The Industry Committee of the European Parliament last week rejected Evelyne Gebhardt's proposed removal of the 'country of origin' principle from the Services Directive.
Tasked with amending the controversial directive to make it more palatable for member states such as France and Germany, Ms Gebhardt had removed the provision allowing European firms to establish in other member states but to operate under the rules of their own country. She also excluded public services from the remit of the legislation.
However, a majority of the Industry Committee voted on Tuesday to retain the principle.
Meanwhile, it also emerged last week that the French and German governments are planning to create an alternative version of the Services Directive, although French President, Jacques Chirac declined to give a publication date for the joint proposals.
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