- Services Directive. As early as 1957 the six founder members of the European Economic Community envisaged the creation of an internal market comprising the free movement of persons, goods, capital and services
As early as 1957 the six founder members of the European Economic Community envisaged the creation of an internal market comprising the free movement of persons, goods, capital and services.
In 1985 Jacques Delors , President of the European Commission launched the internal market. Today, of the four fundamental freedoms, only those concerning persons (safeguard clause, time-frame) and services have not yet become reality.
The services directive on the freedom of establishment for service providers and the free circulation of services in the internal market is one of the European Parliament’s projects for its 2004-2009 term of office.
Key elements : The aim of this directive is to establish a system of regulation which eliminates obstacles to the freedom of establishment for service providers, the freedom to provide services and the free circulation of services in EU Member States (...). This aim concerns the completion of the four fundamental freedoms of the internal market: the free movement of persons, goods, capital and services.
The Commission’s initial proposal contained two essential points: the country of origin principle (COP) and its scope.
Country of origin principle : The basis of this innovative principle was that an undertaking from any Member State should be able to provide a service in a Member State other than that in which it was established in accordance with the rules of its own country of origin. This principle therefore posed a problem for competition between the different social systems, since there are no joint rules between the individual Member States (consumer protection, health rules, etc.). A service might be provided under different conditions with no respect for the law or social practices of the host state in the case of a service performed by a service provider from another Member State, since these standards are for the most part governed by collective agreements.
Scope : The Commission’s initial text covered almost all economic areas of services provided for consumers and undertakings. It provided for the exclusion of financial services, electronic communications services and networks, transport services controlled by other community bodies and fiscal matters.
What is at stake for us, the Socialist Group in the European Parliament ?
The Socialist Group in the European Parliament considers that the Council/European Parliament codecision procedure on the Commission’s initial proposal made it possible to use the European Parliament as a political area for imposing the values of solidarity and improved social cohesion within the European Union.
The first success for the Socialist Group in the European Parliament was the appointment in January 2005 of Evelyne Gebhardt , a German Social Democrat and member of the Socialist Group since 1994, as rapporteur and coordinator for the text adopted in 2004 by the European Commission. This appointment thus placed the European Socialists at the heart of the debate on the ‘Bolkestein’ directive.
The debate was a tough one: the fundamental issue for the European Socialists was to see that rules were followed which were not detrimental to workers and which did not contribute to job losses. This technical and very specific text was the subject of a media frenzy which was unexpected, since these features made the debate difficult both within the EP and outside it, amongst citizens, workers and businesses.
In the context of the adoption of a services directive in the internal market, the Socialist Group campaigned to steer the directive towards ‘increased competitiveness’ but also ‘increased social cohesion’ within the European Union.
Mobilisation in the political sphere in particular, but also at the level of the unions and citizens, focussed on the dangers inherent in the country of origin principle to prevent it from becoming the basis for the internal services market and also on clarification of the scope of the directive.
The other points on which our group fought included:
- providing more effective control in order to guarantee a better quality of services for European consumers.
Our Group’s second success was to persuade the European right and the liberals to change their position on the amendments which were important to us socialists, when they had initially rejected them as a whole; those amendments were:
- the rejection of the country of origin principle whilst dealing with the question of obstacles to the setting up of an internal services market and allowing the host Member State to continue to apply specific conditions for reasons of public policy, public security, public health and environmental protection ,
- consumer protection so that consumers always enjoy the protection afforded to them by the consumer protection legislation in force in their own Member State,
- exclusion from the scope of the directive of health services, audiovisual services (the entire audiovisual sector), social services (social housing, childcare and family services), temporary employment agencies, security services, transport services (whether or not controlled by community bodies), port services, gambling, casinos and professions concerned with the exercise of public legal authority (notaries, bailiffs),
- maintaining high-quality public services and their exclusion from the scope of ‘services of general interest (SGI)’,
- exclusion of labour law (legal or contractual provisions) from the directive,
- insertion of the ‘Monti clause’ to ensure that the Commission’s proposal does not adversely affect the exercise of fundamental rights as recognised in the Member States and the rights enshrined in the Charter of Fundamental Rights of the European Union,
- deletion of Articles 24 and 25 on the posting of workers.
