EU Service Sector Plans Face Final Obstacle | Europe| News and current affairs from around the continent | DW | 14.11.2006
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EU Service Sector Plans Face Final Obstacle

Plans to free up Europe's vast services sector face a final obstacle on Wednesday with a vote before the EU parliament, which is set to end three years of fierce debate.

The reform bill is expected to be passed with the sector opening up for all workers

The reform bill is expected to be passed with the sector opening up for all workers

The reform comes before EU lawmakers in a second reading, but there are few doubts that it will be passed after a compromise was hammered out with member states in May.

The aim is to create a huge service market which will make it much easier for a plumber or architect to set up shop in another EU member and boost competition.

"I think it's a done deal," said German social democrat Evelyne Gebhardt, the text's rapporteur, on Friday

Although the plans, which affect a sector generating at least half the EU's economic activity and 60 percent of its jobs, are expected to sail smoothly through the parliament, in its earlier forms they proved to be deeply controversial.

Known in previous versions as the Bolkestein directive after the former internal market commissioner Frits Bolkestein of the Netherlands, the original plans proposed that companies offering services in the EU be allowed to operate under the laws and regulations of their country of origin.

Fears of social dumping

But many western European countries and trade unions feared that companies from countries with fewer taxes and regulations, in particular in Eastern Europe, would be able to operate in higher-cost economies without paying their employees the local rate.

17.05.2005 MIG Osteuropa.JPG

Countries with fewer taxes and rules were sees as a threat

Critics warned the directive would lead to "social dumping" -- companies and jobs relocating to Eastern Europe or using low-cost labor in jobs like construction throughout the rest of the European Union.

Anti-globalization and left-wing demonstrators took to the streets in France, Germany and Greece to oppose the reform and opponents of the EU's draft constitution cast it as a threat to workers' jobs in France ahead of the country's rejection of the charter in a referendum in May 2005.

The European Parliament in February threw out the original draft and approved their own watered-down version with the offending country-of-origin principle axed.

They also reduced the scope to cover mainly commercial activities and not services such as healthcare and security, which are deemed to benefit the public good.

New text nothing like Bolkenstein Directive

Evelyne Gebhardt

Evelyne Gebhardt

In April the European Commission -- the EU's executive arm -- produced a draft that largely echoed the parliament's version, and served as the basis for an agreement between member states in May.

"The work over these last few years was worth it," said Gebhardt. "The text now has nothing in common with the Bolkestein directive," she added.

Eager not to upset the delicate compromise due to go before the parliament on Wednesday, the three biggest political groups in the parliament have not proposed amendments to it, significantly raising the odds that it will be easily passed.

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