# C_2007175EN.01001401.xml

| 27.7.2007 | EN | Official Journal of the European Union | C 175/14 |
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27.7.2007

EN

Official Journal of the European Union

C 175/14

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Opinion of the European Economic and Social Committee on ‘The internal market in services — requirements as regards the labour market and consumer protection’

(2007/C 175/05)

On 29 September 2005, the European Economic and Social Committee, acting under Rule 29(2) of its Rules of Procedure, decided to draw up an opinion on: The internal market in services — requirements as regards the labour market and consumer protection

The internal market in services — requirements as regards the labour market and consumer protection

The Section for the Single Market, Production and Consumption, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 3 May 2007. The rapporteur was Ms Alleweldt.

At its 436th plenary session held on 30 and 31 May 2007 (meeting of 30 May), the European Economic and Social Committee adopted the following opinion by 110 votes to 2, with 2 abstentions.

1.   Aim

| 1.1 | The Directive on services in the internal market (1) is designed to promote competitiveness, growth and employment, in line with the Lisbon Strategy. It has, at the same time, triggered an intensive debate on the form to be taken by the freedom to provide services. A contentious issue has been and continues to be the effects which the proposal will have on national labour markets, social conditions and consumer protection requirements. The EESC gave a detailed response to the Commission proposal in its opinion of February 2005 (2). The question here, then, is not the document as such, but the effects on employment and the interests of consumers that can be expected if the internal market in services is implemented in the way proposed. |
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1.1

The Directive on services in the internal market (1) is designed to promote competitiveness, growth and employment, in line with the Lisbon Strategy. It has, at the same time, triggered an intensive debate on the form to be taken by the freedom to provide services. A contentious issue has been and continues to be the effects which the proposal will have on national labour markets, social conditions and consumer protection requirements. The EESC gave a detailed response to the Commission proposal in its opinion of February 2005 (2). The question here, then, is not the document as such, but the effects on employment and the interests of consumers that can be expected if the internal market in services is implemented in the way proposed.

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2

| 1.2 | Freedom to provide in services is one of the four internal-market freedoms enshrined in the EU Treaty and has long been a political reality. The Commission's strategy, set out in the EU services Directive, aims to dismantle all barriers to the provision of services. In a sense, this is not directly about the labour market or consumer protection. However, the more that freedom to provide services is implemented, the more apparent and keenly felt the differences between the various national systems will be. At the same time there are relatively few EU-wide provisions for protecting the interests of employees and consumers. In these fields, national, legal, social and employment provisions predominate and they frequently differ from state to state to a considerable extent. Adding to this is the parallel or separate validity — enshrined in the services Directive — of certain national measures of the country of origin and country where the service is provided, the impact of which will only become clear in future practice. |
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1.2

Freedom to provide in services is one of the four internal-market freedoms enshrined in the EU Treaty and has long been a political reality. The Commission's strategy, set out in the EU services Directive, aims to dismantle all barriers to the provision of services. In a sense, this is not directly about the labour market or consumer protection. However, the more that freedom to provide services is implemented, the more apparent and keenly felt the differences between the various national systems will be. At the same time there are relatively few EU-wide provisions for protecting the interests of employees and consumers. In these fields, national, legal, social and employment provisions predominate and they frequently differ from state to state to a considerable extent. Adding to this is the parallel or separate validity — enshrined in the services Directive — of certain national measures of the country of origin and country where the service is provided, the impact of which will only become clear in future practice.

| 1.3 | Social stability and consumer confidence are an important element of European integration and a prerequisite for a successful internal market in services. Discussion of the services Directive is seriously flawed in including no meaningful analyses of the effect on national social conditions, employment and consumer interests. The absence of a statistical basis for quantifying cross-border traffic resulting from the freedom to provide services and freedom of establishment was one of the points criticised by the EESC (3). Furthermore, there are hardly any reliable data on the structural changes that can be expected in Member States' labour markets. The result is a few very general statistical impact assessments on the one hand and particular individual cases of a frequently illegal or semi-legal nature on the other. Neither suffices for an objective impact assessment. |
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1.3

Social stability and consumer confidence are an important element of European integration and a prerequisite for a successful internal market in services. Discussion of the services Directive is seriously flawed in including no meaningful analyses of the effect on national social conditions, employment and consumer interests. The absence of a statistical basis for quantifying cross-border traffic resulting from the freedom to provide services and freedom of establishment was one of the points criticised by the EESC (3). Furthermore, there are hardly any reliable data on the structural changes that can be expected in Member States' labour markets. The result is a few very general statistical impact assessments on the one hand and particular individual cases of a frequently illegal or semi-legal nature on the other. Neither suffices for an objective impact assessment.

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| 1.4 | Creating the internal market in services is an important part of the Lisbon Strategy. The growth potential in this sector is an important stimulus to job creation. Increased competition, triggered by liberalisation in the internal market in services, will have positive repercussions as it will lead to a broader range of services and a fall in prices. This must be accompanied by a permanent improvement in the social protection of employed workers and an appropriate level of consumer protection. The same applies to the Member States' present quality and safety standards, including environmental protection. The employment effect will differ in the individual sectors and Member States. And the effect on small and medium-sized enterprises is crucial here. |
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1.4

Creating the internal market in services is an important part of the Lisbon Strategy. The growth potential in this sector is an important stimulus to job creation. Increased competition, triggered by liberalisation in the internal market in services, will have positive repercussions as it will lead to a broader range of services and a fall in prices. This must be accompanied by a permanent improvement in the social protection of employed workers and an appropriate level of consumer protection. The same applies to the Member States' present quality and safety standards, including environmental protection. The employment effect will differ in the individual sectors and Member States. And the effect on small and medium-sized enterprises is crucial here.

| 1.5 | The aim of the own-initiative opinion is to make it clearer what the effects of the current strategy for the internal market in services will be on job markets, employment conditions and consumer protection and in so doing to be of practical use to those affected and the EU institutions. These two aspects were not central to the EESC's two earlier hearings on the single market (4). |
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1.5

The aim of the own-initiative opinion is to make it clearer what the effects of the current strategy for the internal market in services will be on job markets, employment conditions and consumer protection and in so doing to be of practical use to those affected and the EU institutions. These two aspects were not central to the EESC's two earlier hearings on the single market (4).

