EUROPEAN UNION WORLD

4. Measures to facilitate exercise of the two freedoms: mutual recognition of qualifications and diplomas

Measures to facilitate freedom of establishment and provision of services include harmonization of legislation, i.e. national rules for the exercise of these professions. This harmonization is slow and difficult . The mutual recognition of these rules, in the spirit of the new approach for completion of the internal market, has been more fruitful. It is primarily applied to qualifications and diplomas, starting with each profession separately and then trying to establish a general system of equivalences.

a. The approach by profession

- The results have been most notable in the health sector, for the obvious reason that training courses do not vary much from one country to another, which facilitates their mutual recognition. Most health professions benefit from full mutual recognition of national access diplomas in that the qualifications listed in Community directives can be exercised in any Community country with regard to establishment and freedom of services. The qualifications are:

•doctors: Directives 75/362 and 363 of 16 June 1978 (amended most recently by Directive 93/16 of 5 April 1993);

•dentists: Directives 78/686 and 687 of 24 August 1978;

•veterinary surgeons: Directives 78/1026 and 1027 of 23 December 1978;•nurses: Directives 77/452 and 452 of 27 June 1977;

•midwives: Directives 80/154 and 155 of 21 January 1980;

•pharmacists: Directives 85/432 and 433 of 16 September 1985.

- For other professions mutual recognition has been less widespread. In particular:

•lawyers: the major differences between national legals systems have prevented full mutual recognition of qualifications that would have allowed for freedom of establishment. With a national professional qualification a lawyer can offer only occasional services in another Member State (Directive 77/249 of 22 March 1979). At the end of 1994 the Commission presented a proposal for a directive (COM(94) 572) making it possible to go further: the lawyer could establish himself with his original professional qualification in any Member State and exercise any professional activity but the host Member State may require the assistance of a national lawyer for representation and defence in court. After three years under this temporary procedure the immigrant lawyer would automatically acquire (if he so wished) the right to fully exercise his profession in the host country.

• road haulage operators: Directives 74/561 and 562 of 12 November 1974 and 77/796 of 12 December 1977 (freedom of establishment of road haulage operators), among a number of other texts;

•insurance agents and brokers: Directive 77/92 of 13 December 1976 (freedom to provide services and freedom of establishment);

•hairdressers: Directive 82/489 of 19 July 1982 (freedom to provide services and of establishment);

•architects: Directive 85/384 of 10 June 1985 (freedom to provide services and of establishment);
•self-employed commercial agents: Directive 86/653 of 18 December 1986 (coordination of the laws of the Member States).

b. The general approach

Drafting of legislation for mutual recognition sector by sector, sometimes with more extensive harmonization of national rules, is always a long and tedious procedure. The resulting difficulties have led to consideration of a general system of recognition of the equivalence of diplomas, by level, which is valid for all regulated professions that have not been the subject of specific Community legislation.

The system has been set up in two stages:

- In 1990 recognition of higher education diplomas awarded on completion of professional education and training of at least three years' duration. If the training in the host Member State is very different, it can require an adaptation period or an aptitude test (Directive 89/48 of 21 December 1988) .

- In 1992 expansion of the system to diplomas, certificates and qualifications that are not part of long-term higher education, with two levels:
•shorter post-secondary or professional courses;

•secondary courses.

Here again, if there are substantial differences with the training in the host country, it may require an adaptation course or an aptitude test (Directive 92/51).

Parliament has been instrumental in the liberalization of the activities of the self-employed. It has ensured the strict delimitation of activities that may be reserved for nationals (e.g. those relating to the exercise of public authority) and respect for Community legislation by the Member States. Particular mention should be made of the case it brought before the Court of Justice against the Council for failure to act with regard to transport policy: this case, brought in January 1983, led to a Court judgment (13/83 of 22 May 1985) condemning the Council for failing, in breach of the Treaty, to ensure free provision of international transport services and to lay down conditions under which non-resident carriers may operate transport services within a Member State. The Council was thus obliged to adopt the necessary legislation.The role of Parliament should increase with application of the codecision procedure (as provided for in the Maastricht Treaty) to several aspects of freedom of establishment.

6.4 Free movement of capital

Articles 67 to 73h of the EC Treaty (73a to 73h added by the EU Treaty)

- Removing all restrictions on capital movements between Member States, then between Member States and third countries (in the latter case with the option of safeguard measures in exceptional circumstances).

- Liberalization should help to establish the single market by encouraging other freedoms (the movement of persons, goods and services).

- It should also encourage economic progress by enabling capital to be invested efficiently.

1. First endeavours (before the single market)

a. The first Community measures

These were limited in scope.

A 1960 Directive amended in 1962 unconditionally liberalized

- direct investment;

- short- or medium-term lending for commercial transactions;

- purchases of securities dealt in on the stock exchange.

b. Unilateral national measures

Some Member States decided not to wait for Community decisions and abolished virtually all restrictions on capital movements.

- The Federal Republic of Germany did so in 1961;

- the United Kingdom did so in 1979;

- the Benelux countries did so, between themselves, in 1980.

2. Further liberalization and its completion under the single market

a. Further progress

It was not until the single market was launched, almost 20 years later, that the progress begun in 1960-62 was resumed. Two directives, in 1985 and 1986, extended unconditional liberalization to

- long-term lending for commercial transactions;

- purchases of securities not dealt in on the stock exchange.

b. General liberalization

- Liberalization was completed by Directive 88/361 of 24 June 1988 [1], which scrapped all remaining restrictions on capital movements between residents of the Member States on 1 July 1990. As a result, liberalization was extended to monetary or quasi-monetary transactions, which were likely to have the greatest impact on national monetary policies, such as loans, foreign currency deposits or security transactions.

- The directive does include a safeguard clause enabling Member States to take protective measures when short-term capital movements of exceptional size seriously disrupt the conduct of monetary policy. But such measures only apply to restrictively identified transactions and may not last for more than 6 months.

- Broadly speaking, however, the liberalization of capital movements is the aspect of the single market that has been most fully completed. The option for some countries to maintain restrictions for a certain time (until 31 December 1992 in the case of Spain, Ireland and Portugal, and 30 June 1994 in the case of Greece), mainly for short-term movements, has since expired and now all the Member States of the Union before its most recent enlargement have abolished all limits on the movement of funds and payments, and exchange controls.

- The only restrictions that remain are justified by the needs of tax control and the prudential control of financial services.

Parliament has strongly supported the Commission's efforts to encourage the liberalization of capital movements. However, it has always taken the view that such liberalization should be more advanced within the Union than between the Union and the rest of the world, to ensure that European savings treat European investment as a priority. It has also pointed out that capital liberalization should be backed up by full liberalization of financial services and the harmonization of tax law in order to create a unified European financial market. See Parliament's resolution of June 1988 on this subject.

Jorge Rodrigues Simão