proposed in the context of the ESPON project SeGI (Rauhut et al. 2013). Lastly a few concluding reflections are made.

2.

SGI: An EU-specific policy concept in the making

Within the European Union (EU) the term ‘Services of General Interest’ (SGI) has been coined and widely accepted (although subject to lively debate) to denote “market as well as non-market services which the public authorities class as being of general interest and subject to specific public service obligations” (CEC 2004). The term has come to be regarded as covering the arrangements, tasks and functions assumed to be of essential importance to citizen welfare, quality of life and participation, as well as to the general functioning of societies at a level of development and quality corresponding to Community visions and goals – the European model of society (Faludi 2007). Some commonly stated examples are arrangements for safety and justice, provision of water supply, postal services, supply of gas and electricity, transport functions, education, housing, and social and health services. A wide sub-class of SGI is considered to be services regarded typical of the welfare state, frequently referred to as SSGI; Social Services of General Interest (CEC 2006, Bjørnsen et al. 2013). The primary function of the welfare state is protection of citizens against social risks through institutional arrangements which differ considerably between states, including a wide range of collectively organised services on a continuum from purely ‘social’ to more general ‘public’ services (Titmuss 1974, Kildal 2013). Particularly during the quarter of a century following WWII, the welfare state in many European countries acquired the basic characteristics constituting important dimensions in several well-known typologies of ‘social policy’, ‘welfare state’ or ‘welfare regime’ models (Titmuss 1974, Esping-Andersen 1990, Ferrera 1996, Arts and Gelissen 2002, Fenger 2007). The particular term SGI is not found in the policy vocabularies of the EU member states and remains mostly unknown to the general public. It has emerged within the EU policy process for the purpose of a common Community

The concept and definition of SGI

51

language independent of national terminologies, policies and practices in fields at the very heart of public policy concern in modern welfare states. The more recent document “A Quality Framework for Services of General Interest in Europe” (CEC 2011), states that “the debate on services of general interest suffers from a lack of clarity on terminology. The concepts are used interchangeably and inaccurately. Stakeholders have asked the Commission to provide clarity. In doing so, however, the Commission is bound by EU primary law and the Court’s case law. Moreover, the concepts are dynamic and evolve. (CEC 2011: ch.1)”. The communication referred to does not offer greater clarity. It repeats the general definition stated in multiple policy documents (CEC 2011: ch.1) that SGI are differentially related to specific EU legislation, the internal market and competition rules of the Treaty.

3.

SGI at the centre of European political change and debate

There is an emerging consent that many services considered a SGI have been and will be subjected to increasing ‘Europeanisation’ processes, in the EU member states as well as in other European Economic Area (EEA) states (Jacquot 2008, Szyszczak et al. 2011). In recent years a considerable body of literature on the manifold concept of ‘Europeanisation’ has emerged, dealing with the interaction of EU policy processes and national welfare state reforms, including essential aspects of SGI provision (Palier 2006, Jacquot 2008). The welfare state has been a target of reform activity in many states in the past decades, entailing complex questions regarding changes in basic characteristics as well as functional aspects related to their goals and performance (Stamsø 2009, Palier 2010, Hemerijck et al. 2013, Kildal 2013). From the 1980s onwards, trends of liberalisation, privatisation, outsourcing and other reforms (frequently denoted “New Public Management” reforms, implying that public authorities increasingly take the role as purchaser, organiser and controller rather than as direct producer) have become apparent and partly dominant in most European countries. The EU-driven political and legal processes of Europeanisation in the sphere of SGI – especially following the Single Act of 1986 (European Communities 1986) – starting with the network sectors of communication, energy and transport, have enhanced the general trends of privatisation, contracting-out and outsourcing across the entire range of services traditionally regarded as public services/public responsibility (being subject to specific public service obligations), cf. Bauby et al. (2010). Lately, however, some of the basic assumptions behind the dominant trends in how services are regulated, organised, provided and financed have been contested in several studies (cf. Hartman,

52

Hild Marte Bjørnsen et al.

red. 2011 and Jefferys 2012). There is also increasing evidence of an emerging trend in the opposite direction, particularly regarding the municipal sector. Several countries are shown to have experienced an apparent trend towards the re-municipalisation of certain basic services/SGI (Hall 2012). Analysis of and debates on SGI policies, trends, implications and prospects in the EU and the member states suffer from the above-mentioned lack of clarity concerning definition and terminology, including their rationale, justification and connotation.

4.

Tentative definitional aspects and types of SGI as implied in EU documents

According to the general EU definition (cf. above) the term SGI typically refers to general interest functions and objectives, not particular activities, sectors/industries, financial aspects, modes of provision or types of provider etc. The assumed essential importance of SGI places an obligation on public authorities to ensure their provision according to certain standards regarding quality, availability, accessibility and affordability – in defence of “general interest”, which is the implementation of fundamental citizen rights and, in EU terms; the achievement of economic, social and territorial cohesion. The concept implies the existence of a more universal or collective interest that is shared by – and eventually benefits – all members of society, and therefore should take precedence over the interests of specific individuals or groups. Reflecting neither national terminologies nor the various conceptual worlds of scientific literature, in fact, no complete official definition of SGI exists. The Commission Green Paper of 2003 (CEC 2003: ch.1.1) acknowledges that “In the Member States different terms and definitions are used in the context of “SGI”, thus reflecting different historical, economic, cultural and political developments”. Although closely related to – and in several countries largely overlapping with – what is or has been regarded as public services, the alternative “technical” term SGI has been consciously chosen, reflecting the overall objectives of the EU-level policy process. The aim has been to develop a common terminology and frame of reference for common policy purposes, however initially respecting the wide national diversities in the field. The Green Paper also points out that the term SGI is not to be found “in the Treaty itself”. It is derived in Community practice from the term ‘Services of General Economic Interest’ (SGEI), already consecrated in the Treaty of Rome (EEC 1957), but denotes a broader scope of purposes, activities and functions (CEC 2003: ch.1.1). The Commission White Paper (CEC 2004), in presenting its

The concept and definition of SGI

53

conclusions of the broad public consultation on SGI, launched on the basis of the Green Paper (CEC 2003), does not bring more clarity to the term and concept. Rather it underlines that the consultation revealed significant differences in points of view and outlook, although there seemed to be an emerging consensus on “the need to ensure the harmonious combination of market mechanisms and public service missions” (CEC 2004: ch.1). The European Parliament, in its resolution of 13th January 2004 on the Green Paper on SGI (A5–0484/2003), states that certain services should be excluded from the scope of the competition rules, including health, education and social housing, as well as services aimed at maintaining or increasing plurality of information and cultural diversity (ibid.: line 22). The resolution underlines the principles of universality and equality of access, continuity, security and adaptability ; quality, efficiency and affordability, transparency, protection of less well-off social groups, protection of users, consumers and the environment, and citizen participation. The categorisation of SGI as being either of an “economic” or “non-economic” nature is not apparent in principle, and in practice these categories have become increasingly blurred through the last decades’ development – and to a rather varying degree amongst the member countries. This is indicated for instance in the response of the Council of European Municipalities and Regions to the Commission’s Green Paper on Services of General Interest (CCRE/CEMR 2003). The communication of the EU Commission (CEC 2006) states that “services provided for payment must be considered as economic activities within the meaning of the Treaty” but gives no specification of what ‘payment’ implies. In principle, this could mean defining all social services as in fact (or in principle) economic activities and thus subject to rules of competition as stated in the Treaty of Rome because all goods and services offered in the social field must be paid for by someone or other. Moreover, the services mentioned in the Green Paper are all in areas where commercial actors operate. The response of the CCRE/CEMR (2003) further indicates that the definition and classification of SGI in the framework of EU policies and regulation, and in particular the competition provisions of the Treaty, is even subject to more fundamental philosophical/ideological disagreement, over the role of the public and private sector in the provision of services judged to be essential for achieving shared Community goals (especially what should be the case for public authorities’ direct/“in-house” provision). The Green Paper (CEC 2003) roughly identifies three categories of SGI (including SGEI) according to “the need and intensity of Community action and the role of the Member States”:

54

Hild Marte Bjørnsen et al.

– Services of general economic interest (SGEI) provided by large network industries (such as telecommunications/electronic communications, postal services, electricity, gas, transport) – Other services of general economic interest (such as waste management, water supply, public service broadcasting) – Non-economic services and services without effect on trade (a very wide and heterogeneous range of services, not or to a lesser degree subject to specific Community rules, competition and state aid rules etc.) As indicated, the criteria used to distinguish between the three categories are unclear and to some degree a moving target. Which specific functions or services are or should be included in each category are subject to political debate as well as showing actual variation and change amongst and within the Member States. Moreover, in order to address the SGI-field in real terms – scientifically as well as politically – a more operational definition is required, making the phenomenon tangible.

5.

Making a definition of SGI operational: Some relevant issues and questions

The EU policy and legal process does not address an apriority list of SGI for evaluation with regard to potential exclusion/inclusion in relation to the scope of the competition rules or other specific Community regulation. Neither has such a list of SGI been developed in the process. Even the question of what should be regarded the appropriate entities and related properties of classification, remains unspecified; for instance objectives, functions, missions, activities, sectors/industries, types of organisation, responsibilities, modes of provision, regulation, types of provider, modes of financing, and target groups. Any meaningful research and policymaking in the field of SGI requires a clearly defined object of study or interest, and well-elaborated and justified analytical perspectives. The social sciences literature on public services is plentiful, but a common denominator is the discussion and critique of the very concept of “services” as referring to something distinctly different from “goods”. The analytical use of the so-called Fisher-Clark “model” of the succession of sectors in the economy (from primary, via secondary to tertiary sector dominance)1 which is still prevailing in parts of mainstream economics (cf.

1 The “model” is often associated with the so-called “Engel’s Law” (cf. Stigler 1957) which was later frequently contested (cf. Chakrabarty and Hildenbrand 2009), or psychological theories

The concept and definition of SGI

55

Goldkuhl and Röstlinger 2000, Andersen and Corley 2003, Giarini 2009) is also a dominant topic. The “service literature” includes many attempts to establish useful operational definitions and classifications of (goods and) services into broad categories according to, for instance, type of end-product, type of end-user, and function in the economy (for instance, into intermediate and end-user services, business and consumer services, or services related to broad functional categories like distribution, circulation, reproduction and information). A strongly advocated point of view is that the growth of “service” industries and occupations is merely mirroring a widening and deepening of the social and technical division of labour and changing patterns of organisation and integration within large production systems, in a steadily expanding, mainly industrial economy (Walker 1985, Giarini 2009). In the literature and official documents on SGI in the EU context the use and meaning of the term “services” is seldom if ever contested or even discussed. However, the national and EU regulatory framework concerning certain segments of SGI mostly address specific industries or sectors, i.e the supply side or the service providers. ‘Sectors’ seems to be the most frequently used term alongside ‘services’. Otherwise terms like industries, areas, arrangements, undertakings, institutions, enterprises, missions, objectives, functions, are frequently employed. The key to the selection of potential functions, or “services”, to be included in an operational concept of SGI obviously relates to the expression “being of general interest and subject to specific public service obligations”. The Commission Green Paper (CEC 2003) and other relevant policy and legal documents, indicate – directly and indirectly – certain criteria, but state no clear definitions of them. The universe of potential “services” therefore covers a wide and heterogeneous field. These include infrastructural, technical and network facilities (organised, financed and provided in different ways) as well as the very broad and diverse range of social and other arrangements in other fields, usually associated with the welfare state and still most frequently provided by the public sector – or with public subsidies – involving national, regional and local political and administrative level responsibility as well as business and voluntary/nonprofit organisations. The term SGI therefore involves two basic sub-terms in need of elaboration and definition, namely the term “services” and the term “general interest”, none of which lending themselves easily to agreement on either political or more scientific interpretation and definition. Furthermore, the term “general interest” of a hierarchical order of human needs, like the frequently cited “Maslow’s hierarchy of needs” (Maslow 1943).

56

Hild Marte Bjørnsen et al.

is linked by definition to the term “public service obligations”: A particular service is of general interest if it is subject to (specific) public service obligations, and vice versa. The official (EU) definition thus avoids the ethical and socialphilosophical question of which particular functions should be regarded as being of general interest and therefore should be subject to public service obligations. Having defined “public service obligations” in an operational way, distinguishing SGI from other “services” is in principle an empirical task. Additionally the term “Social Services of General Interest” (SSGI) has been emphasised, particularly by the Belgian presidency of the Council of the European Union (2010), denoting a sub-category of functions being “at the heart of the European social model, contributing to the social and territorial cohesion of the EU” (p. 4). This sub-category – in principle cutting across the three mentioned rough categories of the Green Paper (cf. above) – are said to raise special concerns regarding their legal status “in view of the internal market and competition rules” (p. 4). As with SGEI and SGI there is no legally binding or otherwise unified definition of SSGI (cf. Gallo 2011). SSGI are broadly seen as measures addressing the fundamental risks and vulnerabilities of life (CEC 2007), including facilitation of social inclusion and safeguarding fundamental rights (CEC 2010). Put more generally : SSGI are intended to compensate what Richard M. Titmuss (1968) named “the disservices caused by society”, i. e. social costs, especially those where the causal agent cannot be identified and held responsible. In relevant policy documents, the terms “of general interest” and “subject to public service obligations” are explicitly linked to shared Community concerns and values. Corresponding societal roles and objectives are assigned to SGI in the context of overall Community goals and ambitions. By implication a quality of SGI should be “universality”, i. e. a certain degree of universal benefit or universal access. The concept of “universality” is manifold and complex and at the heart of a long-standing debate over the welfare state and different welfare models (cf. Titmuss 1968 and 1974, Esping-Andersen 1990, Rothstein 2001, Bergh 2004). The principle of “universal services” is widely adopted in EU policies, applied to for instance the postal, electricity and telecommunication sector, which raises the corresponding issues of what should be regarded a basic set and minimum level of their provision, availability and accessibility to all residents (Littke and Rauhut 2013). The many issues and questions emanating from the increasing political and scientific attention paid to the definition and role of SGI in the implementation of EU strategic goals are considered mostly normative and political in nature, rather than reflecting reasoning and insights anchored in relevant research and scientific endeavour. However, reference is sometimes made, directly or indirectly, to different schools of theoretical reasoning, especially within eco-

The concept and definition of SGI

57

nomics but also other social sciences. The next section gives a brief overview of some key references relating to the main issues.

6.

Selected theoretical references of potential interest for defining and assessing SGI

6.1.

The concept of public interest and the justification of public services

Use of the term SGI rather than the established term “public services” reduces the risk of conflict with the complex reality and evolution of different national traditions regarding modes of organisation and provision of certain services and arrangements to some degree considered a public concern. As with SGI, it is difficult to establish a single formal definition of the concept of public services (Van de Walle 2008). Spicker (2011) lists four key features for what is commonly understood as public services; they are services directed towards the public in a social sense; they are delivered according to principles of public benefit (though not necessarily publicly provided); they are redistributive in nature; and they are operated as a trust. The last two features distinguish public from private services by the disconnection between purchase and consumption. Payment for public services is not individual and may therefore benefit others. In some cases the beneficiaries cannot even be identified. It is a commonly held conception by citizens and government alike that governments should work in the public interest (Flathman 1966; Goodin 1996). What is meant by public interest is however ambiguous. The concept refers to the general welfare of a society but it has proved difficult to provide a universal definition. Lippman (1955) has defined public interest as “what (people) would choose if they saw clearly, thought rationally, and acted disinterestedly and benevolently”, which is very similar to definitions dating back to Adam Smith and John Stuart Mill, for example. The definition is more ideal than operational (Bozeman 2002). Roxbee Cox (1973) views public interest as nothing more than majority interest, whilst Gunn (1968) relates it to Bentham’s hedonistic utilitarian calculus. A primary role of governments is however to provide the legal framework within which all economic transactions occur (Stiglitz 2000). Beyond that, governments serve the public interest through production, regulation, consumption and redistribution. Following the utilitarian tradition from Bentham and Mill, public interest can be expressed in a Pareto context as argued by Kaldor (1939) and Hicks (1939). The Pareto principle states that an outcome is efficient if all possible trades

58

Hild Marte Bjørnsen et al.

between agents are carried out in the sense that no further trades can be made to make some agents better off without leaving others worse off. The wealthmaximisation approach of welfare economics states that an efficient allocation of resources is achieved when no reallocation can increase the wealth of society. One central principle is that reallocations can occur as long as the gainers gain sufficiently to compensate the losers for their losses, although it is not required that such compensations actually take place. The framework opens for government interventions when they contribute to increased net wealth, but says nothing about how to compare different allocations (Stringham 2001). To determine which set of policies will be wealth-maximising, the government must be able to compare outcomes of all possible property assignments (Ibid, p. 47). The utilitarian approach is built on cardinal welfare functions which imply that the government must be able to measure, compare and sum up every citizen’s utility for every possible allocation of resources. This would require omniscience on the part of government agents and applying the KaldorHicks criterion is thus difficult if not impossible (Caplan 1999, p. 836). The most common criticism of the Kaldor-Hicks criterion is however that is does not take distributional aspects into consideration. Assuming an economy with two agents, an allocation where one gets all resources is just as good as one where they share the given resources equally.

6.2.

The emphasis on market failure as justification for public intervention in the economy

While private sector agents act in order to optimise their own economic returns, public sector bodies have other objectives, usually directly derived from policy objectives. Public service obligations do not imply that services should necessarily be provided by the public sector. Many services are successfully produced in private markets. Economic theory tends to consider extreme cases to shed light on the problem of resource allocation. The Walrasian model of competitive general equilibrium (Felderer and Homburg 1992) and Samuelson’s theory of public expenditure (Blanchard and Fischer 1989) are two such polar extremes to analyse provision of goods and services. The first case assumes a pure market economy where all goods are provided by private actors under free competition while the other assumes that some goods are collective in the sense that it is provided for each man to enjoy or not, according to his tastes (Samuelson 1955). Both pure market solutions and pure collective solutions may generate Pareto efficient outcomes. The only requirement for Pareto efficiency being that no one can become better off without anyone else becoming worse off. The different systems of allocation may however result in great differences in the distribution

The concept and definition of SGI

59

of services between individuals, classes, gender and other groups, and regions. One of the basic arguments for government provision of goods and services or for intervention in private market allocations is thus to gain a more equal distribution in society. It is a common conception that market failure is a basic argument for public provision of goods and services. Market failure occurs when the market is not able to provide an (Pareto) efficient allocation of resources, which occurs whenever the validity of one or more of the underlying assumptions of the competitive general equilibrium models is broken. Typical examples of market failure are when returns to scale are not constant (e. g. monopoly), in the cases of externalities, public goods, common access resources, imperfect information etc. These examples share a set of fundamental causes that have to do with property rights, information and transaction costs. Given that individuals wish to make themselves better off through trade or production, inefficiency can only exist if the individuals do not have sufficient control over commodities and productive assets to make profitable or advantageous exchanges, if transaction and information costs exceed the gains from trade or if the individuals cannot agree on how to share the gains from their mutually advantageous exchange (Gravelle and Rees 1992, p. 513). The first and fundamental theorem of welfare economics asserts that the economy is Pareto efficient under certain conditions (Atkinson and Stiglitz 1980). Violations of these conditions imply the existence of market failure and may justify government intervention. One necessary condition which seldom holds true is the assumption of perfect competition; that there exist a sufficient number of suppliers and consumers so that no single actor can influence prices. Perfect competition is clearly not a realistic assumption in most markets and there are many reasons why this must be the case. When there are economies of scale in production (decreasing average cost of production), one or few producers will secure more efficient provision than many small firms. In this situation, a private monopoly will typically set market prices above marginal costs in order to maximise profits, while a government-run monopoly can produce at break even. Often, we also find that goods produced by different firms are not perfect substitutes and that consumers can distinguish between them (monopolistic competition). Generally, firms will actively strive to be in this situation through branding, advertising etc., in order to gain profits. Firms may also engage in other strategic behaviour, like hidden cooperation, to discourage competition and maximise profits. High transaction costs and unevenly distributed information are other reasons why perfect competition is not achieved. Public services as so-called ‘market failure’ features two distinct characteristics, namely that once the service is produced it can be consumed by additional consumers at no additional cost, and at the same time no consumers can be

60

Hild Marte Bjørnsen et al.

excluded from consuming it. Because public goods inhibit no good revealedpreference, the market cannot provide an efficient production. Public goods are associated with the “free rider problem” (consumers will not pay for a good which they cannot be excluded from consuming), and public sector provision is thus necessary for efficient production. New technology has reduced the public good features of some goods by making it less costly to charge for consumption and thus making provision more attractive for private actors. One typical example is broadcast television. Other goods, which in principle are market goods, are not being supplied in adequate quantities by market actors. This has occasionally been the case for provision of housing and financial goods, such as insurances and loans (Arrow 1963, Lipsey and Lancaster 1956–57). The presence of incomplete markets is a reason for government intervention. Also, when there are high marginal costs associated with supplying additional units of a good, there may be a case for public provision (Auerbach and Hines 2002). Another common market failure is externalities which occur when the actions of one firm or individual affects the wellbeing, production or consumption opportunities of others. Typical examples of negative externalities are pollution or use of scarce resources without compensating for the costs incurred by others. A common feature is again that the market will not provide efficient allocations when the costs/benefits of externalities are not included in the price determination. A most serious example of market failure is however when demand drops and resources are not fully exhausted. Unemployment is costly for individuals as well as society, and high unemployment rates indicate that something is not working well in the economy (Stiglitz 2000), with potential adverse effects on individuals’ welfare and the growth rates of the economy.

6.3.

Additional and competing justification for public intervention in the economy

When markets fail to provide efficient solutions there is a rationale for governments to intervene in one way or another, and the main instruments available are; public production, public purchases, regulations and redistribution (Schelling 1984). Just as information asymmetries and transaction costs are reasons for market failures, these problems may also cause governments to fail in administering the correct responses. Typically, governments do not possess full information on economic agents’ objectives and responses. Moreover, the political processes impose limitations to how governments can intervene. Stiglitz (1998) lists four reasons why Coasian bargaining2 does not apply to the public 2 The Coase theorem states that under certain circumstances, bargaining can provide an ef-

The concept and definition of SGI

61

sector and consequently why potential Pareto improvements will fail. Firstly, there are limitations to a government’s ability to make commitments; secondly, imperfect information distorts bargaining processes and coalition formation; thirdly, political games are prone to suffer from destructive competition losses; and fourthly, imperfect information results in uncertainty about the consequences of change. Even in the unlikely event of fully efficient markets there may be good reasons for governments to intervene in the private economy. Besides market failures, unequal distribution of income and wealth is one principal argument for intervention. Competitive markets may result in a distribution of income which is more unequal than desired and redistribution is one of governments’ most important activities (Stiglitz 2000, p. 86). There is little dispute over the proposition that governments should contribute actively to redistribute income or wealth. More equality is proven to have positive effects in terms of greater social stability and higher growth rates. Design and extent of redistribution policies are, however, a matter of controversy. This is partly due to alleged trade-offs between efficiency and distribution, the relative value assigned to reduced efficiency versus reduced inequality depending on political valuations. The theories of market failure are constructed within the tradition of utilitarian economics and represent situations where one or more of the standard assumptions are being violated. This implies that individual preferences are still at the core of the theoretical framework. An alternative approach which permits the main features of public services to be beneficial to society, to serve the public and redistribute citizens’ access as stated by Spicker (2011), may be applying collective choice models which deal with the preferences of the public or society as a whole. What is best for society is however not revealed by summing up individual preferences and this inherent aggregation problem makes collective decision-making theories far more complex and hence less popular. Imposing marked-based criteria for the production of public services, ignoring the implicit market distortions, may result in less efficient solutions which are not consistent with the values and benefits of the public. In his Theory of Justice, John Rawls (1999) aimed to provide a “workable and systematic moral conception to oppose” (ibid: xvii) utilitarianism. He argues that utilitarianism “adopt[s] for society as a whole the principle of choice for one man” and in so doing, fails to “take seriously the distinction between persons”. Rawls proposes an alternative in a set of principles of “Justice as Fairness”. The first principle addresses the essentials of the constitutional structure and states that society must ensure each citizen has an equal claim to a fully adequate ficient allocation of resources in the presence of externalities, whatever the initial assignment of property rights.

62

Hild Marte Bjørnsen et al.

scheme of equal basic rights and liberties and that the same claims must be valid for all citizens. The second principle addresses those aspects of the basic structure that shape the distribution of opportunities, wealth, and social advantages. The first part is a principle of fairness in equality and opportunity, while the second part of the second principle (the Difference principle) holds that “social and economic inequalities … are to be to the greatest benefit of the least advantaged members of society” (ibid: 72). Each of the three principles addresses a different set of primary goods; i) rights and liberties, ii) opportunities, iii) income and wealth (ibid). The theory of justice is proposed as an alternative to go beyond the scopes of utilitarianism, but still adopts the efficiency criterion of Pareto optimality.

7.

Towards a tentative operational definition of SGI for analytical purposes

Notwithstanding the shortcomings in terms of definitional clarity, and the indirect and partly contradicting contribution of theory, there is a crucial need for an operational approach allowing relevant policy and research questions related to SGI patterns, trends, drivers, implications and prospects in the EU and the member states to be addressed more systematically. This calls a somewhat more pragmatic attitude. As already stated, the EU definition of SGI (CEC 2003: ch.1.1) implies no clear guidance as to what specific kinds of phenomena or activities are involved. However, the exemplifications frequently points to what is regarded as typical sectors (in the sense; areas into which the economic and/or government activities of a country are divided) and industries. Sectors then refer to sub-sectors of the two main institutional sectors (public-private), and policy-areas that may involve actors and activities in the public as well as the private institutional sector. The term “services” in SGI carries no definitional load and may refer to products, activities, facilities, utilities, arrangements, institutions, organisations, industries etc. that may or may not satisfy the different criteria for defining “services” and “service industries” in the “service literature”. For instance, infrastructure like roads and railways, and policies and regulations related to social housing, will be in the borderland. The term “public service obligations” refers to the rights of citizens and enterprises to expect certain actions by public authorities and service providers to ensure their access to a specific level of selected services (“universal access”). The selected services are judged as being of “general interest” and therefore should be provided according to the principle of “universal access”. The White

The concept and definition of SGI

63

Paper on Services of General Interest referred to above, states a rather clear definition of “universal access”: “It establishes the right of everyone to access certain services considered as essential and imposes obligations on service providers to offer defined services according to specified conditions, including complete territorial coverage and at an affordable price” (CEC 2004: ch.3.3)

The term “universal” thus implies availability, accessibility and affordability. Of particular importance are the closely interrelated concepts of accessibility and affordability. A basic precondition for accessibility is availability. Does the service exist in adequate supply where the potential beneficiaries are located? For some categories of SGI the location of provider units is less relevant, like certain network services (Internet providers/telecommunication, electricity etc.). Accessibility denotes the degree of ease and convenience (absence of barriers; spatial, temporal, monetary, cultural, others) by which the potential beneficiaries are able to obtain and utilise the available service. An important dimension of accessibility is the product of transport. It is worth noting that all the above-mentioned criteria must be fulfilled, however, for a service to be judged accessible. Affordability is the monetary dimension of accessibility, including both outof-pocket expenses and availability of user compensation, and is of course interrelated with the mode of SGI financing. However, affordability as a concept is not easy to define. A popular definition of ‘affordable’ is when one is able to pay the price without risking financial difficulties. The inherent problem is how to decide for different socio-economic groups and other potential beneficiaries (businesses, firms) exactly where this line should be drawn, implying a benchmark be set for which there is no objective definition. Affordability is relative and context-sensitive and basically a normative term to be politically defined. A review and discussion of the literature on affordability, specifically related to the sphere of housing, is given in Urban Research Centre, University of Western Sydney (2008). In practice, the provision of many SGI is financed partly via the tax system and partly via market provision. As indicated, European countries’ policies and practices vary substantially with regard to how specific services are classified and financed. Consequently, services that may be regarded as SGI are organised, financed and provided in very different ways. Polacek et al. (2011), in their analysis of 22 EU/EEA countries, demonstrates for the four broad classes of Social Services of General Interest (SSGI; long-term care, early childhood education and care, employment services, social housing) how substantial differences exist in the responsibility and regulatory framework for providing the services. Responsibility is shared in different ways between the public and

64

Hild Marte Bjørnsen et al.

private sectors and between different levels of public administration (from national to local level), varying even among the different types of services within the broad SSGI-domain. The broad range of services and arrangements (including funding arrangements) complicates the identification and classification of modalities of service provision within the different SSGI-domains (e. g. direct provision by public authorities, different types of for-profit/non-profit external providers, unpaid informal providers, and combinations of the three, based on varying contracting and funding principles). Frequently, several modalities coexist within the same country and SSGI-domain. The question of which specific criteria determine whether services are judged to be “of general interest”/”essential”, and therefore potentially subject to “universal access” rights and obligations , is still open. In principle, most services are potentially essential/of general interest since history shows that socio-economic and technological change imposes new requirements and needs to be fulfilled as prerequisites for individual quality of life as well as for a wellfunctioning and sustainable economy. Changes in the way wealth are produced, in the division of labour, in the product life cycles, and not least in the environmental imperative of “serving” the products from long before birth until well after death, including sustainable management of raw materials, energy consumption, the product utilisation and waste, continuously places new types of services in the centre of the system of wealth production. Many services have become indispensable in the production of the goods and services necessary to fulfil basic needs and secure environmental sustainability (Giarini 2009). The ambitious triple general interest objective of SGI reflects this acknowledgement: 1. The right of all citizens of access to certain fundamental goods and services 2. The promotion of economic, social and territorial cohesion 3. Achievement of sustainable development (economically, socially and environmentally) The White Paper clearly states that “universal service is a dynamic and flexible concept” which can be redefined periodically “in order to be adapted to the social, economic and technological environment” (CEC 2004: ch3.3). A precautionary principle would thus imply a rather generous definition of “general interest”, allowing a wide range of functions and activities to be included in our tentative operational definition of SGI3. The purpose of the ESPON 3 This would also be in line with the principle of subsidiarity, which would imply that the right to define SGI should be assigned to the public authorities at every level in the Member States (cf. European Parliament, DG Internal Policies of the Union 2005: Services of the General Interest in the Internal Market. Working Paper, PE 359.357).

The concept and definition of SGI

65

project SeGI; “Indicators and Perspectives for Services of General Interest in Territorial Cohesion and Development” (Rauhut et al. 2013) was primarily to analyse the territorial situation and implications of a sufficiently wide and varied selection of services that may already be regarded as “typical” SGI, and/or as likely “candidates” to be classed as SGI, by proper national authorities. From this pragmatic approach follows (in Bjørnsen et al. 2013: 24): 1. All typical “core” areas/services of the “welfare states” in participating European countries should be included, encompassing “the five pillars of welfare; education, care, labour market, social housing and insurance schemes” (cf. Humer et al. (2013: table 3) 2. Some other areas/services justifying legal public action in a “SGI-context” in several of the countries should be included 3. The sectors already classed as SGEI (under sector legislation) in EU should be included 4. The areas/sectors stated/exemplified as (potential) SGI in the most important EU documents on SGI should be included However, no effort to delimitate a category SGI entirely avoids the problem of ranking according to some notion of “general interest” criteria, whether assuming a normative, scientific or other point of departure. Moreover, any effort at delimitation and ranking requires a clear decision as to what class of phenomena should be the object of delimitation and ranking. In the mentioned ESPON SeGI project (Rauhut et al. 2013) the NACE Rev. 2 classification of economic activities in the EU is pragmatically chosen for this purpose, focusing the SGI providing units and sectors, i. e. the supply side (Breuer and Milbert 2013). A territorial perspective on SGI, as in the ESPON SeGI project, particularly justifies a provider or supply side emphasis allowing for assessment of SGI implications from several angles. The EU functional definition refers primarily to the “service” products, direct beneficiaries and intended direct functions. Another relevant angle could be the general socio-economic and welfare effects (first and second order, etc.) of the systems and activities of SGI provision, the primary “service” product being merely one among several territorially relevant aspects of SGI. The units providing SGI constitute a considerable number and employ a substantial share of the total EU labour force. In many regions of several countries they represent the dominating share of total employment. The somewhat more narrow SGI definitions applied by CEEP (2010) and the European Parliament (2005) indicate that the “SGI sector” employed almost one third of the total EU employed labour force, ranging among member states from around 20 to around 40 percent of total employment. Cf. even Commission of the European Communities (CEC 2007). When local communities and regions are

66

Hild Marte Bjørnsen et al.

regarded as SGI beneficiaries and even targets, a wider and partly different conceptualisation is required, taking into consideration a varied set of effects implying that a certain range and level of SGI provision is necessary for the proper functioning and development of different local communities and regions.

8.

Concluding remarks

SGI are entrusted by a public authority with specific missions of general interest due to the assessed intrinsic importance to the population, the economy and society at large. They are deemed central to the wellbeing of the citizens as well as the functioning of business and the economy. The financial and economic crises of the latter years probably also indicates a certain stabilising effect of SGI on business environment and preconditions for economic activity during periods of crisis, and even ensuring a potential for quicker economic recovery in the wake of the crises. Being at the heart of European social policy debate and the recurrent controversies over the future of the national welfare states, and simultaneously targets of EU competition policy, the services and arrangements to be regarded as SGI – and belonging to the different EU defined categories of SGI – faces specific political challenges. The political concept, definition and classification of SGI therefore may be of significant importance to their future development and social impacts, an aspect not to be ignored in analysis of their provision, accessibility and implications for social, economic and territorial cohesion and development. However, the latter should keep a critical distance to the policy premises and seek a more scientific approach based on the research questions at hand. Notwithstanding the obvious shortcomings in terms of definitional clarity, and the very indirect and partly contradictory contribution of theory, there is a crucial need for an operational approach allowing the relevant policy and research questions related to SGI patterns, trends, drivers, implications and prospects in the EU and the member states to be addressed more systematically. To address the immediate need for an operational definition for analytical purposes a rather pragmatic approach is necessary, as suggested above. The key defining aspect of SGI, the concept of “general interest” – in EU terminology defined as services subjected to “specific public service obligations” by the proper national authorities in order to ensure their universal provision and accessibility – covers substantial variation among European countries in terms of actual policies and practices regarding which services are classified this way, how they are “ranked” according to different criteria of degree of “general interest”, how public policies/intervention are justified and

The concept and definition of SGI

67

implemented, and to what degree policies and practices in this respect are subject to political debate and controversy. Consequently, services that may be regarded as SGI are organised, financed and provided in many different ways according to national histories, traditions and institutional settings. Despite the large number of documents appearing throughout the last decade, conceptual clarity is not much enhanced and the controversies apparently prevail. As argued above, no effort to delimitate a category SGI avoids the problem of ranking according to some notion of “general interest” criteria, whether assuming a normative, scientific or other point of departure. Moreover, a clear decision as to what class of phenomena should be the object of delimitation and ranking is required. However, a pragmatic operational approach for the sake of empirical and analytical feasibility does not completely avoid the political and legal connotations at the centre of EU policy and legal processes related to SGI. Neither does it exclude a critical scrutiny of the concept of “general interest” (and related concepts like “common good”, “public good”, “collective good”, “public interest”, “universal interest”, “essential importance”, etc.) according to different political as well as theoretical perspectives. The chapter has sought to identify and shed some light on central issues and questions in need of clarification in this context. Most SGI have multiple functions and beneficiaries, partly in different ways and related to different aspects of their products and modes of provision. From a territorial cohesion and development perspective, as emphasised in the ESPON project SeGI (cf. above), the analysis of SGI should differentiate between the effects on different groups of direct intended beneficiaries (individuals/households, businesses/firms and regions/local communities), and various indirect effects on economic activity and territorial development, which may also guide decisions regarding definition and operational approach. SGI – depending on their definition – in most countries contribute between ca. 25 and 35 percent of national GDP and a substantial share of total national employment, as stated above. The “sector” not only supplies important factors of production like infrastructure, distribution services, information and circulation functions, education/human capital, labour market services, housing, health and other reproductive functions, but also represents directly and indirectly (through employee spending) considerable local and regional demand effects. The “sector” is also a key investor in the economy. Moreover, at the local and regional level SGI may enhance business environments, for instance, by ensuring a critical mass of highly qualified persons, wider bases of production clusters and potentially stronger innovation systems. The same SGI “sector” comprises around half a million enterprises (and substantially more firms) in the EU27 alone. Obviously, in a territorial development context the supply side of SGI – the SGI providers – is of great im-

68

Hild Marte Bjørnsen et al.

portance. Also from an individual/household perspective (the welfare or quality of life perspective) other aspects of SGI than the primary service product are of obvious importance, in particular the SGI labour market as a source of income and occupation. National public services are redistributive in nature and aim to benefit society by serving the public. Finding the optimal level and quality is difficult when managed in markets because key features of the public services violate central preconditions imposed on market solution thus rendering inefficiency and most likely inconsistent outcomes. When markets fail to provide efficient solutions there is a rationale for governments to intervene in one way or another. Public service obligations do not imply that services should necessarily be provided by the public sector. Many services are successfully produced in private markets. One of the basic arguments for government provision of goods and services, however, is to gain a more equal distribution in society. The unquestionable importance of SGI in national and EU policies towards a broad range of strategic goals requires that substantial effort be made in systematically analysing and assessing the territorial and other implications of different SGI policy regimes and approaches. This should be done too bearing the interplay with other driving forces in mind, which in turn presupposes a far better understanding and a higher level of agreement of, included a scientifically sounder operational approach to, the very concept of SGI.

Literature Andersen and Corley (2003), “The Theoretical, Conceptual, and Empirical Impact of the Service Economy : A Critical Review.” WIDER Discussion Papers. World Institute for Development Economics (UNU-WIDER) 2003/22. Arrow, K. J. (1997) Social Choice and individual values, Wiley, New York. Arts, W., Gelissen J. (2002): Three Worlds of Welfare Capitalism or more? A State-of-theart Report. Journal of European Social Policy, vol. 12 (2): 137–158. Atkinson, A. B. and J. E. Stiglitz (1980) Lectures on Public Economics. Mc Graw-Hill, New York. Auerbach, A. J. and J. R. Hines Jr. (2002) Taxation and economic efficiency in Handbook of Public Economics Vol 3 (Eds. Auerbach A. J. and M. Feldstein). Elsevier, New York. Bauby, Pierre et al. (2010), “Mapping of the Public Servics. Public Services in the European Union & in the 27 Member States.” The European Centre of Employers and Enterprises providing Public services (CEEP), Brussels. Belgian Presidency of the Council of the European Union (2010), Recommendations of the third SSGI FORUM. Bergh, A. (2004), “The Universal Welfare State: Theory and the case of Sweden.” Political Studies Vol. 52, p. 745–766.

The concept and definition of SGI

69

Bjørnsen, M., O. Foss, S. Johansen and B. Langset (2013): Services of General Interest (SGI): I it possible to define this concept in Scientific terms? Romanian Journal of Regional Science, Vol. 7, Special Issue on Services of General Interest. Blanchard, O. J. and S. Fischer (1989) Lectures on Macroeconomics, The MIT Press Cambridge, Massachusetts, London, England. Bozeman, B. (2002), “Public value Failure: When Efficient Markets May Not Do.” Public Administration Review, Vol. 62, p. 145–161. Breuer, I.M. and Milbert, A. (2013) Services of General Interest Indicators: Methodological Aspects and Findings; in: Europa XXI, Polish Academy of Sciences, Vol. 23, pp. 29–46. Caplan, B. (1999), “The Austrian Search for Realistic Foundations.” Southern Economic Journal, Vol. 65, p. 823–838. CCRE/CEMR (2003), Services of General Interest: Public Interest, Democratic Choice. Response of the Council of European Municipalities and Regions to the Commission’s Green Paper on Services of General Interest, Brussels and Paris. CEC (2003), Green Paper on Services of General Interest: COM (2003) 270 final, Brussels. CEC (2004), Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, White Paper on services of general interest: COM (2004) 374 final, Brussels. CEC (2006), Implementing the Community Lisbon programme: Social services of general interest in the European Union: COM (2006) 177 final, Brussels. CEC (2007), Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, Accompanying the Communication on ”A single market for 21st century Europe”, Services of general interest, including social services of general interest: a new European commitment: COM (2007) 725 final, Brussels. CEC (2008), Biennial Report on social services of general interest: COM (2008) 418 final, Brussels. CEC (2010), Guide to the application of the European Union rules on state aid, public procurement and the internal market to services of general economic interest, and in particular to social services of general interest; SEC (2010) 1545 final, Brussels. CEC (2011), A Quality Framework for Services of General Interest in Europe. COM (2011) 900 final, Brussels. CEEP (2010), Public services in the European Union & in the 27 Member States. http:// www.ceep.eu/images/stories/pdf/Mapping/CEEP_mapping%20experts%20report.pdf ?c43417316a8c0ddb72ab1893be164a25=42e435af0495d3118ab0992d8156c580. CEEP (2012): Mapping of the Public Services. Public Services – Supporting The Very Fabric of European Society. The European Centre of Employers and Enterprises providing Public services (CEEP), Brussels. EEC – European Economic Community (1957) Treaty establishing the European Economic Community (Treaty of Rome); EEC: Rome. Esping-Andersen, G. (1989): The Three Political Economies of the Welfare State. In Canadian Review of Sociology and Anthropology 26 (2): 10–36. Esping-Andersen, G. (1990), The Three Worlds of Welfare Capitalism. Polity Press, Cambridge. European Communities (1986) Single European Act, Official Journal L 169 of 29 June 1987.

70

Hild Marte Bjørnsen et al.

European Parliament, DG Internal Policies of the Union (2005), Services of the General Interest in the Internal Market. Working Paper, PE 359.357. European Union (2010) Consolidated versions of the Treaty on European Union and the Treaty on the Functioning of the European Union. Charter of Fundamental Rights of the European Union, Publication Office of the EU: Luxemburg (doi:10.2860/58644). Faludi, A. (2007) The European Model of Society ; in: Faludi, A. (2007) Territorial Cohesion and the European Model of Society, Lincoln Institute: Cambridge/MA. Felderer, B. and S. Homburg (1992) Macroeconomics and New Macroeconomics, 2nd edition, Springer verlag, Berlin. Fenger, H.J.M. (2007): Welfare regimes in Central and Eastern Europe: Incorporating postcommunist countries in a welfare regime typology. Contemporary Issues and Ideas in Social Sciences, August 2007. Ferrera, M. (1996): The ’Southern Model’ of Welfare in Social Europe Journal of European Social Policy February 1996 6: 17–37. Flathman, R. E. (1966), Public Interest. John Wiley and sons, New York. Gallo, D. (2011), “Social security and health services in EU law: Towards convergion or divergience in competition, state aids and free movement.” EIU Working paper RSCAS 2011/19. Giarini, O. (2009), Editorial: “Welfare and the wealth of nations.” European papers on the new welfare, No.11, 2009. Goldkuhl, G. and A. Röstlinger (2000), Beyond goods and services – An elaborate product classification on pragmatic grounds. Conference paper presented at the Seventh international research symposium, Karlstad 2000. Goodin, R. (1996), “Institutionalizing the Public Interest: The Defence of Deadlock and Beyond.”American Political Science Review, Vol. 90, p. 331–342. Gravelle H. and R. Rees (1981), Microeconomics. 2nd edition, Longman Group, London. Gunn, J. A. W. (1968), “Jeremy Bentham and the Public Interest.” Canadian Journal of Political Science, Vol. 1, p. 398–413. Hall, David (2012), “Re-municipalising municipal services in Europe.” Public Services International Research Unit (PSIRU), University of Greenwich. Hartman, Laura, red. (2011), Konkurransens konsekvenser. Vad hander med svensk välferd? SNS FÖRLAG, Stockholm. Hemerijck, A., Verena Dräbing, Barbara Vis, Moira Nelson and Menno Soentken (2013): European Welfare States in Motion. NEUJOBS Working Paper No. D5.2/March 2013. Amsterdam/Lund. Hicks, J. R. (1939), “The Foundations of Welfare Economics.” Economic Journal, 49, p. 696–712. Humer, A., Rauhut, D. and Marques da Costa, N. (2013b) European Types of Political and Territorial Organisation of Social Services of General Interest; in: Romanian Journal of Regional Science, Vol. 7, pp. 142–164. Jacquot, Sophie (2008): National Welfare State Reforms and the Question of Europeanization: From Impact to Usages. REC-WP 01/2008 (Working Papers on the Reconciliation of Work and Welfare in Europe), Sixth Framework Programme. Jefferys, Steve (2012), “Shared business services outsourcing: Progress at work or work in progress?” WLRI Working Paper 11, London metropolitan university.

The concept and definition of SGI

71

Kaldor, N. (1939), “Welfare Propositions in Economics and Interpersonal Comparisons of Utility.” Economic Journal, 49, p. 549–552. Kildal, N. (2013): Den norske velferdsstaten: Fra sosiale til kontraktbaserte rettigheter. Tidsskrift for velferdsforskning, vol. 16, nr. 2. Fagbokforlaget, Bergen. Lippman, W. (1955), The Public Philosophy. Hamish Hamilton, London. Lipsey, R. G. and K. Lancaster (1956–57): “The general Theory of Second Best”, Review of Economic Studies 24:11–32. Littke, H. and Rauhut, D. (2013) Minimum levels of Services of General Interest – What fundamental rights do individuals and enterprises have?; in: Europa XXI, Polish Academy of Sciences, Vol. 23, pp. 47–68. Palier, B. (2006): The Europeanization of Welfare Reforms. Inequality Summer Institute 2006, Kennedy School of Government, Harvard University. Palier, B., ed. (2010): A long Goodbye to Bismarck? The Politics of Welfare Reforms in Continental Europe. Amsterdam University Press. Polacek, R. et al. (2011), “Study on social services of general interest.” Final report. European Commission, DG for Employment, Social Affairs and Inclusion. Available in LSE Research Online, London School of Economics, April 2012. Rauhut, D., Smith, C., Humer, A., Ludlow, D. and Borges, L. (2013) SeGI Indicators and perspectives for services of general interest in territorial cohesion and development ESPON Applied Research 2013/1/16, Final Report j Version 25/5/2013, Luxembourg. Rawls, J. (1999), A Theory of Justice. rev.edition of 1971 edition, Harvard University Press. Rothstein, B. (2001), “Social Trust and Honesty in Government: A Causal Mechanisms Approach”. in Kornai, J., Rothstein, B. & Rose-Ackerman, S. (eds). Creating Social Trust in Post-Socialist Transition. Palgrave/Macmillan, New York. Roxbee Cox, J. W. (1973), “The Appeal to the Public Interest.” British Journal of Political Science, Vol. 3, p. 229–241. Samuelson, P. A. (1955), “Diagrammatic Exposition of a Theory of Public Expenditure.” The review of Economics and Statistics, Vol. 37, p. 350–356. Schelling, T. C. (1984) Choice and Consequence. Cambridge, MA Harward University Press. Spicker, P. (2011), Europe Risks Undermining Public Services. http://www.publicservice europe.com/article/298/europe-risks-undermining-public-services. Stamsø, M.A. (2009): Velferdsstaten i endring. Norsk sosialpolitikk ved starten av et nytt ”rhundre. Gyldedal akademisk, Oslo. Stiglitz; J. (1998), “Distinguished Lecture on Economics in Government: The Private Uses of Public Interests: Incentives and Institutions.” The Journal of Economic Perspectives, Vol. 12, pp. 3–22. Stiglitz, Joseph (1986), Economics of the public sector. 3rd edition 2000, W.W. Norton & Company, New York/London. Stringham, E. (2001), “Kaldor-Hicks Efficiency and the Problem of Central Planning.” The Quarterly Journal of Austrian Economics, Vol. 4, p. 41–50. Szyszczak, E., J. Davis, M. Andenes, T. Bekkedal eds. (2011): Developments in Services of General Interest. T.M.C. Asser Press, The Hague. Titmuss, R.M. (1968), Commitment to Welfare. Unwin University Books, London. Titmuss, R.M. ( 1974), Social Policy. An introduction. George Allen & Unwin LTD, London.

72

Hild Marte Bjørnsen et al.

Van de Walle, S. (2008), “What services are public? What aspects of performance are to be ranked? The case of “services of general interest”.” International Public Management Journal, Vol. 11, p. 256–274. Walker, R.A. (1985), “Is there a service economy? The changing capitalist division of labour”. Science & Society, Vol. XLIX, No.1, p. 42–83. Urban Research Centre, University of Western Sydney (2008), Housing Affordability Literature Review and Affordability Housing Program Audit. University of Western Sydney. A5-0484/2003: http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+ REPORT+A5-2003-0484+0+DOC+XML+V0//EN [2014–08–19].

Alois Humer, Daniel Rauhut and Heinz Fassmann

Chapter 3: Drivers of the Provision of SGI

1.

Introduction

Services of General Interest (SGI) is a concept used within EU policy making, and represents services which are provided for society and businesses. The provision is not fully exposed to unregulated market channels. Since SGI are characterised as ’universal services’, responsibilities are assigned to the public authorities and EU citizens and undertakings is given right to access Services of General Interest. In this sense, the SGI concept is similar to the concept of public goods (for a detailed discussion on concepts and definition see the previous chapter of Bjørnsen et al.). The SGI concept however allows for the individual EU Member State to draw the limit between what should be included and what should be excluded from the definition, or which services that should be publicly – tax – financed or financed via the market, and thus which services that might be exempted from EU rules of competition and single market. Key EU policy documents state that SGI form a cornerstone of the European Model of Society and that they play an important role in stimulating regional economic growth. This chapter aims to discuss the drivers and determinants of the provision of Services of General Interest on a conceptual basis and the framework in which SGI provision takes place. As outlined in the introductory chapter in this edited volume by Fassmann et al., the concept of SGI in Europe can be approached in three ways. Due to the analytical-conceptual purpose of this chapter, the contextual and policy perspectives are central whilst an explicit discussion of legal implications is of minor interest. The discussion is organised in several steps. Firstly, the dual design of SGI provision is presented, looking at the construction of SGI provision and the fulfilling of related standards designed by two sides: the organiser/provider side and the demand/user side. Secondly, this setting is relativised according to space and time components by arguing that pre-conditions of territories and time-dynamic processes affect the dual design of SGI provision Thirdly, it will be pointed out that the SGI setting is deeply embedded in political systems which might be very different according to regional con-

74

Alois Humer et al.

ditions and changes over time. Fourthly, the political system is shaped by external drivers from the social, demographic, economic, and environmental spheres. Altogether, this chapter will conceptually address the impact on SGI standards of availability, affordability, accessibility, quality and variety according to the four steps of (i) organisation and demand, (ii) space and time components, (iii) political embeddedness and (iv) external driving systems. With these four steps, an overall conceptual model of SGI provision and drivers is presented. The policy system is identified as a bridge between SGI provision and external drivers and so discussed explicitly in the conclusions.

2.

