Main Report
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Administrative
burdens/burden savings linked to the obligation of providing information to customers (including the DOP and the CE marking)
1,100 1,200 1,300 1,600 1,600 1,600 1,600 1,700 1,600 3,100 3,100
One off-costs linked to
transition to the CPR - - - 300 300 Administrative cost savings
linked to the possibility of derogating from the DOP and posting the DOP online
- - - (-1,500)* (-1,500)* Administrative cost savings
due to the easier accessibility of information through the PCPC
- - - -1 -1
Substantive burdens/burden savings linked to the obligation for manufacturers to put in place an AVCP system
0 0 0 0 0 0 0 0 0 0 0
Substantive cost savings due to the simplification of the procedures for the testing of products and for the AVCP (art. 36)
- - - - - - - - - n.a. n.a.
Substantive cost savings due to the simplification of procedures for the testing of products and for the AVCP (art. 37-38)
- - - - - - - - - 0 0
Total 1,100 1,200 1,300 1,600 1,600 1,600 1,600 1,700 1,600 3,400 3,400
Share over Turnover 0.4% 0.4% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 0.5% 1.1% 1.1%
* Savings already accounted for in the item above. Source: Authors’ own elaboration over data from
interviews and online stakeholder survey
In the IA Background Study104 (at p. 41), costs for various sectors were estimated at between 0%
and 0.9% of total turnover. As shown in Exhibit 3.4, data for 2006 (as the IA Background Study
103 The analysis is sensitive to certain parameters. Concerning the population of companies subject to the
CPD/CPR, on the one hand the number risks being overestimated, as the enterprises included within the NACE sector covered by the sectoral definition are also likely to include companies with 1 to 4 employees, which are unlikely to manufacture products on their own and thus to comply with CPR. On the other, however, the estimates do not cover many other NACE sectors, which are not sufficiently homogeneous to be considered as part of the ‘construction product sector’, but which are subject to these requirements. Moreover, the estimates are likely to underrepresent the benefits arising from art. 36, for which no quantitative estimates could be retrieved or inferred from the companies interviewed. At the same time, the estimates are based on the assumption of a ‘100% BAU Factor’ for AVCP procedures, which may prove slightly over-optimistic, but for which no sufficiently granular information to disentangle the share of regulatory burdens could be collected.
104 PRC (2007), Study to evaluate the Internal Market and Competitiveness Effects of Council Directive
Supporting study for the Fitness Check on the construction sector: EU internal market and energy efficiency legislation – Main Text
50 dates back to 2007) are in line with those estimates. However, the methodology adopted is different and data are not directly comparable: the IA background study adopted a counterfactual ex ante methodology attempting to measure the additional cost compared to a counterfactual baseline in which no CPD/CPR is adopted; differently, this Study factually measures costs effectively borne by manufacturers over the 2004-2014 period.
Concerning the attribution of effects to the various government tiers, all cost and saving items – excluding BAU costs – quantified in this section are of EU origin.105 This holds even more true for
the period following the introduction of the CPR: differently from the CPD, the legal framework is now based on a Regulation, without an opt-out clause for MS intending not to impose CE marking obligations. MS authorities and public administrations clearly have an impact on costs, being the enforcement authorities; however, enforcement practices are not relevant to this analysis of regulatory costs.
3.3 Business Opportunities, Costs, and Cost Savings of the Professional Qualifications
Directive106
3.3.1 Introduction
The Professional Qualifications Directive (PQD) aims at facilitating the mobility of professionals and craftsmen and the intra-EU trade in services. This objective is to ensure that EU professionals may enjoy both the freedom of establishment, and the freedom to provide professional services in another MS on a temporary basis. To this purpose, the PQD establishes different frameworks. For the freedom of establishment, the PQD consolidates three recognition regimes:
1. The automatic recognition system based on harmonised minimum training requirements, currently applicable i.a. for architects.
