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CASE STUDY 6.2: A CONTROVERSIAL NEW EUROPEAN DIRECTIVE

On behalf of the Commissioner for the Internal Market suggest arguments in support of the Bolkestein Directive. Which parts of your case would be most important?

Answer

The European Commission and the Internal Market Commissioner could argue, with a considerable force of logic, that freedom of movement for services, as well as people and goods, is a fundamental part of the original Treaty of Rome, 1957. Thus this sort of enabling legislation, to allow for the free movement of services is simply long overdue. If the Lisbon Agenda (see chapter 10) is to come to fruition, with the European Union becoming the most competitive economic area in the world by 2010, then competition in services must be increased and improved. Far too many barriers to competition in services exist in the EU today. For example : in some countries the distance between opticians has to be fixed at 350 metres, or there can be no more than one driving school per every 1,500 people, in Greece they require that all diving instructors must speak Greek whether their clients (typically from UK,USA or Australia) do so or not etc. However many silly instances could be cited the key point is the imperative desire to increase competition and thus standards and choice for consumers. Furthermore 600,000 jobs could be created and economic growth could be stimulated say Bolkestein supporters. (BBC 2006).

Prepare an argument, to be put to the European Commission, that the Bolkestein Directive should be scrapped. Amongst your points should be the subsidiarity principle, and the general need for more, not less, regulation of MNCs. Outline your argument carefully, and indicate what you think the most important points to be.

Answer

The strongest arguments against the directive have focussed on the country of origin principle. According to this concept a company offering its services would be governed by the rules and regulations applicable in its home or base market. The subsidiary principle, entrenched in the EU`s ways of thinking and spelled out in the Maastricht Treaty, says that decisions should be made as locally as possible, unless there is an overriding EU wide issue at stake. So, Bolkestein advocates argue, let the governance and regulation of service companies be done where they are based and thus keep things simple. Others would argue the exact opposite. Subsidiarity should give decision making power to the most local authority, not some regulatory body which could be hundreds or thousands of miles literally and culturally from the market in which the services are being provided. How on earth can a regulatory authority in one country try to maintain inspection standards and other controls on service provision in 10 or 20 other countries each with their own culture, language and tradition? It could not be done. Therefore individual member states should, or must be allowed to monitor and regulate affairs within their borders. Monitoring of service standards is totally different from monitoring production quality of manufactured goods.

The MAI (Multinational Agreement on Investment) was put on hold, at least, by the power of publicly state opposition. Considering all the pros and cons, as in Questions 1 and 2, do you think the Bolkestein directive should also be put on hold?

Answer

The arguments against the directive seem, now, to have prevailed. In the spring of 2006 the European Parliament voted a significant number of changes to the directive as originally suggested. Many industries will be covered by the directive, but many are now to be exempt from it. Those exempted include broadcasting, postal services, audiovisual services, temporary employment agencies, legal services, social services, public transport, public health services 9but not private health care services0 and gambling. Industries which will be covered include hotel and catering, car hire, construction, advertising agencies, estate agents and architects. The directive, as now amended, is not expected to become operative before 2009 at the earliest. (BBC 2006). Thus the directive is noiw very much changed in form and -almost- ’on hold’.

BBC News (2006) Questions and Answers on the services directive, 29 May 2006, news vote.bbc.co.uk/mpapps/page tools/print/news.bbc.co.uk/1/hi/world/Europe/…, accessed August 2006.

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