Opinion of the Committee of the Regions on the Proposal for a Directive of the European Parliament and of the Council on services in the internal market
Date: 2004-09-30
Institutions: European Committee of the Regions
Subjects: administrative check, administrative cooperation, expatriate worker, freedom to provide services, health service, provision of services, right of establishment, services company, services of general interest, single market, supervisory power

C 43/18

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Official Journal of the European Union

18.2.2005

Opinion of the Committee of the Regions on the Proposal for a Directive of the European Parlia-
ment and of the Council on services in the internal market

(2005/C 43/06)

THE COMMITTEE OF THE REGIONS,

Having regard to the proposal for a Directive of the European Parliament and of the Council on services in the
internal market (COM(2004) 2 final – 2004/0001 (COD));

Having regard to the decision of the Council of 20 February 2004 to consult it on this subject, under the
first paragraph of Article 265 and Articles 71 and 80 of the Treaty establishing the European Community;

Having regard to the decision of its President of 5 April 2004 to instruct its Commission for Economic
and Social Policy to draw up an opinion on this subject;

Having regard to the Commission Communication to the Council and the European Parliament entitled an
internal market strategy for services (COM(2000) 888 final);

Having regard to its opinion CdR 134/2001 fin of 13 June 2001 (1) on the Commission Communication
entitled an internal market strategy for services;

Having regard to the report from the Commission to the Council and the European Parliament entitled the
state of the internal market for services (COM(2002) 441 final);

Having regard to the draft opinion CdR 154/2004 rev. 1 adopted on 6 July 2004 by its Commission for
Economic and Social Policy (rapporteur: Mr Schröter, Chairman of the Thüringen Land Parliament's
Committee for European and Federal Affairs (DE/EPP));

Whereas:

1)

2)

services play a key role for the EU economy;

the services sector's considerable potential for growth and employment could not be fully exploited
so far because of numerous obstacles impeding the development of services;

adopted the following opinion at its 56th plenary session held on 29 and 30 September 2004
(meeting of 30 September):

Comments and recommendations of
Regions

the Committee of

the

1.3
points to the report on the state of the internal market for
services, which states that a decade after the envisaged comple-
tion of the internal market, there is a huge gap between the
vision of an integrated EU economy and the reality as experi-
enced by European citizens and European service providers;

1. The Committee of the Regions' views

THE COMMITTEE OF THE REGIONS

1.1 welcomes the Commission proposal for a European
Parliament and Council Directive on services in the internal
market, which is designed to reduce the barriers still impeding
the creation of a real internal market in services in the EU;

1.2
emphasises that in order to achieve the target set by
the European Council at its meeting in Lisbon of making the
EU the most competitive and dynamic knowledge-based
economy in the world by 2010, it is also vital to finish building
a real internal market in services;

(1) OJ C 357 of 14.12.2001, p. 65

supports the aim of creating a legal framework that is
1.4
to eliminate the obstacles and barriers still
impeding the
freedom of establishment for service providers and the free
movement of services between the Member States. Both the
providers and recipients of services are to be given the legal
certainty they need in order to ensure that the freedom of
establishment and the freedom to provide services can both be
exercised as fundamental freedoms;

1.5
considers it right that the Directive is to be based in
principle on the country of origin principle. This means that
service providers are initially only to be subject to the laws of
the Member State in which they are established. This principle
assumes a comparable level of protection in each Member
State, i.e. that health and consumer provisions and other safety
standards are generally comparable. Essentially, the principle of
mutual recognition, which is a cornerstone of the internal
market in the free movement of goods, is thus to be extended
to the services sector;

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1.6
regards its as important that service providers are thus
to be given the chance to enter the markets in other Member
States on terms with which they are familiar;

2.4
points out, however, on the other hand, that in prin-
ciple the intention is for the Directive to apply cumulatively in
conjunction with other existing Community legal acts;

1.7
points out, however, that the content and scope of
application of the country of origin principle are not clearly
defined in the proposed Directive. Application of the country
of origin principle would give rise to problems, particularly in
social and health services. Supervision of these services must in
all cases be carried out in accordance with the laws of the
Member State of destination, by the authorities of that Member
State;

2.5
fears therefore that, in particular, existing provisions for
specific sectors may be undermined as a result, for in practice,
the proposed Directive will always come into play in cases not
covered by the special provisions. In case of doubt it is to be
assumed that
the existing sector-specific provisions already
regulate the relevant areas definitively and/or that individual
points of detail have deliberately not been regulated;

