In the second half of 1992 the Crocodile Newsletter will devote much of its news to the development of Community policies in particular those confirmed or strengthened by the Treaty of Maastricht. Among these policies much attention will be devoted to Industrial and Environmental Policy and to Scientific reaserch.

We start by publishing an initial view on the controversial question of Articles 90 and 222 of the EEC Treaty which concerns the role of Member States in economic and industrial activities. In subsequent newsletters we will return to this theme which is a subject of serious discussion between the Commission and certain Member States.

PUBLIC ENTERPRISES AT EUROPEAN LEVEL

The Treaties of Rome and Maastricht have neither denied nor called into question the principle of the EC Member States' participation in economic activity.

Article 222 of the Teaty of Rome was confirmed at Maastricht and States can therefore be owners of businesses on an equal footing with private entreprises. This is a confirmation of the principle of a mixed economy, one of the historical principles of a market economy.

It is nonetheless a mistake to claim that a necessary consequence of the progressive integration of Europe is a reduction or suppression of the public presence in the economy.

The problem that arises is how to judge whether such a requirement falls under an economic angle.

The European Community has paid special attention to public entreprises in the context of the transparency of the transfer of state resources to such entreprises lest the states, confusing their dual position of entrepreneur and supporter, provide their own entreprises with financial aid. They might justify this aid as help for the exercise of the activity in question rather than seeing it as an obstacle to providing their country with the necessary means for realising a serious policy for a wealth-producing economy.

Above all, the EC Commission does not allow governments to intervene in keeping moribund entreprises alive: such an action would change the status of equality of the entreprise on the market and thus violate the principle of free competition in the single European market.

As a result, there may be no discrimination against public entreprises which operate according to the rules of the market without specific state intervention, which are not those of the simple financial support of an associate.

Article 90,paragraphs 1 and 2 of the Treaty of Rome grants to the Member States the right to keep for specific entreprises the direct exercise of determined services or to attribute to them special and exclusive rights, provided that they follow the rules of competition.

In particular, the State is allowed to carry out, through the free entreprise system, the management of services which are of general interest and which have the character of a monopoly. In this case, the State demands only the observance of the rules of competition except where this does not allow them to carry out the tasks they have set for themselves.

The interpretation of these fundamental provision of the Treaty gives rise to a wide range of opinion as to the scope of services which may be performed under monopoly conditions or by way of a concesion. Given the principle of competition there is consensus that the power of State to legislate in respect of economic activity must be reduced.

In certain countries such as Italy there is even a tendency to subject the power of the State to the principle of "essential service" and this mirrors the desire to broaden the rules of competition with a view to reducing the power of the State in respect of monopolies and consesionary rights.

In this respect it must nonetheless be stressed that Community law does not prevent the presence of the State in production activities. However in order to give effect to the basic principle of competition the predominant tendency today is to reduce the possibility of legislative interference by the State by limiting the concept of "essential service" and therefore by transferring the performance of services of a general economic interest to another propietary regime.