Opinion of the European Economic and Social Committee on The internal market in services — requirements as regards the labour market and consumer protection
Date: 2007-05-30
Institutions: European Economic and Social Committee
Subjects: consumer protection, freedom to provide services, labour market, right of establishment, services contract, single market

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Official Journal of the European Union

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

(2007/C 175/05)

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

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

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

1. Aim

The Directive on services in the internal market (1)

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

Freedom to provide in services is one of

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

Social stability and consumer confidence are an impor-
1.3
tant element of European integration and a prerequisite for a
successful internal market in services. Discussion of the services
Directive is seriously flawed in including no meaningful analyses
of the effect on national social conditions, employment and

(1) Directive 2006/123/EC of the European Parliament and of the Council

of 12 December 2006 on services in the internal market.

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

consumer interests. The absence of a statistical basis for quanti-
fying cross-border traffic resulting from the freedom to provide
services and freedom of establishment was one of the points
criticised by the EESC (3). Furthermore, there are hardly any reli-
able data on the structural changes that can be expected in
Member States' labour markets. The result is a few very general
statistical impact assessments on the one hand and particular
individual cases of a frequently illegal or semi-legal nature on
the other. Neither suffices for an objective impact assessment.

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

The aim of

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

(3) See CESE 137/2005, point 3.2 — OJ C 221 of 8.9.2005.
(4) The EESC held a hearing on the broad internal market strategy on
19 September 2001. A hearing held on 24 May 2004 as part of the
process of drawing up the opinion on the
EU services
Directive addressed six key questions, including professional liability,
the ‘one-stop shop’ and statistical methods.

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1.5.1
applies
economic operators in different Member States (5),
three sets of issues:

The ‘freedom to provide services’, which in EU law
to every performance of a service between two
involves

— Evidence with regard to the quantitative impact on employ-
ment and changes affecting sectors and countries which are
likely to be brought about by the outsourcing and reloca-
tion, or the importing, of individual services

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

— Consumer interests and consideration of these interests in

the internal market strategy for services

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

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

2. The dynamics of the service economy in the EU

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

that

A problem which has yet to be resolved is how to
2.2
provide a statistical representation of the cross-frontier service
economy. Up to now, both EuroStat and national statistical
bodies have relied on ‘payment flow’ statistics, i.e. a service is
only exported or imported if it gives rise to a corresponding
cross-border payment transaction. Whilst, on the one hand, the
service economy is characterised by a high degree of coopera-
tion, the transfer of expertise and the exchange of services,

(5) Under Article 50 EC, a service is any independent economic activity

performed in return for remuneration.

(6) This report
presidency.

is expected to be submitted during the Portuguese

(7) Internal Market Advisory Committee.

extensive clearing transactions do, on the other hand, take place
between individual parts of companies, network partners and
also between legally independent economic entities in the
respective countries which are engaged only in long-lasting
cooperation. In such network structures, the respective partners
calculate transfers of expertise, time transfers and transfers of
services
respective home countries as a service
which they have provided to the customer, even though no
cross-border payment transaction is made.

in their

the EESC,

As a result,

in the view of

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

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

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

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

(8) Source for these figures and the figures set out in points 3.5 and 3.6

below: European Commission 2004 and 2005.

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

3. The impact on employment of the creation of a more

efficient internal market in services

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

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

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

the choice of

3.4
The creation of an additional 600 000 jobs is, clearly, a
positive outcome but, given the high level of expectations, such

(9) The Free Movement of Services within the EU, Kox et Al., CPB Report

No 69, October 2004.

(10) Economic Assessment of the Barriers to the Internal Market for

Services, Copenhagen Economics, January 2005.

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

is the fact

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

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

tourism and the

commerce/retail,

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

3.7
The future of SMEs was an issue in itself: would the
increase in cross-border service traffic create more jobs or
would price and competitive pressures squeeze SMEs out and so
lead to job losses? A two-thirds majority (66 %) were sanguine
about
job opportunities. However, 55 % could also foresee
competition driving some firms out of business. Nevertheless, a
clear majority (69 %) thought that liberalisation of the services
market would have no major impact on the future of SMEs, as
In short:
this was more dependent on other

influences.

