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Post an EU jobHeavy pressure by France and Germany has made the Commission beat a retreat on the services directive. Commissioner McCreevy has announced a major overhaul of the proposed plans.
The Commission's draft directive to create an internal market in services (the so-called 'Bolkestein directive', after the former internal market commissioner) can be seen as one of the key elements of the Lisbon goal of becoming the most competitive knowledge society in the world by 2010.
The service sector makes up 70% of the European economy and the Bolkestein directive aimed at opening up European markets to competition, so that services providers would be allowed to offer their services across national borders.
Since its presentation in January 2004, the Commission's proposal has come under fire from trade unions, socialist parties and some national governments (such as France, later Germany, Belgium, Austria and Sweden). The critics of the draft proposal feared that opening up the market for services would lead to a big influx of service providers from new central and eastern European member states, who would offer their services at much lower prices.
LinksDossier: Services in the Internal Market
Internal Market Commissioner Charlie McCreevy distanced himself from the draft proposal of his predecessor on 3 March. He announced that the Commission will seriously amend the services proposal after the first reading in the Parliament.
Mr McCreevy said that the 'country of origin' provision, which is one of the main controversial issues of the proposal, will be reviewed to make sure that the new directive would not undermine higher wage and safety standards.
He also announced that the health-care services sector would be excluded from the revamped proposal.
The Commission's concession to review its services proposal was viewed by some commentators as a serious blow to the 'Lisbon' drive of the Barroso team. French newspaper Le Figaro even accused President Barroso of being 'a prisoner of the Franco-German couple'.
The UK's Financial Times made the link between the Commission's retreat and the referenda on the Constitution: "Referendums on the constitution are important. But winning them is up to national politicians, and the Barroso Commission should not try to make up for the deficiencies in national leadership by sacrificing its own policies." The FT further accused Mr Barroso of flunking "the first test of his proclaimed free market credentials".
Le Monde makes the same analysis. Out of fear for a French 'non' on the referendum, the Barroso Commission "entend éviter toute initiative susceptible de compromettre la victoire du 'oui'", writes the French newspaper.
Germany's Frankfurter Allgemeine Zeitung thinks that there is a strategy battle going on in the European Commission. According to the FAZ, there are serious tensions between German industry and competitiveness commissioner Verheugen and commissioner McCreevy. The internal market commissioner yesterday criticised some of his colleagues saying that some of them "like to speak out of both sides of their mouth on this issue".
The Commission will rewrite its services directive proposal after the first reading in the European Parliament.
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, COM(2004) 2 final (5 March 2004)
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