Commission Directive 2006/111/EC of 16 November 2006 on the transparency of financial relations between Member States and public undertakings as well as on financial transparency within certain undertakings (OJ L 318, 17.11.2006, p. 17), amended by Commission Directive (EU) 2025/1442 of 18 July 2025 (OJ L, 2025/1442, 21.7.2025).
Public undertakings play a substantial role in the economy of the Member State. Member States may grant special or exclusive rights to particular undertakings or make payments or give other kind of compensation to particular undertakings entrusted with the operation of services of general economic interest. These undertakings are often also in competition with other undertakings.
The Treaty on the Functioning of the European Union (TFEU) requires the Commission to ensure that Member States do not grant undertakings, public or private, aids incompatible with the common market. However, the complexity of the financial relations between national public authorities and public undertakings may hinder the Commission to perform this duty. In this context, it is important to ensure the transparency of these financial relations. Such transparency applied to public undertakings should enable a clear distinction to be made between the role of the State as public authority and its role as a market operator.
More precisely, Article 106(1) TFEU imposes obligations on Member States in the case of public undertakings and undertakings to which Member States grant special or exclusive rights. Article 106(2) TFEU applies to undertakings entrusted with the operation of services of general economic interest. Article 106(3) TFEU requires the Commission to ensure the application of the provisions of that Article and provides it with the requisite means to this end. In order to ensure the application of the provisions of Article 106 of the Treaty, the Commission must have the necessary information. The Transparency Directive defines the conditions for ensuring such transparency. In particular, it obliged Member States to ensure that the flow of all public funds to public undertakings and the uses to which these funds are put are made transparent.
See also a summary of the Transparency Directive.
Related information
Communication to the Member States concerning public authorities’ holdings in company capital (Bulletin EC 9 – 1984, p. 93). This Communication has not been repealed. However, the primary reference for the interpretation and application of the market economy operator principle is the case law of the Union Courts, in particular as laid down in the Commission Notice on the notion of State aid as referred to in Article 107(1) of the Treaty on the Functioning of the European Union (OJ C 262, 19.7.2016, p. 1).