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| 1.5.1 | The ‘freedom to provide services’, which in EU law applies to every performance of a service between two economic operators in different Member States (5), involves three sets of issues:






  — | Evidence with regard to the quantitative impact on employment and changes affecting sectors and countries which are likely to be brought about by the outsourcing and relocation, or the importing, of individual services |
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1.5.1

The ‘freedom to provide services’, which in EU law applies to every performance of a service between two economic operators in different Member States (5), involves three sets of issues:

5

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Evidence with regard to the quantitative impact on employment and changes affecting sectors and countries which are likely to be brought about by the outsourcing and relocation, or the importing, of individual services

| — | New challenges in respect of employment conditions arising as a result of the fact that, against the background of an increasing cross-border provision of services, the mobility of posted workers will also increase rapidly |
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New challenges in respect of employment conditions arising as a result of the fact that, against the background of an increasing cross-border provision of services, the mobility of posted workers will also increase rapidly

| — | Consumer interests and consideration of these interests in the internal market strategy for services |
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Consumer interests and consideration of these interests in the internal market strategy for services

| — | The important role played here by small and medium-sized enterprises (SMEs) as the main providers of employment. |
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The important role played here by small and medium-sized enterprises (SMEs) as the main providers of employment.

| 1.6 | The opinion should be seen on the one hand as a starting point and on the other as a contribution to the European Commission's final report on the review of the single market (6) and to IMAC discussions (7). It is based on currently available data and the practical experience and expectations of experts and those affected. These were collected at a hearing held in Vienna in April 2006 and on the basis of a questionnaire circulated to almost 6 000 experts from industry, trade unions and various interest groups, as well as academia and government departments, in autumn of the same year Over 150 people completed the questionnaire. This makes no claim to being an objective study and can be no substitute for such a study. What it does seek to do, rather, is to provide reference points for current issues and future developments which should be explored in greater depth over the long term by the Single Market Observatory (SMO) and in turn serve as a spur to EU institutions and others in their policy decisions and analytical studies. |
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1.6

The opinion should be seen on the one hand as a starting point and on the other as a contribution to the European Commission's final report on the review of the single market (6) and to IMAC discussions (7). It is based on currently available data and the practical experience and expectations of experts and those affected. These were collected at a hearing held in Vienna in April 2006 and on the basis of a questionnaire circulated to almost 6 000 experts from industry, trade unions and various interest groups, as well as academia and government departments, in autumn of the same year Over 150 people completed the questionnaire. This makes no claim to being an objective study and can be no substitute for such a study. What it does seek to do, rather, is to provide reference points for current issues and future developments which should be explored in greater depth over the long term by the Single Market Observatory (SMO) and in turn serve as a spur to EU institutions and others in their policy decisions and analytical studies.

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2.   The dynamics of the service economy in the EU

| 2.1 | The European Commission has pointed out that its internal market strategy has been prompted by the poor level of development of cross-frontier services in the EU. A more dynamic internal market in services is expected to produce both incentives for employment and benefits for consumers and enterprises. How is this dynamism to be defined in concrete terms? |
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2.1

The European Commission has pointed out that its internal market strategy has been prompted by the poor level of development of cross-frontier services in the EU. A more dynamic internal market in services is expected to produce both incentives for employment and benefits for consumers and enterprises. How is this dynamism to be defined in concrete terms?

| 2.2 | A problem which has yet to be resolved is how to provide a statistical representation of the cross-frontier service economy. Up to now, both EuroStat and national statistical bodies have relied on ‘payment flow’ statistics, i.e. a service is only exported or imported if it gives rise to a corresponding cross-border payment transaction. Whilst, on the one hand, the service economy is characterised by a high degree of cooperation, the transfer of expertise and the exchange of services, extensive clearing transactions do, on the other hand, take place between individual parts of companies, network partners and also between legally independent economic entities in the respective countries which are engaged only in long-lasting cooperation. In such network structures, the respective partners calculate transfers of expertise, time transfers and transfers of services in their respective home countries as a service which they have provided to the customer, even though no cross-border payment transaction is made. |
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2.2

A problem which has yet to be resolved is how to provide a statistical representation of the cross-frontier service economy. Up to now, both EuroStat and national statistical bodies have relied on ‘payment flow’ statistics, i.e. a service is only exported or imported if it gives rise to a corresponding cross-border payment transaction. Whilst, on the one hand, the service economy is characterised by a high degree of cooperation, the transfer of expertise and the exchange of services, extensive clearing transactions do, on the other hand, take place between individual parts of companies, network partners and also between legally independent economic entities in the respective countries which are engaged only in long-lasting cooperation. In such network structures, the respective partners calculate transfers of expertise, time transfers and transfers of services in their respective home countries as a service which they have provided to the customer, even though no cross-border payment transaction is made.

| 2.3 | As a result, in the view of the EESC, the service economy involves a considerably greater volume of exchange and therefore has a much larger impact on the internal market than the current official statistics lead one to believe. The EESC therefore strongly believes that the EU should commission a scientifically pursued basic survey to determine how the individual branches of the service economy in the EU Member States organise cooperation with enterprises in other states. On the basis of this survey and by means of a process of extrapolation, a reliable picture of the actual volume of the EU market in services should be established for the future. This project would be supported by corresponding efforts on the part of European statisticians to draw up price indices in respect of all services and to introduce them into all EU Member States. |
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2.3

As a result, in the view of the EESC, the service economy involves a considerably greater volume of exchange and therefore has a much larger impact on the internal market than the current official statistics lead one to believe. The EESC therefore strongly believes that the EU should commission a scientifically pursued basic survey to determine how the individual branches of the service economy in the EU Member States organise cooperation with enterprises in other states. On the basis of this survey and by means of a process of extrapolation, a reliable picture of the actual volume of the EU market in services should be established for the future. This project would be supported by corresponding efforts on the part of European statisticians to draw up price indices in respect of all services and to introduce them into all EU Member States.

| 2.4 | By way of illustration, on the basis of the current level of information, the Commission calculates that the service sector accounts for 56 % of EU GDP and provides 70 % of overall employment but represents only 20 % of the volume of trade carried out within the EU. The increase in productivity in the service economy in the EU has been significantly lower than in the USA (8). |
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2.4

By way of illustration, on the basis of the current level of information, the Commission calculates that the service sector accounts for 56 % of EU GDP and provides 70 % of overall employment but represents only 20 % of the volume of trade carried out within the EU. The increase in productivity in the service economy in the EU has been significantly lower than in the USA (8).

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| 2.5 | This weakness is not apparent on the world market since the EU is the leading player in the trade in services and this lead is tending to increase at a significant rate. In 2003 the EU share of the global market in services was 26 %, whilst that of the USA was just over 20 %. Despite their considerable dynamism, India and China, whose importance as trading partners is increasing all the time, so far account for a joint share of the global market in services of just over 5 %. Between 1997 and 2003 the EU share of this market increased by 1.8 %, which was also the highest increase recorded amongst the leading players. |
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2.5

This weakness is not apparent on the world market since the EU is the leading player in the trade in services and this lead is tending to increase at a significant rate. In 2003 the EU share of the global market in services was 26 %, whilst that of the USA was just over 20 %. Despite their considerable dynamism, India and China, whose importance as trading partners is increasing all the time, so far account for a joint share of the global market in services of just over 5 %. Between 1997 and 2003 the EU share of this market increased by 1.8 %, which was also the highest increase recorded amongst the leading players.

| 2.6 | Attention is drawn to the fact that the weakness in the trading position of the EU concerns, above all, trade within the Union. In this field, too, the figures do not absolutely bear out this conclusion. Between 2000 and 2003 intra-EU trade in services increased by 10.8 %, whilst trade with trading partners outside the EU increased by only 6.4 % during this period. The comparative dynamism of the internal market was therefore very clear, all the more so in view of the fact that the year 2003 as a whole witnessed an economic downturn. Furthermore, account also has to be taken of the decline in prices in the service sector. |
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2.6