EU standards and the designers of SGI provision

Services of General Interest are a notion of EU policy and so a normative concept. The definition upon the ‘general interest’ does not follow theoretical, analytical approaches to the publicness or non-excludability of goods and services (Buchanan 1968; Samuelson 1954) but is created through public choice (Marmolo 1999; Kaul and Mendoza 2003). The many communications of the European Union and its bodies concerning the requirements for satisfying provision of SGI (see e. g. CEC 2003, 2004 and 2007 and Bauby et al. 2004) can be summarised to five standards: (1) secured availability, (2) accessibility, (3) affordability, (4) quality and (5) variety/choice. These standards are ranked in an ordinal scale in a way that the first standard is the most basic, whilst the fifth standard completes a successful SGI provision. (Humer 2014b, Constantin et al 2013, Borges et al. 2013). These five consecutive standards can be described as follows: Availability. The very basic standard of SGI provision is obviously the simple presence of an SGI. A service has to be there for citizens and businesses. More specifically, the present SGI must be of secured availability to users. Only then, the idea of SGI – i. e. serving basic needs for livelihood, respectively production and trade – is met. Already short interruption in the operation or uncertainty about the lifetime of a service is harmful to good standards of SGI. Users have to rely on a continuous operation of an SGI. Accessibility. Following the secured availability of an SGI, the locations and facilities of SGI must be well accessible for the users in a physical sense, respectively, mobile services must easily be able to access the locations of their users. Already with this second standard, the normative character of SGI gets visible. To define, what is good accessibility for a certain SGI, is a matter of negotiation between providers and users and dependent on framing conditions. Affordability. Secured availability and easy accessibility do not necessarily

Drivers of the Provision of SGI

75

make SGI useable by citizens and businesses. There is the additional question of financial affordability. This third standard of SGI provision foresees a reasonable monetary effort in SGI provision – and in the case a supporting re-distributive system – so that users are actually entitled as well as able to make use of a certain SGI. Quality. A further feature in the consecutive list of standards is the quality of an SGI. Here, again, the normative estimation of what is good quality of a certain SGI is at stake. The previously mentioned standards of availability, accessibility and affordability can be consulted to express the quality of an SGI. Variety. A fifth and final standard of SGI provision, the variety of provision, rounds up the consecutive standards that are postulated in the EU documents on SGI. Users should in ideal case be able to choose between similar, but still targeted kinds of certain SGI that meet their needs best. The variety standard asks for a trade-off between collective one-size-fits-all and individualised SGI solutions. The construction of SGI provision and fulfilling of related standards is designed by two sides: organisation/provider side and demand/user side. It would be too simple to declare SGI provision as a sole matter of the provider side. Providers may be the decisive side for organising and implementing SGI, but the standards to be reached are co-designed by the user side and their expressed needs and intentions. So, availability, accessibility, affordability, quality and variety of a specific SGI in a specific context is reflected by the user demand and provided by the different modes of organisation. Aspects such as a minimum level of availability, accessibility, affordability, quality and variety of a specific SGI are not determined in the key EU policy documents (Littke and Rauhut 2013) but are decided in national contexts within the co-design of providers and users in ‘specific conditions’. SGI providers. When we first look into the provider side, the SGI organisation comprises the division of (public) responsibility as well as the modes of production, finance and delivery of SGI (Ludlow and Rauhut 2013; Humer, Rauhut and Marques da Costa 2013). Within SGI organisation, public, private and civic providers are in charge of SGI provision – in co-operative arrangements or exclusively. The possible modes of production and finance are to be seen within the provider-triangle of public, private and civic. Since the 1980s, New Public Management (NPM) has aimed to make the public sector more efficient. The basic hypothesis holds that market-oriented management of the public sector will lead to greater cost-efficiency for governments, without having negative side-effects on other objectives and considerations (Hood 1991). Public service production includes the three keywords: markets, managers and measurement (Ferlie et al. 1996). In the economic literature, there is a consensus that not all services can be

76

Alois Humer et al.

subject to market competition. There are distortions to a free and competitive market that bias an allocative efficiency. These distortions are usually labelled as market failure and justify public action: (1) imperfect competition, (2) social priorities such as equity, (3) externalities (e. g. noise, pollution and congestion), and (4) missing markets (Begg et al. 1987). However, the general picture of Services of General Interest is that of an interplay of public, market and civic forces. This brings us to financial issues. Whether the services are privately produced or not, public provision of services is often criticised for not taking into consideration a pricing-effect. Paying a price for a service has a direct effect on the overall demand for this service. If the users have to pay directly, they will prioritise between the SGI and other goods and services. If the price is zero, demand is, many claim, indefinite. To deal with this, public provision is often combined with a certain – in many cases relatively small – price for the user. User payment contributes to restricting demand, and at the same time it reduces pressure on the tax system. Generally, the public, would to a greater degree, accept user payment if the income level is high. Economic growth, where especially the middle classes’ income increases, therefore leads to a reduction in the legitimacy of the public provision of welfare services (see Easterlin 1998, Kristov et al 1992, Lindert 2004). The responsibility for SGI organisation can lie with different public levels – be it the national state, provinces or regions or at the local level. Over the last 20 years, an increasing decentralisation of public services has occurred in Europe (Lankina et al. 2008, Wollmann and Marcou 2010). To some extent this trend can be understood in the context of NPM in general and the shift from central planning to market economy in East-Central Europe. The actual delivery of an SGI – i. e. the action where SGI and user meet – can be explicitly managed by spatial plans and further distributive programmes or, rather be left to market forces. SGI users. SGI demand on the other hand is formulated by users on a collective and individual level and co-designs SGI provision. Users can be citizens, families and households as well as private businesses or also institutions – accordingly they may formulate different needs and follow different intentions. The issue of what can be considered as a minimum provision of SGI is subject to the ideological preferences and moral values of the decisive actors/designers. From a user-perspective, a distinction between individual and collective intentions is of crucial importance. The Theory of Public Goods (see e. g. Buchanan 1968) highlights the specificities of service consumptions in case of collective – i.e. non-excludable – services or goods. Individual strategies for consuming collective services will – due to the so-called ’free rider problem’ – led to a less than perfectly efficient provision which can find its expression in

Drivers of the Provision of SGI

77

unsecure availability or limited quality, for example. What is of foremost important here is that users have an impact on the five standards of SGI provision, together with the providers.

SGI organisation:

responsibility, production, finance, delivery (public + private + civic) providers

SGI standards of provision:

availability, accessibility, affordability, quality, variety

users (citizens & businesses & institutions)

SGI demand:

collective and individual needs/intentions

Figure 1: Standards and designers of SGI provision (modified after Humer, Fassmann and Rauhut 2013), Graphics and design: J. Eder/A. Humer.

So far the ideal design of SGI provision must be clear that both, providers’ and users’ actions, are not static over time and space and are constrained and affected by surrounding systems. The next section offers a comprehensive overview, discussing time and space dynamics, policy systems and also external drivers like socio-demographic development or economic conditions as an explanation for SGI provision. All drivers entail spatio-temporal characteristics that give the design of SGI provision, the mentioned ‘specific conditions’. For conceptual purpose, the dimensions of space and time and the surrounding drivers will be first discussed separately – it goes without saying that they are of course interrelated– and how they impact on the five standards of SGI provision via the intermediating system of policy. Figure 2 highlights the spatio-temporal dynamic brackets of SGI provision, how they are embedded in political conditions and influenced by external drivers of demography, society, economy, and cultural and natural environment.

78

Alois Humer et al.

Society

Economy

social values, social threats, family structures, lifestyles

macro conditions, micro potentials, labour market

Policy

welfare models, governance, spatial planning, sector policies

SGI organisation:

responsibility, production, finance, delivery

SGI standards of provision:

availability, accessibility, affordability, quality, variety

time / change

space / territory

(public + private + civic) providers

users (citizens & businesses & institutions)

SGI demand:

collective and individual needs/intentions

Demography

age structure, fertility behaviour, migration patterns

Cultural and natural

Environment

built-up area, climate conditions, energy resources, topographic features

Figure 2: SGI provision within spatio-temporal brackets, embedded into policy systems and surrounded by external drivers (modified after Humer, Fassmann and Rauhut 2013 and Humer 2014a), Graphics and design: J. Eder/A. Humer.

3.

Dynamic conditions of SGI provision: space and time

In the above model, the co-design of SGI standards between providers and users is set within a spatio-temporal bracket. Whenever elaborating on the provision of SGI, the actual territorial situations and dynamics over time need to be taken into account. Depending on the spatial setting and regional prerequisites as well as temporal changes, certain standards of certain SGI may be significantly different. Space/territory. All surrounding driving systems of SGI provision – i. e. policy as well as demography, society, economy and environment – are characterised in regional settings. Therefore, SGI provision has to be seen from a territorial dimension. The characteristics of a region itself – population density, geographic features etc. – as well as the relation of a region to other territories are an important condition for all drivers. Generally, territorial characteristics are very long term and difficult to influence; so they are setting an important frame for

Drivers of the Provision of SGI

79

SGI provision. The different types of territory such as islands, mountainous or peripheral regions but also corridors and hubs of high regional and continental connectivity are of stable character and SGI provision needs to take these territorial framings into account, especially when it comes to the standard of accessibility and to issues of critical mass. Copus et al. (2011) as well as Gløersen et al. (2012) provide in their empirical research insight into specific types of territory and the challenging situation nowadays, especially faced by rural regions (see also Rauhut et al. 2013, Swiatek et al. 2013). Regions that struggle with long distances in the provision of SGI face higher efforts for provision and expenditures per produced SGI unit. Time/change. All surrounding drivers of SGI provision – i. e. policy as well as demography, society, economy and environment – undergo changes over time. Therefore, analysing the SGI provision has to be seen in a time dimension. A major time component of SGI is the matter of technology and modernisation. Fiscal incentives and structural measures can accelerate technological progress to some extent – as highlighted by Capello et al. (2012) but huge innovations cannot be forced but just happen, as history has proven many times. With new technologies, new possibilities for SGI provision may be created – e. g. in the areas of communication and transportation. Established SGI provision too might become obsolete or undergo changes due to new possibilities. Next to technological jumps in the course of innovation, steady modernisation processes form a frame for SGI provision and may influence standards of quality and variety. Long-term economic growth, prosperity and welfare, are determined by factors such as (for example) the capability to produce technological innovations, the social capability to adapt to new technology, the educational level of the labour force and the values in society towards economic activity and existing institutions (Abramovitz 1956, 1995; Gerschenkron 1952; Kuznets 1966; Lucas 1988; Romer 1986, 1987, 1990; Rostow 1960, 1990; Solow 1956, 1957). Additionally, these two major dimensions of space and time must be brought into connex, as the historic path of public services shows. At the beginning of industrialisation in the 18th and 19th centuries, the public was most concerned about SGI provision in the fast-growing industrial urban areas, the focus has however turned quite strongly in the peak of the modern welfare state towards full SGI provision for rural, peripheral settlements on an equal level as in urban areas. In a current post-Fordist regime and in a time of economic crises, a new negotiation of SGI provision for different types of territory takes place (Humer 2014a).

80

4.

Alois Humer et al.

The embeddedness of SGI provision into political systems

The political sphere is a crucial driver or even intermediator of SGI provision in a way that it translates demographic, societal, economic and environmental aspects into legislation, governance structures and practices. It decisively frames the co-design of SGI providers and SGI users, as well as appearing on both sides as organiser and demander of SGI in institutionalised form. In this operational sense, the policy system defines the procedures of SGI provision by interpreting the possibilities within the overall spatio-temporal conditions. Welfare policy targets the production and finance of SGI especially, while spatial policies may shape the delivery of SGI and arrangement and accessibility of SGI facilities. The allocation of limited public budgets and the important role of local levels are two major lessons in recent times (see Schmitt et al. 2012) that have an impact on policy modes of SGI provision. Furthermore, the ideology of provision is of special importance. In some EU member states, childcare is an issue for the family, while in others it is provided by the state via government subsidies. Elderly care is similar in this case. Some countries have extensive labour market services, while others have basically none at all; etc. This reflects the ideology of the provision of SGI in the EU member states. In accordance with ideology, matching institutions have emerged to enhance the ideologically desired provision of SGI. Also, from a sectoral policy perspective, certain SGI may be weighted very differently within a comprehensive welfare system. SGI provision is a substantive part of welfare policy and given to the spatial character of services, it is also a territorialisation of welfare policy (Humer 2014b). There are many issues connected with the financing of services on the local and regional levels which represent a traditional ‘conflict’ within welfare economics, a debate which is encapsulated in the conflict between equity and efficiency. Given that decentralising the responsibility for providing certain services to sub-national authorities is often represented as efficient and democratic, there is an interesting discussion to be had. The central government can reduce these differences by creating rules and regulations – i. e. minimum standards – within which the SGI are to be provided. One might argue that this is in conflict with local and regional priorities and therefore democracy issues. At the same time, such regulations are national and therefore represent national priorities. Another way of reducing regional differences is to reduce the local tax base’s influence on local public income. This is done by re-distributing income between localities and regions, for instance using a so-called municipal income system. In this case, the poorer regions will be allocated additional funding and it will become easier for them to finance SGI within the boundaries set by national standards. The central government can also add money to the re-distribution

Drivers of the Provision of SGI

81

system, if it wants to expand the provision of local and/or regional SGI and react on regionally different SGI demands. Over- or under-supply of SGI can be seen as the consequences of rigidities in the economic and political system. The next point in our argument is not controversial: the tax base in the richer regions is larger than that in the poorer ones. This implies that the richer regions have more money to spend on SGI, and vice versa. This directly and negatively affects the provision of SGI in the poorer regions. At the same time the richer regions may even seek to reduce their tax claim and privatise some SGI, as income levels are high and the public is inclined to pay more themselves as income grows. These two factors endow richer regions with significant benefits. The political system is furthermore a consequence of demographic, social, economic and environmental drivers. Age structures, population densities, educational status, monetary possibilities etc. all influence the design of a political programme and so they influence the provision of SGI.

5.

The driving systems of SGI provision

In this section, the proposed four external drivers of demography, society, economy and environment are discussed. Interrelations between the drivers are not neglected but for the purpose of this chapter, focus is given to the direct links towards SGI provision and the territorial and temporal dimensions of each driver. Two groups of drivers will be distinguished. On the one hand, there is a sort of drivers that is in mutual relation with SGI provision in a way that these drivers shape SGI provision but are as well shaped – or at least influenced – by SGI; e. g. economy and society. On the other hand, there is a second, rather passive sort of drivers that determines the framing conditions in which SGI provision takes place but are vastly unaffected by the conditions of SGI provision; e. g. demography and environment.

5.1.

Interactive drivers of SGI provision: economy and society

Society. Society is an integral part of both sides of the conceptual model. First, societal values shape demands of users and second, civic society is part of provider-arrangements as well. In a collective sense of SGI demands, societal values interpret and influence the five standards of SGI provision – e. g. what is understood as affordable SGI provision or which quality of SGI provision is acceptable? These values address the collective part of SGI demand and are built upon the multitude of individual needs and interests that every participant of society expresses in order to make one’s living. Since SGI should satisfy basic

82

Alois Humer et al.

needs, assure social inclusion and allow full participation in society, central issues of livelihood – such as labour-participation, access to education, free movement, etc. – the demands towards standards of SGI provision are formulated accordingly. SGI provision is therefore at the core of preventing poverty and social exclusion, as also stated by Kahila et al. (2012). Apart from the basic needs, which are always socially constructed, lifestyle aspects also influence the usage of SGI, for instance in respect of the choice over a desired pedagogic approach at school, medical treatment or environmental concern and is a matter of affordability of course. Here, income distribution is of critical importance on the individual operational level as persons with low income often simply cannot afford to travel (i. e. use some types of transport), buy a smartphone, send their children to a school with tuition fees, buy health insurance, etc. The use of SGI can, however, in part be stimulated by subsidised provision of these services to hamper the negative effects of a skewed income distribution. In some EU member states the unemployed show marked demographic traits: +55 years, young adults, women or immigrants. To what extent a person uses SGI is related to the individual and regional income distribution. Societal values may be different by region but change even more over time. This concerns large and long-term changes from a modern to a post-modern, plural, knowledge-based society and also short-term trends and temporal emphases by putting special issues like ecological behaviour, integration issues, etc. high on the daily agenda. Family and household structures undergo changes in the long term and highly affect the situation of SGI provision. Multi-generation households may organise services themselves – like child or elderly care – while single households need much stronger institutionalised care. Economy. The macro-economic conditions within which SGI provision takes place is another important driver (Humer and Palma 2013). The potential influence of private spheres in SGI organisation is highly dependent on the – financial – means and the understanding of macro-economic functioning. Macro-economic performance is in any case way important for the production of basic goods and services, regardless of whether the SGI is provided by private or public actors, economic booms or busts will affect service provision. The final set of SGI – of certain standards – that is to be provided for the citizens and businesses is to great extent a political choice (see section 2 of this chapter). The economic question of how these services can be provided most efficiently is one of resource allocation. Research shows that using the resource allocation perspective, there is no difference between efficiency in the private or public production of SGI (Hartmann 2011). If the conditions for production are the same, private production of SGI is relatively more expensive than public, as the private producers want returns on their investments. Russo et al. (2012) clearly identify high quality services and infrastructure as factors increasing the attractiveness

Drivers of the Provision of SGI

83

and competitiveness of regions. So, SGI provision is dependent on the economic capacity of the service provider and the economic surplus which can thus be transferred to SGI. The income distribution is of great importance too, as it has an impact on which kinds of SGI will be in demand with regard to quality as well as quantity. Short-term changes in the supply and demand of SGI are also dependent on short-term economic fluctuations resulting from variations in the economic surplus and the income distribution. The long-term development of SGI is a function of long-term economic development in that it essentially follows primary economic trends. Thus time will be available to correct imbalances between demand and supply as a consequence of the long-time perspective (see Gaspar et al. 2005, Johansson and Rauhut 2005). Furthermore, macro-economic conditions go hand-in-hand with microeconomic potential of citizens and businesses, which relates to different demands on standards of SGI provision. E. g., a high share of wealthy households will probably raise expectations on – and potential for – consuming high quality, varied SGI.

5.2.

Determining drivers of SGI provision: demography and environment

Demography. Short-term demographic changes and long-term developments are dependent on economic fluctuations, societal behaviour and changes in social and family policies. Nevertheless, broad demographic trends tend to be quite stable and long term in nature. Population structures – i. e. sex ratio, age structure – are determined primarily by births and deaths and secondly by migration. Both factors are embedded into wider socio-economic developments and difficult to reverse. Policy interventions may influence short-term developments but may not change the long trend of demographic change. For Europe in the coming decades this means an ageing society with low birth rates and high life expectancy as well as migratory patterns in favour of urban areas on a regional scale and in favour of prosperous macro-economic regimes on continental scale, as De Beer et al. (2010) found out in a European research project ESPON DEMIFER. Kurekova (2013) proves welfare and SGI policies are a factor in in- or out-migration. These developments on regional and international scale influence the SGI provision in terms of changing foci on specific SGI – like mobility, care and educational services – and their standards – e. g. availability – and changing critical mass – affordability – in most regions. Immigration has, in general, a positive impact on the age distribution as inmigrants are often in the active ages while the contrary is true for out-migration regions. On the other hand, immigration generally increases the pressure on SGI in the sense of adapting measures in social security schemes or in case immi-

84

Alois Humer et al.

grants are over-represented among those dependent on welfare. The positive aspect due to the demographic change is the observation that the demand for different types of SGI is a function of the cohort development in a country, region and municipality from the cradle to the grave and can be predicted better than e. g. economic development especially in the short term. The most ‘disturbing’ factors are associated with short-term variations in migration and are often a function of non-demographic factors outside the control of the immigration country. Cultural and natural environment. Climate change is a global megatrend that in some way or another impacts on all human activities – change simply needs adaption. There is a wide set of measures for mitigating climate change features but it cannot be steered in a direct sense. In this case it is less about needed changes of SGI provision in response to climate change but foremost it is about possible contributions of SGI provision for supporting adaptive measures by using less energy and CO2 intensive ways of SGI provision. Greiving et al. (2011) highlight the importance of an efficient built environment – i. e. settlement and transportation patterns – that would allow a more efficient use and distribution of energy and social services. Apart from long-term climate trends, single (hazardous) environmental events can harm the most basic SGI standards of a secured availability and constant accessibility of SGI. Infrastructures and facilities of SGI therefore may need special protection and construction in case of emergencies. The physical environment also provides resources especially for SGI relating to energy supply. Topographic features like bodies of water, exposure to wind and solar radiation or geological values in terms of fossil resources provide a decisive framework for the possibilities and finally choice of energy supply modes. It remains however a matter of the political system whether to exploit and favour certain resources or not.

6.

Discussion

So far this chapter has offered a conceptual picture of SGI, in which certain normative standards are co-designed by providers and users. Zooming out, this co-design is embedded into a certain spatio-temporal and political setting, and hugely influenced by interactive drivers of the economic and social systems as well as pre-determined by long-term demographic developments and environmental conditions. There is also qualitative support for the conceptual framework outlined in this chapter. Swiatek et al. (2013: 127–128) study SGI in nine regions in nine European countries – Austria, Germany, Hungary, Iceland, Norway, Poland, Romania, Spain and the United Kingdom. The findings suggest that economic

Drivers of the Provision of SGI

85

conditions and the demographic structure are the two determinants of Services of General Interest. “Areas with concentrated demand benefit from higher availability of SGI, which in such areas are more accessible, with higher quality and more affordable due to economies of scale. Remote, mountainous, rural and other regions with lower population density have fewer services available”. They also note that political intervention can adjust poor accessibility, affordability and quality of SGI. Such intervention is however costly and the financial pressure most governments experienced after the 2008–2009 crises have resulted in budget cutbacks. Hence, areas with a relatively low aggregated demand have faced poorer accessibility, affordability and quality in the provision of SGI. This conclusion on political intervention is supported when considering Social Services of General Interest (SSGI) versus Services of General Economic Interest (SGEI). Relatively, the highest provision of SSGI is found in the more peripheral areas of the EU15 countries; i. e. eastern Germany, the Alpine region, northern Spain, southern Italy and in the Nordic periphery. This indicates a strong national political commitment to SSGI provision in order to counteract territorial disadvantages, a negative population development and a weak economic structure (BBSR 2013, Humer and Palma 2013). Hence, what intervention and support actions are on the political agenda are not always the most efficient ways of helping disadvantaged regions in terms of SGI provision (Littke et al. 2013). In a study on Eastern Austria, the Ruhrgebiet in Germany, D¦l-Alföld in Hungary, Mazowsze in Poland and Navarra in Spain, Stepniak and Rosik (2013) conclude that the type of welfare regime did not impact the accessibility of SGI. Territorial aspects in terms of the centrality level of the type of services played a more important role. There was a good provision of low centrality services, such as primary education and pharmacies, in all regions, while regions with a lower population density started to experience a less accessibility to SGI regarding medium centrality services – secondary education, hospitals and railway stations. Remote, mountainous, rural and other regions with lower population density have a poor accessibility to high centrality services, such as tertiary education, motorway entry points and airports. Areas with a high population density have moderately good to good accessibility to high centrality services. The reduction in provision of SGI in general, and SSGI in particular, will have social implications. In many EU countries the financial crises 2008–2009 have led to budget cuts. Many of the SSGI have been implemented as a response to social needs, e. g. elderly care, childcare, social housing, education and labour market services. In some countries the question is if the governments can actually maintain and even guarantee, a minimum provision of SGI. If the national governments cannot do this, who can? “The larger policy challenge here then is not simply about solving the acute financial problems faced by some EU

86

Alois Humer et al.

countries, rather, there is now clearly a real need to resuscitate the policy of economic, social and territorial cohesion while at the same time addressing the unequal distribution of SGI within and between different regions and countries across the EU 27+4 space” (Rauhut et al. 2013: 48). Prior to the financial crises a significant improvement in SGI in general, and SGEI in particular, was noted in the study by Noguera-Tur et al. (2009). Parallel to the development identified by Noguera-Tur et al. (2009), a significant decentralisation of public services has occurred in Europe over the past 20 years (Lankina et al. 2008, Wollmann and Marcou 2010). The shift from central planning to market economy in East-Central Europe plays of course an important role in this context as do the implementation of New Public Management in public services. Notwithstanding this, the actual delivery of SGI, i. e. the action in which the producer of SGI and the user of it actually meet, has to a large extent been left to market forces. Compared to the results found in the ESPON Study SeGI by Rauhut et al. (2013) changes in and a variation of the provision of SGI – both in terms of SGEI and in SSGI – can be observed over time.

7.

Conclusions

The functioning of Services of General Interest is a complex, dynamic and regionally diverse issue seen from both a provider and user perspective. Apart from the pure SGI focus, socio-demographic, economic and environmental influences impact on the political system in which SGI provision is embedded. The role of a normative policy frame is central to further research and understanding of Services of General Interest. Indeed, demographic change and macro-economic conditions etc. do change prerequisites of SGI provision, but the question remains of how sectoral and spatial policies can translate and bridge these developments into the designing of SGI provision. For example, the demographic ageing of society definitely changes the demand for elderly care, but if policy reacts to these additional efforts for care in terms of increasing the budget for elderly care itself or introduces family-beneficial changes in order to allow home-care it is a normative decision, based on political programmes and ideologies. So the political system must be seen as a bridge or an inter-layer between external drivers and SGI provision.

Drivers of the Provision of SGI

87

References Abramovitz, M. (1956): Resource and Output Trends in the United States Since 1870, American Economic Review, Papers and Proceedings (May 1956), 5–23. Abramovitz, M. (1995) Tankar om tillväxt. Finland: SNS förlag. BBSR (2013) European Atlas of Services of General Interest. Bundesamt für Bauwesen und Raumordning, Bonn. Bauby, P., Hall, D., Thiry, B., Sak, B. (2004) Contribution of Services of General Interest to Economic, Social and Territorial Cohesion. Final Overall Report. DG Regio Contract No 2003.CE.16.0.AT.038, CIRIEC, LiÀge. Begg, D., Fischer, S. and Dornbusch, R. (1987) Economics. London: McGraw-Hill. Borges, D., Humer, A., Johannesson, H. and Rauhut, D. (2013) ‘Explorative scenarios’, in Rauhut, Marques da Costa and Humer (eds.) Scientific Report to Indicators and perspectives for services of general interest in territorial cohesion and development. Luxembourg: ESPON. Buchanan, J.M. (1968) The Demand and Supply of Public Goods; Rand McNally & Co., Chicago. Capello, R. et al. (2012): ESPON KIT – Knowledge, Innovation, Territory. ESPON Applied Research Project 2013/1/13 Final Report, Luxembourg. CEC (2003), Green Paper on Services of General Interest, COM (2003) 270 final, Brussels. CEC (2004), White Paper on Services of General Interest, COM (2004) 374 final, Brussels. CEC (2007), Services of general interest, including social services of general interest: a new European commitment, COM (2007) 725 final, Brussels. CEC (2011), Seventh progress report on economic, social and territorial cohesion, COM (2011) 776 final, Brussels. Constantin, D., Grosu, R.M. and Iosif, A. (2013) “Exploring the Territorial Capital, Global Competition and Territorial Cohesion Policy : A Swot Analysis of Services of General Interest”, Romanian Journal of Regional Science Vol. 7, June 15: 124–141. Copus, A. et al. (2011): ESPON EDORA – European Development Opportunities in Rural Areas. ESPON Applied Research Project 2013/1/2 Final Report, Luxembourg. De Beer, J. et al. (2010): ESPON DEMIFER – Demographic and migratory flows affecting European regions and cities. ESPON Applied Research Project 2013/1/3 Final Report, Luxembourg. Easterlin, R.A. (1998): Growth Triumphant: The Twenty-first Century in Historical Perspective. University of Michigan Press. Ferlie, E., Ashburner, L., Fitzgerald, L., and Pettigrew, A. (1996) New Public Management in Action. Oxford: Oxford University Press. Gaspar, J., d’Abreu, D., Marques da Costa, N., Marques da Costa, E., Barroqueiro, M. and Estevens, A., Rauhut, D. (2005): Ageing, Labour Shortage and ‘Replacement Migration’. ESPON Thematic Project 1.1.4 Final Report Annex B, Luxembourg. Gerschenkron, A. (1952) ”Economic Backwardness in Historical Perspective”, in B.F. Hosilitz (Ed.) The Progress of Underdeveloped Areas. Chicago: Chicago University Press.

88

Alois Humer et al.

Gløersen, E. et al. (2012): ESPON GEOSPECS – Geographic Specificities and Development Potentials in Europe. European perspective on specific types of territories. ESPON Applied Research Project 2013/1/12 Final Report, Luxembourg. Greiving, S. et al. (2011): ESPON CLIMATE – Climate Change and Territorial Effects on Regions and Local Economies in Europe. ESPON Applied Research Project 2013/1/4 Final Report, Luxembourg. Hartmann, L. (2011): Konkurrensens konsekvenser. Vad händer med svensk välfärd? SNS FÖRLAG, Stockholm. Hood, C. (1991) A Public Management for All Seasons. Public Administration 69 (1): 3–19. Humer, A. and Palma, P. (2013): The provision of Services of General Interest in Europe: regional indices and types explained by socio-economic and territorial conditions; in: Europa XXI, Polish Academy of Sciences, Vol. 23, p. 85–104. Humer, A., Fassmann, H. and Rauhut, D. (2013) Determining and interactive drivers of Services of General Interest; ESPON SeGI Scientific Report Chapter 5, Luxembourg. Humer, A., Rauhut, D. and Marques da Costa, N. (2013), European Types of Political and Territorial Organisation of Social Services of General Interest, accepted for the Romanian Journal of Regional Science, 2013-I. Humer, A. (2014a) Services of General Interest in der EU – räumliche und raumpolitische Dimensionen. Dissertation at the University of Vienna, August 2014. Humer, A. (2014b) Researching Social Services of General Interest: an analytical framework derived from underlying policy systems. In: Journal of European Spatial Research and Policy ESR& P, Vol. 21, p. 65–82. Johansson, M. and Rauhut, D. (2005): ESPON 1.1.4 – The Spatial Effects of Demographic Trends and Migration. ESPON Thematic Project 1.1.4 Final Report, Luxembourg. Kahila, P. et al. (2012): ESPON TIPSE – Territorial Dimension of Poverty and Social Exclusion in Europe. ESPON Applied Research Project 2013/1/24 Interim Report, Luxembourg. Kaul, I. and Mendoza R.U. (2003) Advancing the Concept of Public Goods; in Kaul, I., Conceicao, P., Le Goulven, K. und Mendoza R.U. (2003) Providing Global Public Goods – Managing Globalization; UNDP: New York. Kristov, L., Lindert, P. and McClelland, R. (1992) ’Pressure groups and Redistribution’, Journal of Public Economics 48: 135–163. Kurekova, L. (2013) Welfare Systems as Emigration Factor : Evidence from the New Accession States. JCMS: Journal of Common Market Studies, 51(4), 721–739. Kuznets, S. (1966) Modern Economic Growth: Rate, Structure, and Spread. New Haven and London: Yale University Press. Lankina, T.V., Hudalla, A. and Wollmann, H. (2008) Local Governance in Central and Eastern Europe. London: Palgrave McMillan. Lindert, P. (2004) Growing Public. Vol. 1 and Vol. 2. Cambridge University Press. Littke, H. and Rauhut, D. (2013) ‘Minimum levels of Services of General Interest – What fundamental rights do individuals and enterprises have?’; in: Europa XXI, Polish Academy of Sciences, Vol. 23, p. 47–68. Littke H, Rauhut D and Foss O (2013) ‘Services of General Interest and Regional Development in the ESPON Space’. Romanian Journal of Regional Science Vol. 7, Special Issue, June 15: 88–107.

Drivers of the Provision of SGI

89

Lucas, R.E. (1988) “On the Mechanics of Economic Development”, Journal of Monetary Economics 22:1, 3–42. Ludlow, D. and Rauhut, D. (2013) ‘Services of General Interest: Policy Challanges and Policy Options’; in: Europa XXI, Polish Academy of Sciences, Vol. 23, p. 69–83. Marmolo, E. (1999) A constitutional theory of public goods; in: Journal of Economic Behaviour and Organization, Vol. 38, pp. 27–42. Noguera-Tur J, del Mar Garc†a-Garc†a M, Veloso-P¦rez E and Lückenkötter J (2009) Review of Current Situation and Trends: Access to services of general interest. EDORAWorking Paper No. 6. Rauhut, D., Smith, C., Humer, A., Ludlow, D. and Borges, L. (2013) Indicators and perspectives for services of general interest in territorial cohesion and development. Luxembourg: ESPON. Romer, P. (1986) “Increasing Returns and Long-Run Growth”, Journal of Political Economy 94:5, 1002–1037. Romer, P. (1987) “Growth Based on Increasing Returns Due to Specialization”, American Economic Review, 77:2, 56–62. Romer, P. (1990) “Endogenous Technological Change”, Journal of Political Economy 98:5 part II, 71–102. Rostow, W. W. (1960) The Stages of Economic Growth. Cambridge: University Press. Rostow, W.W: (1990) Theorists of Economic Growth from David Hume to the Present. USA: Oxford University Press. Russo, A. et al. (2012): ESPON ATTREG – Attractiveness of European Regions and Cities for Residents and Visitors. ESPON Applied Research Project 2013/1/7 Final Report, Luxembourg. Samuelson, P.A. (1954) The pure theory of public expenditure; in: Review of Economics and Statistics, Vol. 36, pp. 387–389, MIT Press: Cambridge. Schmitt, P. et al. (2012): ESPON TANGO – Territorial Approaches for New Governance. ESPON Applied Research Project 2013/1/21 Interim Report, Luxembourg. Solow, R. (1956) “A Contribution to the Theory of Economic Growth”, Quarterly Journal of Economics Vol. 70 No. 1, 65–94. Solow, R. (1957) ”Technical Progress, Capital Formation, and Economic Growth”, Review of Economic Statistics (August), 312–320. Swiatek D, Komornecki T and Silka P (2013) ’Services of General Interest: Empirical Evidence from the Case Studies of the SeGI Project’, Europa XXI Vol. 23: 105–130. Stepniak M and Rosik P (2013) ‘Accessibility of Services of General Interest at Regional Scale’, Europa XXI Vol. 23: 131–148. Wollmann, H. and Marcou, G. – eds. (2010) The provision of Public Service in Europe. London: Edgar Elgar.

Eduarda Marques da Costa, Pedro Palma and Nuno Marques da Costa

Chapter 4: Regional Disparities of SGI provision

Services of General Interest (SGI) are essential to promote social and territorial cohesion and can be a major boost to the competitiveness of the European economy. The provision of higher standard quality services, accessible to all and with affordable prices, can play a key role in achieving the objectives of EU cohesion and convergence processes; appropriate measurement and analysis of their regional disparities provides useful information for the policy processes. The national heterogeneity of systems providing services of general interest and the regional variation that exists across Europe can lead to significant disparities in the provision of SGI. Given the importance of these specific services in the cohesion and convergence process, the existing gaps must be recognised and reduced to ensure the policies’ success. In line with the introductory chapter in this edited volume, this chapter will focus on the political implications of Services of General Interest in a territorial context. Several factors are related to disparities across the European regions. From this perspective, five main groups arise: demographic, economic, political, social and environmental (see Borges, Humer and Smith in this edited volume). Some of the most relevant factors are linked to territorial characteristics and dynamics, but also to the purchasing power, accessibility of services or even the different political-administrative organisation models of services provision. To understand the relationship between the regional disparities of SGI provision and some of the factors previously mentioned, it is essential to perform an analysis based on relevant and sufficient indicators to show not only some territorial evidence for SGI provision, but also the regional differences linked to specific factors. In this context, different kind of indicators are considered: a group that represents the provision or availability of the services; a second group, related to expenses in services, representing the organisation of social systems; and a final group of indicators that represents contextual conditions of countries and regions as population density and economic conditions. The aim of the analysis is to re-evaluate the relationship between the regional disparities in SGI provision,

92

Eduarda Marques da Costa et al.

and the social welfare systems, exploiting the expenditure patterns of each system. This analysis allows us to evaluate possible regional and national dependencies, given the different characteristics of social welfare system of each European state. Social expenditures have particular relevance as different levels of investment, its composition and its evolution over time may be an important explanatory factor of disparities. In addition, and related to the economic and demographic group of factors, it will also address the relationship between SGI provision and the distribution of population and their purchasing power. In general, the wealthier countries can afford more generous social security programmes and are distinguished by having the best starting conditions for the provision of SGI. However, this relationship does not always translate into practical terms. In some cases, the economic factors may have a strong influence on SGI provision levels, while in others, demographic or politico-administrative factors can play a major role.

1.

Introduction

Nowadays the three dimensions of cohesion – territorial, social and economic – are at the core of EU’s political agenda. They appear expressed as objectives, not only in cohesion policy, but also in several sector European policies. Territorial cohesion was the last component to emerge in the context of the European Spatial Development Perspective (EC, 1999), a strategic document that proposes harmonious development, regionally balanced across all European regions, by reducing the social and economic regional disparities, with particular attention to the poorest regions of EU. Territorial cohesion increases importance not only in political and institutional levels – as in the Lisbon Treaty (EU, 2010), in the Territorial Agenda approved in 2007 (EU, 2007) and it’s update (EU, 2011) and the subsequent inclusion into the European Strategy for 2020 (EUROPE 2020) – but also in academic terms when supporting discussions about the convergence process and the sustainable development of cities and regions (e. g. Faludi, 2006 and 2007). From this perspective, Services of General Interest (SGI) are assumed to be important. The term appears in the EU policy process, but still as a fuzzy, allaround concept, and without consensus amongst all member states. Bjornsen, Foss and Johansen in this edited volume declare the definition of SGI as an ongoing debate. Nevertheless for the European Union, it is seen as “a key element in the European model of society” and is defined as “market and non-market services which public authorities class as being of general interest and subject to specific public service obligations” (CEC, 2003).

Regional Disparities of SGI provision

93

SGI are “essential for ensuring the social and territorial cohesion and for the competitiveness of the European economy” (CEC, 2004), and they are fundamental in the achievement of the EU goal to “become the most competitive and dynamic knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion” (EC, 2000). The specific key concept associated with the SGI definition of “general interest” is important. It leads to “specific public obligations” in the provision of the services, with the aim of ensuring universal access to services, even in those areas where the market fails to afford it. The challenge is to ensure a harmonious combination of market mechanisms and public service missions (CEC, 2004). As such, the public authorities are obliged to provide SGI within certain parameters of quality, availability, accessibility and affordability, in order to be fully accessible to everyone – as Humer, Rauhut and Fassmann also argue earlier in this edited volume. The key role of a well-functioning, accessible, affordable and high-quality SGI is for the social, environmental and economic spheres in the EU, fostered by the publishing of the Green Paper (CEC, 2003) and White Paper on SGI (CEC, 2004). More recently, in 2011, the Commission published new orientations synthesised in a document titled “A Quality Framework for Services of General Interest in Europe” (EC, 2011). The role and the growing importance of this kind of services to promote social cohesion becomes more central. This question is traduced in the Lisbon Treaty (EU, 2010, prot.26), expressed in the Protocol “On Services of General Interest”, that says in the first article “the essential role and the wide discretion of national, regional and local authorities in providing, commissioning and organising services of general economic interest as closely as possible to the needs of the users”. This also highlights “the diversity between various services of general economic interest and the differences in the needs and preferences of users that may result from different geographical, social or cultural situations” and claims for “a high level of quality, safety and affordability, equal treatment and the promotion of universal access and of user rights”. The principles presented in Article 1 represent an answer from the EC to the strong and vulgarised trend of replacing Keynesian social visions with liberal ones, where principles like equal treatment and universal access granted by public support are replaced by the individual capacity to supervise one’s own welfare. The provision process of SGI is highly costly and in the actual financial crisis the desired quality, accessibility and affordability of SGI could be impaired, as well as future provision and maintenance. It is precisely in these situations that SGI are even more important, as the public service is an essential support, or

94

Eduarda Marques da Costa et al.

even the main support, for the poorest regions. The level of public service is vital to diminish disparities, namely, by supporting rural settlements and maintaining an urban-rural balance. In this context, a better knowledge of regional disparities of SGI provision is essential to promote quality services at national level, but also to evaluate cohesion policy in a time of social model reorganisation. This chapter presents regional disparities of SGI provision and contributes to the discussion of the role of SGI in territorial cohesion process. This analysis is supported by different kinds of indicators across Europe. A first group related to the provision of SGI and its availability ; a second group related to government expenditure; and a third comprising a set of indicators representing contextual conditions of countries and regions, in terms of population density and economic conditions. To perform the analysis outlined, a database was created based on the available EUROSTAT data and ESPON typologies. However, the present research is dependent on the availability of data, and so it does not discuss the concept of access to SGI, but rather attempts to evaluate the different levels of the provision of services. Table 1: SGI indicators, by domain Indicator – Households with access to broadband 2010 – percentage of households ICT Telecom – Telecommunication activities 2009 – number of units per 100,000 inhabitants – Density of motorways – length of motorways in km per 1000 km2 Infrastructures – Waste collection, treatment and disposal – number of units per 100,000 inhabitants

Education

Health

– School enrolment pre-primary 2009 – students in pre-primary education per 100 population aged 0 to official school entrance age – School enrolment upper secondary 2009 – students in upper secondary education per 100 population of relevant age – School enrolment tertiary 2009 – students in tertiary education per 100 population of relevant age – Available hospital beds 2008 – per 100,000 inhabitants – Physician and doctors 2008 – per 100,000 inhabitants – Professional nurses and midwives 2008 – per 100,000 inhabitants

Regional Disparities of SGI provision

95

Beyond the discussion around the definition of SGI, this research will adopt a wider concept of SGI. However, it is important to distinguish the two main groups that comprise SGI in thematic sense: a) Services of General Economic Interest (SEGI), traditionally related to infrastructures (e. g. energy, water, transport) and ICT (Information and Communications Technologies)/communications (e. g. broadband, postal services); b) Social Services of General Interest (SSGI) linked to education, healthcare, labour market and social housing. The EUROSTAT database was the main source used to collect indicators (Table 1), indicators from other potentially relevant sources were not used due to important data gaps.

2.

Some factors in the provision of SGI

The provision of SGI is not equal across the European territory (Humer and Palma, 2014) and several drivers support regional disparities in provision. The implication of global and pan-European drivers of change in the European territory and the consequent influence in the provision of SGI must be recognised and anticipated in the policy development process. The drivers of change are per se external, like environmental/climate, economic, demographic or social, but through the policy process they become influential for SGI provision (Humer, Rauhut and Fassmann in this edited volume). Policy options for SGI have to be able to deal with the changes induced by the drivers, however due to the current financial crisis, public expenditure impacts less on the quality and accessibility of SGI at present, but also compromises the future. The analysis of general government expenditure by function can thus indicate the level of investment and the efforts of the government of each Member State. It is thus interesting to analyse some functions that can be related to the provision of SGI, namely, education, health, economic affairs and social protection. With the exception of the economic affairs function, in general, the countries presenting higher SGI expenditures as shares of GDP (2000–2009) are the Nordic countries, some central European countries like Austria, Netherlands, Germany and France and also some southern countries like Portugal, Italy and Greece. This relative homogeneity changes if we consider the real total amount spent by governments per inhabitant. The Nordic countries are those presenting the highest values together with France, Austria and the Benelux countries, while the lowest values per capita is observed in the East European countries. In the case of southern countries, the high percentages of GDP as government expenditure does not represent high level of expenditure per capita, since the GDP of the

96

Eduarda Marques da Costa et al.

southern countries is lower than the Nordic ones. Portugal and Norway are a perfect example of this situation. Portugal has expenditures representing 49.8 % of the GDP against 46.2 % in the case of Norway, but in practical terms, the government expenditure in Portugal is 7,940 euros per inhabitant while in Norway it is 26,285 euros. These distinct contexts represent different starting conditions of countries pursuing satisfactory levels of services provision. The cohesion policy itself is very costly and if it is true that its success depends on several factors, we cannot ignore the significant financial capacity disparities existing between countries. Specific territory characteristics and dynamics can play an important role in explaining some of the provision disparities. The demographic and urban structure determines different SGI development (affecting demand and efficiency) but at the same time, the adjustment of SGI to the regions is also valid. If ageing and rural areas tend to have less variety of services, and thus cannot attract new population, the densely urbanised areas tend to have more variety of services, sometimes less effective or with bad quality, but attract more and more users. This is evidence that existing disparities can constrain the improvement of service provision in a way that compromises the achievements of the cohesion policy goals. From this point of view, it is relevant to understand the relation between eventual shortcomings in the provision of SGI and the most peripheral territories. The way that each national state organises SGI relies deeply on the applied social model (Humer et al., 2013) that only fairly abstract fit together into the principles of European Social Model, initially defined in the White Paper on Social Policy in 1994 (CEC, 1994). Since the work of Esping-Andersen (1989, 1990, 1996), several welfare state classifications were developed of which Nadin and Stead (2008) give a detailed overview. Aiginger and Guger (2006) as well as Alber (2006) consider five main models of welfare state: the Scandinavian or Nordic model, the Anglo-Saxon or liberal model, the Continental/Corporatist model, the Southern or Mediterranean model and the fifth comprising the new member states/catching-up model. Alber (2006) also includes a class of “others”, with only two countries, Netherlands and Luxembourg.

Economic affairs

Health

Education

Social protection

44.7

6094.0

23565.1 13978.5

4680.1 172799

11146.4 10459.4

16636.8 13361.9

9780.4 5325.6

3757.1 32571.8

4688.6 6156.6

17881.0 17394.2

Denmark Germany

Estonia Ireland

Greece Spain

France Italy

Cyprus Latvia

Lithuania Luxembourg

Hungary Malta

Netherlands Austria

51.4 52.6

51.4 42.5

44.9 45.2

46.2 43.7

56.8 51.9

54.0 46.2

44.7 48.1

58.1 48.3

41.4

1938.9

2160.9 1787.6

540.9 702.8

333.5 3391.3

782.1 892.6

1133.3 1159.5

1017.6 1245.2

540.6 2525.1

1320.0 1126.3

1016.0

203.7

6.2 5.4

5.9 4.8

4.0 4.7

3.7 7.3

3.9 4.5

4.9 5.5

5.2 7.0

3.3 3.9

7.4

4.4

2875.9 2720.5

462.9 766.6

563.3 3891.8

693.5 573.1

2375.9 1950.7

1372.4 1545.0

580.5 2978.5

3554.0 2125.9

1050.9

197.9

8.3 8.2

5.1 5.3

6.7 5.4

3.3 4.7

8.1 7.6

6.6 6.8

5.6 8.3

8.8 7.3

7.7

4.2

2051.9 1897.5

485.0 781.6

571.8 3824.1

1531.4 825.6

1806.2 1196.2

878.9 1144.1

743.9 1938.7

3232.6 1272.8

656.4

201.9

5.9 5.7

5.3 5.4

6.8 5.3

7.2 6.8

6.2 4.6

4.3 5.1

7.1 5.4

8.0 4.4

4.8

4.3

5907.3 7194.1

1694.6 2118.6

1403.1 14144.7

2323.9 1723.5

7014.7 5256.8

3971.0 3704.2

1626.5 6105.3

10190.8 6157.5

1870.2

636.4

17.0 21.8

18.6 14.6

16.8 19.6

11.0 14.1

23.9 20.4

19.2 16.4

15.6 17.0

25.1 21.3

13.7

13.6

Per capita % of GDP Per capita % of GDP Per capita % of GDP Per capita % of GDP Per capita % of GDP 17025.0 53.7 1878.7 5.9 2474.4 7.8 1973.9 6.2 6265.5 19.8

Total

Bulgaria Czech Republic

Belgium

Countries

Table 2: General government expenditures by function, Euro per capita and percentage of GDP, 2009

Regional Disparities of SGI provision

97

Economic affairs

Health

Education

Social protection

50.8 51.0 46.2

18156.6 17359.8

13037.7 13842.3

Finland Sweden

United Kingdom Iceland

Norway 26285.9 Source: EUROSTAT, 2014

56.1 54.9

48.7 41.6

8480.5 4848.6

Slovenia Slovakia

49.8 41.1

7940.4 2378.2

2473.2

1134.2 1700.2

1623.8 1473.6

810.7 609.2

707.6 444.6

4.3

4.4 6.3

5.0 4.7

4.7 5.2

4.4 7.7

4299.4

2126.3 2265.1

2571.4 2331.2

1229.2 910.2

1156.6 221.6

7.6

8.3 8.3

7.9 7.4

7.1 7.8

7.2 3.8

3436.4

1757.6 2322.7

2128.7 2283.1

1138.2 507.0

1085.3 236.3

6.0

6.9 8.6

6.6 7.2

6.5 4.3

6.8 4.1

10192.6

4502.1 3070.1

7758.6 7230.4

3146.7 1434.9

2851.5 844.3

17.9

17.6 11.3

24.0 22.9

18.1 12.3

17.9 14.6

Per capita % of GDP Per capita % of GDP Per capita % of GDP Per capita % of GDP Per capita % of GDP 3636.8 44.6 448.9 5.5 417.8 5.1 454.6 5.6 1339.9 16.4

Total

Portugal Romania

Poland

Countries

(Continued)

98 Eduarda Marques da Costa et al.

99

Regional Disparities of SGI provision

Table 3: Countries by welfare state types. Aiginger and Guger 2006 Scandinavian/ DK, FI, SE, NL Nordic Anglo-Saxon/ IE, UK Liberal Continental/ Corporatist Mediterranean Catching-up

AT, BE, FR, DE, LU, IT GR, PT, ES CZ, HU

Nordic

Alber 2006 DK, FI, SE

Anglo-Saxon

IE, UK

Continental

AT, BE, FR, DE

Southern New Member States Other

GR, IT, PT, ES CY, CZ, EE, HU, LV, LT, MT, PL, SK, SI LU, NL

Source: as in Nadin and Stead (2008)

Based on this, we have reduced it to four groups (Table 4). The first one refers to the Scandinavian/Nordic and corresponds to the proposal presented by Aiginger and Guger, with the inclusion of Norway. The second group joins the AngloSaxon and Continental groups (despite their differences in the financial support system, the countries that adopted these two distinct models have both high level of services provision, provided by public or private sectors); the third comprises the Mediterranean/Southern; and the fourth the Catching up/New Member States. The distinct political-administrative organisation models and the following variation in the systems organisation can also have a significant impact on the process of service provision. Different political-administrative organisation models reflect more centralised or decentralised systems of governance. The organisation of systems between central and local, between central-regional or central-regional-local level clearly affect the provision process of services. Table 4: Types of welfare state used in this present analysis Type 1 – Scandinavian/Nordic Type 2 – Anglo-Saxon and Continental

DK, FI, SE, NL, NO IE, UK, AT, BE, FR, DE, LU, IS

Type 3 – Mediterranean/Southern GR, PT, ES, IT Type 4 – Catching up/New Member States CZ, HU, CY, EE, LV, LT, MT, PL, SK, SI, BG

Based on the presented clustering, it is essential to understand whether the countries in each class have distinct initial conditions, to pursue fair and satisfactory levels of services provision. In general, we can say that government expenditure, as a percentage of GDP, decreases from type 1 to type 4 from countries with a higher GDP to the others with a lower GDP. On the other hand, if we measure the investment in euro per

100

Eduarda Marques da Costa et al.

capita, an even more unbalanced reality is revealed. For example, Ireland presents 36.1 % of GDP as total government expenditure, which represents 17,280 euro per capita, while Hungary presents a higher relative investment, 50 % of GDP, but a much lower value of euro per capita, 4,689 euros.

Figure 1: Total Government Expenditures in % of GDP per Welfare State Types, 2009 (boxplot from max. to min and percentiles 75, 50 and 25). Source: EUROSTAT, 2014.

This situation is particularly relevant for health care expenses, where assistance become more and more capital-intensive and the subsequent equalisation of costs across all European countries. The registered differences of investment among countries are relevant and, although the provision of services depends on several factors, it is clear that different financial capacities represent distinct starting conditions to pursue a more fair and satisfactory provision of services. The breakdown of government expenditure, concerning social and economic support, shows that major differences are related to social protection expenditure, while education, health and economic support expenses present slighter differences. Social protection expenditure varies from an average of 20 % for the first type to 13 % for the fourth type. Economic affairs expenditure in the catching-up states group had higher expenses relative to GDP than the other groups. Nevertheless, the differences between the countries are very small, no more than 5 %, for example the difference between the United Kingdom (2.8 %) and the Czech Republic (7.7 %).

Regional Disparities of SGI provision

3.

101

Provision and disparities of SGI

The national heterogeneity of services of general interest providing systems – i. e. the prevalent social welfare system – and the regional variation that exists across Europe can lead to significant disparities in the provision of SGI. Given the importance of these specific services in the cohesion and convergence process, the existing gaps must be recognised and reduced for the purpose of the policies success. According to Rauhut et al. (2013a, 2013b), Humer and Palma (2013) and Marques da Costa, Palma et al. (2013) the existing disparities can be related to some factors linked to territorial dynamics, such as the demographic structure and population density, and others linked to purchasing power, accessibility or the political-administrative organisation models. These factors assume higher relevance according to the huge regional differences across Europe. The European regions have very distinct characteristics, needs and potentials that introduce manifest disparities. According to these regional variations, countries adopt diverse strategies and take different paths towards convergence, which can lead to significant disparities in the provision of SGI. As already stated, SGI can have a fundamental role in the pursuit of cohesion, mainly in “convergence regions” according to EU Regional Policy 2007–2013. These are the poorest regions of the European Union and to attain the convergence policy objectives, they need an extra stimulus that could be achieved through the provision of SGI. Some of these regions are also struggling with other issues linked to processes like depopulation and ageing. The provision of SGI can have an important role in reversing these processes, making the areas more attractive to people by providing several services at certain levels of quality, accessibility and affordability. The challenge is to provide these services in the most needed areas, where the market does not make it profitable and it is not attractive to private investment. In the next points, we analyse the disparities related to the provision of SGI that have arisen across the European territory. The analysis is based on indicators from each domain of SGI and concerning NUTS2 regions, allowing us to identify which territories present signs of provision shortage.

ICT Telecom (Information and Communications Technologies) In the area of ICT Telecom, the two indicators selected allow us to see clear disparities in the European territory (percentage of households with access to broadband and percentage of individuals who have never used a computer). The

102

Eduarda Marques da Costa et al.

Nordic countries present the highest levels of household’s accessibility to broadband, and also in some regions in central Europe, mainly in Germany, Netherlands, Belgium and the United Kingdom. Most of these regions are also those with the lowest number of people that have never used a computer, showing that the ICT domain is more developed in these regions. The highest percentage of households with access to broadband is in Stockholm with 87 %, a value that contrasts with the lowest one, registered in Sud-Vest Oltenia or Severoiztochen, regions of Romania and Bulgaria, where only 15 % and 17 % of households have access to it. Lower values are also observed in Italy, Spain (with the exception of Madrid and Catalonia regions) and Portugal (except Lisbon Metropolitan Area and Algarve). In the regions of Vestlandet or Oslo og Akershus, only 1–2 % have never used a computer, while in Sud-Vest Oltenia and Bucharest-Ilfov in Romania, almost 60 % of the population have never used a computer. The lowest values characterises eastern and southern regions of Europe, including Portugal, Spain, South Italy and Greek regions. These disparities reveal the different use and presence of ICT in society, but we cannot assume that a gap exists in the provision of services. More than that, it seems that these disparities are a result of differences in purchasing power, age structure, and the education and qualification of the population. Generally, less well-educated people show a very similar profile to the oldest age-group, and rural areas have a different pattern to urban ones. This evidence already was shown in the Fourth Cohesion Report reported in 2007, where only 52 % of EU citizens in rural areas found it easy to access broadband as compared with 70 % in large towns (CEC, 2007).

