Internal market Services Package

For an imaginary review, we have been looking at building blocks of the European internal market (single market) at mid-term. The blog entry Services in the internal market strategy prepared the way for the Services Package launched by the European Commission in January 2017.

The press materials about this major element serve as your short cut or executive summary, before we embark on the scenic route.

Services Package launched

On 10 January 2017 the European Commission launched A services economy that works for Europeans IP/17/23:

The proposed measures aim to make it easier for services providers to navigate administrative formalities, and to help Member States identify overly burdensome or outdated requirements on professionals operating domestically or across borders. Rather than amending existing EU rules in the area of services, the Commission focuses on ensuring they are applied better, as evidence shows that implementing them to their full potential would provide a significant boost to the EU economy.

The four concrete initiatives, briefly explained, were:

• A new European Services e-card
• A proportionality assessment of national rules on professional services
• Guidance for national reforms in regulation of professions
• Improved notification of draft national laws on services

The press release was accompanied by the customary background memo, with 38 hypothetical questions and answers, both on background and individual proposals, on how to make the rules and administrative practices of the EU member states less incompatible, MEMO/17/11, with a summary of the scope of services targeted (or not) by the Services Package:

The Services Directive applies to important services sectors such as business services, construction and retail services. It does not apply i.a. to financial services, healthcare services, public social services, electronic communications services and networks, and transport services. These sectors and services may be subject to sector-specific legislation and in any event to the overall freedoms enshrined in the Treaty.   

Here are links to the four individual parts of the Services Package 2017, each page (some of them somewhat truncated) with links to various documents for further study:

European services e-card

Notification procedure for authorisation schemes and requirements related to services

Proportionality test before adoption of new regulation of professions

Guidance on reform needs for Member States for regulation in professional services

This concludes the short cut or the executive summary to the 2017 Services Package. I am going to send the postcards from the scenic route from my Finnish blog Eurooppaoikeus and my Swedish blog Grahnblawg.

Ralf Grahn

Services in the internal market strategy

In the preceding blog posts and in the latest entry Internal market mid-term we have looked for building blocks for an imaginary review when the EU Commission reaches mid-term.

The purpose of this blog entry is to present the European Commission’s intentions regarding services in the 2015 internal market strategy, as an introduction to a coming article about the 2017 services package.  

Internal market in services

According to the political guidelines of the Juncker Commission, we need to complete the internal market in products and services and make it the launch pad for our companies and industry to thrive in the global economy, also when it comes to agricultural products.

The European Commission expanded on the theme in its internal market strategy:

Upgrading the Single Market: more opportunities for people and business; Brussels, 28.10.2015 COM(2015) 550 final

The role of the accompanying Commission staff working document A Single Market Strategy for Europe - Analysis and Evidence; Brussels, 28.10.2015 SWD(2015) 202 final;  was illustrated in the blog entry Services in EU single market strategy.  

The new single market strategy came against the background of the Investment Plan for Europe and the European Fund for Strategic Investments (EFSI), the European Energy Union, the Digital Single Market Strategy, the Action Plan for a Capital Markets Union and the Trade for All communication (plus TTIP work), while promising a Circular Economy package and a Labour Mobility package, with taxation and road transport thrown in for good measure; everything having to pass through the better regulation eye of the needle (pages 1-2).   

This left the strategy communication to deal with two of the four internal market freedoms, consequently arguing for more seamless trade in goods and services (page 2):

These measures need to be complemented by a true European Single Market for goods and services.

For all the progress made, too many significant economic barriers remain, notably in the area of services. The Commission estimates that more ambitious implementation of the Services Directive would add 1.8 % of EU GDP.

Service actions

One of the first promises of the new internal market strategy was to enable the balanced development of the collaborative economy, also known as the sharing economy, which includes peer-to-peer finance, online staffing, peer-to-peer accommodation, car sharing and music video streaming. The Commission promised guidance concerning these services and a European agenda for the collaborative economy (pages 3-4).

In order to open up professional services, the Commission promised guidance on regulated professions, first in priority sectors. An analytical framework for member states and mutual evaluation were promised for the EU members, plus legislative proposals to address regulatory barriers (pages 7-9).

With regard to cross-border services in general, the Commission promised to launch a legislative initiative introducing a services passport with a harmonised notification form and an electronic document repository to increase certainty and reduce barriers for service providers, who want to access other EU markets in order to expand their activities (page 9).

The Commission promised to set out best practices on retail establishment and operational restrictions in the single market, in order to give consumers better choices (page 10).

The Commission’s pledged legislative proposals and enforcement action to address geo-blocking and other forms of discriminations concerning access, price or conditions by market operators, on the grounds of place of residence or of nationality (page 11).

The Commission planned a Joint initiative on Standardisation with the European standardisation community, as well as dedicated guidance on service standardisation (page 12).

According to the EU Commission, intellectual property-intensive sectors account for 39 % of GDP and for 35 % of jobs in the EU (page 14), but it may be more debatable if they are a force for innovation or an obstacle to growth. The Commission repeated its promise in the Digital Single Market Strategy for Europe to review the IPR enforcement framework according to a ‘follow the money’ approach, in order to respond to the increasingly cross-border nature of infringements (page 15).