(12) Criticisms have been expressed by reliable sources which regard even

this projection as unrealistic.

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the anticipated benefits predominated, though they were likely
to be quite modest. However, the crucial factors for success or
survival were expected to be the workers' skills, their capacity
for innovation and the quality of the service provided. There
would also be greater pressure or demand for further harmoni-
sation (educational and vocational qualifications, management
requirements, prices and salaries, social welfare contributions,
corporation tax, and meeting EU and international standards in
general). Welfare standards and consumer and environmental
protection were expected to deteriorate. There was concern, too,
that local cultural specialities could also lose out if large provi-
ders cornered the markets.

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

Study with regard to increasing wages. The point here is defi-
nitely not to suggest that market participants and those bearing
political responsibility are generally intent on social dumping,
but to present a true picture of what is happening.

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

4. New challenges in respect of working conditions and

terms of employment

cases,

services

cross-border

In virtually all

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

in services is successfully deepened,

4.2
This own-initiative opinion does not, however, provide
the setting in which the debate on the implementation of the
Directive on posted workers can and should be conducted. The
key question to be answered is rather the following: what new
problems will arise or how will existing problems be exacer-
bated as a result of the fact that, in future, in connection with
the provision of services, employees from more than one
Member State will more often — and perhaps for longer
periods of time — be working at the same workplace whilst
being subject to partially different conditions? This situation
could, however, also be a source of opportunity, bearing in
mind, for example, the prognosis set out in the Copenhagen

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

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

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

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

5. The interests of consumers in the internal market in

services

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

5.2
The EU posted workers Directive prompts a mixed
appraisal when judged from the standpoint of promoting

concerning

supply-side

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

level

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

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

Another question was about desirable and essential
5.5
the
information in cross-border services. Top of
consumer
list
guarantees,
compensation and rights of complaint. Then came the identity
precise
price
of

provider/origin,

transparency

here were

information

about

legal

and

the

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information on the quality of the service and the safety of the
product/guarantee. Clearly confused by the debate on the
country-of-origin principle, many called for information as to
authority or
which law applies
complaints body has jurisdiction.

and which supervisory

spheres (such as private pensions and healthcare services). Social
questions also played a role (erosion of the minimum-wage,
‘black economy’ work, migration), as did the fear of
losing
environmental and safety standards. A minimum level needed to
be set for generally available public services which guaranteed
social involvement. Other fears included distortion of competi-
tion for local providers (e.g., different social costs) and problems
arising from currency differences.

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

The EU services Directive recommends

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

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

Finally, there was another opportunity to address unre-
5.9
solved questions about consumer protection in the future
internal market for services. Once again, the lack of legal clarity
and security came up as a key concern regarding warranties,
liability (for example, in the event of insolvency), claims against
warranty (inadequate harmonisation, burden of proof
issues)
and the enforcement of compensation claims (too slow, proce-
dure too complex, desire for greater harmonisation). In second
place came the guarantee of sufficient
information on the
service and the provider. The lack of common quality standards
and the ability to compare skills and qualifications were also
seen as a shortcoming. Consumer protection measures were
often incorrectly implemented or were lacking in certain

6. Most important findings

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

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

determining

essential

the

for

is

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

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

C 175/20

EN

Official Journal of the European Union

27.7.2007

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

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

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

6.8
Consumers' views of the EU services directive are mixed.
Some opinions are positive, some negative. The results of the
questionnaire show that quality and legal certainty are rated
highly but are not, according to the respondents, sufficiently

Brussels, 30 May 2007.

promoted in the EU services Directive. Only 23 % were satisfied
with the present state of consumer protection.

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

Few respondents had experience of

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

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

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

The president

of the European Economic and Social Committee

Dimitris DIMITRIADIES