Europäischer Rechnungshof - European Court of Auditors
EU’s lacklustre attempt to boost cross-border services
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Press release
Luxembourg, 25 March 2026
EU’s lacklustre attempt to boost cross-border services
- Only 20 % of services in the EU are provided cross-border
- 60 % of barriers in the EU’s single market from more than 20 years ago persist
- EU action to remove long-standing obstacles is insufficient
The European Commission has not done enough to get rid of the considerable barriers that EU businesses have faced for years when providing their services in another EU country, according to a new report by the European Court of Auditors (ECA). The EU’s financial watchdog criticises the EU’s executive for its lack of clear goals and strategic ambition, while noting that EU countries themselves bear their share of responsibility for undermining the integration of the single market for services through regulatory or administrative measures. The audit comes against the backdrop of critical studies on the subject, such as the ‘Draghi report’ on the future of European competitiveness and the ‘Letta report’ on the future of the single market, both published in 2024.
Services, ranging from construction and transport to architecture, IT and employment services, account for around 70 % of EU countries’ economic output (GDP), but only 20 % of services are provided cross-border. According to the Letta report, significant barriers still need to be removed to unlock the full potential of the single market for services. At the heart of the problem lie significant differences in national authorisation and certification requirements, together with diverging national regulations, burdensome administrative procedures, and restrictions on sending workers abroad, all of which create long-standing barriers that make it difficult and costly for businesses to provide services in a cross-border capacity.
“Businesses in the EU continue to face an uphill struggle in providing services in a cross-border capacity,” said Hans Lindblad, the ECA Member leading the audit. “The Commission’s efforts to do away with barriers are still insufficient.”
Around 60 % of the barriers to the EU’s single market for services that were identified in 2002 persisted in 2023, and continued to hinder business activity and price competition. The Commission took measures to address the issue, but until 2025 its efforts lacked not just strategic focus but also a procedure for properly targeting barriers with the greatest potential impact. The situation has not changed much since the Commission adopted its 2025 single market strategy, which relies on tools that are unlikely to be effective.
While the Commission supported EU countries in facilitating cross-border services, businesses still lack full access to the information they need to take up services in another EU country. In addition, the EU’s yearly economic policy coordination, known as the European Semester, failed to encourage significant regulatory reform in services, and few countries used COVID recovery funds to reform service sectors and remove regulatory obstacles.
Overall, the enforcement of rules in the single market for services was weak. First and foremost, the Commission faced serious challenges in enforcing them, and mainly relied on infringement procedures. However, it did not always act promptly when countries failed to comply with the EU’s Services Directive. Moreover, its processing of complaints from businesses against countries that had allegedly violated EU rules was flawed: resolving complaints was sometimes a lengthy process and disadvantaged small companies.
Studies show that significant benefits could be achieved if existing obstacles were removed. However, the Commission does not have a full and up-to-date picture of barriers to cross-border services, and has not sufficiently analysed the costs, benefits and impact of removing them.
The auditors propose several ways for the Commission to become more effective at ensuring a functioning single market for services. It should develop a clearer and more ambitious strategy, use the European Semester more actively, and provide member states with better incentives to carry out necessary reforms. It should also clarify legislation, focus the enforcement of rules on cases with considerable impact, strengthen tools that facilitate cross-border services, and monitor and evaluate progress on completing the single market for services.
Background information
In the EU, individuals and companies have the right to provide and receive services across borders without discrimination or unjustified restrictions. The free movement of services promotes competition and growth, and consolidates the bloc’s single market. The Services Directive is the main legislative instrument for removing the most significant national barriers to EU trade in services.
In terms of cross-border trade intensity in 2023, imports and exports accounted for 0.4 % of turnover in the wholesale/retail sector, 0.8 % in construction, 4.6 % in legal and accounting services, 6.6 % in engineering, 8.1 % in transport, 15 % in computer services, and 31.8 % in advertising and market research. The Commission’s own analysis estimates that ambitious additional reforms could generate extra growth of 2.5 % in the EU’s GDP by 2027.
Special report 13/2026: “Single market for services: Commission action to remove barriers to cross-border services still insufficient” is available on the ECA website, with a one-page overview of the key facts and findings. It follows the 2016 special report on the Services Directive.
Contact:
ECA press office: press@eca.europa.eu