MEPs Adopt Amended Services Directive

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

20 February 2006

The European Parliament last week adopted, by a large majority, a first-reading report on legislation opening up the EU single market for services, a major issue for the Union.

The Commission's initial proposal has been thoroughly revised, and the controversial "country of origin" principle has been dropped. In its place MEPs have 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 by 391 votes in favour to 213 against, with 34 abstentions.

Rapporteur Evelyne Gebhardt observed during the debate preceding the vote that: "We are dealing with the most important piece of EU legislation apart from the Constitution. Services in Europe must be as free and open as goods and capital."

It is now up to the Council of Ministers, as joint legislator with Parliament, to decide its position on the directive and the amendments adopted by MEPs. If all of the European Parliament's amendments are acceptable to the Council, the legislation will be adopted in its modified form. If the Council rejects any of Parliament's amendments or adds any of its own, the text will return to Parliament for a second reading.

Commenting on the adoption of the amended Services Directive, Internal Market Commissioner Charlie McCreevy told the Plenary Session of the European Parliament that:

"First of all, I would like to welcome the vote reached today in the European Parliament. I know that this has been the subject of a lively and vigorous debate and I very much appreciate the constructive work that has done by members of the European Parliament."

"With the broad consensus reached on key aspects of this proposal the European Parliament has provided us with a solid basis for going forward. This represents a real advance, a step that no one would have believed possible just 12 months ago. I believe that today’s vote demonstrates that there is a willingness in Europe to pursue measures to deliver more jobs and growth."

"I am convinced that we can have a workable services directive which will provide real value added. In all of this, the challenge is to get the balance right. We need a directive that will facilitate the cross-border provision of services and at the same time, we need to ensure that legitimate public policy considerations can be safeguarded. This is the balance we are all working for."

"On the Commission side we will begin work on preparing a modified proposal based on the vote in the European Parliament. I look now to the Council of Ministers to complete the work which has been done by Parliament."

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