Transport infrastructure One of the most used indicators is the density of motorways, infrastructures considered fundamental for promoting competitiveness and economic flow. Nevertheless, in the context of services of general interest, the highest density of motorways represents not only the economic perspective, but represents the possibility of better access to these services, contributing to improving social equity and territorial cohesion. As pointed out in the Fourth Cohesion Report (CEC, 2007), there are persistent differences between the EU-15 countries and the new Member States, disparities that continue even now. Less covered areas include convergence regions in eastern countries such as Poland, Bulgaria and Romania, but a more indepth analysis of regions finds the lowest number of motorways in remote areas of northern countries (in Sweden, Norway or Finland) or in lower density areas

103

Regional Disparities of SGI provision

Reykjavik !

!

!

Canarias

Guadeloupe Martinique !

!

Réunion

Helsinki !

Tallinn

Oslo !

!

Stockholm !

!

Guyane

Riga !

!

København

Vilnius

!

!

Madeira

Minsk !

Dublin !

Berlin

Amsterdam

!

!

!

!

London

Warszawa

Acores

Kyiv !

!

Bruxelles/Brussel !

Praha

Luxembourg Paris

!

!

!

Kishinev

Wien ! Bratislava ! Budapest

!

!

Bern

Vaduz

!

!

Ljubljana Zagreb ! !

Bucuresti

Beograd

!

!

Sarajevo !

Sofiya

Podgorica !

Roma

!

Skopje

Ankara

!

!

Tirana

!

Madrid

!

!

Lisboa !

Athinai !

Nicosia !

El-Jazair !

Tounis !

!

Valletta

0

Percentage of households (%) 15

- 34

34,1 - 54 54,1 - 66 66,1 - 76 76,1 - 87 No data

Figure 2 – a) Households with access to broadband, 2009. Source: Adapted from Rauhut et al., 2013a.

250

500

km

Regional level: NUTS 2 Source: EUROSTAT, 2011 Origin of data: EUROSTAT, 2009 © EuroGeographics Association for administrative boundaries

Data availability: Information at NUT 1: DE(2011), GR, FR, PL

104

Eduarda Marques da Costa et al.

Reykjavik !

!

!

Canarias

Guadeloupe Martinique !

!

Réunion

Helsinki !

Tallinn

Oslo !

!

Stockholm !

!

Guyane

Riga !

!

København

Vilnius

!

!

Madeira

Minsk !

Dublin !

Warszawa

Berlin

Amsterdam

!

!

!

!

London

Acores

Kyiv !

!

Bruxelles/Brussel !

Praha

Luxembourg Paris

!

!

!

Kishinev

Wien ! Bratislava ! Budapest

!

!

Bern !

Vaduz !

Ljubljana Zagreb ! !

Bucuresti

Beograd

!

!

Sarajevo !

Sofiya

Podgorica !

Roma

!

Skopje

Ankara

!

!

Tirana

!

Madrid

!

!

Lisboa !

Athinai !

Nicosia !

El-Jazair !

Tounis !

!

Valletta

0

Percentage of individuals* (%) 1

- 10

10,1 - 19 19,1 - 28 28,1 - 41 41,1 - 58 No data

Figure 2 – b) individuals who have never used a computer, 2009. Source: Adapted from Rauhut et al., 2013a.

250

500

km

Regional level: NUTS 2 Source: EUROSTAT, 2011 Origin of data: EUROSTAT, 2010 © EuroGeographics Association for administrative boundaries

Data availability: NUTS 1: DE(2011), GR, FR, PL * All individuals aged 16 to 74

Regional Disparities of SGI provision

105

of Italy too. Conversely, the highest density is found in in regions with important urban areas. Here we include the cases of the north of Greater Lisbon, Bremen, Düsseldorf, Greater Manchester or Utrecht. Nevertheless, motorway density is very sensitive to the physical dimension of the regions and to the regional and sub-regional urban network. Large regions with low population density and a weak urban network are largely dependent on a good motorway network, to guarantee better accessibility and improve equity conditions for their population. These are the regions where this kind of infrastructure is most needed and justified, along with the huge associated investments.

Education From the education domain, there is a huge number of indicators showing different education attainment (pre-primary education level, primary education, secondary one, tertiary level and early-school leavers). Considering the pre-primary level, lower enrolment rates can be seen in eastern countries, but also in some regions of the United Kingdom. Higher values are found in German, Swedish, Finnish or French regions, as well as Spanish (example of Aragon and Navarra, where 66 % of children are in preprimary school), and Italian and Portuguese ones (Campania and Sardegna or Alentejo, about 50 %). At the secondary level, the rates of attainment are more “comfortable”, as many regions have 80–100 % of the population at the relevant age that attended, which reflects the effort to promote and generalise compulsory education, namely in convergence countries. Considering the top level of education, the tertiary enrolment reveals a different pattern, following the urban hierarchy of each Member State. The disparities are stronger between regions than between countries. The more impressive rates of students in tertiary education at the relevant age are found in: Vienna, Hovedstaden region (that includes Copenhagen), Oslo and Brussels, but also in Bucharest, Bratislava, Prague and Western Slovenia (that includes Ljubljana), reflecting the “capital city” effect in the provision of this service. The lowest rates are found on Islands (Malta and Baleares) and rural areas such as Alentejo, a low-density region in Portugal. Nevertheless, in some major cities, like Dusseldorf or Stuttgart, only about one third of people at the relevant age have attended tertiary education. The pattern of early school leavers has been largely analysed in the context of cohesion policy. Fighting early school abandonment, namely at the secondary stage, and promoting tertiary studies has been a focus since the Lisbon Strategy,

106

Eduarda Marques da Costa et al.

Reykjavik !

!

!

Canarias

Guadeloupe Martinique !

!

Réunion

Helsinki !

Tallinn

Oslo !

!

Stockholm !

!

Guyane

Riga !

!

København

Vilnius

!

!

Madeira

Minsk !

Dublin !

Warszawa

Berlin

Amsterdam

!

!

!

!

London

Acores

Kyiv !

!

Bruxelles/Brussel !

Praha

Luxembourg Paris

!

!

!

Kishinev

Wien ! Bratislava ! Budapest

!

!

Bern !

Vaduz !

Ljubljana Zagreb ! !

Bucuresti

Beograd

!

!

Sarajevo !

Sofiya !

Podgorica !

Roma

Skopje

Ankara

!

!

Tirana

!

Madrid

!

!

Lisboa !

Athinai !

Nicosia !

El-Jazair !

Tounis !

!

Valletta

0

Length of motorways in km per 1 000 km2 , 2009 up to 3 3.1 - 6 6.1 - 18

250

500

km

Regional level: NUTS 2 (2006) Source: EUROSTAT database, 2011 Origin of data: EUROSTAT, 2009* © EuroGeographics Association for administrative boundaries

Data availability: PT (2004); DK, IE, IT, SL (2008); GR (digital data service - DDS 2010); IS (National Statistical Offices).

18.1 - 27 27 and more No data

Figure 3 – Density of motorways, Length of motorway in km per 1 000 km2, 2009. Source: Adapted from Rauhut et al., 2013a.

107

Regional Disparities of SGI provision

!

Reykjavik

!

!

Oslo

!

Stockholm

!

!

København !

Vilnius !

Dublin

!

!

London !

!

Paris

Amsterdam

!

Berlin

!

!

Réunion

Guyane

Riga !

!

!

Tallinn

!

!

Guadeloupe Martinique

Helsinki

!

!

Canarias

Madeira

Minsk

Warszawa

!

!

Acores

Kyiv

Bruxelles/Brussel

!

Luxembourg

!

Praha

!

Wien ! BratislavaBudapest

!

Kishinev

!

!

Bern

!

Vaduz LjubljanaZagreb !

!

!

!

Beograd

Podgorica !

! !

!

Madrid

Roma

!

Bucuresti

Sarajevo

! !

!

Sofiya

Skopje

!

Ankara

Tirana

Lisboa

!

Athinai !

!

El-Jazair !

Nicosia

Tounis !

Valletta

0

Per 1 000 inhabitants 55,1 - 75 75,1 - 86 86.1 - 100 100,1 - 113 113,1 - 139,5 No data

Figure 4 – a) Secondary level students, 2009. Source: Adapted from Rauhut et al., 2013a.

250

500

km

Regional level: NUTS 2 Source: EUROSTAT, 2011 Origin of data: EUROSTAT, 2008 © EuroGeographics Association for administrative boundaries

Data availability: Information at NUT1: CH, DE, UK

108

Eduarda Marques da Costa et al.

!

Reykjavik

!

!

Oslo

!

Stockholm

!

!

København !

Vilnius !

Dublin

!

!

London !

!

Paris

Amsterdam

!

Berlin

!

!

Réunion

Guyane

Riga !

!

!

Tallinn

!

!

Guadeloupe Martinique

Helsinki

!

!

Canarias

Madeira

Minsk

Warszawa

!

!

Acores

Kyiv

Bruxelles/Brussel

!

Luxembourg

!

Praha

!

Wien ! BratislavaBudapest

!

Kishinev

!

!

Bern

!

Vaduz Ljubljana Zagreb !

!

!

!

Beograd

Podgorica !

! !

!

Madrid

Roma

!

Bucuresti

Sarajevo

! !

!

Sofiya

Skopje

!

Ankara

Tirana

Lisboa

!

Athinai !

!

El-Jazair !

Nicosia

Tounis !

Valletta

0

Percentage of individuals* (%) 3,7 - 10 10,1 - 17 17,1 - 27 27,1 - 42 42,1 - 70 No data

Figure 4 – b) Early school leavers, 2009. Source: Adapted from Rauhut et al., 2013a.

250

500

km

Regional level: NUTS 1 Source: EUROSTAT, 2011 Origin of data: EUROSTAT, 2008 © EuroGeographics Association for administrative boundaries

* Percentage of the population aged 18-24 having attained at most lower secondary education and not being involved in further education or training

Regional Disparities of SGI provision

109

particularly that decreasing early abandonment was one of the goals that remains to the Europe 2020 agenda. Despite the primitive evolution, the north/ south disparities persist, showing the unfavourable situation in Iberian regions, parts of Italy, Greece, Turkey and some regions of the United Kingdom, highlighting the relationship between economic performance and education enrolment. One explanation for the pattern is a tradition in these countries of early entrance into the labour market to develop low qualified tasks in industry or services, traducing the economic needs of families with consequences in school abandon.

Health In the health domain, there are indicators available to NUTS 2 level that reflect different aspects of the health services: the number of doctors (general and specialists), nurses, or beds in hospitals, all normalised to 100,000 inhabitants that represent the provision level of services. Marques da Costa, Palma et al. (2013), when discussing the relevance of indicators, argue that the “number of hospital beds, per 100,000 inhabitants”, could be considered an SGI indicator, but in a broad perspective. It reflects investment in this domain, but also results in the providing service model. Nevertheless, it highlights the potential quality of health services, showing the attending capacity of the system. This indicator shows central Europe with higher values, mainly in Germany, France and Austria but also in Finland. The opposite situation is found in the southern countries, Portugal, Spain and Turkey, and also in Norway and Sweden. The nurses and midwives indicator also reveals a clear disparity between the Nordic countries and some central European regions. The northern countries have the highest values, and the southern and eastern countries the lowest ones. In this domain, it is very important to relate the apparent disparities with the characteristics of the health care system in each Member State. Some of the differences pointed out by indicators could be a result of organisational options and health care techniques, and thus, we cannot point to a shortage of provision. The differences regarding the number of hospital beds are an example of this situation. The generalised trend to move towards more integrated and efficient patterns of care, supported by a package of financial and organisational measures, led to several changes in the management of patient services, amongst others, the possibility to reduce the number of hospital beds. The state of progress and distinct approaches of this process can dictate relevant disparities across Europe (HOPE, 2014). This broad approach could however, not answer one question, that is whether indicators represent real shortcomings in the provision of SGI or if they are the

110

Eduarda Marques da Costa et al.

Reykjavik !

!

!

Canarias

Guadeloupe Martinique !

!

Réunion

Helsinki !

Tallinn

Oslo !

!

Stockholm !

!

Guyane

Riga !

!

København

Vilnius

!

!

Madeira

Minsk !

Dublin !

Warszawa

Berlin

Amsterdam

!

!

!

!

London

Acores

Kyiv !

!

Bruxelles/Brussel !

Praha

Luxembourg Paris

!

!

!

Kishinev

Wien ! Bratislava ! Budapest

!

!

Bern !

Vaduz !

Ljubljana Zagreb ! !

Bucuresti

Beograd

!

!

Sarajevo !

Sofiya !

Podgorica !

Roma

Skopje

Ankara

!

!

Tirana

!

Madrid

!

!

Lisboa !

Athinai !

Nicosia !

El-Jazair !

Tounis !

!

Valletta

0

Available hospital beds per 100 000 inhabitants up to 300 300.1 - 420 420.1 - 640

250

500

km

Regional level: NUTS 2 (2006) Source: EUROSTAT database, 2011, National statistical offices* Origin of data: EUROSTAT, 2008* © EuroGeographics Association for administrative boundaries

* IS (World bank data 2007, NUTS 0); DE (disaggregation of NUTS 1 data by data from the Federal Statistical Offices); NL (disaggregation of 2008 NUTS 0 data by NUTS 2 data of 2002); EE (National Statical Office, 2006); UK ( disaggregation of 2009 data for England by data of National Statistical Office).

640.1 - 800 800 and more No data

Figure 5 – Hospital beds/100,000 inhabitants, 2006. Source: Adapted from Rauhut et al., 2013a.

Regional Disparities of SGI provision

111

result of a different national strategy, as in the case of the healthcare, different needs, as in the case of motorways, or even as a result of different regional demands.

4.

Peripheral territories and SGI

Considering the status that peripheral areas – represented by low-density rural territories – and isolated regions have less provision of services, a more in depth analysis is required. So, to understand the relationship between regional provisions of SGI and different regional levels of rurality, the territorial typologies created in the EDORA ESPON project (Copus et al., 2011) were used. The developed typologies classify European NUTS 3 regions into three main classes: urban, intermediate and rural. In order to use the NUTS 2 level, we calculated the percentage of population, for each NUTS 2 region, that live in rural areas. Based on this step, it was possible to search for relations between indicators concerning the provision of specific SGI (table 5), and the classes of urbanisation/rurality. This analysis will be carried out for only four domains of SGI, and so the indicators will be related to: infrastructures, ICT telecom, healthcare and education. Table 5: SGI indicators Indicator Motorway Density Broadband access Primary enrolment Upper Secondary enrolment

Definition Density of motorway, length of motorways in km per 1000 km2 Percentages of households with access to broadband School enrolment pre-primary 2009 – students in pre-primary education per 100 population aged 0 to official school entrance age School enrolment upper secondary 2009 – students in upper secondary education per 100 population of relevant age

Hospital beds

School enrolment tertiary 2009 – students in tertiary education per 100 population of relevant age Available hospital beds 2008 per 100,000 inhabitants

Doctors Nurses

Physician and doctors 2008 per 100,000 inhabitants Professional nurses and midwives 2008 per 100,000 inhabitants

Tertiary enrolment

In the domain of infrastructure, the motorways indicator refers to density, and shows an evident and expected concentration in central urban areas. In contrast, the dispersion of population across rural regions leads to a decrease in motorways density. Common sense, especially due to the actual shortage of public funds, would be to introduce a cut in investment on transport infrastructure

112

Eduarda Marques da Costa et al.

where the demand density is limited. Nevertheless, in less urbanised regions, such as in Alentejo (PT), Basse-Normandie (FR) or Galicia (SP), motorways could play an important role in supporting regional development. In the case of the Alentejo region, the motorway could cross almost the entire region, and connect the most touristic Portuguese region in the south with the capital of Lisbon. Therefore, the purpose is not to link the rural settlements of the region, as a regional service, but to connect the neighbouring regions of the north and south, generating a tunnel effect. The average values of the four typologies clearly show that differences exist between them. There are almost 40 km per km2 in urbanised regions and just 7 km per km2 in the most rural regions. Looking at the maximum values, the difference is huge, approximately 180 km per km2 between the best and least well-served regions. In the ICT domain, the percentage of households with access to broadband is highlighted. This indicator points out some differences between the four groups, but they are not as relevant as the case of motorways. The average values are higher in the more urbanised territory, but, again, the differences are small. Some contextual factors, like the level of education of the population, purchasing power or the concentration of ICT jobs, can contribute to more convergent values. In the healthcare domain, we analysed some health personnel indicators concerning doctors and nurses, but also indicators related to a physical infrastructure perspective, such as the number of hospital beds. Concerning the health personnel indicators, the urban regions tend to present higher rates of personnel per inhabitant, however the indicator hospital bed per 100,000 inhabitants shows higher values in the regions with intermediate levels of rural population. The more urbanised regions present higher values than the rural ones, but the highest values are in the intermediate ones. These regions present a lower population density than the urban regions, but at the same time figures justify the presence of health equipment, leading to a higher number of hospital beds. However, this is not uniform across all the analysed regions within these four classes, and other factors, such as the social model of the healthcare system, can contribute in explaining the differences. According to the differences in these indicators and the meaning and nature of them, it is not possible to specify where the provision of healthcare services is better or worse. Several factors, like the options taken by the national governments regarding the organisation of healthcare systems, must be considered to identify this kind of information. A limited number of beds per 100,000 inhabitants does not necessarily represent poor provision of healthcare services, as it can be balanced with a more expressive ambulatory treatment.

113

Regional Disparities of SGI provision

Table 6: Provision of SGI and rurality (% of rural population) Indicators Motorway density per 1000 km

% Households with Broadband access

% Primary enrolment

% Upper Secondary enrolment

% Tertiary enrolment

Hospital beds per 100,000inh.

Doctors per 100,000inh.

Nurses per 100,000inh.

Rurality 0–15 % 15–45 %

Examples Vienna/AT Galicia/ES

Min 0.00 0.00

Med 39.45 16.18

Max 219.39 49.14

45–80 % 80–100 %

Basse-Normandie/FR Alentejo/PT

0.00 0.00

11.25 6.95

37.38 34.94

0–15 % 15–45 %

Vienna/AT Galicia/ES

17.00 17.00

64.84 58.18

87.00 87.00

45–80 % 80–100 %

Basse-Normandie/FR Alentejo/PT

15.00 24.00

57.24 56.16

81.00 82.00

0–15 % 15–45 %

Vienna/AT Galicia/ES

6.65 24.56

45.71 49.23

77.05 66.56

45–80 % 80–100 %

Basse-Normandie/FR Alentejo/PT

0.56 0.25

45.63 43.56

98.89 103.76

0–15 % 15–45 %

Vienna/AT Galicia/ES

55.81 64.22

87.53 84.42

139.65 108.91

45–80 % 80–100 %

Basse-Normandie/FR Alentejo/PT

66.42 59.53

86.00 84.55

101.96 106.82

0–15 % 15–45 %

Vienna/AT Galicia/ES

4.26 8.09

50.97 48.03

220.30 103.40

45–80 % 80–100 %

Basse-Normandie/FR Alentejo/PT

12.56 3.38

45.92 43.59

96.23 93.82

0–15 % 15–45 %

Vienna/AT Galicia/ES

141.80 247.20

530.97 613.29

1,004.70 1,026.60

45–80 % 80–100 %

Basse-Normandie/FR Alentejo/PT

299.40 188.10

638.99 425.43

1,251.90 864.50

0–15 % 15–45 %

Vienna/AT Galicia/ES

128.30 127.30

334.64 320.57

828.70 628.40

45–80 % 80–100 %

Basse-Normandie/FR Alentejo/PT

187.90 168.10

323.82 295.58

591.30 459.90

0–15 % 15–45 %

Vienna/AT Galicia/ES

396.70 220.30

942.87 850.82

1,646.82 1,697.20

45–80 % 80–100 %

Basse-Normandie/FR Alentejo/PT

249.20 133.70

819.25 861.68

1,604.80 2,848.29

114

Eduarda Marques da Costa et al.

To analyse the education domain, it is essential to look at the enrolment rates of the three main education levels: primary, secondary and tertiary. The differences that exist in the three levels are very small, which reveals the governments’ interest in ensuring the provision of this service to all citizens. The rates at the primary and secondary levels present minimum values in rural regions, but the maximum values are also higher in these areas. Generally, these are regions with a high mean age amongst the population, and a slight increase in students coming from other regions could have a significant impact on the rates, leading to higher values than in other regions, and even rates above 100 students per 100 inhabitants at the relevant age. This could be the main explanation for the higher tertiary rates in urban areas, as the average values show. The concentration of universities and other tertiary institutions in urban areas make these regions more attractive for students. The capital regions from the East are some examples of this situation, for example, Bucharest reaches 220 students per 100 inhabitants at the relevant age. It is not clear whether higher or lower rurality levels of regions can lead to higher or lower levels of SGI provision. In some specific domains the relation does seem to exist, however in others this does not seem to be the case. Different configurations of elements such as taxation, social insurance, public services and employment can also introduce major differences in the starting conditions to pursue acceptable levels in the provision of SGI. Therefore, the different European social models and their related specific policies constitute different organisational, strategic, and political contexts that can be related to different settings of the service’s provision and further, with the disparities in SGI provision

5.

Typology: a proposal

In order to establish a regional typology of the provision of SGI, we have used a set of sixteen variables of service provision and of social and economic context. Using a K-means clustering technique, we have selected an allocation of NUTS 2 regions in four clusters (Figure 6). The methodology adopted uncovers some relations that can be relevant to understand the disparities of SGI provision across Europe and the territorial fragilities of some European regions.

115

Regional Disparities of SGI provision

Table 7: Average variation in each cluster. Clusters Variables GDP / Capita

1 41,827.27

2 26,925.96

3 19,525.00

4 10,967.57

Waste Treatment attendant Density of motorways

10.08 53.63

12.21 36.00

14.86 20.84

9.12 4.74

Broadband access School enrolment pre-primary

74.27 44.20

69.02 49.18

57.24 45.10

43.35 44.38

School enrolment upper secondary School enrolment tertiary

95.28 72.17

87.39 51.18

85.00 45.15

83.26 42.61

583.75 406.56

555.29 350.07

517.71 313.51

641.80 249.42

1,104.33 18.75

1,027.82 11.61

826.12 9.25

544.70 11.36

Share of rural population Unemployment rate

3.57 69.24

23.94 72.14

27.36 84.46

47.45 83.14

Long term unemployment rate Aging index

2.20 95.34

2.47 118.00

4.53 120.16

4.85 100.28

1,470.71

294.43

321.26

87.58

Hospital beds Doctors Nurses Telecommunication activities

Population density

The four clusters reveal a transition from group 1 to group 4. From wealthy urban territories, more dense and with a more favourable unemployment rates, with a more dense transport infrastructures, a widespread broadband service, higher tertiary educational enrolment and a better position on health services, with more health professionals, on cluster 1, to a more rural and poor regions and a lowest level of service provision on cluster four.

Cluster 1 The first cluster aggregates dense urban regions with the highest GDP per capita, younger population and the lowest rate of unemployment. These regions are served by a dense motorway system and have a widespread broadband provision. High level of tertiary educational enrolment and a high provision of medical and nursery personal. It represents 8 % percent of regions, 9 % percent of the population and 4 % of the study area. In this cluster, we have the European regions that contain not only the major European cities such as London, Paris, Amsterdam, Brussels, Bremen and Hamburg, but also the Scandinavian capitals of Stockholm, Oslo, Copenhagen and Helsinki. The Grand Duchy of Luxembourg and the regions containing the cities of Vienna, Munich, Prague and

116

Eduarda Marques da Costa et al.

Reykjavik !

!

!

Canarias

Guadeloupe Martinique !

!

Réunion

Helsinki !

Tallinn

Oslo !

!

Stockholm !

!

Guyane

Riga !

!

København

Vilnius

!

!

Madeira

Minsk !

Dublin !

Warszawa

Berlin

Amsterdam

!

!

!

!

London

Acores

Kyiv !

!

Bruxelles/Brussel !

Praha

Luxembourg Paris

!

!

!

Kishinev

Wien ! Bratislava ! Budapest

!

!

Bern !

Vaduz !

Ljubljana Zagreb ! !

Bucuresti

Beograd

!

!

Sarajevo !

Sofiya !

Podgorica !

Roma

Skopje

Ankara

!

!

Tirana

!

Madrid

!

!

Lisboa !

Athinai !

Nicosia !

El-Jazair !

Tounis !

!

Valletta

0

Cluster 1 2 3 4 No data

Figure 6 – NUTS 2 clusters based on SGI provision.

250

500

km

Regional level: NUTS 2 Source: EUROSTAT, 2011 Origin of data: EUROSTAT, 2009 © EuroGeographics Association for administrative boundaries

Regional Disparities of SGI provision

117

Bratislava are also included in this first cluster. It incorporates the more central European areas, the European polygon, with the Scandinavian and the extensions for Eastern Europe.

Cluster 2 The second cluster aggregates regions with a GDP per capita above European average, but with a less dense occupation, with fringes of rural areas and an older population. The indicators show an overall good level of service provision, namely in medical and nursery personnel and in broadband provision. This cluster represents 38 % of regions, 40 % of the population and 39 % of the area in study. It is composed mainly of German and Scandinavian regions, regions from the South of France and North of Italy and the regions that include Lisbon, Madrid, Barcelona, Rome, Dublin, Athens, Berlin, Budapest and Bucharest.

Cluster 3 The third cluster aggregates regions with a lower GDP per capita, a higher unemployment rate, an older population and lower service provision, namely in the ICT services and accessibility. It aggregates 41 % of regions, 37 % of the population and 39 % of the study area. In this cluster we have large parts of the Iberian, French and British regions, the Czech and Eastern German regions, the South of Italy and the Greek regions. The regions of Warsaw and Sofia are also in this cluster.

Cluster 4 The fourth cluster aggregates a set of regions with the lowest GDP per capita, an elderly population, long-term unemployment and areas that are more rural. In services provision, they are the regions with lower accessibility, lower broadband access, and lower health personnel provision. This cluster represents 13 %, 14 % of the population and 19 % of the study area. This cluster aggregates the eastern European regions and the North region of Portugal. To understand the differences between the four clusters it is interesting to look at the relation with the types of social models mentioned earlier (Table 4). The particularities of the four types of social models regarding government expenditure were already explained, and as stated before, they can affect the level of service provision.

118

Eduarda Marques da Costa et al.

More than 90 % of the regions from countries with the Scandinavian/Nordic social model fit in clusters 1 and 2, and there is not a single region from cluster 4. The high investment that characterises this type of social model seems to result in higher levels of service provision. A somewhat similar situation happens with countries that have an AngloSaxon and Continental social model. The regions from these countries fit in clusters 1, 2 and 3, but mainly in the last two. Approximately 90 % of these regions fit in these two clusters, having good levels of service provision.

Figure 7 – NUTS 2 clusters by type of social model.

In the case of countries with the Mediterranean/Southern type of social model, more than 95 % of the regions fit in cluster 2 and 3, and the other 5 % are divided between cluster 1 and 4. The main difference from countries with the Anglo-Saxon and Continental social models is the higher share of regions belonging to cluster 3 (almost 60 % against less than 50 %). New Member States have more than 60 % of regions belonging to cluster 4 and very few regions in clusters 1 and 2. It is clear that this constitutes a situation of lower levels of service provision in the majority of the regions of countries characterised by the lowest government investment.

6.

Conclusions

The developed work confirms the strong relation established between the provision of services of general interest, the convergence process and territorial cohesion. This relationship is not linear nor does it have a single path. The way this reflects on the countries and regions is far from having a unique explanation and results from the combination of social organisation models (more social

Regional Disparities of SGI provision

119

versus more liberal); from the country’s political and administrative structure (national/local or national/regional/local); from distinct demographic and economic contexts (facing challenges like ageing, economic restructuring processes; rural settlement characteristics and other) and also from distinct models of providing education, health or other services. The presumed obvious relations mentioned before can lose expression when the analysis becomes more complex by adding social transfers into it. If in one way the GDP could be a relevant indicator, providing evidences of economic dynamism, of services availability and economic ability, on other, the increased complexity can weaken the expected relations. Thus, it is important to analyse the characteristics of each social model, namely the contributions, taxes and social transferences. In some cases, the social transferences are made through the individuals, as in the cases of countries of Mediterranean type of social model, but in other cases, these transferences are applied directly in the services, as in the case of the Nordic countries. In countries with the Nordic social model, the taxes are high but the services became more affordable. The transferences are directed to improve the quality and availability of services instead being given to the individuals. In this case, fewer regional disparities are expected and a higher territorial cohesion too. The relation between the GDP and the provision of services is also weaker than normal since these transferences disguise the distribution pattern of GDP. Besides, the influence of different demographic and economic contexts can be seen in a household’s access to broadband, in the sense that rather than showing a shortage of service provision, they are more related to affordability and educational level of the population. The service may be accessible but the population may be unable to afford it. Another aspect is the influence of distinct models of providing services in the health sector, of which indicators do not show the type of model chosen by the country. In some countries secondary healthcare services are not supported through an increase in hospitals and beds, but in the reinforcing of the nursing and diverse function of primary healthcare units, namely to recovering surgery support and chronic patient monitoring. The provision of services it is a complex process and cannot be explained solely based on one or two factors. It is possible to analyse and identify general disparities related to the services, but they do not always represent disparities in the provision process. One example is the indicator that measures household access to broadband, in the sense that it points to population contexts rather than to service provision. All previous evidence highlights the discussion of recovering SGI as public services. The (political) question is if that is possible, considering general trends in the social model paradigm of EU?

120

Eduarda Marques da Costa et al.

References Aiginger, K. and Guger, A. (2006) The Ability to Adapt: Why it differs between the Scandinavian and Continental European Models; in: Intereconomics, Vol. 14(1), pp. 14–23. Alber, J. (2006) The European Social Model and the United States; in: European Union Politics, Vol. 7(3), pp. 393–419. CEC (1994) European Social Policy. A way forward for the Union. A White Paper. COM (1994) 333 final. CEC (2003) Green paper on services of general interest. COM(2003) 270 final. CEC (2004) White Paper on services of general interest. COM(2004) 374 final. CEC (2007) Growing regions, growing Europe. Fourth report on economic and social cohesion. COM(2007) 273 final. Copus, A. et al. (2011): ESPON EDORA – European Development Opportunities in Rural Areas. ESPON Applied Research Project 2013/1/2 Final Report, Luxembourg. EC (2000) Council of the European Union. Presidency Conclusions. European Council. 11225/09. Available from: http://consilium.europa.eu/ueDocs/cms_Data/docs/ pressData/en/ec/00100-r1.en0.htm [Accessed 01/07/2014]. EC (2011) Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions. A Quality Framework for Services of General Interest in Europe. COM(2011) 900. EC (1999) ESDP: European Spatial Development Perspective: Towards Balanced and Sustainable Development of the Territory of the European Union. Brussels: European Commission. Esping-Andersen, G. (1989) The Three Political Economies of the Welfare State; in: Canadian Review of Sociology and Anthropology, Vol. 26(2), pp. 10–36. Esping-Andersen, G. (1990) The Three Worlds of Welfare Capitalism; Princton University Press. Esping-Andersen, G. (1996) After the Golden Age? Welfare State Dilemmas in a Global Economy ; in: G. Esping-Andersen (1996.) Welfare States in Transition; Sage: Great Britain. EU – European Union (2007) Territorial Agenda of the European Union. Towards a more competitive and sustainable Europe of divers regions; agreed on the occasion of the Informal Ministerial Meeting on Urban Development and Territorial Cohesion in Leipzig on 24/25 May 2007. EU – European Union (2010) Consolidated versions of the Treaty on European Union and the Treaty on the Functioning of the European Union. Charter of Fundamental Rights of the European Union, Publication Office of the EU: Luxemburg (doi:10.2860/58644). EU – European Union (2011) Territorial Agenda 2020 agreed at the Informal Ministerial Meeting of Ministers responsible for Spatial Planning and Territorial Development on 19th May 2011 Gödöllo˝, Hungary. EUROPE 2020: http://ec.europa.eu/europe2020/index_en.htm [Accessed 01/12/2014]. Faludi, A. (2006) From European spatial development to territorial cohesion policy. Regional Studies. 40. p. 667–678.

Regional Disparities of SGI provision

121

Faludi, A. (ed.) (2007) Territorial Cohesion and the European Model of Society. Cambridge, Massachusetts: Lincoln Institute of Land Policy. HOPE (2014) Hospitals in Europe. Healthcare Data. 2012. Brussels: Hope publications. Available from: http ://www.hope.be/03activities/quality_eu-hospitals/eu_country_ profiles/00-hospitals_in_europe-synthesis.pdf [Accessed 01/08/2014]. Humer, A. and Palma, P. (2013) The provision of Services of General Interest in Europe: regional indices and types explained by socio-economic and territorial conditions; in: Europa XXI, Polish Academy of Sciences, Vol. 23, pp. 85–104. Humer, A., Rauhut, D. and Marques da Costa, N. (2013) European Types of Political and Territorial Organisation of Social Services of General Interest; in: Romanian Journal of Regional Science, Vol. 7, pp. 142–164. Marques da Costa, E., Palma, P., Rauhut, D., Humer, A., Constantin, D. and Velasco, X. (2013) What indicators to use when measuring Services of General Interest?; in: Europa XXI, Polish Academy of Sciences, Vol. 23, pp. 7–28. Nadin, V. and Stead, D. (2008) European Spatial Planning Systems, Social Models and Learning. disP – The Planning Review. 172(1). p. 35–47. Rauhut, D., Marques da Costa, E. and Humer, A. (2013a) SeGI Indicators and perspectives for services of general interest in territorial cohesion and development ESPON Applied Research 2013/1/16, Scientific Report j Version 25/5/2013, Luxembourg. Rauhut, D., Smith, C., Humer, A., Ludlow, D. and Borges, L. (2013b) SeGI Indicators and perspectives for services of general interest in territorial cohesion and development ESPON Applied Research 2013/1/16, Final Report j Version 25/5/2013, Luxembourg.

Luciane Aguiar Borges, Alois Humer and Christopher J. Smith

Chapter 5: Europe’s possible SGI futures: Territorial settings and potential policy paths

1.

Introduction: Territorial Cohesion, SGI and uncertain futures

As the Territorial Agenda 2020 (European Union, 2011) notes, territorial cohesion represents a common goal in relation to the ultimate pursuit of a more harmonious and balanced Europe. Moving beyond the notion of economic competitiveness and social cohesion however, this concept focuses on the reduction of disparities and imbalances while taking into account geographical features and territorial levels (Van Well, 2011: 8). The notion of social and economic cohesion was first given a territorial interpretation in 1999 with the publication of the European Spatial Development Perspective ’ESDP’ (CEC, 1999). In the ESDP, polycentric territorial development, equal access to infrastructure and knowledge and the prudent management of natural and cultural resources is promoted. Territorial cohesion goals were defined in relation to the enabling of development in all regions – be they urban, rural, sparsely populated, peripheral, coastal, mountainous or other types of territory – in both the new as well as the old EU Member States, in accordance with their specific territorial capital. In addition, the concept sought to identify the most appropriate balance between territorial measures designed to increase economic competitiveness, to ensure social cohesion and those designed to promote sustainable development. The promotion of the notion of Services of General Interest (SGI) encompassing the provision of public transport, healthcare services, education and broadband connectivity amongst others, is generally seen as a means to achieving the EU’s broader territorial cohesion goals (CEC, 2004 and Humer and Palma, 2013). In an economic sense, the promotion of SGI through the provision of basic soft and hard infrastructure services is seen as a prerequisite for ensuring full participation in the European single market while in a social sense, it is a prerequisite for the creation of more equitable living conditions across Europe’s regions. In this light then, SGI emerges as a crucial factor in general regional prosperity. The relationship between SGI and territorial cohesion has been specifically addressed in European policies and with regards to EU legis-

124

Luciane Aguiar Borges et al.

lation. Indeed, SGI were instrumental in introducing the notion of Territorial Cohesion into the EU treaties (cf. Robert, 2007: 27). It is however important to note the legal differences between market-based and non-market SGI. The former are primarily associated with Services of General Economic Interest (SGEI), while the latter have generally been more closely associated with the field of Social Services of General Interest (SSGI) (Bjornsen et al. and Milstein in this edited volume and Hatzopoulos, 2012: 46)1. As such then SGI can be viewed as contributing both to issues of competitiveness through SGEI and to issues of social balance through SSGI. Moreover, the reality that responsibility for SGI falls to the Member State level while, at the same time, SGI itself is assigned a key role in the promotion of supranational objectives pertaining to territorial cohesion, immediately places the issue within the wider framework of EU multilevel governance. Despite the close relationship between the EU’s territorial cohesion objectives and its position on SGI provision, it is clear that attaining fair access to affordable and high-quality SGI across the EU territories – as promoted in the White Paper on SGI (CEC, 2004: art.2.1, par.2) – will be extremely difficult to achieve. The reasons for this are multi-faceted. On the one hand relating to the complex multi-level setting of responsibilities and the inherent diversity of Europe with regards to economic development, culture, social conditions, history and the particular endowment of welfare-related institutions, any or all of which can potentially impact the attainment of common SGI objectives across the European territory. On the other hand relating to the additional challenge of needing to address the specific regional conditions across different types of territory. As such, it may be useful to attempt to introduce new perspectives and methods designed to help tackle this problem and to facilitate solutions. One such approach is offered in this chapter and relates to the use of scenario building. Scenarios are exercises in ‘coherently structured speculation’, as Sparrow (2000) puts it. They are stories that describe possible futures. Their usage however represents an attempt not to map out the future but rather to explain its inherent possibilities; therefore scenarios deal with uncertainties in ways that are specifically intended to support decision-makers by highlighting the potential implications of, and possible responses to, various foreseeable and unforeseeable events (Van Notten, 2005). Most studies that deal with the future of services focus on discreet or individual services in isolation for instance, in relation to education (Daanen and 1 In this exercise on creating scenarios for SGI provision within different grand policy environments, the exact legal impacts will not be taken on board but the main focus will lie in the consequences for different types of territories.

Europe’s possible SGI futures

125

Facer, 2007; Blass et al., 2010), health (Schreuder, 1995), energy and transport (Sircar et al., 2013), etc. In this study, services are conceptualised in an integrated way with the scenarios structured in accordance with different providers, namely, the market, the state and civil society, in order to generate the respective explorative scenarios: Competitive, Social and Green Europe. While this approach may, initially at least, seem rather general in the manner in which it attempts to address a wide range of services it does nevertheless allow for a comprehensive discussion of the territorial consequences of SGI provision on the basis of a number of different organising assumptions. Based on these scenarios, this chapter presents and discusses the results of an assessment carried out by a group of national and regional experts from across Europe, drawn from a number of different territorial settings, with the aim of outlining the consequences for different types of territory of three distinct SGI futures. As such, the question of ‘in which SGI-futures will different types of territory profit or be challenged?’ will be answered on the basis of interviews and with reference to the average level of European development. In the following section some methodological considerations in respect of scenario building in general and those specifically relating to the exercise undertaken in this study in particular, are presented. Significant attention is given to expert participation throughout the process of scenario elaboration. At the end of this section the three explorative SGI scenarios are introduced. Section three focuses on the assessment of the SGI scenarios by experts from nine countries and regions across Europe, each representing a different type of territory. It also describes the assessment method and presents some of the results by means of a discussion of SGI provision in relation to the differing socioeconomic regimes of the countries/regions discussed and to the varying types of territory. The chapter concludes by highlighting the main findings of the study which indicate that potential future provision patterns, in respect of SGI, are likely to require the adoption of different place-specific solutions and are thus unlikely to be amenable to a generic ‘one-size-fits-all’ approach. Instead, a compromise focusing on a mix of Europe-wide principles and regionally specific targets is recommended.

2.

Looking into the future: the research process

Explorative scenarios deal with possible futures. They answer the question, ‘What can happen?’ (Börjeson et al., 2006). They acknowledge deep changes in their scope; therefore, they are useful when engaging in long-term planning. Explorative scenarios assist the process of developing robust strategies which can endure different kinds of external development. As such, they provide a

126

Luciane Aguiar Borges et al.

framework for the development and assessment of policies and strategies (Svenfelt, 2010). Most of the literature on futures studies strongly recommends the participation of a diverse range of stakeholders in scenario building (Carlsson-Kanyama et al., 2008). This helps to broaden perspectives and has generally proven key in the production of more robust scenarios. Therefore the process of designing the explorative scenarios (Borges and Hummer, 2013) was supported, at different stages, by the participation of various experts. Figure 1 summarises the consecutive steps in respect of the scenario design process which was undertaken during the two year period, from 2011 to 2013.

Figure 1: Scenario design process in the ESPON SeGI research project (cf. Borges and Humer, 2013). SeGI is the acronym of the ESPON project: Indicators and Perspectives on Services of General Interests – SeGI.

This section describes the steps leading up to the creation of explorative scenarios. The scenario assessment – in some ways the final methodological step – is presented and discussed in detail in the following section of this chapter.

Step 1: Interviews with external experts With the aim of discussing the primary SGI drivers and the future challenges likely to be faced in the sector, the first consultation undertaken in this study was a questionnaire survey with specialists, decision-makers and experts who deal with SGI on a daily basis. Around five national experts each from Austria, Germany, Iceland, Hungary, Norway, Poland, Romania, Spain and the UK participated in the survey, with each representing a different field in respect to SGI provision. Most of the interviewees pinpointed demographic change, including migration patterns, population social structure, ageing and the economy, and legal regulations on service provision as the main aspects likely to influence the future

Europe’s possible SGI futures

127

provision of SGI. The size and location of settlements were also mentioned in the sense that small municipalities are more likely to suffer from the withdrawal of various services due either to a decline in the number of potential recipients or because of fiscal tightening which is also likely to affect the financing and quality of SGI. In regards to the main challenges facing the future provision of SGI, a wide range of answers were documented. Territorial aspects associated with demographic change, economic features – e. g. the financing of services, etc. – governance, environmental threats – e. g. the shortage of natural resources, natural disasters – and the increasing plurality of lifestyles figured prominently here. In addition, in those regions that face demographic problems, spatial planning and technological development were mentioned as being crucial in any attempt to cope with the territorial aspects associated with the challenges linked to SGI provision. Step 2: Experts workshop 1 The objective of this workshop was to establish a link between the scenario design process and two primary EU policy documents: Europe 2020 and the Territorial Agenda ‘TA 2020’. Since both documents deal with the future, the analysis of their long-term objectives in relation to SGI helped to identify which SGI may be prioritised in future. The seven workshop participants were asked to (i) identify the main SGI that would empower accomplishment of the objectives stated in Europe 2020 (CEC, 2010) and (ii) pinpoint which SGI would best counteract the challenges faced and endorse the priorities declared in the Territorial Agenda 2020 (European Union, 2011). The participants were then asked to identify synergies and hindrances arising within the different types of ‘growth’ – smart, sustainable and inclusive – and SGI. The overall consensus was that the underlying tensions between economic and social priorities at the EU level remained a significant obstacle to progress in this area. The workshop participants associated the notion of ‘smart growth’ developed in the EU 2020 document with education and ICT potentialities such as eeducation, e-administration and e-connectivity. The EU 2020 notion of ‘Sustainable Growth’ was related to basic services such as gas, electricity, water and transportation. Education, ICT, social care and housing were the main services identified as fulfilling the objectives of the EU 2020 in relation to ‘Inclusive Growth’. It is, moreover, worth pointing out here that ICT was mentioned in all kinds of growth. As such, all of the workshop participants acknowledged the potential of technology to counteract environmental challenges, enhance economic growth and promote social cohesion. The Territorial Agenda of the European Union 2020 (TA 2020) aims to fulfil

128

Luciane Aguiar Borges et al.

the EUROPE 2020 Strategy while placing territorial cohesion principles at the core of its approach. The document identifies six challenges and six priorities (see Figure 2). To render these linkages more explicit the workshop participants were asked to correlate both challenges and priorities in relation to SGI. Figure 2 reproduces the matrix used in the workshop.

Figure 2: Matrix TA 2020: Challenges and territorial priorities.

Most workshop participants pinpointed ICT services as being important in offsetting the threats posed by globalisation and economic crises and in the enhancement of EU integration and regional interdependence in relation to almost all six territorial priorities. Social services such as healthcare and education were tightly coupled with demographic and social challenges in relation to all territorial priorities. On the other hand, basic services – such as water, waste, energy sewage and transport services – were linked to climate change and environmental risks as well as to energy challenges and competitiveness. The creation of incentives to promote environmentally friendly alternatives in the provision and management of these services was highlighted as an essential measure. Education and transportation were also identified as likely to be beneficial in addressing the challenges associated with natural and cultural heritage, particularly in relation to most of the territorial priorities. Although the analysis of EUROPE 2020 in relation to SGI did not provide a precise indication of the main types of SGI likely to be prioritised by the EU in the future, it did, nevertheless, help participants to appreciate that, in the scenarios, SGI would be addressed in two categories: Services of General Economic Interest (SGEI) and Social Services of General Interest (SSGI). The analysis of the Terri-

129

Europe’s possible SGI futures

torial Agenda 2020 raised doubts about the ability of polycentric spatial structures to deliver SGIs more efficiently. Cross border and transnational functional regions were also discussed in relation to the perspective of ‘winners and losers’, considering different policies in regards to SGI provision in these regions. Step 3: Expert workshop 2 All sixteen members of the TPG group participated in this workshop. They were divided into four groups which dealt with different SGI: (a) education and healthcare; (b) labour market issues; (c) transportation and roads and (d) ICT. Based on the European Commission’s White paper statement on the provision of SGI, the groups were asked to (i) identify the measures required in order to realise the goal of providing ‘SGI to everyone, everywhere’; (ii) identify the actors needed to make the change happen and (iii) identify how, and by whom, these actors could be stimulated to take action (Wangel, 2012). “ensuring the provision of […] services of general interest to all citizens and enterprises in the European Union. […] Citizens and businesses rightly expect to have access to affordable high-quality services of general interest throughout the European Union. For the citizens of the European Union this access is an essential component of European citizenship and necessary in order to allow them to fully enjoy their fundamental rights. For enterprises, the availability of high-quality services of general interest is an indispensable prerequisite for a competitive business environment” (CEC, 2004).

Table 1 displays the main outcomes of the workshop. Table 1: TPG workshop 2: measures and actors to enable SGI ‘to everyone, everywhere’ (cf. Borges and Humer, 2013). WHAT? (MEASURES) EDUCATION Lower the costs of & HEALTH provision with use of ICT. Institutional & regulatory factors

WHO? (ACTORS) Administration authorities Private actors

HOW? (ACTION) e-education to peripheral areas;

Government Civil society

Due to liberalisation create framework within which provision of services can be established and controlled.

Flexible labour market Government regulations: shortage Elderly workers, of skilled labour force Migratory labour force Voluntary workers

Enabling members of society to access resources (time, skills) to allow active participation in areas providing the services.

130

Luciane Aguiar Borges et al.

(Continued)

LABOUR MARKET

WHAT? (MEASURES) Establish labour market offices to manage demand and supply in regions

WHO? (ACTORS) Regional authorities Authorities on employment services

Use distance learning

Universities, Secondary schools

Education matches needs of economy

Government bodies / ministries / institutes

ROAD AND Maintenance and enTRANSPORT largement of the EU network Sustain small scale mobility

Transport adaptation for ageing population Increasing use of renewables

Need to work across institutional boundaries EU TEN-T competitive National governments with flights Integration of neighbouring countries Local government Urban and regional planners Civil society Private companies Civil society Government Urban planners

Car pooling Decreasing private car use Improvement of public transportation Rationalisation of transport on demand Car sharing

Universities R& D Government Private companies Civil society as endusers

Territorial dimension should be taken into consideration: global private players, many players, More auto sourcing: private companies provide the service but are paid by government Multi-modal systems development

Enlargement of public Urban planners transport system Civil society Understand the new logic of flows (flexibility of working hours and travel for leisure)

HOW? (ACTION) Tax deductions and companies employing workers from those currently unemployment The actors and institutes / ministries for education

Universities R& D Government Civil society

Government incentives for research in mobility and ICT Cooperation of different actors New government: cooperative administration structure

131

Europe’s possible SGI futures

(Continued)

ICT

WHAT? (MEASURES) Provide ICT to sparsely populated areas to aid coverage of other SGI

WHO? (ACTORS) Government Private investiture

HOW? (ACTION) Private actors can be stimulated by governments through subsidies to provide ICT in remote areas

This workshop proved key to identifying the main stakeholders able to influence the future provision of SGI. Discussions of the various actors led to the decision to structure the explorative scenarios in such a way that they reflected different providers, namely, the market, the state and civil society. SGI futures As noted above, SGI provision is complex and dependent on various contextual and territorial factors. Both short and the long-term SGI provision is dependent on both demographic and economic development. Reciprocal links exist between both aspects as population size and structure define an economy’s resource base in terms of human capital, while population size and structure shape the consumer side. Demography and the economy are also intertwined with environmental conditions. A rising population – and with it economic development – means that additional natural resources will be spent while resource stocks are depleted more quickly. Nevertheless, the effects of a growing population on the environment can be minimised if the economy is able to benefit from new technical innovations. The political framework in which SGI provision operates is also an outcome of the ongoing dynamic played out between demography and economic development. For instance, growing economies are likely to allocate more resources to SGI, enhancing their availability and efficiency which might, in turn, reduce the pressure created by the age old conflict between equity and efficiency. In addition, SGI provision is also a territorially sensitive matter. So, provision which is initially shaped across numerous policy spheres becomes territorial reality, but this reality may be differentiated across various types of territory supporting different population densities and physical preconditions – i. e. urban, rural, border, island, mountainous, etc. The European Commission’s White paper statement on the provision of SGI suggests that the role of SGI providers is fairly active while the character of the users is quite passive in the provision of services. Based on this, the explorative scenarios were structured according to three main providers: the market, the state and civil society. The statement also highlights SGI standards such as availability, accessibility, affordability, quality and variety. These standards are

132

Luciane Aguiar Borges et al.

consecutively interrelated, e. g. accessibility already implies availability and, best accessibility is worth nothing if the actual SGI is unaffordable for users and so forth (Fassmann, Rauhut and Humer elaborate further on the five standards of SGI provision elsewhere in this edited volume). The explorative scenarios were then designed to depict the future behaviour of SGI drivers, SGI standards, and various types of territory in relation to different SGI ideal-type providers (market, state and civil society). From this analysis three ‘possible European futures’ emerged: Competitive Europe, Social Europe and Green Europe. The matrix below depicts the relation between these variables while the explorative scenarios are presented, in turn, in the following sub-sections. SGI in a Competitive Europe ‘Competitive Europe’ is a market-oriented scenario where the role of the public sector is limited. Europe is globally committed and adjusts its trade policies to the world market. Therefore, European economies increasingly focus less on internal demand than they do on promoting innovation and efficiency. To strengthen competitiveness European integration is reinforced especially in relation to issues such as growth promotion – e.g. single market, trade, R& D. Environmental issues are also important due to the increasingly challenging nature of global climate change and thus also as a profitable developmental strategy. However, traditional middle-income occupations and the lifestyles they once supported – high personal mobility and consumption – are still sustained in a way that is becoming increasingly environmentally unfriendly. Population size and structure is a decisive production factor. Competitiveness leads to free movement within the EU space. People may move to find work in different areas of Europe almost without restriction. Societal needs are of low significance. Societies are predominantly shaped by the market and people are expected to pay the cost price for the provision of a service. Those who cannot afford to do so cannot consume or have to rely on substitutional SGI via informal schemes. Only weak support exists for those parts of society in receipt of special needs. The provision of SSGI entails modest social insurance. Benefits cater mainly for those on low incomes. The progress of social reform is severely circumscribed by liberal work-ethic norms. Entitlement rules are therefore strict and often associated with stigma. In turn, the state encourages the market, either passively by guaranteeing only a minimum, or actively by subsidising private welfare schemes. High educational attainment and the promotion of innovation and research are the preferred strategies for growth delivery. Higher education is based around an ongoing process of cooperation between the university sector, industry and government. R& D is thus driven primarily by market needs.

