Hair SalonThe European Parliament has today finally voted Evelyne Gebhardt’s report on the Services Directive, otherwise known as the Bolkenstein / Frankenstein Directive if you are one of those people scared of it. As one of the people who has read the original Directive, I am not one of the people scared of it – I have from the start been left more confused by the odd way the Directive has been drafted, and concerned by the even odder and more emotive way it has become a symbol of the evil of the EU for some. The aim to get better cross border trade in services is essentially a good one. But what has the EP actually agreed to?

The EP report, voted thanks to a compromise between PES and EPP, does away with the controverial country of origin principle of the Directive, but it is hard to work out what it has been replaced with! This is what the EP’s news page says about the compromise:

The compromise amendment modifying the old Article 16 contains four points. Firstly, the Member State into which the service is provided must ensure free access to and free exercise of a service activity within its territory. However, the Member State may restrict the provision of services, subject to certain principles: non-discrimination (e.g. as regards nationality), necessity (reasons of public policy or public security, protection of health or the environment) and proportionality (i.e. what is needed to secure the objective pursued, but no more).

Secondly, the proposed amendment sets out a list of requirements that the Member State may not impose on a service provider established in another Member State. For example, it may not require a provider to open an office in the country where it plans to provide services temporarily, nor require it to register with a professional body or association in that country, nor ban it from using its own equipment or material.

Thirdly, the new text lists grounds on which the Member State is allowed to restrict the free provision of services on its territory (public policy, public security, social policy, consumer protection, environment and public health). This is the part of the text which would appear to require clarification if the compromise is to achieve a clear majority at the plenary vote.

To me, the second paragraph sounds very like a cut-down version of the country of origin principle! Yet the possible exemptions are very wide-ranging. Take public health for example. If health and safety standards in Cyprus are worse than in the UK, can the UK shut down a Cypriot hairdresser’s shop in London because the public health of the workers is at risk? Or do we mean simply the health of the people having their hair cut?

Further, the press release about the Directive on Evelyne Gerbhardt’s website (read it in German here) talks of ‘taking the teeth out of the monster’ (“Es ist uns gelungen, dem ‘Monster’ Dienstleistungsrichtlinie die Z√?hne zu ziehen”) but the press release does not make it clear how the EP compromise draft would work either.

As ever, there are plenty of people on the left who are complaining like mad about the Directive (even about the compromise) – take this from Remi Baziller of MJS for example. There is generally a bland call for a ‘Social Europe’ from plenty of people on the left, but what the hell is that supposed to actually mean or entail? The problem for those opposing the Services Directive is – at root – nothing to do with the EU per se but more to do with national politics. Centre-left parties have been kicked out of government across the EU and – surprise, surprise – centre-right parties don’t like social protection that much.

The solution is to try to convince populations at each and every level that social protection is what they want, and that they should vote for it. Much anger has been directed at the EU, and the Services Directive has been the key symbol of that anger. Instead of marching in Strasbourg, those on the left would probably do better to try to work to win some elections – starting in France in 2007 – if they want to make a real difference.

A positive step for those on the left would be to advocate a major increase in the EU’s budget and hence plenty of funds for investment in the new Member States. By committing more funds the EU would show it was serious about enlargement, and serious about catch-up growth in these countries. That would be positive and non-protectionist, and actually very socially democratic too, but I doubt anyone on the left will consider it as an option.

Oh, and finally, rather than talking of a ‘Social Europe’, coming up with a coherent plan of what the EU should do in order to be more ‘Social’ would be a start… And complaining about the Services Directive is not enough.

In conclusion, I fear there’s a lot more fighting to be done over this one yet… While I can understand some of the EP’s concerns, the fear is that all the changes are going to make a dog’s dinner of the Directive, meaning it is going to suit no-one.


  1. Thanks for the kind answer… 🙂 Glad I give a bit of food for thought at least! Also, if you keep using the same e-mail address your comments appear here straight away – I just have to check e-mails first time as there were too many spam problems.

