Malta spells out reservations on services directive

Malta holds various reservations on the proposed EU services directive and urged the European Commission to base its approach on specified and agreed exclusions, such as health services, education and tax.

The issue was brought up during discussions held yesterday in Brussels between Foreign Minister Michael Frendo and Internal Market Commissioner Charlie Mc Creevy.

Following the meeting, Minister Frendo told The Times that although Malta agrees with the general spirit of the proposal, liberalising as much as possible the provision of certain services in the EU to have a more functioning internal market, Malta have many reservations on certain sectors.

He specifically mentioned health, education and taxation where total liberalisation can create problems especially in the context of the limited size of Malta's economy.

The Directive on Services in the Internal Market, otherwise known as the Bolkestein Directive aims at removing barriers to the provision of services between member states. The proposed directive is often criticised for its "country of origin principle".

Under this principle, companies registered in any EU member state may not only provide services in any other, but can also employ workers to perform such services abroad remaining subject to the law of the country in which they are registered.

Trade unions strongly oppose this directive because they fear that businesses will utilise this law to take advantage in counties with poor labour and environmental standards.

The European Parliament is expected to discuss and vote on this controversial directive next month and many unions are already organising massive protests.

During the meeting, Minister Frendo brought up the issue of the need for more liberalisation of online services in the internal market, with particular reference to the gaming sector.

He said that Malta had developed a well regulated internet gaming sector which is today considered one of Malta's areas of specialisation.

Raising specifically the issue of Zeturf, a Maltese-registered remote gaming company that is at the centre of a legal battle with France's largest betting syndicate, Minister Frendo said that Commissioner Mc Creevy assured him the Commission is taking the case seriously and is looking at all the issues raised by the Maltese company.

Zeturf recently complained to the Commission that the French syndicate, Groupment d'Internet Economique Pari Mutuel Urbain is using tactics contrary to the free market principles which are endangering Malta's fledgling remote gaming industry.

Minister Frendo yesterday also held talks with Enterprise and Industry Commissioner Günter Verheugen and Justice Commissioner Franco Frattini.

Throughout the meetings, Minister Frendo was accompanied by Malta's Permanent Representative to the European Union, Ambassador Richard Cachia Caruana.