The European Commission has failed to adequately remove barriers blocking businesses from trading services across EU borders, the bloc’s spending watchdog concluded in a damning new report.
The services sector accounts for around 70 percent of both GDP and employment in the EU, but make up only 20 percent of trade between member states.
That is “a relatively low figure that indicates further potential gains,” European Court of Auditors (ECA) member Hans Lindblad, who led the audit, told reporters on Wednesday (25 March).
Auditors also found that around 60 percent of the barriers to the single market for services identified in 2006 still persist 20 years later, with national authorisation and certification requirements continuing to make it difficult and costly for businesses to operate across member states.
‘Lack of ambition’
The report lands at a time when pressure is mounting on Brussels to boost European competitiveness.
According to the commission’s own estimates, ambitious additional reforms in the services sector would generate an additional growth potential of 2.5 percent of EU GDP by 2027.
But auditors say these potential gains remain out of reach under the current approach.
“We note that there is a lack of ambition,” at the commission level, said Lindblad. “Its not our job to answer the question why [ambition is lacking], but they have put forward a whole bunch of proposals which have all been rejected.”
Legislative proposals to open up services markets have repeatedly gone nowhere.
A services passport for businesses to operate across the EU without separate national authorisations, and a stronger system to flag new barriers early, were both pulled in 2021 after member states blocked them in the council, unwilling to let Brussels decide who gets to operate in their domestic markets
The commission’s single market strategy adopted last year again relies on tools that are “unlikely to be effective,” the auditors note.
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