The European Parliament has pledged its support of European Union plans to open up the EU single market for services, with a majority vote in favour of the revised legislation.

16 February 2006

AMSTERDAM - The European Parliament has pledged its support of EU plans to open up the EU single market for services, with a majority vote in favour of the revised legislation.

Germany, which had strongly criticised the original draft over fears it would trigger further job losses, immediately welcomed the vote, reports German newswire DPA.

The amended legislation now covers fewer services than the original text.  It has also increased the list of reasons allowing Member States to restrict the freedom of a service provider from another Member State to provide services on their territory and now clearly states that the directive does not affect labour law in the Member States.

The European Federation of Public Service Unions (EPSU) describes the current legislation as "a significant dilution of what was originally a radical European Commission proposal."  

Business services such as management consultancy, certification and testing, advertising, recruitment services and the services of commercial agents are included in the directive along with services of general economic interest such as postal services and water supply.

Both public private healthcare are excluded, along with industries covered by legislation specific to their sector.

"This is significant progress but the focus is now on definitively excluding public services from the scope of the directive," said  EPSU General Secretary Carola Fischbach-Pyttel.

The vote ensures that 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 and fundamental rights to collective bargaining and action are respected.

The country of origin principle has also been done away with, which should enable Member States to exercise better supervision and apply rules to protect the public interest.

This is significant as allows a company to offer its services in another member state on the basis of rules applicable on its home territory, DPA reports. However, companies have to respect the labour, health, safety and environmental standards of the host country, not their home base.

By EU law, the amended bill will be examined again by the European Commission before passing before the assembly for a second time. The legislation should be approved in June.

According to the European Parliament, If the free movement of services in the European market - a principle laid down in the EC Treaty - is to become a reality, certain barriers must be removed, for example the obstacles preventing a service provider from setting up shop in another Member State or operating temporarily across borders.

[Copyright Expatica 2006]