EUROPEAN SEMESTER THEMATIC FICHE
REGULATED PROFESSIONS
Thematic fiches are supporting background documents prepared by the services of the
Commission in the context of the European Semester of economic policy coordination. They
do not necessarily represent the official position of the Institution.
1
Introduction
The Five Presidents Report on 'Completing Europe's Economic and Monetary Union'
highlights that in order to secure long-term success of the Economic and Monetary Union,
the European Union should go a step further and push for a deeper integration of national
labour markets by facilitating geographic and professional mobility, including through better
recognition of professional qualifications.1
Better recognition of qualifications is sought through the Directive 2005/36/EC on the
recognition of professional qualifications2 (Professional Qualifications Directive) which was
revised in 2013 and due to be transposed by all EU Member States and EEA countries by 18
January 2016. This directive has a direct role in supporting geographic and professional
mobility by virtue of the mutual recognition process.
OECD studies show that labour mobility is a key determinant of productivity which enhances
economic growth.3 Not only does labour mobility help close skills gaps and labour shortages,
it also balances demand for labour between Member States. The modernisation of
professional regulation can improve the functioning of the labour market by promoting
mobility between Member States; contribute to lower prices for professional services and by
doing so, increase the capacity for growth of the European economy.
The regulation of professions is the prerogative of the national authorities, subject to the
principles of non-discrimination and proportionality. However, mobility could be improved by
Member States increasing the transparency of their regulated professions, completing a
more thorough analysis of the proportionality of adopted regulations notified to the
Commission, by more actively processing recognition decisions from citizens, while
simultaneously completing reforms of their regulated professions by screening, evaluating
and modernising the requirements.
1
http://ec.europa.eu/priorities/economic-monetary-union/docs/5-presidents-report_en.pdf
2 OJ L 255, 30.9.2005, p. 22–142.
3
http://www.oecd.org/eco/growth/OECD-2015-The-future-of-productivity-book.pdf
1
Under the Directive, national authorities are required to register each regulated profession in
the Professional Regulations database. There are more than 600 generic professions
registered in the database, with more than 5000 national regulations of specific professions.
These numbers indicate that the regulation of professions concerns many EU citizens.
According to a recent survey4 carried out in April 2015 in all 28 Member States, at least 21%
of the labour force in the European Union (50 million people) can be considered as working
in a regulated profession5. The results show that at national level, the share of people
working in regulated professions ranges from 15% in Sweden and Denmark up to 33% in
Germany.
Figure 1 – Share of regulated professions in total labour force, 2015
35%
30%
25%
20%
15%
10%
5%
DK
SE
PT
LV
FR
BE
FI
ES
MT
LT
CY
IT
SI
EE
UK
EL
BG
PL
LU
RO
EU28
AT
NL
HU
CZ
SK
IE
HR
DE
0%
Source: TNS Survey 2015
Regulated professions are present in all sectors of the economy. The chart below indicates
the distribution of regulated professions by economic sector. The 'health and social service'
sector (including doctors and dentists) accounts for 40.3% of all regulated professions.
'Business services', such as lawyers, accountants and architects are second and account for
14.8% of all regulated professions. The transport sector (e.g. taxi drivers) accounts for 9.1%
of all regulated professions and the 'public service and education' sector, including
teachers, represents 9%. Fifth is 'construction' sector (e.g. civil engineers and many craft
professions) at 6.5%. Together these five sectors account for 79.7% of all the regulated
professions.
4
TNS Opinion, Measuring the prevalence of occupational regulation: ad-hoc survey for the European Commission, April 2015,
publication forthcoming.
5
Respondents were asked whether they needed to have a professional certification or a licence or to have taken an exam in
order to practice legally the profession. Those surveyed were either in employment or actively searching for an employment.
