Relaxed restrictions

Services make up 70 percent of Europe's economy but the bulk of the sector is nationally-based because of obstacles to cross-border competition. New rules, set to take effect in early 2010, are to ease that restraint and promote growth and dynamism. Service providers, from software firms to caterers and plumbers, will be able to ply their trade freely across the European Union. The Finnish Industry Minister, Mauri Pekkarinen, described this as a crucial development in internal-market history.

EU Internal Market Commissioner Charlie McCreevy said the new rules were integral to fostering entrepreneurship, making it quicker and cheaper for businesses to expand in the bloc. When questioned over how the move would impact the local economy, McCreevy noted that there would be an increase in jobs over time. Consumers will have legal redress in their local courts against foreign service providers and there is hope that the new rules will help drive out rogue traders.

The 25-nation EU bloc adopted the new rules, opening services to increased cross-border competition, after a final vote in the European Parliament. The move attracted opposition from left-wingers and labor unions, and sparked street protests in some countries, especially France. The debate pitted wealthy Western European states keen to protect their companies from cheaper foreign labor against Eastern European newcomers eager to break into their markets. The laws supersede protectionist measures in member states.

The EU business lobby UNICE is said to want more radical reforms and will be monitoring the implementation of the rules. (Reuters)