The EU Services Directive: Law or Simply Policy? (Legal Issues of Services of General Interest)

The EU Services Directive is difficult to achieve without also affecting issues of national social policy, closely related to the welfare state. The EU Services Directive’s characteristics have raised numerous legal questions essential for its full understanding and implementation. It has become a “moving target” for the national administrations. In this book important issues are covered: is the EU Services Directive to be interpreted as law or simply policy and what are its actual effects on the regulatory autonomy of the Member States? Does it represent a new and innovative instrument which facilitates prosperous integration within the EU or, has the EU legislator gone beyond its regulatory competence? This book helps to understand the EU Services Directive and its effects on the regulatory autonomy of the Member States of the European Union in a broader perspective. It is valuable for academics, practitioners and officials both nationally as well within the EU institutions. Preface 7 Contents 8 Abbreviations 13 1 Introduction 14 1.1...Background 14 1.2...The Subject of This Study 19 1.3...Structure of the Study: A Dualistic Approach 22 1.3.1 Introduction 22 1.3.2 Part I: Points of Departure 23 1.3.3 Part II: Legal Positivist Approach 24 1.3.4 Part III: Contextual Approach 26 Part IThe Services Directive,its Implementationand Legal Foundation 29 2 Background to the Harmonisation of the Free Movement of Services 30 2.1...Introduction 30 2.2...Specific Characteristics of the Free Movement of Services 31 2.2.1 Introduction 31 2.2.2 Regulatory Competition Within the Union 31 2.2.3 Home-State or Host-State Control 33 2.3...Background to the Adoption of the Services Directive 35 2.3.1 Introduction 35 2.3.2 Initial Proposal of the Services Directive 36 2.3.3 Modified Proposal 41 3 Transposing the Services Directive 43 3.1...Introduction 43 3.2...Obligations Provided by the Services Directive 45 3.2.1 General Legal Framework 45 3.2.2 Administrative Simplification 46 3.2.3 Establishment of Service Providers 46 3.2.4 Free Movement of Services 47 3.2.5 Quality of Services 48 3.2.6 Administrative Cooperation 49 3.2.7 Convergence Program 49 3.3...The First Phase: The Screening Process 52 3.3.1 Generally 52 3.3.2 The Swedish Transposition Process 53 3.4...Second Phase: Mutual Evaluation 58 3.5...The Evaluation Process: From a Swedish Perspective 61 3.6...Implementation Throughout the Union 63 4 The Services Directive as Legislative Tool 66 4.1...Introduction 66 4.2...Directives as Binding Instruments of Legislative Action 66 4.3...Harmonisation Models of the Internal Market 69 4.4...Positive and Negative Integration Through Harmonisation 71 5 National Regulatory Autonomy Versus Conferred Powers in the Services Directive 73 5.1...Introduction 73 5.2...Sovereign Nation States 74 5.2.1 Sovereignty 74 5.2.2 Europeanization 76 5.2.3 Regulatory Constraints 77 5.3...Effects on the National Regulatory Autonomy Versus Conferred Powers 78 5.4...Legal Foundation of the Services Directive 81 5.5...Characteristics of the Services Directive and Its Legal Basis 84 Part IIThe Services Directive in the Roleof a Traditional Directive 87 6 Bases for Defining the Scope of Articles 49 and 56 TFEU and the Services Directive 88 6.1...Introduction 88 6.2...Beneficiaries of Free Movement 90 6.3...Internal Matters 93 7 Scope and Effect as Defined by Restrictiveness and Justifications 100 7.1...Introduction 100 7.2...Interrelation Between Restrictiveness and Justification 102 7.3...The Boundary of the Scope of Articles 49 and 56 TFEU 106 7.3.1 Introduction 106 7.3.2 Effect, in Law and in Fact 110 7.3.3 Direct Discrimination 115 7.3.4 Indirect Discrimination 117 7.3.5 Non-Discrimination 119 7.3.6 A Wide Scope 120 7.4...Justifications: Article 52 TFEU and the Public Interest 121 7.4.1 Introduction 121 7.4.2 The Range of Justifications in a Specific Case 123 7.4.3 Establishing Balance 128 7.5...Articles 14, and 16(1) of the Services Directive 131 7.5.1 Introduction 131 7.5.2 ‘‘Restrictiveness’’ 135 7.5.3 ‘‘Non-Discrimination’’ 136 7.6...Concluding Remarks 138 8 Definition of ‘‘Measures’’ and ‘‘Requirements’’ 142 8.1...Introduction 142 8.2...Parties Responsible for Securing the Free Movement 144 8.2.1 Introduction 144 8.2.2 Direct Effect 144 8.2.3 State Parties 147 8.2.4 Private Parties 156 8.2.5 The Scope of Articles 49 and 56 TFEU 163 8.2.6 The Scope of Article 4(7) of the Services Directive 164 8.2.7 Concluding Remarks 165 8.3...Types/Kinds of Measures or Requirements 166 8.3.1 Introduction 166 8.3.2 ‘‘Measures’’: Articles 49 and 56 TFEU 167 8.3.3 ‘‘Requirement’’: Article 4(7) of the Services Directive 171 8.4...Fields of Law Exempted from Union Competence 173 8.4.1 Introduction 173 8.4.2 Fields of Law (Not) Exempted from the Scope of Articles 49 and 56 TFEU 173 8.4.3 Fields of Law Exempted from the Scope of the Services Directive 179 8.5...Concluding Remarks 180 8.5.1 Articles 49 and 56 TFEU 180 8.5.2 Article 4(7) of the Services Directive 182 8.5.3 Definition of ‘‘Measures’’ and ‘‘Requirements’’ 183 9 Scope of ‘‘Service Activities’’ 185 9.1...Introduction 185 9.2...