2
Source: Database of the Regulated Professions
2
6
Identification of the challenges affecting regulated
professions
Challenge
Europe
1:
The
multiplicity
of
approaches
to
regulating
professions
in
There are currently different approaches to regulation of the same profession between and
sometimes even within Member States. This means that the same professions might be
regulated differently in Member States or sometimes even in the same country or regions,
which makes it more difficult for citizens to have their qualification recognised and to be
employed or self-employed elsewhere.
The graph below is an example of the different regulatory regimes applying in different
Member States for the profession of accountants/tax-advisors. It is also extracted from the
European database of regulated professions7. In some countries, for example in Sweden, the
profession of accountant/tax-advisor is not regulated at all, whereas in the UK, accountants
have a protected title.
6
7
http://ec.europa.eu/internal_market/qualifications/regprof/index.cfm?action=homepage
http://ec.europa.eu/internal_market/qualifications/regprof/index.cfm?action=map&b_services=true
3
Figure 2 –Regulation of the accountant/tax advisor professions in Europe, May 2016
Source: Database of the Regulated Professions, extracted May 2016
Challenge 2: The proportionality of a regulation relative to its objective
In the absence of harmonisation at EU level, the regulation of professions is a prerogative of
Member States. The role of the Professional Qualifications Directive is to ensure that where
regulation is necessary for entry or conduct within the profession linked to the general
interest, there are clear rules on mutual recognition of professional qualifications.
Furthermore with its revision in 2013 the Directive also laid the basis for a process of mutual
evaluation aiming at ensuring that regulation is balanced, proportionate, properly justified and
appropriate. Ideally such regulation should not have a negative impact on consumers,
business, jobs or growth. Member States have to provide a justification on why the regulation
of a profession is necessary with regard to overriding reasons of general interest. They must
also analyse the proportionality of national measures and verify whether they do not go
beyond what is necessary in order to attain these objectives. By mid-January 2016, Member
States had to provide the Commission with information on the professional regulations they
intend to maintain and the reasons for considering that those requirements are justified and
proportionate. At this stage, the assessment of proportionality appears to be quite
challenging for many Member States. This indicates a sizeable problem concerning the way
proportionality assessments are carried out at national level.
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Challenge 3: The recognition process
The Directive lays down the conditions for the recognition process in order to ease the
administrative burden on those who want to be employed or self-employed in a different
country from where they have obtained their qualification. Where a profession is regulated,
citizens may have to go through the recognition process which often requires paying
substantial fees, can be time-consuming and cumbersome. This directly affects the mobility
of citizens which has a knock-on effect on the amount of skills available to businesses.
The graph below shows the number and the type of decisions taken for professionals
qualified in one Member State who apply for recognition in another country8 to practise there
on a permanent or on a temporary basis. The statistics refer to the country in which the
qualification was issued and not to the country of origin of the citizens.
Figure
3
–
Recognition
rates
of
professional
qualifications,
2005-2013
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
HR HU RO SK EE CZ LU NL PT BE UK FI CY SI AT DK IE SE ES MT PL FR BG LV LT IT DE EL
% Negative, difficult* or unsettled cases…
% Quick positive* recognition…
Source: Database of the Regulated Professions
As shown above, the EU average for a quick positive recognition of a qualification is 77.5%.
The EU average of negative, difficult or unsettled cases is 22.5%. The statistics also indicate
that there is a substantial difference in the recognition rates between Member States, which
is influenced by several factors such as the Member State's resources/dedication to manage
the applications for recognition, the number of applicants, the complexity of the regulation
and the specific sector of the profession. However, the higher the response and recognition
rate, the easier and less costly it is for the citizen to have their qualification recognised.
8
EU Member States, EEA countries and Switzerland.
5
3
Identification of appropriate policy levers to address
the challenges
3.1
Structural reforms that can address the identified challenges
There are a number of avenues open to Member States to reform the regulated professions.
