SERVICES DIRECTIVE : GRUDGING CONSENSUS IN COUNCIL ON MEPS' REDRAFTED DIRECTIVE.

The draft Services Directive seems to be slowly edging towards approval. When EU Economics Ministers discussed it over dinner on the eve of the formal Competitiveness Council on 12 March, there was consensus that the amended draft voted by the European Parliament on February 16 (see issue 3031) formed a solid basis for securing a deal. Nevertheless, it was clear the new member states and some of the old ones are not too happy about the situation. Many feel MEPs went too far by scrapping the country-of-origin principle, under which cross-border service providers are only bound by the laws of the country where they are established. But political pragmatism seems to be entrenching itself as Ministers realise it will be hard to substantially diverge from the EP's less-liberal blueprint given the cross-party compromise the MEPs achieved.

The Directive, first proposed in January 2004, aims to revolutionise the services sector by dismantling a raft of national barriers to cross-border trade. Summing up the ministerial discussions on 12/13 March, Austrian Economics Minister Martin Bartenstein, who chaired the Council, said "we have taken a major step forward" while adding "we are still quite a long way off full agreement". Predicting there would be no drastic changes to the EP's first reading opinion, he said "we'll have to stick to the compromise to a large extent". His view was shared by EU Enterprise Commissioner Gunter Verheugen. "There is not much point in being too stubborn or ideological - what is important is getting consensus", said Mr Verheugen who, along with EU...