The procedure illustrated the development of the role of the European Parliament , which was able, together with the Council, to take up an alternative position on a Commission proposal, which reflected the fight put up by the Socialist Group in the European Parliament. As Evelyne Gebhardt pointed out: ‘We also expect the Commission to take full account of the compromise whose provisions include the primacy over the “Services” Directive of sectoral Directives such as the Directive on employee postings and the Regulation on individual contracts ’.
To this effect the Socialist Group in the European Parliament was involved in major negotiations between September and November 2006, which made it possible to reach agreements, in particular with the EPP, which was blocking two crucial points concerning the directive – its scope and the country of origin principle (COP).
During the final vote on second reading (on 15 November 2006) Evelyne Gebhardt stressed that, thanks to that text, human beings had been placed at the heart of the economy and workers’ rights had been saved from unhealthy competition, which illustrated the symbiosis between workers’ and consumers’ interests and those of the service providers.
At the same time, the Group received strong support from the
European Trade Union Confederation , which had been active at all stages of the procedure, in particular in February 2006, during the vote on first reading in the Strasbourg plenary.
Martin Schulz, Chairman of the Socialist Group, suggested to the European People’s Party (EPP) taking practical action at all stages of the procedure concerning revision of the controversial directive. He proposed that an ‘informal group’ should be set up to monitor the procedure.
Despite the different approaches to the directive taken by the EPP and the Socialist Group, Martin Schulz managed to obtain a qualified majority in particular by rallying the moderate wing of the EPP and some socialist members from the new Member States to a Group joint position on the key amendments, such as rejecting the COP and excluding certain services from the scope of the directive.
In this way, by proposing a different approach from that taken by the Commission, the Group, by rejecting the COP and deleting certain areas from the scope, managed to preserve both workers’ and consumers’ rights, avoiding any levelling down of agreed standards within the European Union .
socialists involved in the procedure :
Evelyne GEBHARDT (rapporteur and coordinator )
Anne Van Lancker (as a member of the Committee on Employment and Social Affairs )
Robert Goebbels (Vice-Chairman of the Socialist Group and Chairman of the Working Group )
Hannes SWOBODA (Vice-Chairman of the Socialist Group )
Harlem Désir (Vice-Chairman of the Socialist Group )
Richard FALBR (as a member of the Committee on Employment and Social Affairs ).
What stage of the procedure have we reached ?
- 16 February 2006 : the European Parliament gives its opinion on first reading (adopted by 391 votes to 213, with 34 abstentions).
- 29 May 2006 : the Council follows the European Parliament’s amendments and gives its political approval in the Competitiveness Council .
- 4 September 2006 : second reading in the European Parliament at the plenary session in Strasbourg. The Finnish Presidency and Parliament’s rapporteur, the Social Democrat Evelyne Gebhardt, aim to ensure that the directive is adopted by the end of November 2006. Approximately 90% of our amendments are incorporated in the Council’s common position.
15 November 2006 : the European Parliament adopts the Council’s common position on the Directive on Services in the Internal Market at second reading. Thanks to the Socialist Group, Parliament obtains legal clarification on the exclusion of labour law, criminal law, social rights and harmonisation. "The process of transforming the initial proposal from Liberal former commissioner Bolkestein into a “Services” directive that upholds labour law and reinforces social protection marks a huge success for the whole of the Socialist Group in the European Parliament, declared Martin Schulz, President of the Socialist Group in the EuropeanParliament", at a press conference in Strasbourg on 14/11/2006. "The European Parliament text on the “Services” directive, to be voted on at second reading during the plenary on Wednesday 15 November, also provides companies with the business flexibility they need within this sector and promises the creation of new jobs", the PSE Group’s president added.
"It is also important to stress that the Union’s other institutions (Council and Commission) have aligned themselves with the European Parliament’s position on the final text of the “Services” directive – a text which has been radically transformed with the decisive backing of the Socialist Group", concluded president Schulz.
After a procedure lasting almost three years, the internal services market is being opened up to cross-border competition , whilst at the same time, the European social model is being preserved. The Council had already approved the text on first reading when the compromise was negotiated with Parliament in February 2006.
The European Parliament is thus following the rapporteur Evelyne GEBHARDT who, as a member of the Socialist Group in the European Parliament and in her role as coordinator, recommended supporting the Council’s common position, thus retaining the acquis of the text at first reading.
Finally, the text adopted will enter into force the day after it is published in the Official Journal. The Member States will be required to transpose the provisions of the directive within a maximum of three years and, at the latest, by 2010.