By Chris Jones - 4th October 2005
A key vote by MEPs on the controversial proposal to open up the EU services sector looks set to be postponed “for one or two months”.
The European Parliament’s Internal Market Committee was due to vote on Tuesday on more than 1600 amendments to the so-called services directive, with a full vote by MEPs due on October 24-25.
The proposal would make it easier for companies providing services in a wide range of sectors to set themselves up in any member state.
These companies would be subject to the laws of the country they come from, rather than those of the country in which the service is provided.
It is this ‘country-of-origin’ principle that has divided MEPs.
The committee was due to vote on the amendments drawn up by German Social Democrat MEP Evelyne Gebhardt, who does not support the country-of-origin principle, preferring a system of mutual recognition between member states.
But an alternative proposal put forward by the Conservatives and Liberals, retaining the county-of-origin principle, has been rejected by Phillip Whitehead, the UK Labour MEP who chairs the internal market committee.
As a result, EPP-ED and ALDE members are expected to call for the vote to be postponed.
No to social dumping
Gebhardt’s amendments are seen by Socialists and Greens in the European Parliament as providing greater protection for workers.
"The liberalisation of services should not open the door to social dumping. That's why we reject the country-of-origin principle,” said Belgian Green MEP Pierre Jonckheer, a member of the internal market committee.
“This approach only makes sense in areas where the social and labour standards are harmonised on a European level. But today this is not yet the case in many areas, there are especially big differences between some old and new member states.”
But the Conservatives and Liberals believe that the country of origin principle should be applied with the proviso that the service provider be obliged to meet certain local standards, such as health and safety, environment and security.
“The commission's decision to base its draft on the country of origin principle is the only feasible guarantee for the functioning of the internal market on services,” said Malcolm Harbour, EPP-ED group coordinator on the internal market committee.
“Full harmonisation of all technical and administrative rules for service providers in 25 member states would be much too complicated.”
Feelings run high
Opening up the services sector remains a key priority for commission president José Manuel Barroso, who ruled out dropping the country-of-origin principle ahead earlier this year.
“The heterogeneity of services means that it would be totally impracticable to legislate for each service,” he said in March.
“If we are to have a single market for services, it will have to be largely on the basis of the country-of-origin principle, but with appropriate guarantees.”
But the commission itself appears to be split on the issue.
French Transport Commissioner Jacques Barrot has broken ranks and called for the proposals to be reworked.
Internal Market Commissioner Charlie McCreevy also told MEPs that the proposal had “a snowball’s chance in hell of getting through,” without major changes.
He refused to comment on the future of the country-of-origin principle, however.
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