French 'non' drives EU to revise services plan

23rd March 2005, Comments 0 comments

BRUSSELS, March 22 (AFP) - The European Union agreed Tuesday on the need for a "far-reaching" revision of plans to free up Europe's vast services sector, after protests notably in France fuelling anti-EU sentiment ahead of a key poll.

BRUSSELS, March 22 (AFP) - The European Union agreed Tuesday on the need for a "far-reaching" revision of plans to free up Europe's vast services sector, after protests notably in France fuelling anti-EU sentiment ahead of a key poll.

In France critics fear the plans will lead to the loss of jobs in rich, expensive western European countries at the expense of cheap labour from the ex-communist states of central Europe which joined the EU last year.

The protests have led to a boost in support behind campaigners for a "no" vote in a French May 29 referendum on the EU's first-ever constitution, which if confirmed on the day would be a devastating blow to the EU.

"There is agreement to have a far reaching revision of the proposal which is in line with the social European model," Swedish Prime Minister Goeran Persson on the sidelines of a two-day summit here of EU leaders.

"We all realise there is a need for a services directive," he added.

Pressure has built for the plans to be reworked, in particular due to concerns about a "country-of-origin" clause which suggests that companies could provide services throughout the EU using the laws of their own country.

Luxembourg Prime Minister Jean-Claude Juncker, whose country currently holds the EU's rotating presidency, underlined that the EU would in any case retain its long-cherished social model however the service sector rules were changed.

"We agreed to say that the internal services market must become fully operational, but that its entire implementation should preserve the European model," he said.

"The current text does not fully answer the demands that I have just described," he added.

In France two recent polls indicated that a majority of French voters could oppose the EU's first ever constitution in the May referendum.

The historic document, signed amid much fanfare in Rome last October, needs to be ratified by all 25 member states to come into force. A no in a large EU founder state like France would kill it, forcing the EU to muddle along with its current institutional framework.

French President Jacques Chirac, who is risking his political standing on getting the constitution approved, renewed a call for a total rewrite of the plans which in their current version were "unacceptable" for France.

"It is indispensable to totally rewrite, as the (European) Commission has committed itself, the proposal on the services directive," Chirac told other EU leaders here.

The directive is intended to slash red tape and create a genuine single market in Europe in the services sector, which accounts for almost 70 percent of the EU's gross domestic product and jobs.

It is a major part of the Lisbon agenda, set out five years ago at the height of the dot-com bubble when EU leaders vowed to turn Europe into the world's leading knowledge-based economy by 2010.

At the weekend some 50,000 demonstrators from all over Europe took part in a protest in Brussels against the directive.

Trade unions say it will drive standards and wages down to the level of the poorer countries and encourage businesses to set up their headquarters in countries where the laws are weakest.

They also claim that if the measure is approved it would provide ample opportunity for competition and privatisation in all public services, including those of general interest such as education and health.

EU leaders deny this, saying that key public service sectors would be exempt from the directive.

© AFP

Subject: French News

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