EC unveils compromise plan for services

Bowing to pressure, the European Commission Tuesday unveiled acompromise version of its plan to create a single European marketfor a wide range of services, including computer consulting.

Gone is a clause designed to allow service providers to observe thelaws of their own country when operating in a different EuropeanUnion country, and with it most of the opposition to the proposedlaw, dubbed the services directive, from European Parliamentmembers.

“This has allowed us to move on from allegations on the lowering ofsocial standards and threats to the European social model,”Internal Market Commissioner Charlie McCreevy said Tuesday, as hepresented the new proposal to European Parliament members at theirplenary meeting in Strasbourg, France.

The directive’s original aim was to make it easier for the 116million people employed in service provision — almost 70 percentof Europe’s total workforce — to operate beyond their respectivecountries’ borders.

However, hostility to the plan exploded last year, whenpoliticians, especially in France, told voters that the directivewould result in cheap workers from the new, poorer countries of the25-nation E.U. undercutting well-paid and well-protected serviceproviders in richer countries.

The directive became a symbol of excessive economic liberalism andplayed a prominent role in French voters’ rejection of the proposedEuropean constitution in the French referendum last year.

McCreevy said in an interview last month that a watered-downdirective is better than no directive at all.

“It would have stayed on the shelf if it remained in the state itwas in before. So we had to decide: do we get a directive or do wecarry on talking about the one that never becomes law,” hesaid.

The revised directive also exempts all audiovisual servicesincluding radio and TV channels, temporary employment agencies,gambling and security services from the scope of the law, theCommission said.

By stripping out the country-of-origin clause the Commission willbe preventing some unscrupulous firms in poorly regulated countriesfrom dodging expensive employment-protection measures inwell-protected markets in the richer Western countries, arguecritics.

However, clause supporters insist that its exclusion from theservices directive will allow service providers to protect theirnational markets from competition.

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