France Renews Attack On Services Directive

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

17 March 2005

Despite the European Commission's announcement earlier this month that it would be reassessing the 'country of origin' principle contained within the proposed Services Directive, French President, Jacques Chirac renewed calls this week for the legislation to face a "complete overhaul".

The directive was intended to boost cross-border competition by allowing the provision of services in any member state based on the rules of the operator's home country.

However, both France and Germany took exception to this rule, arguing that it was likely to encourage "social dumping or wage dumping", and calling for various sectors to be exempted from the provision.

Responding to these concerns in early March, a spokeswoman for Commission President, Jose Manuel Barroso announced that:

"The Commission has been very clear that we will not withdraw the directive. But we will look at various aspects of the directive; particularly the aspects that have been causing trouble, including the country of origin principle and the sectors covered by it."

However, this assurance does not appear to have satisfied M. Chirac, and a spokesman for the French leader told Le Monde this week that:

"The President of the Republic reminded the President of the Commission that the services directive was unacceptable for France as well as for other European partners, and that it needs to be completely overhauled."

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