Is the Commission looking to privatize social security?

MEP Marc Tarabella

MEP Marc Tarabella

Following a directive proposal issued in December 2011 regarding public procurement procedures, MEP Marc Tarabella (S&D, Belgium) accused the European Commission of inserting a passage in favor of opening mandatory social security services to competition.

 Opposition to Appendix 16 of the proposal

Marc Tarabella, named the European Parliament rapporteur on this issue, clarified his allegations in a press release published on October 17, 2012: “This directive is of the utmost importance for both citizens and public services. Imagine my surprise upon discovering Appendix 16! In the appendix, the Commission explains that a ‘procurement notice’ should be issued annually for mandatory social security, following which public authorities would select the top candidate. In other words, any private operator could potentially lay hands on the social security market. This is dangerous, unacceptable and illegal,” insisted Mr. Tarabella.


“Privatizing social security would sound the death knell for all mechanisms of collective solidarity in our countries. It would also mean giving free reign to capitalization principles in lieu of solidarity among generations, between healthy and ailing citizens…” added the head of the Socialist Party delegation at the European Parliament. “I have specifically called for social security to be excluded from the scope of application of this directive. We must not weaken Member States’ implementation and management of social services, especially in these difficult economic times. In my view, social security MUST remain the state’s prerogative!” concluded Marc Tarabella.

Formal denial by the Commission

The Commission reacted by denying any intention of privatizing social security, calling the accusation “false and regrettable, reflecting a flawed interpretation of the legislative proposal in question […]. Compelling a country to privatize its system of social protection in any way would go against the Treaty, as well as against jurisprudence, as Mr. Tarabella himself points out.” The Commission added that “the rules of public procurement only apply in the event that a national or local government decides, on its own initiative, to outsource part of its responsibilities through a public procurement contract.”


 Nonetheless, the website Politis reports that the spokesperson for Commissioner Barnier (Internal Market) admitted offering to those Member States so disposed the possibility of “organizing certain social security services through a contractor.” The spokesman went on to say that, “should a country wish to organize its social security through a public procurement contract (…) it would need to have the legal framework necessary to comply with rules of good governance, transparency and fairness in choosing the private contractor.”


 This appendix will be discussed during October negotiations. The next negotiating session is scheduled for this Thursday.