Attention is drawn to the fact that the weakness in the trading position of the EU concerns, above all, trade within the Union. In this field, too, the figures do not absolutely bear out this conclusion. Between 2000 and 2003 intra-EU trade in services increased by 10.8 %, whilst trade with trading partners outside the EU increased by only 6.4 % during this period. The comparative dynamism of the internal market was therefore very clear, all the more so in view of the fact that the year 2003 as a whole witnessed an economic downturn. Furthermore, account also has to be taken of the decline in prices in the service sector.

| 2.7 | The EESC calls upon the Commission to step up its efforts to draw up an impact assessment in respect of a further realisation of the internal market in services. Carrying out a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis could be beneficial in this respect. |
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2.7

The EESC calls upon the Commission to step up its efforts to draw up an impact assessment in respect of a further realisation of the internal market in services. Carrying out a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis could be beneficial in this respect.

3.   The impact on employment of the creation of a more efficient internal market in services

| 3.1 | The estimates of the impact on employment are linked to the growth forecasts. One of the first analyses of the impact of the EU services Directive was published in October 2004 by the Netherlands Bureau for Economic Policy Analysis (9). This analysis follows the usual OECD assumption that any removal of regulation will give rise to growth and, as a consequence, an increase in employment. An interesting feature of this analysis is that it comes to the conclusion that it is not regulations per se that serve as an impediment but rather the heterogeneous nature of regulations. The authors of this analysis expect that the services Directive could bring about an increase in trade in services of between 15 and 30 %, with the proportion of direct foreign investment in this trade sector increasing by between 20 and 35 %. |
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3.1

The estimates of the impact on employment are linked to the growth forecasts. One of the first analyses of the impact of the EU services Directive was published in October 2004 by the Netherlands Bureau for Economic Policy Analysis (9). This analysis follows the usual OECD assumption that any removal of regulation will give rise to growth and, as a consequence, an increase in employment. An interesting feature of this analysis is that it comes to the conclusion that it is not regulations per se that serve as an impediment but rather the heterogeneous nature of regulations. The authors of this analysis expect that the services Directive could bring about an increase in trade in services of between 15 and 30 %, with the proportion of direct foreign investment in this trade sector increasing by between 20 and 35 %.

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per se

| 3.2 | In the spring of 2005, Copenhagen Economics published a study (10), drawn up on behalf of the European Commission. This study set out a number of explicit observations on the impact on employment. It noted that an expected increase in consumption of 0.6 % of EU GDP would bring about a net increase in job numbers for all 25 EU Member States of approximately 600 000. It was also expected that there would be an increase in productivity and that wages would increase by an average of 0.4 %. |
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3.2

In the spring of 2005, Copenhagen Economics published a study (10), drawn up on behalf of the European Commission. This study set out a number of explicit observations on the impact on employment. It noted that an expected increase in consumption of 0.6 % of EU GDP would bring about a net increase in job numbers for all 25 EU Member States of approximately 600 000. It was also expected that there would be an increase in productivity and that wages would increase by an average of 0.4 %.

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| 3.3 | The conclusions of the Copenhagen Study gave rise to controversy, above all because they are argued solely from a supply-side standpoint and are geared solely to the scenario of increasing demand and falling prices brought about by the removal of all regulations. This study fails to take account of any factors which could work against a growth in demand, such as a decline in purchasing power or any other change in consumer behaviour. Moreover, the choice of sectors was controversial. As far as other estimates of the impact on employment are concerned, such estimates are either not available or are based on the Copenhagen Study and accordingly come to the same conclusions (11). Attention must also be paid to the impact of research and innovation, raising the level of improved qualifications and the use of communication technologies on increasing the efficiency of the internal market in services. |
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3.3

The conclusions of the Copenhagen Study gave rise to controversy, above all because they are argued solely from a supply-side standpoint and are geared solely to the scenario of increasing demand and falling prices brought about by the removal of all regulations. This study fails to take account of any factors which could work against a growth in demand, such as a decline in purchasing power or any other change in consumer behaviour. Moreover, the choice of sectors was controversial. As far as other estimates of the impact on employment are concerned, such estimates are either not available or are based on the Copenhagen Study and accordingly come to the same conclusions (11). Attention must also be paid to the impact of research and innovation, raising the level of improved qualifications and the use of communication technologies on increasing the efficiency of the internal market in services.

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| 3.4 | The creation of an additional 600 000 jobs is, clearly, a positive outcome but, given the high level of expectations, such an outcome can rather be described as modest (12). A much more important element, however, is the fact that such an increase in the number of jobs may very well have a considerably different impact depending upon the individual sectors, countries and the various groups of employees involved. No information whatsoever is, as yet, available in this field. With the help of the Single Market Observatory and in the light of the impetus provided by this own-initiative opinion, the EESC would like to try to draw up a clearer picture of the structural changes affecting the labour market. |
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3.4

The creation of an additional 600 000 jobs is, clearly, a positive outcome but, given the high level of expectations, such an outcome can rather be described as modest (12). A much more important element, however, is the fact that such an increase in the number of jobs may very well have a considerably different impact depending upon the individual sectors, countries and the various groups of employees involved. No information whatsoever is, as yet, available in this field. With the help of the Single Market Observatory and in the light of the impetus provided by this own-initiative opinion, the EESC would like to try to draw up a clearer picture of the structural changes affecting the labour market.

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| 3.5 | The EESC questionnaire clearly demonstrates the great interest there is in findings of this kind. 90 % found information available on the employment impact in the internal market in services to be inadequate. Our questions addressed first of all those sectors that would be particularly affected by a drop or rise in jobs. 60 % anticipated benefits generally or in certain sectors. Business and legal advice services were mentioned most often. Others were: commerce, crafts/SMEs, transport, healthcare, agriculture and forestry, industrial services, education, tourism, personalised services, and building and property management. 44 % said they expected job losses. Industry was the most frequently cited loser here, followed by: public services, building and property management, agriculture and forestry, business-related services, basic and premium foodstuffs, personalised services, commerce/retail, tourism and the textile industry. |
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3.5

The EESC questionnaire clearly demonstrates the great interest there is in findings of this kind. 90 % found information available on the employment impact in the internal market in services to be inadequate. Our questions addressed first of all those sectors that would be particularly affected by a drop or rise in jobs. 60 % anticipated benefits generally or in certain sectors. Business and legal advice services were mentioned most often. Others were: commerce, crafts/SMEs, transport, healthcare, agriculture and forestry, industrial services, education, tourism, personalised services, and building and property management. 44 % said they expected job losses. Industry was the most frequently cited loser here, followed by: public services, building and property management, agriculture and forestry, business-related services, basic and premium foodstuffs, personalised services, commerce/retail, tourism and the textile industry.

