In a previous blog entry we have informed you about the European Commission’s initiative to establish an E-card, pointing out that this measure could be of interest to EurEta members. Today we are coming back with some further information on the issue, hoping that this will help you to get a better understanding of what is at stake. As we said before, the Executive Board of EurEta is going to discuss the E-card at its coming meeting.

A New Services E-Card to Benefit Freelancers

The vast majority of freelancers are highly-skilled knowledge workers and business service providers.

Because of their flexible mind set, they are naturally driven to broaden horizons and expand at cross-border level. Truth is, freelancers know no boundaries — they only need a wifi connection and their brain to work.

On 10 January the European Commission has published a Services Package, that includes a set of measures to upgrade the internal market for services in the EU.

A Services E-Card is part of this package and is a standardised electronic procedure that aims to facilitate, in key economic sectors such as business services, the development and mobility of companies and the self-employed across the internal market.

Its objective is to simplify administrative procedures for service providers wanting to operate cross-border, and reduce obstacles of a regulatory and compliance nature that discourage them from entering a market in another European country.

Freelancers must applaud the ambition of the EU Institutions to reboot the internal market for services, and welcome the pledge to ensure small businesses benefit from simplified rules about cross-border services.

“Working for yourself and being your own boss is the best feeling in the world, but  that doesn’t mean it’s all sunshine, though”.  

Problems Persist

The self-employed population contributed to European GDP with 8.6 billion € in service trade in 2014[1]. Yet, the free movement of services and the free movement of self-employed service providers, both central principles governing the internal market, remain underdeveloped.

The new Services E-Card properly tackles several persistent administrative hurdles faced by the self-employed. However, its success rests upon European Countries to implement all other necessary reforms in the services sector to facilitate more cross-border business.

“If the Services E-Card’s only purpose is to simplify compliance with unnecessary, inconsistent, and frequently changing requirements, that would fail to address the root cause of the problem“.

Reducing administrative burdens for small business, or as they say “more red carpet and less red tape”, is of paramount importance.

According to the Flash Eurobarometer FL 354 “Entrepreneurship in the EU and beyond”, in 2012, 37% of Europeans surveyed expressed a preference for self-employment over being an employee, and there is a lot of supporting evidence to suggest that job satisfaction is very high among the self-employed.

Those who preferred self-employment cited greater freedoms, such as personal independence, self-fulfilment and the chance to do something of personal interest, as well as the ability to choose their own place and time of work.

However, only 14% of Europeans actually are self-employed. Such a gap between aspiration and reality exists because 72% see complex administrative process and 51% see a lack of information as barriers to start on their own.

Freelancers’ Call for Policy Action

Ahead of an event on the EU Services Package, the European Forum of Independent Professionals, a European association representing freelancers, has called on EU Institutions to be more ambitious in support to self-employed service providers operating at cross-border level. The event was co-organised with the European Business Service Alliance and the ALDE Group and took place in the European Parliament on 31 January.

Here below are a number of policy suggestions that emerged from the event as to how the EU Institutions should take the Services E-Card further:

  • Place a primary focus of application of the Services E-Card on temporary cross-border service provisions and on SMEs. Additionally, ensure the specific inclusion of self-employed professionals as one-person enterprises (also those who are unincorporated and those who do not belong to the regulated professions).
  • Introduce additional specific provisions facilitating cross-border business coaching and offer other tailored advice (e.g. on insurance, tax, social security and VAT requirements). Additionally, introduce standard accounting and reporting obligations for those service providers using the Services E-Card.
  • Make the Services E-Card valid for the whole EU, rather than in one single Member State for which it was requested, and valid for other closely related business services that are offered. Additionally, ensure the Services E-Card informs and directs the holder to all other relevant national procedures in relation to the provision of services in the host Member State.
  • Put in place a proportionality test and a set of indicators to help national authorities consider whether additional administrative requirements may be the best means to ensure a high level of quality for services. Additionally, review the indicators in the framework of the European Semester process of convergence of economic and employment policies in the Member States.
  • Ensure the electronic platform at the heart of the Services E-Card includes an open API where developers can build third party solutions to match service providers with clients, for them to actually gain access to the market of another Member State.
  • Ensure the Services E-Card is fully operational as of 1 January 2018.