Proposed services directive : core and principles

Abstract

In January 2004, the European Commission introduced a proposal for a Directive of the European Parliament and of the European Council on services in the internal market. It intends to create a general legal framework in order to eliminate existing barriers to the freedom of establishment for service providers and the free movement of services between Member States. The establishment of a genuine internal market in services is considered to be a key step in the process launched by the Lisbon European Council to make the EU the most competitive and dynamic knowledge-based economy in the world by 2010. In this context, the EU Heads of State and Government invited the Commission and the Member States to devise a strategy aimed at eliminating the obstacles to the free movement of services. A year ago, the controversy surrounding the Commission's proposal for a Services Directive made all believe that the prospects for reaching an agreement and adopting the proposal were extremely far off. Today, it is a fact that the Internal Market is not yet working as well for services as it should be. Despite the importance of the services sector, only around 20% of cross-border trade in the EU is in services. Strong social opposition brought the original proposal of 13 January 2004, down and the Commission had to re-introduce a new proposal to get through Parliament. In the European Parliament's first reading on 16 February 2006, a controversial compromise was found, which reduced the scope of the legislation, excluding several sectors which had originally been covered by the Bolkestein proposal. The principle of 'country of origin' was abolished, which was the most controversial issue of the debate of Services Directive and it was replaced by more consensual 'freedom to provide services'. The text also leaves many sectors untouched by the liberalisation, and allows Member States to define such sectors. The Council's position is along the same lines as the political agreement reached by the Council on 29 May 2006. The agreement reflected the Parliament's 16 February 2006 vote and an amendment proposal presented by the Commission at the beginning of April 2006. It no more contains the disputed country-of origin principle. Following a political agreement at the end of May 2006, the Council adopted its common position on the Directive on 24 July 2006 almost unanimously. Only Belgium and Lithuania abstained. The Directive will go into second reading in the Parliament in October 2006 but it is unlikely to become law before 2009. In this dissertation an attempt has been made to consider the scope of the proposed Directive, its objectives and main features. Also, detailed analysis of the amendments to the Proposal made by the European Parliament, approved or disapproved by the Commission and the European Council will be examined in depth. Accent will be placed on the services excluded by the Proposal and subsequently by Parliament, the Commission and the European Council. These repercussions, in particular, have caught the attention of the writer and are the main brunt that forms this dissertation.