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ARTICLE16 October 2020

An improved Single Market for services: the key to the EU”s economic recovery

The ongoing pandemic has placed Europe”s business in a challenging economic situation. At the same time, the service sector has also experienced an increased demand. It is important that the opportunities that this crisis offers are not ‘wasted’; instead, we should see this occasion as a chance to strengthen and improve the Single Market, not least for services – both digital and traditional.

The participants in the recent webinar ”An improved Single Market for Services - a Kickstart for the Economic Recovery of the EU”, fully agreed that this was the best way forward. The webinar, organised by the Confederation of Swedish Enterprise in partnership with its sister organisations in Denmark, Finland and the Netherlands, was opened by Morten Løkkegaard, Danish MEP (Renew). During the Coronavirus lockdown, he had presented a draft initiative report on the importance of a well-functioning Single Market for services.

The service sector should be given the opportunity to realise its full potential, said Løkkegaard. It accounts for 70% of the EU”s GDP, but at the same time it is being hit hardest by the obstacles in the Single Market. This is at a time when services are an increasingly important part of the business solution, and manufacturing companies are increasingly dependent on services in order to be able to grow and create jobs.

– I believe that the potential benefits of free movement of services are far too important to ignore. Therefore, I want to see the EU focus on four issues: implementation, application, evaluation and autonomy. Implementation in such a way that Member States are not allowed to fall behind or engage in gold-plating; and application - we must not tolerate overlapping rules and double standards. We MEPs love to draft new legislation, but we must become better at evaluating the impact of the regulations we create. Finally, we must help companies - not least our SMEs - by making information easily accessible.

Magnus Nyhlén, founder of the online medical service Min Doktor/Docly highlighted just how complicated it can be to run a company that wants sell services on the Single Market. He explained how much effort it took to examine and analyse the national rules of each individual Member State, not all of which even permitted the use of digital healthcare. To deal with this, the company needed to hire local lawyers, local staff and conduct quality reviews in each country. This required considerable resources and substantial investment of time, without any certainty that they would, in the end, be able to establish themselves.

– It is very difficult to become a pan-European player in digital healthcare. When we have met with potential international investors, they do not understand how digital healthcare could scale up in Europe under such circumstances, with these diverse rules. It will be difficult to compete with major players from China, the USA and India in the future.

Many of the rules need to be improved, Nyhlén believes, and - above all - a harmonised regulatory framework for digital care and a common regulatory framework for data storage and data protection in the medical sector are urgently needed.

– Being able to provide digital prescriptions that apply throughout the Single Market would also help increase uptake. More than anything, better regulations in the sector could have contributed to an increase in the number of practitioners and thus in quality.

Responsibility for the economic recovery, as well as the Single Market, is shared by the EU institutions and the Member States. Among the panellists were a Swedish MEP - Arba Kokalari (EPP) - and Hubert Gambs, who is deputy Director General of the European Commission”s DG Growth.

– This is a critical time for Europe”s business, and therefore we must focus on making our economy competitive again by removing further obstacles in the Single Market. We must reduce the regulatory burden for companies, particularly those small and medium-sized companies that do not have the same resources for handling bureaucracy as large companies. The laws that are enacted must be implemented, instead of simply constantly enacting more new laws. Bureaucracy must be reduced.” Kokalari said. She warned that confidence in the Single Market will fall unless the implementation of laws is tightened in order to help harmonise regulations within the Union.

Several in the panel spoke about the business community is becoming increasingly entrusted with service aspects. Traditionally, a company that may have sold lamps, nowadays they also sell light - that is, both the product itself and the services associated with it. If the Single Market is not opened up for services in an effective way, and the view of services is improved, the EU may well find itself left behind by its competitor countries in the not-too-distant future.

– Digital services will put pressure on other services and together these will require a less-regulated world. We live in an increasingly consumer-driven environment, and if we are not able to let European companies offer what EU citizens want, others will fill that gap. We already see this happening in e-commerce, and it is why we must protect and strengthen the core values of the Single Market and seek greater confidence in this approach among Member States,” said Hubert Gambs.

Gambs was supported by Morten Løkkegaard, who saw increasing digitalisation as a major component of the solution.

– The key is to develop products that consumers want so much that they do not care about what politicians say, as we see in digital healthcare. Then we politicians will be pressured to act - but those actions must be specific, concrete and precisely consumer-driven. I believe that if we allow digital development and give companies more freedom, it will solve much for the service market, even if we never achieve a perfect world.

Cemille Üstün, who is responsible for internal market issues at the Confederation of Swedish Enterprise, was pleased with the outcome of the webinar.

– It is fantastic that a proper discussion about the free movement of services on the Single Market has started and that all responsible institutions were represented in the panel. It was great that all panellists took ‘My Doctor’ experiences on board. We, as organisers, see this as the prelude to a continuing dialogue where the business community can be involved, she said.

XSkriven avCemille Üstün
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