Opinion of the Committee of the Regions on the "Communication from the Commission to the Council and the European Parliament - An Internal Market Strategy for Services"

(2001/C 357/17)

THE COMMITTEE OF THE REGIONS,

having regard to the Communication from the Commission to the Council and the European Parliament - An Internal Market Strategy for Services (COM(2000) 888 final);

having regard to the decision of the Commission of 13 February 2001, under the first paragraph of Article 265 of the Treaty establishing the European Community, to consult it on this matter;

having regard to the decision of its Bureau on 13 June 2000 to instruct Commission 6 (Employment, Economic Policy, Single Market, Industry and SMEs) to draw up an opinion on the subject;

having regard to the Conclusions of the Lisbon European Council;

having regard to the Conclusions of the Stockholm European Council;

having regard to the Communication from the Commission to the European Parliament and the Council - The strategy for Europe's Internal Market (COM(1999) 624 final);

having regard to its Opinion on Challenges for enterprise policy in the knowledge-driven economy (COM(2000) 256 final) CdR 185/2000 fin(1);

having regard to its Opinion on Innovation in a knowledge-driven economy (COM(2000) 567 final) CdR 468/2000 fin(2);

having regard to the draft opinion (CdR 134/2001 rev.) adopted by Commission 6 on 7 May 2001 (rapporteur: Mr Sanz Alonso (E-PPE), President of the Government of the Autonomous Community of La Rioja),

at its 39th plenary session of 13 and 14 June 2001 (meeting of 13 June) adopted the following opinion unanimously.

Introduction and recommendations

General aspects of internal market services

1. The Committee welcomes this opportunity to comment on this Communication, which will provide the overall framework for developing services in the European internal market.

2. The Committee welcomes the fact that the Conclusions of the Stockholm Summit take note of and welcome the proposals made by the Commission in its Communication on an internal market strategy for services.

3. The Committee believes that the internal market makes a crucial contribution to achieving the objectives of sustainable and sustained growth, more and better jobs, and greater social cohesion.

4. The information society has introduced a new dimension to the services sector. The Committee believes it is vital that appropriate measures are taken to advance the process of adapting service companies, especially SMEs, to the changes brought about by new technologies in the way in which services are offered and delivered.

Need for an internal market strategy for services

5. The Committee agrees that a comprehensive internal market services strategy needs to be defined. The quality and competitiveness of its service industries must be enhanced since changes made to improve the sector will contribute towards the expansion of the European economy. In 1999(3) the Commission presented a strategy for Europe's internal market which identified the following four strategic objectives: to improve the quality of life of citizens, to enhance the efficiency of Community product and capital markets, to improve the business environment and to exploit the achievements of the internal market in a changing world. These objectives have been reflected in the internal market services strategy.

6. The Committee realises that the new economy has changed the concept of borders in economic transactions; this situation favours the creation of the internal market as it is just as easy for consumers to access services offered by local, regional or national companies as it is for them to access services offered by companies in towns or regions in another State.

7. However, the Committee wishes to point out that the information society must be a factor for integration and regional cohesion rather than for increasing regional differences(4) and thus dividing Europe into regions that provide services and regions that consume them.

8. In the future, infrastructures - especially in telecommunications - will play an important role in service provision. As a consequence, and in accordance with the regulations laid down in the Structural Funds and Cohesion Fund package, the Committee endorses the need to set up and develop a telecommunications infrastructure that enables all European regions and municipalities to provide electronic services and to improve the physical infrastructure necessary for providing non-electronic services.

9. The Committee would point to the need to reduce telecommunications costs and welcomes the liberalisation of the sector, which in recent years has led to cheaper and more wide-ranging services. It does, however, recall the need to respect the universal service and specific services to disabled and underprivileged groups.

10. The information society and, in particular, its implementation in the services sector has not only helped speed up the development of Europe's internal market but has also consolidated the emerging global market in which it is difficult for regional SMEs to operate in equal conditions. The Committee believes that local and regional authorities must therefore be able to encourage the setting-up and development of local and regional companies that are familiar with the needs and preferences of their local and regional customers and can therefore provide competitive services. Regional SMEs must operate on the European internal market in a way which optimises their use of information and communication technologies and, in particular, must exploit the tools and infrastructures offered to them by the information society in order to operate on an equal footing with their counterparts from outside Europe.

11. The Committee is aware of the difficulties that consumers and some companies have in accessing electronic services and therefore calls for companies and consumers to be offered the appropriate training to help them access this new generation of services.

12. The lack of graduates in Europe is causing the development of electronic services and the rate of job creation to stagnate simultaneously. Training, in particular ongoing training, must be one of the priorities for regions and municipalities if they are to include regional companies, in particular SMEs, in electronic service provision.

13. The Committee realises that multilingual electronic services need to be encouraged if European consumers are to be able to access these new services. This is one of the advantages of local and regional companies that are closest to the consumer.

14. The Committee would argue that the specific cultures of European regions and municipalities must be respected. Integrating cultural factors into electronic service provision increases the possibilities for trade, which in turn helps to promote tourism and related services and to spread local and regional arts and crafts.

15. The Committee believes that reference needs to be made to EU enlargement. In the future, new States will join the single market; they therefore need to be integrated prior to enlargement and also given the necessary information and training so that once they have joined the EU, they can be part of the internal market. This will help reduce as far as possible the transitional periods relating to the freedom to provide services laid down in the Accession Treaties.

