Opinion of the Economic and Social Committee on the "Communication from the Commission to the Council and the European Parliament — An Internal Market Strategy for Services"
Date: 2001-11-28
Institutions: European Economic and Social Committee
Subjects: provision of services, services contract, single market

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such a multiannual plan of action as soon as possible, in
concert with the European Parliament, the Economic and
Social Committee and the organisations that are truly represen-
tative of craft
firms and small enterprises. The effective
implementation of the plan and the success of European policy
for small enterprises can only really be guaranteed by a
genuine, direct dialogue, by strengthening cooperation with
the intermediary organisations representing the craft sector
and small enterprises and with the social partners, who enjoy
the advantage of links with all levels and very long experience,
and by the direct involvement of these parties in the entire
decision-making and operational process.

5.5.
The Committee asks the Council to adopt, at one of its
forthcoming meetings, a decision on the implementation of
the Charter by means of this multiannual plan of action that
embraces all the initiatives of relevance to small enterprises
and the measures proposed in the present opinion and at the
same time to establish budgets for the programmes concerned.
To this end,
the European
the Committee suggests that
Parliament and the Council approve the proposal for a special
budget formulated last year in connection with the discussion
of the Multiannual Programme for Enterprise and Entrepre-
neurship. These funds would be used to support the innovative
measures in the Charter that are not covered by other
programmes.

Brussels, 28 November 2001.

The President

of the Economic and Social Committee

Göke FRERICHS

Opinion of the Economic and Social Committee on the ‘Communication from the Commission
to the Council and the European Parliament — An Internal Market Strategy for Services’

(2002/C 48/05)

On 28 February 2001 the Economic and Social Committee decided, under Rule 23(2) of its Rules of
Procedure, to draw up an opinion on the above-mentioned communication.

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 21 November 2001. The rapporteur was
Mr Vever.

At its 386th plenary session (meeting of 28 November 2001) the Economic and Social Committee
adopted the following opinion by 106 votes in favour, with one abstention.

1. Summary of the Committee’s comments

The Committee is pleased that the Commission, in its
1.2.
communication of December 2000, stressed the urgent need
to relaunch the internal market in services by deciding to
intensify work on current questions, update analysis of barriers
and introduce an overall, innovatory approach in 2002.

1.1.
The Committee is concerned about the continuing
delays in completing the internal market, at a time when
activities in these fields have taken on a dominant role in
economic development and employment in Europe. In the
current environment, characterised by the pressure of glo-
balisation, the resumption of the WTO negotiations, the arrival
of the information society, the transition to the euro, the
commitments on competitiveness undertaken in Lisbon and
the preparations for enlargement, these delays should be
remedied immediately.

1.3.
The Committee is aware of the complexity of the task
of completing the single market in services in the face of
differences which are deeply rooted in the laws and cultures of
the Member States. However, the survey and hearing which it

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organised show that nearly all socio-occupational
interest
groups, while acknowledging this complexity, feel that the
European aspects are not currently dealt with in an optimal
way.

horizontal legal instrument, and trusts that this instrument
will be politically effective, legally binding, comprehensive in
its approach, focused on essential needs, likely to activate and
coordinate other, complementary, instruments, and flexible in
its implementation.

Thus the Committee notes that socio-occupational
1.4.
operators in the field have high expectations for a new
approach which is more effective and better suited to tackling
successfully the complex questions raised. It therefore empha-
sises, like the Commission, the need to revive and speed up
Community work on a new basis which will need to be overall,
coordinated and flexible.
is a question of establishing
a dynamic equilibrium between market pressure, mutual
recognition and harmonisation, while taking account not only
of the competitive demands of adapting to the newly opened
market, but also of the interests of firms and consumers and
the specific tasks of public-interest services.

It

1.5.
On the analysis of barriers, the Committee draws the
Commission’s attention to the need to define a methodology
and make a more precise distinction between the different
types of barrier — distinguishing more clearly between the
real barriers to be removed and the reality of European cultural
diversity, to which operators will still have to adapt.

1.6.
On the strategy to be developed and implemented in
2002 to speed up completion of the internal market in services,
the Committee supports the general approach proposed by
the Commission; at the same time it makes the following
recommendations:

The Committee recommends that the transposition
1.6.4.
of the essential requirements of the framework instrument and
the various flanking directives be entrusted to joint regulatory
committees, based on experience with the ‘SLIM’ committees,
made up of representatives of administrations, service pro-
viders and users.