A whole section was dedicated to the improvement of the delivery of the Services Directive, by reforming the notification procedure (pages 17-18). The Commission wanted to extend the successful features of the existing procedure for goods and information society services to other services, including the requirement to notify draft legislation and transparency for stakeholders.

The quickest and clearest route to the promised single market strategy proposals is through the roadmap on pages 21-22.

Later mid-term review?

This blog has wanted to study the internal market in the mid-term review season, but maybe the European Commission has decided to follow a different time-table regarding the single market. The concluding remarks in the communication on the internal market strategy for goods and services gave an indication (page 20):

By the end of 2017, the Commission will review progress on its implementation and, on the basis of comprehensive economic analysis, consider whether additional action is needed to meet its objective of a deeper and fairer EU Single Market.

Services Package

Anyway, one of the new developments we have to take into account is the publication of the European Commission’s Services Package 10 January 2017, summarily presented in the press release: IP/17/23.

After this preparatory blog post we turn to the Services Package in the next entry.

Ralf Grahn

Services in EU single market strategy

In the blog entry Evidence-based European market reforms?, we saw that the condensed single market communication could be used in parallel with the staff working document underpinning the reforms:

Upgrading the Single Market: more opportunities for people and business; Brussels, 28.10.2015 COM(2015) 550 final (22 pages)

A Single Market Strategy for Europe - Analysis and Evidence; Brussels, 28.10.2015 SWD(2015) 202 final (108 pages)

(We found that cross-border VAT offered crushing prima facie evidence of failure from the viewpoint of a single market for SMEs, but we left a detailed discussion until later.)

Domestic keys

The many facets of overdeveloped obstacles for (domestic and) cross-border services and the underdeveloped EU-wide markets were discussed in section 2.3, in the strategy COM(2015) 550 on pages 7-10, but in much greater detail in the analysis paper SWD(2015) 202, on pages 13-39.

Restrictions in the retail sector (section 2.4), page 10 in the communication and pages 39-50 in the supporting working paper, raise similar thoughts:   

EU “red tape” is not the only villain. In many cases the improvement of markets for services - to the benefit of consumers and businesses - requires reforms primarily in the EU member states.

The most concrete Commission proposal was a legislative act to create a services passport to demonstrate professional qualifications. Despite enforcement powers regarding clear breaches, increasingly the Commission seems to assume the role of a guiding mentor and motivational coach, hoping to sway local, regional or state authorities.

Discrimination

The discussion about discrimination (section 2.5), pages 10-12 of the communication and pages 51-54 of the evidence paper, turns to annoying geo-blocking and lame excuses, but with burdensome and fragmented VAT and copyright, how much single market can we realistically expect from SMEs (or anyone under contractual freedom)?

Since the Commission refers to Article 20(2) of the Services Directive 2006/123, let us at least take a look at the excuses provided by the non-discrimination provision:

Article 20

Non-discrimination

1. Member States shall ensure that the recipient is not made subject to discriminatory requirements based on his nationality or place of residence.

2. Member States shall ensure that the general conditions of access to a service, which are made available to the public at large by the provider, do not contain discriminatory provisions relating to the nationality or place of residence of the recipient, but without precluding the possibility of providing for differences in the conditions of access where those differences are directly justified by objective criteria.

“Directly justified by objective criteria” is one more question to remember, when we deal with the concrete actions and proposals of the Commission, based on the 2015 strategy for the single market.

Ralf Grahn

European Commission Work Programme 2012: Internal market and services

For some reason Eur-Lex stubbornly renders the headline of the bibliographic notice in Danish, although the rest of the text is in English. Anyway, the Commission work programme 2012, available in 22 official EU languages, is a suitable read when we are transiting from one annus horribilis to the next. The English language version of the CWP (pdf):

Commission Work Programme 2012: Delivering European renewal; VOL. 1/2 Brussels, 15.11.2011 COM(2011) 777 final (11 pages)

The CWP 2012 offers a convenient overview of ongoing work and planned actions.


Planned actions

If the CWP is Volume 1/2, there should logically be a Volume 2/2, but I was unable to locate it on the legal portal Eur-Lex.

There is, however, an alternative route. If we navigate to the web page The Commission Work Programme, we can find both the CWP proper and an Annex (also in 22 languages). The latter turns out to be the more substantive:

ANNEX to the Commission Work Programme 2012; VOL. 2/2 Brussels, 15.11.2011 COM(2011) 777 final (45 pages)

This is the document for people more deeply interested in one or more areas of the Commission's work in the near future.

About half of the document (pages 2-23) is dedicted to the 129 legislative proposals and other actions planned by the Commission for 2012.

The paper is divided into policy areas, with brief descriptions of each action.


