European Parliament : Debates - Thursday, 18 January 2018 - Strasbourg - Provisional edition

Karmenu Vella,Member of the Commission.- Madam President, I would like to thank the rapporteur Mr Danti for his report underlining the fundamental role of professions and the need for high-quality professional services as well as an effective regulatory environment.

Professional services do indeed play a crucial role in Europe's society and economy and as Mr Danti said, they employ 22% of our labour force. They also account for almost a quarter of the value added in the European Union. That is precisely why we in the Commission have taken such a big interest in them.

But several studies have shown that the European professional services sector is seriously underperforming and its productivity is lagging behind. They conclude that a modernised legal framework could bring as many as 700 000 new jobs to the EU and increase EU GDP by up to 1%. In other words, the same order of magnitude as the EU budget.

This is not a minor matter. This is a call for action that we cannot ignore. We must create the best possible regulatory framework for professional services, a framework that does not restrict professionals' freedom in an unwarranted fashion, but one that allows them to contribute maximally to the welfare of our society. I trust that this House shares our objective to deliver this framework.

Nearly five years ago the Council and Parliament asked the Member States to screen their professional regulation as part of a comprehensive mutual evaluation exercise, foreseen in the revised Professional Qualifications Directive, because even where legislation aims to improve social welfare the resulting rules will not always best succeed.

Indeed, even by the time they are adopted rules can be outdated or inadequate. They can be disproportionate or the accumulation of layers of rules can lead to an overly restrictive legal framework. National legislators may not always take into account the external effects on competitiveness, social welfare and the single market. So constant modernisation of the legal framework governing professional services in the EU is crucial.

We welcome the efforts by Member States since the adoption of the revised Qualifications Directive to increase the transparency of the regulation and assess the substance of the rules in place. This has helped to create a database at EU level offering both an important source of information for professionals and making it easier for them to move.

We continue to work hard to improve the functioning and user-friendliness of that database but sadly, Member States' substantive assessment of the professional rules in place was often of a poor quality or even absent. Moreover, many failed to grasp this opportunity for reform to improve their regulatory framework, although experience with such reforms in the Italian pharmacy and Polish legal sector, for example, clearly show that removing unnecessary burdens creates benefits for all.

The evaluation showed that there are big differences in the way in which Member States regulate very similar professions. Variance in itself is not a problem. Differences in regulatory approaches can sometimes be the reflection of different circumstances, but there are also instances where the variance does not reflect differences in national specificities or preferences and where the design of the rules could be improved.

To get a better perspective on how restrictive the regulatory framework for a specified profession in a specific country is, we developed the so-called 'restrictiveness indicator'. This allows us to measure the accumulated burden of different regulatory requirements for some important professional services sectors. It is based on a solid analysis of regulation in place in all Member States. It refines the parameters of the well known and widely used OECD PMR indicator.

Of course, this indicator is only intended to measure the restrictiveness of professional regulation and, as is pointed out in the report, this indicator is not intended to assess whether a restriction can be justified because it pursues a legitimate public interest in a proportionate manner. This is a separate exercise which the Member States have to do in line with the Treaty, but it is still helpful in indicating where Member State regulation is especially restrictive and where they have an interest in examining that regulation more deeply.

Differences in the level of restrictiveness may not be problematic in and of themselves, but they do indicate that other countries might have found other less restrictive ways forward. This could serve as an inspiration.

In order to assist the Member States with the removal of specific unjustified restrictions and to identify possibilities for improving the regulatory environment, we have put forward reform recommendations for seven professional services sectors. They are based on the restrictiveness indicator combined with a qualitative assessment. They target those instances where regulation is found to be particularly restrictive.

These reform recommendations are also important in the context of the European Semester exercise, which has addressed the issue of regulation of professions in several instances. While the indicator may not tell the whole story as it is referred to in the report, this does not mean that the rest of this story should not be based on strong evidence. Indeed, the Professional Qualifications Directive reinforced the obligation for Member States to ensure that the restrictions they impose are truly justified and demonstrably proportionate.

Based on the experience with the mutual evaluation exercise, it became clear that Member States may have difficulties in conducting such a proportionality assessment. Also in some cases the readiness to revisit existing regulations seemed limited. The uneven scrutiny of regulation of professions called for a coherent legal framework, so we put forward a proposal for an ex ante proportionality test for new regulations on which trilogues will start at the end of this month. It fully respects Member States' responsibility for the regulatory decisions they take. It does not impose an obligation of result, it simply proposes a common EU-wide framework to conduct a genuine proportionality assessment before a new or amended regulation is proposed.

Finally, these two policy initiatives will complement and strengthen the Commission's enforcement policy rather than replace it. In this context we take due note of Parliament's call for infringement proceedings to address discriminatory, unjustified and disproportionate regulation. We stand ready to act to address the issue.

We count on the sustained support of honourable Members to keep the reform of professional services high on the political agenda. It is only with their active commitment that we will be able to unleash the potential of this important sector for the benefit of our citizens.