The Committee also recommends that the framework
1.6.5.
instrument should recognise and encourage self-regulation and
co-regulation approaches on the part of the socio-occupational
groups concerned, monitored with regard to their effects and
application by the European legislator and the Commission.
The Committee calls upon European socio-occupational oper-
ators to take all necessary steps towards this end, in order to
play a leading role in the completion of the internal market in
services.

1.6.6.
The Committee expects that this new approach will
make possible significant, irreversible results in speeding up
completion of the internal market in services by the end of the
current terms of office of the Commission and the Parliament
and before the next new accessions.

2. Main points of the Commission Communication

1.6.1.
The Committee is convinced that the success of this
new approach will depend on a new partnership between
European institutions, socio-occupational groups and Member
States, around the following principles: rigorous assessment of
barriers, prevention of new barriers, coordination through
complementary instruments, simplification of the rules, cau-
tion in removing barriers which also constitute ‘sluice-gates’,
taking account of trade globalisation, participation of the
socio-occupational groups in the rules which concern them,
permanent monitoring of progress by the Commission.

2.1.
The Communication ‘An Internal Market Strategy for
Services’ (1), presented by the Commission on 29 December
2000, emphasises a growing disparity between the increasingly
preponderant importance of services for the European econ-
omy on the one hand, and the persistent delays in achieving a
sufficiently flexible and integrated European internal market
for services on the other. It recalls the commitment made by
the Lisbon European Council to develop services in a more
dynamic and competitive European economy — a commit-
ment which is an essential reason for the issuing of the
Commission Communication.

1.6.2.
One precondition is to strengthen the direct appli-
cation of the Treaty provisions, systematise the procedure for
advance information on national regulatory plans which could
give rise to barriers, and be more rigorous in transposing the
various directives.

To remedy this, the Commission proposes a new

2.2.
strategy, to be pursued in two successive stages.

2.2.1.
mission plans the following series of steps:

From the first stage in 2001 onwards the Com-

In order to give the new strategy the necessary
1.6.3.
impact, the Committee supports the Commission’s intention
to propose that the Parliament and the Council adopt a new

(1) COM(2000) 888 final of 29.12.2000.

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— adoption by the Parliament and the Council of several
current legislative proposals (on public supply contracts,
public service contracts, public works contracts, distance
marketing of consumer financial services, telecommuni-
cations regulatory framework, opening to competition
of postal services, copyright and related rights in the
information society, EU accounting strategy, takeover
bids, and VAT applicable to services supplied by elec-
tronic means);

— launching of new initiatives (commercial communi-
cations/sales promotions, regulated professions/recogni-
tion of qualifications, financial services and e-commerce,
counterfeiting and piracy);

— presentation of a report reviewing the application of
earlier directives (provision of information on technical
standards and regulations, legal protection of conditional
access services, copyright and cable and satellite broad-
casting, legal protection of databases);

— a number of flanking measures (improving statistics,
performance benchmarking, training in ICT skills for
service companies, improving the process of innovation
in the sixth Framework Programme for R&D);

users (firms, local authorities and individual consumers) in a
central, privileged position.

2.3.3.
The definitive establishment of the euro in early
2002 in place of the national currencies will further increase
competition among all operators, while intensifying the need
for integration of the single market in services.

2.3.4.
The operational application of the Lisbon mandate,
seeking to turn Europe by 2010 into the most dynamic and
competitive knowledge-based economy in the world, is already
slowing down and cannot be fully realised without a deter-
mined acceleration of the opening up of services within the
Single Market.

2.3.5.
Preparing for enlargement is another reason for
speeding up the work to complete the single market in services,
in order to make substantial progress before the accession of
the first new Member States.

2.4.

The Committee’s comments set out below focus on:

— survey of barriers to services, with a report at the end of

the first stage.

— the Commission’s analysis of the current situation in the
services market (role of services in the European econ-
omy, delays in achieving the single market in services);

2.2.2.
mission will present other measures covered by a timetable:

For the second stage planned for 2002, the Com-

— drawing up a list of obstacles which can be removed by a

direct application of Treaty principles;

— non-legislative measures to remove certain non-regulat-
ory barriers (including Community codes of conduct,
dispute
awareness-raising
measures);

settlement mechanisms,

— an instrument based on a horizontal approach to remove

most of the remaining barriers;

— complementary measures of targeted harmonisation.

2.3.
The Committee notes that the Commission Communi-
cation comes at an opportune moment, for a number of
reasons:

2.3.1.
Economic globalisation and the external opening up
of the Single Market continue to develop and will be further
accentuated by the relaunching in November 2001 of the
multilateral negotiations in the WTO framework, covering in
particular the liberalisation of services on an international
scale.