Internal market and services

In this blog post I am going to mention the actions regarding the internal market and services even more briefly:

78 Legislative proposal regarding the protection of investors: Amendment of the UCITS Directive as regards rules on UCITS depositary functions, on manager remuneration policy, and on administrative sanctions
79 Shadow banking communication
80 Legislative proposal on the protection of investors: PRIPs (precontractual disclosures of complex investment products
81 Follow-up to the Performance Check for services: Deepening the single market for services
82 Legislative proposal on collective rights management: Music rights – music online
83 Legislative review of single market and pension funds: Institutions for Occupational Retirement Provision (IORP)
84 Legislative proposal: Revision of the Insurance Mediation Directive (IMD)
85 Legislative proposal: Revision of the Community Trade Mark Regulation and of the Directive approximating national trade mark laws
86 Initiative on disclosure of non-financial information by companies
87 Communication about on-line gambling in the Internal Market
88 Enforcement of intellectual property rights – adaptation of the Directive 2004/48 known as IPRED
89 Legislative proposal: Securities Law Directive
90 Legislative proposal: Close-out netting
91 Digital Single Market: Initiative on notice and takedown procedures
92 Legislative proposal: Insurance Guarantee Schemes
93 Legislative proposal: Third Anti Money Laundering Directive
94 Legislative proposal: Amending the Financial Conglomerates Directive (FICOD II) (2002/87/EC)

There are also proposals in the pipeline for 2013 (page 27), a simplification initiative concerning the Statute for a European Company (SE; regulation 2011/2157)(page 39) and a few proposals to withdraw (pages 43-44) in the area of the internal market and services.



Ralf Grahn

P.S. For an interesting and different take of what politics and policies should be about, you can read the blog post by Ronny Patz, #28c3: “The coming war on general purpose computation” as THE 2011 speech, as an introduction to the video presentation by Cory Doctorow.

David Cameron and EU Single Market

We know that politics make strange bedfellows, but it becomes worrying when they reside in the same head.

In March 2011, just ahead of the spring summit, nine national political leaders sent a joint letter on European growth to the president of the European Council Herman Van Rompuy and the president of the Commission José Manuel Barroso.

Together with the leaders of Denmark, Estonia, Finland, Latvia, Lithuania, the Netherlands, Poland and Sweden, UK prime minister David Cameron was seemingly still at that point for the integrity of the internal market and calling for forceful action to liberate the potential of the single market, with the increasingly important services markets on top:

First, we must deliver the full and untapped potential of the Single Market. The Single Market is Europe’s greatest economic achievement – the core foundation of the world’s largest economy encompassing 500 million consumers and €12 trillion of economic activity. But it is far from finished business.

Services now account for almost four fifths of our economy and yet there is much to be done to open up services markets on the scale that is needed. While significant efforts have been made to put in place the provisions of the Services Directive, many sectors still remain closed off by opaque, disproportionate and disparate regulation. Restrictive practices are rife. And implementation overall falls far short of what is needed to open up markets fairly to competition. So we must do for services markets what we have done for markets in goods – removing the restrictions that hinder access and competition, reducing the number of regulated professions, and making a firm commitment to implementation and enforcement, building on and extending the mutual evaluation process and publishing scorecards of national performance. Succeed and we could add €140 billion to the European economy. We welcome the commitment given by the Commission in its Annual Growth Survey to take action in this area and invite the Commission to report at the earliest opportunity on the steps needed to realise these gains.

Striking at the root of decades of British EEC and EU involvement at the European Council last week stunned more than the 26 heads of state or government present.



Ralf Grahn

EU free movement of persons and services: Have qualifications, will travel?

The EU Commission has published a report on how things turn out in practice for mobile professionals: Internal Market: Commission publishes reports on how Professional Qualifications Directive works in practice (22 October 2010, press release IP/10/1367; available in English, French and German).

The press release highlights a number of problems the European Commission describes as issues which deserve ‘further consideration’:

- Training requirements: the Directive provides for minimum training requirements for certain health professions (doctors, dentists, nurses, midwives, pharmacists) and veterinary surgeons which sometimes date back more than 30 years. A considerable number of authorities consider that these requirements should be reviewed; nearly all competent authorities for the professions concerned welcome the system of automatic recognition of the qualifications in question.

- Language knowledge for health professionals: persons benefiting from the recognition of their qualifications should have the necessary language knowledge for practising their profession in the host Member State.

- Automatic recognition in the areas of craft, trade and industry: there is a call for examining the rules in question which date back to the 1960s (in particular, for updating the list of activities).

- Electronic applications: the reports reveal that, generally, the recognition procedures cannot be fully completed by electronic means.

- Administrative cooperation which is built on the Internal Market Information System (IMI) is quite promising. A proactive alert mechanism ensuring prompt information exchange between national authorities on cases of professional malpractice (for all cases not yet covered under the Services Directive, in particular for health professionals) needs to be considered.

Professional qualifications

The internal market service of the European Commission offers a first page on Professional qualifications, with links to more detailed texts: news, Directive 2005/36/EC, evaluation of the directive, database on regulated professions, group of coordinators, regulatory committee, general system, specific sectors (health professionals and architects), infringements and judgments of Court of Justice, useful links, archives, and contact & help. If you encounter problems, there is also a link to the Citizens Signpost Service, now Your Europe Advice. Your Europe is a helpful resource with regard to other cross-border problems as well.

Evaluation of the Directive is the page for you, if you want first-hand knowledge about the reports from the Commission. The web pages about professional qualifications exist in English, French and German, but the reports in English only.