In the first instance, existing regulation could be replaced with a lighter form of regulation
such as the use of the protection of professional title instead of reserve of activities. It is
important for Member States to assess the overall cumulative impact of all restrictions
imposed on the professional and the professional activity. The table below examines some
structural reforms that can address the identified challenges.
Access
requirements to a
profession such as
reserves
of
activities
and/or
qualifications
required
Other access or
conduct
requirements
Examine the reserves of activities to see if the scope of reserved
activities may be reduced
Examine if the qualification requirements are necessary
Examine the length of the required education
See if the fixed length of professional experience is proportionate
See if access is restricted to a national of the Member State concerned
Conduct
requirements
Are obligations related to continuous professional development
necessary?
Are the restrictions on legal form, shareholding or voting rights
appropriate?
Are the restrictions on certain multidisciplinary practices justified?
Is professional indemnity insurance necessary to practice the
profession?
Is it necessary to have insurance requirement for cross-border
services?
Conduct
requirements
Is Protected Title justified? Do the specific requirements of the
profession still require this?
Is it necessary to have mandatory registration in professional bodies?
Are there territorial or regional restrictions for access to the profession?
3.2 Ongoing structural reforms
There are already structural reforms being carried out by some Member States.
Bulgaria
France
Ongoing reforms in all regulated professions. Planned periodic revision of the
scope of the reserved activities.
Loi Macron: Access to six legal professions has been improved. Restrictions
related to shareholding, tariffs and voting rights have been relaxed for most of the
professions dealt with by the Macron law, which should favour investments and
cross-profession practices. 75 of the 85 decrees of Loi Macron are ready or have
been published.
Draft Health law: Extension of the competences of certain professions, such as
nurses, masseurs-physiotherapists, speech therapists, chiropodists, handler of
medical electro-radiology, the creation of a new profession, clinical nurse
specialist. The competences of dispensing opticians and orthoptists will be
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reinforced.
The Public Health Code will be amended to recognize the profession of dental
assistant and medical physicist as a health profession within the meaning of
French law. Liberalisation of regulation regarding companies operating
pharmacies. The decree has been adopted in January 2016 and ordinances are
in preparation or published.
Ireland
The Legal Services Regulation Act was adopted in 2015. Implementation of the
new framework is only just starting, and it is too early to be fully confident that the
competition-enhancing and cost-reducing effects will be effective.
Italy
The 2015 draft Competition Law has been transmitted to the Senate in October
2015 and is still under discussion in Parliament. Concerns about the
postponement to 2016 due to the Italian Government's focus on concluding its
"Legge di Stabilità".
Poland
The third and last tranche of the ambitious deregulation reform entered into force
on 27 August 2015.
The reforms covered 248 professions; for most of them the existing barriers have
been partially abolished (by lowering educational requirements, shortening the
certified professional experience period, lifting the professional entry examination)
and completely abolished for 70 of them. Complete deregulation will affect
professions and activities accounting for almost 0.5 million professionals.
Portugal Since 2011 Portugal has made major reforms in the regulated professions. During
that year, 174 professions were deregulated. Additionally, in 2012 and 2013 all the
regulated by law professions were analysed in order to check the proportionality of
the existing regulation, as a result 14 additional professions were deregulated.
The by-laws amending the statutes and the internal rules of professional
associations have been adopted in 2015. However, restrictions to the access to
some professional services (especially the legal professions), in particular
concerning the statutes and internal rules of professional bodies, are being kept or
newly introduced, contrary to Commission's recommendations.
Slovenia The Slovenian government announced further reforms by the end of this year to
modernise regulated professions in certain services' sectors such as tourism,
retail, cemetery-funeral services, construction, chimney-sweeping activities,
detective activities, driving schools, bars, veterinary and socials services.
Geodesy and real estate services will be dealt with by the end of 2016.
Spain
In February 2015, Spain announced that they do not intend to continue with the
planned reform on professional services. In Spain some professional activities
(e.g. legal, architects and engineers professions) are still protected from
competition by rights granted to some services providers to the exclusion of other
service providers with relevant qualifications.
