Strasbourg, 15/11/2006 (Agence Europe) - On Wednesday 15 November the European Parliament completed its second reading of the draft services directive for the internal market. By adopting (no surprises) the common Council position in compliance with the internal market parliament committee's recommendation (EUROPE 9238, 9293), it put an end to a legislative procedure that has lasted nearly three years. Most MEPs welcomed the key role played by the EP in the adoption of a balanced text that constitutes a stage in the opening up of the services market, while preserving workers' rights. Some MEPs, notably those from the new Member States, would have liked more opening up to competition, others, among the ranks of the Socialists, regretted that they were unable to further amend the text in the second reading. The Commission made a five point declaration on the elements that posed a problem.
The rapporteur on this dossier, Evelyne Gebhardt (Social Democrat, Germany) declared, “we can be proud and pleased with our work”. She said that the good cooperation at the EP and institutions can be found in the text of the directive which constitutes a “symbiosis between workers, consumer and economic operators' rights”. According to Gebhardt, respect for balance will be maintained by “getting rid of the principle of the country of origin” included in the Commission's initial proposal and which would have subordinated a cross border service provider to rules where he is established; the suppression of the provisions on the “detachment of workers”; the exclusion of the “services of general interest” (SIG) such as “social and health services”, “the principle of free movement” of services is included in the text which will compel Member States to lift restrictions. Ms Gebhard said that “with the official Commission declaration the final uncertainties have been lifted” and recommended to her colleagues to vote for the Council's common position without amending it, except for three technical amendments reflecting the inter-institutional agreement on committee procedures.
Charlie McCreevy, European Commissioner for the internal market said that the services directive “is essential for stimulating the services economy”: it will make life easier for companies and consumers by reducing bureaucracy and costs, notably through the creation of “one-stop shops” and making authorisation regimes lighter. He said that the common position of the Council respected and reflected the EP's compromise with a few small adjustments but thought it undesirable to amend the text apart from the three amendments on committee procedures.
McCreevy made a five point declaration: the orientations that the Commission could provide on reports from Member States on national restriction implemented for limiting cross border service provision will help “Member States implement the directive” but they do not provide the Commission with “new powers” or constitute “binding interpretations”, which is the prerogative of the European Court of Justice; the Commission will study the need for further approximation of certain services and listen to EP's proposals in this connection; the services directive is “unambiguous”; it is neutral on the role of social partners; it will have no effect on criminal law; the following social services are excluded from the directive, “social housing, childcare and support of families and persons in need are a manifestation of the principle of social cohesion and solidarity in society and are provided by the State, by service providers on behalf of the State or by acknowledged charitable organisations”.
Mauri Pekkarinen, the Finnish minister of trade and industry said today marked a milestone in the history of the internal services market. He described the Council's common position as being very different from the initial proposal which reflected, “the real desire from everyone to reach an agreement”. According to the minister, the future directive constituted an “exceptional and necessary stage” because, “the only provisions in the treaty are not sufficient for regulating services”. Pekkarinen gave his “full support” to the Commission's declaration. He was hoping that during the vote “the Council's common position will remain unchanged” except for the three amendments on committee procedures.
British Conservative Malcolm Harbour, speaking on behalf of the EPP-ED group, was delighted that the services directive will improve the quality of life for all citizens and help growth and the economy. He hoped that Member States would be up to the task and pointed out that the future legislative act consisted of 40 specific measures that Member States should get rid of, as well as 65 measures for improving services.
He stated that “SMEs represent 90% of the services sector! If each one created a job, the problem of unemployment would be resolved in the EU”. József Szájer (EPP-ED, Hungary) said “I didn't vote for the directive in the first reading, I will this time”. He considers that the “message” sent at the beginning of the year warning against the sidelining of the new Member States “hit its target”.
Anneli Jäätteenmäki (ALDE, Finland) speaking for the Liberal group said “services meant more jobs”. She explained the dissatisfaction of those how think that the services directive is too weak or goes too far demonstrated that it was the fruit of a political compromise. The parliamentarian also insisted on the need to build “mutual trust” between the different actors and guarantee free movement of workers, an indispensable condition if the internal services market was to be attained.
Disappointment. The European Left is disappointed that it was unable to amend the Council's common position. Ms Gebhardt expressed that some of the bitterness was born out of the Finnish presidency's attitude during the second reading, which constantly refused any modification to the text. She considered that “everything should be done for the EP and Council to express themselves within the framework of co-decision”. French Socialist Harlem Désir said that it was “more logical to amend the text” than ask for the Commission to make a declaration.
