Business Irish

Friday 18 January 2019

Irish push for stronger services market integration with EU trio

Business, Enterprise and Innovation Minister Heather Humphreys. Photo: Kyran O'Brien
Business, Enterprise and Innovation Minister Heather Humphreys. Photo: Kyran O'Brien

Colm Kelpie

Ireland is joining with three other small European Union members to carry out a study of the potential economic benefits of closer integration of the single market for services.

The Government has teamed Ireland up with Denmark, Finland and the Czech Republic to examine the benefits of greater liberalisation in cross-border service provision.

Services account for 70pc of the size of the European Union economy and for a similar share of jobs.

But only a fifth of services, representing around 5pc of the overall EU economy, are actually provided across borders, according to data provided by the European Parliament.

That's in marked contrast to manufactured goods, such as cars - which are sold all over the EU by the same manufacturers.

A briefing note provided to the parliament in 2016 noted that further integration of services would bring about significant economic gains, but that many obstacles to greater integration persist, including differing regulation of services across member states, such as the rules to recognise lawyers or pharmacists.

The Department of Business, Enterprise and Innovation in Dublin said that the single market aims to confer on European businesses and citizens the benefits of four freedoms - free movement of goods, services, capital, and people.

But it added that even after 25 years, there is still work to be done on fully realising free movement of services.

"Deepening mutual access to member states' respective markets for European firms is aligned to the broader access to trading opportunities that is facilitated by the EU's suite of market-opening and comprehensive preferential Free Trade Agreements (FTAs), and to Europe's competitiveness as a trading bloc in these integrated global markets," the department said, in a tender document outlining its request for a consultancy to carry out the study.


"Indeed, some evidence suggests that it may be easier for EU companies to buy or sell services with third countries under these FTAs, than to trade in services with another EU member state."

A spokesman told the Irish Independent that given that 2018 is the 25th anniversary of the single market, it is an appropriate time to carry out the study.

It said Ireland and the other three countries work together as part of a range of "like-minded" groups of states on single market issues.

"The four sponsoring member states have a shared objective of making it easier to trade in services within the single market," the spokesman added.

The department also said that, while there have been previous studies which have sought to demonstrate the economic benefits that can flow from a greater liberalisation in cross-border service provision within the EU, the existing evidence has not so far been persuasive in bringing about a far greater level of freedom in the EU services market.

"Many restrictions, both administrative and, more significantly, regulatory, remain," the department noted.

"Yet, on the other hand, the EU is seeking to make progress in meeting the competitiveness challenge across a suite of crucial emerging policy domains - including most notably digital, innovation, manufacturing, and industrial strategy."

The Government separately announced a week ago that it was aligning itself with a group of eight small and medium EU countries - which includes non-euro members Denmark and Sweden, as well as the Netherlands, one of the founding states of the EU's predecessor - cautious about further plans for deepening eurozone integration.

In a joint statement, they said there are economically liberal and open but want more power retained at national level.

Irish Independent

Also in Business