EU Auditor Calls for Reforms to Facilitate Cross-Border Services

The European Court of Auditors (ECA) said Wednesday (March 25) that the European Commission needs to do more to enable European Union (EU) businesses to provide services in other EU countries.

Currently, while services account for 70% of EU countries’ gross domestic product (GDP), only 20% of services are provided cross-border, the ECA said in a Wednesday press release highlighting its findings published in a special report.

Services include offerings such as construction, transport, architecture, IT and employment services, according to the release.

“The EU’s financial watchdog criticizes the EU’s executive for its lack of clear goals and strategic ambition, while noting that EU countries themselves bear their share of responsibility for undermining the integration of the single market for services through regulatory or administrative measures,” the ECA said in the release.

The ECA is the EU’s external auditor and performs audits to improve the EU’s governance, accountability, transparency and financial management, according to its website.

In the release, the ECA said the single market still has barriers to cross-border services, including national authorization and certification requirements, national regulations, administrative procedures and restrictions on sending workers abroad.

The European Commission has lacked strategic focus and a procedure for targeting barriers that would make the most difference, ECA said in the release.

As a result, among barriers to cross-border services that were identified in 2002, about 60% remained in place more than 20 years later, according to the release.

Suggesting solutions the European Commission could deploy, the ECA said in the release: “It should develop a clearer and more ambitious strategy, use the European Semester more actively, and provide member states with better incentives to carry out necessary reforms. It should also clarify legislation, focus the enforcement of rules on cases with considerable impact, strengthen tools that facilitate cross-border services, and monitor and evaluate progress on completing the single market for services.”

If cross-border trade were made easier, the EU’s GDP could gain additional growth of 2.5% by 2027, the release said, citing an analysis by the European Commission.

PYMNTS reported in July that when it comes to cross-border eCommerce, the EU presents opportunities but also the challenges of dealing with 27 member states, 24 official languages, a range of economic profiles and unique consumer behaviors.