| 3.6 | Some interesting contrasts emerged when it came to the anticipated benefits in the process. We can assume that adapting to the market is crucial and that those who fail to adapt to the new liberalised conditions and the cross-border market will lose out. Skilled work will offer greater opportunities compared with unskilled work and young, specialised and mobile workers will have greater opportunities than the older and less flexible. Jobs with high social standards would lose out compared with unprotected jobs or self-employment, which would in future play a greater role. Quality compared with price, high professional standards and countries with high social costs would suffer. The new Member States were seen as those who would gain the most, the old as those who would gain the least. Local and small providers will face pressure from large multinational companies. When it came to consumers, there was no clear conclusion. |
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3.6

Some interesting contrasts emerged when it came to the anticipated benefits in the process. We can assume that adapting to the market is crucial and that those who fail to adapt to the new liberalised conditions and the cross-border market will lose out. Skilled work will offer greater opportunities compared with unskilled work and young, specialised and mobile workers will have greater opportunities than the older and less flexible. Jobs with high social standards would lose out compared with unprotected jobs or self-employment, which would in future play a greater role. Quality compared with price, high professional standards and countries with high social costs would suffer. The new Member States were seen as those who would gain the most, the old as those who would gain the least. Local and small providers will face pressure from large multinational companies. When it came to consumers, there was no clear conclusion.

| 3.7 | The future of SMEs was an issue in itself: would the increase in cross-border service traffic create more jobs or would price and competitive pressures squeeze SMEs out and so lead to job losses? A two-thirds majority (66 %) were sanguine about job opportunities. However, 55 % could also foresee competition driving some firms out of business. Nevertheless, a clear majority (69 %) thought that liberalisation of the services market would have no major impact on the future of SMEs, as this was more dependent on other influences. In short: the anticipated benefits predominated, though they were likely to be quite modest. However, the crucial factors for success or survival were expected to be the workers' skills, their capacity for innovation and the quality of the service provided. There would also be greater pressure or demand for further harmonisation (educational and vocational qualifications, management requirements, prices and salaries, social welfare contributions, corporation tax, and meeting EU and international standards in general). Welfare standards and consumer and environmental protection were expected to deteriorate. There was concern, too, that local cultural specialities could also lose out if large providers cornered the markets. |
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3.7

The future of SMEs was an issue in itself: would the increase in cross-border service traffic create more jobs or would price and competitive pressures squeeze SMEs out and so lead to job losses? A two-thirds majority (66 %) were sanguine about job opportunities. However, 55 % could also foresee competition driving some firms out of business. Nevertheless, a clear majority (69 %) thought that liberalisation of the services market would have no major impact on the future of SMEs, as this was more dependent on other influences. In short: the anticipated benefits predominated, though they were likely to be quite modest. However, the crucial factors for success or survival were expected to be the workers' skills, their capacity for innovation and the quality of the service provided. There would also be greater pressure or demand for further harmonisation (educational and vocational qualifications, management requirements, prices and salaries, social welfare contributions, corporation tax, and meeting EU and international standards in general). Welfare standards and consumer and environmental protection were expected to deteriorate. There was concern, too, that local cultural specialities could also lose out if large providers cornered the markets.

| 3.8 | 84 % of respondents thought the self-employed would have more opportunities to operate across borders in the future. |
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3.8

84 % of respondents thought the self-employed would have more opportunities to operate across borders in the future.

4.   New challenges in respect of working conditions and terms of employment

| 4.1 | In virtually all cases, cross-border services involve employee mobility. Since there has so far been little harmonisation of conditions in this respect in the EU, differing social provisions can therefore be encountered in a given national labour market or a given enterprise. The EU posted workers Directive introduced a minimum number of fundamental conditions as regards equal treatment of posted workers and local workers. Furthermore, matters relating to labour law and social law were in principle excluded from the scope of the EU services Directive. This would not, however, mean that a growing cross-border market in services would not have an impact. Despite the posted workers Directive, there is still a non-harmonised area of collective agreement rules. The exemption of labour law from the EU services Directive means that no ‘place-of-work’ principle has been established for workers; the legal formulations chosen were vigorously contested and are not necessarily unequivocal. This will become clear only with the transposition into national law. Finally, assuming the internal market in services is successfully deepened, the increasing frequency, and presumably length, of posting will constitute a new phenomenon. |
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4.1

In virtually all cases, cross-border services involve employee mobility. Since there has so far been little harmonisation of conditions in this respect in the EU, differing social provisions can therefore be encountered in a given national labour market or a given enterprise. The EU posted workers Directive introduced a minimum number of fundamental conditions as regards equal treatment of posted workers and local workers. Furthermore, matters relating to labour law and social law were in principle excluded from the scope of the EU services Directive. This would not, however, mean that a growing cross-border market in services would not have an impact. Despite the posted workers Directive, there is still a non-harmonised area of collective agreement rules. The exemption of labour law from the EU services Directive means that no ‘place-of-work’ principle has been established for workers; the legal formulations chosen were vigorously contested and are not necessarily unequivocal. This will become clear only with the transposition into national law. Finally, assuming the internal market in services is successfully deepened, the increasing frequency, and presumably length, of posting will constitute a new phenomenon.

| 4.2 | This own-initiative opinion does not, however, provide the setting in which the debate on the implementation of the Directive on posted workers can and should be conducted. The key question to be answered is rather the following: what new problems will arise or how will existing problems be exacerbated as a result of the fact that, in future, in connection with the provision of services, employees from more than one Member State will more often — and perhaps for longer periods of time — be working at the same workplace whilst being subject to partially different conditions? This situation could, however, also be a source of opportunity, bearing in mind, for example, the prognosis set out in the Copenhagen Study with regard to increasing wages. The point here is definitely not to suggest that market participants and those bearing political responsibility are generally intent on social dumping, but to present a true picture of what is happening. |
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4.2

This own-initiative opinion does not, however, provide the setting in which the debate on the implementation of the Directive on posted workers can and should be conducted. The key question to be answered is rather the following: what new problems will arise or how will existing problems be exacerbated as a result of the fact that, in future, in connection with the provision of services, employees from more than one Member State will more often — and perhaps for longer periods of time — be working at the same workplace whilst being subject to partially different conditions? This situation could, however, also be a source of opportunity, bearing in mind, for example, the prognosis set out in the Copenhagen Study with regard to increasing wages. The point here is definitely not to suggest that market participants and those bearing political responsibility are generally intent on social dumping, but to present a true picture of what is happening.

| 4.3 | 82 % responded in the affirmative when asked if they expected an increase in cross-border services, and hence in the activity of posted workers in another country, to bring about a change in the national employment conditions in their own country. 20 % anticipated an improvement in employment conditions, compared with 17 %, who expected a deterioration. Only 7 % thought jobs would be more secure. 56 % expected an increase in flexible and short-term work. |
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4.3

82 % responded in the affirmative when asked if they expected an increase in cross-border services, and hence in the activity of posted workers in another country, to bring about a change in the national employment conditions in their own country. 20 % anticipated an improvement in employment conditions, compared with 17 %, who expected a deterioration. Only 7 % thought jobs would be more secure. 56 % expected an increase in flexible and short-term work.

