Egmont Paper n°32:
Legislating amidst public controversy: the Services Directive

Author

Peter Timmerman. - View the full report .

Executive summary

The adoption of the Services Directive in 2006 constituted the final act of one of the most
controversial pieces of European legislation adopted in recent years. The ‘Bolkestein
Directive’ envisaged freeing the provision of a large range of services within the EU.
However, it was believed that the proposal would clear the way for social dumping and would
lead to a race to the bottom regarding worker’s rights.

In 2004, as part of the Lisbon Strategy, the European Commission intended to do away with
the remaining obstacles to the internal market in services. A proposal for a directive set out a
legal framework that would eliminate the obstacles to the freedom of establishment for
service providers, remove the barriers to temporary service provision in other member states
and fix detailed rules on mutual assistance and evaluation between member states.

However, the idea of achieving freedom of almost all services by means of one single
directive proved unrealistic. The controversy surrounding it lead to substantial changes during
the legislative procedure. The final text has less far-reaching consequences, particularly
because of the reduction of scope it underwent by introducing additional exclusions and
derogations in it. These amendments gave it a considerably negative tendency, since more
attention seems to be devoted to what is not regulated by it, than to what actually is. This is to
a large extent the consequence of the zealous efforts of the European Parliament.
Furthermore, it inhibits a number of legal uncertainties, due to careless redrafting of the
directive.

On a positive note, the Services Directive does contain a number of good elements. The
codification of existing case-law in it is important, particularly concerning the right of
establishment and the rights of recipients. The provisions introducing limited harmonisation
regarding the quality of services and administrative simplification (e.g. points of single
contact, applications via internet, the screening provisions of national legislation) will also be
to the benefit of consumers and cross-border service providers.

Regarding institutional matters, the European Parliament played a central role during the codecision
procedure, which is positive from a democratic point of view. Questions can be
raised about the way the European Commission initially handled the issue. The Prodi
Commission adopted this high profile proposal only months before the end of its term and
seemingly had not adequately prepared the ground for it. Finally, the Barosso Commission was wise to follow the European Parliament in most of its objections, after initially defending the proposal.

Full report

Click here to view the full report as a PDF file.

Top