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Is the EU Services Directive compromise an acceptable solution?

Evelyne Gebhardt, Martin Wansleben, Klaus Bräunig
ifo Institut für Wirtschaftsforschung, München, 2006

ifo Schnelldienst, 2006, 59, Nr. 06, 03-10

The radical opening of the services markets in Europe proposed by the European Commission has failed. The European Parliament has decided to water down the Services Directive. For Evelyne Gebhardt, Member of the European Parliament, "this compromise can serve as the basis for a fair and socially balanced opening of the services markets. The freedom of movement for services is guaranteed. At the same time, standards and regulations in the member states on important matters of basic services, labour law and consumer, environmental and patient-rights protection are maintained." It particularly underscores the special importance of the abolition of the country-of-origin principle and stresses that with the present proposal "market entrance is facilitated and at the same time the regulations and standards of the country in question are respected". In the opinion of Martin Wansleben, Deutscher Industrie- und Handelskammertag, the compromise is "no reason to rejoice. The opportunity to complete the single market with temporary services and to bolster growth in the member states was sacrificed because of fear of change and distrust of the other member states. With the strong dilution of the country-of-origin principle, the positive economic effects for the European economic area are largely eliminated. Back doors for protectionism still exist." For Klaus Bräunig, Federation of German Industry, the compromise is not "the bold initiative for the liberalisation of the European service market".

JEL Classification: L800

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ifo Institut für Wirtschaftsforschung, München, 2006