‘‘Services’’ Within the Meaning of the Treaty 186 9.2.1 Defining ‘‘Services’’ 186 9.2.2 Applying One or the Other of the Free Movements 189 9.2.3 The Economic Nature of Services and Service Providers 192 9.2.3.1 Introduction 192 9.2.3.2 Free Movement of Services 193 9.2.3.3 Services of General Economic Interest (SGEI) 199 9.2.3.4 For-Profit or Non-Profit Entities 200 9.2.3.5 Concluding Remarks 202 9.2.4 Specifically Regulated Forms of Services 202 9.2.5 Exempted Service Activities 203 9.3...Service Activities Within the Scope of the Services Directive 205 9.3.1 Extended Exemptions 205 9.3.2 Defining the ‘‘Economic Nature’’ of Services 206 9.3.3 Exempted Forms of Service Activities 209 9.3.4 Case C-57/12: Femarbel 219 9.4...Concluding Remarks 224 10 Conclusion Part II 225 10.1...Introduction 225 10.2...A Narrow Interpretation 226 10.3...A Wide Interpretation 227 10.4...Constitutional Issues 229 10.4.1 The Principle of Conferral of Powers 229 10.4.2 Inappropriate and Inadequate? 233 10.4.3 Consequences 233 10.4.4 The Court Must Take a Stand 236 Part IIIContextual Understandingof the Services Directive 237 11 New and Multi-Level Governance Within the Union 239 11.1...Introduction 239 11.2...The Concept of Governance Within the Union 239 11.3...Modes of Governance Within the Union 241 11.3.1 Introduction 241 11.3.2 The Community Method 242 11.3.3 New Modes of Governance 244 11.3.4 Mutual Recognition and Open Method of Coordination 246 11.4...Concluding Remarks 249 12 Contextual Understanding of the Services Directive 251 12.1...Introduction 251 12.2...A Supranational Organisation Moving Towards Intergovernmentalism 252 12.3...Effects of a Proactive Court 258 12.4...Pushing for Supranational Decision-Making and New Governance 260 12.5...A ‘‘New’’ Approach: Goods and Services 263 12.6...Free Movement of Persons 264 12.7...Conceptual Definitions 265 12.8...New Governance 267 12.9...The Services Directive 269 13 The Services Directive Constituting Simply Policy 272 13.1...Introduction 272 13.2...Generally Harmonising the Free Movement of Services 273 13.2.1 Regulating the Free Movement of Services in a Limbo 273 13.2.2 Questions Raised by the Regulatory Solutions Established in the Services Directive 276 13.3...The Aspiration of Services Directive 277 13.3.1 A New Regulatory Approach 277 13.3.2 New Governance Instruments 277 13.3.3 The Core of Articles 14, 15, 16 and 4(7) 278 13.3.4 Consequences of the Procedures Prescribed by the Services Directive 280 13.3.5 Balancing Interests 282 13.4...The Services Directive Introducing a Strategy and New Governance 283 13.4.1 Horizontal Cooperation 283 13.4.2 Contextual Interpretation of Articles 14, 15, 16 and 4(7) 285 13.4.3 The Services Directive is Ill-Drafted 286 13.5...The Services Directive: Simply Policy 287 References 291 Documentation 299 The objective of the EU Services Directive is to realise the internal market for services which is of great importance to the EU and its Member States in respect of facilitating jobs and economic growth. This goal is difficult to achieve without also issues of national social policy, closely related to the welfare state, being affected. This has led to the EU Services Directive exhibiting distinctive features and functions, introducing unique implementation and evaluation procedures and mechanisms to be used by, and within, the Member States. Thus, the Services Directive's characteristics have raised numerous legal questions essential for its full understanding and implementation. It has become a "moving target" for the national administrations. The understanding and implementation of the Services Directive raises several central questions, such as: is it to be interpreted as law or simply policy, and, in light of this, what are its actual effects on the regulatory autonomy of the Member States? In general, does the Services Directive represent a new and innovative instrument which facilitates prosperous integration within the EU or, has the EU legislator gone beyond its regulatory competence? This book provides an in-depth analysis of the EU Services Directive, its scope and its application, and clarifies the problems in interpreting the Services Directive and its effects on the national regulatory autonomy of the Member States. It is a valuable source of information for government officials, practitioners and researchers involved in matters of European Law and especially the EU Services Directive. Maria Wiberg is a Doctor of European Law and Deputy Director at the Swedish Ministry of Foreign Affairs, the Department for the EU Internal Market and the Promotion of Sweden and Swedish Trade, Stockholm, Sweden Front Matter....Pages i-xv Introduction....Pages 1-15 Front Matter....Pages 17-17 Background to the Harmonisation of the Free Movement of Services....Pages 19-31 Transposing the Services Directive....Pages 33-55 The Services Directive as Legislative Tool....Pages 57-63 National Regulatory Autonomy Versus Conferred Powers in the Services Directive....Pages 65-78 Front Matter....Pages 79-79 Bases for Defining the Scope of Articles 49 and 56 TFEU and the Services Directive....Pages 81-92 Scope and Effect as Defined by Restrictiveness and Justifications....Pages 93-134 Definition of “Measures” and “Requirements”....Pages 135-177 Scope of “Service Activities”....Pages 179-218 Conclusion Part II....Pages 219-230 Front Matter....Pages 231-232 New and Multi-Level Governance Within the Union....Pages 233-244 Contextual Understanding of the Services Directive....Pages 245-265 The Services Directive Constituting Simply Policy....Pages 267-285 Back Matter....Pages 287-309