Commission gets tough over services failings

Infringement proceedings to be launched against member states.

The European Commission will launch infringement proceedings against several member states for failing properly to implement EU legislation to liberalise the market in services.

It is thought that only 11 member states had implemented the services directive by the deadline of 28 December. Among these, Greece, Ireland, Slovenia and Italy have still not completed their screening of national business regulations – a preliminary step that is needed before full implementation. In Austria, the legislation is blocked in the national parliament because of a dispute between the government and opposition parties.

Other countries that have failed to implement on time are known to include Belgium, Cyprus, Latvia, Luxembourg, Poland and Romania.

The Commission is planning two waves of infringement procedures. The first will hit those who failed to implement the directive on time. The second will hit countries that have implemented the directive poorly (by failing to properly set up their points of single contact, or to remove discriminatory requirements).

The official said that the first wave of proceedings could be launched soon, while the second will take “a bit more time”.

A Commission official said that around 12 of the countries that have so far failed to implement the directive “should be in a position to do so” before the summer. She said that the Commission was obliged, nevertheless, to launch infringement proceedings against all those that had failed to meet the deadline.

“We are guardians of the treaty, we have an obligation to take action when there is an infringement,” the Commission official said. “The Commission has to take infringement procedures.”

Infringements

A report published this week by Eurochambres, the association of European chambers of commerce, says that some countries still have substantial work to do before the directive is implemented – Latvia, for example, is not expected to complete its implementation of the directive in 2010.

The legislation obliges member states to lift any discriminatory requirements placed on businesses from other EU countries that want to set up a branch or subsidiary on their territory. Examples include economic needs tests and residency requirements. The legislation also obliges member states to create a website (a point of single contact) where foreign businesses can complete all remaining administrative requirements. The legislation covers the services sector (with several large exceptions including gambling, and health services) which collectively accounts for about 40% of the EU’s gross domestic product.

The Commission has not yet fully analysed the quality of the implementation that has taken place. Also, member states are currently undertaking a “mutual evaluation” exercise to identify improvements that should be made to implementation. This process will be completed only towards the end of 2010.

Arnaldo Abruzzini, Eurochambres’ secretary-general, said that the Commission should be tough on those member states that failed to meet the deadline.

“When I have a tax deadline, I have to meet it…I can’t simply say ‘sorry, it’s difficult’,” he said.