Possible effects of the proposed EU Services Directive on the German economy

The Ifo Institute and DIW, Berlin, have analysed the expected structural effects of the planned EU Services Directive. The evidence indicates that the employment effect will differ greatly depending on the industry branches. In Germany, manufacturing should profit from the broader and more economical offerings of services but also from the liberalisation in the provision of product-oriented services in other EU countries. But also the service sector in the narrower sense will profit from the stronger growth dynamics in Europe. This applies especially to R&D consulting, service providers in the area of technical, physical and chemical analyses, as well as advertising. Here there will be opportunities for market expansion for German providers that have high-quality standards. On the other hand, for services marked by a high level of intra-regional tradability and a relatively low portion of highly trained specialist, such as construction, industrial cleaning services, auto sales and employment services, the risks from cheaper service importers are relatively high.