1.8
considers the proposals on administrative simplification
to be sensible in principle. The proposed simplification of
procedures and the use of electronic means to complete proce-
dures are vital
in
services;

for the establishment of a free market

2.6
urges therefore that the Directive's cumulative applica-
tion be expressly excluded in areas in which definitive special
sector-specific provisions exist. It is necessary to rule out the
creation of new supplementary provisions by the Directive in
such cases;

1.9
considers it extremely important that the Directive
lays down rules on the mutual provision of information and
communication in order, on the one hand, to grant service
providers real access to a common market and, on the other
hand, to enable recipients of services to use services free of risk
throughout the Community;

1.10 welcomes the fact that the proposed directive is based
on Member States' mutual trust and support and makes provi-
sion inter alia for joint checks on existing provisions to ensure
that they are compatible with the aim of establishing a free
market in services.

2. The Committee of the Regions' recommendations

THE COMMITTEE OF THE REGIONS

the

supports

2.1
horizontal
approach. This makes it possible to dispense with detailed
provisions and not to harmonise all of the relevant provisions
in the Member States;

framework Directive's

emphasises, however, that the danger of this horizontal
it may overlap with existing Community

2.2
approach is that
provisions for specific sectors;

2.3 welcomes therefore that the Directive makes provision
for a number of general derogations in order to prevent such
overlaps. These derogations concern financial services, elec-
tronic communication services and networks relating to the
‘telecom package’, and services in the transport sector. Taxation
and activities associated with the exercise of official authority
are also expressly excluded;

recognises that

2.7
the planned general
the purpose of
derogations from the country of origin principle is to ensure
consistency with existing legal acts. The country of origin prin-
ciple will not be applicable to service sectors where sector-
specific provisions already apply or are planned. Examples of
this include: postal services, electricity, gas and water supplies,
posting of workers, waste transport, recognition of professional
qualifications, and authorisation schemes relating to the reim-
bursement of the costs of hospital care;

2.8
points out that the country of origin principle may
penalise honest businessmen and consumers, since it makes it
possible to circumvent exacting domestic standards relating to
professional qualifications or the quality of service provision.
Therefore, it is necessary to stop the country of origin principle
being used merely for the purpose of circumventing national
provisions governing economic activity;

2.9 would also point out that the draft Directive makes no
reference whatsoever to the draft Directive currently being
discussed on working conditions
temporary workers
(COM(2002) 149);

for

2.10
notes, however, that although the Directive is not to
it lays down supplementary competing provi-
be applicable,
sions for some of these areas. This concerns in particular the
following areas: recognition of professional qualifications to be
supplemented by provisions on professional
insurance and
commercial communications, posting of workers to be supple-
mented by provisions which extend beyond purely administra-
tive matters, and supplementary provisions covering the reim-
bursement of treatment costs;

2.11
provisions and a lack of transparency;

fears that this may lead to a plethora of competing

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2.12
therefore urges that the Directive's rules which could
be laid down equally well in existing or planned special provi-
sions should also be laid down in such special provisions. This
will also avoid having to discuss a specific sector in the course
of further deliberations on the subject of this Directive. As the
negotiations hitherto about
the
danger of having to do this has already been spotted in a
number of areas;

the Directive have shown,

2.13
sees this problem of competition with special provi-
sions particularly in connection with the proposed provisions
on the posting of workers;

notes that apart from procedural rules and rules on
2.14
competences – as a departure from the country of origin prin-
ciple the Member State of posting is declared to be competent
– the Directive also contains further substantive provisions
which directly follow on from the current Directive on the
posting of workers in the framework of
the provision of
services, and therefore supplement or compete with that Direc-
tive. The measures which Member States are permitted to take
in carrying out their checks are specified and thus limited.
Article 17(5) of the draft Directive lays down a derogation
from the country of origin principle for the Directive on the
posting of workers, but the Committee firmly believes that the
ban on the imposition of any obligations laid down in Article
24 of the draft Directive renders the derogation in Article 17(5)
absurd, for the question of how the Member State of origin is
to learn of any infringements in the Member State of posting
(which is no longer able to exercise supervision and impose
penalties) remains open. Even if this were to be possible, the
question of how the Member State of origin is to take action in
another country where it has no jurisdiction also remains open;

points out that as a result the danger of checks being
2.15
less effective is partly recognised and that therefore the provi-
sions in the proposed Directive definitely have a direct impact
on the Directive on the posting of workers in the framework of
the provision of services;

