A question that is being asked at present in a number of the old member states of the European Union is whether they would like to have Polish plumbers fixing up their water supply or their leaking pipes. In effect, this issue does not have anything to do with the Polish people and neither does it have to do exclusively with plumbers. It has to do with the new EU directive on the provision of services in the internal market, which has created a great deal of controversy.
The aim of this directive is to facilitate the free movement of services, making it easier for service providers to establish themselves in different EU member states by removing national barriers to the free movement of services within the EU. There is the fear among those EU member states whose economy is stronger that this directive shall be generating an influx of service workers into their economy, thereby having an adverse effect on incomes in the service sector.
The details of the new directive would be well explained by our representatives in the European Parliament and other interested parties. What is important is the fundamental principle underlying the directive. One needs to appreciate that, once this is accepted, no amount of derogations or exemptions will stem the tide towards a complete freedom in the movement of services. It becomes a question of "when" and not of "if".
The underlying principle is that a service provider is subject only to the law of the country in which it is established and EU member states may not restrict services from a provider established in another member state. This principle is no different to that which allows the free movement of goods. Therefore, we are not encountering anything new. Moreover, the freedom of movement of capital and of persons (the latter allows a person to work wherever he wants within the EU, albeit there are today some exceptions in particular with new member states) has already opened up the market for services within the EU to a certain extent.
For example, there is very little today that stops the movement of hotel and catering staff from one country to another. The merger and acquisition process in the financial services sector facilitates greatly the movement of consultants, professionals, managers and employees within this sector. Within the contracting services sector, free movement of technical people, working in a wide range of jobs, is very frequent. Such movement of people has not been seen in the case of other areas, especially where the jobs entailed self employment.
Looking closer to home, it has not been difficult for several persons, citizens of other EU member states, to establish themselves in Malta, working in various fields.
These fields do not include legal services, medical services, architectural services and self-employed technical people. However, one also needs to understand why this has occurred.
For example, in the case of legal services, a person requires a warrant granted by the state to work as a lawyer or a notary. This warrant is granted on the fulfilment of certain conditions, which may not be easy for a person resident outside of Malta to satisfy.
Moreover, the laws of Malta are not the same in all their aspects as the laws of other EU member states and so the requirement of such a warrant becomes understandable. The same barriers exist in a number of other areas but not about self-employed persons working in the construction services sector. And this starts to explain the jibe about the Polish plumber.
The services sector in whatever country of the world is made up of a myriad of activities. So there is no one common front which service workers can put up against this directive. Moreover, the requirements of the different countries are so dissimilar. For some it may be an issue of an influx of manual workers, while for others the fear may be an influx of persons working in the traditional professions. The same diversified interests apply also to Malta.
The impact on the new directive on the free movement of services may be very significant on the EU economy as well as that of Malta, especially since the services sector accounts for about 60 per cent to 70 per cent of economic activity and an increasing proportion of overall employment. It will bring its threats and opportunities and it will thus become critical for persons operating in the services sector in this country to exploit fully these opportunities.