The European Committee of the Regions (CoR) welcomes the European Commission’s initiatives to improve cross-border trade in the services sector. In an opinion adopted during the October plenary session of the CoR, rapporteur Jean-Luc Vanraes (BE/ALDE) urges the Commission to clarify its proposals in order to fully realise the potential of the Single Market.

The free movement of services within the European Union is one of the key pillars of the Single Market. Services are a major part of the European economy, accounting for 70% of its GDP and 90% of new jobs. Despite notable progress in eliminating barriers, the lack of clarity and predictability of regulations and diverging national rules continue to stymie European businesses wishing to expand across borders.

“ The services sector is unfortunately characterised by weak competition and slow productivity growth ” explains Jean-Luc Vanraes (BE/ALDE), Member of Uccle Municipal council. “ Tackling barriers to cross-border trade and investment in services could add 1.7% to the GDP of the EU and would give service providers and consumers greater opportunities to fully realise the potential of the internal market. "

In response to the obstacles service businesses face, the European Commission launched a series of initiatives (European service e-card, notification procedure and a proportionality test) in January 2017 to make it easier for companies to provide services to people across the EU. While believing in their contribution to creating a real Single Market in services the rapporteur is concerned about the imposed additional administrative burdens on regional and local authorities and the potential interference in national legislative procedures as voiced by several national and regional parliaments.

Nevertheless Vanraes welcomes the European services e-card as a helpful contribution to promoting the mobility of services and reducing administrative complexity and costs for cross-border service providers. “ This will be particularly helpful for SMEs, which are the backbone of regional and local economies and are the most impacted by administrative complexity when operating across borders ”. However, he regrets that potential benefits of the services e-card remain unclear and insists they must be thoroughly explained by the European Commission

Vanraes also supports steps to improve the notification procedure for services, as the existing procedure is ineffective. The obligation of notification must not, however, interfere with the competences of local and regional authorities and their political assemblies.

He considers that, while proportionality assessments must be thorough, objective and evidence-based, they should also be commensurate, as a "one size fits all" approach could be unnecessarily burdensome in many circumstances. He underlines that “ It is solely for Member States, be it at national, regional or local level, to decide whether and how to regulate professions ”.

Background:

The European Parliament and the Council adopted the European Service Directive on 12 December 2006 (to be implemented by Member States by 28 December 2009) with the purpose to remove the legal and administrative barriers that can hinder businesses from offering their services in another country, and to encourage cross-border competition. In January 2017 - as the potential of the free movement of services has not yet been fully realised - the European Commission brought forward four measures , including:

· A European Services E-Card, an electronic procedure that attempts to simplify administrative formalities,

· A proportionality assessment of national rules on professional services, which aims to clarify the proportionality test Member States should undertake before adopting or amending national rules on professional services

· Guidance for national reforms in regulating professions, which offers guidance on national reform needs in the regulation of professional services with high growth and jobs potential

• Improved notification of draft of national laws on services, which aims to provide Member States with the opportunity to raise potential concerns about possible inconsistencies with EU legislation early in the legislative process

Contact:
Carmen Schmidle
Tel. +32 (0)2 282 2366
carmen.schmidle@cor.europa.eu