Subject files - Internal market for services: the Services Directive and beyond - Committee on the Internal Market and Consumer Protection

The services sector has been the driver for EU growth for some years now, with services today accounting for more than 65% of EU GDP and employment. There is an increasing relationship between services and manufacturing in today's economy, with manufacturing companies increasingly including services both on the output (e.g. maintenance and repair services) and the input side (e.g. business advisory or ICT services). A better functioning EU services market is therefore a vital prerequisite for a more competitive European economy.

IMCO is the lead committee in ensuring the free movement of services within the European Union becomes a reality on the ground. To this end, IMCO led the EP in the negotiations of the Services Directive, adopted in 2006.

 

The Directive, considered a key tool to promote structural reform in the services sector, requires the Member States to simplify administrative procedures and formalities that businesses need to comply with. In particular, it requires Member States to remove unjustified and disproportionate burdens and to substantially facilitate:

• the establishment of a business, i.e. cases in which a natural or legal person wants to set up a permanent establishment in a Member State, and

• the cross-border provision of services, i.e. cases in which a business wants to supply services across borders in another Member State, without setting up an establishment there.

 

It also seeks to make it easier for consumers to benefit from the single market, by offering a broader choice, by making sure consumers have all information necessary when buying services across borders and by addressing practices where businesses unjustifiably deny access to their services to consumers living in another Member State.

 

In addition, the Directive obliges Member States to set up “points of single contact”, e-Government portals to help businesses find out about the rules, regulations and formalities that apply to service activities and to enable them to complete all relevant procedures online (by submitting the necessary application forms and supporting documents etc. electronically) including across borders.

 

IMCO has actively followed the implementation of the Services Directive, which came into force on 28 December 2009. In the 7th legislature, IMCO prepared three parliamentary resolutions on the implementation of the Directive:

 

- The internal Market for Services: State of Play and Next Steps (2012/2144(INI)), Anna Maria Corazza Bildt, EPP

- Mutual Evaluation Process of the Services Directive (2011/2085(INI)), Malgorzata HANDZLIK, EPP

- Implementation of the Services Directive 2006/123/EC (2010/2053(INI)), Evelyne GEBHARDT, S&D

 

Although progress has been made after the past years, it is clear that the Directive is still not fully implemented and correctly applied in all Member States as businesses continue to face an accumulation of red tape, discriminatory practices and barriers that hamper the free movement of services.

 

The latest resolution, adopted by plenary on 11 September 2013, argues that by unleashing remaining barriers and administrative burdens in the services sector, the EU could make an economic gain of up to 2,6% of GDP in the next 5 years. The resolution regrets the "significant numbers of identified cases where Member States are inappropriately invoking overriding reasons of public interests for the sole purpose of "protecting and favoring their domestic markets". The resolution calls on Member States to ease overly onerous requirements and to remove double regulatory burdens in the area of cross-border service provision. In addition, the EP calls on the Commission to take an integrated approach to the internal market for services, ensuring consistency between different pieces of legislation that affect services companies. Finally, it puts forward a number of steps to promote better enforcement and to strengthen transparency and accountability.

Rapporteur: Anna Maria Corazza Bildt (EPP)

Shadow  Rapporteurs: Sylvana Rapti(S&D), Morten Løkkegaard (ALDE), Heide Rühle (Greens), Malcolm Harbour (ECR), Thomas Händel (GUE/NGL) and Matteo Salvini (EFD).

 

IMCO will continue following the work of the Commission in this domain, both in terms of proper enforcement of existing legislation and concerning any future measures,  including the ongoing "peer review" assessing barriers restricting access to and exercise of regulated professions ( see also the subject file on the recognition of professional qualifications).