Frequently Asked Questions
1.
What did the UK achieve during its Presidency?
2. Why does anything need to be done about services?
3. What kinds of barriers exist?
4. Who and what sectors of the economy
will be affected?
5. What are the benefits?
6. What exactly is the Commission
proposing?
7. What happens next?
1.
What did the UK achieve during its Presidency?
The UK
Presidency has made substantial technical-level progress on
the key areas of the Directive where Member States have
concerns: the scope of the Directive, scope of the country
of origin principle, and worker protection. In addition,
the Council Working Group has also discussed the
requirements concerning the rights of service recipients
(Articles 20-22), professional indemnity insurance (Article
27) and the convergence programme (Chapter VI).
As a result
of these discussions we produced a new consolidated text and
progress report which was presented to the Competitiveness
Council for a lunchtime discussion on 28 November. The
Council agreed that the text provided a good foundation for
further work, and that it looked forward to Parliament’s
opinion and the Commission’s response early next year. All
Member States have complimented the Presidency’s handling of
discussions in Working Group and the progress made.
2.
Why does anything need to be done about services?
Provision
of services accounts for over 70% EU GDP (and the private
sector alone for almost 50%) – but only 20% of trade between
EU Member States. The European services sector contains
vast untapped potential.
Almost
all activity involves using a service. Even when we
buy goods, such as cars or computers, what we’re paying
for is as much the cost of marketing and distribution as
the cost of manufacturing the product. As a result
services have been the major drivers of growth and job creation
for over two decades.
Intra-EU
trade in services, however, is made difficult by regulatory
and other barriers that impinge on a business’s ability
to market, sell and provide services in other Member States.
The Services Directive aims to tackle the barriers to trade
in services within Europe – in accordance with the EC Treaty
and ECJ case law.
3.
What kinds of barriers exist?
A
survey by the Commission, the ‘State
of the Internal Market’ (2002), identifies some 91 barriers
that service providers have faced in providing services
across borders (this Report was produced following a consultation
with services providers across the EU in 2001). Examples
of barriers include quantitative restrictions, nationality
restrictions, overly bureaucratic, complicated and lengthy
authorisation procedures, expensive compliance costs and
difficulties relating to the promotion of services (advertising).
These
barriers hinder productivity and innovation; reduce consumer
choice and value for money, and block export and growth
opportunities for service sector firms in Member States.
A
report commissioned by the DTI on the 'Impact
of the proposed EU Directive on Services in the Internal
market: case studies of UK businesses'
(950 kb) was published on 20 September 2005. The study
looked at 38 firms in the business services and construction
sectors seeking to provide services to other Member States
on a temporary or established basis.
4.
Who and what sectors of the economy will be affected?
The proposed Directive covers
a wide range of different services, including:
- Business Services such as: management consultancy; advertising;
certification and testing; facilities management; including
office maintenance and security; recruitment services;
and the services of commercial agents.
- Services
provided both to businesses and to consumers,
e.g.: legal advice; fiscal advice; real estate services
such as estate agents and letting agents; construction
architects; distributive trades; the organisation of
trade fairs; and security services.
- Consumer
services, e.g. tourism, including tour operators
and tour guides, leisure services and sports centres;
amusement parks; plumbers; and electricians.
The Directive does not
include transport services (with the exception of cash-in-transit
and mortal remains); electronic communications (covered
by the 2002 EC regulatory package); tax (with the exception
of the prohibition of certain discriminations) and financial
services.
In addition there are also derogations
from the country of origin principle including: gas and
electricity services; water distribution and waste water
services, postal services; recognition of professional qualifications;
employment law; and the Posted Workers Directive.
5. What are
the benefits?
A recent study by Copenhagen
Economics on behalf of the Commission found that:
- The proposed Directive would benefit all Member States, delivering
productivity, increased employment, higher wages and
cheaper services for consumers;
- Total economic benefits to consumers and producers would rise by
0.6% or some €37bn (£26bn), and total value added in
the EU services sector by 1.1% or some €33bn (around
23bn);
- Total net employment in the EU would rise by some 600,000.
6.
What exactly is the Commission proposing?
The
proposal aims to deliver two of the freedoms enshrined in
the EC Treaty:
·
Freedom
of establishment by service providers in other Member States
(Art. 43 TEC).
·
Free
movement of services - the freedom to provide services cross-border
on a temporary basis without being established in that Member
State (Art 49 TEC).
It
is intended to apply alongside and complementary to other
sector-specific pieces of legislation.
The proposal contains four main
strands:
•
Simplification of Administrative procedures, obliging
Member States to examine their systems of regulation and
authorisation to ensure that they are compatible with the
s principles of the Internal Market.
•
A Country of Origin Principle under
which temporary or remote cross border service provision
is carried out on the basis of the law of the provider’s
country of origin (country in which the services provider
is established).
•
Mutual assistance between regulatory bodies in different
Member States to make the country of origin principle workable;
the Directive creates obligations for regulators and competent
authorities to co-operate cross-border to monitor their
service providers overseas.
•
Limited harmonisation of rules, including rights
for recipients of services (consumers and other businesses),
guarantees, information requirements and on removal of prohibitions
on marketing of multidisciplinary practices.
7.
What Happens Next?
Information on forthcoming events can be accessed on our
events calendar. Negotiations will continue into the
Austrian Presidency. The European Commission has said it
will publish a revised proposal of the Directive following
the EP first reading.
Further
Enquiries
To contact the
Department of
Trade and Industry team handling
the Directive or if you wish to be informed when this site
is updated, please email:
servicesconsultation@dti.gsi.gov.uk
DTI Enquiry Unit
Tel:
020 7215 5000
Email: dti.enquiries@dti.gsi.gov.uk
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