Editorial: The Directive That Came From Hell


January 28 2005 16:52 | by Steve McGiffen

Working with the Dutch left over the last few years, I have often compared former Deputy Prime Minister, Liberal Party leader and, most recently, EU Commissioner Frits Bolkestein to "Mrs Thatcher in a bad mood". His party, the VVD, has played a major role in the last decade's massive assault on the Netherlands' once enviable welfare state. Now, as his swansong, outgoing Commissioner Bolkestein has brought forward a proposal which can, without hyperbole, be described as a declaration of war on working men and women and the social, health care and educational provisions which are the fruits of two centuries of struggle. Welcome to the European Commission's proposal 2004/002, the Directive on Services in the Internal Market, the Directive that came from hell, widely known simply as the Bolkestein Directive.

The pretext for the proposal is simple. The EU has now largely fulfilled its ambition to create a single market within which goods can be freely traded, almost as in a unified state. As far as the provision of services goes, however, the story is very different. Many EU member states continue to display a distinctly uncooperative attitude to foreigners who try to establish small businesses on their territory. Yet few Star readers will be sufficiently naive to believe that the Eurocracy really cares two eurocents about the "rights" of ordinary people subjected to such forms of discrimination. So what is the real goal?

The Treaty establishing the European Union guarantees that there will be free movement of services between member states. If a French company wants to sell a service in the UK, for example, it must be allowed to. We may have our doubts about the desirability of such a carte blanche right, but that debate is for another day. The point here is that the proposed Directive is more than a hammer to crack a nut. It treats the nut as if it were a WMD, and sends the legalistic equivalent of stealth bombers to hammer those responsible for it into submission.

If the Directive in its current form is approved, almost all services will be exposed to market-based competition: all kinds of social and cultural services, education, health and residential care, all will be included. All services will be treated equally, whether they involve life-saving operations or bungee jumping. For Bolkestein and those who think like him, major surgery and minor sports are simply two different ways of making money.

What precisely will the exposure of essential services to "free competition" mean? It is in answering this question that I am forced to enter the realms of the surreal.

The most disturbing aspect of the proposal is the so-called "Country of Origin principle". Simply put, this states that a service-provider must follow the rules and laws not of the country in which the service is to be provided, but the one in which it is "established".

"Establishment", moreover, should not be taken to mean that a firm has any real roots in a particular part of the world. A US multinational, for example, can establish itself in, say, Lithuania, simply by registering its presence there. It can then trade in the UK whilst conforming only to Lithuanian law on such matters as health and safety, employees' rights, or environmental protection. Worse still, because the British authorities would have no rights in the matter, Lithuania is expected to send inspectors to ensure that the service provider conforms to its laws.

This is not, by the way, to pick on Lithuania. Every country's legal code has strengths and weaknesses, and any company wishing fully to exploit the possibilities opened up by the proposed Directive need only find out what they are before it decides where to "establish" itself.

The Country of Origin Principle is merely the most dangerous and offensive aspect of a proposal which is in every aspect unacceptable. Covering everything except transport, financial services, certain services provided free of charge by the state, and those already covered by other Directives, the Directive forbids member to refuse permission to trade to any operator authorised to do so in any other member states. It also effectively makes the application of any kind of regional development plan illegal. Finally, it obliges national authorities to cover costs incurred by anyone who goes to another member state for medical treatment which would be paid for had they undergone it at home - and forbids them from requiring 'prior consent'.

The good news is that the proposal has a long way to go before it become law, and there are signs of disquiet extending well beyond the labour or environmental movements. When Dutch left Euro-MP Kartika Liotard presented a highly critical report on the proposal to a European Parliament Committee, MEPs from every group, including British Tory John Bowis and Irish Fine Gael Member Avril Doyle, queued up to attack the Directive. In the Council of Ministers, too, criticisms have been raised, though no member state has as yet rejected the measure outright.

Nevertheless, we cannot rely on Euro-MPs and government ministers to throw this proposal into the dustbin. The last major attack on working people to come from Brussels, the Port Services Directive, was defeated by co-ordinated activities inside and outside parliaments, including mass demonstrations which brought tens of thousands of dockworkers and their supporters to Rotterdam, Brussels and Strasbourg. At the same time, some intelligent work from left parliamentarians assembled a coalition of the unwilling which was eventually able to have the entire proposal chucked out. We need urgently to organise our parliamentary and extra-parliamentary forces again in the face of this even greater threat. And with the legislative process well under way, we need to do it now.

Steve McGiffen is editor of Spectrezine. This article first appeared in the Morning Star.

To sign a petition against the Bolkestein Directive and read up-to-date information on developments, go to this website

See Also: Thomas Fritz The European Services Directive