Europe’s possible SGI futures

133

SGEI are viewed as being of greater importance than SSGI. ICT services and transportation are given high priority status on the EU agenda in relation to the promotion of communications efficiency and the circulation of flows of individuals, capital, information, etc. Both services also promote frictionless mobility as a strategy to reinforce the internal market and support the economic interaction of Europe with other parts of the world. Since one of the primary factors in the location choices of enterprises is good lifestyle conditions for their employees, the concentration of company premises in particular areas has a significant impact on the availability and quality of services at the individual level. The shape of the European territory is moulded in a concentrated manner because the market invests primarily on the basis of the prospects for profit. In regions where economic growth is weak, it is more difficult to address demand levels as public interventions are limited and private services are not as profitable as in agglomeration regions. In prosperous regions, private services are more cost-effective because of economies of scale, deregulation and the higher level of demand for services, not only in terms of SGEI but also in relation to health, elderly and child care. As such, regional inequalities are heightened under this scenario. This holds true in general terms for economic development, labour market conditions, educational activities and general service supply. These imbalances also foster the emergence of underlying divergent tendencies across Europe’s regions. SGI in a Social Europe This scenario is a reaction to the ideology of competition and individualism. In it, European societies value solidarity, equality and social justice above competition. Here it is the public sector that is the main provider of SGI. Universalism is the guiding principle: SGI should be accessible, available and affordable for all. The market plays a secondary role and civil society is rather passive. Strong governmental intervention is not however supportive of private and nonprofit engagement. In terms of international cooperation, in this scenario the EU Member States have become rather introverted, focusing on their own needs. Common global action is thus quite limited while the European Union’s global role is now very limited. Rather than tolerating complementarity between state and market provision, the individual national welfare states must promote equal standards. A familyfriendly welfare policy has a positive impact on fertility development with a growing population in many regions. This positive population development is a consequence of decreasing mortality and increasing fertility and less a consequence of immigration in this scenario. Environmental issues are acknowledged in relation to the imposition of a strict regulatory regime on the activities

134

Luciane Aguiar Borges et al.

of private sector companies and enterprises. Energy resources are exploited and distributed in a planned manner, basically, in accordance with the short-term needs of the population and business without the promotion of innovative, alternative methods. The state is the only actor that can redistribute income and resources. Because of its market power in the SGI area, the state can engage in price discrimination and charge different price rates for the same service in different areas using the ‘surplus’ from the high paying areas to subsidise those where the service, for one reason or another, runs at a loss thus stabilising provision costs and increasing accessibility and affordability. In terms of SGI financing, efficiency is a minor concern with fiscal transfers – taxation, subsidies, re-distribution – remaining high. SSGI are prioritised. Education, health and social care are the core of this social Europe since these services ensure individuals’ basic rights. The variety of SSGI is rather low although availability and accessibility are high. Significant investments in SGEI can be made by the state since their long-term benefits are assured. Investments in transport are not intended to be profitable but rather to allow people to satisfy their basic mobility and communications needs. ICT develops rather slowly. ‘Social Europe’ promotes regional development and stimulates territorial cohesion. Cohesion policy is focused to a much greater extent on the equalisation of regional disparities. Attempts to address regional imbalances however burden more dynamic and prosperous regions. This has a direct impact on the provision of SGI. Territorial policies focus on helping struggling regions particularly those facing ageing, unemployment, and low labour force participation. In central regions, the focus is on SGI of higher centrality such as higher education and specialised care services. The public sector is able to address these challenges based on a high level of monetary re-distribution while the market is involved only as a minor complementary factor in the provision of SGI. This situation will be found most frequently in expanding regions while in stagnating regions individual or public solutions will be more frequent. SGI in a Green Europe This scenario emerged as a response to the failure of both the market and the welfare system, neither of which could prevent the emergence of severe ecological challenges. Society therefore finds alternative ways to organise. Europe has adopted a zero-growth policy as a way to reduce the pressure on its environmental resources. The EU Member States make a joint effort to address growing environmental concerns. Social cooperation and local scale activity are key concepts in the quest for economic stability. Traditional EU integration efforts stagnate. The EU Member States respond differently to the new economic

Europe’s possible SGI futures

135

model. Countries with a tradition of small-scale production and cooperative government systems cope better with the new social and economic conditions. Economic and societal activities are increasingly intertwined. Society is an engine for the economy in terms of initiating and carrying out activities. Most goods and services are locally produced and consumed. Small businesses are the main employers, providers and consumers of the goods and services that sustain the local economy. Local and regional production is also supported by bottom-up networked organisations that link producers and distributors into a system that helps to guarantee access to a variety of goods produced regionally. Innovation and information is spread informally and depends on the free-networked organisations. Limited access to environmental resources reshapes individual lifestyles. Mutual self-help and a life in harmony with nature have grown in popularity, supported by the rearrangement of family structures and social organisation in small communities. The progressively ageing nature of the population is not really an issue of labour force resources as those who formally would have been considered ‘old aged’ remain in work life – at least in part-time community work – for as long as possible. Most SSGI are managed within the context of each community’s own resources. Housing or social transfer schemes are organised individually in a bottom-up manner and are based on civic engagement but lack security of provision. Education and care are at least partly provided on a family basis or by voluntary associations. Specialised human resources are obtained in special centres located across Europe which are not however easily accessible by all people. A few centres are dedicated to research and innovation related to SGEI which is provided and sustained by joint cooperation between countries. Research focuses primarily on environmentally friendly ways of living. The demand for SGEI, including ICT, has generally declined. Societies have instead arranged themselves such that they are as independent as possible of these ICT technologies. High energy prices have been counteracted with new forms of energy. Waste and sewage systems are run and organised by local initiative groups without public authority involvement. Intra-regional public transport is organised similarly. However, territorial distance has become a significant obstacle. Peripheral, rural and remote regions are negatively affected by long distances to specialised services and high transportation costs. As such, densely populated regions with more central geographical locations become better at organising specialised SGI. Nevertheless, traditionally urban and/or metropolitan areas are in an unfavourable position given the complexity of parallel bottom-up smallscale solutions in a rather atomistic societal setting. European territories will increasingly be shaped differently according to the respective small-scale solutions adopted in individual regions.

production factor low significance

profitable

Demography Society

Environment

Policy Economy

COMPETITIVE (primacy of the market) Strong EU. Weak policies as a whole global

SCENARIOS

regulating

target value preserving

SOCIAL (primacy of the state) Weak EU. Strong national politics fixed

Table 2a – Scenarios’ rules of interaction – drivers of SGI provision (cf. Borges and Humer, 2013)

sustainable

mutual dependency civic engagement

GREEN (primacy of civil society) Weak EU. Bottom up democratic local

136 Luciane Aguiar Borges et al.

emergence of specialised regions

SGI products within a wide quality-range

substitutional SGI products within a wide price-range

Quality

Variety

densely : multitude of same providers for more options in providers; sparsely : everyone; polycentric no or few providers compulsory territory assignment of users to providers

same (low/high) level of quality inquality of services of- different in all terfered ritories

lower prices in territories of concentration

Affordability no subsidies, everyone pays full price

different sort of producers with different level of professionalism everyone can take initiative him/ herself (bottomup)

insecure decommodified costs (time and effort)

dependent on status of socio-econ. integration

different sort of producers according to type of territory more providers in densely pop. territories

un-coordinated locations; primarily small scale solutions; Incomparable prices due to small, placebased provision

GREEN (primacy of civil society) Territorial Social Territorial perspective perspective perspective SGI products with- provider defines associated proin a wide quality their beneficiaries/ viders esp. reprange users/ members resented in urban areas

hierarchically- ordered locations; supporting sparsely pop. areas indirectly more exsame prices in all pensive for higher in- territories come people

dynamic location if uneven, then supformations; mobility porting people on a mainly left to the user needs basis

SOCIAL (primacy of the state) Social perspective following min. standards; producer-oriented provision

Accessibility uneven, depending on available income

SCENARIOS COMPETITIVE (primacy of the market) SGI Social Territorial standards perspective perspective Availability wide range of territories with clusopening hours, ters of providers vs. territories with lack consumer-oriented provision of providers

Table 2b – Scenarios’ rules of interaction – standards of SGI provision (cf. Borges and Humer, 2013)

Europe’s possible SGI futures

137

138

3.

Luciane Aguiar Borges et al.

Assessing the scenarios for different types of territory

With the aim of evaluating the provision of SGI for each of the three explorative scenarios, a survey of several European countries and regions was undertaken with TPG experts from nine countries and regions across Europe, each representing a different type of territory. A template was then developed to evaluate the provision of SGI. Based on the economic, demographic, social, political and environmental SGI drivers, the experts, who were part of the SeGI Transnational Project Group, and who had already been asked to develop studies on SGI provision in their own countries and regions, were asked to evaluate the provision of SGI ‘to everyone, everywhere’ taking as a reference the EU27+EFTA4 average. This average is provided by another SeGI-related study by Humer and Palma (2013) which combines a multitude of single SGI indicators across European regions. The experts were also asked to consider ‘provision’ as the framing term for SGI availability, accessibility, affordability, quality and variety. The template was distributed to the experts by email prior to the conducting of telephone interviews. The expert interviewees were all between 30 and 50 years old and the sample was balanced with regards to gender. In order to facilitate the assessment of the scenarios in different socio-economic, political and territorial settings, not only in terms of singular case interpretations, the nine countries are, in addition, derived from different socioeconomic state regime types. Various classifications from the welfare state literature (for an overview see e. g. Nadin and Stead, 2008) led to a three-type classification that builds primarily upon the distinction between Beveridgean and Bismarckian-based welfare regimes. Beveridgean welfare policy is characterised by low de-commodification – i. e. involving market forces – and low stratification – i. e. high social mobility. For those welfare regimes in the Bismarckian tradition it is the other way round. While the principle Beveridgean approach is more universalist, the Bismarckian approach is a means-tested welfare policy (see e. g. Esping-Andersen, 1990 and Bonoli, 1997 for a more thorough discussion). One specific region per country was then picked. These nine regions were ranked according to the type of territory that they represented. The classification proposed by the European Commission’s Directorate General for Regional Policy ’DG REGIO’ and the OECD (Dijkstra and Ruiz, 2010 and ESPON-Typology-Compilation) allows for a comprehensive ranking from remote to metropolitan. While the grouping of the countries aims at depicting the socio-economic and political qualities of the different states, the ranking of regions should enable us to identify trends in the three scenarios that obviously follow a territorial pattern. Table 3 presents the case studies and their classification according to countries and territories listed between one and nine along

139

Europe’s possible SGI futures

an axis based on their remoteness-to-urbanisation score. The states following the Bismarckian approach are sub-divided into the more traditional proponents of this approach – Austria and Germany – and those that may be termed protoBismarckian welfare states. This sub-group includes those states without a long tradition of organised welfare but who are seemingly moving towards a Bismarckian pattern of welfare production and provision, such as Spain, and those who have had an ‘interrupted’ history of Bismarckian provision, such as Poland. The Radical-Beveridgean grouping is something of an amalgamation of the Esping-Andersen categories of Liberal and Social Democratic welfare states which have moved much closer together since the 1990s and which are regularly referred to in the literature (Castles and Mitchell, 1993; Korpi and Palme, 1998; Bambra, 2007; Ebbinghouse, 2012 and Hemerijck et al., 2013). The state of Romania is such a new welfare regime that it currently lacks a clear position and therefore is not assigned to any of the socio-economic groups. Table 3: SeGI case studies (modified after Borges and Humer, 2013) Country NUTS0

Region NUTS2 (ca.)

Type of Territory*

IC – Iceland

Soc-econ. grouping Radical Beveridgean

Northeast Iceland

1 – remote, island, sparsely populated, coastal

NO – Norway HU – Hungary

Radical Beveridgean ProtoBismarckian

Finnmark

2 – remote, border, sparsely populated, mountains, coastal 3 – rural, border

D¦l-Alföld

AT – Traditional Austria Bismarckian RO – Romania

East Austrian Periphery Northeast Romania

4 – rural, border, mountains

UK – U.K. ES – Spain

Radical Beveridgean ProtoBismarckian

South Gloucestershire Navarre

6 – intermediate, coastal

PL – Poland DE – Germany

ProtoBismarckian Traditional Bismarckian

Mazowsze

8 – intermediate, metropolitan

Ruhrgebiet

9 – urban, metropolitan

5 – intermediate-rural, border

7 – intermediate, metropolitan, border, mountains, coastal

*Types of territory according to the ESPON-Typology-Compilation – re-aggregated from NUTS 3 level. Qualitative and relative ranking from 1 ’very remote and peripheral’ to 9 ’very urban and metropolitan’

In the following, the results of the TPG expert opinions on the provision of SGI in their countries – NUTS0 – and regions – NUTS2 will be presented.

140 3.1.

Luciane Aguiar Borges et al.

Provision of SGI at the national level, NUTS 0

The expert opinions are illustrated in a comprehensive way. Figure 3, below, indicates the experts’ indications on the performance of their country, both in relation to the current situation – compared to the EU27+EFTA4 average – and to the three explorative scenarios. The hollow bars indicate the country’s best position.

Figure 3: Summary of expert opinions on the provision of SGI at the national level in different scenarios.

The first important finding is that there is no clearly ’best’ scenario. In each of the SGI futures, we find some countries that are better-off while others appear worse-off. However, four of the nine national experts evaluate their country’s current situation as better than any of those contained in the three scenarios. These are the traditional Bismarckian countries of Germany and Austria as well as Proto-Bismarckian Spain and Radical-Beveridgean Iceland. In addition to Norway, it is the Proto-Bismarckian countries of Hungary and Poland who see their best option in a Social Europe SGI-scenario, while Romania is the only country that experiences a better level of performance in the radical Green scenario – although the competitive scenario also delivers significant im-

Europe’s possible SGI futures

141

provements over the current situation for Romania. Not surprisingly, the UK with its liberal tradition views a more competitive Europe quite favourably. The competitive scenario appears to be the better option in the opinion of the UK and to some extent also of the Romanian experts. Both countries however start from rather different positions. While the UK belongs to the radical Beveridgean group, Romania has only recently joined the EU and has, since its abandonment of communism, yet to develop a clear position in terms of its likely welfare trajectory. This, perhaps, goes some way to explaining why it is difficult to allocate it a ‘best outcome’, as its current baseline is so weak, relative degrees of improvement are difficult to gauge. In general terms however, both traditional and Proto- Bismarckian welfare states see a relative downturn in the context of this scenario. ‘Social Europe’ is viewed as a very favourable scenario for the Bismarckian groups as well as for non-EU Norway. The Norwegian specialist argues that Social Europe would provide the best future for Norway because the ongoing processes of privatisation and part-privatisation, designed to keep the public sector finances in balance imply that services will become less affordable for the poorest. Countries like the UK, Spain and Romania however do not look positively on a future based on the social Europe scenario in terms of SGI provision. The Green Europe scenario poses the most difficult problems for the experts, probably because it is the furthest from current experience, with the majority of experts being unwilling to give a clear indication of whether they view it positively or negatively.

3.2.

Provision of SGI at regional level (NUTS 2)

At the regional level, the larger picture is similar in so far as each possible future presents both ’winners and losers’, with the green scenario again causing the most uncertainty. What is striking however is that the ’winners and losers’ in the various scenarios are generally from specific types of territory. In the current situation, the medium urbanised areas find themselves in the most unfavourable positions while the extreme version of extreme periphery – such as the regions in Norway and Iceland – as well as the highly urbanised ones in Germany, Poland, Spain and the UK do fairly well, according to the experts. The competitive scenario reveals a territorial ranking of 2–5–3–4–7–1–6–8–9. So, with the exception of Iceland a pattern clearly favouring urbanised areas under this scenario is revealed. In the Social Europe scenario, territorial expectations are less polarised and aligned as follows: 8–5–7–6–3–1–4–9–2. Here, the German Ruhrgebiet, in the second best position is an exception; otherwise it is generally the rural regions that do relatively better in terms of SGI provision in

142

Luciane Aguiar Borges et al.

Figure 4: Summary of expert opinions on the provision of SGI at the regional level in different scenarios.

this setting according to the experts. The results for the Green Europe scenario are difficult to gauge, reflecting perhaps the level of uncertainty faced by the experts in coming to terms with this scenario. As such, SGI provision remains difficult to assess under the radical premises of the Green Europe scenario.

3.3.

SGI provision for different types of territory under different socio-economic policy regimes

Having looked at the SGI scenarios separately, in relation to socio-economic policy at the national level and at the territorial/ regional level, these two qualities will now be discussed in conjunction in order to better analyse their interrelations with a view to gaining an aggregate view, thus adding value to the overall analysis. A clear picture emerges for the Bismarckian regimes, generally favouring the

Europe’s possible SGI futures

143

Social Europe SGI scenario – with the more traditional welfare states in a relatively better position than the proto-Bismarckian developing states. Within the Radical-Beveridgean grouping there is less agreement with expert opinions perhaps reflecting ideological zeitgeists, rather than the practical realities of current and possible future SGI implementation. On a regional scale, in the Competitive Europe scenario, experts see a more positive future for SGI provision in urban areas, while peripheral areas are expected to be better-off in the Social Europe scenario. Two additional points are however worthy of further comment here. First, there is the case of the highly metropolitan and polycentric Ruhrgebiet in Germany. Irrespective of the variations at the national level, this region performs well in every possible future scenario. Secondly, with the exception of the urbanised Polish region of Mazowsze in the Competitive Europe scenario, the regions of the less traditional welfare regimes are regularly estimated to remain worse-off than regions from the established welfare regimes, irrespective of the type of territory they represent. Clearly then, urban areas are expected to face fewer challenges in respect of future SGI provision, although this relates rather more to their level of embeddedness in a national socio-economic policy regime than to the regional typography. History is more important than geography – thus national level policy frameworks remain key in terms of future SGI provision at the regional level even though implementation often occurs at the regional or municipal level.

4.

Final Considerations

The findings of this study illustrate that the expert opinions regarding SGI, and in relation to the potential future provision patterns, are likely to require the adoption of different place-specific solutions, rather than being simply amenable to a generic ‘one-size-fits-all’ approach. Attaining the EU’s Territorial and Social Cohesion objectives with regard to SGI implies the adoption of different solutions which are dependent on (i) specific national – socio-economic, political, historical and cultural – conditions and the particular endowment of welfare-related institutions, and (ii) the territorial conditions of different types of territory such as urban, rural, border, etc. In addition, it is important to note here the interrelated importance of the two aspects of national frameworks, plus the regionally specific situations, in respect of SGI provision in the light of the EU’s strategic policy options. What we learn from the SGI scenarios and the experts’ assessment in both the national and regional contexts is that a place-based approach towards the objectives of SGI provision in Europe must address several levels and respect

144

Luciane Aguiar Borges et al.

specific regional settings. First, the European Union is likely to continue the complementary pursuit of competitiveness-oriented and cohesion-supporting policies at the supranational level because both of these grand policy approaches generate opportunities for SGI provision in specific regional settings. Second, these policies will manifest rather differently in the various specific national, socio-political and economic contexts. Despite the importance attached to regionally sensitive EU policies, the influential, historically path-dependent nature of national welfare approaches simply cannot be forgotten – and this is a decisive factor when it comes to SGI provision. Third, there is in part a clear spatial reasoning for the prospective SGI future of different types of territory. Urban, densely populated areas will clearly face – irrespective of the upper-tier settings – less challenges in terms of future SGI provision. This does not however mean that rural and peripheral areas will necessarily face a difficult future in terms of SGI provision as the national institutional-administrative contexts and opportunities provided by the EU are generally decisive in sustaining SGI provision in unfavoured areas. To conclude with a final thought on the alternative future option for SGI provision; a future that was expressed as a ‘third way’ strategy of higher sustainability and the de-prioritising of both the competitiveness and cohesion objectives, expert opinions were rather reticent in respect of this scenario and, given the circumstances, this is perhaps understandable. On the other hand, an alternative SGI future with significant responsibility allocated to bottom-up solutions and the greater involvement of civil society may suggest promising strategies to complement the glaring lacunae in the trajectories of the main competitiveness and cohesion strategies. Interestingly, what this radical alternative suggests is that in the future, regional SGI provision need not necessarily be pre-defined historically and geographically.

References Bambra, C. (2007) Going beyond the three worlds of welfare capitalism: regime theory and public health research; Journal of Epidemiology and Community Health. Dec. 61(12). Bonoli, G. (1997) Classifying Welfare States: a Two-dimension Approach; Journal of Social Policy 26 (3): 351–372. Borges, L. and Humer, A. (2013) Scenarios of SGI in Europe; ESPON SeGI Final Report/ Scientific Report Chapter 14, Luxembourg. Blass, E., Jasman, A and Shelley, S. (2010): Visioning 2035: The future of the higher education sector in the UK. In: Futures 42(5) (445–453). http://dx.doi.org/10.1016/j. futures.2009.11.029. Börjeson, L., Höjer, M., Dreborg, K. H., Ekvall, T. and Finnveden, G. (2006). Scenario types and techniques: towards a user’s guide; Futures 38 (7) 723–739.

Europe’s possible SGI futures

145

Carlsson-Kanyama, A., Dreborg, K. H., Moll, H.C. and Padovan, D. (2008): Participative backcasting: A tool for involving stakeholders in local sustainability planning; Futures 40 34–46. Castles, F. and Mitchell, D. (1993) Worlds of Welfare and Families of Nations. In Castles F (ed) Families of Nations: Patterns of Public Policy in Western Democracies. Aldershot, Dartmouth. CEC (1999) European Spatial Development Perspective: Towards Balanced and Sustainable Development of the Territory of the EU, Luxembourg, Office for Official Publications of the European Communities. CEC (2004) White Paper on Services of General Interest, COM (2004) 374 final, Brussels. CEC (2010) EUROPE 2020: A strategy for smart, sustainable and inclusive growth, COM (2010) 2020 final, Brussels. Daanen, H. and Facer, K. (2007) 2020 and beyond: Future scenarios for education in the age of new technologies. Futurelab. Online, available at: www.futurelab.org.uk/open ingeducation. Retrieved on December 2013. Dreborg, K. H., (2004) Scenarios and Structural Uncertainty – Explorations in the Field of Sustainable Transport. Doctoral thesis, Royal Institute of Technology, Stockholm. ESPON Typology Compilation: http://www.espon.eu/main/Menu_Projects/Menu_Scien tificPlatform/typologycompilation.html. Dijkstra, L. and Ruiz, V. (2010) Refinement of the OECD regional typology : Economic Performance of Remote Rural Regions. DG Regio & OECD, http://www.oecd.org/da taoecd/41/56/45511797.pdf [05 April 2014]. Ebbinghouse, B. (2012) Comparing Welfare State Regimes: Are Typologies an Ideal or Realistic Strategy?; Draft Conference Paper presented at European Social Policy Analysis Network, ESPAnet Conference, Edinburgh, UK Sept 6–8, 2012. Esping-Andersen, G. (1990) The Three Worlds of Welfare Capitalism, Princeton: University Press. ESPON-Typology-Compilation: http://www.espon.eu/main/Menu_Projects/Menu_Scien tificPlatform/typologycompilation.html [05 April 2014]. European Union (2011) Territorial Agenda 2020 agreed at the Informal Ministerial Meeting of Ministers responsible for Spatial Planning and Territorial Development on 19th May 2011 Gödöllo˝, Hungary. Hatzopoulos, V. (2012) Regulating Services in the European Union, Oxford University Press. Hemerijck A.C, Palm T.P, Entenmann E and Van Hooren F.J (2013) Changing European Welfare States and the Evolution of Migrant Incorporation Regimes; iMPACiM Background Paper University of Amsterdam. Humer, A. and Palma, P. (2013) The provision of Services of General Interest in Europe: regional indices and types explained by socio-economic and territorial conditions; in: Europa XXI, Vol. 23, pp. 85–104. Korpi, W. and Palme, J. (1998) The paradox of redistribution and the strategy of equality : welfare state institutions, inequality and poverty in the Western countries; American Sociological Review. Oct. 63(5). Nadin, V. and Stead, D. (2008) European Spatial Planning Systems, Social Models and Learning, disP The Planning Review, Vol. 172, No. 1, pp. 35–47.

146

Luciane Aguiar Borges et al.

Rauhut, D., Smith, C., Humer, A., Ludlow, D. and Borges, L. (2013) SeGI Indicators and perspectives for services of general interest in territorial cohesion and development ESPON Applied Research 2013/1/16, Final Report j Version 25/5/2013, Luxembourg. Robert, J. (2007) The Origins of Territorial Cohesion and the Vagaries of Its Trajectory. In: Faludi, A. (ed.) Territorial Cohesion and the European Model of Society, Lincoln Institute, Cambridge/MA, pp. 23–35. Schoemaker, P. J. H. (1995) Scenario Planning: A Tool for Strategic Thinking; Sloan Management Review 36 (2): 25–40. Schreuder, R. F. (1995) Health Scenarios And Policy Making: Lessons from the Netherlands. In: Futures, Vol. 27, pp. 953–958. Sircar, I.; Sage, D., Goodier, C., Fussey, P. and Dainty, A. (2013) Constructing Resilient Futures: Integrating UK multi-stakeholder transport and energy resilience for 2050; In: Futures 49, 49–63. Sparrow, O. (2000) Making Use of Scenarios – From the Vague to the Concrete; Scenario & Strategy Planning, Vol. 2(5). Svenfelt, æ (2010) Two strategies to deal with uncertainty in social-ecological systems. Doctoral thesis, Royal Institute of Technology, Stockholm. Van Notten, P. (2005) Writing on the Wall. Scenario development in times of discontinuity. Thela Thesis, Amsterdam. Van Well, L. (2011) Institutional Capacity for territorial cohesion. Doctoral Thesis at Royal Institute of Technology, Stockholm. Wangel, J. (2012) Making Futures: On Targets, Measures & Governance in Backcasting and Planning. Doctoral Thesis at Royal Institute of Technology, Stockholm. Waterhout, B. (2007) Territorial Cohesion – the underlying discourses. In: Faludi (ed.) Territorial Cohesion and the European Model of Society, Lincoln Institute, Cambridge/ MA, pp. 37–59.

Part II: National Insights

Elisabeth Gruber, Heinz Fassmann and Alois Humer

Chapter 6: Demographic change changing SGI demands: The example of Austria

1.

Introduction

Austria’s population has been growing since the late 1950s and not only the size of the Austrian population changed, but also its structure and distribution over the country. Urbanisation, including suburbanisation, made urban agglomerations expand and remote rural areas decline. Declining fertility and outmigration has led to an ageing society and changing family structures and immigration has led to a diversification of society. The ‘demographic change’ that has taken place in Austria – as well as in many European countries – is foremost to be explained by economic factors, as well as political and societal changes. In return, it also resulted in changes for the economy, policy and society and amongst others for the provision of services of general interest (SGI). Since population sizes and structures are changing, needs and demands on SGI are changing, too (Bauer and Fassmann 2010, Bauer et al. 2012, Gans and SchmitzVeltin 2006, Johansson and Rauhut 2005). In this chapter, the impact of demographic change on SGI demands and provision will be discussed using the example of Austria. After an exploration of the demographic development in Austria, economic and territorial preconditions, as well as societal changes will be explained. Later, we will address the main challenges that have arisen for SGI provision and we will discuss possible adaption strategies to the changing demands. The different sections of this chapter are enriched with findings from a case study analysis and expert interviews undertaken by the authors in summer 2012 in the East Austrian region (Gruber et al. 2013) in the course of the research project ESPON SeGI (Rauhut et al. 2013). Fassmann et al. offer in the introductory chapter of this edited volume three different angles from which to approach a discussion on SGI. In this chapter we mainly address contextual issues; more precisely, demographic societal contexts that influence SGI provision.

150

Elisabeth Gruber et al.

2.

Demographic change challenging SGI provision

2.1

The general demographic development

From 1961 (the year of the second population census after World War II) to 2011, the Austrian population has increased by approximately 882,424 people (ca. 9.5 % of the total population), due to an increase in international migration.1 Over the past four decades, there have been only few years when the number of international immigrants has not exceeded the number of emigrants or return migrants. With the end of the ‘baby boom’ in the 1960s, the natural population development diminished to the secondary component of demographic dynamics, with migration development becoming the prime driver shaping Austria’s population stocks. From a purely statistical standpoint it is clear : Austria became a country of immigration in the course of the late 20th Century (Fassmann and Münz 1995). Table 1: Population and population change by components in Austria, 1961–2011 Year of Population Period Population Birth Net Census Census covered Change balance migration 1961 7,073,807 1961–03–21 to 1971–05–11 417,719 340,844 76,875 1971 7,491,526 1971–05–12 to 1981–05–11 63,812 -9,898 73,710 1981 1991

7,555,338 7,795,786

1981–05–12 to 1991–05–14 1991–05–15 to 2001–05–14

240,448 237,071

23,470 69,360

216,978 167,711

2001 2011

8,032,857 8,401,940

2001–05–15 to 2011–10–31 1961–03–21 to 2011–10–31

369,083 1,328,133

21,933 445,709

347,150 882,424

Source: STATISTIK AUSTRIA Population Census 1961–2001 and Register based Census 2011

Due to increasing life expectancy and declining fertility, the age structure of the Austrian population has become more and more uneven. The Austrian population ageing is, compared to other countries, progressing relatively slowly, but the trend is clear and irreversible. In 1961, around 12 % of the Austrian population was 65 years or older and around 22 % were younger than 15 years. The highest proportion of people those in the ‘working age cohorts’, which meant a very convenient age structure from the economic and welfare point of view. In the long run, the high proportion of working cohorts and the low proportion of younger cohorts will lead to very high share of cohorts that drop out of the labour market when the phase of retirements starts. The share of old age people 1 Unless otherwise stated, all statistical figures are taken from the databases of the Austrian National Statistical Office (STATISTIK AUSTRIA).

151

Demographic change changing SGI demands: The example of Austria

is growing and will be significant when those born in the 1960s retire in the 2020s, with an enormous effect on the Austrian welfare state. The ageing process will then accelerate significantly and the share of elderly people will increase to up to one third of the population. By 2030, the number of people aged 65 and older will increase to 2.8 million, double compared the 1.24 million in 2001. The share will rise from 15.2 % (2001) to 31 % (2030). The dependency ratio – which describes the ratio of people in working age (15–64) versus people not yet (until 14) or no longer (65 and older) in working age – will rise from 47.7 (2001) to 82.7 (2030). This means that in our society, for every 100 people in the working age there will be around 83 people who are not, compared to only 48 dependent people 30 years previously. This tremendous change is the cause for societal and political discussions on how to continue financing the social security systems. Table 2: Absolute and relative population by main age groups in Austria, 1961–2011 Year 1961 1971 1981 1991 2001 2011

absolute total 7,073,807 7,491,526 7,555,338 7,795,786 8,032,857 8,401,940

64 873,205 1,061,597 1,145,994 1,166,918 1,241,679 1,492,113

64 12.3 14.2 15.2 14.9 15.5 17.8

Source: STATISTIK AUSTRIA Population Census 1961–2001 and Register based Census 2011

2.2

The spatial differentiation

Population development in Austria shows a strong regional differentiation. In spatial terms, immigration flows have concentrated on urban areas and their surroundings. Vienna remains the main destination area for international immigrants, with 40 % of all registered immigrants to Austria in 2012. Due to the suburbanisation processes, the surrounding municipalities were also characterised by population growth, particularly in the Eastern region, caused by excess of birth over death and a significant migration surplus. Whereas urban agglomerations and suburbs generally gain population, peripheral regions often experience a decline. There, an exodus of young people and dwindling birth rates prevail. However, not all rural areas in Austria have experienced a decrease in population; Austria’s tourism economy, especially in the winter season, generates a prosperous economic situation outside of the urban areas. Former

152

Elisabeth Gruber et al.

industrial cities are generally losing population to areas with a higher share on economic activities in the tertiary sector (ÖROK 2011) In Figure 1, the local population development in the early 2000s is shown with a focus on the East Austrian area, which very well represents the above-described regional situation. Over the past decades, some municipalities have more than doubled the number of inhabitants, while others have shrunk by half. One can imagine the enormous changes for services and administration resulting from this, thinking for example of the housing stock, schools, hospitals and technical infrastructure. National border regions as well as inner-peripheral Alpine regions show mostly population loss, whilst in and around the main urban areas – on this map Vienna and Graz – as well as along and – a pity for the spatial planning authorities –the Western and Southern transport axes mostly municipalities with population gains.

2.3

Demography driven SGI challenges

Changing population sizes as well as changing population structures have produced new patterns of SGI demands and needs with different regional characteristics. Changing demands on SGI are a challenge for public institutions. Declining regions are facing problems sustaining the critical mass that is necessary for SGI provision, while urban areas are reaching the levels of capacity, easily shown on the example of traffic infrastructure: daily traffic jams can be experienced in most metropolitan areas of Europe, while rural areas suffer from a reduction of public transport infrastructure. While expanding SGI provision needs investment from already low public budgets, the decision to remove SGI in regions where the critical mass is not fulfilled anymore is in many cases not an easy one to make. While the private market is very fast in the adaption process, the public sector often lags behind when it comes to adaption as decisions are not purely economic in nature, but often have a strong political determination. The spatial differentiation of population development therefore leads to a spatial differentiation in the supply with Services of General Interest (Machold 2010). The demographic changes challenging SGI provision in Austria is shown below. Shrinking base of customers Population growth is, generally speaking, mainly concentrated in urban areas and economically prosperous areas. Especially for rural peripheral areas, population decline has been taking place over the last decades. This loss of population has deeply challenged and is still challenging the provision of SGI. The

Demographic change changing SGI demands: The example of Austria

153

Figure 1: Local population development in East Austria, 2001–2009 (in Gruber et al. 2013).

154

Elisabeth Gruber et al.

decline of population has meant a decline in the demand for services. Private services, especially retail stores, have been disappearing more and more in declining areas, since economic profit can only be made with a certain critical mass. For some municipalities in Austria population deconcentration processes have been followed by the closing down of stores, supermarkets, restaurants and other private services. The public sector has to adapt to shrinking population sizes. Services of General Interest, organised on the national level, such as post offices or rail infrastructure have been privatised and so exposed to a profitmaking logic. The cost rationality has led to a closing of infrastructure in remote areas with shrinking demands for the services, in other words speaking: Shrinking municipalities have experienced a closing down of services in the last decades due to privatisation and the rationality of cost (Machold 2010). Also services organised on a local level face challenges due to the population decreasing. Municipalities in Austria get shares from taxes based on the size of the population. With shrinking population budgets too are shrinking and the organisation of services becomes more difficult for a municipality. The organisation of kindergartens, but also clubs and societies depend on the funding of the municipality. One example that is very evident on how the population loss is challenging municipalities is the development of primary schools in the Austrian municipalities. In the last decades, the number of pupils in primary education has reduced due to decreasing fertility rates. Fertility decline has been more pronounced in some regions more than others – especially in regions with a negative net migration the number of children has dropped even more dramatically. In the federal state of Burgenland, the total population growth in the second half of the last century was modest. The share of younger population reduced remarkably : In 1981, the share of the population aged 0–20 was 29 %; in the beginning of 2011 it was 18.7 %. The decline of 31.6 % in this age group was one of the strongest throughout the whole country, in line with the federal states Styria and Carinthia. In the fairly rural NUTS2 region of Burgenland, 29 schools have closed since 2000, due to a declining number of pupils. Today, 18 municipalities of a total 171 in this federal state have no primary school, 50 do only have a school with one or two classes for all four grades (BMUKK). The number of school classes per municipality in the Burgenland and its surroundings, which was part of the Austrian case study (Gruber et al. 2013), is shown in Figure 2. As already described, there is a high concentration of municipalities with only one class or none at all, which creates a risk of further school closure or mergers in this region and thus a further decline of services. A similar pattern can be observed in other peripheries in Austria.

Demographic change changing SGI demands: The example of Austria

155

For the future, there is a constant decline of children in the age of primary education predicted by the Austrian National Statistical Office (STATISTIK AUSTRIA). For the school year 2016/17 a decline of 0.6 % has been predicted – with the base year 2009/10 – by this the lowest level is supposed to be reached. The only federal state that is experiencing a growing number of primary school aged children is Vienna, due to a high level of in-migration. In peripheral regions a strong decline is to be expected. Although there are more examples on the topic of critical mass that could be described in this chapter, the social service of primary schools is a crucial example, as every child and thus every family with children has a demand for this service. Municipalities losing such SGI infrastructures are getting less attractive in respect of life quality. Families are more likely to be interested in choosing a residential location offering a school place for their children. Shrinking is thus creating a vicious cycle, especially once the critical mass is no longer reached to provide certain SGI on a profitable level (ÖROK 2006).

Changing age structure and growing diversity Besides changing population sizes, the process of aging is one of the biggest demographic challenges in the Austrian society, also when it comes to changing SGI demands. Increased life expectancy and lower fertility rates have led to a growing number of the population in older age groups. The total number of older population creates a greater demand for social infrastructures, such as care facilities or medical care. The limited mobility of elderly people with increasing age furthermore changes the requirements on certain services: Barrier-free and age-based access of public services or public transport has become increasingly important due to a higher share of users having difficulties. The growing need for medical service and a care infrastructure is not only a function of demographic aging process. The aging process is deeply interwoven with social and lifestyle changes the society has undergone over the last decades. Family size and structures or household situation have become more diverse in the last years: Families with or without children, single parent or patchwork families are becoming more of a standard than a deviation. Therefore, the probability of a person getting old without children living in the neighbourhood who could be take over daily or weekly care is declining. A big challenge in this respect is not only the general investment in medical and care infrastructure, but also the adaption of the services in accordance to the needs of the population. In postmodern societies there are out-differentiated demands and needs and it becomes – especially for small municipalities with a limited budget – close to impossible to fulfil all of them.

156

Elisabeth Gruber et al.

Figure 2: Primery school classes (grades 1 to 4) per municipality in East Austria, 2011 (in Gruber et al. 2013).

Demographic change changing SGI demands: The example of Austria

3.

SGI provision in Austria

3.1

General features: High but endangered levels of SGI provision

157

The development of welfare regimes originated in the industrial revolution rather late in the 19th century. Rapidly growing cities and the negative impact of economic growth, as well as changes in the societies, had the effect that the national states started to take over duties and responsibilities in the production of public goods and services, such as water supply, sewers, transport infrastructure, education, healthcare and so on. The development began in the cities, where the urgency of such measures was high. For Austria, this was especially the case for Vienna and Linz. Only in a later step, in the second half of the 20th Century, were the welfare services and infrastructures spread as widely as possible into rural areas as well. In peripheral regions in Austria, a lot of network-infrastructure and services were only developed in more recent decades. Railways were developed more quickly in the regions predominantly for the purpose of transporting raw material. In a broad picture, the development of infrastructures like central water supplies or sewers, as well as schools for further education or transport routes can be characterised as a centre-periphery directed catching-up process, going hand-in-hand with industrial-economic as well as social-political progress. Austria can be categorised as a typical European continental welfare state with a high degree of public interference in providing, financing and regulating services for the population (Lichtenberger 2000, Gruber et al. 2013). A high share of public expenditure is based on an extensive tax system, public fiscal equalising schemes between and within governmental tiers, strong trade and labour unions and a rather conservative policy in terms of society and family are key features in the functioning of the Republic. The public expenditure quota in the year 2011 was 51.76 %, which is, despite the Scandinavian countries, a comparably high value within Europe. Overcoming regional disparities is a declared target in the Austrian spatial development objectives, with a focus on catching-up, especially in rural areas, still actively pursued. The built environment is only partly oriented along the ‘central places’ and on major transport axes – this accounts more for developments under public responsibility than under private decision-making. The main provider of SGI in Austria is the public – either on the level of the national state, the nine federal states or the over 2,300 municipalities. Usually a mix of different stakeholders is involved, for example national ministries or federal governments give general guidelines and regulations on the national state level, whilst provision is carried out on a local level. Also in terms of liberalisation, the market is not solely responsible, but restricted by the public due to

158

Elisabeth Gruber et al.

national laws or even steered by public ownership. Public-private partnership models are very common in the organisation and provision of SGI. In many cases, especially in the field of Services of General Economic Interest (SGEI), liberalisation processes have taken place and state-owned companies in the traditional sense no longer exist. Liberalisation has to a large extent happened as a result of EU directives encouraging a liberal market. Different models of public-private partnerships (PPP) exist. Mostly, within these PPP public authorities hold responsibility over a certain SGI provision that is assured by a temporal exclusive contracting of private companies who then operate the SGI. Otherwise, the public authority may run its own, outsourced company. It is a clear public duty and responsibility to maintain and/or improve all regions on a functional level, which is in line with long-term national strategies – like the Austrian Spatial Development Strategy 2011 (ÖROK 2011) – and indirectly with European Union objectives of Territorial Cohesion. Services of General Economic Interest (SGEI) in Austria usually get close to a supply rate of 100 %. Many SGEI represent infrastructures that should ideally be available in or for every household: water supply, energy supply, connection to sewers and sewage facilities, telephone connection, etc. For most of the Austrian inhabitants, supply from central providers is a reality, but in some cases costs are too high to give access to everyone. A dispersed settlement structure resulting in low population densities, especially in regions of the Alpine foreland, challenge the financial feasibility of network infrastructures due to high costs per capita. Therefore, individual solutions for services of sewage, heating and water supply for independent households have been and still are a small but constitutive part of SGI provision in remote settlement areas. Social Services of General Interest (SSGI) are strategically concentrated in central locations, while ‘centrality’ is a matter of scale and range of the service and not a normative decision. In terms of education, for example, primary schools – with a low range – are available in almost every municipality – still predominantly situated in a central and easily accessible place – secondary schools are usually located in the main villages or settlements and tertiary facilities like universities are consequently located in larger cities. The distribution of SSGI is thus orientated along central place hierarchies, maybe with the exception of highly touristic villages that are seasonally over-equipped with, for example, healthcare or cultural services. The variety of provided SGI undergoes changes over time. It is less the case that the infrastructure for an outdated SGI is removed, rather new SGI enlarge the supply. Broadband internet for example from the side of SGEI gained high importance in regional development and diffused into rural areas. On the side of SSGI, care services must be mentioned. Childcare as well as elderly care facilities and skilled personnel increased significantly over the last couple of years.

Demographic change changing SGI demands: The example of Austria

3.2

159

Adaption processes on a changing SGI demand

Population concentrations lead to a lack of critical mass in some areas as well as the closing down of certain SGI. Besides demographic reasons, adaption processes are undertaken too in response to burdened public budgets. Liberalisation processes of public companies were often followed by the rationalisation or closing down of services in less dense areas, for example post offices. However, public services are also undertaking an ongoing process of economisation. In the early 2014, the Austrian Ministry for the Interior decided to significantly reduce the number of police stations across the country. The reduction in the number of schools or school classes is an ongoing process in peripheral rural areas, as already described in section 2.3, above. When the ‘critical mass’ is missing, elimination of single SGI facilities is a logical consequence in SGI provision, but in most cases the mass does not disappear as a whole, rather it decreases below certain level. Villages get smaller over time and those inhabitants left behind still need to be provided with SGI. In order to fulfil the needs of those who stay there, common strategies to keep up the provision must be defrayed by the (local) authorities. Furthermore, municipalities need to uphold a certain quality of life for their citizens in order to escape the vicious cycle of decline. SGI provision is crucial for strategies aimed at sustaining quality of life in a municipality under shrinking conditions – which will be further explained below. Inter-municipal cooperation Austria’s local administrative entities are very small in terms of population. As introduced above, the municipalities are in many cases responsible for providing the local communities with SGI. Kindergartens, primary schools, sewage or waste disposal services are all on the municipality’s agenda. Especially for small municipalities, SGI provision is an expensive burden as the costs per capita are high. Consequently, many examples have emerged where two or more municipalities cooperate to provide SGI. Technical infrastructures especially – fresh water provision or sewage – are more and more organised in cooperative forms, where costs are shared and as a result the – respectively higher professional level – quality in many cases can be raised by a combined organisation. However, not all SGI can be easily organised in such a way. SSGI in particular are seen as identity building institutions. Kindergartens and primary schools, but also sports and cultural clubs, are considered important for social inclusion and local identity. From a rational point of view, the low centrality of such services is another obstacle for inter-communal cooperation. It would need a well-organised public transport system to provide those social services to everyone. ‘Backoffice’ municipal services are comparably better suited for cooperation. Many

160

Elisabeth Gruber et al.

municipalities – without explicitly informing the local population – already share common management and administration systems. With regards to preserving local identity, one mayor of a remote municipality in East Austria stated that ”a successful inter-municipal cooperation is invisible for the local citizens” (Gruber et al. 2013: expert interviews). The range of possible forms of cooperation between Austrian municipalities and other public authorities goes from sectoral foci – e. g. public transport network, waste management – to integrated approaches – e. g. common spatial or regional-economic strategies – and in practice work with very little to very firm legal agreements – from temporal voluntary projects to unlimited contracting based on private law (Humer 2010). Supporting and maintaining local retail A main concern for most small municipalities is to maintain a local retail supply. Especially old people or people without individual transportation facilities face being dependant on relatives or friends for their daily needs. There is a bunch of examples where – in cases where the regular market fails – municipalities and supra-local authorities subsidise and encourage entrepreneurs to reopen a store. Whether through in-kind benefits such as free rent of a publicly owned retail unit or financially through local tax relief. As well as private commercial solutions, in many cases voluntary associations in villages run a local shop in order to keep up at least a basic local retail supply. If single sectoral shops are not profitable, another promising strategy is the creation of multi-functional shops, e. g., a local bakery or restaurant offers a selected product range of daily goods or petrol stations additionally run a small supermarket. Another option to sustain local supply are mobile services. In rural areas, it is becoming more and more common to offer home delivery services, where the customer orders certain products or services online or via telephone. For the older and immobile population especially this service is of great interest. Such solutions work well for basic commercial services like retail or hairdressing. Voluntary engagement and self-organisation Where the private and the public institutions are retreating, the population in many cases has to take over service provision by itself. In Austria, the situation has not yet progressed to the point where duties previously not carried out for the population: Giving lifts or organising rides to immobile people or familybased child and elderly care. Under current trends of regional demographics and limited public budgets, an increased responsibility of civil society in providing certain SGI is likely. In areas with a very sparse population there is already now a high degree of self-organisation. This does concern above-mentioned examples

Demographic change changing SGI demands: The example of Austria

161

of individual services as well as commonly organised technical infrastructures. There are examples of peripheral neighbourhoods that have constructed and now run their own water and sewage supply by means of a cooperative society with executive board, treasurer and all the required legal positions. Civil selforganisation works better in regions where traditional structures for it are present. Newly endangered regions due to losing critical mass face comparably greater challenges. Local expertise and experience is a valuable prerequisite for civil self-organisation. It must be seen as a kind of minimum responsibility of the public authorities to at least support people in setting up self-organised SGI, giving platforms and enabling people to share ideas for bundling voluntary engagement. Parts of the country civil engagement will become a crucial resource to guarantee SGI provision when public budgets are concentrated elsewhere and markets fail.

3.3

Accepting regional disparities: Farewell to equal standards

The adaption processes and strategies discussed above are mainly local matters to counteract the decline of service provision. A question that remains is whether there are official minimum guarantees or minimum standards to what public bodies have to provide across the whole Austria? In contemporary national political discussions on the provision and organisation of SGI critical issues are, on the one hand, equal minimum standards for and, on the other hand, regional distribution of SGI. Especially regions lacking a critical mass, the search for strategies and instruments for a budget-efficient and still user-friendly adaption is required. Effective spatial planning instruments such as the central place concept or integrated zoning must support a territorial organisation of services of general interest (ÖROK 2011). According to Austrian law, no clear standards are set when it comes to minimum provision of services of any kind, especially not for every region. Even medical services, like ambulance services, are at the end of the day dependent on regional accessibility patterns. People living in remote areas will to some extent stay disadvantaged in respect to accessibility of services of general interest. Not every region in Austria sees this as a huge problem. In some areas it seems to be the way it has always been and people are simply aware by the fact that not every service they need is accessible within 10 minutes. It only seems to become problematic when regions are in the process of decline and the remaining people are using services to a less amount over time. The step-by-step development towards undersupplied regions is a main challenge. On the one hand, it is necessary to make cuts in public expenditure when per capita costs are rising, but on the other hand, a further retraction of service provision will lead to a further loss

162

Elisabeth Gruber et al.

of attractiveness for a region. It will be more difficult for those who stay and it will get less attractive for those who might plan to come. As a matter of cost efficiency, it is still necessary to ask where investments should be made and where they seem to be most necessary. Whether there is a right to SGI or not has to be decided on a political level. To what extent society should be provided with different SGI by the state is in the end a normative decision that at some point has to be made, but is flexible over time. In Austrian strategic documents, there is still a tenor that SGI have to be secured for everybody (ÖROK 2011). Active retraction of certain areas is still not an option from a political point of view. Since retraction is occurring anyway, a shift towards pro-active approaches in consolidating SGI structures by policy instruments of spatial and sectoral planning must be promoted. The question of ‘what is happening to those who remain?’ in regions of out-migration is the one to raise and the answer will have to be given by the society itself. How much do we want to invest in areas lacking a critical mass and how much do we want to invest in keeping those places viable? For politics, this of course is a difficult question and at the moment not one which is being addressed. Adaption processes in some cases will be unavoidable in stagnating or shrinking regions.

4.

Outlook

Shown through the example of Austria, demographic developments have been described as having direct impact on SGI provision. Changing settlement patterns and population structures affect the quantity and distribution of services and infrastructure throughout the country. Besides demographic development shaping different SGI demands, expectations towards standards of SGI provision are also increasing. Not only the availability of services, but also their quality, is of increasing importance for the Austrian society. Due to different lifestyles and preferences, the importance of choice between a variety of similar SGI is increasing. Furthermore, good physical, barrier-free as well as 24/7 accessibility play an ever more important role in the course of promoting social inclusion. The provision of SGI is a continuous process, always adapting to the society’s needs, as well as to population patterns in terms of age structure as well as settlement patterns. While the catching-up process for some SGI in peripheral areas has not even been finished or has been interrupted, the demand for new services is rising, whilst at the same time an adjustment is happening in terms of abandoning services and/or infrastructures that are no longer financially feasible, such as post offices, primary schools, retail stores or public transport. Changing SGI demands must be seen as a consequence of changing lifestyles and changing habits of the society, which in many ways is interwoven with the

Demographic change changing SGI demands: The example of Austria

163

demographic development but is not simply determined by demographic development. Care services may serve as a good example here: Childcare, but especially elderly care, was previously provided by the family. The rising demand in the sector of elderly care is to some extent to be explained by demographic factors. Of course, the process of demographic ageing and increased life expectancy has led to a larger number of people in the need of elderly care. However, is also due to the fact that contemporary family structures and generation-separated households are less appropriate environments for taking over this service. Also, changes in mobility SGI illustrate the importance of changing lifestyles. Wealthier households, flexible working hours, technological progress and increased complexity of spatial patterns of daily life lead to difficulties in providing satisfying public transport in less densely populated areas, leaving people to rely more on the use of individual transport modes and substitutional ICT solutions. The effects of demographic change on SGI provision is not only a topic discussed in Austria. Regional outmigration and demographically shrinking regions in Eastern Germany are more prominent examples on how recent demographic developments have affected regions. The Austrian SGI provision is, compared to other European countries, on a very high level. The high level on SGI provision and the relatively high share of rural population is what makes the discussion of regional development and SGI provision in the countryside unique in Austria. There is still a big commitment to rural areas and for sustaining regions that face outmigration. Whereas in Germany, as well as in the Nordic countries a commitment for supporting central regions seems to have become more common, the Austrian policy and society has a greater interest in supporting and maintaining rural areas. Austria is further in the position of still being able to invest a high share of the public budget to maintain SGI provision, even in remoter areas. Through the economic upswing in the 1960s, the country had the chance to invest in regional development. As described above, the periphery could, during this period, profit from the extension of social and technical infrastructure. In other European countries, improvements to infrastructure began later and/or didn’t take place so extensively (Swiatek et al. 2013). Whether the current level of high quantity and quality of service provision can be kept up in the future in rural areas remains to be seen. Ferencsik, Milbert and Stepniak discuss this with regards to accessibility elsewhere in this edited volume. Fassmann, Rauhut and Humer have argued in their contribution to this edited volume that SGI provision is a process of co-design between the demand side of users and supply side of the public. Therefore, we shouldn’t miss the point of view of the public organisation and finance of SGI. As discussed, SGI demands get more diverse and complex. However, what about the counter part of – public

164

Elisabeth Gruber et al.

– organisation? Austria has no big space to manoeuvre in terms of increasing public budgets but it is rather the other way round. The public authorities on the various tiers have debts and the income via taxation is quite at the ceiling; even higher taxation would potentially harm the macro economic competitiveness. There simply is the reality of limited public budgets which faces the reality of changing SGI demands. A spatially sensitive policy offers a sober way out. This includes to rationalise SGI provision along a consolidated central place policy and to withdraw public responsibilities over SGI provision for certain remote, shrinking settlements. Alternative forms of SGI provision, such as mobile services or civil self-organised services discussed above may help in the phase of transition for concerned remote areas. Developments impacting on the provision of SGI crystallise in manifold way on a regional scale (Humer and Palma 2013). Undersupply and oversupply occurs at the same time while common minimum standards are not defined or in operation (Littke and Rauhut 2013) – which is also a legitimation for having a deeper look at the provision of SGI with a regional focus (Littke et al. 2013). Generally, agglomerations show a good provision of SGI, while peripheral regions that experience population losses have problems maintaining standards or financing them. A shrinking population size for most SGI means higher costs per remaining inhabitant – particularly services organised at a lower level can overburden the budgets of the municipalities. Since some changes are more pronounced in some areas than others, it is necessary to find the right adaption strategy for each region. In both cases, for regions with oversupply as well as regions with limited supply, the potential of more efficient organisation and provision of SGI must be explored under the heading of public financial means. Public budgets need to be distributed in such a way that upper tiers are empowered to strategically steer processes and lower tiers are empowered to influence service provision on a local scale. Despite the overall comparably satisfying situation in Austria, a wide range of SGI will have to go through structural changes in order to meet the targets of an ageing, pluralistic and knowledgebased society.

References Bauer, R., Fassmann, H. Gruber, E. and Humer, A. (2012) Die Projekte DEMIFER und SeGI. Demografische Entwicklungen und sozialpolitische Herausforderungen; in: RaumPlanung (165) pp. 20–25. Bauer, R. and Fassmann, H. (2010) ESPON DEMIFER Typology of Regions; Annex D3; in: De Beer et al. (2010) DEMIFER, ESPON Applied Research Project 2013/1/1; Luxembourg.