2. The automatic recognition system based on professional experience, currently applicable for certain craft activities
3. The general system, applicable to all professions not covered by specific rules and to professionals that do not meet the conditions of the other recognition systems, i.a. engineers, architects whose title is not included in Annex V to the PQD, and craftsmen without sufficient working experience to access the automatic recognition system
As for temporary service provision (‘temporary mobility’), the PQD prescribes that the host MS may only require incoming professionals and craftsmen a yearly declaration including details of insurance cover, nationality and professional qualifications. It may also conduct a prior check of these qualifications when the profession has public health and safety implications and is not subject to automatic recognition. This regime did no pre-exist the PQD.
In this section, the regulatory effects of the PQD in terms of new business opportunities, administrative costs, and cost savings are assessed.107 The exercise is based on the following
sources:
1. Primary information obtained through interviews with professionals;
2. Primary information obtained through interviews with trade associations, public authorities and other stakeholders;
3. Primary information obtained through an e-mail survey targeted at national Chambers of Architects to retrieve cost parameters for carrying out the cost and cost savings assessment linked to the recognition process;
105 Such a conclusion applies to the current state of the world. In the absence of EU provisions, costs would not ‘disappear’, as national or local rules would replace them, as was the case before the adoption of the CPD. However, fact-based information on the costs or benefits of separate national regulations could not be retrieved, since the current legal framework dates back, in its main elements, to the early Nineties. As a result, companies and other stakeholders have little or no memories of the previous situation
106 This Section summarizes the key results of a more detailed analysis presented in Volume 2, Annex III,
Section 3.
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51 4. The Regulated Professions Database (RPD)108 published by the European Commission,
including legal information about whether a profession is regulated and in which MS, and the number of successful, unsuccessful and pending applications for establishment or temporary mobility.109
5. Other secondary sources, including the IA,110 the PQD Evaluation,111 and the mutual
evaluation reports112.
Box 3.1 Number of professionals and craftsmen included in the RPD
The RPD includes data submitted by MS, which retain responsibility for the quality, accuracy and responsiveness of the available information. To make it explicit, the Commission has introduced a disclaimer in the RPD, stating that “[t]he database contains information on regulated professions, statistics on migrating professionals, contact points and competent authorities, as provided by EU MS, EEA countries and Switzerland. Each country is responsible for updating information, on its regulated professions, competent authorities and statistics.”
The relevant Commission services have raised doubts regarding the comprehensiveness of the RPD, which may result in an underestimation of cross-border mobility. The Consultants were not in the position to verify the figures included in the RPD for each MS and profession. However, the information retrieved from the PQD was validated, where possible, via secondary sources and interviews. While discrepancies may remain between the number of accepted demands and the number of professionals and craftsmen establishing abroad or providing temporary services cross-border, the information obtained from other sources suggests that, whatever the gaps in the database, they are unlikely to alter the overall picture of limited cross-border mobility.
Obviously, the RPD does not account for professionals and craftsmen moving to a MS in which a certain profession or craft is not regulated. However, professionals and craftsmen moving towards these MS do not pass through the mechanisms of the PQD, as the recognition of professional qualifications is not necessary therein. Hence, the PQD can be neither attributed administrative costs or burdens falling upon these professionals and craftsmen, nor benefits because of their mobility. In brief, professionals and craftsmen moving towards MS where a profession or craft is not regulated are not relevant for the analysis of the economic effects of the PQD. This also means that the description of the main trends in cross-border mobility in the construction sector (reported in Section 3.2 below) does not account for the whole number of flows, but only for those that go through the PQD mechanisms.
The analysis focuses on the most-mobile construction professions and crafts: (i) architects; (ii) engineers, including both civil and building ones; (iii) electricians (iv) masons, bricklayers, painters, and decorators.113
108 http://ec.europa.eu/internal_market/qualifications/regprof/ (last accessed on March 2016). 109 Data were retrieved from the RPD in November 2015.
110 Commission Staff Working Paper, IA, Accompanying document to the Proposal for a Directive of the
European Parliament and of the Council amending Directive 2005/36/EC on the recognition of professional qualifications and Regulation on administrative cooperation through the Internal Market Information System, SEC(2011)1558.
