Brussels, 10/02/2006 (Agence Europe) - The European Parliament is getting ready to give its opinion at first reading, in Strasbourg next week, on the directive on services in the internal market. On Tuesday 14 February, the debate on the Gebhardt report will take place in the presence of Commissioner Charlie McCreevy, who has responsibility for the internal market, before the vote on Thursday 16 February. In total, over 1800 amendments have been tabled. By request of the unions, two demonstrations in Europe will keep up the pressure on the negotiations, which are far from over.
José Manuel Barroso may well be pleased with the compromise being negotiated at the European Parliament on the "services" directive, according to Friday's Financial Times. Although this compromise "does not go as far as [Mr Barroso] would have liked to stimulate the services sector", it is, he said, "time to put an end to the battle between the Liberals and the proponents of social protection". The day before, Mr McCreevy's spokesperson said that the compromise being negotiated between the PES and EPP/ED groups (see below) sent out a "very positive signal", showing that the EP is committed to finding a consensus, in order to achieve "a clear vote next Thursday". The Commission must wait for the results of the vote before it can take position. It will then put forward a modified legislative proposal.
Six Member States (Spain, the United Kingdom, the Netherlands, Poland, the Czech Republic and Hungary) wrote to the Commission on Thursday evening, pointing out that "competitive markets are the conditions needed to achieve the conditions required for the Lisbon strategy". The letter talks of the "key role" of the "services" directive to breathe new life into the European economy, and goes on to state that the provisions on the cross-border provision of services should not be "watered down". It calls upon all the Member States to "adopt a constructive approach" in the forthcoming negotiations at the Council.
The result of the vote at the EP remains far from a foregone conclusion on the most controversial subjects of the legislative proposal, which are the exact delimitation of its scope of application and the specific definition of the principle of the freedom to provide services. On the first point, a consensus has existed since the vote of the Parliamentary committee to exclude services of general interest (SGI) from the text (see EUROPE 9074). Uncertainty remains on the fate reserved for services of general economic interest (SGEI), which are neither covered by sectorial directives nor expressly excluded by the Gebhardt report (examples: water treatment, waste management, various family services such as nurseries). On SGEI, the votes will be separated. On social services, the compromise amendments of the PES and EPP/ED groups stipulate that the directive does not affect services pursuing a social protection objective. Even though the negotiations are not yet finalised on the definition of the services- as the one favoured by the EPP/ED group is more restrictive than that of the PES group- the exclusion of social housing, nonetheless, has consensus.
The following services have been excluded from the scope of the directive ever since the initial proposal: financial services, electronic communication services and networks, transports governed by other Community instruments and taxation. At its vote on the Gebhardt report, the committee on the external market also excluded: health care, audiovisual services, professions related to the exercise of public authority (notaries, bailiffs), legal services covered by European legislation, gambling and casinos. There is now a compromise in place between the PES and EPP/ED groups also to exclude security services and temporary employment agencies, and to clarify the exclusion of urban transport, and taxi and ambulance transport.
On the principle of the freedom to provide services, the report voted on by the Parliamentary committee on the internal market subscribes to the logic of the principle of the country of origin, but restricts the scope of the initial proposal of the European Commission by allowing the State to impose restrictions related to public order or the protection of public health and the environment. The compromise amendment of the PES and EPP/ED groups on the freedom to provide services, which was published on Wednesday evening, removes the logic of the principle of the country of origin (see below).
A compromise already exists on other elements of the directive. The directive will not affect national employment legislation, particularly the right to strike, collective agreements and Social Security. It will not touch upon the privatisation of public bodies, the abolition of existing monopolies, or the organisation and funding of SGEI. Checks on the service provider and the service provided will be the responsibility of the Member State of destination. Existing (examples: gas, electricity, transport) or future sectorial directives will take priority over the "services" directive. Directive 96/71/EC on the secondment of workers will not be changed. Provisions on the reimbursement of health care fees contained in the initial proposal will be abandoned, with a view to a forthcoming legislative proposal. The provisions of international private law will apply as normal, as the directive does not affect contractual and extra-contractual obligations (Rome Conventions I and II). Administrative cooperation will be strongly encouraged and the competencies of the "one-stop shop" for company start-ups will be broader than the Commission had initially proposed.
