EU leaders back weaker services directive

EU leaders broadly supported the European Parliament revisions to the EU services directive at their summit on March 23 and 24.

Last month European parliamentarians voted 391 to 213 in favour with 34 abstentions for a diluted directive to open up the EU’s large services sector to freer competition.

The main change was the abolition of the “country of origin” principle.

Companies must instead abide by employment, social, health and environmental legislation of the host member state, rather than their own.

Country of origin was replaced by a clause with the title “freedom to provide services”. This means, for example, that member states cannot demand that a company set up an office in its country in order to provide services.

Countries will be allowed to put conditions on the provision of services in the area of social security, environment and health.

The next step is for the European Commission to present a revised proposal and for leaders to pass it probably in the second half of this year.