Austria pushes to open service market

By Anna McLauchlin

Date: 24/05/06

The Austrian presidency of the EU is trying to prise open the Union's services market in discussions with national capitals. But agreement at the Competitiveness Council on Monday (29 May) is thought to be uncertain.

Over the past few weeks, member states' EU ambassadors and officials have been holed up in weekly working group sessions lasting anywhere between four and six hours in an effort to reach political agreement on the revised Commission text of the EU services directive.

According to one source, a majority of member states are in favour of tightening up the draft in order to make it easier for service providers to operate freely anywhere in the EU.

To break the deadlock between those in favour of allowing any provider to operate anywhere under his national law and those against, MEPs in February plumped for a compromise obliging member states to allow foreign competition in services, with exceptions possible for national security, public health or to protect the environment.

"The Austrian presidency is trying to give some satisfaction to those that want to push the door open a bit more," said one source, but added that the final position could not differ significantly from the MEP's compromise text.

One solution currently on the table, said another source, is to ensure that national governments would have to inform the Commission about any restrictions to ensure that they were in line with EU law.

Ten member states support this measure, but it is likely to be opposed by the larger member states, worried about influxes of cheap labour from the east. Denmark and Sweden, whose labour law is dominated by collective work agreements, are also reluctant to approve a screening process. Sweden is currently embroiled in a legal row with a Latvian company over its collective agreement, which stops other EU workers undercutting the national wage level.

Member states are also divided on the scope of the directive, particularly in some areas that have already been excluded,

such as audiovisual and notary services. How the law will apply to public services that have an economic basis, known as services of general economic interest, is an open question.

Agreement by next week appears uncertain - one person close to the discussions put it at 60-40 against - although the situation could be clearer after tomorrow (24 May), when ambassadors consider a consolidated presidency text.

If there is no text agreed after the Competitiveness Council, ministers will have another attempt at the end of June.

Article anticipates discussions at the EU's Competitiveness Council meeting on 29 May 2006 on the proposed Directive on Services in the Internal Market. The Austrian Presidency was aiming to broker a political agreement on the revised Commission proposal, taking into account the amendments suggested by the European Parliament on 16 February 2006.

• Primary Source

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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