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EU Presses Ahead With Single Market Improvements

by Ulrika Lomas,, Brussels

11 January 2017

The European Commission has published a package of measures to ease the administrative burden on service providers, which includes plans for a new European Services e-card and a proportionality assessment of national regulations.

The package forms part of a broader Single Market Strategy, which aims at "unleashing" the full potential of the single market. The services sector is the largest component of the EU's economy, accounting for 70 percent of GDP. Around 50m people – or 22 percent of the European labor force – work in the regulated professional services.

The package comprises four main initiatives. Commission Vice President Jyrki Katainen, responsible for Jobs, Growth Investment and Competitiveness, said: "Barriers to trade in services are also barriers to competitiveness. Making better use of the Single Market for Services will help European businesses create jobs and grow across borders, offering a wider choice of services at better prices, while maintaining high standards for consumers and workers. Today we are proposing to simplify procedures for cross-border service providers as well as a new and more modern way for member states to work together to regulate their services sectors."

The European Services e-card will offer a simplified electronic procedure to make it easier for providers of business and construction services to complete the administrative formalities required to provide services abroad. Services providers will liaise with a single interlocutor in their home country and own language. The interlocutor will then verify the necessary data and transmit it to the host member state. The host member state will retain the existing power to apply domestic regulatory requirements and decide whether the applicant is permitted to offer services in its territory.

Regulation and deregulation of professions remains a national prerogative. However, under EU law, a member state must establish whether new national professional requirements are necessary and balanced. The Commission has proposed streamlining and clarifying how member states should undertake a comprehensive and transparent proportionality test before adopting or amending these rules.

This would require member states to identify: the risk to consumers, the level of that risk, and how to guard against it; consider the impact of the new measure on businesses, job creation, and consumers; and consider the accumulation of various layers of regulation to ensure that each is justified.

EU law requires member states to notify the Commission of changes to national rules on services, to provide the EU executive and other member states with the opportunity to raise potential concerns about possible inconsistencies with EU legislation. The Commission has proposed improvements to this system, to make it more timely, effective, and transparent. Member states will be obliged to notify measures before their final adoption, at a stage when adjustments can still be made. Member states will also be requested to provide more information on the proportionality of notified measures.

Finally, the Commission has published guidance on where it believes member states can improve their regulation of professional services including architecture, engineering, law, and accounting. The recommendations are not legally binding, but the Commission will monitor their implementation.

Commissioner Elzbieta Bienkowska, responsible for Internal Market, Industry, Entrepreneurship, and SMEs, commented: "Services represent two thirds of the EU economy and generate 90 percent of new jobs. But the Single Market – this jewel that is all too often taken for granted – does not function properly for services. As a result, we miss out on important potential for jobs and growth. Today we are giving a fresh boost to the services sector to make Europe a global hub for providing, buying, and developing new services."

TAGS: business | European Commission | law | accounting | legislation | construction | standards | regulation | trade | European Union (EU) | services | Europe | Invest

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