Last week MEPs adopted an amended version of the EU Services Directive.  The Directive aimed to open up services within member states to greater competition by reducing bureaucracies and red tape, whilst creating more jobs and boosting economic growth. 
The controversial point of the Directive was the Country of Origin Principle.  This principle meant that a company that provided services abroad would only have to comply with the regulations of their home country.  Trade Unions across Europe marched in protest against the principle.  Many feared that it would result in companies that did not have high standards in safety or the environment undercutting rivals by their ability to offer cheaper services.  There were fears that in areas such as health care this could have negative consequences for both employees and service users.
However the MEPs abandoned the Country of Origin Principle and also excluded some services such as broadcasting, postal services, audiovisual services, temporary employment agencies, legal services, social services, public transport and gambling - and also public, but not private, health services from the scope of the Directive.  The Directive also acknowledges there are legitimate reasons why a country could restrict the activities of foreign service providers, which include national security and public health.
While some are pleased with the results others are not so, with the Federation of Small Businesses critical of the compromise and also accusing the trade union movement of making "unfounded claims to polarise the debate and block important parts of the measure".
The directive must have a second reading in the parliament, which could see further alteration, but it may be passed this year.  However it is likely to take member states a further two years to implement the directive in domestic legislation.

Back to Search