Directive 2005/36

We generally speak about European Union legislation, even if it would be more exact to refer to the European Economic Area (EEA), as a reminder that the directives are in force in Iceland, Liechtenstein and Norway as well. Adoption is implied by the words ‘Text with EEA relevance’ after the name of a directive.

A few legal acts and corrections have modified Directive 2005/36, so the link is to the consolidated (updated) version of 27 April 2009:

DIRECTIVE 2005/36/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 7 September 2005 on the recognition of professional qualifications

The directive, including seven annexes, runs to 148 pages, but in its day it combined fifteen separate directives into one legal act. The Directive 2005/36 is a corner stone for the free provision of services and the free movement of persons in the internal market.

Next steps

The Commission intends to consult the public (stakeholders), publish a final evaluation report next autumn (2011) and prepare a Green Paper on possible amendments (by 2012).




Ralf Grahn


P.S. Adjudicating Europe – Judicial developments in European law – has returned to active blogging in October, through two blog posts by ‘Cartesio’, both dealing with cases in the Court of Justice of the European Union (CJEU). Hopefully the offer will begin to catch up with the demand for expert comment on EU case law.

EU: What is the Single Market Act? Preview by Barnier

On Europe Day, 9 May 2010, professor Mario Monti delivered his report on the internal market to the president of the European Commmission, José Manuel Barroso: A new strategy for the Single Market – At the service of Europe’s economy and society (107 pages).

On 17 June 2010 the European Council endorsed Monti’s report and called for concrete Single Market proposals from the Commission. The European Council promised to discuss the matter in December.



At the European Parliament, Barroso has referred to the report by Mario Monti and he has promised Commission proposals in October 2010 to deepen the internal market.



Single Market Act



On 16 September 2010 Michel Barnier, the Commissioner responsible for the Internal Market and Services, offered an outline of what the promised Single Market Act is going to be. Some of the remarks are specific to the forum, a conference on the Baltic Sea Strategy in Tallinn (Estonia), but most of the section on the Single Market Act is relevant to businesses, from large corporations to small and medium-sized enterprises (SMEs). Naturally they are important for politicians, public authorities and interest groups in the thirty nation strong European Economic Area (EEA) as well.

In his preview, Barnier was at pains to demonstrate that the Single Market Act will bring direct benefits to citizens of the EEA countries, too:

Services and e-commerce are important initiatives that have to be completed.

But I feel we have to go further.

I do not know if one can "fall in love with the Single Market", to quote the words of Jacques Delors.

But what I know is that the Single Market is there for the people; it was made for them and it must work to their benefit.

Students, workers or pensioners, consumers or public services users… Everyone experiences obstacles to the Single Market in everyday life. And then they wonder: "what's the point of all this, if it does not work when I need it?"

This is a very serious challenge that we face, and it needs an ambitious response. This response I propose to you today is the 'Single Market Act'. To save and consolidate our common economic and social space of life, and to fight against so many tendencies of protectionism and populism.

This Single Market Act will be a framework communication setting out what the Commission intends to do by 2012.

And what is expected of the other public authorities – meaning you.

I have never believed that Europe could be made by Brussels or some institutions in isolation. Europe is not an abstraction; it is everywhere, here in Tallinn as much as in Berlin or Madrid.

The EU has much more to offer to its people than institutions and rules: it is first and foremost about freedoms and opportunities.

This is the meaning of the Single Market Act.

The Single Market Act will put a strong focus on business and SMEs. SMEs make up 99% of businesses and employ 90% of the work force in Europe.

The Single Market Act will stress the urgency of improving the capacity to innovate of European companies – and I hope we will soon find a solution on patents; my aim is that the first European patent be granted in 2014.

We will also step up the fight against piracy and counterfeiting. These practices do not empower consumers, as some demagogues could make people believe. Quite on the opposite; they ultimately impoverish them by stopping innovation. Why would you take your time and money to create something for which you will not be rewarded?

It will propose ways to help businesses get easier financing. I think of helping out venture capital funds, creating regional stock exchanges for SMEs, and simplifying EU rules on public procurement.

More generally, the Single Market Act will attempt to reduce red tape especially – but not only – for cross-border activities, including in the field of taxation and standardisation policy.

We will act abroad to ensure that European companies get fair access to third country markets, especially public procurement procedures.

The other pillar of the SMA will be to show that Europe works for all citizens.

It will notably concern services of general interest, universal access to banking services or patients' rights to the provision of health services.

We will also ensure that consumers are not discriminated against simply because they do not live in the "right" country. Give them more efficient means of redress in case of cross-border abuse.

Finally, we will improve the free movement of workers by reforming the system of recognition of professional qualifications.

And – I know this is a major issue in the Baltic Sea region – we will try to improve the implementation of the Posting of Workers Directive. We must find the right balance between fundamental social rights and equally fundamental economic freedoms to provide services and set up a business in the EU.

Last but not least, the Single Market Act will be about making all stakeholders better informed: if citizens do not know their rights and if practitioners and national administrations do not enforce those rights, there is no point changing the rules in the first place.

