WIREDGOV

The Single Market is a key driving force behind economic growth. But to deliver growth and jobs, better implementation of existing rules is essential. This is why the European Commission has recently adopted a course of action to ensure that Single Market rules work better in practice.

The Commission is also proposing measures to improve the way the services sector works, which is vital as the Services Directive accounts for more than 45% of EU GDP and must play a strategic role in promoting economic growth. Based on the assessment of the progress made by the Member States on the implementation of the Services Directive, an economic analysis shows that its implementation will generate an additional 0.8% of EU GDP over the next 5–10 years. But this figure could be increased to 2.6% if Member States increase their level of ambition in opening up their services covered by the Directive. Furthermore, better transposition and implementation of EU legislation could promote growth by reducing administrative burdens for businesses by a third, leading to an overall saving of nearly 40 billion euro.

Michel Barnier, Internal Market and Services Commissioner, said: "Small and medium-sized enterprises tell me that there are still obstacles to how they operate in the European Single Market. The Commission and Member States must work hand in hand to improve the way Single Market rules are implemented, applied and enforced. Economic growth is at the top of our agenda and we should not miss a single opportunity to promote it." He continued: "On the Services Directive, my priority is to ensure that it applies in full to the sectors it covers."

Communication on "Better Governance for the Single Market"

The Commission is proposing to focus efforts on sectors with the largest growth potential. In 2012-2013, the sectors identified are services and network industries. In these areas, the Commission calls on Member States to commit to zero tolerance for late and incorrect transposition of Directives. The Commission, for its part, will provide enhanced transposition assistance in order to smooth out potential problems. In case of infringements, procedures should take no more than 18 months on average (currently 25.5 months) and Member States should comply with Court rulings within 12 months.

To make the Single Market work more effectively, the Commission recommends making better use of IT tools to empower citizens and businesses. It calls on Member States to strengthen problem-solving tools and set up Single Market Centres to better monitor how Single Market rules work.

Communication on the implementation of the Services Directive – a partnership for new growth in services

A Communication entitled "A partnership for new growth in services 2012-2015" shows that implementation of the Services Directive must be improved in order to boost growth. To achieve the forecasted growth the Commission calls upon Member States to eliminate discriminatory regulations which still exist in a number of EU countries, such as rules discriminating on the basis of nationality or residence, obliging service providers to carry out "economic needs tests". It stresses that it will open infringement procedures against violations of the Services Directive. Moreover the Commission plans to work with Member States to maximize the economic benefits of the Services Directive through, for example, deep structural reforms in the areas where Member States decided previously to keep the status quo. Particular focus should be on key sectors such as business services, construction, tourism and retail (almost 30% of GDP).

The Communication is accompanied by three staff working documents:

• The report on the implementation of the Services Directive, which presents the state of implementation of the Directive and remaining problems and of the ''Points of Single Contact'' with a section dedicated to individual Member State assessment. It is complemented by the economic assessment showing the effects and the growth potential of the Services Directive in terms of EU with data for each Member State.

• The results of the performance check which show how well different EU rules are applied to businesses on a day-to-day basis. It identified a number of obstacles such as the heterogeneity of the regulation of professional qualifications and difficulties with the recognition of diplomas from other Member States; requirements limiting the choice of corporate structures for certain professional activities; difficulties in obtaining insurance for cross-border providers or challenges emerging from different levels of consumer protection regulation throughout Europe for businesses wishing to expand to other EU countries, which the Commission is working to remedy.

• The staff working document with a view to establishing guidance on the application of Article 20(2) on the principle of non-discrimination of service recipients on the basis of nationality or country of residence. The document explores the reasons behind such business behaviour and calls on businesses to stop discriminatory practices.

Background

The Services Directive was adopted in December 2006 and covers services accounting for more than 45% of EU GDP. It has been a milestone in removing obstacles to trade in services, thereby facilitating the establishment of businesses in other countries and cross-border provision. It requires Member States to simplify administrative procedures for business and to eliminate requirements that undermine fair competition in the Single Market. It also requires Member States to set up ''Points of Single Contact'', which assist businesses by providing information on relevant procedures in offering services abroad and giving them the possibility of completing them online.

See also MEMO/12/427 and MEMO/12/429

For further information:

Better governance for the Single Market

http://ec.europa.eu/internal_market/top_layer/monitoring/governance_en.htm

Communication on the implementation of the Services Directive – a partnership for new growth in services

http://ec.europa.eu/internal_market/services/services-dir/implementation_report_en.htm

Contacts :

Stefaan De Rynck (+32 2 296 34 25)

Carmel Dunne (+32 2 299 88 94)

Audrey Augier (+32 2 297 16 07)