EU Freedoms: Goods, Persons, and Services Movement
EU Freedoms: Goods, Persons, and Services
Of these four freedoms, the free movement of goods was the first to be tackled. It is a freedom that, it might be thought, would be fairly easy to realise: all barriers to trade must be dismantled according to the guiding principles of the TFUE (and its predecessors), which states customs duties, quantitative restrictions, and measures having equivalent effect are not permitted. Great steps were indeed quickly made in the 1960s with the first two of these, and by 1968 customs duties and quantitative restrictions had been removed. Measures having equivalent effect, however, have been more difficult to deal with and have frequently acted, and been used, as obstacles to trade. Attempts to eliminate such measures have generated a considerable amount of EU legislation and much activity in the Union’s Courts.
Free Movement of Persons
In seeking to establish the conditions for the free movement of persons, the Treaty provides for both the employed and self-employed. The free movement of the former is to be attained by “the abolition of any discrimination based on nationality between workers of the Member States as regards employment, remuneration and other conditions of work and employment” (art 45 TFUE). The free movement of the latter is concerned principally with rights of establishment, that is with the right of individuals and undertakings to establish businesses in the territory of other member states. As with the free movement of goods, legislation and Court rulings have done much to clarify and extend the free movement of persons. They have done so in two main ways.
- First, by providing for mutual recognition of many educational, professional, and trade qualifications.
- Second, by providing key facilitators, notably in the form of the establishment of various legal entitlements, irrespective of nationality and place of domicile, to education and job training, health care, and social welfare payments.
Free Movement of Services
Some of the legislation and Court judgments that have promoted the free movement of persons, and more particular rights of establishment, have also helped to give some effect to the Treaty declaration that there should be free movement of services. Services, which account for approaching 70% of EU GDP, are, however, far from having been wholly liberalised, with many barriers preventing firms from providing services in, or establishing themselves in, other member states. As a central plank in its attempt to tackle this problem, in January 2004 the Commission issued a draft services directive aimed at opening up most of the nonofficial services market: in total, around 50% of economic activity in the EU would be covered. From the outset, however, the directive was steeped in political controversy, with differences between EU decision-makers turning on two points in particular. First, the Commission’s proposal that the directive be based on a country of origin principle—which means that the provider is subject only to the law of the country in which the business is established—met with stiff resistance, not least in the EP. For many, this principle was too liberal and risked standards and levels of social and consumer protection being “driven to the bottom.”