This will in turn allow us to develop a clearer view of the malfunctioning in the single market. For that purpose, the Commission will be holding an annual Single Market Forum from 2011 onwards, which is a very good proposal of the European Parliament.

This will start with publishing a list of the "Top 20" of single-market related sources of dissatisfaction for citizens. That way, we can concentrate on what really matters to them and what national obstacles still are to be lifted.

And indeed what we are doing here today, is a kind of a Single market forum at the regional basis for the Nordic countries. I think it is extremely useful and I would like to thank you for this initiative.

As a conclusion, let me say that the Single Market is not all about economics, competition and market opening. It is also about building bridges based on human values, dialogue, understanding, living together – in several nations but in one Europe. A Europe that is united, but not uniform.

I want to listen and understand the challenges you face, especially in the regional context of the Baltic Sea. My services and I are fully committed and available to support you, and I am now eager to hear how we can further help.

Road ahead


The Single Market Act, promised during October 2010, is going to be a framework communication about actions by 2012. In addition to enterprises, the Commission clearly wants to bring tangible benefits to consumers in general and in cross-border situations, as well as mobile citizens.

Barnier’s list of Gordian knots is impressive, even if mentioned only as examples. However, only the Commission’s concrete proposals will reveal its reform ambitions, and the European Council the prospects for progress.

For now, Mario Monti’s report remains the main public source for the reasons behind and the scope for the coming proposals.




Ralf Grahn



P.S. Nowadays it is increasingly hard to find European enterprises, public authorities or interest groups without an active social media presence or a stake in European Union affairs. Politics, policies, economics and law at a European level are becoming more important in a globalising world, not less.

EU-related blogs are a significant aspect of the emerging European online public space. There are now 671 Euroblogs, or blogs related to European Union (and Council of Europe) affairs, listed on Bloggingportal.eu, the multilingual aggregator.



You can take a look at the stream of all new posts, or follow the editors’ choices on the front page. You can also subscribe to the streams (all or highlighted) and the newsletters (daily or weekly) without cost.



Bloggingportal.eu needs a few more voluntary editors for the daily tagging of posts according to subjects. Why not increase your understanding of European affairs, improve your language skills and do something useful by joining the team of editors?

Project Europe 2030 and Innovation Union

The future prosperity of EU citizens will be decided by our collective choices between reform or witnessing our decline. During the Lisbon strategy decade, we crawled in the slow lane. The new Europe 2020 strategy is now supposed to bring us jobs and growth, but without renewed resolve it will only become another pompous pipe dream.

The European Commission is preparing the flagship initiative Innovation Union, and the governments in the EU member states are drafting their first National Reform Programmes (NRPs) based on the Europe 2020 strategy.

Read on, if you want our leaders to deliver.



Council supportive



With China just ten years from closing the innovation gap with Europe on present trends, the Programme of the Belgian Presidency of the EU Council takes research, development and innovation seriously, at least verbally.

The research communities, innovation systems and other stakeholders have an opportunity to set Innovation Union and the other Europe 2020 flagship initiatives, as well as the first new generation National Reform Programmes on course for success.



Project Europe 2030



The Reflection Group chaired by Felipe González looked at strategic choices for the European Union in a long term perspective. Project Europe 2030 offers valuable ideas and suggestions to official drafters, research and development (R&D) communities and the wider public:



Report from the Reflection Group on the Future of the European Union "Project Europe 2030 - Challenges and Opportunities" (Council document 10559/1/10 REV 1)



Prosperity


The Reflection Group posed two fundamental questions to politicians and EU citizens (page 4):

Will the EU be able to maintain and increase its level of prosperity in this changing world? Will it be able to promote and defend Europe’s values and interests?

Human capital


The Project Europe 2030 report underlined the crucial importance of human capital and the need to catch up (page 7):

Human capital is the key strategic instrument for ensuring success in the global economy. And yet, Europe has lost considerable ground in the race to a knowledge economy. Catching up will require a coordinated effort. Member States must mobilise the resources they agreed to invest in R&D, with the help of the private sector, and reform all aspects of education, including professional training. The Union must also act through its own revised budgetary instruments, while making better use of the European Investment Bank and the European Investment Fund. Finally, we need to consider the possibility of opening up new sources of revenue, for instance through the imposition of a carbon tax.

European Research Area

In a manner comprehensible for a wider public of informed citizens, under Growth through knowledge, the Reflection Group depicts the challenges for the European Research Area (ERA) and argues for increased R&D spending on the way towards Innovation Union (page 24 to 25):

Despite numerous calls for substantial increases in R&D spending, the last decade saw relatively little change – the EU’s expenditure remains at 1.8 per cent of GDP. A concerted effort is needed in Europe to reach the ‘Europe2020’ target of 3 per cent expenditure on R&D and the creation of an “Innovation Union”. This must include budgetary reallocations and greater private sector funding. EU centres for pre-competitive applied research should be developed (public-private partnerships between states, regions and private industry) together with increased support for investigator-driven free research through the European Research Council.

To this end, it will be crucial to simplify the procedures for accessing public funding, including EU funds. This would above all benefit small dynamic businesses, which are often the driving force for forward-looking innovations. Today, SMEs account for half of the EU's GDP although they benefit from only 15 per cent of R&D programmes. New forms of partnership are needed between researchers at publicly-financed universities and researchers at privately-financed companies to ensure a continuous pooling of knowledge throughout the process of research and innovation. In particular, more funding is needed for applied research that would benefit SMEs.

