Abstract

Intra-European Union trade in business services has increased substantially in recent years. However, trade in highly regulated business services is still struggling to take off. This paper uses two general equilibrium models to evaluate the potential macroeconomic benefits of eliminating the regulatory restrictiveness in those sectors in the European countries. The simulations presented here suggest that such reforms could generate up to 500,000 jobs and may increase the value added of the European Union by more than ¤ 40 billion. Additional reforms in the regulation of construction services would add additional benefits. We find considerable variation in the economic impact across European regions.