MEPs to debate new services plan

By Alix Kroeger
BBC News, Strasbourg, France

The directive sparked fears that standards would be eroded

The European Commission has presented revised legislation to open up the European services market.

The services directive is intended to make it easier for businesses to work across borders, but its critics say so many sectors have been excluded that it will have little practical effect.

Services - everything from construction to hairdressing - make up more than two-thirds of the European economy. But unlike goods and people, services do not move freely across European borders.

The services directive is intended to change that, but there is a lot of procedural ping-pong to get through first.

The European Parliament made changes at first reading, excluding sectors such as health and social services.

Despite the criticism about the directive's exclusions, most of the amendments have been accepted by the European Commission. It says even a limited directive is a step in the right direction.

East-West rivalry

The revised version has now been presented to parliament, which will vote at a second reading later in the year.

Parliament also voted to oblige businesses to observe wages and working conditions in the country where a service is delivered. This angered some of the new EU countries from Central and Eastern Europe, whose lower wages would have given them a competitive advantage.

The new countries are also pushing for an end to the restrictions on their workers moving freely throughout the EU.

A report to that effect goes before the European Parliament on Tuesday and is likely to be voted through.

But in the end, it is up to the individual countries to decide: Finland, Spain, the Netherlands and France are all proposing to lift all or part of their ban. But Austria and Germany have already said they will renew their restrictions.