Excellence must be the main criterion for granting public aid both at national and EU levels. The role of the European Research Council must be expanded and strengthened, with funds allocated strictly on the basis of peer reviewed excellence, actual or potential. Likewise, the EU must encourage the development of “European poles of excellence” while ensuring that this process of concentration would not lead to the creation of “intellectual deserts”.

Last but not least, the European Research Area must become a reality – an area without borders where all scientific potential, wherever it is, can be fully tapped thanks to the free movement of researchers, ideas, technologies and capital. This process of “Europeanization” must itself be part of a more general openness to the world. Transfers of knowledge have now become the indispensable complement to the traditional drivers of globalisation based on material and capital flows.

The views of the Reflection Group are not new, but they are presented in a clear and convincing manner.



Regulatory framework for innovation

The Reflection Group states the need for dynamic Europe-wide markets in services in order to unleash innovation and creativity (page 25):

Europe often finds it difficult to translate scientific research into new products, new patents, new entrepreneurial activities and new jobs. A lack of competition in service markets inhibits innovation, raises costs and limits growth. Financial services, next generation digital services, energy solutions and services to promote health and learning have all huge potential. The EU is well placed to become a leader in the new service industries, but only if service providers are supported by a Europe-wide market and a new regulatory environment where innovation and creativity can actually flourish.

Free global markets that respect intellectual property rights are the essential breeding ground for innovation. It is therefore important that Europe remains committed to improving market access both inside and outside Europe, most effectively through the completion of the Single Market, both in regard to services and new technologies. At the same time, the EU must reform the rules on intellectual property, for instance through the creation of a straightforward European patent system that is affordable, quick and reasonable, and offers effective protection on a European scale.

In this context, it will equally be important to put in place the measures needed to reinforce risk capital markets and the availability of seed capital. In particular, SMEs – which are very often at the forefront of innovation – need more adequate support mechanisms, including access to risk capital, to help them compete in the global marketplace.

The creative economy will continue to evolve faster than the political processes intended to support or regulate it. Every day it reveals new horizons and revolutionary prospects. Flexibility and responsiveness must therefore be the backbone of any regulatory framework in this field. Facilitating a culture of risk-taking and entrepreneurship is even more important. Only this will allow the EU to fully reap the rewards of research and experimentation, and with it to create new jobs.

From words to action?

Half a century from the launch of the Common Market, the European Union is still struggling to achieve a functioning internal market (or Single Market) in services.

Just a few examples:



The general Services Directive is a complex and ill digested compromise between European ambitions and tribalist instincts. Many member states have been slow in putting the Services Directive 2006/123 into practice. (See information note 18 May 2010, document 9475/10.)



Businesses and consumers pay the price of fragmented digital markets, as shown by the 15th progress report. Splintered markets do not give birth to world class services at affordable prices.



The “straightforward” European patent system has resisted the efforts of several EU Council presidencies keen to act as midwives.


Project Europe 2030, by the Reflection Group, highlights important challenges and opportunities facing politicians, public officials, business leaders, unions and citizens. Innovation Union needs energetic support, decisive action and high quality communication.




Ralf Grahn

Updated Audiovisual Media Services Directive (AVMSD) published

We return to an old friend we have followed here on Grahnlaw. A codified (updated and readable) version of the EU’s Audiovisual Media Services Directive has been published in the Official Journal of the European Union, in the official languages of the EU:




DIRECTIVE 2010/13/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 10 March 2010 on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the provision of audiovisual media services (Audiovisual Media Services Directive) (codified version); OJEU 15.4.2010 L 95/1.




For explanations you can go to the European Commission’s introductory web page Audiovisual Media Services Directive (AVMSD), which offers a number of useful links (language alternatives: English, French and German).




Ralf Grahn

EU Audiovisual Media Services Directive proposal: Structure and essentials

Our latest blog post on European level audiovisual rules was published last year – such a long time ago - and it tried to use this example to show how we are able to follow all the official stages from an original proposal to the final legislative act, published in the Official Journal of the European Union: History of EU Audiovisual Media Services Directive (Following a legislative procedure) (31 December 2009).



The AVMS Directive 2007/65 was originally based on the Commission’s proposal COM(2005) 646 final, and key to the whole legislative procedure was Oeil, the Legislative Observatory of the European Parliament, with the procedure number (and nature) COD/2005/0260 opening up the process file.



Commission proposal COM(2005) 646 final


After the recapitulation of how to access the whole legislative process, we turn to the original proposal by the Commission:



Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL AMENDING COUNCIL DIRECTIVE 89/552/EEC on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities; Brussels, 13.12.2005; COM(2005) 646 final; 2005/0260 (COD); 29 pages.


(These titles are informative, but hardly media sexy.)


The useful information on the front page also told us that the proposal by the Commission was accompanied by two documents: SEC(2005) 1625 and SEC(2005) 1626.



