The Services Directive Proposal

Of course the fundamental freedoms set out in the Treaty of atomic number 63an Union are key to the success and functioning of the EU Internal Market.Two of these were of great importance for the Internal Market freedom of establishment (Article 43) and the freedom to provide cross border service (Article 49). While the former provides access for operators to practice their economical activities in iodin or more Member States, the latter enables an operator providing services in a Member State to do the same in a nonher Member State temporarily without being obligate to get established there.1 Obviously these energize judicial implications.This means, in practice, that Member States must modify national laws that restrict freedom of establishment, or the freedom to provide services, and are therefore incompatible with these principles.This includes not only discriminatory national rules, but also any national rules which are indistinctly applicable to domestic and foreign operat ors but which hinder or render less attractive the exercise of these fundamental freedoms, in particular if they result in delays or additional costs. 2The Internal Market has effected a number of real benefits particularly in some sectors and gener exclusivelyy in providing date and freedom of movement for operators.Overall, the Internal Market has resulted in real benefits. For instance, in the 10 years since the completion of the first superstar Market programme in 1993, at least 2.5 meg extra jobs have been created as a result of the removal of barriers.The increase in wealth attributable to the Internal Market in those 10 years is nearly 900 billion on bonny about 6000 per family in the EU. Competition has increased as companies find new markets abroad. Prices have converged (in many cased downwards) and the range and quality of products available to consumers have increased. 3Later in 1992 Jacque Delor proposed and implemented a programme aimed at creating a single market by eliminating non-tariff barriers to goods trading. Although the programme has been beneficial but it leaves room for substantial progress in order that services can be offered across borders smoothly.4In 2002 EU commission studied the numerous barriers that affect the flow of services across the borders of Europe. It was found that these barriers, including legal restrictions, difficulties in obtaining the required authorisation from local authorities, and the length and complexity of procedures, made it almost impossible for some businesses to get established in countries other than their origin.5However, on 7 May 2003 the European Commission implemented its Internal Market Strategy for the period of 2003-2006.The Strategy concentrates heavily on removing many of the barriers that prevent businesses in the services sector from operating across Europe. The commission views improvements in this sector as essential to meeting the targets of the 2000 Lisbon package, given that servic es now tale for around two-thirds of the EUs GDP.6The Commission also pointed out that the enforcement of EU legislation was not effective in a way that it itself become one of the barriers. Within these strategies and in order to address the problem of removing barriers hindering the flow of services within the Member States, the Commission proposed a Service Directive aimed at enabling service providers of the Member States to establish themselves and provide services in States other than they originally come from.In January 2004 Frits Bolkestein, the European Commissioner for Internal Market at the time, proposed a draft of the Directive on services in the Internal Market today commonly referred to as Bolkestein Directive.7 The Services Directive by removing all the barriers hindering the movement and establishment of service providers with the EU Member States, is expected to create jobs, boost economic growth and increase quality and choice for consumers.The consultants Copenh agen political economy have predicted a 0.3% rise in GDP and a 0.7% increase in employment. The European Commissions estimates point to a 1.8% increase in GDP and 2.5 million new jobs.8Yet the Service Directive was not well received. Although it was adopted for first reading in February 2004, opposition in different countries were pronounced. Countries with high standard of societal protection expressed fear from the consequences of cheaper competition from the foreign market.Some countries and trade unions feared this would lead to a race to the bottom, with firms relocating to countries with lower wages and the weakest consumer, environmental protection, employment and health and safety rules.9Yet the most disagreed point was that of country of origin principle which allows services providers to operate in another country while being obliged to abide only by the laws of the country of origin.1 EU Single Market General Principles available at http//ec.europa.eu/internal_market/ser vices/principles_en.htm accessed on 15 January 2007 2 EU Single Market General Principles available at http//ec.europa.eu/internal_market/services/principles_en.htm accessed on 15 January 2007 3A Single Market for Services available at http//ec.europa.eu/internal_market/top_layer/index_19_en.htm accessed on 15 January 20074 hind end Europe Deliver Research by Paul Stephenson Edited by Neil OBrien (2006) available at http//www.openeurope.org.uk/research/services.pdf accessed on 15 January 2007 5 Can Europe Deliver Research by Paul Stephenson Edited by Neil OBrien (2006) available at http//www.openeurope.org.uk/research/services.pdf6 Services Directive background available at http//www.smallbusinesseurope.org/en/basic_background319.htm accessed on 15 January 2007 7Directive on services in the internal market From Wikipedia, the free encyclopedia available at http//en.wikipedia.org/wiki/Directive_on_Service_in_the_Internal_marketcolumn-one accessed on 15 January 20078 Q&A Servic es Directive, Available at http//news.bbc.co.uk/1/hi/world/europe/4698524.stm accessed on 15 January 2007 9 Q&A Services Directive, Available at http//news.bbc.co.uk/1/hi/world/europe/4698524.stm accessed on 15 January 2007