Demographic change changing SGI demands: The example of Austria

165

BMUKK – Austrian Ministry of Education: http://www.bmukk.gv.at [1 June 2014]. Fassmann, H. and Münz, R. (1995) Einwanderungsland Österreich? Historische Migrationsmuster, aktuelle Trends und politische Maßnahmen. Jugend & Volk Verlag, Vienna. Gans, P. and Schmitz-Veltins, A. (2006) Demographische Trends in Deutschland. Folgen für Städte und Regionen. ARL FuS Band 226, Hannover. Gruber, E., Humer, A. and Fassmann, H. (2013) ESPON SeGI Case Study Report Austria; Annex 6a. In: Rauhut, D. et al. (2013) SeGI Indicators and perspectives for services of general interest in territorial cohesion and development ESPON Applied Research 2013/1/16, Scientific Report j Version 25/5/2013, Luxemburg. Humer, A. (2010) Inter-communal cooperation in spatial planning in Austria. Politicaladministrative prerequisites since the 1990ies; paper at the 14th International Planning History Society IPHS Conference 2010, Istanbul. Humer, A. and Palma, P. (2013) The provision of Services of General Interest in Europe: Regional indices and types explained by socio-economic and territorial conditions, EUROPA XXI, Vol. 23: 85–104. Johansson, M. and Rauhut, D. (2005) Spatial Effects of Demographic Change and Migration. Final Report ESPON project 1.1.4; Luxembourg. Lichtenberger, E. (2000) Austria. Society and Regions. Austrian Academy of Sciences Press: Vienna. Littke, H. and Rauhut, D. (2013) Minimum Levels of Services of General Interest – What Fundamental Rights do Individuals and Enterprises Have?, EUROPA XXI, Vol. 23: 69–84. Littke, H., Rauhut, D. and Foss, O. (2013) Services of General Interest and Regional Development in the European Union, Romanian Journal of Regional Science, Vol. 7/ 2013, Special Issue June: 88–107. Machold, I. (2010) Regionale Ungleichheit in der Daseinsvorsorge, Konzepte und Leitbilder ; Bundesanstalt für Bergbauernfragen, Vienna. Rauhut, D., Smith, C., Humer, A., Ludlow, D. and Borges, L. (2013) SeGI Indicators and perspectives for services of general interest in territorial cohesion and development ESPON Applied Research 2013/1/16, Final Report j Version 25/5/2013, Luxemburg. STATISTIK AUSTRIA: http://www.statistik.at [1 June 2014]. Swiatek, D., Komornicki, T. and Silka, P. (2013) Services of General Interest: Empirical Evidence from the Case Studies of the SeGI Project, EUROPA XXI Vol. 23: 105–130. ÖROK – Austrian Conference on Spatial Planning (2011) Austrian Spatial Development Concept 2011, ÖROK-Schriftenreihe Vol. 185en, Vienna. ÖROK – Austrian Conference on Spatial Planning (2006) Aufrechterhaltung der Funktionsfähigkeit ländlicher Räume, Dienstleistungen der Daseinsvorsorge und Regionale Governance, ÖROK-Schriftenreihe Vol. 171, Vienna.

Hjalti Jûhannesson

Chapter 7: Provision and Development of SGI at the Edge: The Case of Iceland

1.

Introduction

Iceland is one of the outposts of Europe and conditions are in many ways extreme. Although the country is very sparsely populated, it is at the same time highly urbanised which creates challenges for infrastructure and service provision. Both geographical and geological conditions have an impact, for example, on energy provision and transportation issues. The country has a welfare regime different to its Scandinavian counterparts and has had close ties to the US during last century. This chapter is based on a case study in the ESPON project SeGI and most of the data collection took place in 2012. The discussion here is on how conditions in the Icelandic setting shape or impact provision of services. This concerns geographical and geological conditions as well as issues relating to the settlement pattern and political and historical issues. SGI provision can, as is discussed in the introductory chapter of this book, be seen from three different perspectives: policy, law and context. This chapter will focus on the contextual and policy perspective. The legal aspects of changes in context and policy will also be addressed.

2.

The case study setting and its context

The case study in this chapter is based on research carried our as part of a project named SeGI – Indicators and Perspectives for Services of General Interest in Territorial Cohesion and Development which was funded by the EU-programme ESPON (Rauhut and Borges, 2013). Data collection for the case study took place in 2011 and 2012 and was partly published in a special case study report as part of the project (Jûhannesson and Sigurbjarnarson, 2013). Iceland and its settlement characteristics have a rather unique position in the European context in several ways. The total population size is around 325,000, of which over 63 % live in the capital city Reykjav†k and its surrounding munici-

168

Hjalti Jóhannesson

palities in the southwest corner of the country, constituting the capital region. Most of the remaining population lives in towns or small villages along the coast. Therefore the country can be considered very urbanised, despite a population density of just 3.2 persons per km2. Due to the relative size of Iceland (approximately one third of the size of Poland) and the settlement pattern, service provision, especially in the more sparsely populated parts of the country, is challenging. As more remote regions have become ever more sparsely populated through out-migration, service provision has become more expensive. Due to similar reasons and issues such as increasing specialisation, recruiting healthcare specialists for those areas has become more difficult. On the other side of the coin is Reykjav†k where services have concentrated. Its service role for the whole country seems to have become gradually stronger. The privatisation and liberalisation of the economy has accelerated the process. An example of this is the state telephone company, which has closed many of its offices and service centres. Finally, the credit crisis has to some degree limited the ability of the state to maintain services. The case study region is northeast Iceland and has 29,000 inhabitants. Its size is more than half the size of Denmark or the Netherlands. Having a sizable regional centre, Akureyri with 18,000 inhabitants, the largest town outside the capital region makes it an exception among the rural areas. The region is divided into 13 municipalities, ranging from 55 to 18,000 inhabitants. Akureyri with its 18,000 inhabitants makes the service base relatively strong and the inhabitants are more privileged regarding access to services of general interest than other sparsely populated regions of Iceland with neither a strong regional centre nor easy access to the strong service base of the capital region. The distance from Akureyri to Reykjav†k is around 400 km by road (roughly 5 hours) and 45 minutes by air which is extensively used. Air transport makes services in Reykjav†k more accessible for other regions, but is at the same time expensive. The population in the case study region has increasingly concentrated on Akureyri and neighbouring municipalities. Rural areas and smaller towns, especially in the far northeast part of the region, have been losing population and young adults are under-represented due to out-migration, the gender ratio is however very even. Iceland belongs to the Nordic countries and is a member of the Nordic Council, along with the countries of Scandinavia. Iceland gained sovereignty in 1918 and declared independence from the Kingdom of Denmark in 1944. The country joined NATO in 1949 and the US have had a naval base and airport there until 2006. Links to the US were therefore very important during the second half of the century. An inclination towards Europe has increased gradually, with participation in EFTA 1970 and the EEA-agreement in 1994. A leftist government applied for EC membership in 2009, but with the election of a new right-wing

Provision and Development of SGI at the Edge: The Case of Iceland

169

government in 2013, the negotiations were adjourned. The issue of which welfare regime Iceland belongs to has been debated in recent years and may be looked at in the above context. Public spending on social welfare has been relatively low compared to the other Nordic states but instead there was importance on maintaining high labour force participation. “Although included within the Nordic family of nations, propinquity to social democratic welfare regimes has not determined the development of welfare arrangements in Iceland” (Irving, 2011: p. 235) but instead there has been “affinity towards other more liberal ‘settler’ states (such as New Zealand), and to strong US relations” (ibid, p. 236). Iceland was one of the first victims of the credit crisis in 2008 and after the crisis, a leftist government gained a majority in the period 2009–2013. That government represented a turn towards a more Scandinavian welfare regime. It aimed at “creating a Nordic welfare society in Iceland, where collective interests take precedence over particular interests” (Prime Minister’s Office, 2009). A rightwing government took over in 2013 and more a liberal emphasis was presented again. According to the analysis of Humer and Palma (2013), public spending on certain subdivisions of SGI in 2009 in Iceland was among the highest in the Europe.

3.

Data and methodology

A survey was carried out among the 13 municipalities of the case study region in February 2013 and answers were received from all of them. This was considered important by the Icelandic team due to the low number of municipalities and a wish to gather as much relevant information as possible. The survey used a standardised questionnaire prepared by the research group (S´wiatek et al., 2013). This questionnaire was sent by mail to the municipal offices and in the days following, municipal offices were contacted by a researcher by phone. The questionnaire was answered by someone who has a good overview of the services in the municipalities, usually the director or mayor. A few SGI in this joint questionnaire did not apply to Icelandic conditions and were omitted.

4.

General characteristics of service provision in Iceland

In many respects, Icelandic conditions are specific and the polarised development of the country with high urbanisation level and yet low population number can be seen in the case study region (Jûhannesson and Sigurbjarnarson, 2013). For the purpose of this chapter, these specific conditions and findings have been highlighted.

170

Hjalti Jóhannesson

Services of General Economic Interest (SGEI) Specific characteristics in provision services of general economic interest relate to the energy sector. Iceland is volcanic as a part of the Mid-Atlantic ridge and an abundance of geothermal water is found in most regions. This provides heating for approximately 95 % of homes as well other uses, such as swimming pools, industrial use and even for melting snow from paved surfaces. Most heating grids are owned and operated by municipalities. The case study region is on and near the main geothermal zone that crosses Iceland diagonally SW-NE. However, geothermal water is not accessible in some rural areas due to distances and the cost of building the geothermal grid. Constantin et al. (2013) in a SWOTanalysis pointed out that geothermal energy is an example of SGI that provides strength for global competitiveness of the respective regions. Water for consumption is abundant and usually considered of good quality but interestingly only sporadic information is available on the issue. Water is generally distributed by municipalities and for homes it is usually paid for by a water tax, however firms pay according to consumption. In farming communities most farms have their own water sources but in other cases water is provided by municipalities. Waste management is the responsibility of municipalities who have regional collaboration due to strict regulatory framework and economies of scale. In 2008, 91 % of households recycled waste in one way or the other (Umhverfisraduneytid, 2009) and in 2007, 41 % of waste went to landfills. An example of recent progress is a large composting station for Akureyri and neighbouring municipalities, built in 2009. Landfills are continuously becoming fewer and further apart and municipalities and landowners have not been willing to locate these in their vicinity. Transportation costs are therefore increasing and increased recycling and less going to landfills leads to savings in transport. Another responsibility and challenge for municipalities is the sewage system which is in need of upgrading, both for health and safety reasons as well as to fulfil European regulations adapted through the EEA agreement in 1994 (Umhverfisraduneytid, 2009). Slower upgrading in recent years has been linked to the worsening economic conditions. Estimate suggest that 70 % of inhabitants in Iceland live where sewage is treated. The situation is best in the capital area. One of the interviewees in the case study, a manager for the Public Health Authority of the region informed that smaller and more remote municipalities have troubles fulfilling these duties. However, in some larger urban municipalities there is greater need to take action and improve these systems. An interesting finding of the survey carried out amongst the municipalities is that both the quality of sewage systems and accessibility were graded high by the respondents, contradictory to the interview cited above.

Provision and Development of SGI at the Edge: The Case of Iceland

171

Nearly all electricity is renewable energy produced by either hydropower or geothermal power stations. Future possibilities for sourcing electricity from environmentally friendly sources are considerable compared to the size of the population. Electricity is distributed to homes by companies that are usually owned by the state or municipalities. The main distribution network of electricity, connecting all regions and regional power grids is owned by the state and was, until 2005, a part of the national power company Landsvirkjun which produces most of Iceland’s electricity. To distribute enough energy to meet the different needs of all regions is becoming a challenge due to opposition from municipalities, who hold the planning competence, and landowners relating to the renewal of the major power transmission lines circling the island on environmental grounds. High volume ground cables are spoken for instead, but that is considered a too expensive solution by the government energy company Landsnet. Domestic transportation of goods is, for the most part, provided by two private companies, a market situation that is very common in the small Icelandic market. Domestic collective passenger transport is by plane, bus and ferry. For regions located more than three hours driving distance from Reykjav†k, air transportation is very important. In remote areas where air transport is not economically feasible, the state provides subsidies for the service. Bus services are provided to most of Iceland and are managed by regional associations of municipalities with financial support from the state (Æings‚lyktun um samgöngu‚ætlun fyrir ‚rin 2011–2022). Five ferries for transporting goods and people operate in Iceland, connecting islands to the mainland, two of which are in the case study region. Ferries are organised by the Public Roads Administration but operated by private companies and subsidised by the state. Low population numbers and density has contributed to a lack of public transport in many rural areas and there has been discussion whether it would be possible for the general public to share existing transport, such as the school bus system or even postal services. The integration of school buses and public transport has been experimented with in one municipality in the case study region since 2013 and according to a recent survey, the majority of homes are satisfied with the service (Halapi and Jûhannesson, 2014). However, due to regulations and complexity, integration of public transport with the postal service has not been possible yet. An example service closures due to privatisation, changes in technology and out-migration from rural areas is the post offices, but in a regional development plan 1994–1997 these were among the services with the lowest threshold level (ByggÅastofnun, 1993). These have also merged with small bank branches or shops to maintain service in smaller settlements. International transport was not a focus of the SeGI project, but due to dis-

172

Hjalti Jóhannesson

tances, international transport of passengers is primarily by air and there is a variety of destinations both in Europe and North America served by many airlines. This is both because the airport in Keflavik SW-Iceland is hub for air traffic between the continents and the high number of foreign tourists that keep up the service level (FerÅam‚lastofa, 2014). A Faroese-owned ferry provides a connection to Denmark via the Faroe Islands from SeyÅisfjörÅur in eastern Iceland. These are the two primary points of entry into the country. ICT, including the telephone network, has been entirely provided by private companies since 2005 when the largest telephone company in Iceland was privatised. Unlike many economic sectors in Iceland, there appears to be considerable competition and the number of internet connections per capita in Iceland is among the highest in the world with 93 % of households having an internet connection in 2011 (Statice, 2014). The Global Information Technology Report 2010–2011 by the World Economic Forum (2011) ranked Iceland: – 1st out of 138 in terms of internet users – 1st out of 138 in the use of virtual social networks – 1st out of 138 in terms of internet access in schools – 1st out of 138 in accessibility of digital content – 1st out of 137 in the number of secure internet servers As in many other respects, Iceland shows a polarised development. Conditions are excellent in most urban areas whilst in rural communities, high speed connections are lacking. There are limitations to the optical fibre network in rural areas; long distances and high mountains. This represents an obvious obstacle for providing SGI to a small population in a large and geographically “difficult” country, but it is not the only reason. When the state telephone company was sold in 2005 the infrastructure was sold as well. Due to market reasons, these private companies have not invested in extending their networks in rural areas where return on investment is little. To compensate for this, an ICT fund was established in 2005 (Lög um fjarskiptasjûÅ) with the purpose of funding ICT infrastructure in disadvantaged areas. The fund was amongst the victims of the economic crisis as in 2012 it was used to financially assist the Farice company when it fell into financial trouble but the company operates one of two undersea cables providing internet connections to the outside world (R†kisendurskoÅun, 2012). The increasing importance of ICT will make poor internet and mobile network in rural areas an increasing problem; high-speed broadband can be considered just as important as high-speed trains (Cole and Cole 1998). Humer and Palma (2013) created an index of SGI based on data from the ESPON SeGI project and in this analysis Iceland was among the countries where the index of SGEI turned out to be higher than the index of SSGI. The values of

Provision and Development of SGI at the Edge: The Case of Iceland

173

the SGEI index turned also out to be higher in the UK and the “Pentagon” region of North-West Europe as well as some capital regions; while the SSGI index was relatively higher in peripheral regions. In their analysis, regions with a high share of rural population correlate negatively to SGI provision, especially SGEI considered to require a higher critical mass. Interestingly, Iceland had a positive index for both SGEI and SSGI, despite its extremely low population density of 3.2 per km2. What is probably more important here is the fact that urbanisation level is very high; 94 %, with almost two thirds of the population lives in the capital region.

Social services of general interest (SSGI) Important for the provision and use of certain SSGI is the fact that Iceland has a relatively high birth rate and population increase, putting more pressure on services for the younger section of the population, contrary to many other countries. In 2013, the fertility rate was 2.08 and children under 18 years of age were 24.8 % of the population. Those older than 65 years of age made up 11.2 % of the population (Statistics Iceland, 2013). The education system is divided between municipalities that provide preprimary education and compulsory education and the state is responsible for upper secondary schools (gymnasiums) and most of the university education. Children usually enter the school system at 1.5–2 years of age in preschools with parents paying for around 20 % of the total cost. Compulsory school age is 6–15 years old. In rural areas, challenges arise due to fewer children and the closure of many schools. The merging of municipalities has stimulated this and an improved road network makes it possible to serve larger areas. Upper secondary schools is four years after compulsory school (16–20 years) and thus older than in most countries. The location of upper secondary schools has been considered important for decreasing out-migration, thus new schools have been established in rural areas but distance learning and evening courses are available in many of these schools. Seven tertiary education institutes serve the Icelandic population which may be considered abundant for a country of 320,000 inhabitants, but pressure is increasing to merge institutes. Three are run by private bodies and four by the state. Interestingly, all of the institutions receive the same basic funding from the state based on a specific financing model. A students’ loans fund offers subsidised student loans for subsistence and tuition. Doctoral studies were previously pursued primarily at universities abroad, however in recent years the number has increased at the University of Iceland. The University of Akureyri is located in the case study area and has around 1,500 students. When established

174

Hjalti Jóhannesson

in 1987 one of the justifications for the decision was regional development (GuÅmundsson, 2013). Public administration is to a large degree concentrated in Reykjav†k where the parliament, the ministries and most institutes are located. Access to these institutes from other parts of the country has been considered important and having a domestic airport in the city vital in that sense. The location of cultural and recreational services is noteworthy, as all institutes of national interest are located in Reykjav†k or its immediate surroundings as seen in the table below (The ministry of culture and education, 2014). Table 1. Major cultural institutes of national interest Cultural institutes of national interest Location Fornleifavernd r†kisins (the archaeological heritage agency of Iceland) Reykjav†k Gljfflfrasteinn (museum) Mosfellsbær HfflsafriÅunarnefnd (the national architectural heritage board) šslenski dansflokkurinn (the Icelandic dance company)

Reykjav†k Reykjav†k

KvikmyndamiÅstöÅ šslands (the Icelandic film centre) Kvikmyndasafn šslands (national film archive of Iceland)

Reykjav†k HafnarfjörÅur

Landsbûkasafn šslands – H‚skûlabûkasafn ( the national library) Listasafn Einars Jûnssonar (art museum)

Reykjav†k Reykjav†k

Listasafn šslands (national art museum) N‚ttfflruminjasafn šslands (museum of natural history)

Reykjav†k Reykjav†k

R†kisffltvarpiÅ ohf. (the Icelandic national broadcasting service) Sinfûn†uhljûmsveit šslands (the national symphony orchestra)

Reykjav†k Reykjav†k

Stofnun Ýrna Magnfflssonar † †slenskum fræÅum ÆjûÅleikhfflsiÅ (the national theatre)

Reykjav†k Reykjav†k

ÆjûÅmenningarhfflsiÅ (national theatre, the national centre for cultural Reykjav†k heritage) ÆjûÅminjasafn šslands (the national museum) Reykjav†k ÆjûÅskjalasafn šslands (the national archives)

Reykjav†k

Cultural centres have been established according to contracts between the state and municipalities in eight regions of the country, something which has been method of compensation for this obvious unbalance. Healthcare is primarily the responsibility of the state and there are two hospitals (classified as such); in Reykjav†k and Akureyri and 12 other smaller hospitals/health institutes. The merging of healthcare institutes and enlargement of service areas have been advocated by the state. In the case study area there is a regional hospital in Akureyri with close to 500 full-time positions, this

Provision and Development of SGI at the Edge: The Case of Iceland

175

serves as a ‘backup’ hospital for the main hospital in Reykjav†k. A smaller hospital is located in Hfflsav†k, 100 km east of Akureyri and one in SiglufjörÅur 75 km north of Akureyri. Healthcare centres are located in most towns and villages, but opening hours are longer in the larger centres. According to an expert interview with the director of the hospital in Akureyri, the special status of the hospital is its relative size which contributes to more diverse of services and more advanced equipment than in smaller healthcare institutes in the region. Specialists from the regional hospital visit healthcare centres in other parts of the case study region and thus compensate for a lack of local services and distance health services are also offered. According to the director, one of the main challenges is attracting people with the right skills to meet demand. A relatively small hospital like this is less attractive to specialised staff than larger ones and this is both a challenge and a threat to services in small places. Since the crisis of 2008, the departments providing care for outpatients have been strengthened, a measure that is less expensive than in-patient care. Specialist fields have become more and more specialised and the same applies to equipment and knowledge to use it. The director mentioned that possible hindrances to the access of services are primarily finance-related. Distance from the hospital and social circumstances could also have an impact, but emergency services are usually provided regardless of financial status, social status or geographical location. According to an interviewee who works for the consumer association in the region, complaints concerning increases to the cost of health services are very common but these have been increasing in the past years, especially after the financial crisis. Social care is a service primarily carried out by the municipalities. In some cases, several municipalities collaborate on these services over larger areas. After the credit crisis of 2008 – and the resulting increase in unemployment and worsening economic conditions in general – pressure on the social services provided by municipalities has increased. In the case study region, the main town of Akureyri has a larger role than other municipalities since it has integrated its healthcare centre, service for disabled persons and elderly homes according to a special contract with the state in 1997. This was a part of an experimental project in which a number of municipalities took over some of the service tasks of the state in order to rearrange the services, improve access and make better use of resources. Due to the positive outcome of this arrangement, the experiment continued and a similar arrangement was undertaken by more municipalities and collaborations of municipalities. Services for the disabled were made the responsibility of all municipalities in 2011. Compulsory social security is primarily provided by the state. Social insurance administration in Iceland is financed by the state treasury, with employers paying premiums for

176

Hjalti Jóhannesson

individuals’ social insurance to the state treasury on all paid wages. The funds collected in this way are used, amongst other things, to finance social insurance. In the field of social housing municipalities provide information and counselling, manage housing benefits and process applications for service apartments and nursing accommodation. Social housing is however very limited in Iceland as private ownership has for long time been important amongst Icelanders. Social housing is provided primarily by the municipalities and those who need such solutions can apply for assistance at the social care offices and are provided with housing according to certain rules. Rent became very expensive after the credit crisis and at the same the situation worsened for young people and first-time buyers. As a result, pressure has increased on social housing and the house rental market in general.

5.

Survey among municipalities in Northeast Iceland 2012.

In the following section, the main findings of the survey among 13 municipalities in the case study region in northeast Iceland will be outlined under the themes of accessibility, status of services and quality. The survey was carried out as part of ESPON SeGI project in February 2012 and the questions were the same in all study regions of the project. Two service functions did not apply to the Icelandic part of the research, namely railways and gas supply. Accessibility of SGI in their municipalities was generally considered good by respondents. Most services functions received an average grade between 4 and 5 on the scale 1–5 (with 1 as the lowest score a 5 the highest and most desirable). The lowest score was given to services that are primarily only found in urban areas due to their nature i. e. large scale and/or specialised, such as large shops and tertiary education. When carrying out a SWOTanalysis of SGI, based on data from the ESPON SeGI project, Constantin et al. (2013) listed increased concentration of SGI in urban areas as one of the weaknesses in the context of territorial capital development. This creates imbalances in SGI provision, especially in in remote, sparsely populated, mountainous, insular and outmost regions. Accessibility and availability of these SGI relates both to central place theory and Maslow’s “hierarchy of needs” as described by Milbert et al. (2013). SGI that constitute greater needs and frequent use tend to be located in smaller places than those which may be accessed more seldom and need more customers to thrive. Respondents from smaller municipalities and in more remote locations obviously had more impact here. Internet services got the lowest score of 3.8; the service where accessibility is most noticeable between urban and rural locations. In rural locations respondents complained about both accessibility and the price for the service and this was supported by interviews. ITservices are

Provision and Development of SGI at the Edge: The Case of Iceland

177

amongst the services which have been privatised in Iceland, as was described above, and in the wake of that the market forces have increased differences in their service provision to urban and rural locations. At the same time, technology has progressed much and dependence on IT in most aspects of society has increased. Thus access to the internet is probably becoming increasingly important according to the Maslow’s “hierarchy of needs” and at the same time centrality of the service. Table 2 shows these results. Table 2. Question on the accessibility to SGI Researched Services of General Interest Local public administration Health centre

“Please evaluate accessibility to basic services of general interest within your locality.” (on a scale 1–5, where 5 is the highest score 4.8 4.7

Pharmacy Hospital

4.7 4.3

Social Care Kindergarten/ pre-school

4.7 4.8

Primary school Secondary school

4.9 4.5

Tertiary school/ university Bank/ basic financial services

4.1 4.9

Postal services Personal and household services

4.6 4.6

Cultural centre Library

4.3 4.8

Large shops Local roads

4.0 4.7

Main roads Railways

4.3 -

Electricity network Water supply network

4.7 4.6

Sewage system Waste disposal

4.5 4.8

Gas supply Telephone network

4.9

Mobile phone network Internet

4.3 3.8

178

Hjalti Jóhannesson

When asked about status of services it is clear that according to respondents several types of infrastructure need to be renovated or refurbished in municipalities. The single most important service function in this regard is the road network and it is also the only case where the option is used that an infrastructure/service function needs to be built up from scratch. As cited by Littke et al. (2013), the Fifth Cohesion Report of the European Commission states that many of the problems faced by lagging regions stem from inadequate transport links. This is relevant in the case of Iceland as examples have shown that considerable upgrades to the road network have led to positive regional development, see e. g. Bjarnason and Kjartansson (2014). This refers to both the external and internal transport links. The telephone system appears to be in best shape of all technical infrastructure as most respondents answered that there is no need for new investment. This is quite interesting because this is related to the IT network, used partly to provide xDSL connections to homes. This network can provide internet connections of sufficient quality in urban areas and close to telephone stations, but as the distance from them grows (over ca. 4–8 km) so diminish the opportunities for using copper lines in rural areas and other solutions are needed such as optical fibre cable or G3/G4 wireless connections. Waste disposal is another service where most respondents answer that the current situation is good; nine municipalities stated that there is no need for further investment but in four municipalities it is indicated that this needs either to be expanded or refurbished. In fact, much progress has been made in reorganising the waste disposal in most municipalities in recent years so that this does not come as a surprise. An interesting finding is that just less than half of respondents/municipalities answer that there is no need for further investment in sewage systems, something which is not quite in line with an expert interview with the director of the Public Health Authority of the region. Judging by that interview, much improvement has to be done in many municipalities. These improvements are in many cases very costly and several municipalities should already have made improvements to fulfil regulations. The internet is according to respondents in the aspect most in need of infrastructure expansion and this has to be considered against what has been discussed above regarding how the telephone network and the internet connections relate to each other. The electricity network is also a service considered in need of expandsion according to the survey. This relates to an ongoing discussion in Iceland on the main electricity network which circles the country. Its oldest parts date from the 1970s and are in need of renovation, due both to age and the fact that their capacity is considered too low compared to today’s standards. Secondly, in rural areas single-phase electricity is still common which hampers, for example, the use of large electric motors. Thirdly, smaller overhead lines are vulnerable to ice and

Provision and Development of SGI at the Edge: The Case of Iceland

179

these have been replaced in some rural areas by power cables that are at the same time providing three-phase electricity. 13 12 11

Number of responses

10 9 8 7 6 5 4 3 2 1 0

Built from scratch

Expanded

Renovated/refurbished

No need for new investment

Figure 1. “Which of the types of infrastructure identified below in your locality should be provided, expanded or renovated?”

Four types of technical infrastructure were primarily considered in need of refurbishment or renovation. These are the main roads, the electricity network and the internet. Consensus is highest regarding the main roads, as 10 out of 13 municipalities consider it being in need of renovation or refurbishment. Quality of services, as indicated in Table 3, is on average considered to be in good condition by respondents. However, the internet got the lowest value of quality of technical infrastructure or services along with the main roads. These two infrastructure types are commonly criticised parts of the infrastructure in Iceland, especially in rural areas.

180

Hjalti Jóhannesson

Table 3. Question on the quality of SGI Researched Services of General “Please assess the quality (like durability, reliability, Economic Interest functionality) of the technical infrastructure or services provided in your locality.” (on a scale 1–5, where 5 is the highest score) Local roads 4.1 Main roads 3.8 Railways Electricity network

4.5

Water supply network Sewage system

4.2 4.4

Waste disposal Gas supply

4.5 -

Telephone network Mobile phone network

4.8 4.3

Internet

3.8

6.

Discussion

Information collected and analysed in the SeGI case study in Iceland shows that the economic crisis that hit the country in 2008 impacted services negatively. This varied according to the type of services and geographically between urban and rural settings. Even if it was the aim of government to protect basic services, it was forced to cut costs in service provision and infrastructure to finance the huge loss of the state caused by the bankruptcy of the banks and devaluation of the national currency ofIcelandic Crowns. “The impact on solidarity of the current recession is potentially injurious. The IMF reports that Iceland’s progress is ‘broadly in line’ with the recovery plan (IMF, 2009) but the unemployment rate, which peaked at 5 per cent in 1995, rose from 2.5 to 7.1 per cent between 2008 and 2009. In addition, spending on social security and welfare increased from 4.4 per cent of treasury expenditure in 2008 to 46.5 per cent in 2009”. (Irving, 2011, p. 237)

Impacts according to geographical differences between regions and the low population density can be seen. Rationalisation and austerity means that maintaining services in rural areas became increasingly challenging and this is supported by interviews and our survey. This is in line with Milbert et al. (2013, p. 61) who found in their analysis of data in the ESPON SeGI project that “var-

Provision and Development of SGI at the Edge: The Case of Iceland

181

iation of accessibility across case study regions increases on services of medium and high centrality”. The internet is in need of special attention by the Icelandic authorities because of the strong polarisation of quality and access between urban and rural areas. When Iceland telecom was privatised in 2005 it was the intention of the government to improve infrastructure and various services, e. g. the mobile network and high-speed internet connections in rural areas and along the main roads1. With the collapse of the banking system during the crisis, and the resulting loss to the Icelandic state, this intention was cancelled and these and other infrastructure projects were postponed or altogether removed from planning and policy documents. Another major finding of the survey is that the road network is of concern for many respondents. The prioritisation of new road projects is very much debated between rural and urban areas since the needs and objectives are different. Rural regions need basic connections which can be relied on for year-round traffic, but Reykjav†k needs improved roads to allow for an increasing volume of traffic. Privatisation of services and subsequent demand for increased efficiency and economy has had diverse impacts. Emphasis by the private companies has been placed on areas where business is lucrative, i. e. a relatively large clientele is accessible and the costs to provide the services are less. This impact is clearly seen in the case of IT services. This concentration can also be seen in public services as S´wiatek et al. (2013) in their comparison of case studies in the SeGI project pointed out that in Iceland, centralisation is physical and mostly focused on the high-level services, such as specialised medical services in the capital region, making use of agglomeration effect. Pressure to improve services can come from different directions, such as from the EU (through the EEA agreement), food producers and competing land uses, e. g. recreation. This is noticeable in certain types of services such as waste management and sewage treatment. It was pointed out by an interviewee that the influence of European laws and traditions can be observed in consumer services, even down to this small case study region in Iceland. The EU runs seminars in how consumer associations can have an impact and there is, for example, an importance on trans-European consumer protection so that if faulty product is bought in one country you can seek solutions in another country. According to the same interviewee, the EEA agreement improved the position of consumers as many regulations on consumer affairs were adopted into Icelandic laws and regulations and that generally European regulatory framework was viewed as being more consumer friendly than the Icelandic one. Parliament decisions have much impact on development of services. An ex1 Act no. 133/2005, abolished with Act. 173/2008.

182

Hjalti Jóhannesson

pert interviewee mentioned that this regulatory framework has a tendency to promote centralisation as demands of various kinds can primarily be met in the capital region. Lack of planning by the government on matters such as how to provide hospital services in times of austerity is an issue which needs attention. Due to necessary cutbacks during economic recession, service will become more limited and in some cases certain service types will cease to exist in some places. An example of this is small hospitals that may not be able to provide as many services as before and patients will have to seek services elsewhere. An expert interviewee pointed out that simply planning would come primarily through the state budget, i. e. how much should be spent each year and the management of each institute would then have to adjust their service capacity accordingly. The state did not put forward a definite policy about which hospital services should be offered in each place in north Iceland following the credit crisis. Planning proposals were set forward in many reports, but usually each institute gets certain money from the state without clearly stating which services it shall offer. Similarly, another interviewee discussed the lack of robust planning as regards public transport as an example. The goals may be ambitious, but funding is too limited for the planned system to function properly. Even if some respondents in the survey and interviewees agree that there are services and infrastructure that might be more accessible and/or in a better condition (and the latter applies especially to certain types of infrastructure), the quality of the services appears to be satisfactory for the majority of respondents. One of the main challenges for the region is development of infrastructure a common concern for many regions of Iceland. Network infrastructure such as the roads and the internet network are the most challenging according to our data. However, a consensus is lacking between regions as conditions vary considerably and so do opinions on how to prioritise projects. The prioritisation has to take into account different purposes of road projects; whether it is to open for year-round access between places, increase the capacity of roads, increase road safety, or facilitate regional development policy statements (Jûhannesson and ­lafsson, 2003). This appears to become increasingly challenging in times of austerity when people from different locations are competing for limited funding. Some of the objectives of the new transportation policy of Iceland (2011–2022) have much relevance in the context of the SeGI project (Æings‚lyktun um samgöngu‚ætlun fyrir ‚rin 2011–2022): – Accessibility and mobility in the transportation system for movement of people and goods within and between regions shall be improved. Conditions will be created for most citizens to access centres of employment and services within one hour.

Provision and Development of SGI at the Edge: The Case of Iceland

183

– Centres of employment and services in the country will be defined in regional planning policies and Iceland’s national plan. – Transportation should support structure and development of service areas in all regions. – Harbours and airports that shall ensure easy access to and from the country will be defined. Some of these objectives appear to support concerns brought up in the case study, such as accessibility to urban functions, the state of the road network and generally to “unify” the region with the use of better roads. Today, however, it appears somewhat fragmented due to the long distances and inadequate road network preventing reliable connections during winter. Many municipality mergers have taken place in the case study region since the late 20th century2. However, according to an interview, SGI would have been more economical and effective with municipalities merging into larger units. Municipalities with very few inhabitants may stretch over considerable distances3 and have little service capacity unless collaborating extensively with larger municipalities. This is amongst the challenges associated with providing services, territorially speaking, at the edge. The impacts of privatisation are considerable according to interviewees, the process being always the same and the impacts disproportionately felt in rural areas more than in urban locations, leading to complaints about poor service and high prices where market conditions are not at hand. To maintain service levels different services, post offices and banks – for example – have been combined in rural areas.

7.

Conclusions

Among its Nordic counterparts, Iceland is considered to have a specific welfare regime. “Although included within the Nordic family of nations, propinquity to social democratic welfare regimes has not determined the development of welfare arrangements in Iceland” (Irving, 2011, p. 235). Instead there has been “affinity towards other more liberal ‘settler’ states (such as New Zealand), and to strong US relations” (ibid, 236). However after the credit crisis (2009–2013), the first leftist government in Iceland took over ; a coalition of social democrats and the left green party. It placed welfare issues high on its agenda and referred to 2 From 28 municipalities in 1993 down to 13 in 2012. 3 In January 2014 seven out of 74 municipalities had fewer than 100 inhabitants, there of two in the case study region.

184

Hjalti Jóhannesson

Nordic welfare regimes. However, in 2013 a right-wing government took over again with more liberal agenda. The settlement characteristics obviously provide an extra element to the question of provision and accessibility of SGI since almost two thirds of the population live in Reykjav†k and surrounding municipalities. In that region and its immediate hinterland the level of and accessibility of services is usually very good while remote regions face more challenges. Despite this, SGI appear to be of a relatively high level in the case study region, even if accessibility depends very much on the municipality in which you are located. Roads and the internet are services in need of particular attention in order to even out matters of access in rural and urban areas. Different access to services can also be noted within the case study region. The Akureyri municipality has the majority of inhabitants or 62 % of a total of 13 municipalities. A challenge is to make services with a higher “threshold level” accessible to those living in smaller localities where these services do not generally exist. The region is over one-fifth the size of Iceland, very mountainous and there is heavy snow during winter. Upgrading the road infrastructure, amongst other things, to ease access to services is considered important, such as replacing mountain roads with road tunnels. In fact, much has been achieved in this regard. In 2017, a new road tunnel will open which improves year-round access to Akureyri. Previous tunnels were opened in 1967, 1990 and 2010. Compared to regions in northwest and east Iceland, inhabitants in the case study region in northeast region have better potential access to SGI due to the existence of the strong regional centre that is gradually made more accessible for its hinterland. The challenges for the next years include prioritising road projects so that accessibility to services amongst other things will be high on the agenda. Services of general interest in Iceland and the case study region appear to be in a relatively good condition, even if there are definitely challenges in the form of financial conditions, the state budget, the budget of municipalities and individuals, distances, low population density and the transport and communications network in certain areas. This general finding can be observed both from collection of diverse data from public sources as well as from the questionnaire and the six interviews conducted. Privatisation and the demand for economisation have the tendency to centralise services in urban areas. The financial crisis has had a strong impact on SGI as it is has limited the ability of the state to finance services. The boom period prior to the crisis on the other hand fuelled general growth in the capital region of Iceland. Subsequent cutbacks in public expenditure were worse in the rural regions. Future challenges include the question of consensus on how to provide SGI and where. A declining population in rural areas creates uncertainty about

Provision and Development of SGI at the Edge: The Case of Iceland

185

maintaining services such as schools and healthcare. With limited funding the provision of services will be increasingly challenging. In many ways, Iceland is considered to be in a relatively good position to provide an economic basis for welfare society with natural resources such as renewable energy, fisheries and good conditions for development tourism. However, the country is still struggling with the aftermath of the financial crisis, which continues to have an impact on the economic conditions, SGI and society in general. Providing services at the edge is thus both a challenging task due to involvement of the global economy and the specific geographical conditions.

References Lög um fjarskiptasjûÅ no. 132/2005. Reykjav†k: AlÁingi. Æings‚lyktun um samgöngu‚ætlun fyrir ‚rin 2011–2022. no. 48/140 2012. Reykjav†k: AlÁingi. Bjarnason, Th. and Olafsson, K., 2014. Skammt†ma‚hrif H¦ÅinsfjarÅarganga ‚ mannfjöldaÁrûun † FjallabyggÅ. šslenska ÁjûÅf¦lagiÅ, 5. ‚rgangur 2014, pp. 25–48. Available at: http://www.thjodfelagid.is/index.php/Th/article/view/63/pdf [Accessed 29 April 2014]. ByggÅastofnun, 1993. Breyttar ‚herslur † byggÅam‚lum : Tillaga aÅ stefnumûtandi byggÅa‚ætlun 1994–1997. Reykjav†k: ByggÅastofnun. Cole, J. and Cole, F., 1998. ”EU:s ekonomiska geografi”. Lund: Studentlitteratur. Constantin, D. L., Grosu, R. M., Iosif, A. E., 2013. Exploring the Territorial Capital, Global Competition and Territorial Cohesion Policy : A Swot Analysis of Services of General Interest. Romanian Journal of Regional Science, Vol. 7.2013, pp. 125–141. Available at: http://www.rrsa.ro/rjrs/rjrs.swf [Accessed 28 April 2014]. FerÅam‚lastofa, 2014. Fjöldi ferÅamanna. Available at: http://www.ferdamalastofa.is/is/ tolur-og-utgafur/fjoldi-ferdamanna [Accessed 18 February 2014]. GuÅmundsson, B. ed., 2013. H‚skûlinn ‚ Akureyri 1987–2012: afmælisrit. Akureyri: H‚skûlinn ‚ Akureyri. Halapi E. and Jûhannesson, H., 2014. EyjafjarÅarsveit, skûlaakstur og almenningssamgöngur, helstu niÅurstöÅur könnunar. Akureyri: Rannsûkna- og ÁûunarmiÅstöÅ H‚skûlans ‚ Akureyri. Available at: http://www.rha.is/static/files/Rannsoknir/2014/ eyjafjardarsveit_skolaakstur-almenningssamgongur_rha-2014-loka.pdf [Accessed 25 April 2014]. Humer, A. and Palma, P., 2013. The Provision of Services of General Interest in Europe: Regional Indicies and Types Explained by Socio-Economic and Territorial Conditions. EUROPA XXI 2013, 23, pp. 85–104. Available at: http://rcin.org.pl/igipz/dlibra/pub lication?id=59788& tab=3 [Accessed 23 April 2014]. Irving, Z., 2011. Curious cases: small island states’ exceptionalism and its contribution to comparative welfare theory. The Sociological Review. Volume 58, Issue Supplement s2. pp. 227–245. Available at: http://onlinelibrary.wiley.com/doi/10.1111/j.1467-954X. 2011.01971.x/pdf Accessed 3 March 2014].

186

Hjalti Jóhannesson

Jûhannesson, H. and ­lafsson, K., 2003. ForgangsröÅun framkvæmda † vegakerfinu, F¦lags- og efnahagsleg ‚hrif samgöngubûta – Ýfangasky´rsla II. Akureyri: University of Akureyri Research Centre. Available at: http://www.rha.is/static/files/Rannsoknir/ 2003/samgongubaeturI.pdf [Accessed 4 March 2014]. Jûhannesson, H., and Sigurbjarnarson, V., 2013. Annex 10 d to SeGI scientific report case study report, Iceland (north-east region). Luxembourg: ESPON. Littke, H., Rauhut, D. and Foss, O., 2013. Services of General Interest and Regional Development in the European Union. Romanian Journal of Regional Science, Vol. 7.2013, pp. 88–107. Available at: http://www.rrsa.ro/rjrs/rjrs.swf [Accessed 28 April 2014]. Milbert, A., Breuer, I. M., Rosik, P., Ste˛pniak, M.and Velasco, X., 2013. Accessibility of Services of General Interest in Europe. Romanian Journal of Regional Science, Vol. 7.2013, pp. 37–65. Available at: http://www.rrsa.ro/rjrs/rjrs.swf [Accessed 28 April 2014]. Prime Minister’s Office, 2009. Government coalition co-operation statement by the social democratic alliance and left-green movement. Available at: http://eng.for saetisraduneyti.is/news-and-articles/nr/3706 [Accessed 18 March 2014]. Rauhut, D. and Borges, L., eds., 2013. SeGI. Indicators and perspectives for services of general interest in territorial cohesion and development. Luxemburg: ESPON. R†kisendurskoÅun, 2012. Æjûnustusamningur r†kisins viÅ Farice ehf. Sky´rsla til AlÁingis. Available at: http://www.rikisend.is/fileadmin/media/skyrslur/Farice_lokaskjal.pdf [Accessed 13 March 2014]. Statistics Iceland, 2013. Population projection 2013–2060. Statistical Series 2013:2. Available at: https://hagstofa.is/lisalib/getfile.aspx?ItemID=15409 [Accessed 30 April 2014]. Statistics Iceland, 2014. Tourism, transport and information technology. Available at: http://www.statice.is/Statistics/Tourism,-transport-and-informati [Accessed 28 March 2014]. S´wiatek, D., Komornicki, T., Silka, P., 2013. Services of General Interest: Empirical Evidence from Case Studies of the SEGI Project. EUROPA XXI 2013, 23, pp. 105–130. Available at: http://rcin.org.pl/igipz/dlibra/publication?id=59788& tab=3 [Accessed 23 April 2014]. The ministry of culture and education, 2014. Stofnanir. Available at: http://www.mennta malaraduneyti.is/stofnanir [Accessed: 25 March 2014]. Umhverfisr‚ÅuneytiÅ, 2009. Umhverfi og auÅlindir. Stefnum viÅ † ‚tt til sj‚lfbærrar Árûunar? Reykjav†k: Author. World Economic Forum, 2011. Global Information Technology Report 2010–2011. Available at: http://www3.weforum.org/docs/WEF_GITR_Report_2011.pdf [Accessed 28 March 2014].

Xabier Velasco Echeverr†a

Chapter 8: EU influenced modernisation and austerity: The case of SGI in Spain

1.

Introduction

The development of SGI in Spain before the economic crisis was accompanied by modernisation and liberalisation processes, most of which were influenced by EU directives (environmental, single market, passenger and freight transport, energy, waste and sewage and others) rather than national and regional initiatives. National and regional governments in Spain have tended to only apply reforms after a new EU regulation had been put in place, rather than based on self-initiative (Spain, 2007 a, 2003 a, 2008, 2010, 2012 a, 2007 b). One of the few examples of national and regional initiatives in Spain is housing, an area where the EU has no competences. A major housing reform was introduced in 1996 and, after the housing bubble burst in 2008, several experts used this as an example to demonstrate policy failure (Naredo, J.M., 2010). After Spain joined the EU in 1986, the country experienced an evident improvement in economic and social SGI provision and infrastructures, and moved toward convergence with other EU countries (De la Dehesa Romero, 2001). For example, the growth in GDP led to important investments in public works. Between 1995 and 2012 investment per square kilometre and inhabitant was similar to that of France and Germany (Confederaciûn EspaÇola de Organizaciones Empresariales, Comisiûn de Concesiones y Servicios, 2013). This EU-driven liberalisation process, which paved way for the modernisation and convergence process towards other EU members, did, however, generally lead to increased prices rather than the opposite. Moreover, many private customers as well as businesses have remained clients to the former monopolies, with the possible exception of ICT (Calzada, J., Estruch, A., 2011). This could indicate room for improvement in the regulation or de-regulation of liberalised sectors as stated by other authors (Arroyo Jim¦nez, L., 2009), in order to increase competition and obtain better services and prices by clients. When the financial crisis hit Spain in 2008, the country and its regions were not prepared. One of the pillars of economic growth up until 2008 had been the

188

Xabier Velasco Echeverría

expanding housing sector, and the financial crisis led to a complete collapse of the housing market. The increasing public debt is troublesome, although budget cutbacks were made in an attempt to make expenditure meet revenue, and investors are again interested in public bonds. Public employees have been forced to accept reduced salaries and the unemployment rate has rocketed to approximately 27 % overall and up to 50 % for young adults. Beside this, the private debt (household and business) is also high. Put into the context of high unemployment, lowered incomes for public employees and the collapse of the housing market, high private debts were devastating. Most Europeans understand that the crisis hit Spain hard, but perhaps not how hard it hit its population. At the time of writing this paper, the only positive remark that can be made after so much suffering due to the economic and financial crisis and the policies to address them is that, employment rates are increasing and GDP growth will be well above the European average and slightly lower than Germany’s for 2014 and 2015 (European Commission, Directorate-General for Economic and Financial Affairs, 2014). This chapter aims to discuss what impact the financial crisis has had on the provision of SGI in Spain since 2008. Three questions are proposed to be answered: (1) How hard was Spain hit by the financial crisis in terms of SGI provision?; (2) Why was Spain hit so hard?; and (3) What long-term effects can the crisis be assumed to have on the SGI provision in Spain? The provision of SGI in Europe can be conceptualised in many ways. This chapter will follow the conceptualisation outlined in the introductory chapter. The contextual and legal perspectives will be in the centre of the discussion and the policy implications will hence be discussed.

2.

Services of General Economic Interest

The management and coordination of the gas system is carried out by the technical manager of the system, a role assigned in Spain to ENAGAS (a previously state-owned enterprise privatised in 1994) as the main distributer in the territory. Gas consumption in Spain has doubled in the last six years and accounts for 17.8 % of the total primary energy, which makes it the main contributor to electricity production. Moreover, 76 % of the population resides in municipalities with a supply of gas, although only 33 % use it (Fern‚ndez Muerza, 2011). In spite of market liberalisation, prices have not been affected, as gas tariffs have followed an upward trajectory mostly due to a price increase at the origin, where the main provider is the Algerian public company SONATRACH (Spain, Comisiûn Nacional de la Energ†a, 2012). Municipalities and local entities, together with the private sector, play an

EU influenced modernisation and austerity: The case of SGI in Spain

189

important role concerning the provision of services to final users, such as water supply, sewer and wastewater treatment services. Current management of water resources in Spain is framed by the 2000/60/EC Water Framework Directive (European Parliament, Council of the European Union, 2000), establishing a framework for Community action in the field of water policy. Through this Directive, the European Union organises the management of inland surface waters, groundwater, transitional waters and coastal waters with the aim of “preventing and reducing pollution, promoting sustainable water usage, environmental protection, improving aquatic ecosystems and mitigating the effects of floods and droughts”. Spanish Law implemented this Directive with the 140/2003 Royal Decree (Spain, 2003 b). The institutional framework consists of public and/or private bodies that aim to provide goods and services concerning water, address the basic needs of the population, maintain ecosystems and enable the development of economic activities. Some of these bodies (the state, the National Water Council, basin agencies, autonomous communities, municipalities and local entities) share competences, necessitating coordination among them. Municipalities can provide the service directly through a municipal public company (or a commonwealth of municipalities) or through concessions to mixed public-private companies or to fully private companies. Currently there is growing a tendency to involve the private sector in these services through administrative licenses, keeping the municipality in the regulatory function. In some cities, water supply is the responsibility of a company, while sanitation services are provided directly by the municipality (AGA, s.d.). Users are not able to choose a supplier, as they receive the service from the enterprise operating in their area. The supplier has to guarantee immediate availability and permanent access to drinking water. It is thus in charge of the maintenance of water pipes and all elements used for that service. Concerning tariff levels, according to research undertaken in 2009 by the Spanish Association of Water Supply and Sanitation (AEAS), Spanish tariffs for water are among the lowest in the EU. On average, industrial users paid 1.81 euros per cubic metre and residential users paid 1.40 euros per cubic metre. There were large variations in prices between cities and regions, and islands normally had the highest tariffs. According to the research of the National Statistics Institute (Spain, Instituto Nacional de Estad†stica, 2011), water consumption in households per inhabitant and day decreased in 2009 compared to 2008. In 2009, the consumer organisation OCU analysed the presence of pollutants in drinking water in 64 cities and towns. The analysis showed that drinking water had improved since the last report by OCU on drinking water in 2006. The current law regulating waste and sewage in Spain, which is framed by the European Directive 2008/98/EC on waste (European Parliament, Council of the

190

Xabier Velasco Echeverría

European Union, 2008 a), is the recently approved 22/2011 Law of waste and polluted soil (Spain, 2011 a). The law establishes the competences in the subject of waste and sewage between the state, autonomous communities and local entities. The local entities are responsible for the management of urban waste and sewage. In Spain, waste services are mainly provided by the so-called “commonwealths”, which are voluntary associations of municipalities created in order to provide one or more services, in this case waste collection and sewage. In other cases, municipalities do the collection without association or by contracting a private company. Currently, the functions of these entities are the subject of debate, as in some cases they duplicate the functions of provinces or other local administrations. The law is applicable to any kind of waste with the exception of atmospheric pollution, radioactive waste, discharges to inland waters or from land to sea and those discharges caused by ships and aircrafts to the sea. In 2005, 77 % of municipal wastewater was treated in accordance with standards set by the EU. Currently, approximately 98 % of the urban population and 93 % of the rural population are connected to sewers, while the rest are served by on-site sanitation systems, such as septic tanks. The electric market, as in the case of gas market, is fully liberalised with the exception of transport in compliance with European Directive 2009/72/EC of the European Parliament and of the Council of 13th July 2009 concerning common rules for the internal market in electricity. This market is regulated by the 24/ 2013 Law (Spain, 2013 a) that updated the 485/2009 Royal Decree (Spain, 2009) which introduced two important changes: on the one hand, the annulment of the former Regulated Tariff and the creation of the Tariff of Last Resort; and on the other hand, the entry of all consumers into the liberalised market. The electric Tariff of Last Resort (TUR) is an electric power supply tariff set by the Spanish Government on the price of electricity. In addition to this tariff, there is another special figure, called “electricity social benefit”, which has entailed discounts of the electric tariffs for some low-income households. The agents of the electric sector (producers, distributors, marketers and qualified consumers) buy and sell energy by the auction system in the “Iberian Electric Energy Wholesale Market” (as known as “Electric Pool” or MIBEL by its acronym), which is shared with Portugal. The management of the wholesale market and the bids is done by the enterprise OMI-Polo EspaÇol (OMIE). This mode of functioning has led to various problems. The “pool” displays the price of electricity generation as equal to zero for many hours. The explanation for this is that highly subsidised renewable energies have priority in the market as their variable costs are zero (these energies do not use any fuel), leaving other sources of energy without subsidies (for instance thermal centrals, which have

EU influenced modernisation and austerity: The case of SGI in Spain

191

higher variable costs of generation) out of the market in times of low demand, thus decreasing the prices. However, the opposite effect is also happening. Nuclear power plants and hydraulic plants, which are usually already amortised, produce much higher income than their generation costs, making consumer bills higher. Another problem is caused by the so-called “tariff deficit”, which is the difference between the bills paid by consumers and the costs recognised by the electric companies. Since liberalisation, the successive governments have repeatedly frozen the tariffs in order to control the inflationary impact of the electricity (as every activity depends on it), which disconnected the tariffs from the real costs. This difference transferred the debt from the state to the electric companies, which amounted to approximately 20,000 million euros in 2010. The situation of the transport infrastructure in Spain in 2014 has changed completely compared to previous years. While the huge investment made in recent years by public administrations, mainly by the state and regional administrations, has modernised Spanish provisions, the economic crisis has delayed the construction of many of these infrastructures. Spain has led the construction of public infrastructures in Europe, especially when it comes to transport, such as airports and high-speed railways. In the case of housing construction, infrastructures have been the engine of growth of the Spanish economy. Nevertheless, this massive infrastructure provision has led to diverse problems, including the under-usage of infrastructures due to a lack of planning of the expected demand. In many cases, this means that the cost of maintenance of the infrastructure is higher than the income generated by it.Moreover, the economic crisis, which was worsened by the decrease in financing from the EU Structural Funds for infrastructures from 2009–2012 (5,500 million euros less per year than the previous period), has reduced the investment in infrastructure to a minimum. More than 65 % of the total high-capacity transport infrastructures in Spain were built in the last ten years. As a result, Spain has one of the most extensive road networks in Europe, with a technological level comparable to the leaders in this area. Of the total network, 14,262 kilometres are highways or dual carriageways, making Spain the country with highest length of this kind of roads, ahead of Germany (Spain, Ministerio de Fomento, 2013). Air transport is a means of transport that has become increasingly popular in Spain in recent years. This upward trend in air transport has been reflected differently in each of the Spanish airports. Whilst a few airports located in tourist destinations and in big cities experience a concentration of a large part of the traffic and have noted an increase the number of passengers (especially the ones in the Mediterranean), the majority, mostly smaller airports, have experienced gradual decreases in the number of passengers, turning their profits into losses.

