McCreevy 'seeks changes' to services directive

Charlie McCreevy, the European Union’s (EU) commissioner for the internal market, has given a broad hint that he will seek major changes in the EU’s controversial services directive, which has aroused fears that it could lead to ‘social dumping’ and unfair competition in accountancy and other services.

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The commissioner said at a Brussels press conference that he would ‘work with the European Parliament (EP) to address the worries’ arising from the proposed legislation. This legislation would allow service providers to operate according to the rules of their home country under the ‘country of origin’ principle.

McCreevy said that ‘changes would have to be made’ in the text drawn up by the previous EU commissioner Frits Bolkestein. ‘This has to be made watertight, and we need to amend it to make clear that standards and conditions for workers will not be lowered. We will not allow social dumping,’ he said.

The directive states that service providers ‘are subject only to the national provision of their member state of origin’.

While this is welcomed by business it has raised fears in a number of EU member countries and the EP that companies will be tempted to locate their ‘home base’ in the member state with the weakest regulations.

This in turn could lead to a widespread weakening of laws covering social protection and workers’ rights.

McCreevy said it was basically up to the European Parliament, which will have its first reading of the directive in June, ‘to move forward’ and promised the commission’s support for changes.

Earlier this month, it was reported that the commission had decided to find a way of watering down the key ‘country of origin’ clause, after France and Germany had both expressed strong opposition to the text.

However, it declined to withdraw the directive as many of its critics had urged.