A European Union (EU) directive could open up new markets on the continent for UK recruiters.

Most recruiters have come to dislike the European Commission for burdening the industry with excessive regulations. But the new services directive could provide a welcome reprieve for recruiters by cutting down on red tape required for UK companies looking to offer their services abroad.

The new directive proposes to improve the free flow of services between different countries in the EU. Firms offering services to other member states often have to deal with a welter of paperwork before being granted permission to work on projects.

Demand for UK agencies’ services could increase if French and German companies were allowed to bring in cheaper British temps.

The UK government supports the directive, but the legislation has been delayed following objections from France and Germany.

Ann Swain, chief executive of technology recruitment trade body the Association of Technology Staffing Companies (ATSCo), said: “While certain sectors, such as healthcare, are likely to be excluded, IT is a sector that the directive highlights as likely to benefit from a free market in services. Red tape makes it much more expensive for UK-based staffing companies to transact business in the euro zone and this directive could make a huge change and provide an important boost to our industry.”

But Matthew Brown, managing director of the IT contractor services provider Giant Group, warned that the opposition to the directive could limit opportunities for UK IT contractors.

Although France and Germany only want healthcare and public services excluded from the directive’s remit, he argued the ban could also be applied to IT services.