| 4.4 | The question of flexibilisation came up again in answers to the open questions that followed. Many expected a drop in stable workforces in favour of part-time and contract work and an increase in pseudo self-employment. Expected benefits were also specified: language training, fresh perspectives and positive incentives to gain skills, as well as rising wages and more jobs. Even so, the fears predominated: there would be more competition, worse working conditions, and longer and more flexible working hours, while social strife and illegal practices would increase and wages would fall. The social welfare system would face new difficulties. Less mobile workers, especially women, would find it more difficult in future and families would suffer as a result of increasing mobility. On the question of how a future liberalisation of the internal market in services would impinge on wages, 50 % expected them to fall, 43 % to rise and 7 % envisaged no notable effect or said it would depend on the sector. |
| --- | --- |

4.4

The question of flexibilisation came up again in answers to the open questions that followed. Many expected a drop in stable workforces in favour of part-time and contract work and an increase in pseudo self-employment. Expected benefits were also specified: language training, fresh perspectives and positive incentives to gain skills, as well as rising wages and more jobs. Even so, the fears predominated: there would be more competition, worse working conditions, and longer and more flexible working hours, while social strife and illegal practices would increase and wages would fall. The social welfare system would face new difficulties. Less mobile workers, especially women, would find it more difficult in future and families would suffer as a result of increasing mobility. On the question of how a future liberalisation of the internal market in services would impinge on wages, 50 % expected them to fall, 43 % to rise and 7 % envisaged no notable effect or said it would depend on the sector.

| 4.5 | Responding to whether the posted workers Directive was sufficient to ensure social protection, 48 % replied ‘yes’ and 52 % ‘no’. If new measures were needed, most (65 %) would prefer an EU-wide approach, a third thought this would be better addressed at national level and 2 % thought both were needed. The following areas were mentioned in response to the open question of which problems particularly needed highlighting: the lack of harmonisation in the social sphere (including admission to vocations and trades) and the ensuing inequality of treatment was the most frequently mentioned. Some accordingly called for the posted workers Directive to be extended in terms of both sectors covered and substance. The inadequate application of posting rules, legal uncertainty and the growth in illegal practices, as well as shortcomings in monitoring and prosecution, also loomed large. Problems of safety and health protection in the workplace, the social security system and combating pseudo self-employment were also mentioned. Finally, there was criticism of undue red tape, remaining obstacles at national level and a tendency to national isolationism. Difficulties were also foreseen if not enough attention were paid to linguistic and cultural differences. |
| --- | --- |

4.5

Responding to whether the posted workers Directive was sufficient to ensure social protection, 48 % replied ‘yes’ and 52 % ‘no’. If new measures were needed, most (65 %) would prefer an EU-wide approach, a third thought this would be better addressed at national level and 2 % thought both were needed. The following areas were mentioned in response to the open question of which problems particularly needed highlighting: the lack of harmonisation in the social sphere (including admission to vocations and trades) and the ensuing inequality of treatment was the most frequently mentioned. Some accordingly called for the posted workers Directive to be extended in terms of both sectors covered and substance. The inadequate application of posting rules, legal uncertainty and the growth in illegal practices, as well as shortcomings in monitoring and prosecution, also loomed large. Problems of safety and health protection in the workplace, the social security system and combating pseudo self-employment were also mentioned. Finally, there was criticism of undue red tape, remaining obstacles at national level and a tendency to national isolationism. Difficulties were also foreseen if not enough attention were paid to linguistic and cultural differences.

| 4.6 | What would the effect of this be at company level, if workers from different countries were employed on service contracts, in some cases under differing national conditions? 6 % saw no particular impact and 23 % thought it was too early to tell. 24 % expected differences in working conditions within companies to increase, 34 % saw new difficulties in maintaining social and employment provisions and 13 % said national rights to participate in company decision-making did not fully cover posted workers. New aspects came to light in the space for comments on this question. New social and wage-related problems were appearing as a result of, for example, different remuneration for the same work or because voluntary company social benefits would be reduced. An expectation just as frequently voiced was that familiarity with best practice could be an opportunity to improve working conditions and boost the quality of work. On this front, greater intelligence was needed in the social dialogue at company level. Communications barriers could hamper the quality of work and team work and team solidarity could generally be eroded. In some circumstances, it could become more difficult for individual workers to find out and be aware of their rights. Excessive inequalities could also hamper business success (conflicts, red-tape, work quality) and respecting legal provisions could lead to excessive demands and more abuse. Finally, the liberalisation of services was also seen as an opportunity to free up bottlenecks in finding skilled staff. |
| --- | --- |

4.6

What would the effect of this be at company level, if workers from different countries were employed on service contracts, in some cases under differing national conditions? 6 % saw no particular impact and 23 % thought it was too early to tell. 24 % expected differences in working conditions within companies to increase, 34 % saw new difficulties in maintaining social and employment provisions and 13 % said national rights to participate in company decision-making did not fully cover posted workers. New aspects came to light in the space for comments on this question. New social and wage-related problems were appearing as a result of, for example, different remuneration for the same work or because voluntary company social benefits would be reduced. An expectation just as frequently voiced was that familiarity with best practice could be an opportunity to improve working conditions and boost the quality of work. On this front, greater intelligence was needed in the social dialogue at company level. Communications barriers could hamper the quality of work and team work and team solidarity could generally be eroded. In some circumstances, it could become more difficult for individual workers to find out and be aware of their rights. Excessive inequalities could also hamper business success (conflicts, red-tape, work quality) and respecting legal provisions could lead to excessive demands and more abuse. Finally, the liberalisation of services was also seen as an opportunity to free up bottlenecks in finding skilled staff.

| 4.7 | It is difficult to summarise the responses to the question on particular practical examples, since it was precisely in their detail that they sought to contribute to a better understanding. This being the case, only a few such examples should be mentioned here which cast light on hitherto unmentioned problem areas. There are, for example, references to unclear regulations and procedures in the case of an industrial accident, particular problems regarding posting within a company, the changing of employment contracts, the application of collective agreements from other countries and the treatment of migrant workers. |
| --- | --- |

4.7

It is difficult to summarise the responses to the question on particular practical examples, since it was precisely in their detail that they sought to contribute to a better understanding. This being the case, only a few such examples should be mentioned here which cast light on hitherto unmentioned problem areas. There are, for example, references to unclear regulations and procedures in the case of an industrial accident, particular problems regarding posting within a company, the changing of employment contracts, the application of collective agreements from other countries and the treatment of migrant workers.

