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Single Market for Services

Services are crucial to the EU economy. They account for over 70% of the EU’s GDP and an equal share of its employment. The European Commission aims to remove barriers for companies looking to offer cross-border services and to make it easier for them to do business.

In the spotlight: The Single Market Strategy

On 28 October 2015, the European Commission presented a new Single Market Strategy to deliver a deeper and fairer Single Market that will benefit both consumers and businesses.

The full Single Market Strategy and underlying analysis are now available. See the communicationpdf Choose translations of the previous link  (458 kB), staff working documentpdf Choose translations of the previous link  (2 MB), press release, fact sheetpdf Choose translations of the previous link  (266 kB) and supporting economic analysis for more information.

Core principles of the Single Market for services

The core principles governing the Single Market for services are:

  • the freedom to establish a company in another EU country (Article 49 TFEU)
  • the freedom to provide or receive services in an EU country other than the one where the company or consumer is established (Article 56 TFEU).

Services Directive

The application of the core principles have been developed through the case law of the European Court of Justice. This case law was codified into EU law with the adoption of the Services Directive in 2006. The Directive covers services activities accounting for 46% of EU GDP, including in sectors like retail, tourism, construction and business services. It is not limited to services provided between EU countries however and also covers services provided within countries.

Full implementation of the Services Directive should:

  • remove red tape and simplify the establishment of service providers in their home country and abroad;
  • simplify the cross-border provision of services into other EU countries;
  • strengthen the rights of service recipients, in particular consumers;
  • ensure easier access to a wider range of services.

In addition to the Directive, a number of sector specific laws provide the rules for financial services, transport, telecommunications, postal services, broadcasting and patient rights.

Professional Qualifications Directive

Sometimes EU countries may make the access to a particular profession conditional upon the possession of a professional qualification traditionally issued within their territory. This represents an obstacle to the core principles of the single market for services as those qualified to practise the same profession in another EU country cannot do so. In response, the EU established rules to facilitate the mutual recognition of professional qualifications between EU countries. This was mainly done through the Professional Qualifications Directive but there are also specific directives for lawyers dealing with establishment in another EU country and the cross-border provision of services.

The retail and wholesale sector

One of the crucial sectors for the competitiveness of the European economy is the retail and wholesale sector. The European Retail Action Plan (ERAP), adopted in 2013, sets out a strategy to improve competitiveness and to enhance the sector’s economic, environmental and social performance. To further develop the policy in retail, a High Level Group on Retail Competitiveness has been set up to advise the Commission on issues important for the sector, including e-commerce.

Internal Market Information System

National authorities in different countries often need to exchange information to ensure the implementation of single market rules. The European Commission’s Internal Market Information System was created to help these authorities cooperate across borders.