The development of the information society totally
2.3.2.
changes the conditions for the supply of services, making
borders irrelevant, intensifying competition and putting service

— the new strategy proposed by the Commission to acceler-
ate completion of the single market in services (basic
principles, measures in the first and second stages).

2.5.
The Committee opinion draws in particular upon a
hearing of socio-economic representatives held on 19 Septem-
ber 2001. This hearing made it possible to obtain a clearer
picture of the present situation in the internal market in
services, particularly with regard to barriers, and to collect
recommendations on how to speed up completion of this
internal market.

3. The Committee’s comments on the role of services in

the European economy

The Commission is right to draw attention to the key
3.1.
role of services in completing the European Internal Market.
The European economy plays a dominant part in the develop-
ment of services, of which it is the leading world exporter
(26 % of exports) and the leading investor. The Committee
stresses in particular that the European services sector accounts
for more than half of GDP and employment, 70 % of jobs
created in the last three years, and nearly 90 % of new firms.
The median wages and average skills are superior to those in
other sectors. The Committee emphasises that it is necessary
to consolidate this situation and to exploit to the full the
economic weight of European activities in the services sector.

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3.2.
The Committee notes that the services sector is as
diverse as it is vast. Listing its component parts gives the
impression of an endless inventory: financial and insurance
services, intangible services to firms (consultancy, publicity
and marketing, information technology etc.), operational ser-
vices to firms (external support for management, cleaning,
collective catering, security etc.), services to communities,
services to individuals (hotels, individual catering, leisure etc.),
personal services in the home, temporary work, transport and
logistics.

3.3.
The Committee also emphasises that this apparently
heterogeneous group has three major characteristics in com-
mon, which greatly affect management methods, organisation,
management of skills, funding needs etc.:

— a wage component of turnover which averages 70 %,
varying from 40 % to 80 % depending on the specialis-
ation;

— the fact that nearly all employees are in constant daily
contact with the customers, which leads to a specific way
of managing customer relations;

— network-based operation, involving highly decentralised
decision-making and considerable autonomy for local
management, because of the need for proximity to the
customers.

3.4.
Going beyond the strict definition of the services
sector, the Committee also notes that it is the concept of
service itself which is now coming to the fore. After a decade
of development of the idea of services associated with one or
more products,
the products themselves are increasingly
associated with the supply of services. The creation of added
value has shifted to the heart of the service relationship itself,
with upstream and downstream operations now dependent on
it. Finally, there is an irreversible trend towards an economy
based on intangible factors and knowledge, and composed of
interdependence and joint responsibilities of all
alliances,
kinds.

3.5.
Finally, the Committee stresses that the services market
is itself intrinsically linked with the products market. The
development of services is the main characteristic of developed
countries. All sectors of activity are concerned: industry, where
production costs but also profits and jobs are increasingly
composed of services, the retail sector, which seeks to gain
customer loyalty through associated services, the services
sector itself, where more than half the transactions are between
services, and finally the States, which increasingly have to
make a distinction between the public service and service to
the public. All these are interdependent and complementary.

The Committee would also point out that in opting for
3.6.
the euro,
the EU implicitly chose to focus on the role
of services in order to remain competitive in the face of
globalisation. Those with a high individual added value (based
as much on processes as on individuals) are a motor for
innovation and Europe’s place in the world economy. Those
with a lower individual added value but of great social utility
are essential to the performance of the first category of services,
while contributing directly to the balance of society through
their role of social inclusion, integration and promotion. The
consolidation of the social and societal balance is also a factor
in making regions attractive to investors. Services are in fact a
strong response to the challenges of land-use development,
regional networks, structuring demand, and strengthening the
image of Europe internationally while meeting local challenges
and needs.

3.7.
For the above reasons and in the same spirit, the
Commission is completely justified in stressing the central role
of services for the operation of the Single Market in general
(telecommunications, financial services etc.) and their impact
on the various stages of the commercial process. The Com-
mittee is itself convinced that improving the single market in
services is a decisive force for strengthening the free movement
of persons, products and capital, because of the manifold
effects of freedom to provide services on the various economic
factors.

3.8.
The Committee would place special emphasis on the
key role of SMEs in developing the services sector, and on
the need to support them with a more favourable global
environment — e.g.
through simplification of rules and
formalities, easing of the tax burden, online connection, easier
access to funding.

