EU services directive passes test

Services such as restaurants are affected by the directive

A European Parliament committee has approved a controversial directive designed to create a market in services comparable to its free market in goods.

The Services Directive is a key plank of EU efforts to boost economic growth.

But in its original form it helped to turn French voters against the EU constitution, stoking fears of a flood of cheap labour from new member states.

EU leaders ordered the re-shaping of the directive in March, two months before the French referendum.

The aim of the directive is to allow service providers to operate more easily across borders and will affect a vast range of businesses such as hotels and restaurants, car hire, construction and estate agencies.

Public services

It also covers advice provided by professionals such as architects and lawyers, and mentions some public services such as health care and environmental services.

The directive is expected to go to a vote of the full parliament in January.

We succeeded in getting a balanced regulation for trade in services on the road German conservative Joachim Wuermeling Q&A: EU reform agenda

The parliament's Internal Market Committee voted in favour of the principle that a firm would be able to operate in a foreign country according to the rules and regulations of its home country - the so-called "country of origin principle".

It also rejected amendments that would have removed "services of general interest" - such as provision of energy or water - from the scope of the directive.

In both cases, the committee's conservatives and liberals outvoted socialists and greens.

They agreed only to exclude gambling, audiovisual and health services.

"We succeeded in getting a balanced regulation for trade in services on the road," German conservative Joachim Wuermeling said after the vote.

The directive is sometimes referred to as the Bolkestein directive, after the former Internal Market commissioner Frits Bolkestein, who originally proposed it.

Its enemies regard it as a drive to undermine wages, health and safety and environmental standards in Western Europe.