Good morning.
Two decades on, the EU's services market is still broken
Services make up 70 percent of EU GDP and employment, but account for just 20 percent of cross-border trade. On Wednesday, the European Court of Auditors explained why: roughly 60 percent of the barriers identified back in 2002 are still standing today.
The report's lead auditor, Hans Lindblad, blamed the commission for “lacking ambition.”
“It's not our job to explain why that is,” he added. But for the past two decades, “the commission has proposed a whole bunch of proposals which have all been rejected.”
It's easy to blame national capitals. Several plans failed after member states blocked them, refusing to cede control to Brussels over who does business in their country.
But part of the blame lies with the commission, which hasn’t properly mapped out what the potential (financial) gains could be if those barriers were to be removed. And there are also signs that the EU executive is simply too lenient.
It took Brussels more than 20 years to convince Italy to stop automatically renewing beach concessions to private (often family-run) businesses and open them up for public tender. By any measure, that's a long time.
And slow enforcement is making things worse for businesses. On average, the commission takes 15 months to handle complaints, with some cases dragging on for more than five years.
National "one-stop shop" portals for cross-border paperwork are “largely inadequate” with many failing to offer even basic information in English. Only three of the 27 member states run them properly, the auditors found.
The EU's free dispute resolution service, which helps businesses with cross-border legal issues and employs 200 people according to the website, handled just 25 cases in all of 2024. Companies, it seems, simply do not know it exists.
The auditors are now calling on the commission to fix both, and to build a clearer case for why removing barriers is worth it, even if only to give national capitals the political cover to actually act.
Wester van Gaal, economy editor
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