2.16
therefore considers it appropriate that the provisions
relating to checks under the Directive on the posting of
workers in the framework of the provision of services should
also be laid down in that Directive insofar as such checks are
necessary in practice;

further and guaranteeing an area free of internal borders for
services of general economic interest, too, would considerably
restrict the competent national, regional and local authorities'
freedom to act;

2.19
therefore expressly welcomes the fact that in talks
held to date on the Directive, the Commission has explained
that the Directive is in no way targeting the special features of
services of general interest and intends neither to liberalise nor
to abolish monopolies;

2.20
Directive itself so far;

notes that this point is not, however, reflected in the

2.21
therefore demands that this matter be rectified and
that services of general interest be excluded as a matter of prin-
ciple from the Directive's scope (and not only in part from the
application of the country of origin principle), in order to avert
any discussion when the time comes to implement the Direc-
tive and so as to avoid the need to have to harmonise this
sector in the short term with the aid of Community-wide provi-
sions. This would also tally with the Commission's position as
expressed in the recent White Paper on services of general
interest;

emphasises that in this connection special attention
2.22
must be paid to the sensitive area of health care and social
security;

proposes that this area of services of general interest
2.23
also be expressly excluded from the Directive's scope. This
would also tally with the Commission's
intention – as
announced in the recent White Paper on services of general
interest – to present a communication in 2005 on social and
health care services given the latter's special importance and
features;

notes that in this sector too the draft Directive is
2.24
creating new provisions which compete with existing provi-
sions;

2.25
therefore proposes that any legislative adjustments
necessary to implement ECJ case law be laid down in the corre-
sponding special provisions. Consequently, the provisions of
Article 23 should be deleted from the Directive;

2.17
thinks that the Directive fails to clarify to what extent
it is to apply to the extremely sensitive area of services of
general economic interest. It is recognised that it is a matter for
the competent national, regional or local authorities to define,
organise, finance and monitor services of general interest;

2.26
also considers it desirable that whenever reference is
made to other provisions, the title of the particular provision
should be expressly given in order to make the Directive easier
to read;

points out

2.18
services of general
economic interest in the scope of the services Directive and the
objective being pursued therein of developing the single market

inclusion of

that

emphasises the particularly important

role to be
2.27
played by regional and local authorities in implementing the
proposed Directive. Considerable demands will be made on
these authorities;

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that

thinks

insufficient

2.28
account has been taken
hitherto of the effects of the Directive's implementation on
regional and local authorities. The Directive is addressed to the
Member States, but particularly concerns regional and local
government, which will be charged with the practical imple-
mentation as part of the administrative process;

2.29
points out that in this connection problems relating
to competences may arise initially in cases where implementa-
tion of the Directive at regional and local level requires new
structures, a uniform administrative procedure on overarching
cooperation. Rules such as the one stipulating that ‘the authori-
sation shall enable the provider to have access to the service
activity, or to exercise that activity, throughout the national
territory’ (Article 10(4)) or the establishment of single points of
contact for handling all the procedures and formalities needed
for access to service activities (Article 6) are, for example, in
conflict with federal states' constitutional
foundations. The
Committee would point out
that under the constitutional
Treaty the Union has to respect the national identities of the
Member States inherent
in their fundamental political and
constitutional structures;

fears that all national authorisation procedures come
2.30
under the scope of
the Directive and therefore are to be
checked to see whether they should be retained, are to be abol-
ished or adapted if need be and at all events are to be simpli-
fied. Such massive interference in Member States' procedural
laws is disproportionate. Therefore it should be made clear that
only the authorisation procedures directly associated with the
initial start-up of an economic activity are to come under the
scope of the Directive. All procedures laid down by law for
overriding reasons relating to the public interest – whether or
not they concern economic activities – are to be excluded from
the scope of the Directive;

2.31
and local
deregulation and streamline administration;

fears that implementation of the Directive at regional
level will run counter to the moves to introduce

2.32
draws attention to the fact that implementation of
the Directive at regional and local level will require unforesee-
able extra staffing and – not least - funding. This applies in par-
to cross-border cooperation, electronic information
ticular
exchange,
the establishment and coordination of the single
points of contact, the checks on whether existing provisions
are compatible with the aims of the Directive, and the mutual
evaluation to be carried out later by the Member States;

notes that the Commission has said nothing about the
2.33
overall outlay – and particularly the financial outlay. So far a
figure has only been put against the financial impact on the
Commission itself (approx. EUR 3.4 million);

2.34
carried out in respect of the impact on each Member State;

corresponding calculations also be

requests

that

2.35
considers it vital that support or compensation be
provided for a transitional period. Without such assistance for
regional and local government the planned simplification of
transnational procedures will not be able to be introduced
swiftly. It is absolutely vital not to put too great a practical
strain on regional and local authorities;