3.9.
The Committee also points out the economic and
social role played by public-interest services, which was
explicitly acknowledged by the Treaty of Amsterdam and the
Charter of Rights signed in Nice. These public-interest services
are characterised by great diversity, resulting mainly from the
specific political, administrative and cultural features of the
Member States. Public-interest tasks can also be delegated to
non-public operators, under state concessions subject
to
special conditions. The Committee supports the legitimate role
of public-interest services, while stressing the need to ensure
that they are compatible with the proper functioning of the
internal market, especially as regards the transparency of their
management, the participation of the users and the social
partners in their organisation, and their compliance with
Community competition rules. The Committee would also

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ask the Commission to clarify the distinction between the
economic and non-economic activities of public-interest ser-
vices. Finally, the Committee emphasises the need to complete
the opening up of
telecommunications, postal
services and energy, which is essential for achieving a genuine
European internal market.

transport,

4. The Committee’s comments on the delays to the

single market in services

3.10.
The Commission underlines the importance attached
to services by the Lisbon mandate. In particular, it points out
that services are the motor of the new economy, emphasising
the effects of the current technological revolution, the impact
of services on the innovation process, on competition in
Europe and the wider world,
their effects on economic
growth, and their contribution to strengthening the quality
requirements which all users now have. The Committee
supports this reference to the Lisbon mandate, while stressing
that the lack of rigorous monitoring of its implementation still
remains a disturbing weak point, which was revealed by the
lack of enthusiasm for reforms and of transparency on their
state of progress shown by the 15 at the Stockholm European
Summit (lack of information from the Member States on the
stage reached in national reforms, delays in European decision-
making, delays in the transposition of directives into national
law) and which has to be remedied between now and the next
spring summit meeting (Barcelona, March 2002).

3.11.
The Committee stresses the need on the impact — not
only economic but also social — of a greater opening up of
the single market in services: it is desirable to support the gain
in productivity and competitiveness made possible by this
development, but also to be alert to the social consequences in
previously protected situations, by taking transitional measures
and promoting training and conversion measures, where
appropriate with the support of the Community Funds. The
Committee would also point out that improving the single
market in services will have a positive overall social effect:
mention has even been made of a potential for creating
36 million new jobs.

in products. Having started later,

Like the Commission, the Committee notes that the
4.1.
lagging behind the single
single market in services is still
market
it continues to
encounter more barriers, as shown by the large number of
directives still to be adopted. Moreover, it is essentially more
Indeed, the
difficult to harmonise services than products.
conditions for providing services are closely linked to current
national rights (civil, commercial, social etc.), characterised by
specific cultural features which are themselves particularly
resistant to harmonisation. The conditions for practising the
service professions are in general highly regulated, and in
many cases have been so for a long time; they are frequently
supplemented by self-regulation on the part of the professions
themselves. The legal responsibilities of these professions can
also vary a great deal from one country to another (for
example, the responsibility arising from the construction of a
building can lie with the architect in one country and with the
engineer in another). These disparities seriously limit the
freedom to provide services from one Member State to another,
and considerably complicate the data for its harmonisation.

4.2.
The Committee is aware of the variety of instruments
brought into play by the European Union to assist completion
of the single market in services. The processes of harmonis-
ation and mutual recognition must be made more effective by
clarifying their respective fields of application, even if their
interaction is likely to develop further. Moreover, Community
action is likely to develop not only on the basis of legislative
instruments (e.g. regulations or directives) but also on the basis
of accompanying tools (e.g. communications, studies, notice
boards, training measures, programmes etc.).

4.3.
The Committee would also draw attention to the
criticisms contained in the Lamfalussy Report of March 2001
concerning the slowness of the European legislative process; it
stresses that the grounds for such criticisms go far beyond the
question of financial services, and can equally apply to the
harmonisation of rules on the other categories of services.

3.12.
Finally, the Committee underlines the need to start
immediately to consider the role of services in an enlarged
European Union, and to associate the applicant countries fully
in the preparation, definition and implementation of the new
strategy for the single market in services.

4.4.
The survey carried out by the Committee among the
European socio-occupational interest groups when drawing
up this opinion confirms the dissatisfaction while acknowledg-
ing the complexities. Only 4 % stress the progress achieved
above all. 16 % emphasise the delays, while 80 % balance their
judgement between the two aspects. 80 % acknowledge that
the remaining problems are difficult to solve both technically
and politically, but 80 % also think that they are not being

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dealt with optimally at present. This survey confirms that the
well-established complexity of the problems to be tackled
must not under any circumstances become an excuse for
adopting a low profile in Community action: operators in the
field have high expectations of a new, more dynamic and
effective approach — one which is better suited to tackling
this complexity effectively.

