Services directive
A directive on freedom of movement for services, which is one of the EU’s four freedoms. 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 is ostensibly 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 would mean the greatest liberalisation of the European economy hitherto. The Directive 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 has now been removed from the proposal. However, it has not been replaced by a host country principle ensuring that services are provided according to the rules applicable where they are provided.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’. But 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. But 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 255 out of 345 possible votes. For some sectors, special directives have been adopted; for others, proposals are in preparation.
In July 2006, the Council of Ministers adopted a common position in which the Member States accepted most of the European Parliament’s amendments. The final proposal was adopted in November 2006.
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 only for the first three months of a posting.
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.
Links
http://www.europarl.europa.eu/......DOC+PDF+V0//EN&language=EN
On second reading, 105 voted to reject the proposed directive, while 405 voted against rejection: http://www.europarl.europa.eu/......DOC+PDF+V0//EN&language=EN