5.   The interests of consumers in the internal market in services

| 5.1 | The internal market in services is also designed to benefit consumers. These benefits relate to availability (price, access, supply), quality, transparency (information and confidence) and legal guarantees (liability and consumer protection). Are these aspects adequately reflected in current practice? Will they be promoted by the proposals for implementing the internal market in services or are there problematic developments, judging from the standpoint of the consumer? The third focus should be to highlight practical experiences with cross-border services, from the standpoint of the consumer. |
| --- | --- |

5.1

The internal market in services is also designed to benefit consumers. These benefits relate to availability (price, access, supply), quality, transparency (information and confidence) and legal guarantees (liability and consumer protection). Are these aspects adequately reflected in current practice? Will they be promoted by the proposals for implementing the internal market in services or are there problematic developments, judging from the standpoint of the consumer? The third focus should be to highlight practical experiences with cross-border services, from the standpoint of the consumer.

| 5.2 | The EU posted workers Directive prompts a mixed appraisal when judged from the standpoint of promoting consumer protection. The EESC hearing in April 2006 heard critical views to the effect that consumer protection had been criminally short changed. There were also favourable opinions, mostly concerning supply-side improvements. Overall, consumer protection questions are not given adequate prominence and will, in all probability, only become apparent when the impact of the Directive at national level in the various Member States is considered. Consumer confidence is, however, an element which is of major importance to the success of the EU's internal market in services. |
| --- | --- |

5.2

The EU posted workers Directive prompts a mixed appraisal when judged from the standpoint of promoting consumer protection. The EESC hearing in April 2006 heard critical views to the effect that consumer protection had been criminally short changed. There were also favourable opinions, mostly concerning supply-side improvements. Overall, consumer protection questions are not given adequate prominence and will, in all probability, only become apparent when the impact of the Directive at national level in the various Member States is considered. Consumer confidence is, however, an element which is of major importance to the success of the EU's internal market in services.

| 5.3 | The questionnaire called on respondents to prioritise the criteria for a consumer-friendly internal market in services set out in point 5.1 (availability, quality, transparency and legal certainty): firstly from their own perspective and secondly on the basis of how far these aspects were promoted by the EU services Directive. While quality and legal certainty ranked highly from the personal perspective (1st and 2nd position), when it came to the EU services Directive, it was clear that availability was sought above all and legal certainty came last. Only 23 % were satisfied with the current implementation of this dimension and 77 % saw a need for improvement. |
| --- | --- |

5.3

The questionnaire called on respondents to prioritise the criteria for a consumer-friendly internal market in services set out in point 5.1 (availability, quality, transparency and legal certainty): firstly from their own perspective and secondly on the basis of how far these aspects were promoted by the EU services Directive. While quality and legal certainty ranked highly from the personal perspective (1st and 2nd position), when it came to the EU services Directive, it was clear that availability was sought above all and legal certainty came last. Only 23 % were satisfied with the current implementation of this dimension and 77 % saw a need for improvement.

| 5.4 | Although the EU services Directive leaves the validity of consumer protection measures in the country where the service is provided essentially intact, fears were repeatedly voiced in the discussion that these had shortcomings. Asked whether they saw national consumer protection legislation coming under threat in future, 52 % said they did. Deteriorations in the enforcement of rights were most often mentioned, especially regarding complaints and compensation claims. This also tallied with answers to another question, where 76 % of respondents saw problems in relation to administrative implementation and liability. 51 % feared a general decline in the level of consumer protection. Particularly at risk were all those national standards that were above the EU minimum. This danger also applied to administrative rules regarding the exercise of trades — such as protection from unfair advantage and the grounds for compensation claims — which were directly relevant to consumers because they would in future be governed by the country-of-origin principle. There were concerns about the warranty terms and felt that the quality of services would be cut back. Finally, many feared the loss of the right to information, such as product information (environmental damage, liability, general transparency), price labelling, provider (integrity of the provider, skill level, the required guarantees and safeguards), warranty terms, liability, and so on. |
| --- | --- |

5.4

Although the EU services Directive leaves the validity of consumer protection measures in the country where the service is provided essentially intact, fears were repeatedly voiced in the discussion that these had shortcomings. Asked whether they saw national consumer protection legislation coming under threat in future, 52 % said they did. Deteriorations in the enforcement of rights were most often mentioned, especially regarding complaints and compensation claims. This also tallied with answers to another question, where 76 % of respondents saw problems in relation to administrative implementation and liability. 51 % feared a general decline in the level of consumer protection. Particularly at risk were all those national standards that were above the EU minimum. This danger also applied to administrative rules regarding the exercise of trades — such as protection from unfair advantage and the grounds for compensation claims — which were directly relevant to consumers because they would in future be governed by the country-of-origin principle. There were concerns about the warranty terms and felt that the quality of services would be cut back. Finally, many feared the loss of the right to information, such as product information (environmental damage, liability, general transparency), price labelling, provider (integrity of the provider, skill level, the required guarantees and safeguards), warranty terms, liability, and so on.

| 5.5 | Another question was about desirable and essential consumer information in cross-border services. Top of the list here were information about legal guarantees, compensation and rights of complaint. Then came the identity of the provider/origin, price transparency and precise information on the quality of the service and the safety of the product/guarantee. Clearly confused by the debate on the country-of-origin principle, many called for information as to which law applies and which supervisory authority or complaints body has jurisdiction. |
| --- | --- |

5.5

Another question was about desirable and essential consumer information in cross-border services. Top of the list here were information about legal guarantees, compensation and rights of complaint. Then came the identity of the provider/origin, price transparency and precise information on the quality of the service and the safety of the product/guarantee. Clearly confused by the debate on the country-of-origin principle, many called for information as to which law applies and which supervisory authority or complaints body has jurisdiction.

| 5.6 | Only 25 % of those questioned had any experience with European consumer advisory bodies or EU-wide cooperation on consumer protection. Their views were in the main favourable, though shortcomings were also raised, such as cross-border help in enforcing rights or finding the right partners at national level. Critical voices were also heard condemning procedures as overly bureaucratic and expensive and generally considering cooperation on consumer protection as too weak and not very effective, especially in complex cases. The impression generally was that information on European consumer advisory bodies or the opportunities for cooperation was not was not very well disseminated. |
| --- | --- |

5.6

Only 25 % of those questioned had any experience with European consumer advisory bodies or EU-wide cooperation on consumer protection. Their views were in the main favourable, though shortcomings were also raised, such as cross-border help in enforcing rights or finding the right partners at national level. Critical voices were also heard condemning procedures as overly bureaucratic and expensive and generally considering cooperation on consumer protection as too weak and not very effective, especially in complex cases. The impression generally was that information on European consumer advisory bodies or the opportunities for cooperation was not was not very well disseminated.

| 5.7 | The EU services Directive recommends introducing voluntary standards and certification to improve quality in services. 54 % of respondents thought this was a very good idea, 46 % found it questionable. Those in favour of voluntary quality standards thought it an efficient means that would have to prove itself in the market and to customers. Critics were unanimous in thinking that there was no guarantee these standards could be maintained without state supervision. Some consequently preferred clear legal rules. While voluntary standards were respected by reputable businesses, they were of no use against the ‘black sheep’. Yet this was precisely what mattered so much in cross-border service traffic. |
| --- | --- |