4.5.
The Committee draws the Commission’s attention to
the need to define a methodology and make a selection among
the remaining barriers within the Single Market. The survey
and the hearing carried out by the Committee confirmed that
the barriers to services pointed out by the socio-occupational
operators are many and varied, and broadly cover the vast
range of administrative, technical and fiscal barriers which
persist in the internal market. However, these barriers are
often presented and commented on without enough care to
‘prioritise’ them in relation one to another. It must be borne in
mind here that the aim of completing the European internal
market in services is indeed to ensure greater transparency,
fluidity, effectiveness and consistency in trade, but not to
unify all its aspects. Certain differences have to be accepted
(differences of culture, language etc.) and everyone must adapt
to them. However, there are still real barriers and serious forms
of discrimination which are unjustifiable in a single market
and must therefore be rapidly removed. Between the two,
there is a ‘grey area’ where debate of course exists and
will continue to develop on the degree of fluidity (mutual
recognition, opening up through the direct effect of the
market, etc.) and the desirable level of Community action
(particularly through harmonisation).

4.6.
In the list of barriers which the Commission is soon to
present, the Committee therefore recommends that a distinc-
tion be made between:

— barriers which make it impossible or highly undesirable
to provide certain services, such as a failure to recognise
technical requirements or diplomas and professional
qualifications — here Community action is urgently
needed to remedy them;

— barriers which complicate the provision of a service
without seriously affecting competition conditions, such
linguistic and other
as the need to adapt to cultural,
differences — here it is rather up to service providers and
consumers to adapt to them;

— barriers which create a significant extra cost for provision
of services and which can affect competition conditions
to varying extents, such as additional charges linked with
rules, procedures and conditions for activities — here
Community action may prove to be necessary, albeit
taking account of the level of political commitment of
the Union in formulating and implementing common

policies, and of the requirements of subsidiarity and
proportionality. This is a field of action which is likely to
develop further as European integration progresses.

5. The Committee’s comments on the strategic prin-

ciples proposed by the Commission

5.1.
The Committee takes the view that the Commission is
right to insist on the importance of a global strategy to
relaunch the single market in services. The Committee endorses
the five basic principles on which this strategy is based:

— a complete strategy covering all services;

— a strategy aiming to make cross-frontier provision of
services as easy as within a Member State — although the
Committee notes that everyone must adapt in practice to
the cultural and linguistic differences which are an integral
part of the rich European reality;

— a strategy in the service of firms and consumers;

— a strategy which keeps pace with change;

— a strategy which is consistent with the other policies.

5.2.
The Committee especially endorses the Commission’s
expressed wish to generalise the effort to remove remaining
barriers by emphasising the entire micro-economic process
(productive, commercial,
financial, etc.) as it appears to
economic operators, and by bringing out the need to remove
barriers throughout this process in order to achieve a positive
result which can actually be perceived by these operators.

5.3.
The Committee notes, however, that the solutions have
not always been clearly defined, as the Commission prefers to
subordinate this definition to a more detailed analysis of the
barriers. That is why the Commission Communication still
seems at this stage to be a methodology which has still to be
clarified in terms of operational balance and the division
of responsibilities among all the participants, and whose
implementation remains to be ensured in appropriate ways.
The success of such a strategy becomes more and more
necessary at a time when the double pressure of the euro and
the information society creates an urgent need for a more
fluid, more cohesive and better organised European market in
services.

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5.4.
The Committee agrees with the Commission in recog-
nising the need to give priority to liberalising cross-border
trade, which really helps to weld the single market together,
particularly with the euro coming into operation. One good
approach would be to make a better assessment of, and give
support to, the initiatives taken at grass roots by the economic
actors to remove the existing border barriers. The Single
Market Observatory’s PRISM database already provides many
different practical examples of such initiatives.

5.5.
Again like the Commission, the Committee attaches
the highest importance to the need to guarantee real support
to consumers and enterprises (which are in any case themselves
both suppliers and consumers of services). This means taking
account of their perceptions on the ground and of their
expectations, but certainly also involving them directly in the
actual formulation of the rules.

5.6.
The Commission draws attention to the need to adapt
the rules to the pace of change. The Committee shares this
concern and stresses the need to respond to it by better
organising the division of tasks among all the actors concerned.
the European
Thus,
legislator should not try to regulate all the details, but should
focus on the essential requirements (on the lines of the ‘new
approach’ already adopted about fifteen years ago for the
harmonisation of products).