The need to remove barriers

16. An integrated internal market is one in which services can be provided irrespective of national borders. The Committee therefore agrees with the Communication that administrative barriers must be overcome and legislative conditions harmonised, so that they do not prevent a company providing services in a Member State other than the one in which it is located, or make it less attractive to do so. This must be a comprehensive strategy that encompasses all services in line with other Community policies, without overlooking the specific nature of each sector.

17. The Committee supports the idea of setting up an effective system for settling claims and disputes that safeguards the economic rights of consumers in an integrated market and boosts their confidence in electronic service provision. This system is particularly important for cross-border transactions.

18. The Committee considers that the introduction of the single currency will have a positive impact on the integration of the internal market and will help break down many existing barriers to trade in intra-Community services.

19. The Committee believes services must be provided with due respect for environmental criteria. The Member States, regions, municipalities and institutions must always comply with the principles of subsidiarity and proportionality in the environmental sphere.

Implementing the strategy

20. The Committee agrees with the strategy but considers the proposed timetable to be very ambitious. Although the Commission will have to keep to the deadlines, the Committee considers it essential for the Commission to hear and take on board the views of all the players concerned - i.e. Member States, regions and local bodies on the one hand, and companies and consumers on the other.

21. The Committee points out the importance of the "analysis of the persistent barriers to free movement of services and their spill-over effects across economic sectors". This document, which the Commission will present in early 2002, will provide the basis for measures to remove barriers. The analysis carried out by the Commission must therefore be as accurate and all-embracing as possible.

22. The Committee supports the Commission's initiative to draw on the experience of consumers, and companies who supply or use services, through public consultation.

23. The Communication's proposed actions do not include implementing these measures in the applicant countries; it will therefore be necessary to work in collaboration with them. A good way of raising awareness of the internal market strategy for services is administrative twinning with towns and regions in the applicant states.

24. The Committee endorses the Commission's proposed policy to remove barriers through mutual recognition, the direct application of Treaty principles where infringement cases are not already underway, the use of non-legislative procedures and a horizontal harmonisation instrument. The aim of the policy is to make it easier to remove barriers to the freedom to provide services by using non-regulated procedures whenever possible.

Concluding recommendations

25. The Committee considers compliance with geographical and regional cohesion to be the main priority when creating an integrated market for services. The single market must be completed through a joint effort involving all European regions and towns and must not create exclusions due to differing degrees of regional economic development.

26. Secondly, the Committee believes that the creation of the internal market for services must in no way reduce the citizen to the role of mere consumer. The information society, when used to help create the internal services market, must not be a new factor of social exclusion; it must be seen as a means of facilitating and improving the quality of life of European citizens, and not as an end exclusively in the interests of service suppliers.

27. The Committee believes that for the internal market to run smoothly it is vital that progress is made in removing barriers to the free movement of services. The services sector currently represents approximately two thirds of existing jobs in Europe.

28. New technologies have a key role to play in achieving an integrated internal market. The Committee believes that helping SMEs adapt to new technologies is a unique opportunity that will help them compete and cooperate with large companies, and enter new market segments. The costs of establishment and maintaining infrastructures and operations in different Member States will also fall considerably. These costs are governed by (separate) legislation in each of these Member States and can currently be borne by large companies but not SMEs: this has until now made it easier for the former to access different markets.

29. However, the fact that the information society makes it easier to create an internal market in the services sector may encourage companies in this sector to relocate to regions and municipalities that have greater economic and tax facilities. The Committee of the Regions therefore believes special attention must be paid to the implementation of European tax legislation, the aid that more developed regions may give to these companies, and the impact of such aid.

30. The Committee believes it essential to boost the development and efficiency of major transport, energy and telecommunications networks. It would argue that the interconnectivity and interoperability of these networks must be ensured, so that they can contribute to balanced, fair regional development.

31. The Committee believes the integration of the internal services market must be sustainable, matching the capabilities of employees, companies and markets on the basis of quality, eco-efficiency, and what is reasonable, workable and competitive.

32. The Committee considers that the competitiveness of European companies must be based on service provision quality indicators. European services are known for their high added value and are characterised by quality indicators such as organic production, the cultural dimension, designations of origin and geographical indications, and respect for the environment. Improving the competitiveness of European companies vis-à-vis non-European companies must not be at the expense of the quality of European services.

33. The Committee urges companies to ensure that reducing the price of services in order to improve competitiveness does not result in lower labour costs. Fair pay and social contributions are two characteristics of the European social model. Respect for labour rights and the social dialogue sets the European model apart(5).

34. The Committee points out that innovation must be brought to bear on the creation or provision of new services by European companies.

35. The Committee will pay special attention to consumer protection policy. Service provision within the internal market must respect the health of consumers. However, the consumer health protection criteria drawn up by each Member State must not create additional barriers to the creation of the internal market.

36. The Committee believes regions must be involved in the consultation phase in order to identify barriers in the internal market for services, as their direct knowledge of and relationship with local and regional companies means they are able to provide the Commission with extremely useful information.

37. The Committee believes that the Commission must ensure that the Member States, towns and regions properly implement the rules governing the freedom of movement of services in the internal market, including those that relate to the environment, health and consumers. Above all, the Commission must continue to be vigilant in removing existing barriers.

Brussels, 13 June 2001.

The President

of the Committee of the Regions

Jos Chabert

(1) OJ C 22, 24.1.2001, p. 10.

(2) OJ C 253, 12.9.2001, p. 20.

(3) Communication from the Commission to the European Parliament and the Council - The strategy for Europe's internal market, COM(1999) 624 final.

(4) Commission's second report on economic and social cohesion.

(5) Eurostat report (March 2001): "Analysis of labour costs in industry and the service sector in Europe, the United States and Japan".