192

Xabier Velasco Echeverría

In 2010, according to AENA economic results, only 11 of the 48 airports in Spain turned a profit. The two biggest airports, Madrid-Barajas and Barcelona-El Prat made losses (Mars, 2011) (Elpa†s.com, 2010), closely related to the amortisations of their recent enlargements. There are also airports that have been built, but are not operative (Fabra, 2011). The differences in passenger traffic as well as the difficulties that the airports experience in making a profit have highlighted the debate on the excess of this kind of infrastructures and the change of the management model. With regard to railways, the implementation of the Law of the Railway Sector (Spain, 2003 c) in 2005 changed the picture of railways in Spain. The law separated the national railway that was in charge of both infrastructure and services into two different enterprises, although the debt of both companies combined remains at over 19 billion euros. The first enterprise, ADIF, is in charge of the management (operation and maintenance) of almost all of Spain’s railway infrastructure and is also responsible for the construction of new railway lines. The second enterprise, RENFE, is a state-owned company that is in charge of passengers and freight transport and is in competition with other private enterprises. Besides these two government railway companies, there are other agents such as private and regional public companies. All enterprises with a European license providing freight services have free access to the entire Spanish network of railways of general interest once they have received prior authorisation from ADIF. The transport of passengers by private companies is prohibited by law until the liberalisation process in the framework of European transport directives enters into force. In regions such as Catalonia, the Basque Country, Valencia and Baleares, the regional authorities manage parts of the railway proximity network in their own regions that for historical reasons have a different gauge than the Spanish standard (Olmedo Gaya, 2003). In the case of maritime transport, Spain is one of the European countries with highest coastal length. Its geographical position benefits the country as a strategic area in international maritime transport and as a logistics platform in Southern Europe. At the national level, the Ministry of Public Works is responsible for the regulation of the maritime transport through the Directorate General of Merchant Marine. This body is in charge of the general planning, technical and control inspections, licenses and authorisations in order to develop maritime navigation, to guarantee marine safety and fight against pollution in the marine environment. Some of the autonomous communities, such as the Canary Islands and Balearic (insular Spanish area), also have competences on regulations (Spain, Ministerio de Fomento, s.d., a). The Spanish public port system is comprised of 46 ports of general interest

EU influenced modernisation and austerity: The case of SGI in Spain

193

that are managed by 28 port authorities that are subsidiary to the Ministry of Public Works, which is in charge of the port policy. The activity of the state port system contributes up to 20 % of the GDP of the transport sector, representing 1.1 % of the total Spanish GDP. At the same time, it generates more than 35,000 direct jobs and around 110,000 indirect jobs (Spain, Ministerio de Fomento, s.d., b). The investments in recent years have focused on improving transport conditions, such as increasing the number of routes and connections with other means of transport, rather than on creating new ports, (Spain, Ministerio de Fomento, 2010). The current provision of postal services is based on Law 43/2010, of the Universal Postal Service (Spain, 2010), users’ rights and postal market. This law implements Directive 2008/6/EC, of the European Parliament and the Council, with regard to the development of postal services internal market within the European Union and the improvement of the service’s quality (European Parliament, Council of the European Union, 2008 b). Postal services are classified into two categories. The first category is constituted by services included in the universal postal services’ scope. This refers to the set of quality postal services determined by the law and its regulations, provided in an ordinary and permanent regime in the entire Spanish territory, and at an affordable price for all users. Despite current liberalisation policies, services included within the universal postal service, interurban shipping and outgoing cross-border shipping are still entrusted to the Postal and Telegraphs State Company, an operator appointed by the state. This state company has the right to provide these services for a 15-year period starting on 1st January 2011, and is subject to the duties of a public service. After 15 years, the state will be able to appoint other enterprises as providers of this service, which requires coverage of the entire Spanish territory. The second category refers to services not included within the universal postal services scope. This means that other operators can be established as providers of postal services in Spanish territory if international agreements confirmed by the state foresee it, according to current Spanish regulations. Two of the main services within this category are urgent national and international shipping for businesses. Telecommunications and the ICT market have been liberalised since 1998 through the 11/1998 General Law of Telecommunications (Spain, 1998), which adapted the sector to the liberalisation process established by the EU. The regulatory agent of the ICT and telecommunications sectors in Spain is the Market and Competence National Commission (CNMC), which adapts regulations to the current European Union Strategy 2010–2015 for the encouragement of the ICT and Information Society Sectors. At the moment, the economic crisis has affected the demand in Spain for telecommunication services and, especially, the expenditure on final services.

194

Xabier Velasco Echeverría

However, despite the decrease of prices and incomes since the middle third of 2007, the penetration rate and use of most of the services has continued to increase. For instance, broadband lines by fixed networks increased by 8.6 %, mobile phone by 1 % and Pay TV by 7.7 %. The greatest growths came from broadband by 3G/UMTS networks, which increased by 71 %, reaching 3.3 million people in 2010.

3.

Social Services of General Interest

Education in Spain is a constitutional right of citizens and is free and compulsory until the age of 16. It is incorporated into the Spanish Constitution as a competence shared between the state, which is responsible for basic legislation and coordination and inspection services, and the autonomous communities, which manage non-university education to its full extent at all levels and degrees. The state holds exclusive responsibility for the regulatory function concerning homogeneity and equality of the education system. It also has responsibility for regulating the structure of the different education levels and the conditions for obtaining, issuing and recognising academic and professional qualifications. For the most part, these competences regulate only basic elements of the system. The autonomous communities have regulative responsibility in the development of state standards and in non-basic aspects of the education system, as well as most of the competences for the executive and administrative management in their own territory. Each autonomous community is able to configure its own model of management concerning the functions and services assumed. Besides public schools, there are private schools and private schools with public financing, the so-called “centros concertados” (subsidised centres) (Spain, Ministerio de Educaciûn, Cultura y Deporte, s.d.). Since 1970, Spain has passed four education laws, showing to a certain extent the lack of agreement between political parties. Since the turn of the millennium, the economic, social and technological developments necessitated the introduction of the Organic Law of Education (Ley Org‚nica de Educaciûn – LOE) in 2006. The law aimed at adjusting legal regulations of non-university education to the reality in Spain (pre-school, primary, secondary compulsory school, vocational training, languages, arts, sports, adult education, etc.) under the principles of quality for all students, equal opportunities and effective transmission of the values favouring freedom, responsibility, tolerance, equality, respect and justice. In 2014, a new reform called LOMCE entered into force, which aimed to reduce dropouts, to improve the results according to international standards and to improve employability and entrepreneurship by means of three

EU influenced modernisation and austerity: The case of SGI in Spain

195

pillars: ITC, multilingualism and the modernisation of vocational training. This reform is again not based on a consensus between political parties. In 2007, the year when the 4/2007 Organic Law of Universities was enacted, university education took a step toward the European Higher Education Area (EHEA) by adapting different aspects of university education, such as the European Credit Transfer System and the graduate/postgraduate structure. The Spanish ranking in education according to successive reports of international and national organisms such as CES or PISA (the last report was published in 2012) (OECD, 2012 a), which involve OECD countries, shows educational backwardness compared to other developed countries. According to these reports, Spain displays high rates of school failure, early dropout and poor performance of students in basic competences at the end of their compulsory education. This backwardness implies more vulnerability for the employability of less educated people and more social costs. Furthermore, several differences between public and private schools results are clear. Labour market regulations are within the exclusive competence of the state via labour laws and collective bargaining. The Law of Employment of 2003 (Spain, 2003 d) configured the National Employment System as a territorial network headed by the Public Employment Service (SEPE). This public service manages unemployment benefits, orders active policies and coordinates the regional network, which provides services of attention and improvements of job conditions for the unemployed and employed as well as services for companies in need of workers. The most extreme manifestation of the economic crisis is unemployment. Concretely, the unemployment rate has reached 26 % (from less than 8 % in 2007) and 5.8 million were unemployed during the last third of 2013, one of the highest rates among developed countries. The number of people receiving unemployment benefits has increased to 2.9 million and youth unemployment reached 55 % in 2013. Furthermore, unemployment costs for the state and administrations grew from 1.4 % of the GDP in 2007 to 3.2 % in 2009. Contributions to unemployment ceased to be enough to finance this expenditure in 2008, and currently taxes have to provide the rest. The main factors for this scenario are the construction sector’s slowdown and the high percentage of temporary contracts in the economy. In previous years, the construction sector generated more than 10 % of the GDP. This labour-intensive sector generally employs a less-trained work force, which has fewer chances of reinsertion into the labour market after being laid off. The Spanish labour market combines high protection for permanent workers with low costs of termination of contracts for temporary workers. This excessive segmentation has provoked an unequal distribution of the flexibility of the labour market, bringing negative consequences such as rigidity, and a lack of

196

Xabier Velasco Echeverría

capacity for the absorption of economic adjustments. In 2009, Spain had the second highest rate of temporality with 25.4 % of the contracts, followed only by Poland (OSE, 2010, p. 155–156). In 2012, the government modified the labour market regulations of 2006 and 2010 through Decree Law 3/2012 (Spain, 2012 b). In order to reduce costs and penalty of temporary contracts, aiming to stop the sequence of temporary contracts for a worker and benefiting the permanent contracts, the law brought the following changes: (1) Compensation of 33 days per year worked for unfair dismissal in determined cases of permanent contract (replacing the previous 45 days), (2) Recognition of crisis in enterprises as an objective dismissal, (3) The possibility that employers and employees agree on a labour agreement not linked to the collective bargaining agreement in force. The so-called “German model”, which consists of the reduction of working hours per day due to economic causes, was also approved. Moreover, in July 2012 a new law came into force to reduce the subsidies received after the seventh month of unemployment from 60 % to 50 % of the base salary, without affecting the subsidy period, which remains at two years. Care services are defined by the National Health System and the Social Security system (guaranteed by the Spanish Constitution). The main characteristics are: (1) Extension to the entire population, (2) Appropriate organisation to provide high level quality care services, (3) Coordination of all public health and employment resources. The objective of the Social Security system is to guarantee specific and individualised social benefits in order to face specific situations that may put people (and those who depend on them) in a state of necessity. Membership and payment of fees are compulsory as of the start of the working activity. The law regulating Social Security is the 1/1994 Royal Decree approving General Law of Social Security (Spain, 1994). The protective action of Social Security involves basic welfare schemes: (1) Healthcare (primary and hospital care) in cases of maternity, common or professional illness and accidents; (2) Professional recovery in all cases describe above; (3) Economic benefits in the following situations: Temporary disability, maternity, death and survival, disability, retirement and unemployment; (4) Social service benefits concerning re-education, disabled rehabilitation and elderly assistance; and (5) Complementing the previous, benefits of social assistance such as assistance to customers in order to understand and use their rights. The current situation concerning healthcare and social care in Spain is complex. This is not due to the quality or a lack of services provided (universal coverage in Spain is one of the most advanced in the world and one of the best examples of the welfare state in the country) but because of the fact that the

EU influenced modernisation and austerity: The case of SGI in Spain

197

maintenance of the quality of the system is in question due to its lack of sustainability according to the current economic context. On the one hand, population ageing is causing an increase in expenditures for pensions, treatment of disease and technological equipment. On the other hand, saturation of the system, especially in primary care (Spain records the most doctor’s visits per inhabitant and year in the EU) (Semergen, 2011), is evident, as well as the difficulties of the social security financing model. The non-permanent legislative Commission on Social Security discusses the system’s development at regular meetings. The “Report of Evaluation and Reform of the Toledo Agreement” (Spain, Ministerio de Trabajo e Inmigraciûn, 2011) analysed the current demographic and economic trends and perspectives and questioned the sustainability of the system. The report recommended, among others, the “prolongation of working life” and the “extension of the calculation period for the pensions”, which are highly controversial recommendations within Spanish society. The “Toledo Agreement” refers to a document that analysed “the structural problems of the social security system and the main reforms to be undertaken”. After months of debate, these recommendations were included in the 27/2011 Law (Spain, 2011 b) on the update, adaptation and modernisation of the Social Security system. This law was the final result of the social debate concerning its sustainability, implying, among others, the delay of the retirement age from 65 to 67 years and the extension of the pension calculation period from 15 to 25 years. After the reform, the OECD published a “country note” entitled “Pensions at a Glance 2011” (OECD, 2011 b), in which the improvements that the reform could bring to Spain are analysed. Two additional measures were adopted in 2012 to reduce annual expenses by 6 billion euros. Firstly, medicine co-payment was introduced. The active population will pay between 40 % and 60 % of medication based on income, whereas pensioners will pay 10 % with a maximum between eight euros and 18 euros based on income. Secondly, Law 29/2006 (Spain, 2006) entered into force, which excludes the financing of 426 medicines based on criteria such as minor illness, low price or same active component as other medicines not included in the public financing. Social housing in Spain aims at favouring determined groups (people with access for the first time to a dwelling, people under 35 years or over 65, victims of terrorism or gender-based violence, persons with a disability, etc.) in order to acquire decent and appropriate housing at affordable prices for ownership or rent. The 31/1978 Royal Decree about subsidised housing regulates social housing in Spain. This law has been complemented by various housing plans, such as the current State Plan of Housing and Rehabilitation 2009–2012, which aims to:

198

Xabier Velasco Echeverría

– Guarantee the freedom of choice of the access model to housing (ownership or rent) – Ensure that families’ housing costs do not exceed one third of their income – Facilitate the attainment of social housing by both new promotions or rehabilitation – Make rented housing at least 40 % of the actions related social housing – Establish conditions guaranteeing access to housing by all citizens in equal conditions Autonomous communities also have competences in social housing; thus, there are different housing plans in the regions and there is not any unified regime for the entire country. Autonomous communities’ planning has increased in the last few years, complementing state regulations and, in the end, leading to a situation in which state regulations have become minimum frameworks. Social housing is divided into two main legal forms in Spain: Subsidised Housing (Vivienda de Protecciûn Oficial – VPO) (Euroresidentes, s.d., term “V.P.O”) and Controlled-Price Housing (Vivienda de Precio Tasado – VPT). Their type, dimensions and prices are regulated by the government, establishing conditions for eligibility for certain benefits, both economic and tax by the purchaser, who in turn must meet certain conditions set regarding the ownership of these homes income or family income, etc. They must also be used for habitual and permanent residence and not exceed a maximum area. The promotion can be public (by the administration), private, of general scheme and of special scheme. They have pre-determined maximum retail prices and there are also certain limitations related to the sale of the property. The housing can be sold before the end of the limitation period in which it is still public (usually 30 years) if the public administration has been informed, as it can exercise its right of purchase. While classified as subsidised housing, the price of the property is also set by the administration. There is absolute freedom of price when its protected status is lifted (Spain, 2013 b). The huge development and construction of private housing in Spain and the lack of policies for social housing have made the investment in this subject one of the lowest of the European Union. Nevertheless, the decrease in Spanish economic activity nowadays has caused an increase in the demand for social housing both for rent and for sale. Rental housing, contrary to the traditional pattern of purchase of Spanish society, has experienced great growth due to current rent promotion policies of the Spanish government. Public housing policies are now the solution for many people, especially the young, who suffer from the difficulties of access to the housing market due to their economic insolvency, as most of them are unemployed, as well as from the rigidity of mortgage conditions.

EU influenced modernisation and austerity: The case of SGI in Spain

199

In 2009, the current State Plan of Housing and Rehabilitation came into force, which introduced, together with the Plans from Autonomous Communities, grants and subsidies for purchase, rent and housing renovation, as well as aid for mortgage payments and, more recently, a VAT increase in housing purchase from 4 % to10 %. Meanwhile, the construction of social housing as a measure to reduce housing prices could be unadvised, as they could increase the huge private stock. However, they are advisable as an instrument of affordable housing for people suffering from vulnerabilities such as exclusion, abuse, terrorism, etc. In each autonomous community, social services provide different measures in order to benefit these people, such as the provision of temporary dwellings and priorities over other people in the purchase of social housing.

4.

Overlapping competences and measures taken

Since the introduction of democracy 30 years ago, there has been a severe decentralisation process with many competences transferred to the regional and local authorities. To give some relevant figures, at the regional level there are 17 autonomous regions and two autonomous cities. At the local level there are 8,117 municipalities, 3,721 local entities, 1,027 commonwealths, 81 regions, 50 provinces, 11 islands and 3 metropolitan areas. The most relevant fact is that 84 % of the municipalities are below 5,000 inhabitants and 95 % of the municipalities are below 20,000 inhabitants. In Table 1 the different services are classified according to their competence level. Table 1: Competence levels of different SGI in Spain Service Management of financial matters

National Yes (National and regional)

Regional Yes (Regional and local)

Local Yes

Budget control and Yes (National and management of regional) public funds and public debt Management of re- Yes search and development policies and corresponding funds

Yes (Regional and local)

Yes

Yes

No

Yes

Yes (depending on size)

Management of statistical services and social and economic planning

Yes

200 (Continued) Service Regulation of health, education and cultural activities and other social services Regulation of economic sectors and provision of subsidies

Xabier Velasco Echeverría

National Yes

Regional Yes (cultural and social services)

Local Yes (social services)

Yes

Yes

No

Tax collection

Yes

Yes (housing, vehicles, building permits, economic activities)

Foreign affairs

Yes

Yes (only Navarre and Basque Country except Excise Tax and the Value Added Tax) No (some autonomous regions have their own commercial and political offices in foreign countries)

Homeland security

Yes

Yes (local police)

Justice

Yes (constitutional tribunal, supreme court)

Yes (some Autonomous Regions have their own police) Yes

Civil defence and fire extinguishing

Yes (resources ofYes fered to regional authorities for a specific emergency) Yes No

Management of compulsory social security

No

No Yes (local volunteers) No

A new Law of Rationalisation and Sustainability of Local Administration (Delgado Ramos, D., 2013) was approved by the government to deal with the evident overlaps in competences and the reality of municipalities in Spain. This reform aims to protect budget stability and financial sustainability (saving estimate of 8.024 billion euros between 2013 and 2019) (Beltr‚n, A., et al., 2009). It also aims to organise responsibilities to avoid duplication (or relinquish competences to a higher level when certain conditions are met). Furthermore, to rationalise the organisation of local entities is also an aim, and, finally, it aims to organise several aspects related to political organisation,

EU influenced modernisation and austerity: The case of SGI in Spain

201

public leadership and staff payments (Spain, Ministerio de Sanidad, Pol†tica Social e Igualdad, 2008). On the other hand, several experts as well as the opposition parties maintain that the new law does not solve the existing problems at the local level and also point out that the debt of the municipalities is less than 5 % of the total national debt. This reform is only part of a package of measures adopted by the government since 2011 at the state, regional and local levels to achieve efficiency and to deal with the economic situation. The measures are wide reaching. The retirement age has been delayed from 65 to 67 years and the weekly working hours for public workers is increased from 35 to 37.5. The Spanish Constitution has been modified to include legal limits according to EU policies for budget deficit and public deficit for all administrations in the country. The number of town councillors has been reduced by 30 % across the country. Cuts in organisation charts (and wages) from public enterprises and administrations (5 % in 2011 and an additional 5 % in 2012) have been made. A replacement rate of 10 % for vacancies in education, health care, homeland security, fire fighters, labour inspectors and tax inspectors has been introduced. No replacement of vacancies for other public workers. Another novelty is the reorganisation (by merging companies and decreasing the labour force), closing and reduction of subsidies for public companies (public television, railway infrastructures, etc.). Public companies are involved in diverse sectors related to the range of responsibilities for the public administration (television, railway, environment, technology, housing, etc.) and at several administrative levels (national, regional and local). In 2011, there were 2,372 public companies, 626 foundations and 1,055 consortiums. These numbers are rapidly decreasing, as several directives were established in 2012 to reduce costs in the public sector. The list of actions continues with cuts in culture, education (35 %) and R& D as well as a freezing of pensions. Other actions taken include a stagnation and delay of the execution of public works, removal and operational budget reduction of ministries and cuts in social assistance (disabled, immigrants, etc.) and a moratorium on the Dependency Law. A financial agreement with the Eurogroup to deal with the Spanish financial sector reform has been signed and to increase supervision of this reform by the European Central Bank. New regulations in the energy market have been introduced. Increasing of taxes: VAT (from 16 % to 21 %), income tax and property tax, decreasing of unemployment subsidies, and a removal of the current tax deduction by home acquisition. A reduction of subsidies (an estimated 40 %) for political parties, unions and employers’ organisations has been implemented. The minimum monthly wage has been set at E641.40. Last, but not least, an introduction of medicine co-payment and exclusion of financing for several medicines of low cost or therapeutic impact has been introduced.

202

Xabier Velasco Echeverría

On the one hand, these measures are achieving the effective narrowing of the administration’s expenses and an increase in income (15 billion euros in early 2011, 9 billion euros in late 2011, 65 billion euros in 2012/2013) However, have led to a public debate on the sustainability and quality of public benefits dealing with a lesser amount of resources.

5.

Lessons learnt

The decentralisation processes in Spain brought the administration closer to citizens, which was highly relevant during the democratisation process of the 30 years after the end of the dictatorship. On the other hand, decentralisation led to overlapping competences among the national, regional and local levels and also caused efficiency losses, for instance in purchasing processes where more buyers have less critical mass and thus reduced negotiation power with providers. In terms of SGI, decentralisation led to an explosion of availability, accessibility, affordability and quality in the provision of services, but at the same time caused an increasing burden on public finances. In other words, the system overgrew, assuming that the continuous economic growth could indefinitely finance the enlargement of public services. At a certain point during the process, the point of equilibrium was surpassed and it became impossible to finance SGI provision in current terms while facing an economic and financial crisis. As a result of this situation, the government decided to undertake extreme measures and cut expenses and increase public incomes, both in the short term as well as in the long term. Therefore, the provision of SGI has suffered an evident setback, although it seems that a certain level of equilibrium is being reached. The modification of the Spanish Constitution to include legal limits according to EU policies for budget deficit and public deficit for all administrations in the country is of the utmost importance in order to achieve this.

6.

Conclusions

During the last decades, there has been a wide development in the provision of SGI at the national, regional and local levels, although the financing model of services has become more complex and remains at the middle of political debate. Despite this heavy increase, when compared to other European countries, social SGI in Spain are not yet fully developed yet. According to EUROSTAT 2010 data, the GDP (%) expended in social services is 41.1 % (the EU average is 46.8 %), occupying the 20th position in the EU27. This can be explained to a certain extent by the relatively low fiscal income of the country (31.9 % GDP) when compared

EU influenced modernisation and austerity: The case of SGI in Spain

203

to the European Union rates (38.4 % GDP average), and by the decreasing but still important role of family. Despite the evident improvements in the provision of SGI during the last few decades, moving towards convergence with other European Union countries, the sustainability of the current model is being questioned, as it has been hampered by the current economic crisis. The observed trends impose severe challenges and there is an ongoing debate about specific issues that could influence the future provision of SGI in the country : The following actions are however still needed: (1) Clarification and reorganisation of the structure of the public administration at the national, regional and local levels, defining which administration level has responsibility and funding to provide for services in order to avoid duplication of effort in the provision of these services and thus increase efficiency ; (2) Market liberalisation and privatisation of certain public services; (3) Public health co-payment. According to the research of the Foundation for Applied Economic Studies and the consulting firm McKinsey & Company, the public debt of the National Health System could reach 50 million euros by 2020. Today experts estimate that it is approximately 12 billion euros. Healthcare expenditure amounts to approximately 60 billion euros per year, representing 6 % of the GDP of Spain and onethird of state revenue. Expenditure is increasing at much higher rates; (4) Reform of the education system; (5) Reform of the pension system to address the impact of population ageing on the current system; and (6) Further regulations in the energy market. These challenges should be addressed through coordinated policies in order to maintain (not improve) territorial and social cohesion by means of efficiency gains. In other words, it seems that unless a thorough reorganisation of administrative structures and management takes place, SGI provision will only reach pre-crisis levels after economic growth gains sufficient momentum.

References AGA – ASOCIACI­N ESPAÄOLA DE EMPRESAS GESTORAS DE SERVICIOS DE AGUA A POBLACIONES (s.d.) Ciclo Integral del agua. [Online] Available from: http://www. asoaga.com/ciclo-integral-del-agua/# [Accessed: 27th October 2014]. Arroyo Jimenez, L. (2009) “Spain”, in Krajewski, M., Neergaard, U., Van De Gronden, J., (eds.) The changing legal framework for Services of General Interest in Europe, between competition and solidarity. The Hague: T.M.C. Asser Press. p. 309–325. Beltran, A., et al. (2009) Impulsar un cambio posible en el sistema sanitario. [Online] Madrid: Fundaciûn de Estudios de Econom†a Aplicada, McKinsey & Company. Available from: http://www.cambioposible.es/documentos/sanidad_cambio_posible. pdf [Accessed: 27th October 2014].

204

Xabier Velasco Echeverría

Bjørnsen, H.M., et al. (2013) Services of General Interest (SGI): is it possible to define this concept in scientific terms? Romanian Journal of Regional Science. [Online] Vol.7 Special Issue on Services of General Interest (15th December). pp. 9–36. Available from: http://www.rrsa.ro/rjrs/V7SP1.Foss.pdf [Accessed: 27th October 2014]. Calzada, J., Estruch, A. (2011) Telefon†a mûvil en EspaÇa: regulaciûn y resultados. Cuadernos Econûmicos de ICE. [Online] 81. p. 39–69. Available from: http://www.re vistasice.com/CachePDF/CICE_81_39-70__4D2E26DCC881483187872FE9A63999E2. pdf [Accessed: 27th October 2014]. CONFEDERACI­N ESPAÄOLA DE ORGANIZACIONES EMPRESARIALES, COMISI­N DE CONCESIONES Y SERVICIOS (2013) La inversiûn en infraestructuras pfflblicas en EspaÇa [Online]. Madrid: CEOE. Available from: http://www.ceoe.es/resources/image/ inversion_infraestructuras_publicas_espana_propuesta_mejora_marco_legal_2013. pdf [Accessed: 27th October 2014]. De La Dehesa Romero, G. (2001) La convergencia de EspaÇa con Europa [Online]. In Ribot Garcia, L.A., Villares Paz, R., and Valdeon Baruque, J. (coords.) AÇo mil, aÇo dos mil: dos milenios en la Historia de EspaÇa. Madrid: Sociedad Estatal EspaÇa Nuevo Milenio. V.2. p. 165–178. Available from: http://www.guillermodeladehesa.com/files/la_con vergencia_de_espana_con_europa.pdf [Accessed: 27th October 2014]. Delgado Ramos, D. (2013) El proyecto de ley de racionalizaciûn y sostenibilidad de la administraciûn local: garantizar la viabilidad presente y futura de la administraciûn m‚s cercana al ciudadano. [Online] Madrid: Fundaciûn Ciudadan†a y Valores. Available from: http://funciva.org/uploads/ficheros_documentos/1383221207_la_reforma_ local.pdf [Accessed: 27th October 2014]. ELPAIS.COM (2010) Situaciûn financiera de los aeropuertos espaÇoles. [Online]. 12 de enero. Available from: http://www.elpais.com/graficos/economia/Situacion/finan ciera/aeropuertos/espanoles/elpgraeco/20100112elpepueco_1/Ges/ [Accessed: 27th October 2014]. EUROPEAN COMMISSION (2003) Green Paper on Services of General Interest [Online] Brussels: 21. 5. 2003. COM (2003) 270 final. Available from: http://eur-lex.europa.eu/ legal-content/EN/TXT/?uri=CELEX:52003DC0270 [Accessed: 27th October 2014]. EUROPEAN COMMISSION, DIRECTORATE-GENERAL FOR ECONOMIC AND FINANCIAL AFFAIRS. (2014) European economic forecast: Winter 2014. [Online]. [Luxembourg]: [Publications Office]. Available from: http://ec.europa.eu/economy_ finance/publications/european_economy/2014/pdf/ee2_en.pdf [Accessed: 27th October 2014]. EUROPEAN PARLIAMENT, COUNCIL OF THE EUROPEAN UNION. (2000) Directive 2000/60/EC of the European Parliament and of the Council of 23 October 2000 establishing a framework for Community action in the field of water policy. Official Journal of the European Union. [Online] L 327, vol. 43 (22/12/2000). p. 1–73. Available from: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32000L0060:EN:NOT [Accessed: 27th October 2014]. EUROPEAN PARLIAMENT, COUNCIL OF THE EUROPEAN UNION. (2008 a) Directive 2008/98/EC of the European Parliament and of the Council of 19 November 2008 on waste and repealing certain Directives. Official Journal of the European Union. [Online] L 312 (22nd November). p. 3–30. Available from: http://eur-lex.europa.eu/legal-

EU influenced modernisation and austerity: The case of SGI in Spain

205

content/EN/TXT/?uri=uriserv :OJ.L_.2008.312.01.0003.01.ENG [Accessed: 27th October 2014]. EUROPEAN PARLIAMENT, COUNCIL OF THE EUROPEAN UNION. (2008 b) Directive 2008/6/EC of the European Parliament and of the Council of 20 February 2008 amending Directive 97/67/EC with regard to the full accomplishment of the internal market of Community postal services. Official Journal of the European Union. [Online] L 52 (27 February). p. 3–20. Available from: http://eur-lex.europa.eu/legal-content/EN/ TXT/?uri=uriserv :OJ.L_.2008.052.01.0003.01.ENG [Accessed: 27th October 2014]. EURORESIDENTES (s.d.) Diccionario, glosario de t¦rminos relacionados con la vivienda, sector inmobiliario y la compraventa de viviendas. [Online] Term “V.P.O. Vivienda de Protecciûn Oficial”. Available from: http://www.euroresidentes.com/vivienda/hipo tecas/diccionario/VPO_%28Vivienda_de_Proteccion_Oficial.htm [Accessed: 27th October 2014]. Fabra, M. (2011). Camps y Fabra inauguran el aeropuerto de Castellûn sin aviones. Elpais.com. [Online] 25 de marzo. Available from: http://elpais.com/elpais/2011/03/25/ actualidad/1301044646_850215.html [Accessed: 27th October 2014]. Fernandez Muerza, A. (2011) Gas natural en EspaÇa. Eroski Consumer [Online] 10 de marzo. Available from: http://www.consumer.es/web/es/medio_ambiente/energia_y_ ciencia/2011/03/10/199374.php [Accessed: 27th October 2014]. Mars, A. (2011). Solo uno de cada cuatro aeropuertos gana dinero. Elpais.com. [Online] 8 de abril. Available from: http://elpais.com/diario/2011/04/08/economia/1302213608_ 850215.html [Accessed: 27th October 2014]. Narede, J.M. (2010) El modelo inmobiliario espaÇol y sus consecuencias. Bolet†n CF+S. [Online] 44. p. 13–27. Available from: http://habitat.aq.upm.es/boletin/n44/ajnar.html [Accessed: 27th October 2014]. OECD (2012 a) PISA 2012 Results. [Online]. Available from: http://www.oecd.org/pisa/ keyfindings/pisa-2012-results.htm [Accessed: 27th October 2014]. OECD (2012 b) Spain: country note. In OCDE, Pensions at a Glance 2011: Retirement Income Systems in OECD and G20 Countries. Paris: OECD, 27 March. Available from: http://www.oecd.org/insurance/pensionsystems/47367529.pdf [Accessed: 27th October 2014]. Olmedo Gaya, A. (2003) Historia legislativa de los ferrocarriles de v†a estrecha. In AYUNTAMIENTO DE GIJ­N and FUNDACI­N DE LOS FERROCARRILES ESPAÄOLES (eds.) III Congreso de Historia Ferroviaria: siglo y medio de ferrocarriles en Asturias. [Online] Gijûn: Fundaciûn de los Ferrocarriles EspaÇoles. Available from: http://www.docutren.com/HistoriaFerroviaria/Gijon2003/pdf/sa5.pdf [Accessed: 27th October 2014]. OSE – OBSERVATORIO DE LA SOSTENIBILIDAD EN ESPAÄA (2010) Sostenibilidad en EspaÇa 2010. Madrid: Observatorio de la Sostenibilidad en EspaÇa. SEMERGEN – SOCIEDAD ESPAÄOLA DE MÊDICOS DE ATENCI­N PRIMARIA. (2011). An‚lisis sobre la situaciûn de los m¦dicos de familia en EspaÇa: An‚lisis sobre recursos asistenciales, condiciones de trabajo, organizaciûn y motivaciûn profesional. [Online] Madrid: Semergen. Available from: http://static.diariomedico.com/docs/2011/05/03/ situacion_semergen.pdf [Accessed: 27th October 2014]. SPAIN (1994) Real Decreto legislativo 1/1994, de 20 de junio, por el que se aprueba el texto refundido de la Ley General de la Seguridad Social. Bolet†n Oficial del Estado. [Online]

206

Xabier Velasco Echeverría

154 (29 de junio). p. 20658–20708. Available from: http://www.boe.es/buscar/doc. php?id=BOE-A-1994-14960 [Accessed: 27th October 2014]. SPAIN (1998) Ley 11/1998, de 24 de abril, General de Telecomunicaciones. Bolet†n Oficial del Estado. [Online] 99 (25 de abril). p. 13909–13940. Available from: http://www.boe. es/buscar/doc.php?id=BOE-A-1998-9802 [accesed: 03-09-2012]. SPAIN (2003 a) Ley 62/2003, de 30 de diciembre de 2000, de Medidas Fiscales, Administrativas y del Orden Social, que modificû el Texto Refundido de la Ley de Aguas. Bolet†n Oficial del Estado. [Online] 313 (31 de diciembre). p. 46874–46992. Available from: http://www.boe.es/diario_boe/txt.php?id=BOE-A-2003-2393612869 [Accessed: 27th October 2014]. SPAIN (2003 b) Real Decreto 140/2003, de 7 de febrero, por el que se establecen los criterios sanitarios de la calidad del agua de consumo humano. Bolet†n Oficial del Estado. [Online] 45 (21st February). p. 7228–7245. Available from: http://www.boe.es/buscar/ doc.php?id=BOE-A-2003-3596 [Accessed: 27th October 2014]. SPAIN (2003 c). Ley 39/2003, de 17 de noviembre, del Sector Ferroviario. Bolet†n Oficial del Estado. [Online] 276 (18 de noviembre). p. 40532–40562. Available from: http://www. boe.es/buscar/doc.php?id=BOE-A-2003-20978 [Accessed: 27th October 2014]. SPAIN (2003 d) Ley 56/2003, de 16 de diciembre, de Empleo. Bolet†n Oficial del Estado. [Online] 301 (17 de diciembre). p. 44763–44771. Available from: http://www.boe.es/ buscar/doc.php?id=BOE-A-2003-23102 [Accessed: 27th October 2014]. SPAIN (2006) Ley 29/2006, de 26 de julio, de garant†as y uso racional de los medicamentos y productos sanitarios. Bolet†n Oficial del Estado. [Online] 178 (27th July). p. 28122–28165. Available from: http://www.boe.es/buscar/doc.php?id=BOE-A-200613554 [Accessed: 27th October 2014]. SPAIN (2007 a) Ley 12/2007, de 2 de julio, por la que se modifica la Ley 34/1998, de 7 de octubre, del Sector de Hidrocarburos, con el fin de adaptarla a lo dispuesto en la Directiva 2003/55/CE del Parlamento Europeo y del Consejo, de 26 de junio de 2003, sobre normas comunes para el mercado interior del gas natural. Bolet†n Oficial del Estado. [Online] 158 (3 de julio de 2007). p. 28567–28594. Available from: http://www. boe.es/buscar/doc.php?id=BOE-A-2007-12869 [Accessed: 27th October 2014]. SPAIN (2007 b) Ley Org‚nica 4/2007, de 12 de abril, por la que se modifica la Ley Org‚nica 6/2001, de 21 de diciembre, de Universidades. Bolet†n Oficial del Estado. [Online] 89 (13 de abril). p. 16241–16259. Available from: http://www.boe.es/buscar/doc.php?id= BOE-A-2007-7786 [Accessed: 27th October 2014]. SPAIN. (2008) Ley 22/2011, de 28 de julio, de residuos y suelos contaminados. Bolet†n Oficial del Estado. [Online] 181 (9 de julio). p. 85650–85705. Available from: http:// www.boe.es/buscar/doc.php?id=BOE-A-2011-13046 [Accessed: 27th October 2014]. SPAIN (2009) Real Decreto 485/2009, de 3 de abril, por el que se regula la puesta en marcha del suministro de fflltimo recurso en el sector de la energ†a el¦ctrica. Bolet†n Oficial del Estado. [Online] 82 (4 de abril). p. 31971–31989. Available from: http://www.boe.es/ buscar/doc.php?id=BOE-A-2009-5618 [Accessed: 27th October 2014]. SPAIN (2010) Ley 43/2010, de 30 de diciembre, del servicio postal universal, de los derechos de los usuarios y del mercado postal. Bolet†n Oficial del Estado. [Online] 318 (31 de diciembre). p. 109195–109236. Available from: http://www.boe.es/buscar/doc. php?id=BOE-A-2010-20139 [Accessed: 27th October 2014].

EU influenced modernisation and austerity: The case of SGI in Spain

207

SPAIN (2011 a) Ley 22/2011, de 28 de julio, de residuos y suelos contaminados. Bolet†n Oficial del Estado. [Online] 181 (29 de julio). p. 85650–85705. Available from: http:// www.boe.es/buscar/doc.php?id=BOE-A-2011-13046 [Accessed: 27th October 2014]. SPAIN (2011 b) Ley 27/2011, de 1 de agosto, sobre actualizaciûn, adecuaciûn y modernizaciûn del sistema de Seguridad Social. Bolet†n Oficial del Estado [Online]. 184 (2 de agosto). p. 87495–87544. Available from: http://www.boe.es/buscar/doc.php?id=BOEA-2011-13242 [Accessed: 27th October 2014]. SPAIN (2012 a) Real Decreto-ley 13/2012, de 30 de marzo, por el que se transponen directivas en materia de mercados interiores de electricidad y gas y en materia de comunicaciones electrûnicas, y por el que se adoptan medidas para la correcciûn de las desviaciones por desajustes entre los costes e ingresos de los sectores el¦ctrico y gasista. Bolet†n Oficial del Estado. [Online] 78 (31 de marzo). p. 26876–26962. Available from: http://www.boe.es/buscar/doc.php?id=BOE-A-2012-4442 [Accessed: 27th October 2014]. SPAIN (2012 b). Ley 3/2012, de 6 de julio, de medidas urgentes para la reforma del mercado laboral. Bolet†n Oficial del Estado. [Online] 162 (7 de julio). p. 49113–49191. Available from: https://www.boe.es/diario_boe/txt.php?id=BOE-A-2012-9110 [Accessed: 27th October 2014]. SPAIN (2013 a) Ley 24/2013, de 26 de diciembre, del Sector El¦ctrico. Bolet†n Oficial del Estado. [Online] 310 (27 de diciembre). p. 105198 a 105294. Available from: https:// www.boe.es/diario_boe/txt.php?id=BOE-A-2013-13645 [Accessed: 27th October 2014]. SPAIN (2013 b) Ley 27/2013, de 27 de diciembre, de racionalizaciûn y sostenibilidad de la Administraciûn Local. Bolet†n Oficial del Estado. [Online] 312 (30 de diciembre). Available from: http://www.boe.es/diario_boe/txt.php?id=BOE-A-2013-13756 [Accessed: 27th October 2014]. SPAIN, COMISI­N NACIONAL DE LA ENERGšA. (2012) Informe sobre la evoluciûn de la competencia en los mercados de gas y electricidad: periodo 2008–2010 y avance 2011. [Online] Madrid: CNE. Available from http://www.cnmc.es/Portals/0/Ficheros/En ergia/Informes/PA_Competencia_2012-full.pdf [Accessed: 27th October 2014]. SPAIN, INSTITUTO NACIONAL DE ESTADšSTICA. (2011) Encuesta sobre el suministro y saneamiento del agua: aÇo 2009. Notas de prensa [Online] 27 de junio. Available from: http://www.ine.es/prensa/np659.pdf. SPAIN, MINISTERIO DE EDUCACI­N, CULTURA Y DEPORTE. (s.d.) Organizaciûn del sistema educativo. [Online] Available from: http://www.mecd.gob.es/educacion-mecd/ areas-educacion/sistema-educativo/principios-fines/administracion-educativa.html [Accessed: 27th October 2014]. SPAIN, MINISTERIO DE FOMENTO. (2010) Los transportes, las infraestructuras y los servicios postales: informe anual 2009. [Online] Madrid: Secretar†a General T¦cnica, Ministerio de Fomento. Available from: http://www.fomento.gob.es/AZ.BBMF.Web/ documentacion/pdf/RM-642_2009.pdf [Accessed: 27th October 2014]. SPAIN, MINISTERIO DE FOMENTO. (2013) Cat‚logo y evoluciûn de la red de carreteras. [Online] 31 de diciembre. Available from: http://www.fomento.gob.es/MFOM/LANG_ CASTELLANO/DIRECCIONES_GENERALES/CARRETERAS/CATYEVO_RED_CAR RETERAS/ [Accessed: 27th October 2014].

208

Xabier Velasco Echeverría

SPAIN, MINISTERIO DE FOMENTO. (s.d., a) Direcciûn General de la Marina Mercante. [Online] Available from: http://www.fomento.es/MFOM/LANG_CASTELLANO/DI RECCIONES_GENERALES/MARINA_MERCANTE/NAUTICA_DE_RECREO/Organ izacion_administrativa/DGMM/ [Accessed: 27th October 2014]. SPAIN, MINISTERIO DE FOMENTO. (s.d., b) El Sistema Portuario EspaÇol: presentaciûn: los puertos de inter¦s general del Estado. [Online] Available from: http://www.puertos. es/sistema_portuario/presentacion.html [Accessed: 27th October 2014]. SPAIN, MINISTERIO DE SANIDAD, POLšTICA SOCIAL E IGUALDAD (2008). Nota de prensa de 14-10-2008. [Online] Available from: http://www.lamoncloa.gob.es/Servi ciosdePrensa/NotasPrensa/MSC/_2008/ntpr20081014_ForoNuevaSociedad.htm [Accesed: 3th September 2012]. SPAIN, MINISTERIO DE TRABAJO E INMIGRACI­N. (2011) Informe de evaluaciûn y reforma del Pacto de Toledo. [Online] Madrid: Ministerio de Trabajo e Inmigraciûn, Subdirecciûn General de Informaciûn Administrativa y Publicaciones. Available from: http://www.seg-social.es/prdi00/groups/public/documents/binario/128563.pdf [Accessed: 27th October 2014].

Daniela-Luminita Constantin, Raluca Mariana Grosu, Claudiu Herteliu and Adriana Dardala

Chapter 9: Regional disparities and equal access to healthcare: A case study of Romania

1.

Introduction

The services of general interest (SGI) hold an important place in relation to the European model of society, referring to general functions and objectives that are essential for the implementation of fundamental citizen rights and for the accomplishment of economic, social and territorial cohesion goals (Bjørnsen et al., 2013; Constantin, Grosu and Iosif, 2013). Indeed, the European social model, launched by Jacques Delors in the mid-1990s (EC, 1994), points to a set of common values which incorporate “the commitment to democracy, personal freedom, social dialogue, equal opportunities for all, adequate social security and solidarity towards weaker individuals in society” (Jepsen and Serrano Pascual, 2006, p. 26). This is a very dynamic model, which evolves in accordance with current European forces and processes (Jepsen and Serrano Pascual, 2006). Its importance for economic and social cohesion has grown as the result of the latest enlargements of the EU, playing a major role in constructing the European identity. It stresses the social dimension of the European policies as a result of the establishment of pronounced welfare states, well-grounded forms of labour protection and large public sector, able to provide a wide variety of public services (Hermann and Mahnkopf, 2010). Accordingly, state responsibility for full employment, providing services of general interest and, in a larger view, economic and social cohesion is a basic element of the European model of society (ETUC, 2006) Territorial cohesion shares common roots with the European model of society, represented by a shared interest in equity, competitiveness, sustainability, good governance, and other issues. However, compared to the European model – which is considered more abstract – the territorial cohesion aims to underlie these goals in concrete areas, at various spatial scales (Faludi, 2005). More specifically, territorial cohesion has acquired a “practical” meaning via its inclusion in “a direct policy frame” (Camagni, 2007, p. 134). Thus, “in practical terms territorial cohesion implies: focusing regional and national territorial

210

Daniela-Luminita Constantin et al.

development policies on better exploiting regional potential and territorial capital – Europe’s territorial and cultural diversity ; better positioning of regions in Europe (…) facilitating their connectivity and territorial integration; and promoting the coherence of EU policies with a territorial impact (Luxembourg Presidency, 2005, p. 1) According to Camagni (2007), three main components of territorial cohesion can be distinguished, namely : territorial quality – which refers to “the quality of living and working environment, comparable living standards across territories, similar access to services of general interest and to knowledge”; territorial efficiency – which envisages “resource-efficiency with respect to energy, land and natural resources, competitiveness of the economic fabric and attractiveness of the local territory, internal and external accessibility” and territorial identity – which highlights “the presence of ‘social capital’, a capability to develop shared visions of the future, local know-how and specificities, productive ‘vocations’, and competitive advantage of each territory” (Camagni, 2007, p. 135). From the very first debates, territorial cohesion has been closely linked to the concept of SGI, especially when approached within “Europe in balance” and “Competitive Europe” storylines (Waterhout, 2007). Thus, SGI are considered essential for “ensuring social and territorial cohesion and for the competitiveness of the European economy” (CEC, 2004, p. 4). At present, in accordance with the priorities of the Europe 2020 Strategy and the Territorial Agenda 2020, SGI are considered one of the “territorial keys” meant to add value to the territorial dimension of the development policy, together with accessibility, territorial capacities, city networking and functional regions (Lindblat, 2011). The particular interest in SGI, when it comes to the conditions able to generate both economic success and better living standards, is based on the wide range of activities included in this category, from water, gas, electricity supply, transport, postal services, telecommunications, and sewage services to education, healthcare, social housing, etc. The Green Paper on SGI (CEC, 2003) classifies them into three categories, namely services of general economic interest, provided by large network industries (e. g. electricity, gas, transport, telecommunication, postal services), other services of general economic interest (e. g. water supply, waste management, public service broadcasting) and non-economic services and services without effect on trade. The services in the third category are not subject to specific EU rules, competition, state aid rules and are usually named social services of general interest (e. g. education, healthcare, child care, social housing, etc.) (EC, 2011). SGI reflect the obligation of public authorities to provide them at certain standards in terms of quality, availability, accessibility and affordability, an important issue in this respect being the minimum level of SGI for individuals and enterprises. As suggested by the normative character of the European social

Regional disparities and equal access to healthcare: A case study of Romania

211

model, the minimum or basic level of SGI is closely related to the concept of the welfare state, which “is not just obliged to the owners of capital, but to all citizens” and which “enjoys a wide support in most EU countries” (Krätke, 2005, p. 92). The minimum level brings terms like thresholds, critical mass, and vulnerability applied to local community and regional level into discussion. Given the heterogeneity of the EU territories it is not possible to determine quantitative levels of SGI at the EU level. Thus, “all of the actors in a community (individuals/ enterprises/organisations) have different needs and considering the changes on different effects, functions, concepts etc. it can be assessed that a certain range and level of SGI provision, varying across the territory, would be necessary for the proper functioning and development of different local communities and regions”. (Littke and Rauhut, 2013, p. 51). As a result, SGI levels are subject to national policies in relation to ideologies, institutions, macroeconomic performance, as well as reflecting moral values, demographic structures, traditions, life style aspects, etc. (Littke and Rauhut, 2013 ; ESPON, 2012). It should also be mentioned that “the concept of a basic level of SGI may refer to the types of service provided as well as to what should be regarded as a minimum acceptable level of supply and accessibility within each type of service, in order to satisfy the specified requirements of universal access” (Bjørnsen, Foss, Johansen and Langset, 2012, p. 25). The approaches to the issue of minimum level of SGI suggest a combination of the socio-economic dimension, which envisages the provision of SGI to everyone, and the territorial dimension that emphasises the provision of SGI everywhere. The latter is closely related to the territory types relevant to SGI, in line with ESPON territory types, as follows: densely populated regions (metropolitan, urban), sparsely populated regions (sparsely populated, outermost, island, mountainous, rural) and swing regions (border, costal, industrial, transition) (ESPON, 2012). The key aspects related to the SGI provision lie in policy, law and the context. The focus in this chapter will be on context and policy. When legal aspects are of relevance, they will be addressed. This chapter aims to investigate how the above considerations are reflected in the case of the North-East region of Romania, which has been selected as one of the nine regions included in the case studies of the project entitled “Indicators and Perspectives for Services of General Interest in Territorial Cohesion and Development (SeGI)”, in which the Bucharest University of Economic Studies has been one of the partners. The North-East region has been chosen as a relevant example of border, rural, intermediate region according to ESPON typology (ESPON, 2012). In this chapter the case study results have been updated and discussed with an emphasis on the availability of healthcare services. More precisely, it compares

212

Daniela-Luminita Constantin et al.

the situation of regional healthcare disparities to the overall regional development disparities, seeking to establish whether the obligation of providing a minimum level of social SGI to all citizens has led to healthcare service disparities lower than those in terms of GDP per inhabitant. The chapter is organised as follows. First, the regional development disparities in Romania are discussed, highlighting the relative distance between the North-East region, Romania and EU-28 averages in terms of GDP per inhabitant, as well as differences regarding the share of employment in non-agricultural activities, the household income per inhabitant, share of urban population, FDI and various demographic aspects. Then, the interregional and intraregional (within the North-East region) healthcare disparities are examined, concentrating on basic indicators such as number of hospitals per 100,000 inhabitants, hospital beds per 1000 inhabitants, people per physician ratio. A special emphasis is placed on the comparison of these indicators and the difference for GDP per inhabitant. Finally, the chapters concluding remarks confirm that the concern with the provision of a minimum level of healthcare services has led to lower inequalities than those in terms of GDP per inhabitant and open the door for further research in order to substantiate the territorial cohesion policy in relation to SGI.

2.

Regional Development Disparities in Romania. The Situation of the North-East Region

The latest data issued by Eurostat for GDP per inhabitant at PPS indicate that Romania was at 48 % of the EU average in 2011, ranked as last but one amongst all EU-28 states. It also displays high amplitude of regional disparities (Table 1): the relative distance between the North-East region – which is the weakest among the NUTS2 Romanian regions with a GDP per inhabitant of only 29 % of the EU-28 average – and Bucharest-Ilfov, the most developed with a GDP per inhabitant at PPS of 122 % of the EU-28 average is 0.238:1. Table 1. Regional disparities in Romania in terms of GDP per inhabitant (PPS) in 2011 Region North-East South-East

GDP per inhabitant As % of the EU-28 average As % of the national average Euro, PPS 7,200 29 59 9,900 39 81.1

South South-West

10,000 9,300

40 37

82 76.2

West

13,500

54

110.7

Regional disparities and equal access to healthcare: A case study of Romania

213

(Continued) Region North-West Centre Bucharest-Ilfov

GDP per inhabitant Euro, PPS As % of the EU-28 average As % of the national average 10,500 42 86.1 11,400 30,700

45 122

Romania 12,200 48 Source: authors’ calculations based on Eurostat data

93.4 251.6 100

In fact, the North-East region ranked second amongst the least developed NUTS2 regions of the EU-28 in 2011. It showed a very slow growth compared to 20041, when it had 24 % of the EU average, compared to Bucharest-Ilfov which increased from 68 % of the EU average in the same year to 122 % in2011. The North-East region is still characterised by a high level of employment in agriculture – 41.54 % in 2011 (the highest in Romania) – a household income per inhabitant of 86.7 % of the national average and a share of only 2.9 % of total FDI in Romania in the same year, while the share of population is 17.3 %. The share of urban population in the North-East region was 42.9 % in 2011, compared to 54.9 % for the whole country. However, when it comes to demographic indicators, the situation is different: in 2011 the density of population was 100.3 inhabitants per km2 (compared to the national average of 89.6 inhabitants per km2), the live birth rate was 9.8 live births per 1000 inhabitants (compared to 9.2 at national scale) and the natural increase, even if negative, was higher than the Romania’s average (-1.3 natural increase per 1000 inhabitants, compared to -2.6 for the whole Romania). The North-East region displays significant variations between its counties (NUTS3 level) with regard to the share of urban population (from 46.4 % in Iasi and 45 % in Bacau, to 37.6 % in Neamt), population density (from 150 per km2 in Iasi and 107.6 in Bacau to 82.9 in Suceava and 84.2 in Vaslui – both of which are under the national average), live births rate (from 11.1 per 1000 inhabitants in Suceava and 10.5 in Iasi to 9.1 in Botosani and 8.2 in Neamt – both below the national average – and the natural increase rate (0.5 per 1000 inhabitants in both Iasi and Suceava compared to -3.2 in Neamt and -3.3 in Botosanik, a more important decrease than the whole country’s average). The regional development and demographic disparities which characterise the North-East region will be examined in the next section in relation to the disparities in healthcare provision and address the central question of this chapter.

