EC Puts Forward Amended Services Directive Proposal

by Ulrika Lomas, for LawAndTax-News.com, Brussels

06 April 2006

The European Commission announced on Tuesday that it has adopted an amended proposal for a Directive on services in the EU single market.

This is the next stage in the legislative process following the European Parliament's vote in February 2006, at which MEPs adopted, by a large majority, a first-reading report on the legislation opening up the EU single market for services.

The amended proposal builds on the Parliament's work, and on discussions in the Council to date.

The Commission's initial proposal has been thoroughly revised, and the controversial "country of origin" principle has been dropped. In its place MEPs put a clause with the title "freedom to provide services". Parliament also voted to limit the scope of the directive, meaning that it now covers fewer services than the original text.

The amended text was adopted in February by 391 votes in favour to 213 against, with 34 abstentions.

According to the EC:

"It will help to create more growth and jobs in the EU by freeing up cross-border trade and investment in services. Businesses will find it easier to establish anywhere in the EU, saving time and money. They will also find it easier to provide services across borders – Member States will be obliged to remove unjustified obstacles."

"Consumers will have more choice, information and protection. And services providers will be properly supervised under enhanced provisions for cooperation between national authorities. The Council will now debate and vote on the amended proposal."

The amended proposal is part of a comprehensive series of measures aimed at ensuring a fully working Internal Market for Services. The Commission is also publishing guidance to Member States on the operation of the Directive covering the posting of workers from one Member State to another.

In line with the European Parliament's amendments, the revised proposal does not affect labour law or deal with the posting of workers.

The following are excluded from the scope of the Directive: financial services, telecommunications, transport services, port services, healthcare, social services relating to social housing, childcare and support of families and persons in need, activities connected with the exercise of official authority, temporary work agencies, private security services, gambling and audiovisual services.

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