the Committee takes the view that

6. The Committee’s comments on the priorities pro-

posed by the Commission for the first stage

6.1.
The priorities for adoption in 2001 listed by the
Commission will also affect the first half of 2002, if one takes
account of certain delays and shifts which can be foreseen
almost a year after the presentation of the Communication.
These priorities provide a comprehensive survey of work in
progress. This certainly brings out the diversity of the issues of
regulation relating to services, but it also reveals the need for a
sufficiently well-thought-out guiding principle in the way they
are dealt with when the initiatives to be taken in the second
stage are being defined. Because of the imminence of the
definitive introduction of the euro on 1 January 2002, the
Committee takes the view that priority must now be given to
opening up services in the financial sector (distance marketing
of financial services, company accounting, implementation of
the Lamfalussy Report’s recommendations, associating socio-
occupational interest groups with the regulatory committees
for stocks and shares). The Committee also agrees with the
need to apply pressure, under the current Belgian presidency,
for the adoption of a series of pending decisions on public
supply, services and works contracts, the telecommunications
regulatory framework, the opening to competition of postal
services, copyright in the information society, and the VAT
applicable to services supplied by electronic means.

5.7.
The Committee would also point out to the Com-
mission the need to take account, when developing a more
offensive strategy, of the ‘reverse discriminations’ which the
accelerated opening up of the market can also create in a
Member State for its own nationals. The treaties of the
European Union were drawn up mainly to protect against any
discriminatory treatment by a State the nationals of other
Member States, not its own. Of course, a State is generally
likely to abolish or open up outdated national rules which
tend to penalise, but it can also derogate from these changes
and penalise its own nationals in relation to the opening up.
The Commission would play a useful role by regularly
highlighting the situation regarding such ‘reverse discrimi-
nations’, thus strengthening the pressure on these States to
reform their national rules.

5.8.
Finally, the Commission emphasises the need for the
services strategy to be consistent with the other policies
pursued by the EU. The Committee shares this concern, which
simply underlines the need to define a true global strategy.

6.2.
As regards the list of new initiatives which the Com-
mission intends to present by the end of 2001, the Committee
can only reiterate its earlier comment on the current lack of a
guiding principle for work on the services sector and the need,
failing that, to give priority at all events to measures to
accompany the introduction of the euro, particularly with
regard to the new initiatives required by the action plan for
the opening up of financial services. In addition, following the
recent rejection by the European Parliament of the draft
directive on takeover bids, there also appears to be an urgent
need for a new draft which could soon be adopted by the
Parliament and the Council, so as to ensure a clear, common
legal framework in the face of increased restructuring of firms
within the Single Market. The Committee is pleased to note
that the Commission recently announced the setting up of a
group of independent experts to consider the current situation
as regards company law and contribute in particular to
relaunching draft Community rules on takeover bids. Subject
to the clarification of the solutions to be proposed in the
second stage, the Committee also supports the other initiatives
announced by the Commission for the end of 2001 relating to
commercial communications (sales promotions), regulated
professions (recognition of qualifications), financial services
and e-commerce, counterfeiting and piracy.

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6.3.
As regards the review reports announced by the
Commission for a number of directives, the Committee lays
particular stress on the question of advance information on
technical standards and regulations, which is the precondition
for any increased harmonisation and for simplifying the rules
in the single market for services. The Committee also awaits
with interest the other review reports announced, on legal
protection of conditional access services, copyright and cable
and satellite broadcasting, and legal protection of databases.

7.1.3.
Coordination: the proper balance should be found,
through complementary approaches, particularly between
mutual recognition, regulatory harmonisation and progressive
self-regulation, while reconciling the interests of firms and
consumers and taking account of the tasks of public-interest
services. The new horizontal instrument should be the solidly
anchored yet flexible pivot of such coordination.

6.4. With regard to the flanking measures announced by
the Commission, the Committee strongly emphasises the need
for better statistics, particularly of a comparative nature, for
assessing the development and opening up of services within
the Single Market. A better statistical analysis appears to be a
key factor in providing a good basis for the new strategy of
relaunching the single market in services. The Committee also
supports the other flanking measures announced by the
Commission, on the one hand to train service companies in
information and communication technology, and on the other
to improve the process of innovation in the sixth Framework
Programme for R&D.

6.5.
Finally, on the studies announced by the Commission
on the barriers to services, the Committee takes the view that
this report will mark less the last measure of the first stage
than the opening of the second stage, and therefore gives
its comments below. It also proposes the development of
cooperation with its Single Market Observatory (SMO) in the
preparation of this report; the SMO has also, through its
hearings and questionnaires — partly in preparing this opinion
— and in its PRISM database, identified a range of barriers to
the single market in services which have been highlighted by
the economic operators in the field.

7. The Committee’s comments on the priorities pro-

posed by the Commission for 2002

7.1.4.
Simplification: it is essential to avoid complicating
services activities through European rules which are too
complex or do not correspond to operator’s actual expec-
tations.

