One of them is lacking” “

The internal market of the European Union is still incomplete; of the four “fundamental liberties” established by the six founding states as the backbone of the European Economic Community in 1957 – circulation of persons, goods, capital and services -, one has so far remained on paper. So work is going ahead in Brussels and Strasbourg to draft a Directive for the liberalization of services that represent, according to the Commission, 70% of the wealth produced in the 25-member EU. But while everyone agrees with the principle of opening up markets, in actual fact the regulation on services is still encountering difficulties. THE COMPLEX LEGISLATIVE PROCESS OF THE DIRECTIVE. The free circulation of services has long been on the agenda in the institutional seats of the EU. It is considered the missing piece of the jigsaw of the single market, without internal barriers. In 2001 and 2003 the European Parliament (EP) pronounced its support for the measure, declaring it was an “absolute priority”. In January 2004 the Executive put forward a draft directive, prepared by the Dutch Commissioner Fritz Bolkestein (hence “Bolkestein Directive”). The draft, put before Parliament and Council, must be approved by both as co-legislators. Within the EP ten commissions are working on the project, though it is the commission of the internal market, responsible for this field, that will draw the final conclusions. Yet this commission has itself revealed sharp divisions. On 4 October it postponed any decision to 21-22 November. The presumption is that the question will be put to the EP’s plenary assembly in January, under the Austrian Presidency of the European Council. MEPs DIVIDED. “The free circulation of services is the cornerstone of the European single market”, explains EVELYNE GEBHARDT, German MEP of the Socialist group, and “rapporteur” for the internal market commission. “We must overcome useless forms of protectionism. On the other hand, it’s a question of regulating a fundamental economic sector of momentous practical consequence; it’s enough to think of labour law or the protection of consumers. One thing is certain: the ‘no’ of the French and the Dutch to the Constitution was linked with this question and their message was clear: they asked for more social Europe”. Gebhardt thinks that the EP can reach an agreement on the circulation of services in January, whereas MALCOLM HARBOUR, English conservative of the People’s Party group, seems more sceptical: “The differences that need to be resolved are numerous. Consensus exists on the principle of liberalization, but the positions remain far apart on the way of reaching this result. Economic growth and employment are connected with the services sector, which must not be subjected to excessive restrictions”. PRINCIPLE OF “COUNTRY OF ORIGIN”. Many questions still remain open. “The Commission – says an internal statement drafted by the EP’s offices – proposes that companies in the services sector be permitted to establish themselves more easily in another member state”, with a reduction of the bureaucracy and the creation of a “single counter”. “Moreover, the draft directive is aimed at facilitating the temporary cross-border provision of services”. On the basis of type of services and the progressive phases of liberalization, “the Commission proposes both the principle of country of origin, as a general rule, and harmonization, usually as a complementary measure”. According to the principle of country of origin – one of the bones of contention that still needs to be overcome – “the provider [of services] shall be subject to the law of the country in which it is established on a permanent basis and not to the law of the state in which the service is provided”. Given the disparities (economic, legal, social) between the various countries, “the draft directive provides a series of exemptions to the principle of country of origin that concern in particular labour law: minimum wage, hours of work, social security, safety regulations”. The principle of country of origin is supported by the Commission, and also by the moderate wing of the political representation at Strasbourg. The left and the greens seem, instead, to prefer the “principle of reciprocal recognition” or of “country of destination”. WHAT SERVICES TO BE EXCLUDED? Without entering into complex legal questions – on which the debate is still in progress -, it should be pointed out that another field in which agreement is lacking concerns the type of services regulated by the directive. Doubts do not exist about those of purely economic character; but some differences of view are registered on “services of general interest” (health, education, and so on), which almost everyone wants to exclude from the directive’s sphere of application. Positions are also far apart on “services of general economic interest” (provision of gas and water): here the positions of the political groups in the EP are far apart. Services already subjected to particular regulations, such as electronic communication networks or financial services, would also be excluded from the directive.