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5. Compatibility with the Community’s Interest
If the answer to the question of proportionality test is negative, then the matter ends there. If the answer is positive, however, then one has to proceed to the compatibility test whether the exclusive rights in question could be compatible with the Community interest. This is the remarkable position which is held by the Court and academics.
Nonetheless the second sentence of Article 86(2) looks like ridiculous from some point of view. In the first sentence the Treaty has required undertakings concerned to comply with the rules of Treaty. Subsequently in the following sentence it again demands the behaviors of undertakings in question should not be contrary to Community’s interest. What is the distinct between compliance with the rules of the Treaty and accordance with Community’s interest? They have, in my view, the same meaning except that the Treaty presupposes such a condition under which Community’s interest cannot be completely protected even after one has behaved in accordance with the rules of the Treaty. But if the Community’s interest can not be definitely identified according to the Treaty, what is the applicable law for such overflowing Community’s interest? Therefore there is absolutely no justification for this proposition.
Conclusively I think the second sentence adds nothing to the first one. It only functions as a reiteration of part of proportionality principle contained in the first sentence. And it is the very reason that the Court never in deed implemented the compatibility test whether the monopolized activities are contrary to Community’s interest or not. Furthermore according to this reason the national courts can also have competence to apply Article 86(2).
6. Conclusion
Article 86 provides the Community with competence to intervene into the field of Member States’ discretionary power, which is the most sensitive, both politically and economically, area in the Community. And it is a field intercrossed of interests of freedom of citizen, undistorted competition and Member States. In particular as to Article 86(2), it offers the only derogation for Member States to deviate from the Community interest to some extent. The Court is required to be prudential to reckon activities of privileged undertakings as contrary to the Treaty on the basis of Article 86(1) at the same time be more prudential to justify them according to Article 86(2). It is difficult for the Court to draw a balance of value between the Community and Member States. And it is more difficult for the Court to weigh economical proportionality between them without necessary economic instruments. Hence as regards the scope of Article 86(2) the Court left more questions than answers. This paper seemly listed some comparatively definite principles concerning Article 86(2). Nevertheless from a substantive point of view every definite principle contains more indefinite areas. Article 86(2) itself covers a great quantity of obscure questions waiting for being dug by academics. Questions are listed as follows.
6.1 Whether the activities of ‘entrust’ can include concession by private law
According pre-existing case law the Court did not accept undertakings entrusted with concessions by private law. Even in the cases concerning such private contracts the Court always consider them as services of general economic interest by public law instruments related. However, once in some cases where the concession is indeed ‘entrusted’ by private law and the Court cannot find the related public law, what would the Court do? Would they like to discard its rigidly formal principle of public law instruments?
6.2 Article 16
The appearance of Article 16 is full of dispute. Some authors though it changed the former approach of Article 86(2). And some author thought differently. Even more, the Community plan to revise this article in the forthcoming European Constitution. Therefore the situation of Article 16 is preserved to be cared about.
6.3 Service of general economic interest
Attention is being tensely paid to this area in recent years. As regards this problem the Commission has drafted two successive communications to collect public advices on services of general economic interest in last two years. And the Commission promised to issue another one to figure out some questions in the second half of this year. Thus runs this concern.
6.4 To what extent that cross-subsidy can be justified according to Article 86(2)
By virtue of the passing case law when an exclusivity of a service of general economic interest is considered as operating universal service, then in order to settle down cross-subsidy problem the monopoly on this service will be automatically justified. Specifically speaking the monopolized undertaking is justified to exclude competition in the profitable geography. However the Court did not go further to analyze whether the monopolized profit in the profitable geography is so much as to exceed the operational costs in the unprofitable geography. In fact the existing method does not accord with proportionality principle from a strict point of view. Will the Court change its approach in the future liberalization process?
6.5 The relationship between Article 86(2) and State Aid
This is a problem closely related to cross-subsidy. Considering articles concerning state aid I dissociate it from cross-subsidy problem. Can the financial support granting by Member States to undertakings entrusted with services of general interest be regarded as state aid? The doctrine is whether such financial support is the very compensation of performance of SGEI.
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