5.7

The EU services Directive recommends introducing voluntary standards and certification to improve quality in services. 54 % of respondents thought this was a very good idea, 46 % found it questionable. Those in favour of voluntary quality standards thought it an efficient means that would have to prove itself in the market and to customers. Critics were unanimous in thinking that there was no guarantee these standards could be maintained without state supervision. Some consequently preferred clear legal rules. While voluntary standards were respected by reputable businesses, they were of no use against the ‘black sheep’. Yet this was precisely what mattered so much in cross-border service traffic.

| 5.8 | The EU services Directive also introduces a system of joint supervision by authorities in the country of origin and the country of destination. We wanted to know whether this inspired greater consumer confidence. 82 % answered in the affirmative, while 18 % were less convinced. Evidently, there were serious reservations about this how would actually be implemented in practice. |
| --- | --- |

5.8

The EU services Directive also introduces a system of joint supervision by authorities in the country of origin and the country of destination. We wanted to know whether this inspired greater consumer confidence. 82 % answered in the affirmative, while 18 % were less convinced. Evidently, there were serious reservations about this how would actually be implemented in practice.

| 5.9 | Finally, there was another opportunity to address unresolved questions about consumer protection in the future internal market for services. Once again, the lack of legal clarity and security came up as a key concern regarding warranties, liability (for example, in the event of insolvency), claims against warranty (inadequate harmonisation, burden of proof issues) and the enforcement of compensation claims (too slow, procedure too complex, desire for greater harmonisation). In second place came the guarantee of sufficient information on the service and the provider. The lack of common quality standards and the ability to compare skills and qualifications were also seen as a shortcoming. Consumer protection measures were often incorrectly implemented or were lacking in certain spheres (such as private pensions and healthcare services). Social questions also played a role (erosion of the minimum-wage, ‘black economy’ work, migration), as did the fear of losing environmental and safety standards. A minimum level needed to be set for generally available public services which guaranteed social involvement. Other fears included distortion of competition for local providers (e.g., different social costs) and problems arising from currency differences. |
| --- | --- |

5.9

Finally, there was another opportunity to address unresolved questions about consumer protection in the future internal market for services. Once again, the lack of legal clarity and security came up as a key concern regarding warranties, liability (for example, in the event of insolvency), claims against warranty (inadequate harmonisation, burden of proof issues) and the enforcement of compensation claims (too slow, procedure too complex, desire for greater harmonisation). In second place came the guarantee of sufficient information on the service and the provider. The lack of common quality standards and the ability to compare skills and qualifications were also seen as a shortcoming. Consumer protection measures were often incorrectly implemented or were lacking in certain spheres (such as private pensions and healthcare services). Social questions also played a role (erosion of the minimum-wage, ‘black economy’ work, migration), as did the fear of losing environmental and safety standards. A minimum level needed to be set for generally available public services which guaranteed social involvement. Other fears included distortion of competition for local providers (e.g., different social costs) and problems arising from currency differences.

6.   Most important findings

| 6.1 | The responses to the questionnaire show there is considerable interest in tackling the new challenges for labour markets, employment and consumer protection in the internal market in services. Many potential problems were pointed out, but so, too, were future opportunities. In general, both merit more attention and should inform the implementation of the EU services Directive that is now in the offing. |
| --- | --- |

6.1

The responses to the questionnaire show there is considerable interest in tackling the new challenges for labour markets, employment and consumer protection in the internal market in services. Many potential problems were pointed out, but so, too, were future opportunities. In general, both merit more attention and should inform the implementation of the EU services Directive that is now in the offing.

| 6.2 | One outstanding problem is the statistical break-down of the EU services economy in cross-border traffic. An accurate picture is essential for determining the employment dynamic that may emerge. The EESC therefore reiterates its call for a one-off grass-roots survey, which is the only way of solving the problem. |
| --- | --- |

6.2

One outstanding problem is the statistical break-down of the EU services economy in cross-border traffic. An accurate picture is essential for determining the employment dynamic that may emerge. The EESC therefore reiterates its call for a one-off grass-roots survey, which is the only way of solving the problem.

| 6.3 | Information on the possible impact on employment of the new internal market strategy is inadequate, according to 90 % of respondents. 60 % expected a beneficial effect on employment, while 44 % foresaw job losses. Above all, people expected job relocations. It would be helpful to have a sector-specific and differentiated approach for future monitoring of the internal market in services by the SMO, focusing on areas such as industry-related services, education, selected liberalised public services, personalised services and crafts. The pointers to those who will gain the most are significant here. It would be useful to examine closely the question of skilled vs. unskilled work and the opportunities for skilled workers with the flexibility to relocate vs. workers with less mobility. The former is expected to be an issue both between Member States and within individual sectors. The latter is a particular challenge for labour markets and social security systems. |
| --- | --- |

6.3

Information on the possible impact on employment of the new internal market strategy is inadequate, according to 90 % of respondents. 60 % expected a beneficial effect on employment, while 44 % foresaw job losses. Above all, people expected job relocations. It would be helpful to have a sector-specific and differentiated approach for future monitoring of the internal market in services by the SMO, focusing on areas such as industry-related services, education, selected liberalised public services, personalised services and crafts. The pointers to those who will gain the most are significant here. It would be useful to examine closely the question of skilled vs. unskilled work and the opportunities for skilled workers with the flexibility to relocate vs. workers with less mobility. The former is expected to be an issue both between Member States and within individual sectors. The latter is a particular challenge for labour markets and social security systems.

| 6.4 | A bright future was overwhelmingly predicted for SMEs and job trends, with the EU services Directive having little influence on this, however. However, new challenges were expected and these would need to be met with better quality and skilling of workers and with innovativeness. Some believe that framework conditions should be further harmonised to counteract the new pressure of competition. It was feared that local and cultural specialities could lose out in future if big providers cornered the markets. |
| --- | --- |

6.4

A bright future was overwhelmingly predicted for SMEs and job trends, with the EU services Directive having little influence on this, however. However, new challenges were expected and these would need to be met with better quality and skilling of workers and with innovativeness. Some believe that framework conditions should be further harmonised to counteract the new pressure of competition. It was feared that local and cultural specialities could lose out in future if big providers cornered the markets.

| 6.5 | A majority (82 %) expected the future deepening of the internal market in services to result in changes in national work and employment conditions. This was not because of ignorance of the EU services Directive, but in view of the lack of harmonisation and new market influences. A majority anticipated an increase in short-term and flexible modes of working. Expected benefits included improved employment opportunities, language training and training generally. |
| --- | --- |

6.5

A majority (82 %) expected the future deepening of the internal market in services to result in changes in national work and employment conditions. This was not because of ignorance of the EU services Directive, but in view of the lack of harmonisation and new market influences. A majority anticipated an increase in short-term and flexible modes of working. Expected benefits included improved employment opportunities, language training and training generally.

