EU leaders greenlight services law compromise

EU leaders have agreed to give political backing to a disputed piece of legislation on services, exactly one year after the French president declared it dead. But since last year, the law on opening up the bloc's internal market in services has lost its most controversial elements.

In the summit’s conclusions adopted on Friday (24 March), member states "took good note" of the commission's intention to reformulate the original proposal in a way that makes it based "largely on the outcome of the European Parliament's first reading." Austrian chancellor Wolfgang Schussel commented that the deal meant that the parliament's text - which is viewed as being a considerably watered-down version - "will be put into practise."

German chancellor Angela Merkel praised the agreement, with Berlin featuring as a key player behind the parliamentary compromise, referred to by Mrs Merkel as a "breakthrough." Mr Chirac also confirmed France is in favour of the new version of the services legislation. "Considering France is the fourth biggest exporter of services in the world, we are in favour of some opening up on the market for services. But it is also absolutely necessary that the rights of workers and consumers are protected," he said.

But Friday’s agreement is a blow for more liberal-minded member states such as those from central and eastern Europe as well as the UK, Ireland and the Netherlands – all of whom had hoped for a more ambitious law. Slovak prime minister Mikulas Dzurinda commented, "We wanted to push for a more liberal services sector and less exemptions from the proposed rules." But he added that most EU governments admit it is better to have a less ambitious law than nothing at all. "The adopted compromise is a smaller step but still in the right direction," he said.

Commission's draft eagerly awaited
The European Commission is now expected to publish on 4 April a new formulation of the Bolkestein directive - so called after its ex-commissioner author. The European Parliament’s compromise was struck in February after an agreement between the two main political groups, the centre-right and the socialists.

The watered down proposal does not include the disputed "country of origin" principle, which stated that companies can run their businesses in other member states according to their home country rules.

On top of this, its scope is narrower than originally proposed, with several types of services - mainly commercially provided ones in the health and social policy sectors - are excluded from liberalisation. EU leaders said they expect the bloc's institutions to "swiftly conclude the legislative process," following the political agreement achieved at the summit.

Euobserver