Services Directive Fears Contribute To French 'Non' Vote

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

31 May 2005

Anger over high unemployment levels, disapproval of President Jacques Chirac's economic reforms, and concerns regarding enlargement of the European Union (and in particular the possible entry of Turkey to the EU) all informed the decision of the French people to reject the proposed EU constitution on Sunday.

With turnout at a reported 69.7%, 55% of voters in the French referendum rejected the planned treaty, co-authored by former French President Valery Giscard d'Estaing.

The debate in France over the constitution became, to the annoyance of its supporters, linked with the proposed services directive, which caused controversy with its 'country of origin' principle, designed to allow European firms to establish in other member states but to operate under the rules of their own country.

A clearly disappointed President Chirac addressed the nation following the vote, observing that:

"France has democratically expressed itself. You have rejected the European constitution by a majority. It is your sovereign decision and I take note of it. Nevertheless, our ambitions and interests are profoundly linked to Europe."

He continued:

"The process of ratification is in progress across all the countries of the union. Nine countries have already said "Yes". Our other partners will in turn make their decision. Between now and then, the European Union will continue to function on the basis of the current treaties."

"We have (an) important meeting ahead of us. On 16 June, the European Council will meet in Brussels. There, I will defend the positions of our country, while taking account of the message of French men and women."

"But let us not be mistaken. The decision of France inevitably creates a difficult context for the defence of our interests in Europe."

President Chirac has stated that he will not resign as a result of the rejection of the treaty to which he had given his backing, although observers have suggested that Prime Minister Jean-Pierre Raffarin may take the fall for the embarrassing defeat.

It has also been suggested by some in the 'Non' camp that the matter will be put before the French people again at some point in the next few years.

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