The proposal began with an Explanatory memorandum, which presented the grounds for and objectives of the proposal, the general context, existing provisions in the area covered by the proposal, as well as consistency with other policies and objectives of the Union (pages 2 to 4).


Two paragraphs presented the essence of the matter:

In sum, the objective of the Commission’s proposal is to modernise and simplify the regulatory framework for broadcasting or linear services and introduce minimum rules for non-linear audiovisual media services.



• Existing provisions in the area covered by the proposal

Council Directive 89/552/EEC as amended by Directive 97/36/EC concerns “television broadcasting”. The present proposal amends the TVWF Directives in order to establish a modernised and flexible framework for television broadcasts, including other linear (scheduled) audiovisual media services, and to introduce a set of minimum rules for non-linear (on-demand) audiovisual media services.

Under Consultation of interested parties and impact assessment, the Commission described the consultations and some of the major issues (page 4 to 5):

• Scope of regulation (distinction between linear and non-linear services)
• Advertising (insertion and daily advertising limits)
• Protection of minors and human dignity (including incitement of hatred)
• Cultural diversity (transmission time quotas; free flow of non-linear services)
• Rights to information and short extracts


The Commission proposal listed and described the outside expert advice it had received (page 6) on the scheduling of European works and the impact of regulation on television advertising markets.


Under Impact assessment, the Commission mentioned and discussed five options, from repealing existing regulation or doing nothing to full harmonisation in the European Union (page 7 to 8).


Legal elements of the proposal discussed (page 8 to 9):

• Summary of the proposed action
• Legal basis (ativities of self-employed persons, provisions against restrictions on services)
• Subsidiarity principle (including obstacles to the freedom to provide services in the internal market)
• Proportionality principle (minimum harmonisation to ensure free movement of services in the internal market; co- and self-regulation)
• Choice of instruments


The Commission covered the points that the proposal (page 10):

• had no budgetary implications for the Community budget
• included a transitional period for the proposal
• provided for simplification of legislation
• included a review clause
• included a requirement for member states to notify transposition measures
• concerned the European Economic Area (EEA)



On page 10 and 11 the Commission offered a short explanation of the proposal, which is about the depth we want to go into in this blog post:

• Short explanation of the proposal

The aim of the revision is to define rules for audiovisual media services in a platform neutral way, which would mean that the same basic rules apply to the same kind of services. The set of applicable rules shall no longer depend on the delivery platform but on the nature of a service. The future regulation will distinguish between linear audiovisual services or “broadcasting”, including IPTV, streaming or web-casting on one side, and non-linear services, such as “video-on-demand”- services, on the other side.

The amending Directive introduces new definitions based around the notion of “audiovisual media service” in Article 1 of the amended Directive. The definition of audiovisual media services covers mass media in their function to inform, entertain and educate, but excludes any form of private correspondence, like e-mails sent to a limited number of recipients. This definition also excludes all services the principal purpose of which is not to provide audiovisual content, even where such services contain some audiovisual elements. Services where the audiovisual content is merely ancillary to and not the principal purpose of the service are not covered.

The new Articles 3c to 3h contain the basic tier of rules for all audiovisual media services. As a consequence, some of the specific provisions for television broadcasts, such as Article 7, Article 12 and Article 22a, can be abolished.

Non-linear (on-demand) services will be subject to some minimum principles with regard to

• protection of minors

• prohibition of incitement to hatred

• identification of the media service provider

• identification of commercial communication

• some qualitative restrictions for commercial communication ( ex. for alcohol or targeted at minors).

The new Article 3b introduces a rule on the non-discriminatory application of the right to short news reporting for linear services.

The main changes to Chapter IV on television advertising concern flexible rules for the insertion of advertising (amended Article 11), clear rules for product placement, the abolition of the daily limit on television advertising (old Article 18) and the dropping of quantitative restrictions with regard to teleshopping (old Article 18a).

The daily limit of three hours of advertising per days is considered obsolete, as it finds no application in practice and therefore it is deleted. The insertion rules have been simplified and made more flexible. Instead of being compelled - as is now the case – to allow 20 minutes time between each advertising break, broadcasters can now choose the most appropriate moment to insert advertising during programmes. Nonetheless, films made for television, cinematographic works, children’s programmes and news programmes may be interrupted by advertising only once per each period of 35 minutes.

Pages 12 to 29 contained the text of the proposed Audiovisual Media Services Directive.




Ralf Grahn



P.S. Gobal Europe is a website with valuable materials and an eminent blog with a Morning Brief on international affairs from a European perspective each working day. Global Europe is listed among the nearly 500 great euroblogs on multilingual Bloggingportal.eu, a useful one-stop-shop for fact, opinion and gossip on European affairs, i.a. politics, policies, economics, finance and law.

EU: Last call for copyright comments! Consultation closing

There are only a few days left to respond to the public consultation “Content Online”, launched by the DG Internal Market of the European Commission. This consultation on audiovisual and media policy, copyright, and the Single market ends 5 January 2010.




The exercise is based on the document Creative Content in a European Digital Single Market: Challenges for the Future ─ A Reflection Document DG INFSO and DG MARKT (22 October 2009; 22 pages).


