Business services cover many varied sectors. They range from technical services such as engineering, architecture and IT, to other professional services such as legal services, employment services and facility management.
Construction works undertaken by builders and developers account for 6.1% of EU GDP and 7.3% of EU employment. Based on its high economic importance and low single market integration, the European Commission has identified construction as a priority services sector for internal market policy action.
As announced in the Standardisation Package of June 2016, the European Commission aims to prioritise and incentivise the development of voluntary European service standards.
The European Commission regularly monitors and analyses the functioning of the EU single market for services. This page contains key economic reports and studies which inform the Commission's policies in this area.
The European Commission has the option of launching infringement proceedings against EU countries that do not comply with EU law.
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).
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 around 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
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 services package
The services package of January 2017 is an ambitious but balanced set of measures that will make it easier for companies and professionals to provide services to a potential customer base of 450 million people in the EU. It will give a boost to the services sector, which accounts for around two-thirds of the total EU labour force, that will benefit consumers, jobseekers and businesses, and will generate economic growth across Europe.
The package includes initiatives on the European Services e-card (directive and regulation), an improved notification of draft national laws on services, a proportionality assessment of national rules on professional services and guidance for national reforms in regulation of professions.
The collaborative economy
The collaborative economy, sometimes called the sharing economy, covers a great variety of sectors and is rapidly emerging across Europe. Many people in the EU have already used, or are aware of collaborative economy services, which range from sharing houses and car journeys, to domestic services. The collaborative economy provides new opportunities for citizens and innovative entrepreneurs. But it has also created tensions between the new service providers and existing market operators. The Commission is looking at how we can encourage the development of new and innovative services, and the temporary use of assets, while ensuring adequate consumer and social protection.
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.
Standardisation in services
Voluntary service standards can benefit service providers and their customers in many ways. Yet service standards account for only 2% of all EU standards. In addition, differing national service standards can make it harder for companies to offer their services across Europe. In its guidance – the Staff Working Document, 'Tapping the potential of European service standards', the Commission is putting forward a number of measures to address these issues.