Access to Services and Services Markets

Services account for about 70% of the EU economy, a similar share of employment and 90% of new jobs.

The single market for services remains incomplete with cross-border trade and investment in services considerably lagging behind that of goods. While not all services are easily tradeable across borders, this is in no small measure due to remaining regulatory and administrative barriers to cross-border trade and investment in services. These barriers are one important factor limiting the availability of services for EU consumers and businesses.

The Services Directive sets rules to facilitate the cross-border provision of services and the right of establishment. The Professional Qualifications Directive provides rules for the recognition of professional qualifications, so that a professional from one Member State can practice and provide services in another Member State.

Because of their share in the EU economy and the significant potential for increased trade and investment in services, the reduction of barriers presents an important potential for the deepening of the single market.

The following sections provide indicators on specific areas of services.
 

Why do they matter for the Single Market?

Industry is a major buyer of business services such as legal, accounting, tax advice services, which thus play a considerable role for the overall competitiveness of our industrial ecosystems.  Business services are also an important driver of new business models and the digital and green transition of the EU economy. The performance of the single market for services moreover impacts the prospects of many EU SMEs to grow and operate across borders.

The EU Restrictiveness Indicator (EURI) measures the level of regulatory restrictiveness on a scale from 0 (least restrictive) to 6 (most restrictive) for the cross-border provision of services and the right of establishment for seven groups of professional services with high share in the EU firms’ intermediate consumption or cross-border mobility. These are accountants (incl. tax advisors), architects (incl. landscape architects and interior designers), civil engineers, lawyers, real estate agents, patent agents and tourist guides. The indicator is based on assessments carried out by the Commission and verified with Member States authorities.

In the area of professional services, the Scoreboard shows little if any progress in the reduction of regulatory barriers for entry and exercise of professions between 2017 and 2021. A few Member States introduced limited reforms, but others raised the level of restrictions. Compared to 2017, the EU average values of EURI have either remained the same for all monitored professions or even slightly increased in 2021 (i.e. more regulations) for tourist guides, real estate agents and travel agents.

In this context, the European Commission issued country specific reform recommendations as part of the European Semester process and in two Commission Communications in 2017 and 2021 (Communication “On taking stock of and updating the reform recommendations for regulation in professional services of 2017"; July 2021).

The most protected business service among those under assessment remain legal services. This has negative consequences for industrial competitiveness because of the share of legal services in intermediate consumption of all EU companies, including SMEs. The average EURI score for legal services remains at 3.4, with little if any improvement in the last 5 years and most Member States above the EU average (and 10 Member States with values of 3.0 and above). Protection from competition in the Single Market remains relatively high as well for architects and civil engineers, as well as for patent agents with EURI scores of respectively 2.5, 2.4 and 2.2.

The recognition rate indicator, which measures how many requests for the recognition of a professional qualification obtained a positive decision in countries regulating the establishment of providers of such services shows lowest values for tourist guides (40%) and real estate agents (58%), as well as for patent agents and lawyers (at about 2/3 of applications). It also shows a disproportionate share of pending decisions in some Member States.

Reporting period: 2017, 2021

Source: European Commission, EURI database
 

These indicators refer to decisions taken by host country authorities on professionals who, having qualified in another EU Member State, apply for their qualifications to be recognised in the host Member State so they can practice there long-term.

Recognition rates by profession: The indicator measures the EU wide positive recognition rate as a percentage of all requests received by the host country in 2019 – 2021 for the 7 professions in the scope of the EURI.

Reporting period: Jan. 2019 – Dec 2021

Recognition rates by Member States : The indicator measures the positive recognition rates as a percentage of all requests received by the host country from all other EU member states in 2019 – 2021 for the 7 professions in the scope of the EURI. It zooms further into the role of recognition of qualifications for access to EU services markets, by presenting the performance by MS.

Reporting period: Jan. 2019 – Dec 2021

The Professional Qualifications Directive (Directive 2005/36/EC) is the cornerstone of the EUmechanism for mutual recognition. Furthermore,  Directive (EU) 2018/958 states that before new professional requirements are introduced or existing ones amended, Member States should conduct a  proportionality test  to assess the impact of these measures against clear criteria and should ensure they are proportionate and suitable for achieving legitimate policy objectives.

The Professional Qualifications Directive specifies two systems of professional recognition.

General system

Professionals wishing to work in another EU Member State need to apply to the relevant authority in the country where they are moving to have their qualifications recognised.

The relevant authorities examine the duration and content of the professional training attested by their diploma(s) and any accompanying documents. The issue is whether there are any significant differences between their training and the qualifications required to practise the relevant profession in the host country.

If there are major differences, the authorities can impose “compensatory measures” on the applicant. For instance, they might have to take a test or complete an adaptation period.

Automatic recognition

This system, which does not allow for compensatory measures, covers a limited number of professions:

• health professions (doctors, nurses, dentist, pharmacists, veterinary surgeons);
• architects.

Applicants from either category must meet the minimum training requirements set out in the Directive.

Certain professionals in trade, industry and business can also have their qualifications recognised automatically if they meet minimum professional experience requirements. For more details, visit the free movement of professionals page of the European Commission.

Efficient and reliable postal services are a vital component of communication services in the EU affecting the everyday lives of all citizens as well as all business sectors. Other sectors such as e-commerce, publishing, mail order, insurance, banking and advertising depend on the postal infrastructure.

Employing about 1.5 million people, the postal services – including express services – is major source of jobs in the EU.

Postal Services and the Single Market – why does it matter?

The aim of the postal services directive is to ensure that affordable, high quality and efficient postal services are available throughout the EU. The postal services directive sets out minimum objectives for postal services and establishes a regulatory framework for European postal services.

For the postal services the price indicator shows an increasing impact of digitalisation in letter mail. Prices for a priority letter are 25 to 30 % more expensive than in 2015. This increase partially compensates the revenue loss caused by declining volumes. On the other hand, on average in the Single Market the quality of service has remained stable with 85% of domestic priority letters reaching the final recipient within the next day.

The graph below shows the public tariff in EUR of sending 20 g letters. It illustrates how much it costs to send a letter domestically compared to sending a letter within the EU.

The figures are based on data on postal services collected by the Commission. There are missing values for the cross-border tariff for Lithuania, Slovakia, Latvia and Spain.

The chart also indicates on the right axis the percentage change in the tariff of letters within the EU since 2015 for the countries where data is available for 2015 and 2020.

Transit time is the time it takes to deliver postal items. This is measured from the time of dispatch (when a person posts a item) to the its arrival at the final destination (when the postal service delivers the item to the house or premises of the recipient).

The chart below shows the percentage of priority mail delivered by the next working day (D+1), in the same country. It also compares, in percentage change, the performance of 2015 with 2020 on the right axis.

This indicator measures quality of service: a high percentage means that the universal service provider delivers a high proportion of priority mail within next day.

The figures are based on data on postal services collected by the Commission. There are missing values for Austria, France, Italy, Ireland, Malta, and Spain for one or more years.

The chart also indicates on the right axis the percentage change since 2015 for the countries where data is available for 2015 and 2020.

Under the universal service obligation, Member States must ensure a basic postal service is available to all members of the public at an affordable price. The obligation includes collecting, sorting, transporting and distributing letters weighing up to 2 kg and parcels weighing up to 10 kg. Deliveries are performed at least 5 working days a week.

More information about Postal services.