EU Services Directive threat to housing


May 9, 2005 16:30 | by Kartika Liotard, MEP

Similar to the housing associations found in some parts of the UK, Dutch housing corporations, although privatised just over a decade ago, are non-profit foundations obliged to meet a number of exacting statutory obligations. Vital to the provision of affordable housing in the Netherlands, they are now under fire from the European Commission. Kartika Liotard, Member of the European Parliament for the Dutch Socialist Party (SP), explains.

Dutch non-profit housing corporations are deeply concerned over criticisms by the European Commission of their interpretation of the duty to put contracts above a certain size out to tender across the whole of the EU. What provoked this disquiet was a tender issued by a housing corporation in Vathorst, a new estate at Amersfoort, a pleasant town in the cenrtre of the country, not far from Utrecht. Because housing corporations, under legislation governing the sector, can still (despite being privately owned) be defined as public bodies, they are obliged to fulfil the conditions laid down in the EU's compulsory tender laws. These require any public authority or organisation belonging to such to put any project over a certain size out to tender across all twenty-five member states. The Commission sees public-private partnerships as state-run bodies and believes therefore that they fall within the scope of this European tender system.

What the Commission - or possibly in the end the European Court - is going to do about this is not clear. What is obvious, however, is that co-operation between local authorities and housing corporations now faces an even greater threat: the EU Services Directive. Paragraph 6 of Article 14 of Bolkestein's proposed measure forbids ""the direct or indirect involvement of competing operators, in the granting of authorisations or other decisions of the competent authorities". This is a far-reaching interdiction. Every agreement between a local housing corporation and a local authority must, according to the Services Directive, be viewed as, by its very nature, an impermissible form of interference with competition, because service providers from other countries can have no possibility of making such an accord. Any such arrangement must, according to the Commission, discriminate against foreign firms - and indeed it must.

But local authorities and corporations need each other, being together responsible for a major part of building production and social housing in my own country and elsewhere. It is common for a corporation to be given permission to develop an area in return for certain undertakings to the local authority in relation to the sort of housing the authority wishes to see. Social housing agreements between local authorities and corporations rely to a large extent on mutual advantage. The EU Services Directive would put an end to this form of cooperation. Corporations and similar bodies in other member states would be forced increasingly to present themselves as 'ordinary' property developers. According to 'Bolkestein' that would be a good thing, because they could then tender for work in any member state of the Union. It is open to question, however, whether a local non-profit housing corporation from, say, Amersfoort would really have much interest in building flats in Prague or Zagreb. Even if one might wish it success in such a venture, this would not alter the fact that the local authority would be left empty-handed, forced to rely entirely on the 'free market' for all of its social housing needs.

Kartika Liotard represents the Dutch Socialist Party in the European Parliament. The SP is the Dutch delegation affiliated to the United Left Group (GUE/NGL) of 41 MEPs.

This article is translated from a piece which appeared in the Dutch national newspaper NRC Handelsblad on 19th April, 2005

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