Economy & Trade, Europe, Headlines, Human Rights, Labour

LABOUR-EU: Unions Welcome Changes to Directive on Services

Stefania Bianchi

BRUSSELS, Mar 23 2005 (IPS) - Trade unions and political groups have hailed a decision by European leaders to revise controversial plans over the European Union’s vast services sector.

European leaders agreed Tuesday (Mar. 22) to introduce far-reaching changes to European Commission proposals that had been aimed at freeing up the Europe Union (EU) services sector.

The original Bolkestein directive, named after internal market commissioner Frits Bolkestein, had proposed “liberalisation and deregulation of all service activities in Europe.” It would have allowed companies to provide services acrosss the EU while operating under the laws of their own country.

But EU leaders said at a summit in Brussels Tuesday (Mar. 22) that the directive needed to be re-worked in order to gain broad consensus. There had been fears that the scheme would erode workers’ rights and drive down wages. A final verdict on the directive is expected in July.

The plans were intended to open up the EU internal market in all services offered to companies and consumers such as advertising, recruitment, trade, cleaning services, construction, telecommunication, financial services, and services directly offered by the government.

Critics of the proposals were concerned about the “country of origin” clause in the directive under which meant companies could have provided services throughout the EU using the laws and regulations of their own country.

Several unions feared this could result in companies shifting staff to cheaper bases in eastern Europe, undercutting large EU economies and undermining social protection.

Luxembourg prime minister and current head of the EU rotating presidency Jean-Claude Juncker told the summit that although the directive would not be withdrawn, “changes will be made to take the social model into account.”

“Nobody can sensibly dispute the fact that we need to open up the services sector in Europe…but it must be done with respect for certain sensitivities and convictions,” he said.

French President Jacques Chirac had led the campaign to revise the directive after fears over the effects of the services directive led to a surge in support of opponents of the EU constitution. France is holding a referendum on the constitution May 29.

It is widely accepted that a French rejection of the constitution would be a devastating blow to the entire EU project.

The constitution, which creates a long-term EU president, a foreign minister and a proportionate voting system, must be ratified by all 25 member states for it to come into force.

Chirac told EU leaders Tuesday that the proposals were “unacceptable”. He urged the EU to protect key public services from competition, and eliminate the risk of “social dumping” by companies in eastern Europe.

He said the directive had to be reworked to “respect social rights and public services.”

Further battles on the “country of origin” principle are certain, but trade unions and many EU officials have already welcomed the decision to revise the directive.

“This is a victory for the ETUC (European Trade Union Confederation), but a victory in a battle, not a war. The need now is to ensure that any new services directive is based on high standards, and is not designed to lower terms and conditions of employment, and undermine public services,” ETUC head John Monks said in a statement Wednesday.

“The EU’s decisions on the services directive shows that neo-liberalism can be stopped, that social Europe has powerful allies, and that trade unions can win in Europe,” he added.

Many members of the European Parliament, who are due to finalise a report on the directive before the end of May, also welcomed the decision by EU leaders.

Martin Schulz, leader of the Parliament’s 202-strong Socialist party, which has campaigned against the draft directive, said his party would do all it can to influence the outcome of the report.

“The decision by the EU summit is a victory for the socialist group. During the parliamentary stage of the procedures, we will do everything in our power to improve this directive in terms of social responsibility,” he said Wednesday.

He urged his conservative colleagues in the European People’s Party (EPP), which has so far approved the directive, to do the same.

“I now call on the EPP to give their support to our proposals. It is time for them to stand up and be counted and to show whether or not they wish to safeguard the European social model,” he said.

The Alliance of Liberals and Democrats for Europe (ALDE) party urged the European Commission to make the changes to the proposals clearer than the original plans.

“It may be wiser, from a political point of view, to clarify the scope of application of this directive as well as the principle of the rule of origin,” Anneli Jäätteenmäki, shadow rapporteur for the directive in the internal market parliamentary committee said Wednesday.

“In its current form, the Commission proposal is very general and leaves much room for interpretation. It would be unreasonable to leave the interpretation of the rules of the directive to the European Court of Justice and to make service providers bear the costs,” she added.