7.1.5.
Caution: it is advisable to provide adaptation stages
for dealing with barriers which also act as ‘sluice-gates’ between
national systems which are legally and culturally different.

7.1.6.
Globalisation: account must be taken of the inter-
national framework and requirements (e-commerce, WTO
etc.).

7.1.7.
Participation: it is advisable to involve socio-occu-
pational operators in the formulation and implementation of
the rules, allowing scope for co-regulation and self-regulation,
along the lines of the European codes of conduct already
surveyed in the PRISM data-base of the Committee’s Single
Market Observatory.

7.1.8. Monitoring: regular reports should be drawn up by
the Commission on progress made with the arrangements as a
whole.

7.1.
The Committee wishes at the outset to underline a
number of essential principles, which emerged clearly from
the hearing organised in the context of this opinion, and which
should guide the new Community approach to completing the
single market in services:

7.2.
In line with the above principles, the Committee
presents the following recommendations, emphasising that
each of them contributes to building an overall, dynamic,
interactive and coherent whole, without which it hardly seems
possible to relaunch successfully the completion of the single
market in services.

7.1.1.
Evaluation: a properly updated survey of barriers, on
the basis of professional surveys and recent statistics, must be
prepared as the basis of the new strategy for the internal
market in services.

Prevention: a key element of the new strategy must
7.1.2.
be to prevent
the creation of new national barriers by
strengthening the obligation to provide advance information.

7.3.
The Committee supports the Commission’s plan to
issue, at the end of the first stage and the start of the second, a
systematic inventory of all the barriers and obstacles which
prevent European firms from offering consumers cross-border
services. The Commission must ensure it has the resources to
draw up as complete an inventory as possible, covering all
service activities whether or not they are already regulated at
Community level. The proposed timetable does not seem
realistic given the vast scope of this inventory.

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The Committee also supports

7.4.
the Commission’s
declared intention to present in 2002 a list of obstacles which
can be removed by a direct application of Treaty principles. It
does indeed seem essential to reaffirm clearly the principle
of freedom to provide services and mutual recognition of
qualifications within the Single Market, in the spirit of the
Treaty and in line with the Cassis de Dijon case-law, while
defining more precisely the reasons which Member States
might have for maintaining certain barriers, and the fields to
which these barriers can still apply in the absence of Com-
munity rules. As mentioned above, the Committee hopes that
a dialogue can take place on the drawing up of this list.

7.8.
The Committee supports the Commission’s intention
to re-centre harmonisation on certain essential requirements,
and notes with interest its plan to develop an instrument based
on a horizontal approach to remove most of the remaining
barriers. The Committee itself considers that, without a strong
political and legal commitment on the part of the Parliament
and the Council to establish a genuine border-free area for
services in Europe, based on such a legal framework instrument
and thus organising a new division of responsibilities between
the EU institutions, the Member States and the socio-occu-
pational interest groups, it will be impossible to markedly
speed up the work on harmonisation and mutual recognition
concerning the single market in services.

7.5.
The Committee also stresses the need to combat
more effectively the infringements which have risen to an
unacceptable level in the Member States over recent years,
the
seriously threatening the efficiency and cohesion of
Single Market. The Commission should perform in a more
determined and effective way it role as guardian of the Treaty,
particularly by speeding up the procedures for dealing with
breaches of the principles of free movement of services and
freedom of establishment, and by examining carefully the
question of the proportionality of the national measures
underlying these restrictions. At a time when an exceptional
effort is required of the applicant countries in order to adopt
the entire Community acquis, the Member States should feel
obliged to set a good example.

7.6.
The Committee also emphasises the need to strengthen,
and extend to all services activities, the procedure for advance
information on national regulatory plans which are likely to
create new barriers. Adoption of a new directive supplementing
existing arrangements to this end seems to it to be inseparable
from the setting up of a new strategy for the internal market
in services; this is also one precondition for ensuring its
credibility and effectiveness.

7.7.
As regards the non-legislative measures which the
Commission intends to present in 2002, to remove certain
non-regulatory barriers, the Committee stresses the need to
promote whenever possible the adoption of codes of conduct
by European socio-occupational interest groups, either as an
alternative to new Community rules or to supplement them.
In this context the Committee draws attention to the con-
clusions of its hearing of 3 May 2001 on the prospects for co-
regulation within the Single Market, which point out the
enormous potential for development in this area, especially in
the services sector.
the Committee supports
the Commission’s intention to promote dispute settlement
mechanisms and to develop awareness-raising measures relat-
ing to the single market in services.

