MEPs want to improve free movement of services 

The resolution on the future of free movement of services was adopted with 31 votes in favour (3 against, 11 abstentions).

MEPs call on the Commission to ensure enforcement and compliance with the Services Directive in many member states in order to reduce existing barriers to provide services cross-border. They assert that fragmentation and issues with implementation costs the EU around €297 billion, which corresponds to 2% of the EU’s GDP.

At the same time, the MEPs emphasise the need to balance economic freedoms, social rights and the protection of consumers, workers, and business interests. Development of the single market should also bring further improvement for consumer and workers’ rights.

"The single market creates jobs and generates wealth for European citizens, but we still need to improve it to realize the full potential. This report highlights different ways to reap the low hanging fruit of the market for services. SMEs would benefit enormously if we finally manage to open this market," said Rapporteur Morten Løkkegaard (Renew, DK).

Unjustified restrictions and an administrative burden

The resolution points out that cross-border provision of services is often made difficult due to numerous obstacles, including a lack of user-friendly information, failure to mutually recognise or compare professional qualifications, limited access to regulated professions, unfounded territorial restrictions, language requirements, and administrative barriers for public procurement. MEPs underline that the special status of services of general interest remains fully recognised; however, the rules should not be misused with member states sometimes unjustifiably hindering access to certain sectors.

The MEPs want to see the single digital gateway becoming more citizen- and SME-friendly and the points of single contact being developed into fully functioning portals, providing all necessary information about any business-related requirements a company must comply with in the relevant member state (e.g. professional qualifications, VAT rules, registration requirements, reporting obligations).

The resolution also emphasises that free, fair and safe movement of services and people, consumer protection, and the strict enforcement of EU law is paramount for tackling the economic crisis caused by the COVID-19 pandemic. MEPs therefore urge the member states to ease unjustified and disproportionate barriers and not use COVID-19 as a justification for limiting the free movement of services.

Next steps

Plenary is expected to vote on the resolution in January 2021.

Background

Services account for 73% of the EU GDP and contribute to 74% of employment. As many as 9 out of 10 new jobs in the European Union are created in services sector. At the same time the share of services in intra-EU trade is only around 20%, generating just 6.5% of EU’s GDP.