Main points of the services directive

Date: 09/02/06

Overall objective: To allow any service provider legally operating in his home state the freedom of establishment and the freedom to provide services anywhere else in the EU. This means bringing down all legal or administrative barriers currently in place that prevent such movement.

Administrative simplification: The law will provide a single point of contact in each member state to make it easier for those wanting to operate to find out what is required as well as allowing procedures to be carried out online.

Legal simplification: Member states will have to abolish any remaining restrictions on establishment such as discrimination on the basis of nationality or a ban on having establishments in several member states.

Country of origin principle: The original proposal would allow anyone providing services to apply the legislation of their home state. Though it would have excluded any sectors with particular health and safety or consumer protection issues, the principle has proved highly controversial among those who fear it could lead to a decline in social standards. Its scope might be significantly reduced in the Parliament draft.

Scope: The original directive would have covered all economic services - i.e. those already open to competition - apart from electronic communications, financial services and transport. Gambling, audiovisual services, healthcare, temporary work agencies and security services now look set to be added to this list.

Relationship with other EU laws: The services directive was designed to run alongside other EU legislation. A person wishing to offer a service in another member state would have to look to the professional qualifications law for the rules on his qualifications. But in all other aspects, such as administration, the services directive would apply.

But this became problematic with the posting of workers directive which already covers a company wishing to send workers temporarily to another member state. As some member states still impose restrictions, the services directive would have tightened these rules even further, annoying those member states with the restrictions as well as those who feel that the services directive was not the place to deal with loopholes in other laws. MEPs will have to vote whether or not to delete these extra restrictions.

Brief summary of key concepts: Overall objective; Administrative simplification; Legal simplification; Country of origin principle; Scope; Relationship with other EU laws.

European Commission: DG Internal Market: Services and Establishment: The Internal Market for Services http://ec.europa.eu/comm/internal_market/services/index_en.htm

European Commission: PreLex: COM(2004)2: Proposal for a Directive of the European Parliament and of the Council on Services in the Internal Market http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2002:002:FIN

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