The European Union’s Services Directive has created a great deal of discussion, and it will be in the spotlight during Finland ’s EU Presidency as well. Finnish business life wants to move the Directive proposal forward so that its main merits will not be watered down.

Services represent two-thirds of the EU’s gross domestic product and employment, but their markets are very national. Only 20 per cent of the trading among the Member States is services. In addition to services provided directly for consumers and companies, a service is in many instances a highly important part of a physical product in many sectors of industry, so it is an area that is growing in importance the whole time.

One-stop shop

Freedom of establishment and the free movement of services are two of rights in the Treaty on the European Union. According to a survey, however, companies face many obstacles when trying to provide cross-border services on the internal market. Because of this, the Commission issued a Directive proposal in January 2004 for the development of the internal market for services in the EU.

The Directive endeavours to make it easier for services permanently located in another Member State and for the temporary provision of services from one Member State to another. The Directive requires Member States to examine their administrative procedures relating to service providers’ access to a market and engagement in service activities, e.g. permit and registration procedures.

The Directive requires the Member States to establish a one-stop shop through which a service provider can deal with all matters. Furthermore, it requires Member States to cooperate and exchange information more closely than at present.

Important project for Finland

The proposal has created a great deal of discussion. The aim of the Directive, the opening up the EU’s services market and improved functioning, has generally been recognized as being important. Discussion is going on about the extent to which Member States are ready to make access to their markets easier for service providers.

The Services Directive is an important project for Finnish business life. It will make it possible for Finnish companies to gain access to EU markets more easily. Foreign service-providers can already enter the Finnish open markets easily, because the administration was simplified in the 1990s in Finland . The aim is to guarantee that Finnish companies can operate on a similar basis in other EU countries.

During Finland ’s EU Presidency attempts should be made to take the proposal forward so that the main merits will not be watered down. The Directive must aim for as wide an area of application as possible because omitting areas from the Directive will eliminate Member States’ obligation to examine their administrative procedures. Finnish business life feels that it is particularly important that there is no dilution in the simplification of administration, one-stop shops, permit procedures and registrations concerning cooperation among Member States.

Text: Minna Niemivirta, Confederation of Finnish Industries (EK)