The agreement on freedom to provide services goes down
better on the Left than the Right
After intense negotiations, the EPP/ED and PES groups and the European Parliament tabled a joint amendment on 8 February, which is likely to attract a convincing majority at the plenary session, on the Gebhardt report on the proposed directive on services in the internal market (see EUROPE 9127). This amendment re-formulates the freedom to provide services in a cross-border context, by removing all references to the application of the legislation of the country of origin. This compromise was generally well received by the Socialist group, with the EPP/ED and Liberal groups voicing reservations, and the Greens/EFA and GUE groups rejecting it. Negotiations will continue next week in order to put the finishing touches to the compromise. The option of oral amendments tabled at the time of the vote has not, at this stage, been ruled out.
Quite logically, the Socialist group (of which rapporteur Evelyne Gebhardt is a member) gave a "warm welcome" to the compromise amendment on the freedom to provide services on Wednesday evening, the group's spokesperson announced. It is, therefore, likely that "a convincing majority" within this group will vote in favour of the compromise. The French Socialists are said to have welcomed the agreement, but are calling for the group to continue to bring pressure to bear to have services of general economic interest (SGEI) excluded from the scope of the directive.
The compromise on the freedom to provide services got a mixed welcome from the EPP/ED group, which was supposed to have voted on Wednesday evening, but then decided to defer this until next Tuesday. Some of its members feel that the compromise goes too far, thus bearing little relation to the proposal originally put forward by the European Commission, a source close to the group explained. It is worth noting that Belgian Christian Democrat Marianne Thyssen and British Conservative member Malcolm Harbour have tabled another amendment on the principle of the freedom to provide services: the content of this amendment is very close to the one drafted by the EPP/ED and PES groups, but the difference relates to the grounds on which the Member States can block the free movement of services, as the EPP/ED group believes that in the proposed compromise, these restrictions, particularly those related to consumer protection, go too far. This amendment is supported by the majority of the Liberals.
The Greens/EFA group appears to be rejecting the compromise on the freedom to provide services, but even so, the Socialists are hoping for their support at the vote in plenary. On Wednesday morning, Belgian Green Pierre Jonckheer said that it "would have been better to start again from scratch", beginning with an in-depth analysis of the obstacles to the free movement of services, before making a legislative proposal. In a press release, the GUE/NGL group continues to speak out against the "intrinsically perverse" nature of the legislative proposal and maintains its appeal in favour of rejecting it. It is pleading for the rule of the country of destination in terms of the cross-border provision of services and for services of general interest (SGI) and SGEI to be excluded.
The compromise amendment on the freedom to provide services is made up of four elements: 1) first of all, it defines the sense of the principle of freedom to provide services: the Member States must respect the rights of service providers to provide a service in another Member State than the one in which the provider is established, and the Member State of destination must ensure free access and the free exercise of a service activity on its territory. 2) The Member States must demonstrate that they are not applying any restrictions to the cross-border provision of services, counter to the principles of non-discrimination, need and proportionality. The compromise contains a list of banned obligations such as the requirement upon a service provider operating in a cross-border context to have a representative in the Member State of destination, to be registered or to use a particular material. 3) The third element of the amendment relates to the restrictions which the Member States may invoke in order to limit the cross-border provision of services. These restrictions will be justified for reasons linked to public health and safety, social policy, consumer protection and the environment, as well as to working conditions, including those featuring within collective agreements. 4) Lastly, no more than five years after the entry into force of the directive, the Commission must produce a report on the application of the principle of freedom to provide services, in which it will examine the need to propose harmonisation measures for the services covered by the directive.