PURPOSE: build on the results of the mutual evaluation process of the Services Directive in order to improve the operation of the single market for services.
BACKGROUND: services are the driving force of the EU economy. Services account for over two-thirds of EU GDP and employment, and have been the source of all net job creation in recent years. Furthermore, approximately 75% of services trade concerns the supply of services to other businesses in almost any sector of the European economy, in particular industry.
However, the Single Market for services is not yet deliveringits full potential. Services still represent only around one-fifth of total intra-EU trade. The absence of dynamism in intra-EU services trade becomes clear when mirrored against EU's global trade in services. Today only about 8% of European SMEs do business in other Member States.
The recently adopted Commission Communication "Towards a Single Market Act" stressed the need to further deepen the Single Market for services and to build on the results of the "mutual evaluation" process provided for in the Services Directive.
Overall, conservative estimates predict that the implementation of the Services Directive has the potential to bring about economic gains of up to EUR 140 billion, representing up to 1.5% growth of EU GDP. In short, the EU economy urgently needs a more integrated, deepened Single Market for services.
CONTENT: in this Communication, the Commission presents the main results of the "mutual evaluation" process and builds on them to move on to a new phase in the building up of a Single Market for services where the benefits of the Services Directive are consolidated and complemented by a set of further actions.
1) the key findings of the process of mutual evaluation: the adoption and subsequent implementation of theServices Directive has been a crucial milestone in improving the functioning of the Single Market for services. It has done so by removing unjustified barriers, simplifying the regulatory framework and helping modernise public administrations. Yet more remains to be done. The main problems problems still needing to be resolved are the following:
2) Actions for further deepening the single market for services: the key findings of the mutual evaluation demonstrate that the Commission needs to take further steps to enable the European economy to fully benefit from the potential of the Single Market for services.
As a matter of priority, the Commission will continue and step up work with Member States on an individual basis so as to achieve a complete and correct transposition and implementation of the Services Directive in all Member States. In the first half of 2011, the Commission will carry out a series of bilateral meetings with those Member States where there are strong indications of incorrect or incomplete implementation of the Services Directive. When needed, formal enforcement measures will be taken.
In parallel, a first economic assessment of the actual implementation of the Directive and of its impact on the functioning of the services markets will be carried out by the Commission in 2011
In addition, the Commission , building on the acquis, will take, a number of additional measures to take the Single Market for services forward.
A single market “performance check” for services: in 2011, based on Member States' input as to the specific sectors that should be examined, the Commission will launch the “performance check” of the Single Market for services. The aim will be to finalise it within one year with a view to report on the results to the European Parliament and to the Council and, if required, propose further measures by the end of 2012.
Tackling remaining regulatory barriers: the Commission will i) launch an assessment of the issue of reserves of activity focussing in particular on areas where the link with the professional qualification required warrants further discussion; ii) launch an assessment to better understand the manner in which restrictions on capital ownership and legal form affect certain services sectors and to gather evidence on the economic effects of these rules; iii) examine the difficulties the difficulties for cross-border service providers resulting from insurance requirements. The Commission will decide by 2012 on possible specific initiatives.
Targeted actions to make the Single Market for services a more concrete reality on the ground:in order to ensure that the freedom to provide services clause in Article 16 of the Services Directive is applied properly and consistently in all Member States, the Commission will closely monitor its application and discuss its findings with all Member States. It will issue annual guidance on the application by Member States of the freedom to provide services clause and the evolution of cross-border service provision in the Single Market. To avoid the appearance of new regulatory barriers, the Commission will work with Member States to consolidate the notification system in the Services Directive and to help providing guidance to national administrations as to its operation. Lastly, to help service providers, in particular SMEs, to enforcetheir rights in the Single Market, the Commission will assess the effectiveness of means of redress available at national level to service providers for breach of their Single Market rights by national administrations and decide on next steps by the end of 2012.