Latvia
Changes are anticipated to the current system of supervision of certified auditors.
3.3 Mutual Evaluation and Transparency exercise
An important aspect of the revised Professional Qualifications Directive is the 'mutual
evaluation and transparency' exercise according to which Member States notify to the
European Commission the professions they regulate, listing the regulatory measures applied
and check whether these restrictions are non-discriminatory, justified and proportionate,
applying the so-called proportionality assessment. The exercise was due to be concluded by
January 2016. As well as bringing to light many instances of unjustified, detrimental and
burdensome regulations, the mutual evaluation process has also revealed a scarcity of
arguments based on sound analysis. All Member States are currently reviewing their
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regulatory measures affecting regulated professions in this context and assessing whether
these are excessive or if they constitute barriers to economic growth.
3.4 Facilitation of mutual recognition by the modernised Professional Qualifications
Directive
An important new element of the revised Directive is the European Professional Card,
which is an enhanced mutual recognition process, which provides electronic recognition for
both permanent establishment and temporary provision of services with shortened deadlines,
streamlined workflows and limited document requirements. The implementation of the EPC
for five selected professions is ongoing and includes nurses responsible for general care,
pharmacists, physiotherapists, mountain guides and real estate agents. Another new aspect
of the revised Directive is the introduction of common training principles. This offers the
possibility to extend the mechanism of automatic recognition to new professions. There are
also enhanced sectoral agreements in the area of health.
4
Cross-examination of policy state of play
4.1
National Action Plans
Member States were due to submit by 18 January 2016 an Action Plan setting out their
intentions and next steps to improve professional access by removing or improving
unnecessary or disproportionate regulation. The Action Plans are divided into two clusters:
(1) Business services, Construction, Manufacturing, Real estate, Transport, Wholesale &
retail and (2) Public Services and Education, Other, Financial Services, Health and Social
Services and Network Services.
By 10 May 2016 17 EU and 1 EEA countries had submitted their final Action Plans outlining
concrete actions to improve access to regulated professions9.
4.2
Single Market Strategy
As part of the Single Market Strategy10, the Commission has announced that it will issue
periodic guidance in view of improving access to, and the exercise of specific regulated
professions at national level. These will take the form of Profession specific
recommendations which will identify concrete reform needs for specific Member States. In a
first phase, the focus will be on selected professions in priority sectors. In a second phase,
reforms will be evaluated and the remaining disproportionate barriers will be addressed.
Depending on the Member State, reform priorities may also be addressed in the context of
the European Semester process.
The Commission will also set out an analytical framework for a proportionality test for
Member States to use when reviewing existing professional regulations or proposing new
ones. This framework will contain a methodology for comprehensive proportionality
assessments of professional regulations. Member States will need to demonstrate that public
9
http://ec.europa.eu/DocsRoom/documents/16603
http://ec.europa.eu/DocsRoom/documents/13444?locale=en
10
8
interest objectives cannot be achieved through means other than limiting access to, or
conduct in, the professional activities in question.
4.3
Best Practices
Best practice 1: Peer review as part of Mutual Evaluation Exercise
1) As part of the mutual evaluation exercise, Member States have exchanged best practices
on how to protect public interest objectives. To facilitate this, examples were taken from
selected sectors for in-depth group discussions. The professions chosen were real estate
agents, driving instructors, architects (business services), civil engineers (construction),
electricians, opticians, physiotherapists, psychologists, hairdressers/beauticians, dental
hygienists, sports instructors and tourist guides/travel agents.
Best practice 2: Cooperation with other Member States: Frontrunners initiative
2) Sweden, Norway, Lithuania, Estonia, the Netherlands, the United Kingdom, Denmark and
Portugal have participated in the Frontrunners initiative on professional qualifications which
aims at developing the work of the transparency process further by sharing experiences and
knowledge and offering non-binding guidance to Member States when assessing the
regulation of professions. The project builds on studies analysing the economic impact of
regulated professions as well as case studies provided by the participating Member States.
