EPP, Socialists seek compromise

A compromise on a watered-down version of the proposed Services Directive appeared to be around the corner yesterday as the biggest two political groups in the European Parliament - the European People's Party and the Socialists - discussed last-minute changes to the proposals made by the European Commission in 2003.

Intense negotiations aimed at reaching an agreement before tomorrow's crucial vote continued even as the debate on the issue was taking place in the plenary in the afternoon.

Maltese MEPs from both sides of the political divide also looked set to back the compromise.

Addressing the plenary last night, the head of the Nationalist delegation in the EP, Simon Busuttil, said that the opening up of the services market is good and one should say so loud and clear. "It is good for business - particularly SMEs - and good for jobs. We have a reasonable compromise; I say let's go for it," he told MEPs.

Dr Busuttil said the compromise should be workable and strike a fair balance between the objective of opening up the services market and the EU's intention to address the social concerns that are justified. From its inception, the proposal has been plagued by scare mongering, he said.

"Coming from a new member state, this scare mongering seems like deja vu. In my country, opponents of EU membership used to conjure up nightmare scenarios that foreign workers would invade us and take our jobs. The same cassandras played the same act in the 'old' member states too. But now we know that the doomsday scenarios were just not true - they did not materialise. Nor will they materialise with the Services Directive."

Labour MEP Joseph Muscat spoke on the same wavelength.

He said that if the European Parliament lives up to the deal that seems to have been struck on the directive, this would be a clear sign that the social rights of workers and self-employed come before other considerations.

He expressed his positive outlook on the situation and said that following the rejection of the Port Services Directive last month, this could be the second step in a short period showing that there are many people in the European Parliament who want to build a Social Europe.

"The way in which a majority in Parliament agreed to drastically change the Services Directive witnesses the effectiveness of this institution. Labour and the European Socialists were from the start against the country of origin principle as it would give rise to unfair competition and would undermine consumer protection and workers' rights."

Mr Muscat pointed out that although there is room for more improvement, the directive is likely to be much more realistic than the original draft proposed by the Commission.

"We are turning a proposal which could have had disastrous effects on our societies - especially the most vulnerable parts - into one which is much more sensible," he said.

During the debate, Commission President José Manuel Barroso said the Services Directive was crucial to European growth and employment prospects.

"A lot of work has still to be done for Europe to fully enjoy the fundamental freedoms enshrined in the treaties. The directive would be a test to see if the EU25 were able to find solutions to difficult issues that are particularly sensitive to public opinion. Europe needs a strong consensus in the European Parliament on the Services Directive," he added.

Originally, the main bone of contention was the so-called country of origin principle. This would have meant that a European Union service provider wanting to provide services in another member state would have to abide by the rules of his/her country of origin and not the host country.

There now seems to be a majority in the European Parliament that wants to do away with this principle. According to the compromise, the host country rules, including consumer protection, working conditions and social legislation, would prevail.