The European Services Directive, which has been debated for several years, was recently approved at the second reading in the European Parliament. 

Despite progression over the years in terms of free movement of goods, free movement of services has lagged behind.  The new Services Directive, designed to open up Europe's services sector and improve co-ordination across Member States, has been a difficult Directive politically. 

The purpose of the legislation is to create a free market for the services sector and to remove barriers that can hinder businesses from offering their services in more than one Member State.  Disagreements centred mainly on the 'country of origin principle', which would mean that a company offering services in one Member State would operate under the rules of its home country.  This principle was removed, however, and certain services were removed from the directive. 

The Directive as it stands now is a compromised version and arguably far removed from its radical predecessor.  A Common Position was agreed as the Directive began its second reading at the European Parliament.  It was approved there and is now awaiting final approval from Member States before going through the process of transposition into national law in the Member States.

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