Brussels, 24 June 2010
Services Directive: good progress on implementation, but more needs to be done
The European Commission has today taken a new step to ensure that work is speeded up in the twelve Member States that have not yet finalised implementation of the Services Directive. The Directive (Directive 2006/123/EC) was adopted end 2006 and it had to be implemented in all EU countries by 28 December 2009. It covers a large variety of economic activities – such as retail, construction services, tourism services and the services of many regulated professions – representing around 40% of EU GDP and employment. The Directive commits Member States to carry out an ambitious reform programme, combining the lifting of unjustified regulatory barriers and administrative simplification. It is expected to significantly contribute to boosting growth and job creation. Overall, the preliminary results of the Directive's complex implementation process are encouraging. The large majority of Member States have already adopted "horizontal" implementing legislation and in most countries a number of changes to specific regulations have also already been made. The Commission has today sent a reasoned opinion to those Member States who have not yet notified to the Commission the adoption of all the regulatory changes required by the Directive – namely Austria, Belgium, Cyprus, France, Germany, Greece, Ireland, Luxemburg, Portugal, Romania, Slovenia and the United Kingdom.
What is the aim of the EU rule in question?
The Services Directive aims to improve the functioning of the Single Market for services, which is the EU's major source of growth and job creation. The Directive requires EU countries to remove unjustified or disproportionate legal and administrative barriers to the setting-up of a business or the provision of cross-border services in the EU. It also aims to dismantle barriers affecting service recipients (whether consumers or businesses) wanting to have access to services from other Member States. Proper implementation of the Directive will help make the freedom of establishment and the freedom to provide services, enshrined respectively in Articles 49 and 56 of the Treaty on the Functioning of the European Union, a reality for European businesses and consumers.
The challenge of implementing the Services Directive
Implementing the Services Directive has proved to be a particularly challenging endeavour for Member States, as it concerns a wide range of laws and regulations that can be found at all administrative levels. Beyond legislative work, the Directive also required Member States to put in place large practical projects, such as the setting up of "Points of Single Contact" for businesses.
To fully implement the Directive, Member States had to dedicate unprecedented efforts and resources at all administrative levels. This proved particularly challenging for Member States with a regional/decentralised structure. Due to this complexity, the Commission dedicated significant resources to closely assist Member States throughout the implementation process. Some of the twelve Member States concerned have already communicated a number of measures to implement the Services Directive but they still need to adapt at least some aspects of their legislation.
How are EU citizens and/or businesses suffering as a result?
Today, unjustified or disproportionate requirements put a major brake on the development of service activities. Businesses, in particular small ones, are being deprived to make use of their opportunities, whether they want to do business at home or abroad. Citizens, in particular consumers, are as a result denied access to a wider and better range of services. According to conservative estimates, the potential economic benefits of the Services Directive could range between 60-140 billion euros, representing a growth potential of 0.6-1.5% of EU GDP1.
What are the next steps?
The Commission's action takes the form of a reasoned opinion, the second stage of the EU infringement procedure. If Member States do not reply satisfactorily within two months, the Commission may refer them to the EU's Court of Justice.
The three year implementation period ended on 28 December 2009. The Member States concerned received a first letter from the Commission at the end of January 2010 asking them to communicate the measures already adopted in order to implement the Services Directive.
Latest information on infringement proceedings concerning all Member States:
Source: "Expected economic benefits of the European Services Directive", Netherlands Bureau for Economic Policy Analysis (CPB), November 2007.