| 6.6 | The current provisions on posting play an important role in this context. Inadequate implementation of the rules was often presented as a problem. However, half of those surveyed thought the present regulations were insufficient to ensure social protection in the light of the new challenges. Close examination at company level makes this clear. The greater the non-harmonised sphere, the greater the scope for unequal treatment for the same work. In part, this was also seen as an opportunity, if contact with ‘better practices’ acted as an incentive to better working conditions in the country of origin. Generally speaking, unequal working conditions or legal provisions in a company or workplace also constituted a challenge for businesses. This is not the place to discuss the posted workers Directive. What matters here is to note that inequality and hence conflict will increase. This is a task for EU and national legislators, especially in the context of the forthcoming implementation of the EU services Directive, as well as being a challenge for social dialogue in the EU. |
| --- | --- |

6.6

The current provisions on posting play an important role in this context. Inadequate implementation of the rules was often presented as a problem. However, half of those surveyed thought the present regulations were insufficient to ensure social protection in the light of the new challenges. Close examination at company level makes this clear. The greater the non-harmonised sphere, the greater the scope for unequal treatment for the same work. In part, this was also seen as an opportunity, if contact with ‘better practices’ acted as an incentive to better working conditions in the country of origin. Generally speaking, unequal working conditions or legal provisions in a company or workplace also constituted a challenge for businesses. This is not the place to discuss the posted workers Directive. What matters here is to note that inequality and hence conflict will increase. This is a task for EU and national legislators, especially in the context of the forthcoming implementation of the EU services Directive, as well as being a challenge for social dialogue in the EU.

| 6.7 | The increased worker mobility involved in providing cross-border services and the increasing difficulty of knowing one's rights will create more demand for consultation services. These services must be provided throughout the EU. The work done by the Euro Info Centres and the creation of a database of employees' questions, in which the EESC is taking a keen interest, would be an important source of information. |
| --- | --- |

6.7

The increased worker mobility involved in providing cross-border services and the increasing difficulty of knowing one's rights will create more demand for consultation services. These services must be provided throughout the EU. The work done by the Euro Info Centres and the creation of a database of employees' questions, in which the EESC is taking a keen interest, would be an important source of information.

| 6.8 | Consumers' views of the EU services directive are mixed. Some opinions are positive, some negative. The results of the questionnaire show that quality and legal certainty are rated highly but are not, according to the respondents, sufficiently promoted in the EU services Directive. Only 23 % were satisfied with the present state of consumer protection. |
| --- | --- |

6.8

Consumers' views of the EU services directive are mixed. Some opinions are positive, some negative. The results of the questionnaire show that quality and legal certainty are rated highly but are not, according to the respondents, sufficiently promoted in the EU services Directive. Only 23 % were satisfied with the present state of consumer protection.

| 6.9 | Concerns about legal certainty and enforcement of rights were central. Although the EU services Directive leaves national consumer protection essentially intact, 52 % felt that national regulations would be at risk in future. People wanted clear rules on the honouring of guarantees and on liability and the rapid settlement of compensation claims. Here, the current rules appeared inadequate, or else the future state of competition was considered likely to threaten high national standards. The availability of sufficient information on the service and the provider was seen as no less important. Another perceived shortcoming lay in the lack of common quality standards (views on voluntary certification were mixed) and the comparability of skills and qualifications. Consumer protection measures were often incorrectly applied or were lacking in some areas (such as private pensions and healthcare services). |
| --- | --- |

6.9

Concerns about legal certainty and enforcement of rights were central. Although the EU services Directive leaves national consumer protection essentially intact, 52 % felt that national regulations would be at risk in future. People wanted clear rules on the honouring of guarantees and on liability and the rapid settlement of compensation claims. Here, the current rules appeared inadequate, or else the future state of competition was considered likely to threaten high national standards. The availability of sufficient information on the service and the provider was seen as no less important. Another perceived shortcoming lay in the lack of common quality standards (views on voluntary certification were mixed) and the comparability of skills and qualifications. Consumer protection measures were often incorrectly applied or were lacking in some areas (such as private pensions and healthcare services).

| 6.10 | Few respondents had experience of the European consumer advisory bodies or cross-border cooperation. There was approval in the main for current approaches, but these were not enough. They were too weak and were of little use in the enforcement of rights or in difficult cases. |
| --- | --- |

6.10

Few respondents had experience of the European consumer advisory bodies or cross-border cooperation. There was approval in the main for current approaches, but these were not enough. They were too weak and were of little use in the enforcement of rights or in difficult cases.

| 6.11 | Consumer protection aspirations in the internal services market must play a greater role. The palpable uncertainty regarding the legal situation in cross-border services must be countered with an information strategy at national and EU level. The desire for accurate information on the service and the provider must not be underestimated. That must also be taken into account in the implementation of the EU services Directive. |
| --- | --- |

6.11

Consumer protection aspirations in the internal services market must play a greater role. The palpable uncertainty regarding the legal situation in cross-border services must be countered with an information strategy at national and EU level. The desire for accurate information on the service and the provider must not be underestimated. That must also be taken into account in the implementation of the EU services Directive.

| 6.12 | The EESC's Single Market Observatory will work closely with the Section for Employment, Social Affairs and Citizenship in continuing to look at the effect of the internal market in services on the growth in trade in services between Member States, employment and consumer protection. The findings of the present opinion suggest that it would make sense to take a closer look at individual sectors and, in the process, to make use of the main findings from the questionnaire. |
| --- | --- |

6.12

The EESC's Single Market Observatory will work closely with the Section for Employment, Social Affairs and Citizenship in continuing to look at the effect of the internal market in services on the growth in trade in services between Member States, employment and consumer protection. The findings of the present opinion suggest that it would make sense to take a closer look at individual sectors and, in the process, to make use of the main findings from the questionnaire.

Brussels, 30 May 2007.

The president

of the European Economic and Social Committee

Dimitris DIMITRIADIES

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(1)  Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market.

1

(2)  CESE 137/2005, OJ C 221 of 8.9.2005.

2

(3)  See CESE 137/2005, point 3.2 — OJ C 221 of 8.9.2005.

3

(4)  The EESC held a hearing on the broad internal market strategy on 19 September 2001. A hearing held on 24 May 2004 as part of the process of drawing up the opinion on the EU services Directive addressed six key questions, including professional liability, the ‘one-stop shop’ and statistical methods.

4

(5)  Under Article 50 EC, a service is any independent economic activity performed in return for remuneration.

5

(6)  This report is expected to be submitted during the Portuguese presidency.

6

(7)  Internal Market Advisory Committee.

7

(8)  Source for these figures and the figures set out in points 3.5 and 3.6 below: European Commission 2004 and 2005.

8

(9)  The Free Movement of Services within the EU, Kox et Al., CPB Report No 69, October 2004.

9

(10)  Economic Assessment of the Barriers to the Internal Market for Services, Copenhagen Economics, January 2005.

10

(11)  See, for example, the study entitled ‘Deepening the Lisbon Agenda: Studies on Productivity, Services and Technologies’, Vienna 2006, a study which was commissioned by the Austrian Ministry of Economic Affairs and Labour.

11

(12)  Criticisms have been expressed by reliable sources which regard even this projection as unrealistic.

12

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