In addition,

7.8.1.
in deciding the legal form such an instrument should take:

The Committee is aware of the difficulties involved

It may seem at

first sight a difficult

7.8.1.1.
task to
encapsulate all the problems entailed by the opening up of
services in a single directive — even a framework directive,
given the great complexity and diversity of these problems.
Should the Commission nonetheless opt for such a formula, it
would be advisable to make such a directive very innovative in
comparison with standard directives, especially in terms of
flexibility of content,
involving socio-occupational groups,
decentralising its implementation, and references to other,
complementary, directives and legal instruments.

The Committee for its part would be prepared to
7.8.1.2.
recommend the choice of a framework resolution of the
Parliament and the Council if it was clear that such a resolution
could not in any way be regarded as a mere recommendation
and that, like a directive, it would commit its authors to a new
programme and a new plan of action tied to a legally binding
timetable.

At all events,

the Committee hopes that

the
7.8.1.3.
creation and the expected impact of a horizontal
legal
instrument will not be adversely affected by excessive contro-
versy over its legal form. It is ready to go along with the
proverb whereby the colour of the cat does not matter as long
as it catches the mouse. However, the Committee insists
below on a number of essential requirements for the new
arrangements to be set up by this horizontal instrument.

7.8.2.
new instrument should be as follows:

In the Committee’s view, the specifications for this

it should be horizontal, i.e. it should concern all
7.8.2.1.
aspects of freedom to provide services, regardless of their
differences;

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7.8.2.2.
it should involve political commitment and be
legally binding, which would rule out the use of a mere
recommendation;

7.8.2.3.
it should stipulate a number of key principles on
the conditions for opening up the market, to which additional
instruments deriving from it could refer;

7.8.2.4.
while comprehensive in its approach, this instru-
ment should be flexible in its application, and should organise
optimal coordination among a number of complementary
approaches (harmonisation, mutual recognition) and a number
of players (European legislator, regulatory committees, Euro-
pean socio-occupational interest groups).

7.8.3.

This new horizontal instrument should thus:

7.8.3.1.
have the aim of attacking persistent barriers while
concentrating on an overall approach, removing barriers
encountered by firms at the various stages of provision of
services, rather than dividing up measures into excessively
specific fields;

7.8.3.2.
stipulate the circumstances in which the Member
States could have a valid reason for maintaining a specific
national framework;

7.8.3.3.
promote a more effective application of the prin-
laws, making it
ciple of mutual recognition of national
possible to avoid unnecessary rules at Community level while
guaranteeing that the border-free Community area can be used
as easily as a national market;

7.8.3.4.
provide for a limited number of targeted directives
in the main fields of service provision (financial services,
services to individuals, services to communities, etc.) —
directives which should draw on well-tried methods for the
opening up of the single market in products, while remaining
limited to laying down essential requirements;

7.8.3.5.

as a permanent instrument, seek to anticipate new

Brussels, 28 November 2001.

regulatory needs, free up the liberation/integration process,
and transcend sectoral and category-based divisions.

The Committee recommends that the transposition
7.8.4.
of the essential requirements of the framework instrument
and the various directives be entrusted to joint regulatory
committees (based on the experience of the SLIM committees),
which should be made up of the representatives of national
governments, service providers and service users.
In this
decentralised approach, the role of the European legislator and
of the European Commission should be above all to monitor
the application of the rules adopted by the joint regulatory
committees, and if necessary to harmonise them.

7.8.5.
This new instrument should recognise and encourage
self-regulation and co-regulation approaches by the socio-
occupational groups concerned, supplementing the directives
and rules adopted by the joint regulatory committees, subject
to checks by the legislator and the European Commission as
regards their effects and implementation. The Committee
emphasises that the socio-occupational operators, to the extent
they take on such self-regulation responsibilities at
that
European level, will have the chance to play a major role in
the future architecture of the internal market in services. This
presupposes an innovative partnership with the European
legislator. The Committee would welcome the development of
such a partnership, which in its view should be the key to
making a success of the ‘new approach’ to completing the
European single market in services.

The implementation of the framework instrument,
7.8.6.
the flanking directives, the implementing measures emanating
from the joint regulatory committees and the self-regulatory
approaches of the socio-occupational interest groups would
give rise to European Commission reports reviewing the
progress of the work and updating the new priorities for the
single market in services.

7.8.7.
The implementation of this new instrument should
make it possible to make significant, irreversible progress in
speeding up completion of the single market in services
between now and the end of the Commission’s and Parlia-
ment’s current terms of office and before the next accessions
of new Member States.

The President

of the Economic and Social Committee

Göke FRERICHS