Analyse the distinguishing characteristics of the freedom of establishment and the freedom of services, taking into account the ECJ case-law. Consider further whether the concept of freedom of services applies only to economic activity and its potential i

The freedom of establishment derives from the EC Articles 43-48. However the common

definition given for establishment is “the actual pursuit of an economic activity through a fixed establishment in another Member State for an indefinite period.” Specifically the first part of article 43 deals with the establishment of companies in another member state, the second part goes on to confer the rights of self employed workers. This allows the individual and companies to maintain their business in the member state without any restrictions except “under the conditions laid down for its own nationals by the law of the country.”Freedom of Establishment prevents any restrictions on the rights of individuals and companies to maintain their business in any member state. In the wider sense the provisions of the article creates a levelled platform for all companies without any unfair leniency for national companies.

In Reyners the court ruled that article 43 had direct effect however it does not satisfy the criteria set out in Van Gend en Loos, the case portrayed that an individual was being discriminated against on the grounds of nationality; this prevented him from establishing himself there. Similarly in the case of Vlassopoulou the EU national was unable to establish himself due to discrimination on the grounds of qualifications. The member state was ordered to compare and equate the qualification of the EU national before they excluded him.

The freedom of services derives from the EC in Articles 49-55 the article dictates that there

should be no restrictions on the provision of services between member states, when there is a cross border element. The provision of freedom of services is specifically for self employed workers. As the freedom of movement of persons or labour does not include self employed individuals. To simplify the individual is allowed to cross over to member states without restrictions to provide a service. Or that the recipient of the services can travel to another member state to obtain a service. In both these cases one individual is required to cross over to a member state where they are not permanent or established. This right extends to services provided from within the individuals own state via telecommunication, without physically having to cross borders to provide or receive the service.

The freedom of establishment and freedom of service overlap in the area of self –employed workers. The freedoms can apply to a self employed worker who is the establishment himself as well as the service provider. In the case of Van Binsberg, advocate Mayras highlighted that all citizens should receive equal treatment on grounds of nationality underpinned workers, services and establishments alike. In comparing Articles 39 on workers and Articles 43 on establishment it is evident that each person has asserted their freedom of movement however the difference in each case is whether they are employed or self employed.

 It can be stated that if a self employed person moves to another member state and works there then in actual fact he has established himself there. The EU can benefit from the combination of both the doctrines as the self employed person who is cross border in a member state will sell his services and make a profit. This in turn will contribute to the economic and social climate of EU and create the borderless union that they aimed to create. This breaks any restrictions or misconceptions on the economic market access, self employed persons and companies are given equal rights.

The doctrine of freedom of services is an economic notion; which can guarantee an open market. The Directive 2006/123 must be considered, it focuses on services in the internal market. This covers services on a temporary basis compared to the freedom of establishment. It tries to reinforce the EU freedoms and practices as an economic state. By allowing an open market for workers the economic market benefits as its grows and more jobs are created. The freedom of establishment is an influential doctrine in allowing companies to grow however it does not fully meet the needs of small business that want to expand. The directive attempts to bridge the gaps in the EC articles and the services market. The report explains that the services market shows the least economic growth in the EU when it’s primarily an economic notion. Overall it simplifies and reduces obstacles to the freedoms of services and establishment.

In conclusion the freedoms of service and establishment are economic notions they link back to the very reason the EU was first formed. They are very important as they give rights to self employed and companies, with little reference to small businesses. Competitiveness amongst the movement of workers and establishment prevents the service doctrine from growing. EU citizens would benefit greatly from growth in the services sector. They would be able to choose the best services for themselves with the best price on the entire market. This will help to maintain a borderless Europe.

Word Count (1232)

---