By Bruno Waterfield - 23rd March 2006
EU leaders should keep their hands off a compromise on the services directive, the European parliament has warned.
Free market minded capitals and low wage new EU member states are gunning for MEP amendments that soften the impact of the service sector shake-up.
The issue is on the table at the EU’s spring economic summit ahead of a new European commission proposal on April 4.
Parliament president Josep Borrell cautioned heads of state and government about reopening wounds on legislation credited with sinking the EU constitution.
The services directive is blamed for associating the EU with unfettered globalisation in the minds of French voters during last May’s referendum rejection rejection.
Borrell stressed that MEPs had sidestepped concerns that firms from new EU countries with lower social protections would not be able to compete on the basis of their own “country of origin” rules.
“Many of the misunderstandings around the project have been cleared up. Some member states viewed the directive as an opportunity for improving their competitiveness in the internal market, while others saw it as bringing the risk of social dumping,” he told the summit.
“Parliament has managed to find a middle ground, reducing the directive’s scope, removing the controversial 'country of origin' principle, building a political consensus and avoiding a stand-off between old and new member states.”
“I call on you not to upset what is now a highly detailed agreement which will make it possible to operate a single market in services while respecting the social systems of the member states.”
The issue, already a totemic dividing line between liberal and more protectionist capitals, may become caught in the cross fire of rows over economic nationalism versus free markets.
Draft summit conclusions hint that the parliament may be disappointed with a call for new proposals “largely based” on MEP amendments.
As French protesters take to the streets over EU-style economic reforms, Borrell is reminding Europe’s leaders that globalisation is often unpopular.
“Reforms are often seen as an alibi for low pay and ever less job security,” he said.
“This situation can encourage a withdrawal from engagement which is opposed to the objectives of openness and adaptation to the world that we seek.”
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