A. Introduction

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The single market has been and remains the cornerstone of Europe’s integration and sustainable growth.

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The freedom to provide services (established by Art. 56 TFEU) along with all the others fundamental freedoms contributes to the development of the internal market within the EU. Free movement of services is one of the fundamental freedoms on which the objective of an internal market without barriers for trade as provided in Art. 26 para.  2TFEU is based. It is closely interrelated with the right of establishment that is another fundamental freedom provided in Art 49 TFEU.

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The freedom of establishment and the free movement of services - and thus the objective of an internal market - can be achieved only on a truly open market which enables the customers to freely choose the suppliers and the suppliers to freely deliver their products to the customers. 

B. Free movement of services and the internal market for electricity and gas

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In some regulated sectors there are still barriers and regulatory obstacles that hinder the objective of single market. One of such markets is the energy market that may be seen as a market that is being under construction. There are still obstacles to the trade of elec­tricity on equal terms and without discrimination or dis­advantages in the EU. In addition, non-discriminatory network access as well as equally effective level of regulatory supervision in all of the member states does not yet exist.

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Respectively, similar obstacles hinder also the free trade on gas and access to gas network. 

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The important relation between the single market and energy market is well defined by Mario Monti who has stated that “the single market sits at the nexus of all Europe’s energy policy objectives: competitiveness, security of supply and sustainability”. 

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Even in general electricity and natural gas count as goods, there are cases where it can be discussed about services (e.g. the capacities for grid usage represent services). Therefore it is important to identify the main objective of the measure in question: if it is related to goods, Art. 34 TFEU applies or if it is related to services, Art. 56 TFEU applies. 

C. Limitation of free movement of services

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According to Art.114 para. 3 TFEU the Commission will take as a base, inter alia, the high level of consumer and environmental protection in its proposals concerning the internal market. Within their respective powers, the European Parliament and the Council will also seek to achieve this object. This means that rather than being limitations, the protection of consumers and the environment form a basis for the EU law that concerns the internal market.

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On the other hand, Art. 52 paragraph 1 of TFEU, interpreted by the Court of Justice of the European Union (“ECJ”), provides that the Member States may under certain conditions limit the free movement of services on grounds of public policy, public security or public health. Such limitations are only allowed to the extent they are non-discriminatoryand when the limitations do not go beyond what is necessary to in order to achieve their objective.

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According to ECJ´s case law protection of consumersand environmentmay be regarded as such an overriding public interest which entitles a Member State to limit the basic freedoms, including also the free movement of services.