Furthermore, the project highlights factors which should be taken into consideration when
assessing regulated professions and offers guidance as to: a) when regulation is justified and
if so what kind of regulatory tools could be considered and b) when an alternative to
regulating might be preferred. 11
4.4
Empirical studies
There is evidence that reducing unnecessary regulation can have positive economic effects.
A recent study by the European Commission showed that less strict regulation leads to more
intense business dynamics, improves allocative efficiency and reduces excessive profit
rates.12
The level of regulation and the economic importance of sectors differ between countries and
there is no one-size-fits-all methodology to assess the economic impact of the regulation of
professions. However, case studies examining how changes to regulation affect economic
indicators in specific sectors shed light on the interactions at play.
A 2015 European Commission assessment of the economic impact of selected barriers in
four business services (architects, civil engineers accountants and lawyers) confirmed a
significant economic impact regarding intensity of competition, sector profitability and
efficiency of resource allocation.13
11
Danish National Action Plan.
The Economic Impact of Professional Services Liberalisation, European Economy – Economic papers 533 September 2014
http://ec.europa.eu/economy_finance/publications/economic_paper/2014/pdf/ecp533_en.pdf
13
http://ec.europa.eu/DocsRoom/documents/13405?locale=en
12
9
The European Commission contracted economic studies in 2014 on the effects of reforms of
regulatory requirements to access selected professions in four different countries: Germany,
Greece, Italy and the United Kingdom14.
(1) A case study in Germany illustrated that, the number of new entrants into a number of
craft professions, for which requirements based on qualifications were made less stringent in
2004, has doubled between 2002 and 2008.15 Higher rates of self-employment are still
observable in the liberalised crafts’ professions five years after the reform and there are more
start-ups than companies going out of business following the reforms.
(2) In Greece, liberalisation reforms enacted in 2011 have resulted in lower prices for
consumers of services of real estate agents, legal professions, accountants, tax consultants
and physiotherapists. The analysis provides indications of positive effects on employment for
the regulated professions as a whole, as without the reforms the recession-induced reduction
in their employment would have been larger. Also the number of new entrants as a result of
the reforms for notaries, auditors, tourist guides and chartered valuers has more than
doubled in 2014 compared with the yearly average before the liberalisation.16
(3) In Italy, the Bersani reform of 2006 brought new entrants into the market for over-thecounter drugs, increasing demand for pharmacists leading to higher earnings of young
pharmacists and their higher overall employment.17
(4) The UK study explores the impact of authorisation schemes required to pursue a
profession on the labour market (number of practitioners, monopoly effects, level of wages
and skills, quality of services). The results indicate that for nursery school workers, licensing
had a negative effect on employment and wages but a positive effect on skill levels. For
security workers, wages went up but there was no effect on employment or skills. 18
Date: 11.05.2016
14
http://ec.europa.eu/growth/tools-databases/newsroom/cf/itemdetail.cfm?item_id=8525&lang=en
Rostam-Afschar D., ‘Regulatory Effects of the Amendment to the HwO in 2004 in German Craftsmanship’, Free University
Berlin and German Institute for Economic Research (DIW Berlin), 2015
16
Athanassiou E., Kanellopoulos N., Karagiannis R., Kotsi A., ‘The effects of liberalisation of professional requirements in
Greece’, Centre for Planning and Economic Research (KEPE), Athens, 2015
17
Pagliero M., ‘The effects of recent reforms liberalising regulated professions in Italy’, University of Turin & Carlo Alberto
College, 2015
18
Koumenta M., Humphris A., ‘The Effects of Occupational Licensing on Employment, Skills and Quality: A Case Study of Two
Occupations in the UK’, Queen Mary University of London, 2015
15
10