1 2004 is the year when the “Convergence” regions for 2007–2013 were established.

214

Daniela-Luminita Constantin et al.

3.

Interregional and Intraregional (North-East region) Disparities in Terms of Healthcare

3.1.

Overall Considerations

An analysis of the North-East region and the share of national resources for 2012 reveals the following: 14.0 % of the hospitals, 3.9 %2 of private clinics, 13.9 % of dental clinics, 16.2 % of pharmacies, 16.1 % of family medicine clinics and 13.8 % of specialised medical offices. The number of hospital beds in Romania was approximately 129,400 thousand. Out of them, 19,900 thousand, i. e. 15.4 % were located in the North-East region. Thus, Romania has an average of 6.1 beds per 1000 inhabitants while in the North-East region this indicator was at the slightly lower level of 5.4 beds per 1000 inhabitants. As far as specialised staff is concerned, the North-East region benefits from 12.8 % of the total number of doctors in Romania, 15.3 % of dentists, 15.1 % of pharmacists and 16.5 % of the persons with medium qualification in healthcare. Bearing in mind that the share of population is 17.3 %, it can be shown that the access of the North-East region inhabitants to the healthcare professionals is lower than the national average. Thus, compared to the 397 national average, in the North-East region there are 540 patients to each doctor, 1,751 patients to each dentist to (compared to the national average of 1,543), 1,586 people to each pharmacist to (compared to 1,381 nationally) and for each person with medium qualification in healthcare there are 179 people (compared to 170 nationally). As pointed out by Swiatek et al. (2013) in their crosscut analysis in SGI based on the ESPON project results (ESPON, 2012), even if the Romanian units of the healthcare are not necessarily distributed in a uniform manner geographically speaking, there are very well-equipped medical units both in terms of specialised staff and medical equipment in the big university centres, with a longstanding tradition in medical higher education. For the North-East region, Iasi county is a very good example of this.

3.2.

Healthcare Disparities Analysis

When the disparities in terms of healthcare services are analysed, the number of hospitals, hospital beds and physicians are the aspects most frequently taken 2 The explanation for this much lower share compared to the population of the region (17.3 %) consists in the lower level of income in the North-East region, which makes the access to private clinics (quite numerous in Romania) impossible for many people in this region. (ESPON, 2012).

Regional disparities and equal access to healthcare: A case study of Romania

215

into consideration. In accordance with the framework built by the ESPON project on SGI for regional typologies that provide evidence on SGI patterns at regional scale, hospital beds per inhabitant is employed as a background indicator for the availability of main healthcare treatment, while physicians per inhabitant serves for estimating the availability of first aid treatment (ESPON, 2012). In terms of hospitals, the North-East region has 64 hospitals, representing 13.95 % of the total hospitals in Romania (Table 2). This share is lower than the national average, indicating a weaker representation for this indicator in the North-East region compared to other regions. However, the relative distance in terms of hospital beds per 100 thousand inhabitants between North-East region and the national average is only 0.82:1, better than the relative distance between the North-East region and the national average in terms of GDP per inhabitant, which is 0.59:1. Table 2. Interregional and intraregional (North-East) disparities in Romania in terms of hospitals number in 2012 Hospitals 473 70 59 66

Hospitals per 100 thousand inhabitants 2.2 2.6 2.3 1.8

Botos¸ani

13 4

1.8 0.9

Ias¸i Neamt¸

30 5

3.6 0.9

Suceava Vaslui

10 4

1.4 0.9

South-East South-Muntenia

50 58

1.8 1.8

Bucharest-Ilfov South-West Oltenia

86 39

3.8 1.8

ROMANIA North-West Centre North-East Baca˘u

West 45 2.4 Source: Authors’ calculations based on primary data provided by the Statistical Yearbook of Romania, 2013

The intraregional disparities with regard to the number of hospital beds are presented in Table 2. They indicate the gap between Iasi county and the rest of the region, reflecting the better economic situation and higher population density of this county compared to the other counties of the North-East region. As regards the number of hospital beds per 1000 inhabitants (Table 3), the

216

Daniela-Luminita Constantin et al.

North-East region has a relative distance of 0.89:1 to the national average, much better than the gap in terms of GDP per inhabitant. Moreover, this indicator records a higher level in North-East region than in South-East and SouthMuntenia regions, both of these regions having a higher development level than North-East. Instead, the intraregional disparities are bigger, Iasi county having a number of 8.6 beds per 1000 inhabitants, whereas all other counties of the NorthEast region are below 5.0, less than both the North-East and national average. Table 3. Interregional and intraregional (North-East) disparities in Romania in terms of hospital beds in 2012 Hospital beds 129,397 18,011

Hospital beds per 1000 inhabitants 6.1 6.7

15,821 19,907

6.3 5.4

Botos¸ani

3,163 2,191

4.5 5

Ias¸i Neamt¸

7,242 2,259

8.6 4.1

Suceava Vaslui

2,950 2,102

4.2 4.7

South-East South-Muntenia

13,501 14,635

4.8 4.5

Bucharest-Ilfov South-West Oltenia

22,331 12,336

9.9 5.6

ROMANIA North-West Centre North-East Baca˘u

West 12,855 6.7 Source: Authors’ calculations based on primary data provided by the Statistical Yearbook of Romania, 2013

When it comes to the number of physicians and the people per physician ratio, data must be analysed in a different manner : the less people per physician the better. The gap between North-East region and the whole Romania is 1.36:1, again better than the GDP per inhabitant gap (1.69:1, if expressed as a ratio between the national average and the North-East region). Again, the situation is better than in South-East and South Muntenia regions (Table 4). Nevertheless, the amplitude of intraregional disparities in the North-East region is considerable, 2.87:1, resulting from the lowest ratio in Iasi county, of 279 and the highest in Suceava County of 800 people per physician. It reflects the large discrepancy in the standards of living between Iasi county, where one of the biggest growth poles and largest university centres of Romania – the city of Iasi – is located and Suceava, a county of a lower development level. However, con-

Regional disparities and equal access to healthcare: A case study of Romania

217

sidering that in 2011 the worst position was held by Vaslui, a county characterised by chronic underdevelopment and poverty, another explanation may be a higher level of emigration of Suceava’s physicians abroad in the last year, in search of better-paying positions. In addition, whereas Iasi county has the highest population density (150 people per km2, much higher than the national average of 89.6), it is significantly lower than the national and region’s average in Suceava county (only 82.9 people per km2). The situation is more nuanced in the North-East region in terms of total number of physicians, mirroring the hierarchy in terms of GDP per inhabitant: Iasi is followed by Bacau, Suceava and Neamt. Table 4. Interregional and intraregional (North-East) disparities in Romania in terms of doctors and physicians number in 2011 Physicians 53,681 7,738

People per physician ratio 397 350

6,376 6,852

395 540

Botos¸ani

1,049 578

676 763

Ias¸i Neamt¸

3,007 764

279 729

Suceava Vaslui

885 569

800 783

South-East South-Muntenia

4,766 4,549

584 710

Bucharest-Ilfov South-West Oltenia

12,199 4,677

185 473

ROMANIA North-West Centre North-East Baca˘u

West 6,524 292 Source: authors’ processing based on primary data provided by the Statistical Yearbook of Romania, 2013

4.

Concluding Remarks

Healthcare services represent an important driver of regional development from both scientific research and policymaking perspective. The investigation performed by Lietke et al. (2013) shows that healthcare is one of the only six out of fourteen SGI explicitly mentioned in the EU policy documents, justifying the need of deeper research in this field.

218

Daniela-Luminita Constantin et al.

The analysis of the statistical data with regard to healthcare services in the North-East region of Romania points out the concern with the minimum provision of social services of general interest, the disparities of the corresponding indicators between North-East region and national average being significantly lower than those in terms of GDP per inhabitant. The results also highlight the impact of demography on the distribution of SGI: healthcare services are concentrated in agglomerations and county capital municipalities and other urban centres, confirming the overall conclusions of the ESPON project on SGI (ESPON, 2012, Rauhut et al., 2013). They also confirm the findings of Milbert et al. (2013) with regard to the relationship between the hierarchy of needs (as described by Maslow’s concept) and the centrality of SGI: for example, from this viewpoint hospitals display a medium centrality, like railway stations and secondary schools. In a broader context, the accessibility features are associated to the NorthEast region’s territorial aspects that are reflected by the ESPON typology on NUTS3 level, namely border, rural, intermediate region, with the resulting implications. Thus, considering that the North-East region has a low degree of urbanisation, special efforts are required to counteract real and potential problems of social exclusion associated to poor accessibility of healthcare services in rural areas (Noguera-Tur et al., 2009). Such an emphasis will contribute to achieving the goal of equal opportunities and to reducing regional disparities, not only in economic, but also in social terms. The revealed interregional and intraregional disparities within the NorthEast region healthcare services represent a challenge for applying future cohesion policy and SGI management at the local level. Their interpretation can suggest realistic starting points for the healthcare strategies and policies in Romania, in accordance with territorial cohesion principles focused on rebalancing objectives (in relation to the equity and fairness promotion), growth and development, and the territorial aspect of cohesiveness efforts.

References Bjørnsen, H.M,, Foss, O., Johansen, S. and Langset, B. (2013) Services of General Interest: Is It Possible to Define This Concept in Scientific Terms?. Romanian Journal of Regional Science. 7(1- Special Issue).p. 9–36. Camagni, R. (2007)Territorial Development Policies in the European model of Society. In: Faludi, A. (ed.)Territorial Cohesion and the European Model of Society. Cambridge, Massachussetts: Lincoln Institute.

Regional disparities and equal access to healthcare: A case study of Romania

219

CEC.(2003)Green Paper on Services of General Interest.COM (2003), 270 final. [Online]. Brussels: CEC. Available fromhttp://europa.eu/legislation_summaries/competition/ state_aid/l23013_en.htm.[Accessed: 10th April 2014]. CEC.(2004)White paper on services of general interest (Communication from the Commission to the European Union to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions).COM (2004), 374 final. Brussels: CEC. Available from http://eur-lex.europa.eu/LexUriServ/site/en/com/ 2004/com2004_0374en01.pdf [Accessed: 12th April 2014]. Constantin, D.L., Grosu, R.M. and Iosif, A.E. (2013) Exploring Territorial Capital, Global Competition and Territorial Cohesion Policy : a SWOT analysis of SGI. Romanian Journal of Regional Science. 7(1 – Special Issue) p. 124–14. EC. (1994)White paper – European social policy : a way forward for the Union. [Online]. Luxembourg: Office for official publications of the EC. Available from: http://ec.euro pa.eu/white-papers/index_en.htm. [Accessed: 12th April 2014]. EC. (2011) A Quality Framework for Services of General Interest in Europe. Communication from the Commission to the European Parliament, the Council, The European Economic and Social Committee and the Committee of Regions. COM (2011), 900 final. [Online]. Brussels: COM.Available from:http://ec.europa.eu/services_general_interest/docs/ comm_quality_framework_en.pdf.[Accessed: 12th April 2014]. ESPON. (2012) SeGI Scientific Report – Draft. [Online]. Luxembourg: ESPON. Available from: http://www.espon.eu/main/Menu_Projects/Menu_AppliedResearch/SeGI.html. [Accessed: 12th April 2014]. ETUC. (2006)The European Social Model. [Online]. Available from: http://www.etuc.org/ european-social-model. [Accessed: 15th April 2014]. Faludi, A. (2005) Territorial Cohesion Policy and the European Model of Society. In AESOP Conference. [Online]. Vienna, Thursday 1st to Friday 2nd April 2006. Available from: http://aesop2005.scix.net/data/papers/att/228.fullTextPrint.pdf. [Accessed: 15th April 2014]. Hermann, C. and Mahnkopf, B. (2010) The Past and Future of the European Social Model.Working Paper. 05. [Online]. Available from: http://www.ipe-berlin.org/fil eadmin/downloads/working_paper/ipe_working_paper_05.pdf. [Accessed: 16th April 2014]. Jepsen, M. and Serrano Pascual, A. (2006) The concept of ESM and supra-national legitimacy building. In: Jepsen, M. and Serrano Pascual, A. (eds.) Unwrapping the European Social Model.Bristol: Policy Press. Krätke, M. (2005) Hat das Europäische Sozialmodell noch eine Zukunft?. In:Widerspruch 48:Europa Sozial. Zürich. Lindblad, S. (2011) The EU Territorial Agenda 2020 and Territorial Cohesion – A Swedish Policy Viewpoint. Nordregio News. 1. [Online]. Available from: http://www.nordregio. se/en/Metameny/Nordregio-News/Europes-strive-for-Territorial-Cohesion/The-EUTerritorial-Agenda-2020-and-Territorial-Cohesion-a-Swedish-Policy-Viewpoint/. [Accessed: 16th April 2014]. Littke, H. and Rauhut, D. (2013) Minimum levels of Services of General Interest – What fundamental rights do individuals and enterprises have? EUROPA XXI. 23. p. 47–68.

220

Daniela-Luminita Constantin et al.

LITTKE, H., RAUHUT, D. and Foss, O.(2013) Services of General Interest and Regional Development in the European Union. Romanian Journal of Regional Science. 7(1 – Special Issue). p. 88–107. Luxembourg Presidency. (2005)Scoping document and summary of political messages for an assessment of “The territorial state and perspectives of the European Union: Towards a stronger European territorial cohesion in the light of the Lisbon and Gothenburg ambitions. Endorsed for further development by the Ministers of Spatial Development and the European Commission at the Informal Ministerial Meeting for Regional Policy and Territorial Cohesion. Luxembourg, 20th to 21st May 2005. Milbert, A., Breuer, I.M., Rosik, P., Stepniak, M. and Velasco, X. (2013) Accessibility of Services of General Interest in Europe. Romanian Journal of Regional Science. 7(1 – Special Issue). p. 37–65. Noguera-Tur, J., Del Mar Garcia-Garcia, M., Veloso-Perez, E. and Lückenkötter, J. (2009). Review of Current Situation and Trends: Access to services of general interest. EDORA Working Paper.6. [Online]. Available from: http://www.espon.eu/export/sites/default/ Documents/Projects/AppliedResearch/EDORA/EDORA_Final_Report_Part_C_WP122.pdf. [Accessed: 25th May 2014]. Rauhut, D., Smith, C., Humer, A., Ludlow, D. and Borges, L. (2013) SeGI Indicators and perspectives for services of general interest in territorial cohesion and development ESPON Applied Research 2013/1/16, Final Report j Version 25/5/2013, Luxembourg. Swiatek, D., Komornicki, T. and Silka, P. (2013). Services of General Interest: Empirical Evidence from the Case Studies of the SeGI Project. EUROPA XXI. 23. p. 105–130. Waterhout, B. (2007) Territorial Cohesion: The Underlying Discourses. In: Faludi, A. (ed.) Territorial Cohesion and the European Model of Society. Cambridge, Massachusetts: Lincoln Institute.

Istv‚n Ferencsik, Antonia Milbert and Marcin Ste˛pniak

Chapter 10: Accessibility of SGI in urban, suburban and remote areas – a regional comparison in Germany, Poland and Hungary

This chapter is about the differences of car driving distances from place of living to the next service facilities. The focus is a truly contextual with regards to territorial patterns in SGI provision. The main question is how urban and peripheral areas differ regarding SGI accessibility towards services of different centrality and whether there are common patterns between European countries. Due to the huge amount of data, the analysis is restricted to case study regions. This chapter derives from empirical work within the ESPON SeGI research project (Rauhut et al. 2013) on several case studies (Swiatek et al. 2013) and accessibility analyses (Stepniak and Rosik 2013); a.o. about Germany (Breuer and Milbert 2013), Poland (Swiatek et al. 2013a, 2013b) and Hungary (Ferencsik 2013).

1.

Introduction

EU policy on territorial cohesion not only seeks to strengthen economic competitiveness, but also addresses the provision of ‘Services of General Interest’ as a key factor in the process of economic, social and territorial cohesion. For their wellbeing, European citizens have a right to services of “universality and equality of access, continuity, security and adaptability ; quality, efficiency and affordability, transparency, protection of less well-off social groups, protection of users, consumers and the environment, and citizen participation” (European Commission 2003, p. 5). However, the term “Services of General Interest” (SGI) is not operationally defined nor it is outlined precisely what “equality of access” entails. For a more detailed discussion on the definition of SGI see Bjornsen et al. earlier in this edited volume. The literature on accessibility generally addresses the notion of physical access by viewing it in terms of the overcoming distances seen as physical barriers. Access however can also be prevented or restricted by high costs, a lack of facilities or by the existence of only facilities of an inferior or unacceptable

222

István Ferencsik et al.

quality. Penchansky and Thomas (1981) drew our attention to the so-called “five A’s of access” to medical care services: affordability, availability, accessibility, accommodation and acceptability. For the authors “access reflects the fit between characteristics and expectations of the provider and the clients” (McLaughlin and Wyszewianski, 2002:p. 1441). The five A’s of access explain on the one hand the provider’s ability to supply SGI, and on the other, the client’s ability to use them. Their approach does not solely focus on the consumer perspective, but also includes the providers of services and their expectations. Nevertheless, in most empirical and comparative studies ‘Accessibility’ within the five A’s relates to physical accessibility for the clients – the same will be the case in this comparative study. The geographical distribution of service facilities on one hand and the existence of a transportation system on the other hand, are preconditions of access to SGI. Both are highly influenced by settlement structure. This chapter shows three diverse cases of Mazovia in Poland, Ruhrgebiet in Germany and D¦l-Alföld in Hungary (see Table 1). For the case studies the comparative accessibility results to different SGI is presented, featuring the differences between urban and rural regions and between centres and the periphery. Table 1. Case study areas

Area Population Average population density Settlement structure

Mazovia 35,600 km2 5.2 mill

Ruhrgebiet 4,435 km2 5.15 mill

D¦l-Alföld 18,337 km2 1.308 mill

146 inh./km2

1,161 inh./km2

71.3 inh./km2

Urban/rural, metropolitan, core area

Densely populated, post-industrial Agricultural, peripheral

Administrative/ Voivodeship/ statistical unit NUTS 2 (Mazowieckie) Main centers Warsaw, Radom, Plock

2.

Free association of 15 NUTS 3 regions for the common purpose of regional planning Dortmund, Duisburg, Essen

Statistical region/ NUTS 2 (D¦l-Alföld) Kecskem¦t, Szeged

Measuring accessibility of SGI

A large body of literature already exists adapting diverging measures and approaches in the field of accessibility analysis and numerous methods, reviews and evaluations (e. g. Fortney, Rost, and Warren, 2000; Geurs and van Wee, 2004; Neutens et al., 2010; among others). Their developed indicators are alike in that

Accessibility of SGI in urban, suburban and remote areas

223

they describe a spatial distance between provider and population. The distance is mostly expressed by geographical distance as the crow flies or spatial distance by length of shortest route etc. If travel distances are used, they refer mainly to road traffic and very seldom to public transport. The reason is the increasing body on geocoded data of road networks for GIS analysis. Also, geocoded information for railway lines is often available. However, railway traffic requires information on departure times and frequencies, connectivity of different places by direct lines or number of intersectional changes to be made too. Distance by car has the advantage that the frequency of services can be neglected; journeys can be started as and when required. However, distance by car excludes those people who not allowed or not able to drive a car by themselves (children and young people, adults without a driving license) or those who do not have access to a car every day. They all need either public transport facilities, someone who is able to drive them or destinations within walking distance. Nevertheless, private transport in most European countries is the mode of choice: “With increasing degree of motorisation, the comfort parameters of private cars in the intermodal comparison set the benchmarks.” (Höfler, 2002 p. 2). For nearly all routes, private transport is faster than the public transport; the private car parking space is closer than the nearest bus, tram or train station; the availability of a car also normally leads to use even for routes – e. g. longdistance commuting – where public transport would have an economic advantage (Höfler, 2002). Choices about transport mode are also determined by a person’s age and social groups and of different regional supply. The final choice is not only dependent on travelling time but also on flexibility, image and safety, shared values and habits. (Knapp, 1998). It has been shown that more destinations within walking distance does not necessarily lead to more walking trips, but rather to shorter driving distances (Farthing, Winter and Coombes, 1996). Therefore the calculation of car travelling times as indicator for the accessibility of SGI can be seen as an insufficient but representative indicator as i) the majority of inhabitants are using this mode of transport mode ii) the absolute minimum of travelling time necessary to reach the destination in all modes. Where the accessibility of the service facility by car is low, it is highly probable that their accessibility by public transport is even lower. Our proposed methodology to research the spatial accessibility of SGI is based on a comparative analysis between the location of service providers and population distribution within the study area (McLaughlin and Wyszewianski, 2002). We understand ‘distance’ as time-distance, instead of physical (Euclidian) or road-network distance. The former ignores any diversification of the road network which leads to an underestimation of the factual distances, especially in mountainous regions (Lin, Allan and Penning, 2002), while the latter ignores the

224

István Ferencsik et al.

influence of congestion on travel times e. g. the difference between city centre and peripherally located zones (Martin et al., 1998). The time distance measure is seen as advantageous in relation to other methods as it allows the inclusion of factual physical distances as well as the all-important characteristics of the transport infrastructure, such as road network density and quality. Accessibility thus is expressed as distance-to-nearest-provider in terms of travel time in minutes by car. The analysis uses the GEOSTAT 2006 (Eurostat) population grid dataset within one square kilometer cells and the latest available data in respect of street network and provider layers. The analysis incorporates only populated cells. This makes up ca. 4 200 cells for the German, 27 600 cells for the Polish and 4 000 cells for the Hungarian region. The centroid of each populated raster cell is treated as a travel origin. Where the centroid is located outside the existing road network, it is connected to the nearest segment of the network artificially, through the shortest path segment. Based on these so calculated travel times three composite indicators – one for each level of low, medium and high SGI centrality – are built: pharmacies and primary schools represent low centrality, hospitals, railway lines and secondary schools represent medium centrality and airports, motorway hubs and tertiary education facilities represent high centrality ( tables 2, 3 and 4; ). Within each SGI centrality level the travel times are classified into deciles over all three case study areas. All SGI within each level are equally weighted so that the final scale of each composite indicator ranges from 1 to 10. 1 means the lowest accessibility of raster cells within the SGI level of centrally, 10 accordingly the highest accessibility. The maps presenting the composite index enable both, the assessment of spatial pattern within particular case study, as well as the comparison between the three case studies. The international comparison of the initially five ESPON SeGI case study areas (Stepniak and Rosik 2013) is based on this distance-to-nearest-provider in terms of travel time in minutes by car from which here only three areas are presented in detail. For extended urban-rural-peripheral comparisons partly further studies and indicators are used in some of the study areas. Common results of all three case studies are summarized in chapter 4 “Conclusions”.

3.

Case studies

3.1.

Mazovia, Poland

The Mazovia region is the largest (35,600 km2) and the most populated (5.2 million inhabitants) voivodeship (NUTS2 unit) in Poland. It is geographically located in the central part of the country, with Warsaw (1.7 million inhabitants),

Accessibility of SGI in urban, suburban and remote areas

225

the state capital, as the main city in the region. The other main cities in the region – the regional sub-centres – are rather evenly distributed in the south (Radom; 226,000), west (Płock; 127,000), east (Siedlce; 77,000) and north (Ostrołe˛ka; 55,000). Nevertheless, the population distribution is highly polarised: the central part is characterised by a high population density, while in the peripheral areas – especially the eastern ones – the population is more sparsely distributed. From an administrative point of view, the Mazovia region is a NUTS2 unit (voivodeship), consisting of 42 counties (poviats, LAU1 units), 5 of which are urban counties and 37 are rural counties, which are then further divided into 309 municipalities (plus five urban counties, i. e. 314 LAU-2 units; gminas). The subcentre cities were the capitals of former regions (voivodeships), before the administrative reform of 1999. Although they lost their administrative power, they still play an important role when it comes to the concentration of public services providers, especially considering SGI of high centrality. The main transport axes form a ‘star-shape’ connecting Warsaw to its peripheries, while the direct connections between sub-centres are of relatively low quality. Moreover, there exists an extreme imbalance between the western and the eastern part of the region. In the western part, the A2 motorway runs towards the west (Łûdz´) and the S8 express road towards south-west (Silesia region), whilst in the east, only singular, separated and unconnected motorway/express road sections are located. The distribution and, consequently, the accessibility of SGI in the Mazovia region reflects the population distribution over the case study area, with both positive and negative consequences for this issue. On one hand, more densely populated areas are generally characterised by relatively better accessibility level. This is confirmed by the comparison of median travel time calculated for population and calculated for raster cells (see Table 2). The lower medians demonstrate that the more populated areas are better served by SGI. The general conclusion is that the location of SGI providers follows the distribution of population, at least when speaking for the whole region. On the other hand, a strong regional polarisation may be observed (Fig. 1–3). Moreover, the scale of spatial differentiation is correlated to the centrality of particular SGI, i. e. spatial pattern for high centrality SGI shows higher polarisation than for low centrality. It is related to the fact, that the centrality of SGI is obviously correlated to the density of providers within particular group of services. Consequently, regional disparities in accessibility to SGI of low centrality are limited, although some differences between urban and rural areas might be noticed (see Fig. 1). In the case of the SGI of medium centrality, the problem is limited to the sparse distribution but also, with the uneven location of their providers within the case study area. For example, secondary schools are located in the main

Unit = minutes Population weighted average travel time Population last decile minimum travel time Maximum travel time to the nearest service Median travel time for population Median travel time for raster cells Standard deviation for raster cells 34.3 40.9 24.1

33.8

125.5

191.8 49.2

60.2

112.1

82.6

36.5

58.9

Motorway entry Airports point

15.4

34.9

12.7

89.0

46.8

19.9

Tertiary Schools

High centrality

Table 2. Basic statistics on accessibility to SGI in Mazovia region

9.0

21.2

8.9

60.3

25.5

11.8

12.8

17.1

7.7

83.8

24.4

11.0

Hospital Railway

6.2

12.6

4.1

50.5

14.7

6.3

Secondary Schools

Medium centrality

3.7

7.3

2.2

32.0

8.2

3.4

Pharmacy

2.7

5.1

2.6

30.2

5.9

3.1

Primary Schools

Low centrality

226 István Ferencsik et al.

Accessibility of SGI in urban, suburban and remote areas

227

Fig. 1: Accessibility to SGI of low centrality.

urban centres (capitals of poviats, LAU-2 units), which are disproportionately represented when comparing the eastern and western part of the Mazovia region. The spatial pattern of accessibility to hospitals exposes the ‘gaps’ in service supply in the areas that are located ‘in-between’ selected urban areas. The same applies to accessibility to railway lines, but in the latter case, the ‘gaps’ in accessibility to railway stations are related to the ‘star-shaped’ pattern of railway network (connecting peripheries with the Warsaw metropolitan area). These circumstances cause the visible differentiation in accessibility to SGI of medium centrality between urban and rural areas, especially those located in the regional peripheries (see Fig. 2). The SGI of high centrality are mainly located in the Warsaw metropolitan area and regional sub-centres, i. e. the capitals of former regions (voivodeships before 1999; e. g. in case of tertiary schools), in the central part of the Mazovia region

228

István Ferencsik et al.

Fig. 2: Accessibility to SGI of medium centrality.

(airports) or are following the ‘star-shaped’ pattern of the transport system (motorway entry points). Similarly to SGI of medium centrality, the unbalance between western and eastern part of the region are clearly visible (see Fig. 3). The general conclusion is that in terms of accessibility to SGI, the Mazovia region is characterised by a strong and multidimensional polarisation. This polarisation concerns the difference between urban and rural areas, the centre and periphery, as well as the eastern and western areas of the case study region. Furthermore, the distribution of SGI follows the population distribution. This has ambiguous consequences: on the one hand the effectiveness of service provision is relatively good, but on the other hand, the less populated, peripheral parts show even worse accessibility to SGI when analysing the accessibility measures averaged for the whole case study area.

Accessibility of SGI in urban, suburban and remote areas

229

Fig. 3: Accessibility to SGI of high centrality.

3.2.

The Ruhrgebiet, Germany

With 4435 km2 and 5.15 million inhabitants, the Ruhrgebiet is the largest urban agglomeration in Germany and is located in the northern part of the European metropolitan Rhine-Ruhr region. The average population density is 1161 inhabitants per km2, however the northern and western edges of the region is rather rural. The big cities, with their densely populated suburban areas, are mainly located between the rivers Ruhr and Emscher in the southern and eastern part of the area. The period of early industrialisation from the 18th to the beginning of the 20th century was a time of great prosperity for the Ruhr area. At that time, the area was the most important industrial region in Germany. The region is still char-

230

István Ferencsik et al.

acterised by its mining history and industry. The crisis in the region began in 1957 with the coal crisis. From that time on, the region has been undergoing on going structural change. The Ruhr region has sought to become more servicebased, something which is not yet definitively successful. The Ruhr region not only lost jobs in the last years, but also inhabitants as a result. New population predictions show a decline in the population of the area of about 7.7 % by 2030 (BBSR, 2012). There are 4657 kilometres of regional roads that pass through the Ruhrgebiet, one of the densest net of roads in Europe (RVR, 2007:4, Grossmann, 2003:1, 12.9 % of which is motorways, higher than the German average (5 %). Most car journeys within the region are commuters or freight traffic. An important connection between the eastern and western part of the Ruhrgebiet is the A40. More than 100,000 cars use this stretch of road per day. The public transport system is well developed in comparison to other German regions, but not sufficient for the local population. Especially the connections between the cities, those connecting rural areas to the cities and transport possibilities at night were assessed as very disappointing by local authorities and the population. As a result, the population of the Ruhrgebiet favours private car more than the German population on average. This aspect, together with the high interregional and international transit-transport, leads to a decline of the accessibility in terms of travel time by car to every destination; not the connectivity per se is limited but the reduction of speed caused by traffic overload causes worse accessibility. The urban and very densely populated Ruhr region currently has excellent levels of accessibility to most of the services throughout the area. In general, SGI of daily needs – respectively of low centrality – are accessible in all parts of the region within reasonable time. On average, all communities and locations have access to primary schools and pharmacies within 3.5 minutes by car. The maximum travel time does not exceed a quarter of an hour and is the lowest value among all case study areas in the comparative SeGI study (Stepniak and Rosik 2013). Services of lower centrality are treated in Germany as services of local supply, often translated as supply of not more than 15 minutes walking distance. Burgdorf et al. (2014) show with their analysis of distance to supermarkets that local supply in rural and peripheral areas is seldom provided on sufficient level (see Fig. 4). Some urban and central municipalities are also not supplied with services of daily needs within walking distance. Their analysis is based on the calculation of the Euclidian distance between two locations. However, compared to the results of Neumeier (2013) on distances based on road network, all settlement areas outside the town centres it takes walking distances of 60 minutes and more to reach the respective services. The regional pattern of ‘beeline’

unit = minutes Population weighted average travel time Population last decile minimum travel time Maximum travel time to the nearest service Median travel time for population Median travel time for raster cells Standard deviation for raster cells 5.0 5.8 3.7

10.5

22.1

55.3 29.7

10.0

41.4

30.1

5.6

28.9

Motorway entry Airports point

8.1

17.6

14.0

42.4

23.3

14.5

Tertiary Schools

High centrality

Tab 3. Basic statistics on accessibility to SGI in Ruhrgebiet

3.5

6.8

5.0

20.0

9.5

5.4

8.6

17.5

12.2

47.7

23.1

13.2

Hospital Railway

2.2

3.7

2.4

12.9

5.3

2.8

Secondary Schools

Medium centrality

2.1

2.6

1.5

14.4

3.5

1.8

Pharmacy

1.8

2.3

1.5

12.5

3.4

1.8

Primary Schools

Low centrality

Accessibility of SGI in urban, suburban and remote areas

231

232

István Ferencsik et al. DK

Accessibility of pharmacies in Germany, beelines within settled areas by centrality of the municipalities 2011 in km

Kiel

km 12

Rostock Schwerin

Hamburg

Ruhrgebiet

Municipalities by centrality

10

Bremen

8

PL

NL

RUHRGEBIET

Potsdam

Magdeburg

Bielefeld

Essen Dortmund Kassel

Köln Bonn

4

Cottbus

Halle/S.

Düsseldorf

6

Berlin

Hannover

Leipzig Erfurt

Dresden

Chemnitz

BE

Wiesbaden

Frankfurt/M.

2

0

very very pericentral central pheral peripheral

outliers and extrem values maximum

CZ

Mainz

LU

Saarbrücken

Population in % 100

Ulm

Freiburg i.Br.

1.

Population in case study areas with accessibility of pharmacies in international comparison

Stuttgart

FR

3. 2.

minimum

Nürnberg

Mannheim

4. quartile

median

München

AT

80 60

CH 40

100 km

© BBSR Bonn 2013

Average accessibility of pharmacies, beelines within settled areas 2011 in km

0 0

less than 1 1 up to less than 2 3 up to less than 4

unpopulated area

20 10 Travel time by car (minutes)

30

Dél-Alföld, Hungary Eastern Austria, Austria Mazowsze, Poland Navarre, Spain Ruhrgebiet, Germany

2 up to less than 3 4 up to less than 5 5 and more

20

Source: Spatial Monitoring System of the BBSR, Stępniak & Rosik 2012 Geometric units: BKG, municipalities (LAU2), 31.12.2011

Fig. 4: Accessibility of pharmacies in German municipalities.

distances by Burgdorf et al. (2014) of 5 km and more are identical to the car distances of 15 minutes and more by Neumeier (2013). There is a strong relation between (a) increasing distances of residences to service facilities and (b) the central-peripheral site of the municipality (see Fig. 5). All services are highly affected by demographic changes and shrinking capacities, especially in rural areas. Primary schools are mostly a public concern and the closing of schools is not only evaluated according to cost, but also by the consequences for the pupils, however, these regulation mechanisms are less

Accessibility of SGI in urban, suburban and remote areas beeline distances in km 12

233

49,1

10 8 6 4 2 0

very central

peripheral central Municipalities by centrality

very peripheral

median maximum distance pharmacies supermarkets and discounter shops primary schools Source: Spatial Monitoring System of the BBSR

Fig. 5: Accessibility of local supply services in German municipalities.

effective for pharmacies and shops. Economic aspects like purchasing power and consumer behaviour of the residents play a major role in opening or closing a pharmacy or shop and lead to a worsened access to SGI in small, rural and remote municipalities compared to cities. The more central services are, the more likely it becomes that rural parts of the region lack easy or quick access. In general, settlement structure, market for the service and transport network are the major factors of service supply and hence accessibility of service. Some sensitive services, like education and health, are still under government regulation and only partly liberalised. The population is accustomed to making physical visits to the doctor or the physical presence of children in school, so alternative supply modes like e-learning or telemedicine are not yet accepted. Therefore closing schools and hospitals or medical facilities is only feasible if alternative facilities are within the same or similar distance. Demographic change and the constraints on public spending present a challenge for rural regions as well as for the Ruhr region to keep the service supply excellent in terms of quantity and quality. The dependence of people in rural or remote areas on individual car traffic is already a reality. The individualisation of the society, the preference for individual traffic and re-ur-

234

István Ferencsik et al.

banisation trends of the last decade, along with high population losses in the rural and remote areas are a challenge for an increasing number of municipalities. ‘Remoteness’ gets reinterpreted: remoteness doesn’t necessarily mean the badly connected hinterland at the outer boarders of a country but already villages few kilometres outside of the cities (see Fig. 1). These effects of decreasing supply with distance from centres can already be seen in a central, urbanised and well-supplied area like the Ruhrgebiet. This is most visible for services of low and medium centrality (see fig. 1 and 2). In contrast, the accessibility of services of high centrality is excellent for the total area and differs from the patterns of Mazovia and D¦l-Alföld. The decentralisation strategy of research and tertiary education facilities to promote the area economically in times of economic weakness and during structural breaks has led to this. This example shows that a politically directed process has a high impact on wellbeing in terms of service accessibility. It shows furthermore that services with less prestige and public or political attention tend to undergo a centralisation process with decreasing accessibility for suburban and peripheral areas.

3.3.

Dél-Alföld, Hungary

The D¦l-Alföld (South Great Plain) region is the largest region of Hungary, located in the southeastern part of the country covered by the B‚cs-Kiskun, B¦k¦s and Csongr‚d counties. Most of the territory is flat – no more than 200 m above sea level – and rich in diverse natural assets and landscape. The region covers an area of 18,337.3 km2, 19.7 % of the total area of Hungary. Some 13 % of Hungary’s population, 1,281,000 (2014) inhabitants live there; population density is 70 people/km2 (2014). The population is concentrated in the big cities (Kecskem¦t, Szeged), and most areas in the region are sparsely populated. Most of the region’s land is suitable for agricultural use: 1214.8 hectares are agricultural land from which 996.7 hectares are arable (82.05 %). Given the number of municipalities 254 (the smallest number within one region compared with the rest of the country) and the size of the region (largest region), the D¦l-Alföld region has the lowest density of municipalities (1.4 settlements per 1000 km2). However, with 54 towns, it is also the third most urbanised area of the country (2014). This also means that the towns are able to include most of the services of general interests and act as sub-centres of the remote rural living spaces. The number of employed people is 532,000 (2013), the 38.3 % is lower than the national average (39.7 %). The employment rate tendencies are favourable, increasing between 2000 (36.9 %) and 2012 (37.6 %). The ratio of enterprises per

Accessibility of SGI in urban, suburban and remote areas

235

1000 inhabitants (188) is higher than the national average (171). This comes from the individual entrepreneurs working in the agrarian sector (80 entities per 1000 inhabitants). Based on the complex development index, municipalities considered highly developed for the region are clearly the largest towns, along with the traditional medium-sized and small towns. These include Szeged, B¦k¦scsaba, Gyula, Orosh‚za, Baja, Kalocsa, Kecskem¦t, Hûdmezo˝ v‚s‚rhely, Szentes and Szarvas, where the majority of the population with the highest level of education live. These are towns in the D¦l-Alföld area where the potential for social-economic renewal should be taken into consideration as a real and very important asset and one with its basis in the population’s level of education. Szeged emerges above all as having a positive impact on the surrounding area, by decentralising the urban population and services and building a well-connected and increasingly developed urbanised micro-region of the suburbanised villages. Szeged is in a position to play a central role in the knowledge-economy at a national level, because of its social structure and educational base, while traditional industry and services are also modernising there. Kecskem¦t made good use of its industrial traditions during the change of political system. Based on the development of machine industry, it has gone through (in terms of regional standards) successful modernisation, the economic base has strengthened considerably and the service sector is slowly catching up. The region has great potential due to the nearby state border with Romania. However, the main prerequisite for economic and social development is that road transport accessibility be improved in the area. The accessibility of SGI mirrors the (1) unique urban structure (2) population distribution of D¦l-Alföld and (3) road network structure. The urbanised and densely populated areas are generally characterised by good accessibility performance. These big and medium towns and cities (in the national context) act as regional centres for some high centrality SGI. A good example is the tertiary education. Szeged is nationally (and internationally) important with its science and medical university, but the presence of several faculties of other universities in other medium sized towns and cities should smooth the dominance of it. However, the accessibility of these services is still limited due of the poor road and community transportation networks, which would be able to connect the centres and the peripheral households (e. g. farmsteads). Amongst the high centrality SGI, accessibility to the airports is the most critical. Even the minimum travel time exceeds the 2 hours to the Liszt Ferenc International Budapest, although its road connection with M5 and M0 motorways is excellent. Thus, cities and towns with good motorway connections are in far better situation than those far from motorway junctions. In this case, better accessibility (shorter routes) to other motorways running through other regions e. g. M6/M9 even the

236

István Ferencsik et al.

planned and existing highways do not create better accessibility to the only international airport. Medium centrality SGI are linked to the town and cities, which counts some 75 % of the total population of the region. On 1st January 2013, a new administrative structure was implemented, delegating some administrative roles and tasks of the municipalities to the townships (j‚r‚s) as LAU1 category. The core idea of this administrative reform was to provide better accessibility to the central governmental and municipal administrative functions through a decentralised structure (Csite, A., Ol‚h, M. and Szalkai, G.,2011). However, some classical and traditional urban functions have left to the towns e. g. secondary education. As Table 4 shows, the more populated areas have better access to SGI. The strong correlation of hot spots of SGI providers and population density is similar to the pattern of Mazovia. Accessibility to the hospitals, maximum travel time to the nearest service may have a severe effect on the SGI, but some additional facts have to be considered. Those areas which are next to other counties may use the service of those. Travel time and accessibility show the real picture only in case of the border region (Serbia and Romania), the southern part of B‚cs-Kiskun and B¦k¦s counties (Fig. 2). In the longer run, the sustainable solution might be cross-border cooperation of the national health authorities and sharing hospital services over the border. Low centrality SGI accessibility seems to be independent of population dispersal. Maximum travel times are low enough to provide a high standard of primary education and pharmacy services. In both cases D¦l-Alföld shows high accessibility (Fig. 1) amongst the regions studied within the ESPON SeGI project (Rauhut et al. 2013).

4.

Conclusions and Outlook

Services of lower centrality are more accessible in that there is less travelling time involved for most of the population. The dispersed location of these services guarantees that people can access these services within a reasonable time and fulfil their (daily) needs. In the case of primary schools, their dispersed (and traditionally dense) location permits quick travel to and from school for young children. If services have underlying market mechanisms (e. g. retail, partly pharmacies) the situation in accessibility in sparsely populated areas is slightly poorer. Nonetheless, there seems to be a common understanding that there is significant need for a broad supply of, and good accessibility to, these services across European states. For services of lower centrality, at least one provider can be found in nearly every municipality. Accessibility decreases with the distance to the city or mu-

unit = minutes Population weighted average travel time Population last decile minimum travel time Maximum travel time to the nearest service Median travel time for population Median travel time for raster cells Standard deviation for raster cells 44.2 45.5 32.1

48.9

135.0

185.0 150.3

90.3

185.0

112.2

46.7

131.2

Motorway entry Airports point

12.9

30.0

29.5

74.6

44.8

24.2

Tertiary Schools

High centrality

Tab 4. Basic statistics on accessibility to SGI in D¦l-Alföld region

12.6

26.2

16.6

74.6

34.1

17.9

5.1

6.3

10.1

20.9

15.0

5.5

Hospital Railway

9.1

14.0

12.7

59.7

28.2

10.7

Secondary Schools

Medium centrality

2.9

3.8

2.2

29.5

5.7

2.8

Pharmacy

1.9

2.7

5.5

15.0

8.4

2.0

Primary Schools

Low centrality

Accessibility of SGI in urban, suburban and remote areas

237

238

István Ferencsik et al.

nicipality centre. Here inhabitants are already dependent of motorised traffic to access services. The level of variation in terms of accessibility across the case study regions increases in respect of services of medium and high centrality. The location of cities as the nexus for these services in the region in general and in relation to important centres or the capital itself plays an important role in their accessibility. On the other hand, the share of the population and areas with less accessibility increases. Additionally, accessibility is dependent on the connectivity of all areas to these ‘hot spots’ of service provision via the rail or road network. These patterns are evident in all case study areas despite the distinct differences in settlement structure. What differs most between the three case study areas is the relative travel time to services of high centrality. The polycentric structure of the Ruhr region in the core of the European megalopolis brings an advantage for all inhabitants in comparison to the more mono-centric Eastern European case study areas. Additionally the decentralisation strategy of universities, airports and other services of actually high centrality – to promote the structural struck and weakened mining economy in the 1970s – still impact positively on the accessibility level to all these services in the Ruhrgebiet. The historic pattern of service provision and the impact of cutbacks implemented in recent years have had an impact on current patterns and thus on current levels of accessibility to services. Implementation issues and cutbacks not only affect sparsely populated areas, but also densely populated ones too. The impact of liberalisation and financial stress on the accessibility of services might lead to a decline in accessibility, especially – but not exclusively – in more sparsely populated areas. The decline of availability and accessibility of services again causes migration and population loss: why stay in an area when daily life becomes more complicated and with increasing time needed for travelling to and from service facilities – as well as increasing commuter distances (Milbert et al. 2013). Thus, the decrease of accessibility to SGI is related to the process of depopulation. The vicious cycle of population loss, decline in service availability and accessibility and further population loss is also caused by social developments: Weiss (2013) could show that the increase in the educational level of the population in all European countries has a positive effect on the inner-national mobility across regions with a preference for cities. Cities have an advantage as they provide jobs for highly skilled workers and services of all levels. The question for policy-makers is therefore not to stop the urban-rural migration, but to stabilise the rural and peripheral areas by providing the population living there with SGI. Several regions are already experimenting with alternative forms of SGI provision that are either not dependent on the physical accessibility – such as e-learning, e-medical support etc. – or through combining

Accessibility of SGI in urban, suburban and remote areas

239

different services in one small shop. Nevertheless, direct contacts and physical access to services remains the most important way of accessing a service as it reflects the behaviour and will of the majority of the population. Border, often peripheral, areas might be the winner of the new type and institutionalised cross-border co-operation (e. g. European Grouping for Territorial Co-operation /EGTC) and integrated territorial investments, a new approach in the EU Cohesion policy 2014–20. The development of such cooperation might be significant in the high and medium centrality SGI: sharing health services and emergency facilities and even the use of airports in neighbouring countries. The Hungarian case study suggests that some SGI can lose their national/regional privilege while covering and reaching clients, patients etc. over the borders instead. Unfortunately, a thorough research on inter-regional level across national borders was not in the scope of this study but is an important question for further research.

References BBSR (Bundesinstitut f. Bau-, Stadt- und Raumforschung, ed.) (2012) Raumordnungsprognose 2030. Bonn. Breuer, I.M. and Milbert, A. (2013) Case Study Germany ; ESPON SeGI Final Report/ Scientific Report Annex 6b, Luxembourg. Burgdorf, M., Krischausky, G. and Müller-Kleißler, R. (2014) Berechnung und Visualisierung von Indikatoren zur Nahversorgung. In: Strobl, J., Blaschke, T. and Griesebner, G. (eds.). Angewandte Geoinformatik 2014. Wichmann Verlag, Heidelberg (to be publishing in July). Csite, A., Ol‚h, M. and Szalkai, G.: (2011) A területi közigazgat‚s reformj‚t elo˝ seg†to˝ tan‚csad‚s a modern kori j‚r‚sok központjainak ¦s lehat‚rol‚s‚nak t‚rgy‚ban p. 33–45. European Commission (2003) European Parliament resolution on the Green Paper on services of general interest. COM (2003) 270 final. Brussels 21. 5. 2003.Official Journal of the European Union C92E/294 Wednesday 14 January 2004 P5_TA(2004)0018. Eurostat: GEOSTAT 2006 population grid report. http://epp.eurostat.ec.europa.eu/portal/ page/portal/gisco_Geographical_information_maps/publications/geostat_population _grid_report. Farthing, S., Winter, J. and Coombes, T. (1996) Travel behaviour and local accessibility to services and facilities. In: Jenks, M., Burton, E. and Williams, K. (eds.) The Compact City : A sustainable urban form. Routledge (157–164). Ferencsik, I. (2013) Case Study Hungary ; ESPON SeGI Final Report/ Scientific Report Annex 6c, Luxembourg. Fortney, J., Rost, K. and Warren, J. (2000) Comparing Alternative Methods of Measuring Geographic Access to Health Services. Health Services and Outcomes Research Methodology 1 (2). p. 173–184.

240

István Ferencsik et al.

Geurs, K. T. and van Wee, B. (2004) Accessibility Evaluation of Land-use and Transport Strategies: Review and Research Directions. Journal of Transport Geography 12 (2). p. 127–140. Available from: http://www.sciencedirect.com/science/article/pii/S09666 92303000607. Grossmann, A. (2003) Pressemitteilung Nr. 064/03 des Bundesministerium für Verkehr, Bau- und Wohnungswesen (BMVBW). Berlin. Höfler, L. (2002) Öffentlicher Verkehr und Pkw im Systemvergleich – Eine moderne Version des Märchens vom Hasen und Igel DER ÖFFENTLICHE SEKTOR (1). Knapp, F. D. (1998) Determinanten der Verkehrsmittelwahl. Vol. 10. Duncker and Humblot. KTI Közleked¦studom‚nyi Int¦zet Nonprofit Kft (2011) Gyorsforgalmi uth‚lûzat el¦rheto˝ s¦he: 15 ¦s 30 perces vonz‚skörzetek 2015-ben www.kti.hu 2_HU_B_024-06. Lin, G. D., Allan, E. and Penning, M. J. (2002) Examining Distance Effects on Hospitalizations Using GIS: a Study of Three Health Regions in British Columbia, Canada. Environment and Planning A 34 (11). p. 2037–2053. Available from: http://www.env plan.com/abstract.cgi?id=a3528. Martin, D., Roderick, P., Diamond, I., Clements, S. and Stone, N. (1998) Geographical Aspects of the Uptake of Renal Replacement Therapy in England. International Journal of Population Geography 4 (3). p. 227–242. McLaughlin, C. G. and Wyszewianski, L. (2002) Access to Care: Remembering Old Lessons. Health Services Research 37 (6). p. 1441–1443. Milbert, A., Sturm, G. and Walther, A. (2013) Auf der Suche nach dem guten Leben. Geschlechtstypische Wanderungen in Deutschland. BBSR (ed.) Analysen-KOMPAKT 04/2013. Neumeier, S. (2013) Modellierung der Erreichbarkeit öffentlicher Apotheken: Untersuchung zum regionalen Versorgungsgrad mit Dienstleistungen der Grundversorgung. Thünen Working Paper, No. 14. Neutens, T., Schwanen, T., Witlox, F. and De Maeyer, P. (2010) Equity of Urban Service Delivery : a Comparison of Different Accessibility Measures. Environment and Planning A 42 (7). p. 1613–1635. Penchansky, R. and Thomas, J. (1981) The Concept of Access: Definition and Relationship to Consumer Satisfaction. Medical Care 19 (2). p. 127–140. Rauhut, D., Smith, C., Humer, A., Ludlow, D. and Borges, L. (ed.) (2013) SeGI Indicators and perspectives for services of general interest in territorial cohesion and development ESPON Applied Research 2013/1/16, Final Report j Version 25/5/2013, Luxembourg. Regionalverband Ruhr (RVR) (ed.) (2007) Kleiner Zahlenspiegel der Metropole Ruhr. Essen. Ste˛pniak, M. and Rosik, P. (2013) Accessibility of Services of General Interest at Regional Scale. In: Europa XXI, Vol.23, pp. 131–147. Swiatek, D., Komornicki, T., Silka, P. (2013) Services of General Interest: Empirical Evidence from Case Studies of the SeGI project. In: Europa XXI, Vol.23, pp. 105–129. Swiatek, D., Czapiewski, K. and Komornicki, T. (2013a) Case Study Poland; ESPON SeGI Final Report/ Scientific Report Annex 6 h, Luxembourg.

Accessibility of SGI in urban, suburban and remote areas

241

Swiatek, D., Czapiewski, K. and Komornicki, T. (2013b) Services of General Interests in Mazowsze Region – Abbreviation of ESPON SeGI Case Study Report. In: Europa XXI, Vol.23, pp. 149–176. Weiss, C.T. (2013) Education and Mobility in Europe. http://www.eea-esem.com/files/ papers/EEA-ESEM/2013/2414/130523_migration.pdf.

Gregory Hamez and Sophie de Ruffray

Chapter 11: Socio-spatial accessibility to Social SGI: France & The Greater Region

1.

Introduction

The tradition of dealing with services is not the same in Fran ce as it is in any other European country, as the untranslatable term of “service public” shows, often described as the “service public — la franÅaise” (Brillet, 2004). The historical roots of this notion go back to the French Revolution of 1789, on the one hand, providing the notion of equity for all citizens with respect to access to services and, on the other hand, to the central state tradition of intervention. Consequently, the service public brings together the notions of a state monopoly, corporations under the administrative supervision of the state, and citizenship. This model is currently slowly evolving in the European Community context of deregulation. In spite of the parallel emergence of a universal service requirement in the Community texts (e. g. the Universal Service Directive 2002/22/EC), the situation in France remains blurred as more and more types of services become concerned with market competition, but not as many as the European Directives expect. This context gave rise to a particular consideration of services in the Frenchspeaking plan as well as scientific approaches. This chapter provides an example with regard to the measure of accessibility to maternity hospitals or wards. Contrary to approaches assessing the territorial impact of services regarding their economic or infrastructural effects, the crux of the approach adopted is the impact in terms of equity of access to residents wherever they live. Thanks to the use of the fuzzy sets theory, the complexity of the locations of and access to services is shown. Unlike the aim of the previous chapter by Ferencsik et al., this chapter will focus less on providing full results of the accessibility situations of certain SGI in a given region, and more on advancing the methodology behind this accessibility study.

