Stakeholders have reacted strongly to the Parliament's 16 February 2006 vote on the Services Directive. While political decision makers, trade unions and NGOs are happy, businesses are less so.
Internal Market Commissioner Charlie McCreevy welcomed the vote: "I am convinced that we can have a workable services directive which will provide real value added. In all of this, the challenge is to get the balance right. We need a directive that will facilitate the cross-border provision of services and at the same time, we need to ensure that legitimate public policy considerations can be safeguarded."
Commissioner McCreevy announced: "On the Commission side we will begin work on preparing a modified proposal based on the vote in the European Parliament. I look now to the Council of Ministers to complete the work which has been done by Parliament."
British Conservative MEP Malcolm Harbour said: "The 'country of origin' principle is part of European law. It still continues to apply. The work of the EPP-ED, and especially its members in the Internal Market and Consumer Protection Committee, paved the way for this result. Three quarters of the amendments that reshaped the proposal came from our side, in close cooperation with our ALDE and UEN allies. The formulation of a 'freedom to provide services' article was our concept. We expect the Commission to look carefully at the voting, and to see where further improvements can be made. We must have an effective and valuable directive. Member states should start work now to dismantle protectionist barriers."
Swedish EPP-ED MEP Christofer Fjellner was critical about the exclusion of gambling from the directive's scope: "After the vote in the European Parliament today, the Services Directive is a mess. It is weak and in some areas it even restricts more than it facilitates the internal market."
More important, by excluding gambling from the Services Directive in today’s vote, the EP leaves the Commission no other choice than to launch infringement procedures against Sweden, Hungary, Finland, Germany and Italy among many others that have shut off their gambling markets.
Karin Riis-Jørgensen, head of the Danish Liberal delegation in the European Parliament and Vice-President of ALDE (Liberal) group, also commented on the exclusion of gambling from the scope of the directive: "This exclusion will obviously increase the already alarming number of court cases and complaints addressed to the European Commission. The Commission must now launch infringement procedures in order to clarify the legal situation in this sector. Action should be taken urgently."
The French socialist delegation in the Parliament said: "The French socialists have voted article by article to push back the calamitous aspects of the original draft of the services directive. Together with the whole European Left, they have succeeded in safeguarding labour law and social protection of workers, by excluding them from the directive's scope. They have also succeeded in excluding social services like social housing and family aid. We regret however that all public services could not be excluded. Water supply, education, culture, postal services, energy and storage of dangerous goods, among other things, are still subject to the directive and thereby to deregulation. The battle will now be carried on within the Council, while we are waiting for a second reading in Parliament..."
The French UMP (conservative) delegation said: "The text adopted on 16 February 2006 [...] is well-balanced between economic efficiency, the opening of services markets and social equity by safeguarding existing social standards. Effectively, the country of origin principle has been abolished by the Parliament; labour law has been totally excluded from the directive, just as well as basic public and social services."
French EU affairs minister Catherine Colonna said: "The text is now very close to what we have been asking for:
- The county of origin principle has been given up, buried;
- The social legislation to be applied shall be the one of the country of destination (which is quite normal: In France, French labour law will be applied);
- Public services are protected;
- Sensitive sectors, such as social services and healthcare, are now excluded from the scope of the directive.
ETUC, the European trade union congress, said:
"The majority of the ETUC's demands have been met:
- labour law is excluded, and in particular issues linked to the posting of workers;
- sensitive sectors such as temporary work agencies and private security services are excluded;
- fundamental rights to collective bargaining and action are respected;
- services of general interest and some services of general economic interest, such as healthcare, are excluded;
- the country of origin principle has been abolished, enabling Member States to exercise better supervision and apply rules to protect the public interest.
This is the first stage. The ETUC remains mobilised, with a view to consolidating this firm progress and achieving further improvements.
ETUC General Secretary John Monks said: "This vote shows clearly that MEPs have succeeded in finding a compromise that allows for the opening up of the services market, while at the same time safeguarding the European Social Model, even if there are still some improvements to be made."
