The proposed Services Directive, May 2005

The introductory pages on the World Trade Organisation's website on 'services' say: 'Ranging from architecture to voice-mail telecommunications and to space transport, services are the largest and most dynamic component of both developed and developing country economies. Important in their own right, they also serve as crucial inputs into the production of most goods'.

Studies presented to the OECD's annual ministerial meeting in Paris on 3-4 May 2005 underlined the importance of services for future job creation and improved prosperity in both developed and developing nations. One of the reports submitted said: 'The services sector now accounts for over 70% of total employment and value added in OECD economies. It also accounts for almost all employment growth in the OECD area. But despite its growing weight, productivity growth in services has been slow in many OECD countries and the share of the working-age population employed in services remains low in many countries. If policy makers wish to strengthen economic growth and improve the foundations for the futureperformance of OECD economies, the services sector will need to do better. But strengthening growth performance is not the only challenge facing policy makers; OECD countries are also confronted with the growing globalisation of services and manufacturing and with rapid technological change. This has raised doubts about the capacity of OECD economies to create new jobs, while at the same time offering new opportunities for international trade and investment. Addressing these challenges and strengthening the potential of services to foster employment, productivity and innovation will need to build on sound macroeconomic fundamentals and involve a combination of structural policies' (Growth in Services. Fostering Employment, Productivity and Innovation, OECD, 2005). Amongst the recommendations in the report for policy makers are: Open domestic services markets to create new job opportunities and foster innovation and productivity; Take unilateral and multilateral steps to open international markets to trade and investment in services; Reform labour markets to enable employment creation and adjustment to a growing services economy; Adapt education and training policies to rapidly changing requirements for new skills; Adapt innovation policies to the growing importance of services innovation; Remove impediments that prevent services firms from seizing the benefits of ICT; Provide a fiscal environment which is conducive to the growth of services.

This 'free market' approach whereby, it is argued, that the economic benefits of liberalisation of services would outweigh job losses (and the attendant social tensions) in particular sectors is not universally accepted. This is evidenced by the major debate taking place within the EU on the proposed 'Services Directive' (Proposal for a Directive of the European Parliament and of the Council on services in the internal market, COM (2004)2 final).

The proposal is part of the Lisbon Economic Reform Agenda (Lisbon Strategy) agreed by European leaders in 2000.

In its Spring Report published in February 2005, the European Commission restated its commitment to moving forward with the negotiations on the Services Directive. The Commission emphasised it would actively and constructively engage with the European Parliament, the Council and stakeholders to seek agreement. In the conclusions of the Spring European Council in Brussels 22 and 23 March 2005, the Luxembourg Presidency reported consensus in the European Council that the internal market for services had to be fully operational, while preserving the European social model.

How much the Commission will stick to the original proposals, or will adapt the detail to accommodate the criticism of the proposals from the governments of countries such as France, Germany, Belgium and Luxembourg or from other stakeholders is still not clear. This In Focus brings together a range of information sources that provide information on the importance of services in the European economy, the proposed directive, and the views of stakeholders on the proposals.

Further information can be obtained from the link at the bottom of the In Focus.

EU: Legislation and Policy Making

	European Parliament: Committee on the Internal Market and Consumer Protection: Working Document on the Draft Services Directive. Rapporteur: Evelyne Gebhardt
	European Parliament: Committee on Employment and Social Affairs: Working Document on the Draft Services Directive: Freedom to provide services: Relationship with other Community instruments. Rapporteur: Anne Van Lancker
	European Parliament: Committee on Employment and Social Affairs: Working Document on the Draft Services Directive. Legal basis and scope of the draft Right of EstablishmentRapporteur: Anne Van Lancker, January 2005
	European Commission: Secretariat General: Prelex: Follow the progress of the Proposal in the EU policy making process through this link
	European Commission: SEC (2004)21: Commission staff working paper: Extended impact assessment of proposal for a directive on services in the internal market
	European Commission: COM (2004)2 final: Proposal for a Directive of the European Parliament and of the Council on services in the internal market

EU: Background

	European Commission: SPEECH/05/149: Charlie McCreevy: European Commissioner for Internal Market and Services: Statement to the European Parliament on Services Directive European Parliament Plenary Session, Strasbourg, 8 March 2005
	European Parliament: Press: News Report, 20.4.05: Parliament starts work on the services directive
	European Commission: SPEECH/05/148: Verbatim of discussion in the European Parliament Plenary, March 2005: Commissioner McCreevy on the Services Directive
	European Commission: DG Internal Market: Freedom to provide services and of establishment: Draft Directive on Services in the internal market (main website for information from the European Commission)

International Organisation

	OECD: Meeting of the OECD Council at Ministerial Level, 2005 (Paris, May 2005)
	OECD: Growth in Services. Fostering Employment, Productivity and Innovation. Meeting of the OECD Councilat Ministerial Level, 2005
	OECD: Trade Directorate: Services Trade Liberalisation: Identifying Opportunities and Gains (OECD Trade Policy Working Paper No.1, 2004)
	WTO: Trade Topics: Services trade
	OECD: Directorate for Science, Technology and Industry: The Service Economy in OECD Countries (STI Working Paper 2005/3)
	OECD: Press Release, 26.4.05: OECD calls for active employment, social measures to accompany trade liberalisation