These questions are of crucial importance to citizens and consumers, as well creative artists and employees, organisations for various interests, public administrations and businesses of all sizes, as a quick look at the contents show:

TABLE OF CONTENTS

1. Introduction

2. The evolution of technology and content markets
2.1. Music
2.2. Publishing
2.3. Audiovisual (Film, Video-on-Demand)
2.4. Video games

3. Recent EU level initiatives

4. The main challenges
4.1. Consumer access
4.2. Commercial users' access
4.3. Protection of rightholders

5. Possible EU actions for a Single Market for Creative Content Online
5.1. Consumer access
5.2. Commercial users’ access
5.3. Protection of rightholders

6. Conclusions

European Digital Agenda & Creative Content Online


As part of the coming European Digital Agenda, the objective of the reflection paper is the creation in Europe of a modern, pro-competitive, and consumer-friendly legal framework for a genuine Single Market for Creative Content Online, in particular by (page 3):

– creating a favourable environment in the digital world for creators and rightholders, by ensuring appropriate remuneration for their creative works, as well as for a culturally diverse European market;

– encouraging the provision of attractive legal offers to consumers with transparent pricing and terms of use, thereby facilitating users' access to a wide range of content through digital networks anywhere and at any time;

– promoting a level playing field for new business models and innovative solutions for the distribution of creative content.

The announced European Digital Agenda is in a formative phase, and the legislative programme for the next Commission is being prepared (page 3), which means that this is an important time for those who want to contribute to the agenda.



A European Copyright Law?


Among possible EU actions for a single market for creative content online (from page 14), and against the background of hopelessly fragmented markets, the Commission mentions the idea of a unified “European Copyright Law”, as a means to achieve coherence in online licensing (page 18). Here is an excerpt of the reasoning:

A Community copyright title would have instant Community-wide effect, thereby creating a single market for copyrights and related rights. It would overcome the issue that each national copyright law, though harmonised as to its substantive scope, applies only in one particular national territory. A Community copyright would enhance legal security and transparency, for right owners and users alike, and greatly reduce transaction and licensing costs. Unification of EU copyright by regulation could also restore the balance between rights and exceptions – a balance that is currently skewed by the fact that the harmonisation directives mandate basic economic rights, but merely permit certain exceptions and limitations. A regulation could provide that rights and exceptions are afforded the same degree of harmonisation.

By creating a single European copyright title, European Copyright Law would create a toolfor streamlining rights management across the Single Market, doing away with the necessity of administering a "bundle" of 27 national copyrights.

With rapidly evolving technologies and market conditions, copyright is going to be one of crucial issues in the internal market as well as for the European Union’s trade negotiations internationally.

It is important that all interested parties contribute to the improvement of the European legal and policy framework.

The copyright consultation closes on 5 January 2010.




Ralf Grahn



P.S. Read Adjudicating Europe and other great euroblogs listed on multilingual Bloggingportal.eu, our common “village well” for fact, opinion and gossip on European affairs.

EU Audiovisual Media Services: History, amendments & consolidation

In this blog post we set out on the long march from national television broadcasting monopolies towards a European internal market in audiovisual services, by looking at the history through the Television without Frontiers Directives 1989 and 1997.

At the same time, we offer first examples of how legal acts have been adopted and amended in the European Economic Community (EEC), the European Community (EC) and the European Union (EU), as well as how consolidated legislation helps readers to access legislation in force.





Television without Frontiers Directive 1989




In 1989, under the EEC Treaty, the Council adopted:

Council Directive 89/552/EEC of 3 October 1989 on the coordination of certain provisions laid down by Law, Regulation or Administrative Action in Member States concerning the pursuit of television broadcasting activities; published in the Official Journal 17.10.1989 L 298/23.


This Directive became known as the Television without Frontiers Directive, and it introduced some minimum standards applicable in all EEC member states.

The TVWF Directive was adopted by the Council, in cooperation with the European Parliament.



New Television without Frontiers Directive 1997



Now in the European Community (EC), the European Parliament was mentioned as a legislator together with the Council:



Directive 97/36/EC of the European Parliament and of the Council of 30 June 1997 amending Council Directive 89/552/EEC on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities; published in the Official Journal 30.7.1997 L 202/60.



The Commission’s web pages offer summary explanations of the updated rules in the TVWF Directive, on General Provisions; Jurisdiction; Access of the Public to major (sports) events; Promoting the distribution of European Works; Television advertising, teleshopping and sponsorship; Protection of minors; Right of Reply.



Consolidation 1997




An original legal act, especially with major or plural amending acts are difficult to handle for users. Unofficial updated versions are often published on Eur-Lex, in order to let readers access the legislation in force.

For the convenience of users, an “amalgamated”, consolidated version of the 1989 Television without Frontiers Directive and the “new”, or amending 1997 TVWF Directive was published 30 July 1997, at the same time as the amending Directive: consolidated TVWF Directive.



Forward


In future blog posts we follow the development of EU television broadcasting (audiovisual services) rules until the situation today.




Ralf Grahn



P.S. Read Nosemonkey’s EUtopia and other great euroblogs listed on multilingual Bloggingportal.eu, our common “village well” for fact, opinion and gossip on European affairs.