    The left did do a good job in France until 2002. I just wonder quite whether they are in a position to do the same again from 2007? Really hope so… Is there someone who can occupy the role in the party that Jospin played? Might Ségolène Royal manage that, as I doubt Hollande or Fabius can?

    As for the European Commission: I don’t agree with their line, although I do think we have the Commission we deserve. We have centre right parties in power across the EU, so I think it was inevitable that we would get a Commission with a centre-right approach. That’s where the link with national politics comes in – if the centre left fights more of a resurgence nationally, it will be easier to get a more socially responsible European Commission.

    Also, we have to give the Commission a bit of due – it is at least standing up to member states that are prone to blaming the EU for everything (take Chirac’s comments on Hewlett Packard for example).

    Getting the economy in order: I think it’s vital that we stress the value of education, and push much harder on the role of R&D. France is not too bad on the latter, but most of Europe is quite terrible. We need serious European coordination of R&D and far more funds actually at European level for it. Beyond that, we need to make sure we invest in the right education and high education policies: are our universities providing the courses that are best suited to today’s economy? I am not sure.

    I think in simplest terms, most of Europe needs to learn some lessons from the Nordic systems (probably more Sweden/Finland than Denmark)… Can’t really do that topic justice in a quick 5 min comment though!

  2. Jon, i didnt want to say you didnt know french politics. What is interesting in this debate is what we see collectively as European priorities. And i consider the priorities of this commission (with this service directive and other directive of liberalization) just does not fill in my expectations. We need a strong europe, with a strong budget acting in favour of active macro-economic policy. This is possible together with a process of upward harmonization all over europe. What i see is: this commission is just doing the contrary. Liberalization without any thought concerning harmonization, weak budget, weak policy. And the lack of tools to act.
    Concerning the way to put our economy in order as you said, of course we aggree. Maybe you have some experiences in mind. It is just what the left tried to do between 97 and 2002 in france (bringing protection and jobs)
    btw, even if we do not aggree on everything, your blog is interesting 😉

  3. Remi Рsorry, I really disagree. And just because I happen to be British does not mean I am ignorant of the political situation in France. I speak about this matter regularly with French people I know in London, et en plus je parle fran̤ais.

    I am not in any way arguing that the Services Directive is especially good, and I am in no way arguing that the Services Directive is going to protect people – on the contrary. But I also think the fears that this Directive has raised have been blown out of all proportion.

    Further, you have to face the facts that the French economy, like most of the rest of the European economies, is not really in a great situation at then moment. I strongly believe that if we are to do better for our citizens – as I think we must – we cannot simply do that by the state spending. We need to get our economies in order, our education systems in order, get as many people as we can into jobs.

    I think your words “First, we protect, then competition” are quite wrong. First we get our people jobs, our ecomomies growing, and by so doing can ensure social protection. If we protect first and think of everything else later, we’ll be stuck with stagnating ecomomies and not be in a position to provide for generations to come.

  4. Sorry Jon, we are not against this compromise because of national politics but because of the real content of this compromise. please do not be unpolite. We know what we have to do for the next elections. And we also know what is a real european debate between citizens. We also know what was the result of the lack of social protection at the european level, the consequences on the last presidential elections or the huge debate we had on the european constitution last year. We have to think why european citizens (and not only french citizens) are so much afraid about EU politics. ok, you can say: “The solution is to try to convince populations at each and every level that social protection is what they want”. The problem is populations are not stupid. And you cannot tell them this new service directive will protect them, because they know what is inside the directive (energy, some part of education, social housing..). On this, the principle was clear: first a directive on public services, then a service directive. First, we protect, then competition.
    Finally, to stop making caricatures on what we think, for your personal knowledge, we were the first one to be in favour of a stronger european budget, even with a european tax. And we will continue to think this, even if PES and EPP find a compromise on the ridiculous budget presented by the european council..

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