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"
Date: 2001-06-13
Institutions: European Committee of the Regions
Subjects: economic development, provision of services, services contract, single market

14.12.2001

EN

Official Journal of the European Communities

C 357/65

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

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

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

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.

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.

Need for an internal market strategy for services

(1) OJ C 22, 24.1.2001, p. 10.
(2) OJ C 253, 12.9.2001, p. 20.

5.
The Committee agrees that a comprehensive internal
market services strategy needs to be defined. The quality and

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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 (1)
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 achieve-
ments of the internal market in a changing world. These
objectives have been reflected in the internal market services
strategy.

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.

The Committee realises that

6.
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 differ-
ences (2) and thus dividing Europe into regions that provide
services and regions that consume them.

8.
In the future, infrastructures — especially in telecom-
munications — 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.

The Committee would point to the need to reduce
9.
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.

The

information society and,

its
10.
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

in particular,

(1) Communication from the Commission to the European Parlia-
ment and the Council — The strategy for Europe’s internal
market, COM(1999) 624 final.

(2) Commission’s second report on economic and social cohesion.

The Committee is aware of the difficulties that con-
11.
sumers 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.

The lack of graduates in Europe is causing the develop-
12.
ment 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.

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The need to remove barriers

16.
An integrated internal market is one in which services
can be provided irrespective of national borders. The Com-
mittee therefore agrees with the Communication that adminis-
trative 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.

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.

The Committee considers that the introduction of the
18.
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.

Concluding recommendations

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.

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

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.

the importance of

The Committee points out

the
21.
‘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.

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 oppor-
tunity that will help them compete and cooperate with large
companies, and enter new market segments. The costs of

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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 devel-
opment and efficiency of major transport, energy and telecom-
munications networks. It would argue that the interconnectiv-
ity and interoperability of these networks must be ensured, so
that they can contribute to balanced, fair regional develop-
ment.

The Committee believes the integration of the internal
31.
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 competi-
tive.

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
for the
Improving the competitiveness of European
environment.

indications, and respect

Brussels, 13 June 2001.

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 reduc-
ing 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 (1).

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.

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

The President

of the Committee of the Regions

Jos CHABERT