Heide Rühle from Germany expressed the disappointment of the Greens/EFA group faced with the “resistance of the three main groups at the EP during the second reading”. She did not consider that “this is a success for the EP but rather a crushing defeat”. Pierre Jonckheer (Greens/EFA, Belgian) emphasised that the amendments of his group had all been “voted on in the first reading”. He calmed down some of those who were promising millions of jobs when the directive entered into force in 2010. French Communist Francis Wurtz decried the “capitulation” of the three main parliamentary groups which withdrew all their amendments. He denounced the challenge to national labour laws and the “exorbitant controlling power” of the Commission and the “gray zones” affecting social services. He hammered home the fact that his group could not accept this “giant project of deregulation”.
Jacques Toubon (EPP-ED, France) pointed out that the Council's common position had included “95% of our text” and said that “conciliation” would have led to the complete failure of the legislative process. Others thought that the services directive did not go far enough in opening up services to competition. Sophia in't Veld (ALDE, Netherlands) objected to the political compromise. In her eyes “anguish and protectionism prevailed”. Non-Attached MEPs like Jana Bobosikova and Irena Belohorska from Slovakia regretted the getting rid of the country of origin principle. Ryszard Czarnecki (NA, Poland) though that the “Bolkestein directive was better” than what had finally been adopted. Nigel Farage (NA, United Kingdom) repeated the complaint of British companies fed up with the multitude of European rules.
Main elements of services directive
The Council's common position adopted last May with abstentions by Belgium and Lithuania alone, is very close to the EP's opinion in the first reading (EUROPE 9133). This opinion of the EP, included in the amended Commission proposal (EUROPE 9167), has opened the way ahead for a political solution on a controversial dossier inherited by the previous Commission. Commentators see in it a sign of the EP's “political maturity”. Member States have three years at the most to apply the directive.
General objectives. The services directive does not challenge the existence of public monopolies providing services or the way services of general economic interest (SGEI) are organised or funded. It will have no impact on labour law governing collective agreements, social and criminal law in Member States and will not apply to taxation. The directive does not prevail over European sectoral legislation (transport, financial services, detachment of workers).
Field of application. Transversal - the directive includes a vast range of services: BtoB companies such as management consultants, certification, office maintenance, advertising, recruitment; BtoB&C businesses and consumers are both affected such as those providing legal and tax advice, estate agencies, builders, trade fairs, car hire and travel agents; consumers (BtoC) such as tourism, leisure, sports centres. Only provisions on establishing service providers apply to SGEI (post office, electricity, gas, water companies and waste management).
Services of non-economic general interest (education, health), social services relating to social housing, childcare and help for families and those in need which are provided by the State, by providers mandated by the State or by charities recognised as such by the State, audiovisual services, including cinematographic service, gambling and games of chance, activities connected with the exercise of official authority, private security services, services provided by notaries and bailiffs, services of temporary work agencies are not covered.
Free provision of services. The Regulation of cross-border services lie at the heart of the directive. The Directive gets rid of the country of origin principle and replaces it with one of free provision of services. According to this principle, Member States will have to respect the right of a supplier to provide a service in a Member State other than the one in which he/she is established, with the State of destination being required to ensure free access and free exercise of a service. A list of requirements henceforth banned has been drawn up and includes: the requirement for a provider to be established in their country, to obtain authorisation from the competent authorities (e.g. having to register with or join a professional body), the prohibition of specific material. Member States will be required to prove that restrictions they impose can be justified on public order, public safety, public health or environmental grounds and are in line with the principles of non-discrimination, need and proportionality, as laid down in the treaty. The directive introduces a screening mechanism for national restrictions and will require Member States to produce annual reports. The Commission will set guidelines for these reports.
Freedom of establishment. The directive bans requirements, for example, nationality conditions, location of a company's headquarters, preliminary economic tests, on establishment. Here too the directive allows for assessment of national requirements which restrict freedom of establishment (e.g. quantitative or territorial restrictions, legal form imposed, minimum number of workers, compulsory tariffs to be respected, requirement to provide other services). The arrangements also cover authorisation regimes (conditions of granting, duration, procedures for selecting candidates).
Administrative cooperation. The arrangements on administrative cooperation seek to simplify administrative procedures. They deal mainly with one-stop shops which will allow service providers with a single point for administrative formalities, the right to information and electronic procedures. Member States will have to provide mutual assistance, in particular to ensure monitoring of service providers, the responsibility of the country of destination. Five years after the directive comes into force and subsequently every three years, the Commission will present a complete report on the implementation of the directive. (mb)