UNICE, the European employer's association, said: "UNICE considers that the European Parliament has deprived the directive of most of its capacity to create growth and jobs in Europe. Cross-border services will not be facilitated. Too many sectors are excluded from the scope. Application of legislation of the provider’s country of establishment is undermined by many derogations. It leaves excessive power for Member States to restrict services for multiple reasons which go way beyond well-founded reasons of public interest and could lead to protectionism. This will create great legal uncertainty for both companies and customers. The exclusion of labour law from the scope of the directive was not necessary as the posting of workers directive already adequately regulates the conditions for sending workers on temporary missions abroad. The Parliament also excludes temporary work agencies, which contribute to smooth functioning of labour markets and offer job opportunities.
The only positive achievement left in the directive concerns freedom of establishment."
Eurochambres expressed "concerns about the clarity and certainty of the compromises that were voted through. Eurochambres Secretary General Arnaldo Abruzzini said: "The legislation started out as complex, but today's vote has complicated it still further: In the interest of business - who need legal certainty and simplification - Eurochambres calls on the EU Commission to take into account the EP's position, but to come forward with a revised proposal that clarifies and simplifies the Directive and which will truly open up the EU market in services. [...] Chambers fear that those countries wishing to keep their services markets closed have been given ample scope to be imaginative in finding 'necessary and proportional' reasons to deny access to foreign firms."
Hans-Werner Müller, Secretary General of UEAPME, the association of small and medium-sized businesses, said: "The Parliament has shown today that it is able to find solutions on sensitive issues which have divided citizens and political parties for months. By listening to the concerns of the citizens and the SMEs, the Parliament has certainly contributed to closing the gap between the European Institutions and the citizens. [...] By introducing the right for enterprises to offer their services in countries other than those where they are set up, the European Parliament is proposing a principle much closer to one of the four basic freedoms of the Treaty than the controversial country of origin principle, as it was formulated in the Commission's proposal. By adding that this free access and free exercise cannot be governed by provisions, which fail to respect the principles of non-discrimination, necessity and proportionality, the EP reminds the Member States of the principles of good lawmaking. The exemptions to this basic right are only the consequence of the division of competences between the European level and the Member States."
Christoph Leitl, President of the SME Union, welcomed the vote: "Notwithstanding the unfounded fears that have been stoked by various groups and politicians during the past weeks and months, MEPs have allowed reason and a sense of proportion to prevail. This is a success for European business, large and small, as well as consumers who will be able to profit from better quality at lower prices.”
EuroCommerce, the European association of retail businesses, welcomed the result of the vote, "as it will undoubtedly facilitate the establishment of companies, notably SMEs, in other Member States, while allowing others to benefit from improved and simplified national procedures – a major step towards the Lisbon agenda." The association added: "EuroCommerce would have preferred that some provisions contained in the original Commission’s proposal, notably regarding the administrative simplification, were maintained in the first reading. However, given the overall context in which this text was adopted today, it would have been difficult to obtain more at this stage."
The American Chamber of Commerce with the EU said: "AmCham EU welcomes the single point of contact requirements and prohibition of discriminatory practices. However, the compromise text falls short of what is needed to create an open market in services in several areas. We therefore urge the Commission to carefully consider the needs of European consumers and businesses as they work through the detail of revising the text in the coming weeks and months."
The Social Platform, which represents both users of social services and non-profit social service providers, praised the Parliament for its vote to exclude social services from the scope of the directive, while the original Commission proposal had "completely failed to take into account the specific nature of social services and their users". Claire Roumet, Chair of the Social Platform’s Social Services Working Group, said: “Social services such as social housing, and homes for disabled or elderly people cannot be treated in the same way as purely commercial services. MEPs have understood that the services directive would undermine the ability of social services to provide high quality services to their users.[...] The Commission should also publish as soon as possible its announced Communication on social and health services of general interest – there is no excuse for any more delays.”
Eurociett, the association representing the interests of agency work businesses in Europe, criticised the Parliament's decision to exclude temporary work from the scope of the Services Directive. "This decision represents a missed opportunity for the recognition of temporary work agencies’ contribution to an effective and attractive EU labour market," said Eurociett President Annemarie Muntz. "In the very year of enhancing Workers Mobility across Europe and four years to the completion of the Lisbon Strategy, the European Parliament denies the temporary work industry the tools to lift unjustified and unnecessary restrictions. By doing so, MEPs have denied temporary work agencies the possibility of contributing to the creation of millions of new jobs. This was on the grounds of national protectionism and misperceptions about the reality of the well regulated temporary work industry."