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Why no one Cares about Mandatory Rules Applicable to Service of General Economic Interest at the Local Level in France and why it is Likely to Change? A Neo-Institutionalist Explanation

Brice Daniel

This communication deals with French local authorities enforcement of the European law applicable to subsidized local Service of General Economic interest (SGEI). To not be considered as state aids, such subsidies have to comply with mandatory constraints defined under competition law. Building on the observation that most local administrations are not respecting these obligations, our objective is to explain their non-compliance by using a neo-institutionalist approach and by doing so discuss different Europeanization models.First, it should be noted that there is a high degree of misfit between EU and French public services rules, which is hindering local actors' capacity to implement the European policy (historical neo-institutionalism). Thus, only Lille and Nantes have been developing SGEI implementation strategies -- building on their strong European commitment (politics does matter).It's also important to note that the risk of control is very low for local governments, as none of the designated controlling institutions is exercising its powers, resulting in a situation of low compliance incentives (rational choice neo-institutionalism). This hypothesis is confirmed by the fact that local authorities only recently started to develop their SGEI expertise following a Commission announcement that access to structural funds will be made subject to SGEI rules respect.

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