2.36
is also aware of the everyday problems which could
arise for regional and local authorities in this connection. One
example is the language problems when communicating with
authorities or service providers from other Member States or
when recognising certificates, attestations or other documents
issued for service providers in another Member States and thus
in another language. The same is true of the use of electronic
means for completing procedures;

2.37
considers it necessary that due allowance be made
for such practical problems too, at least during a transitional
period. For example, non-certified translations could at least be
permitted;

2.38
considers it foreseeable that problems will also arise
in connection with the planned measures for safeguarding
service quality and in particular for supervising service provi-
ders. Because of the country of origin principle it is to be
feared that transnational cooperation between authorities will
be the only avenue available for taking action against trouble-
some service providers established in another Member State.
This may well result in inappropriate delays;

2.39 welcomes the extensive provision made in the Direc-
tive for mutual assistance in order to counter the aforemen-
tioned dangers;

2.40
calls on the Commission to also make appropriate
allowance for the interests of regional and local authorities
when enacting the supplementary measures required for the
checks in conjunction with the committee that is to be formed.
Should new and as yet unforeseeable problems arise in connec-
tion with the performance of the checks when the time comes
to implement the Directive, these must also be solved in a
suitable and practical manner;

2.41
draws attention to the fact that professional bodies
may also be confronted with similar problems as state adminis-
trative bodies. This applies particularly in the case of the checks
on service providers who are established on their territory but
If professional bodies
are active in another Member State.
perform duties of the state, they also experience the problems
which could arise for Member States' authorities when imple-
menting the proposed Directive;

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2.42
emphasises the need to ensure when the Directive is
implemented that professional bodies can perform their present
duties without restrictions in future,
too. The existence of
if
compulsory membership schemes currently means
service providers intend to set up in business in another
Member State, they must contact the competent professional
bodies in that country directly. It is therefore important,
in
connection with the establishment and setting-up of single
points of contact, to take account of current responsibilities
and allocations of tasks;

that

2.43
is also aware of the new challenges and tasks facing
professional bodies, especially as possible single points of

contacts or in connection with the drafting of new codes of
conduct at Community level;

2.44
for this purpose asks Member States, regional and
local authorities and all other interested parties to prepare
themselves in good time for the challenges set by the new
Directive;

2.45 would urge that actions should not be guided by
defensive reflexes but that the chances presenting themselves to
each Member State's service providers and citizens and to the
internal market as a whole should be seized.

Brussels, 30 September 2004

The President

of the Committee of the Regions

Peter STRAUB

Opinion of the Committee of the Regions on the Communication from the Commission: Follow-
up to the high-level reflection process on patient mobility and health-care developments in the
European Union and the Communication from the Commission to the Council, the European
Parliament, the European Economic and Social Committee and the Committee of the Regions:
Modernising social protection for the development of high-quality, accessible and sustainable
health care and long-term care: support for the national strategies using the ‘open method of coor-
dination’

(2005/C 43/07)

THE COMMITTEE OF THE REGIONS

Having regard to the Communication from the Commission: Follow-up to the high-level reflection process on
patient mobility and health-care developments in the European Union and the Communication from the Commission
to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the
Regions: Modernising social protection for the development of high-quality, accessible and sustainable health care and
long-term care: support for the national strategies using the ‘open method of coordination’ (COM(2004) 301 final
and COM(2004) 304 final),

Having regard to the European Commission's decision of 20 April 2004, under Article 265(1) of the
Treaty establishing the European Community, to consult the Committee on the subject,

Having regard to the CoR president's decision of 5 April 2004 to instruct the Commission for Economic
and Social Policy to draw up an opinion on the subject,

Having regard to the Communication from the Commission to the Council,
the
Economic and Social Committee and the Committee of the Regions on the health strategy of the European Community
and the Commission's Proposal
the Council adopting a
programme of Community action in the field of public health (2001-2006) (COM (2000) 285 final),

for a Decision of the European Parliament and of

the European Parliament,

Having regard to the Communication from the Commission to the Council,
the
Economic and Social Committee and the Committee of the Regions: Strengthening the social dimension of the Lisbon
strategy: Streamlining open coordination in the field of social protection (COM(2003) 261 final),

the European Parliament,

Having regard to the Communication from the Commission to the Council,
the
Economic and Social Committee and the Committee of the Regions: The future of health care and care for the elderly:
guaranteeing accessibility, quality and financial viability (COM(2001) 723 final),

the European Parliament,