A service is not a good but something, which can make you, feel good, as cleaning, entertain, advice or marketing.
The founding Treaty of Rome established free movement of goods, capital, persons and services, also called the Four Freedoms.
The Lisbon Treaty Article 56-62 TFEU cover services. In the new Article 56 TFEU the rights to sell services can be extended to third country companies and persons by a qualified majority vote in the Council of Ministers.
In Article 59 TFEU a new sentence on further liberalisation for specific services can be obtained by qualified majority as well. The European Parliament can propose amendments and reject proposals for these purposes.
Trade in services has become an exclusive EU competence according to Article 3.1e TFEU. Trade is governed by Article 206-207 TFEU. All decisions on trade in services can be decided by qualified majority.
For health, education and social areas there is a unanimity rule if an international agreement will "risk seriously disturbing the national organisation of such services".
For cultural and audio-visual services there must be unanimity if the agreements would "risk prejudicing the Unions ‘cultural and linguistic diversity", see Article 207.6 TFEU.
THE BOLKESTEIN DIRECTIVE
In January 2004, the then Dutch Commissioner, Fritz Bolkestein, presented a proposal for a Services Directive, which became the subject of widespread popular debate and caused the biggest demonstration hitherto at the European Parliament in Strasbourg.
The Directive became widely known as the ‘Bolkestein Directive’ but was of course a proposal from the whole Prodi Commission.
The intention was to remove barriers to freedom of establishment and freedom to sell services, thereby promoting the competitiveness of European firms, growth and employment.
The Directive estimates that the services sector accounts for 70% of the combined economy of the member states. This Commission initiative established the greatest liberalisation of the European economy hitherto. The Directive was met with strong criticism in the European Parliament, which adopted a long list of amendments.
The Commission had proposed a ‘country of origin’ principle, so that service providers could in principle sell their services in other countries according to the rules applying in their own country.
This general principle was removed from the proposal. However, it was not replaced by a host country principle ensuring that services are provided according to the rules applicable where they are provided.
The Directive gives scope for many conflicts of interpretation. A country can intervene ‘for reasons of public policy or public security or for the protection of public health or the environment’. However, the intervention must be both necessary and proportionate.
The burden of proof rests with the member state. The European Court of Justice has set aside many national rules because they were not considered to be necessary and proportionate, e.g. the Danish ban on drink cans.
Within the Directive’s unclear terms, the Commission decides what is legal and permissible. In some cases, this may be the outcome of a special committee procedure. In other words, the Commission must first present its proposals to a committee.
If the Commission does not get support for its interpretation in this way, the proposal is sent to the Council of Ministers for a decision. Now the Commission need only have the support of a minority of countries in order to get its way.
The Commission’s proposal becomes law unless it is rejected by a qualified majority of 260 out of 352 possible votes. For some sectors, special directives have been adopted; for others, proposals are in preparation.
The proposal was first launched by the Commission in a special green paper, and subsequently in more concrete form in a White Paper. The aim is full liberalisation of the public sector in the member states, so that all public services can be offered by public and private providers in free competition.
It was this intention, in particular, which has given rise to major debates and demonstrations. The European trade union movement gathered 100,000 participants for a demonstration in Strasbourg in February 2006.
The trade union movement won acceptance of the principle that the Directive will not directly cover wages and working conditions. But the Directive will extend the area in which, for example, the rules of the Posting Directive are applicable, under which the wage levels in the home country are payable for the first three months of a posting.
The country of origin principle have partly been adopted by the Court in the Vaxholm, Viking, Rüffert and Luxembourg cases. It may therefore be very difficult to claim the respect for national salary tariffs unless they are made mandatory by law.
The French Socialists and a total of 215 Members voted against the compromise between the Christian Democrats and the Socialists on first reading in the European Parliament on 16 February 2006.
The service directive entered into force 1 January 2010 and cover among others the following areas:
Real estate agents
Hotel- and restaurant
Temporary employment agencies
On second reading, 105 voted to reject the proposed directive, while 405 voted against rejection: http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//NONSGML+PV+20061115+RES-RCV+DOC+PDF+V0//EN&language=EN