EP approves the Services Directive, but what have they approved?

The 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.