L 376/36 Official Journal of the European Union 27.12.2006 DIRECTIVE 2006/ 1 23/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 12 December 2006 on services in the internal market THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EURO- PEAN UNION, Having regard to the Treaty establishing the European Commu- nity, and in particular the first and third sentence of Article 47(2) and Article 55 thereof, Having regard to the proposal from the Commission, Having regard to the Opinion of the European Economic and Social Committee (1), Having regard to the opinion of the Committee of the Regions (?), Acting in accordance with the procedure laid down in Article 251 of the Treaty (3), Whereas: (1) The European Community is seeking to forge ever closer links between the States and peoples of Europe and to ensure economic and social progress. In accordance with Article 14(2) of the Treaty, the internal market comprises an area without internal frontiers in which the free move- ment of services is ensured. In accordance with Article 43 of the Treaty the freedom of establishment is ensured. Article 49 of the Treaty establishes the right to provide services within the Community. The elimination of barri- ers to the development of service activities between Mem- ber States is essential in order to strengthen the integration of the peoples of Europe and to promote balanced and sustainable economic and social progress. In eliminating such barriers it is essential to ensure that the development of service activities contributes to the fulfilment of the task laid down in Article 2 of the Treaty of promoting through- out the Community a harmonious, balanced and sustain- able development of economic activities, a high level of employment and of social protection, equality between men and women, sustainable and non-inflationary growth, a high degree of competitiveness and convergence of economic performance, a high level of protection and improvement of the quality of the environment, the raising of the standard of living and quality of life and economic and social cohesion and solidarity among Mem- ber States. (1) OJ C 221, 8.9.2005, p. 113. (2) OJ C 43, 18.2.2005, p. 18. (*) Opinion of the European Parliament of 16 February 2006 (not yet published in the Official Journal), Council Common Position of 24 July 2006 (O] C 270 E, 7.11.2006, p. 1) and Position of the European Parliament of 15 November 2006. Council Decision of 11 December 2006. ) A competitive market in services is essential in order to promote economic growth and create jobs in the Euro- pean Union. At present numerous barriers within the internal market prevent providers, particularly small and medium-sized enterprises (SMEs), from extending their operations beyond their national borders and from taking full advantage of the internal market. This weakens the worldwide competitiveness of European Union providers. A free market which compels the Member States to elimi- nate restrictions on cross-border provision of services while at the same time increasing transparency and infor- mation for consumers would give consumers wider choice and better services at lower prices. The report from the Commission on ‘The State of the Internal Market for Services’ drew up an inventory of a large number of barriers which are preventing or slowing down the development of services between Member States, in particular those provided by SMEs, which are predomi- nant in the field of services. The report concludes that a decade after the envisaged completion of the internal mar- ket, there is still a huge gap between the vision of an inte- grated European Union economy and the reality as experienced by European citizens and providers. The bar- riers affect a wide variety of service activities across all stages of the provider’s activity and have a number of common features, including the fact that they often arise from administrative burdens, the legal uncertainty associ- ated with cross-border activity and the lack of mutual trust between Member States. Since services constitute the engine of economic growth and account for 70 % of GDP and employment in most Member States, this fragmentation of the internal market has a negative impact on the entire European economy, in particular on the competitiveness of SMEs and the movement of workers, and prevents consumers from gain- ing access to a greater variety of competitively priced ser- vices. It is important to point out that the services sector is a key employment sector for women in particular, and that they therefore stand to benefit greatly from new opportunities offered by the completion of the internal market for services. The European Parliament and the Council have emphasised that the removal of legal barri- ers to the establishment of a genuine internal market is a matter of priority for achieving the goal set by the Euro- pean Council in Lisbon of 23 and 24 March 2000