National/regional/local official organisation

	United Kingdom: Health and Safety Executive: HSC's response to DTI's consultation on draft EU Directive on Services in the Internal Market, 2004
	Poland: Office of the Committee of European Integration: Press Release, 21.6.04: Business Consultative Council discusses draft Directive on services in the Internal Market
	United Kingdom: Department of Trade and Industry: EU Directive on Services
	United Kingdom: Department of Trade and Industry: Consultation on draft EU directive on services in the internal market, 2004
	Sweden: Government Offices of Sweden: Article:Göteborgsposten 25 November 2004: Thomas Östros, Minister for Industry and Trade: The EU Services Directive must be adapted to the Swedish context

Stakeholder organisation

	CEPS: Commentaries: The EU Services Directive: Europe needs a genuine single market in services, January 2005
	European Trade Union Confederation: Our Activities: Economic and employment policies: Internal Market and services of general interest
	European Trade Union Confederation: Position Paper: The proposal for a Directive on services in the internal market, 2004
	European Trade Union Confederation: Fact Sheet: Draft Directive on Services in the internal Market, 2005
	European State Lottery and Toto Association: Press Release, 22.3.05: European Lotteries urges EU institutions to respect the special nature of gambling
	European Public Health Alliance: Wealth: Services in the Internal Market
	UEAPME: Position paper on the Proposal for a Directive of the European Parliament and the of the Council on Services in the internal market., November 2004
	CEEP: Opinion on the Proposal for a Directive on Services in the Internal Market, January 2005
	CEEP: Press Release, No.4, 2005: Maintaining the 'acquis communautaire' of services of general interestby excluding them from the field of implementation
	AmCham EU: Press Release, 8.11.04: Without adoption of services Directive there will never be a true single market in Europe
	Ifo Institute: CESifo Forum, No.1, 2005: Pro and Contra: Debating the EU Services Directive

Commercial publisher and media

	Financial Times, 3.3.05: Brussels to water down services directive
	European Voice, Vol.10, No.35, 14.10.04: Opening services sector would 'unleash economy'
	Financial Times, 15.3.05: A recipe for jobs or a race to the bottom? The EU debates a single market in services
	Financial Times, 15.3.05: East European service providers make little headway in Germany
	Financial Times, 9.3.05: Safeguarding trade across Europe for smaller companies
	Financial Times, 9.3.05: The EU services directive would create jobs and wealth for all
	Financial Times, 8.3.05: Services directive under fresh attack as Schröder calls for it to be replac
	Financial Times, 7.3.05: Barroso should heed broad-based complaints over draft directive on services and start again
	The Economist, No.8417, 12.3.05: Charlemagne: Not at your service
	Financial Times, 4.3.05: EU official fuels spat on services directive
	European Voice, Vol.11, No.14, 14.4.05: Constitution 'friendly to public services'
	Financial Times, 16.2.05: Schröder voices fears over plan to liberalise services
	Financial Times, 9.2.05: Proceed cautiously
	Financial Times, 7.3.05: President must back MEPs on this measure
	European Voice, Vol.11, No.4, 3.2.05: McCreevy: we are determined to consider all options
	Financial Times, 1.4.05: What EU services directive is trying to spell out
	Financial Times, 7.4.05: No 'Plan B' for France should voters reject Europe treaty
	Financial Times, 14.4.05: MEPs to debate services directive changes
	Financial Times, 28.3.05: Missed chances to revive Europe's economy
	Financial Times, 26.3.05: Le dumping social
	Financial Times, 23.3.05: Europe must look within for ways to compete
	Financial Times, 23.3.05: Leaders back changes to services directive
	Financial Times, 21.3.05: Germans find opening of EU borders threat or opportunity
	European Voice, Vol.11, No.4, 3.2.05: Service sector key to Europe's wealth
	Financial Times, 28.3.05: Invest more in Germany, Schröder tells business
	European Voice, Vol.11, No.4, 3.2.0527/04/2005 Legal chaos or the best solution for a common market?
	European Voice, Vol.11, No.4, 3.2.05: From trade unions to online betting operators - opinions are divided
	European Voice, Vol.11, No.4, 3.2.05: Bolkestein legacy 'too radical' for new Commission
	European Voice, Vol.11, No.4, 3.2.05: 'No need to tear up and start all over'
	European Voice, Vol.11, No.5, 10.2.05: Question of the Week: In what way should the European Commission revise the proposed services directive to secure acceptance by Parliament and Member States?
	European Voice, Vol.11, No.6, 17.2.05: Will the 'Bolkestein directive' really kill Europe's social model?
	European Voice, Vol.11, No.11, 24.3.05: Results of the 22-23 March Spring Summit
	European Voice, Vol.11, No.11, 24.3.05: Question of the Week: How can the EU find agreement on the services directive which is proving so controversial in many Member States?
	European Voice, Vol.10, No.39, 10.11.04: Tough ride ahead for services directive

Other

	BBC News, 23.3.05: EU talks end after services deal
	BBC News, 18.2.05: Services liberalisation sparks EU row

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