244

2.

Gregory Hamez and Sophie de Ruffray

The socio-spatial dimension of Social SGI

The ESPON SeGI project (Rauhut et al., 2013; Milbert et al., 2013) demonstrated effectively that space is of consequence in terms of differential accessibility depending on the services and how the organisation of these services varies according to countries in Europe and their traditions of administration. These contributions make it possible to consider the services according to their varying definitions and uses. However, the conception defended with respect to the characteristics known as territorial are to be distinguished from the Frenchspeaking conception of “territoires de service” (service territories), as stated in service development plans, or in the scientific literature (Peeters and Thomas, 2001; de Ruffray and Hamez, 2009). The latter approach makes an alternative reading possible with respect to the link between service and territory as well as consideration of the notion of equity.

2.1.

What is the territorial impact of services?

Iosif and Rauhut (2013) explicitly raise the issue of the territorial impact of different services, in order to establish the link between SGI, territorial cohesion and territorial impact assessment. In the authors’ view, the services perceived as having a possible territorial impact fall into three types: – The first type refers to those based on heavy infrastructures that bring investment into the area, such as road and rail transport infrastructure as well as drinking water supply, sanitation, gas and electricity systems. – The second type concerns those services that involve a network and a dense geographical service of collecting and distribution points, e. g. for waste management and postal services. – Lastly, the third type defines services that are likely to have positive local spinoffs in terms of economic development. For example, integrating a university centre into the regional socio-economic environment which can lead to the development of an innovative environment for research centres and industrial segments of high added value, contrary to a branch of a university in a rural setting that would be limited to teacher-training. From this point of view, it is mostly within the economic services of general interest that a territorial impact can be found, rather more than within the social services of general interest. This conception is indicative of the primacy given to the economic dimension for assessing what falls under the territorial, in contrast to French-speaking scientific thoughts. In the French-speaking traditions of territorial development, the territory is

Socio-spatial accessibility to Social SGI: France & The Greater Region

245

considered from a functional dimension, applied as governance support, as well as a subjective dimension related to appropriation of the place (Gottmann, 1973, Brunet, 2005). It is therefore not solely a question of space-support nor of a management space, but of a portion of space constituted by interrelations that are forged, subject to particular management and which the residents can relate to. In this sense, the question of the territorial impact of a service arises not only in terms of consistency between localised supply and localised demand, but also in terms of equity regarding access to services; wherever they live, residents should be able to have access to certain types of services. The aim is therefore to prioritise services according to their uses, the level of acceptance and social expectations. For example, health-related services require a different spatial distribution from a simple “cost-effective” consequence of reasoning, namely with respect to emergencies. Admittedly, general interest in the equity of access is also a fundamental principle in European reference documents (European Commission, 2010) and in the ESPON SeGI Report (Rauhut et al., 2013); it is a terminological difference to French-speaking trends, in which it is a constituent principle of territory. The territorial impact of a service will therefore not be assessed against the physical networks upon which it is built, nor its contribution to economic development, but whether it enables all the residents to be served efficiently. The impact will vary depending on the services. As a counterpoint to the typologies presented in ESPON SeGI, (e. g. Iosif and Rauhut, 2013) the typology proposed by Dominique Peeters and Isabelle Thomas illustrates the implications of this change in point of view: the different criteria put forward relate to the modes of travel between user and service (Peeters and Thomas, 2001). Therefore, the first criterion rests on the ordinary or emergency character of the service; the second on the fixed or mobile character of the service and whether the user has to travel or whether the service comes to them; the third on the elastic or inelastic demand for the service, whether the use depends on the pricing or not. This difference interpretations of ‘territorial impact of a service’ can be may lead to misunderstanding. For example, when Iosif and Rauhut (2013) assume that services connected to early childhood or to primary or secondary education have little territorial impact, this is a reference to an absence of direct repercussions of these services on economic development. From a Frenchspeaking standpoint, these services have, on the contrary, a strong territorial impact in terms of saturation of living space and the necessary guarantee from the community that every inhabitant may benefit from the same rights and opportunities. In the course of the ESPON SeGI project, Iosif and Rauhut are aware of these risks of confusion as a result of a lack of clarity in the definitions: “as long as definitions are vague and unclear (explanans) the predictions of how TIA and SGI relate (explanandum) will be mere ‘guestimates’” (2013: 84). The

246

Gregory Hamez and Sophie de Ruffray

next section of the chapter illustrates another view of service territories, based on different characteristics of the French-speaking conception.

2.2.

The prerequisites for a measure of areas of influence of the services

The scientific literature handling service territories has highlighted several principles to consider before going into the complexities of this subject of research, given the great diversity in services. Here only distinctions with spatial repercussions will be referred to and not in terms of public versus private governance. Firstly, the range diverges widely depending on services. Some services like the big museums or international airports have a small-scale range, when others, like primary education, must respond to very local needs. Milbert et al. (2013: 43) propose the terms “central” versus “dispersed” to characterise the differential polarisation of services. Next, a distinction must be made between services meeting vital criteria like emergency services, and others. The former need to create a close network in the area as saving users’ lives depends on the speed at which the emergency services can reach them. Furthermore, the area in terms of travel distance between user and service provider is not always a determining factor. Several studies have shown that social accessibility is often more determining than spatial accessibility, i. e. that the propensity to use a service is said to be linked less to the distance from this service than to the integration of the user in a social network or his/her social status (Haynes, 1987, Powell, 1995). Each type of service thus needs analysing, taking into account its spatial scale of relevance for the location of users and the frequency of use. From a social demand perspective, travel time of three hours to the nearest international airport does not represent a particular problem as the need to travel by air is rare for most of the population, and a three-hour journey would not be seen as a penalising factor for people having to travel to the airport once a year. From the point of view of economic demand, however, there is a threshold at which the distance to the airport might hinder the smooth running of a global firm. A significant contribution from the ESPON SeGI project was the proposal of a local analysis grid of residents’ accessibility to different types of services in five different European regions (Milbert et al., 2013, Stepniak and Rosik, 2013). Accessibility is measured in terms of travel time to the nearest service provider, using the shortest journey ; the analysis is very detailed since residents are plotted using a grid covering 1 km2 a side. However, the question remains of whether this grid can be used in the same way for such a broad range of services as airports, motorways, stations, hospitals, pharmacies, primary schools and universities. In effect, taking account of distance-time only and using the same

Socio-spatial accessibility to Social SGI: France & The Greater Region

247

framework of spatial reference for such diverse services raises the issues of comparability of services and adequacy of supply, in terms of the possible risk of congestion on behalf of service providers; the characteristics of the demand, in terms of numbers of local users of services; and lastly alternative possibilities to the shortest journey for measuring accessibility, insofar as the residents usually have a choice and where there are methods other than the shortest journey. The following section makes a theoretical and methodological contribution towards modelling services based on multiple memberships.

3.

Objectives of equity in Social SGI

With a view to territorial planning, access to Social Services of General Interest (SSGI) aims to ensure equity of services for citizens, not just from a social point of view but from a spatial one too. From a theoretical standpoint, J. Rawls’ justice as fairness is based on two principles: the “principle of equal basic liberties” and the “difference principle”, the first one taking precedence over the second. (Rawls, 1971, Brennetot, 2011). In using this theory, the aim is to understand that certain forms of organisation of a geographical area are morally preferable to others and to reach a normative representation that renders the action possible and rightful. The different forms of justice proposed make it possible to build a methodological approach using the demonstration of more complex territorial forms founded on multiple memberships. Thus, a territorial measure of accessibility to a SGI is based not only on supply and demand, but also on equity (between the service and the most disadvantaged user) and the effectiveness which can be expressed by minimising the distances/time. The issue is not just the location of SGI but the construction of alternative methods based on fuzzy logic, which accounts for the issue of overlapping between areas of influence in the representation of accessibility to SGI. If the aim is to ensure an equitable distribution of services, this can be rendered in geographical terms by a minimisation of the distance covered (average, median, or even maximum distance). However, nuance must be provided according to the type of SGI under consideration (e. g. emergency medical care or primary and secondary education or airports, universities and specialised hospital services). In the second instance, accessibility arises from a problem of location relative to areas in relation to a function of attraction. In this sense, accessibility to a place will be all the greater since the opportunities encouraging travel are many and close by. The propensity of a place of origin to emit flows is no longer taken into account; the only consideration is the appeal of destinations and their capability as an “attractive economic function” (Huriot and Perreur, 1994).

248

Gregory Hamez and Sophie de Ruffray

If the overlapping of service catchment areas becomes a priority in terms of the choice left to users and the robustness of the overall supply of services, the classic approaches have significant limitations. The location/allocation models usually do not take into account the overlapping of catchment areas (Labb¦ et al., 1995); the Two-Step Floating Catchment Area approach considers the overlaps, but the value of accessibility remains the same in each area surrounding a service provider, although this value should decrease with the distance (Radke and Mu, 2000); the kernel density method considers this decrease along with the distance thanks to a Gaussian smoothing function, but does not take accessibility and demand into account (Yang et al., 2006). The method uses a conceptual foundation and mathematics that aim to account for the complexity of accessibility to services, by applying the fuzzy subsets theory that makes it possible to comprehend, formalise and deal with areas that are badly or imperfectly bounded. As a result, for each spatial unit, one obtains values of membership to services of the neighbourhood. Thus, different profiles can be represented for each place, from a profile of single membership to a profile of multi- membership. In Figure 1, profile A characterises a place situated in the area of influence of a single service provider, with a very high membership score. Conversely, profile B shows a case of high bi-membership, in some ways preferable to the previous case in that the populations have a choice between two service providers. Lastly, profile C indicates average multi-membership, where the populations are in a situation where they are able to choose between several service providers, without one of them exercising a more determining appeal than the others. The method based on fuzzy logic can be applied to an accessibility study of the different types of services (secondary schools, hospitals, courts, etc.) and makes it possible to measure a differential territorial impact of these services, taking into account a cost-effective measure according to supply and demand, but also a reasoning of social cohesion in relation to territorial development. This methodology provides a measure for situations of equity of populations depending on the location of services that can be read in view of the political and philosophical principles of Rawls’ theory of justice. It will be applied in the next part of the chapter to a specific type of service, maternity hospitals or wards: the social service facility for which travel distance is a determining factor in terms of life-threatening risks to unborn children and expectant mothers.

Socio-spatial accessibility to Social SGI: France & The Greater Region

Profile A : unique membership to a social service provider Provider A 100 Provider H

80

Provider B

60 40 20 Provider G

0

Provider F

Provider C

Membership Value

Provider D Provider E

Profile B : high bi-membership to social service providers

Provider H

Provider G

Provider A 90 80 70 60 50 40 30 20 10 0

Provider F

Provider B

Provider C

Membership Value

Provider D

Provider E

Profile C : mean mul=-membership to social service providers Provider A 100 Provider H

80

Provider B

60 40 20 Provider G

0

Provider F

Provider C

Membership Value

Provider D

Provider E

Figure 1. Typology of Accessibility Profiles. Source: own elaboration.

249

250

4.

Gregory Hamez and Sophie de Ruffray

The accessibility measure in maternity hospitals in the Greater Region

We have tested the method in the so-called “Greater Region”. It has been chosen for two reasons: (1) This trans-national area includes regions from four countries (Belgium, France, Germany and Luxembourg), so it is an interesting place to compare the availability of data in a cross-border context; (2) the density of borders is of interest in this region as a way of observing the possible complementarities between countries. Moreover, as there is a political will in the Greater Region to foster the cooperation between regional authorities, it makes sense to define areas of influence of services across the border. The borders are lines of strong discontinuity in terms of localisation and organisation of services. Although European directives encourage governments to consider issues at the Community level (see Milstein elsewhere in this edited volume), the SSGI are always considered in a national context (Humer et al., 2013). In this context, an added value of this study could be a delimitation of cross-border cooperation sectors regarding health. By cross-border cooperation we mean a thorough coordination of health services, not limited as it is today to parsimonious projects between isolated health providers1. This would require a harmonisation of social security systems. Our methodology consists of taking account of the maternity hospitals of the region, and in combining the capacity (number of beds in each maternity hospital) and the demand (number of births in each local administrative unit – LAU) with accessibility to each maternity hospital. In total, there are 146 maternity hospitals in the Greater Region. The empirical test is limited to those maternity hospitals located near the borders, because our aim is not to give an exhaustive view of reality but to present the added value of the method. The idea is that there are no strict limits between the areas of influence of maternity hospitals. On the contrary, a LAU can be in the catchment area of several maternity hospitals at the same time. There are three main parameters form the conceptual foundations of the delimitation method, designing graduated limits around the maternity hospitals. They take into account: – Accessibility in terms of the time required to reach the maternity hospital from each LAU. A threshold of 30 minutes was empirically decided on: when the distance between a LAU and a maternity hospital exceeds 30 minutes, we consider that it cannot be in the area of influence and its value is zero. Taking 1 For the moment, cross-border health cooperation usually deals only with emergency services and social protection of border residents. There are numerous other projects on benchmarking, but they lack a global view.

Socio-spatial accessibility to Social SGI: France & The Greater Region

251

into account various legal speed limits, time is measured for travel by car in optimum conditions without any constraints to stop. This parameter brings a time-distance constraint to the maternity hospital area delimitation. – The capacity that represents the ability of the maternity hospital to attract women from the LAU is based on both the number of beds offered (and the estimated time spent in the hospital) and the number of births in a LAU where the maternity hospital is located. – The demand that represents the numbers of beds offered and the number of births in the LAU. The method is based on an application of fuzzy sets theory and possibility theory (Zadeh, 1965; Kaufman, 1973; Rolland-May, 2000). These theories have been adapted to study and formalise areas which are not strictly delimited, or are only poorly delimited. For each LAU, a membership value to an area of influence is obtained, and for each maternity hospital a membership profile is built. Hence, it is possible to establish the large and small areas of influence to which a LAU contributes. For instance, a LAU can exclusively belong to a maternity hospital area of influence (profile A of the figure 1), or can moderately belong to two or three maternity hospitals areas of influence (profile C of the figure 1).

5.

Towards a typology of accessibility to maternity hospitals

The typology was developed as part of the ESPON 3.2 project, with the aim of highlighting the meaning of territorial cohesion at the local level. This framework implied that the method could be reproduced in other areas of the ESPON space. This is the reason why the considered data is simple and easy to find (number of births by LAU, number of beds by maternity hospital, time distance). The classification based on all the membership values leads to a global view, where each LAU is described according to its membership to one or more maternity hospital areas. Not taking into account the LAUs located 30 minutes further away from the maternity hospitals, the distinction between the five classes provides a representation of the spatial complexity of accessibility to these kinds of services at the Greater Region level (Figure 2). The LAUs with a maternity hospital are often represented in dark blue, characterising a high single membership (see profile A of figure 1). It is usually the case for main cities. This corresponds to different situations, either the residents cannot choose their maternity hospital because there is not another one in the neighbourhood, or their maternity hospital is of particular attraction (in terms of specialised services like neonatology). The LAUs in light blue are in a situation of unique membership to a maternity

252

Gregory Hamez and Sophie de Ruffray

Figure 2. Maternity Hospitals’ Accessibility Typology in the Greater Region. Source: ESPON 3.2 (2006), Final Report.

hospital with a low score and deserve the policymaker’s full attention. A better cooperation between the social security systems could improve the situation of those located close to national boundaries, for example in the east of the Moselle department in France or in the north of the Meuse department. Other LAUs are in a more dramatic situation, namely in the heart of Wallonia. The LAUs in red have no maternity hospital within their limits, but there are two or more ones in their close neighbourhood (profile B of the figure 1). This is a rather comfortable situation because the residents have a possibility of choice.

Socio-spatial accessibility to Social SGI: France & The Greater Region

253

The overlap areas are ranked in three classes displaying more or less privileged situations (see profile C of the figure 1), from the green class for the mean multimembership to the red class for the high multi-membership. In the latter, residents can essentially choose between several maternity hospitals nearby. The typology helps to qualify the extent to which the territories are in a strong or a weak situation, regarding the equality of opportunities for all the residents to access a maternity hospital, wherever they live. In this border area, it stresses the gains in accessibility that the residents could have by crossing the border. Of course, other important factors should be taken into account for a complete overview of the maternity issue, e. g. qualitative factors like the fact that some people could wish that their children are born in their own country and not in the neighbouring one. However, this does not weaken our results because the maternity issue has also an emergency dimension; when the lives of mothers and/or newborn children are under threat, it is meaningful to look for cross border solutions.

6.

Conclusion

As accessibility to services of general interest is an inherent component of territorial cohesion, and given the difficulty in achieving reliable results at LAU level across the European area, the proposed method allows for easy reproduction of results and for dealing with fuzzy delineation of areas of accessibility-areas. Firstly, it is based on a very small set of data: the number of births in the LAU; the number of beds in each maternity hospital, provided by the national health services; accessibility between maternity hospitals and LAUs. This ensures a reproducible issue. Secondly, fuzzy operators appear to be of interest with regard to the political meaning of “accessibility to services of general interest”: on the one hand, the choice of operators determines different views of accessibility, particularly when the inhabitants belong to the areas of influence of several services; on the other hand, areas of influence have no strict delimitations in reality, and fuzzy operators make it possible to take this reality into account. Maintaining this French-speaking definition of the territorial impact assessment of services, it might be worth continuing by proposing a global measure which takes account of health services, education, administration, and so on, at the same time. The subset fuzzy theory makes such global measures possible, and the methodological challenge would be to define the spatial scope of each service. If territorial cohesion continues to be a crucial political issue for the European Union, further local studies such as this one must be undertaken. In a context of

254

Gregory Hamez and Sophie de Ruffray

current doubtful expectations regarding European construction, policy makers and scientists must take responsibility for bringing concrete answers to everyday life concerns of residents as to the meaning European integration holds for them. Choosing maternity hospitals as the SGI focused on should be considered a first step in a more global study taking into account various services, most importantly educational or transportation matters. Working out a method integrating accessibility situations to these different services would enable scientists to provide a more innovative picture of the territory, focusing on the concerns of residents.

References Brennetot, A. (2011) “Les g¦ographes et la justice spatiale: g¦n¦alogie d’une relation compliqu¦e”, Annales de g¦ographie, 2011/2 n8678, p. 115–134. DOI : 10.3917/ ag.678.0115. Brillet, E. (2004) “Le service public “— la franÅaise” : un mythe national au prisme de l’Europe”, L’Êconomie politique 4/24, p. 20–42 URL: www.cairn.info/revue-l-econo mie-politique-2004-4-page-20.htm. Brunet, R. et al. (2005) Les mots de la g¦ographie: Dictionnaire critique, Paris, Reclus/ La documentation franÅaise. de Ruffray, S., Hamez, G. (2009) “La dimension sociale de la coh¦sion territoriale: L’exemple de l’accessibilit¦ aux maternit¦s dans la Grande R¦gion”, l’Espace G¦ographique, 4, p. 328–344. ESPON 3.2. (2006) Spatial scenarios and orientations in relation to the ESDP and cohesion policy, Final Report (http://www.espon.eu). EUROPEAN COMMISSION (2010) Investing in Europe’s Future. The Fifth Report on Economic, Social and Territorial Cohesion. Luxembourg: Publication Office of the European Union. Gottmann, J., (1973) The significance of territory, Charlotteville: University of Virginia Press. Grasland, C., Hamez, G. (2005) Vers la construction d’un indicateur de coh¦sion territoriale europ¦en? L’espace g¦ographique, 2, p. 97–116. Haynes, R.M. (1987) The Geography of Health Services in Britain. London: Croom Helm, 259 p. Humer, A., Rauhut, D. and Marques da Costa, N. (2013) European Types of Political and Territorial Organisation of Social Services of General Interest; in: Romanian Journal of Regional Science, Vol. 7, pp. 142–164. Huriot, J.-M., Perreur, J. (1994) “L’accessibilit¦”. In Auray, J.-P., Bailly, A., Derycke, P.-H., Huriot, J.-M. (dir.), Encyclop¦die d’¦conomie spatiale: concepts, comportements, organisations. Paris: Economica, coll. “BibliothÀque de science r¦gionale”, p. 55–59. Iosif, A., Rauhut, D., (2013), “Assessing territorial impact assessment: The case of services of general interest”, Romanian Journal of Regional Science, Vol.7, pp. 66–87.

Socio-spatial accessibility to Social SGI: France & The Greater Region

255

Kaufman, A. (1973). Introduction — la th¦orie des sous-ensembles flous, t.1. Paris : Masson, 1973, 410 p. Labbe, M., Peeters, D., Thisse, J.-F. (1995) “Location on networks”. In Ball M.O., Magnanti T.L., Monma C.L., Nemhauser G.L. (ed.), Handbook of Operations Research and Management Science. Vol. 8 : Networks Routing. Amsterdam: Elsevier Science, p. 551–624. Luo, W. (2004) “Using a GIS-based floating catchment method to assess areas with shortage of physicians”. Health & Place, vol. 10, no 1, p. 1–11. Milbert, A., Breuer, I.M., Rosik, P., Stepniak, M. and Velasco, X. (2013) Accessibility of services of general interest in Europe; in: Romanian Journal of Regional Science, Vol. 7, pp. 37–65. Peeters, D., Thomas, I. (2001) “Localisation des services publics: de la th¦orie aux applications”, p. 105–127 in. Sanders, L. (dir.), ModÀles en analyse spatiale, Paris, HermÀs. Powell, M. (1995) “On the outside looking in: medical geography, medical geographers and access to health care”. Health and Place, vol. 1, no 1, p. 41–50. Rauhut, D., Smith, C., Humer, A., Ludlow, D. and Borges, L. (2013) SeGI Indicators and perspectives for services of general interest in territorial cohesion and development ESPON Applied Research 2013/1/16, Final Report j Version 25/5/2013, Luxembourg. Rawls, J. (1971) A Theory of Justice, ed. Revise 1999, Harvard University Press. Rolland-May, C. (2000) L’¦valuation des territoires : concepts, m¦thodes et modÀles. Paris: HermÀs, 400 p. Yang, D.-H., Goerge, R., Mullner, R. (2006) “Comparing GIS-based methods of measuring spatial accessibility to health services”. Journal of Medical Systems, vol. 30, no 1, p. 23–32. Stepniak, M. and Rosik, P. (2013) Accessibility of Services of General Interest at Regional Scale; in: Europa XXI, Polish Academy of Sciences, Vol. 23, pp. 131–147. Zadeh, L.A. (1965) “Fuzzy sets”. Information and control, n88, pp. 338–353.

Conclusions

Andreas Faludi, Dominic Stead and Alois Humer

Conclusions: Services of General Interest, Territorial Cohesion and Competitiveness in Europe

As documented in the proceeding chapters of this book, Services of General Interest (SGI) in Europe are considered to be different to regular services provided by the market. Consequently, some public authorities are closely involved in providing SGI, either directly or indirectly, depending on the national system of administration and its underlying philosophy. The status of SGI vis-—-vis regular services provided by the market has been discussed in Europe since the Common Market was first established. The Treaty of Rome, signed in 1957, exempted SGI from competition rules, mainly as a result of the insistence by France and various other Member States who feared the loss of services and national identity, and the resulting impacts on social cohesion (Milstein, Chapter 1). The question for Europe was, and still is, whether and how competition can be applied to public services. A variety of political views on this question exist across Europe’s Member States, reflecting the variety of philosophies and arrangements concerning the relation between the state and the market (‘social models’) and notions of the role of public authority that can be found in Europe. The contributions to this volume provide a variety of perspectives on SGI in different EU states and regions. Rather than recounting and synthesising all the points made in the preceding chapters, this concluding contribution chooses to highlight some important aspects of SGI for future debate, starting firstly with the relation between SGI and the European concept of territorial cohesion. Secondly, the chapter focuses on the diversity of national social models and how they influence the provision of public services. Thirdly, the chapter considers the potential of SGIs in promoting smart, sustainable and inclusive growth under the EU’s ‘Europe 2020’ strategy.

260

1.

Andreas Faludi et al.

Services of General Interest and Territorial Cohesion: French roots

Much like Peyrony (2007) and Robert (2007) before them, the first and second chapters of this volume (by Milstein and Björnsen et al. respectively) relate SGI to the territorial cohesion discourse with its roots in the French tradition of am¦nagement du territoire. In order to promote territorial cohesion, many EU Member States do not subject public services to the full rigours of market competition. This is certainly the case for France, where the state has had ‘an important role in providing public services, and thus in developing the country, since the time of Colbert’ (Direction de l’information l¦gale at administrative 2013; translation by the authors). Referring to a ‘Republican model’, Peyrony (2007) argues that the French state, rooted in a social contract based on solidarity and equality, sees public service as inextricably linked with its role. For centuries, generations of engineers have been organised in the corps d’Etat, elite public services looking after infrastructure. During the twentieth century, social policies were added to the state’s concerns and responsibilities in France (Chevallier 2012) and nowadays the state’s role in providing public services is ‘principally in a national framework by the administration subject to the control of the political power accountable to the nation, the community of citizen-voters-users-taxpayers, from which it derives its legitimacy’ (Peyrony 2014, 307–308, translation by the authors). The provision of public service is required to be, in theory if not in practice, equal throughout the whole of the national territory (Peyrony 2014). As Chevallier (2012) notes: [T]he public service in France constitutes one of the ‘sensitive questions’ at the core of social cohesion (Chevallier 2012, 3–4, translation by the authors). More recently, public services in France have been losing their privileged position (Chevallier 2012; Peyrony 2014), which many citizens believe to be detrimental to social integration, one of the reasons for the French population’s rejection of the European Constitution in 2005. Concerns about the social impacts of EU liberalisation policies hurting public service provision led to the insertion of the concept of territorial cohesion into the Treaty of Amsterdam (Faludi 2004), which stated that “the place that ‘economic services of general interest’ have in the common values of the Union and the role they play in the promotion of social and territorial cohesion of the Union”. This provided arguments for allowing continuing support for certain unprofitable services in remote areas. One of the driving forces behind the inclusion of territorial cohesion in the Treaty was Michel Barnier, the French minister of European affairs. After becoming EU Commissioner for regional policy, he played a key role in efforts to give territorial cohesion the prominent

Conclusions

261

position it now has in the Treaty of Lisbon: whilst remaining an article in the Treaty, it now also figures as an objective of the Union as well. Those unfamiliar with France were puzzled by what territorial cohesion meant. In common with the ideas behind am¦nagement du territoire, territorial cohesion shared a concern for dealing with territorial inequities. In other words, EU competition policy should not be to the detriment of territorial cohesion. What lies behind the notion of territorial cohesion is also resistance to the ‘Anglo-Saxon model’ of liberalising markets. According to Siedentop (2000, 136), this is a strategy of the French political class (see also Hooghe 2001, 9). Europeans, it is argued, are rooted in their soil and not footloose, as “the much more nomadic peoples of the North American continent” (Guigou 2001: 4). In their desire to continue to live where they have for generations, they deserve public support. Subsidising services is often justified for the sake of the ‘European model of society’, as outlined below. As with am¦nagement du territoire, territorial cohesion began to be associated too with the ‘principles of good governance’ in the White Paper on European Governance (CEC 2001), where the latter argues that decisions should be coherent with a broader set of principles underpinning more sustainable and balanced territorial development within the Union (CEC 2001, 13). Thus, territorial cohesion has at least two meanings, one more interventionist, relevant to the topic of this book, and the other advocating more coherent policy-making.

2.

The different notions of SGI in European national social models The debate on the Green Paper has strongly confirmed the importance of services of general interest as one of the pillars of the European model of society. (White Paper on services of general interest – CEC 2004, 4)

Across the EU, ideas about the provision of SGI and the political strategies to deliver them differ. Authors in Part II of this volume provide some valuable insights into this. On the one hand, there are common megatrends and challenges that impact the provision of public services (as identified by Humer et al. in Chapter 3). Whether the issue is demography (Gruber et al., Chapter 6), the economic crisis (Velasco, Chapter 8) or territorial challenges (Johannesson, Chapter 7), many problems are similar across EU member states. However, nation-states respond to these problems differently according to their social model (Marques da Costa et al., Chapter 4). One of the first references to the European Social Model appeared in the 1994 White Paper on Social Policy which defined it in terms of democracy, individual

262

Andreas Faludi et al.

rights, free collective bargaining, the market economy, the equality of opportunity for all, social welfare and solidarity (CEC 1994). Since then, the concept has appeared in various EU policy statements. The link between social models and SGI has been made for some time, as illustrated by the following quote from the conclusions of the 2000 European Council Meeting (Nice, 7–9 December 2000): he European social model, characterised in particular by systems that offer a high level of social protection, by the importance of the social dialogue and by services of general interest covering activities vital for social cohesion, is today based, beyond the diversity of the Member States’ social systems, on a common core of values (CEC 2000: 4; emphasis added).

While the above statement refers to a single European social model, a number of related models exist in the EU, reflecting differences in welfare systems and levels of inequality (Giddens 2005). Speaking at Harvard University, European Commissioner for Economic and Monetary Affairs, Joaqu†n Almunia recognised this, saying that ‘there is no such thing as a single European social model’ (EC 2005), but the models share some common features and aims, notably reducing poverty and social exclusion, achieving a fairer distribution of income, providing social insurance and promoting equality of opportunity. The 2007 White Paper on Services of General Interest confirms the link with social model(s) by affirming that they represent a new European commitment (CEC 2007), adding that ‘…these services [of general interest] are often rooted in (local) cultural traditions’ (CEC 2007, 7) and from there comes to the conclusion that there is variation in approaches to providing SGI across Europe. The concept of ‘social model’ has been used to generalise about the values that underpin policy positions. It makes use of ideal types in comparing and explaining approaches to problems in particular places, not least reconciling the competing objectives of economic competitiveness, social cohesion (or social justice) and environmental sustainability which ‘Europe 2020’ – and with it a whole range of EU policies – subscribes to. Social models have been employed to explain approaches to social welfare policy and, since services of general interest are closely linked to social welfare policy, they help to explain variations in the approach to SGI across Europe. Although the French exerted substantial influence on EU policies concerning SGI (as discussed above), France is certainly not the only European country where SGI are considered important. In Germany, for example, the concern for Daseinsvorsorge – provisions for safeguarding equitable living conditions – has featured in policy discourse for almost a century. In 1938, Forsthoff made reference to the notion of Daseinsvorsorge when considering administrative arrangements for providing public services such as transport, gas, water and

Conclusions

263

electricity, waste disposal, sewage, educational facilities, hospitals, graveyards, and public baths (Kersten 2005). Like SGI, Daseinsvorsorge has many facets and resists a precise definition. German federal planning law identifies Daseinsvorsorge as a key issue of planning, stating that it must promote balanced social, infrastructural, economic, ecological and cultural conditions throughout the territory of the Federal Republic. This leads to much discussion of services in areas subject to demographic decline. Although planning literature does not discuss the relation with SGI, there is much overlap. Daseinsvorsorge refers to provisions by public authorities, including provisions where under safeguards they operate on the market. In so doing, however, Daseinsvorsorge has started to come within the purview, not so much of competition law but of EU state aid regulations. The more acute friction has been with support for industry. Some large firms had to pay back sizeable sums considered as excessive incentives to move to East Germany. In contrast to France, there has been significantly less debate about SGI in Germany. One exception has been the writing of Kersten (2006) who suggested that economic, social and territorial cohesion should replace the German notion of gleichwertige Lebensverhältnisse (equal living conditions). Whether or not territorial cohesion relates to the German notion of equal living conditions (Gleichwertigkeit der Lebensverhältnisse), as Kersten argues, is a moot point. Neither notion is well defined. Both originate from different discourses. Equal living conditions are to be found both in the German Basic Law (Grundgesetz) as well as in German federal planning legislation and are well established in German planning discourse, but planners show little inclination to discuss the notion of territorial cohesion. Primarily a matter of municipal concern, Daseinsvorsorge is also not as constitutive for national consciousness as the service public is in France. They are less central, therefore, to the state’s role. The differences between the French and German approaches to SGI can also be illustrated with reference to public transport policy. Despite sharing similar traditions and philosophies underlying transport policy, significant differences in approaches to public transport provision in France and Germany are nevertheless apparent. In general, transport policy in countries such as France and Germany has historically been considered as an element of wider social and economic policy, and less concerned with the economic efficiency of the relevant industries: the latter being more closely associated with the ‘Anglo-Saxon’ philosophy on transport policy (Button 1998). As such, transport policy in countries such as France and Germany is organised around principles of cohesion, security, employment and public service (Aspinwall 1999). Nevertheless, somewhat different perspectives concerning the role of the private sector are apparent in these countries. According to Hayward (2001), the French approach

264

Andreas Faludi et al.

to public transport provision and the role of the private sector has deep cultural roots in the hostility of French Catholicism and communism to private profit and acquisitive capitalism. In Germany, on the other hand, less resistance is apparent to the involvement of the private sector in transport policy. The liberalisation of transport markets in Europe, brought about by the creation of the Single European Market in the early 1990s, resulted in different policy responses in France and Germany. For example, the privatisation of public transport operations took place at different speeds and in different forms. Consequently, a variety of distinct shifts in fiscal responsibilities, contractingout arrangements and public-private partnerships took place (ESPON 2013, Annex B). Not only were there differences in timing, there were also different directions of change. Countries such as France adopted a very reticent approach to liberalising and privatising transport markets, especially in comparison to frontrunners such as the UK and Sweden (Button 1998).

3.

A territorially sensitive SGI provision, also under ‘Europe 2020’

Borges et al. (Chapter 5) draw scenarios of SGI provision under changing primacies of market forces, public dominance and alternative developments. Irrespective of the assumptions, some types of territory emerge as relative ‘winners’ or ‘losers’ (Marques da Costa et al., Chapter 4). This implies that there is no cardinal solution as to how to organise SGI from a territorial perspective across Europe. Rather, diverse governance mechanisms respecting different prerequisites of urban and peripheral regions could bring about adequate provision where public, private and civil actors complement each other. Neither an approach focusing uniquely on cohesion and balanced development nor one favouring competitiveness can fully exploit the potential of SGI in assisting with social and territorial development. A precondition for optimal outcomes is that territory is recognised as an element in the equation. Here it is pertinent to quote the dictum of a French geographer, Jacques L¦vy (1997, quoted in Peyrony 2007, 61): “The construction of Europe consists of directly modifying… the relative disposition of its places: it is a geographic event.” Whether this is recognised or not, Europe is amongst others a spatial project, a fact that EU policy neglects at its peril. Thus, where the liberalisation of SGI may, indeed, be beneficial in terms of more efficiency and better service for clients, applying such policies across the board, ignoring the distribution of people and the conditions of service provision across EU territory, as if the latter was a homogenous space, is counterproductive. This holds a

Conclusions

265

lesson for the Europe 2020 strategy for promoting smart, sustainable and inclusive growth. Europe 2020 relates to ambitions to increase Europe’s competitiveness in the face of global competition, already evident since before the adoption of the Lisbon Strategy. EU Cohesion policy, which previously focused on creating a better balance in Europe in terms of economic development, is now formulated in the context of economic competitiveness. Similarly, other EU policies are being positioned in the same way. In work done in advance of the formulation of the EU Financial Framework 2014–2020, the Polish government explored the relationship between economic and territorial development, motivated by recent developments in economic theory contending that due attention to territory and territorial issues is required in order to improve the efficiency and the delivery of policies. Based on preparatory work by an international group of experts, Zaucha et al. (2014) propose a set of policy tools for that purpose. The outcome is a set of territorial keys, including SGI (the others relate to accessibility and what the paper calls territorial capacities/endowments/assets). According to Zaucha et al., these territorial keys can help policymakers identify and analyse the territorial context so as to increase the efficiency of policy interventions. Their observations on the subject of SGI represent a fitting conclusion to this chapter, particularly when considering the contribution of SG(E) Is to territorial cohesion and competitiveness in Europe: Some SGEI will be instrumental in the promotion of smart long-run growth (e. g. education), while others are important for inclusive growth (e. g. social care). Different types of territories need different accessibility standards for such services. As such, the vast array of policies applied in the provision of SGEI (e. g. education, healthcare, social care, communications policies, municipal services management, etc.) should have a territorial dimension and be coordinated with transport… or e-policy within broader EU or national development concepts in order to ensure that the general public enjoys broad and comprehensive accessibility to the SGEI (Zaucha et al 2014: 255).

Whether the Financial Framework for 2014–2020 will take heed of this advice, whether it will pay proper regard to the role of Services of General Interest and in which territorial contexts they serve still remains to be seen.

References Aspinwall, M. (1999) Planes, Trains and Automobiles: Transport Governance in the European Union. In: Kohler-Koch, B. & Eising, R. (eds) The Transformation of Governance in the European Union. Routledge, London, pp. 119–134. Button, K. (1998) The good, the bad and the forgettable – or lessons the US can learn from European transport policy. Journal of Transport Geography 6(4) 285–294.

266

Andreas Faludi et al.

Chevallier, J. (2012; 1st ed. 1987) Le Service Public, Presses Universitaires de France, Paris. Commission of the European Communities – CEC (1994) European Social Policy – A Way Forward for the Union. A White Paper. COM(94)333 Final. Office for Official Publications of the European Communities, Luxembourg. Commission of the European Communities – CEC (2000) Presidency conclusions, Nice European Council Meeting, 7–9 December 2000. SN 400/00 EN. Office for Official Publications of the European Communities, Luxembourg. Commission of the European Communities – CEC (2001) European Governance: AWhite Paper, COM(2001)428, Brussels. Commission of the European Communities – CEC (2004) White Paper on Services of General Interest, COM(2004)374 final, Brussels. Commission of the European Communities – CEC (2007) Services of general interest, including social services of general interest: a new European commitment, COM(2007) 725 final, Brussels. European Commission – EC (2005) The Future of the European Model (SPEECH/05/560). Speech at Minda de Gunzburh Center for European Studies, Harvard University, 26 September 2005 [http://europa.eu/rapid/search.htm]. ESPON (2013) ESPON TANGO – Territorial Approaches for New Governance Applied Research 2013/1/21. Scientific Report Version 20/12/2013. ESPON Coordination Unit, Luxembourg/Nordregio, Stockholm. Report available online from http://www.espon.eu/main/Menu_Projects/Menu_AppliedResearch/tango.html. Giddens, A. (2005) The world does not owe us a living! Progressive Politics 4(3) 6–12. Guigou, J.-L. (2001) Europe and territorial planning, in: A. BAILLY and A. FREMONT, (Eds) Europe and Its States: A Geography, pp. 3–4. Paris: La Documentation Francaise. Hayward, J. (2001) In search of an evanescent European identity. In: Guyomarch, A.; Machin, H.; Hall, P.A. & Hayward, J. (eds.) Developments in French Politics 2. Palgrave, Basingstoke, pp. 257–282. Hooghe (2001) The European Commission and the Integration of Europe: Images of Government, Cambridge University Press, Cambridge. Kersten, J. (2005) Die Entwicklung des Konzepts der Daseinsvorsorge im Werk von Ernst Forsthoff; in: Der Staat, Vol. 44, pp. 543–569. Kersten, J. (2006) Daseinsvorsorge und demographischer Wandel: Wie ändert sich das Raum- und Staatsverständnis?; in: Raumforschung und Raumordnung, Vol. 4/2006. L¦vy, J. (1997) l’Europe, une g¦ographie, Hachette, Paris. Peyrony, J. (2007) Territorial Cohesion and the European Model of Society : French Perspectives. In: Faludi, A. (ed.) Territorial Cohesion and the European Model of Society, Lincoln Institute, Cambridge/MA, pp. 61–79. Peyrony, J. (2014) ’La ”modernisation de l’action publique territoriale” en perspective europ¦enne at transfrontaliÀre’, in: GIS CollÀge international des sciences du territoire, Paris, 307–316; available online from. http://www.gis-cist.fr/wp-content/uploads/ 2014/02/peyrony.pdf. Robert, J. (2007) The Origins of Territorial Cohesion and the Vagaries of Its Trajectory. In: Faludi, A. (ed.) Territorial Cohesion and the European Model of Society, Lincoln Institute, Cambridge/MA, pp. 23–35. Siedentop, L. (2000) Democracy in Europe. London: Allen Lane.

Conclusions

267

Waterhout, B. (2007) Territorial Cohesion: The Underlying Discourses. In: Faludi, A. (ed.) Territorial Cohesion and the European Model of Society, Lincoln Institute, Cambridge/ MA, pp. 37–59. Zaucha, J., Komornicki, T., Böhme, K., S´wia˛tek, D. and Z˙uber, P. (2014) Territorial Keys for Bringing Closer the Territorial Agenda of the EU and Europe 2020, European Planning Studies, 22:2, 246–267.

List of Authors

Hild Marte Bjørnsen holds a PhD in political science from the Economics Department, University of Oslo followed by a post-doc position at the Norwegian Agricultural Economics Research Institute. She has 18 years of experience in applied and academic research at the Norwegian Institute for Urban and Regional Research and the Norwegian Agricultural Economics Research Institute, specialising in regional economics, agricultural economics, labour market economics, and welfare economics. Her fields of interest include economic modelling, economic development and distribution, policy analysis and assessment. Luciane Aguiar Borges is an architect and urban planner (UFPel, Brazil) with Masters degrees in Urban and Regional Planning (UFRGS, Brazil) and Spatial Planning (KTH, Sweden). She is currently a doctoral candidate in the field of planning and decision analysis with a specialisation in urban and regional planning (URS, KTH). Her research focuses on how ‘pasts’ and ‘futures’ have been used as political resources in planning and policy making. Her main concerns are how history, cultural heritage and collective memory have been mobilised to build up territorial authorities and identities. Her studies also include a critical perspective on the construction of alternative futures for planning. Discourse analysis and futures studies are key methodologies used in her research. Daniela-Luminita Constantin is Professor of Regional Economics at the Bucharest University of Economic Studies, Romania and Director of the Research Centre for Macroeconomic and Regional Forecasting at the same university. She is the president of the Romanian Regional Science Association and member of the Council of European Regional Science Association (ERSA) Council. Her main scientific interests are regional policy analysis, regional convergence and competitiveness, regional labour markets, migration, regional clusters, munic-

270

List of Authors

ipal real properties management, services of general interest, environmental issues and human security. Adriana Dardala PhD is an Associate Professor at the Department of Economic Informatics and Cybernetics, Bucharest University of Economic Studies, Romania. She achieved her PhD in Economics, in 2006, with a thesis on unconventional data integration in distributed applications. She held a postdoctoral research fellowship in the area of regional development. Her current research interests focus on multimedia systems, GIScience, spatial clustering, data modelling. Sophie de Ruffray is currently Professor of Geography at the University of Rouen, in charge of the research axis ”Temporalities, Regulations, Regionalization” in UMR CNRS 6266 IDEES. She is also director of the Research Institute of Interdisciplinary Humanities and Social Sciences, which includes 13 research laboratories at the University of Rouen. She holds a habilitation from the University Paris 7 (Imprecision and uncertainty in Geography. The contribution of fuzzy logic to the problems of regionalization.) Her main fields of research articulate a theoretical and methodological reflection on regionalisation, mental representations, accessibility to services as well as spatial planning in border contexts. She has taken part in research projects at the European level (ESPON), national level (in France for the UMS RIATE and the CGET) and regional level (Greater Region). Andreas Faludi (1940, Budapest) holds a degree in architecture and planning and a PhD from the Vienna University of Technology as well as honorary doctorates from the Blekinge Institute of Technology and the University of Groningen. He is presently a guest researcher and Professor Emeritus for Spatial Policy Systems in Europe, Delft University of Technology. He has held previous positions at Radboud University Nijmegen, the University of Amsterdam and Oxford Polytechnic as well as fellowships in Australia, the United States and at the Netherlands Institute for Advanced Study and the Rockefeller Centre at Bellagio. He has been a visiting professor in Austria, France and Italy. Heinz Fassmann, Prof. Dr., is Professor for Applied Geography, Spatial Research and Spatial Planning and vice-president of the University of Vienna. He is director of the Institute for Urban and Regional Research at the Austrian Academy of Sciences. He chairs the scientific advisory board of the Institute for the Danube Region and Central Europe (IDM) and the scientific expert panel of integration issues of the Austrian Ministry of European Integration and Foreign Affairs. His work in the field of migration and integration research as well as

List of Authors

271

urban geography and regional planning is documented in approximately 200 book or journal publications. Istv‚n Ferencsik attended Szent Istv‚n University and holds a PhD in environmental sciences, having earlier studied agricultural sciences at Gödöllo˝ Agricultural University and a MSc in agricultural sciences. His research activities focus on multifunctional land use and geo-statistical calculation, applying GIS technology. His research also covers urban and regional environment improvement and energy and economic development; cross-border and macroregional co-operations and multilevel governance with special focus on Carpathian region and the Balkans. He was director of Ister-Granum European Grouping for Territorial Co-operation (EGTC). Olaf Foss holds a degree in sociology from University of Oslo. He has been active in academic and applied research (Statistics Norway, Norwegian Institute for Urban and Regional Research/NIBR) for more than 40 years, covering a wide field of themes and issues related to regional and territorial development, nationally as well as internationally (Europe/OECD and China). He was coordinator and manager for two broad research programs on regional development at the Norwegian Research Council, and edited a Norwegian journal on regional issues, 1987–2010. He was the Norwegian national contact point (ECP) for ESPON 2006 and ESPON 2013. Foss is currently a senior researcher at NIBR, following a long period as research director. Raluca Mariana Grosu, PhD (Business Administration) is an assistant professor in the Department of Business, Consumer Sciences and Quality Management of the Faculty of Business and Tourism, Bucharest University of Economic Studies, Romania and has carried out research in Spain and Italy. She is the general secretary of the Romanian Regional Science Association and assistant editor for a couple of prestigious scientific journals. She is actively involved in international research projects and the author/co-author of articles published in scientific journals and/or presented at international conferences. Her research interests focus on entrepreneurship, migration, regional science, and consumer sciences. Elisabeth Gruber is a research assistant at the Department of Geography and Regional Research, University of Vienna and is working towards her PhD in the field of human geography. Her research interests lie in the field of population geography with a focus of migration, as well as spatial planning and regional development.

272

List of Authors

Gr¦gory Hamez is Associate Professor of Geography and Spatial Planning at the University of Lorraine (France). He graduated at the University Paris 1- Pantheon Sorbonne, where he completed his PhD in the field of border studies in 2004. His main fields of research relate to territorial cohesion, accessibility to services as well as spatial planning in border contexts. He has taken part in research projects at the European level (ESPON), national level (in France for the UMS RIATE and the CGET) and regional level (Greater Region). Claudiu Herteliu holds a PhD granted in 2007 by University of Economic Studies, Bucharest, Romania. He began teaching in 2002 as teaching assistant and is currently an associate professor at the Statistics and Econometrics Department of the same university. He worked with quantitative methods in the Education and Research Ministry (2001–2008) and National Institute of Statistics (2008–2011). He had managerial responsibilities like the dissemination of Romanian Statistical Information Activity or vice-dean of the Faculty of Economic Cybernetics, Statistics and Informatics (2012 – present) and is member of University Senate (2012 – present). His main research interests are: statistics and econometrics; quantitative methods in religion; statistics of education. Alois Humer completed his doctoral studies in Geography and Spatial Planning at the University of Vienna in 2014. He previously worked as scientific referee at the Austrian Conference on Spatial Planning (2008–2009) as well as at the University of Vienna (2009–2014). He is currently a post-doctoral researcher at the Institute for Urban and Regional Research at the Austrian Academy of Sciences. He has excellent knowledge in European questions of spatial processes and spatial policies. His published work focuses on spatial aspects of welfare policies in Europe, applying qualitative and quantitative methods. He is highly experienced in working both in the content and management of European research projects. Hjalti Johannesson is a senior researcher and assistant director of the University of Akureyri Research Centre since 2000. His main research interests are regional development, local government and infrastructure development. He has an MA degree in economic geography from York University, Toronto, Canada and has extensive experience from working in local government and planning prior to his research career. Steinar Johansen holds a degree in economics from the University of Oslo. He has 27 years of academic and applied research experience, mainly at the Norwegian Institute for Urban and Regional Research (NIBR), but also at the Institute of Transport Economics (TØI). His research has focused around regional

List of Authors

273

and welfare economics, including regional economic modelling, welfare production, economic development and distribution, regional economic policy analysis, regional infrastructure and transport development, and impact assessment. Today, he holds the position of senior reseacher at NIBR. Nuno Marques da Costa was born in Lisbon in 1960. He is assistant professor at the Institute of Geography and Spatial Planning, University of Lisbon. He teaches GIS, and complex systems modelling, regional econometrics and statistical analysis. He is a consultant for several private and public companies and has participated in European ESPON and FP7 projects and, in national context, he participated in the elaboration of the Portuguese Strategy of Spatial Planning and several Evaluation Reports of Cohesion Policy. He has expertise in evaluation of public policies, econometrics, geomarketing and transport and accessibility questions. Eduarda Marques da Costa was born in Lisbon in 1966 and is associate professor at the Institute of Geography and Spatial Planning, University of Lisbon. She has taught geography and spatial planning since 1990, and has been a researcher at the Centre of Geographical Studies, since 1987. She now coordinates the study curriculum for spatial planning. Since 1988, she has acted as a consultant for private and public institutions and participated in and coordinated more than 20 research projects and studies. The main scientific areas of interest are regional, urban and local planning, urban geography and evaluation of public policies. In recent years, she participated in DG Regio studies (member of the scientific committee of Regions 2020 – Phase 2), in the ESPON Programme (6 ESPON project teams and member of the sounding board), 2 INTERREG B project teams, and 5 evaluation studies of public policy linked to structural funds in Portugal. Antonia Milbert is a graduate engineer of horticultural sciences (Leibnitz University, Hannover) and works as a researcher in the Spatial Planning and Urban Development Department of the Federal Institute for Research on Building, Urban Affairs and Spatial Development (BBSR) in Bonn, Germany, Fields of research activity are indicator systems in general and here especially indicators of sustainable regional development and gender specific regional indictors. Furthermore she is responsible for the regional typologies of the BBSR and for the long time series of spatial data regarding the on going reforms of administrative units. From 2004 to 2010 she was member of the OECD working party on Territorial Indicators.

274

List of Authors

Alexander Milstein holds of a Master’s degree in law (Diplom-Jurist) from the University of Muenster, Germany. He is currently a law clerk (Rechtsreferendar) at the Regional Court in Wuppertal, Germany. He is also a research assistant at the Central Institute for Spatial Planning at the University of Muenster (ZIR) and pursuing a doctorate in law under the supervision of Prof. Dr. Hans D. Jarass, LL.M. His research focuses on EU constitutional law, the legal implications of territorial cohesion and comparative spatial planning law. Pedro Palma was born in M¦rtola, Portugal in 1982 and is a research associate at the Centre for Geographical Studies, University of Lisbon. He has a PhD grant for geography and is teaching GIS at university. His work focuses on services of general interest, territorial cohesion, access to services, modelling and spatial analysis. He has participated in European ESPON and several national academic projects. Daniel Rauhut, Associate Professor, is a senior researcher at the Norwegian Institute for Urban and Regional Research (NIBR) in Oslo, Norway. He has a PhD in the economic field from the University of Lund, Sweden, and has previously worked in Sweden at Nordregio, Malmö University, the Royal Institute of Technology (KTH) and University West. His major research fields cover regional welfare, labour market issues and regional development, and he has mainly taught in methodology for undergraduate and graduate students. Christopher J. Smith holds a M.Litt in Strategic Studies (Univ. of Aberdeen), Diploma in International Relations (Johns Hopkins, SAIS Bologna), BA (Hons) in Political Studies (Univ. of Stirling). He is currently an independent consultant, having previously worked at the Department of Politics, Univ. of Aberdeen and at Nordregio, Stockholm. His research background focuses on EU policymaking and institutions while his research interests include welfare state studies, with a particular focus on SSGI, EU social policy and the role of the European Commission. In an area where the member states retain de facto sovereignty how has the Commission been able to promote acceptance of the notion of SSGI, and how have the member states responded? Dominic Stead is Associate Professor of Urban and Regional Development at Delft University of Technology in the Netherlands. He has researched and published widely on a range of issues related to urban and regional governance, including more than 60 journal articles, 25 book chapters and 3 edited books. He has previously held positions at HafenCity University, Hamburg (as visiting professor), University College London (as senior research fellow) and the University of the West of England (as associate lecturer and researcher). He is a

List of Authors

275

member of the editorial board of four international, peer-reviewed journals: European Journal of Transport and Infrastructure Research, European Planning Studies, Journal of Planning Education and Research, and Planning Practice and Research. Marcin Ste˛pniak is a research fellow in the Department of Urban and Population Studies, Institute of Geography and Spatial Organization, Polish Academy of Sciences and a fellow of the Polish Ministry of Science and Higher Education. He holds a PhD in geography. His research interests cover issues related to accessibility, transport and urban geography. Xabier Velasco Echeverr†a holds a BSc & MSc in Rural Engineering, is a GIS Specialist and MBA. He currently works as a GIS projects manager at the Territorial Observatory of Navarre and is deeply interested in the implementation of evaluation systems using GIS and maps on different subjects, such as governance, climate change mitigation, territorial evaluation and spatial planning. He has participated in several EU funded projects such as Plan4all and SeGI.