111 European Commission (2011), Evaluation of the Professional Qualifications Directive, Brussels, 05.07.2011. Hereinafter ‘PQD Evaluation’.
112 Directorate General for Internal Market, Industry, Entrepreneurship and SME E/5 (2015), Mutual
evaluation of regulated professions: Overview of the regulatory framework in the business services sector by using the example of architects Report based on information transmitted by MS and on the meeting of 30th September 2014.; and cf. Directorate General for Internal Market, Industry, Entrepreneurship and SME E/5 (2015), Mutual evaluation of regulated professions Overview of the regulatory framework in the construction sector by using the example of civil engineers Report based on information transmitted by MS and on the meeting of 30 September 2014, at §2.
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52 3.3.2 Assessment of New Business Opportunities
Based on the data from the RPD, the new business opportunities created by the PQD for architects, engineers (both civil and building ones) and craftsmen (electricians, masons, bricklayers, painters, and decorators) were assessed.114 The methodology adopted is based on the calculation of the
added value generated by professionals and craftsmen moving abroad. In particular, the Consultants attempted to identify the cross-border added value, i.e. the supplementary added value generated by the professionals or craftsmen moving to another country compared to the one that they would have generated by remaining in their home MS. The cross-border added value is calculated as follows:
1. The full added value generated by the share of moving professionals and craftsmen corresponding to the unemployment rate;
2. The differential added value generated by the complementary share of moving professionals.
As for the latter, the difference in added value per employee across pairs of MS and for each profession/craft was calculated based on the Eurostat SBS Database. This method enables to identify the additional productivity generated by professionals and craftsmen moving from a MS with a low average added value to a MS with a high average added value. Those flows account for most of, though not all, movements of professionals and craftsmen in the construction sector. For both architects and engineers, 60% of the movements go in this direction; for craftsmen, the share is significantly higher, that is 86% of the movements, implying that craftsmen are more likely to move for economic reasons. This also explains why the average differential added value (2013) for craftsmen is higher, amounting to € 22,170 per moving worker, compared to €11,630 and €14,740 for architects and engineers respectively.
As for the former, when an unemployed professional or craftsman moves and works in another MS, the whole added value, and not only the differential one, is to be considered as cross-border added value. Unfortunately, data on unemployment rates per sector of activity are not available. For this reason, the Consultants have used the average EU unemployed rate in the 28 MS, weighted by the number of professionals and craftsmen in the construction sector moving from each MS.
Once the average added value per person employed is calculated for the three professions, the following assumptions are made to calculate the cross-border added value:115
1. For establishment, professionals and craftsmen established abroad in each year are assumed to remain abroad for the whole period, up until 2014. For instance, professionals and craftsmen established in 2004 create mobility added value for 11 years, while professionals and craftsmen established in 2010 create mobility added value for 5 years; 2. For temporary mobility, professionals and craftsmen operating abroad are assumed to
create mobility added value for one year.
The added value generated by professionals and craftsmen moving abroad is then multiplied by the number of successful establishments cumulated over the period 2004-2014, given the assumption of non-return, and the number of successful demands for temporary mobility. Results are shown in Exhibit 3.6. The impact of the mobility of professionals and craftsmen, in any case, remains low, amounting in 2014 to 0.04% of the value added for engineering services, 0.4% for the four crafts considered, and 0.3% for architects.
114 Full details on the calculation and the assumptions are provided in Section 3.4 of Annex III.
115 These assumptions may have an impact on the robustness of the results. For example, these values may
be overestimated if professionals and craftsmen established abroad return to the country of origin after a certain number of years (a period shorter than the one in scope of the analysis), or if temporary mobility concerns projects shorter than one year. At the same time, the values may be underestimated if professionals and craftsmen moving abroad generate an added value above the sector average (but no evidence could be found in this respect), or if temporary mobility concerns projects longer than one year. However, given the marginal share of cross-border added value over the sectoral added value, any refinement is unlikely to generate a significant effect on total results.
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53
Exhibit 3.6 Mobility Added Value: 2004 - 2014
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014