Strasbourg, 16/02/2006 (Agence Europe) - On 16 February the European Parliament voted in its first reading on the draft directive on services in the internal market and significantly revised the Commission's original proposal. The legislative resolution was adopted with 394 votes for, 215 against with 33 abstentions. Most MEPs voted for the compromise elaborated by the two main political groups the EPP-ED and the PES, with certain discrepancies we have previously referred to (see EUROPE 9127, 9129 and 9132). They therefore gave their approval to the principle of free provision of services by getting rid of the country of origin principle. They voted for the inclusion of certain services of General Economic Interest (SGEI), like water but excluded social services. Overall the PES and EPP-ED groups were pleased with the result, which proves, according to them, that Parliament is capable of doing its job as legislator and that the services directive will reconcile the opening up of the service's sector with the protection of citizens. The principle of fee provision of services succeeded, however, to create a number of contradictory interpretations. On a legislative level, it could speed up procedures with a political agreement that would still come under the Austrian presidency and a second reading in the EP towards autumn.
German Social Democrat and rapporteur, Evelyne Gebhardt declared at the end of the vote, “we have achieved our objectives”: the “services directive will open up the markets and encourage Member States to cooperate more, as well as ensure the protection of European citizens. She was pleased that, “We have succeeded in obtaining a large majority…modifying the Commission text in such radical a way” that the “neo-liberal text” has been transformed into “a draft law in which citizens are placed at the centre of all concerns”. Gebhardt explained that this rewriting of the directive had been possible “thanks to a series of fundamental amendments”, which were certainly not written in Article 16 of the provision of services, she acknowledged “but we got rid of the country of origin principle”. She also said that in connection with the EU Court of Justice, “the host country principle will apply when the country of origin principle is not cited”. Other fundamental EP amendments Gebhardt referred to include the exclusion of the future directive on provisions on “the right to work and the social field”, as well as “international private law”. She was pleased that the “Charter on Fundamental Rights is more anchored in reality”.
Ms Gebhardt was pleased that the field of application of the directive excluded “services of general interest” (SGI) defined by Member States: “health services whether they are private or public… transport services, including ports…ambulances and taxis…security services…hospital provision…social services…social housing…looking after children and family services”. Education, cultural services, including collective management company services and copyright are included, as well as funeral services, transporting funds, advertising, hazardous materials storage. On the other hand, Gebhardt recognised that “the pill was quite bitter on water distribution and purification services. GUE/NGL amendments to exclude postal and energy services were rejected. A PES amendment to maintain the capacity of Member States to impose individual systems on authorising SGEI was thrown out too.
British Conservative Malcolm Harbour head of the EPP/ED group said that this vote ushered in a new epoch for the internal market. On the provisions of services principle Harbour indicated that it had been fine-tuned by the liberals. He considered that the country of origin principle remains in the jurisprudence and in the treaties. Belgian colleague Marianne Thyssen said that the EP vote allowed them to respond to two concerns: attain the Lisbon objectives and prevent “social dismantling”. In her eyes improvements involve the field of application which excludes “sensitive sectors but keeps the SGEI as well as “controls” by Member States of destination. Jacques Toubon (EPP/ED, France) said that they agreed that a services directive was “indispensable”. But this directive can be neither socially nor politically acceptable if certain conditions are not met. In his view, the article on the free provision of services as adopted by a two-thirds majority of MEPs, is a “considerable political event that everyone should take into account”. He also shared the point of view expressed by Mr Harbour who said the principle of country of origin is included in the treaties. Othmar Karas (EPP-ED, Austria), also pleased, said the vote is the Parliament's contribution to the European Spring Summit and is the “visiting card for the social market economy” which strikes a balance between market opening and the safeguarding of social rights.
The EP's vote endorsed the compromise reached by the PES and EPP-ED Groups on the principle of free cross-border provision of services. According to this principle: 1) Member States should comply with the right of service providers to provide a service in a Member State other than that where the service providers are established, and the Member State of destination should ensure free access and free provision of services; 2) the Member States must prove that they do not apply restrictions that run counter to the principles of non-discrimination, need and proportionality, or obstacles on a specific list; 3) Member States may nonetheless invoke restrictions on free provision of services justified by security and public health related reasons, as well as the environment and working conditions. It should be noted that consumer protection and social policy do not appear among these valid reasons, as the EPP-ED Group had wished and the PES had finally agreed. On this point, Evelyne Gebhardt said that these two policies are better upheld in other parts of the directive and that keeping them in the article on free provision of services would have a “more symbolic than factual” thrust.
Differences appeared within the two groups promoting the compromise. Malcolm Harbour said he was disappointed that his EPP-ED colleagues from the new Member States did not feel able to support the legislative package. Marianne Thyssen too regretted that it had not been possible to bridge the gap between new and old Member States. Czech, Slovak, Hungarian, Polish, Latvian and Estonian MEPs from the EPP-ED group signed an open letter on the result of the vote, expressing their disappointment on the dilution and weakening of the directive. This text had raised hopes that 50 years after the Treaty of Rome, the free movement of services would be finally achieved, they said, but unfortunately the text adopted by the Parliament as weakened by the loss of its key elements. Among the PES, the French Socialists voted for what improved the original proposal, but they all, with the exceptions of Michel Rocard (for) and Savary (abstained), voted against the legislative resolution.
According to a compromise amendment adopted in plenary session, Member States will set up one-stop shops no later than three years after the directive comes into effect. These one-stop shops will allow service providers to carry out the administrative formalities necessary for their activities. Could we expect a speeding up in legislative proceedings? Ms Gebhardt pointed out that the Commission and Council had clearly indicated that Parliamentary amendments that obtained a large majority had been kept. She also underlined the “comfortable majority” obtained on the amendments on the principle of free provision of services (some achieved 450 votes, she noted). She explained that they were expecting the Commission and Council to keep their word. Malcolm Harbour called on the Commission to get the dossier moving and for the Council to encourage Member States. He said that they needed a political agreement on the basis principles at the heart of the directive. He put the question of how better to face the future spring economic summit than with this “Lisbon” directive.
Commission and Council pleased
Charlie McCreevy gave a favourable welcome in a press release to the results of the vote, “thanks to the constructive work” of the EP. The Commission said that it would begin to work on preparing the revised proposal based on Parliament's vote and that they would then turn their eyes to the Council which had to complete the work that had been carried out, writes the Commissioner. Martin Bartenstein, Austrian minister for the economy and work also welcomed the vote in a press release as “a lightening conductor for future negotiations”.