We have found a third path", said rapporteur Evelyne Gebhardt (PSE, DE) at a press conference last week called to explain the compromise. The deal relates to 23 amendments concerning the goal and aims of the directive (Art. 1), its scope (Art. 2) and above all the rule of the "freedom to provide services" (Art. 16).
The compromise amendment modifying the old Article 16 contains four points. Firstly, the Member State into which the service is provided must ensure free access to and free exercise of a service activity within its territory. However, the Member State may restrict the provision of services, subject to certain principles: non-discrimination (e.g. as regards nationality), necessity (reasons of public policy or public security, protection of health or the environment) and proportionality (i.e. what is needed to secure the objective pursued, but no more).
Secondly, the proposed amendment sets out a list of requirements that the Member State may not impose on a service provider established in another Member State. For example, it may not require a provider to open an office in the country where it plans to provide services temporarily, nor require it to register with a professional body or association in that country, nor ban it from using its own equipment or material.
Thirdly, the new text lists grounds on which the Member State is allowed to restrict the free provision of services on its territory (public policy, public security, social policy, consumer protection, environment and public health). This is the part of the text which would appear to require clarification if the compromise is to achieve a clear majority at the plenary vote.
Lastly, the new text requires the Commission, five years after the directive enters into force, to assess how well the principle of free movement of services is working and to consider any need for harmonising legislation on the services covered by this directive. The new text no longer mentions at all the terms "country of origin" and "host country".
Services excluded from the directive
The other major issue is the scope of the directive (Art.1 and Art. 2). The distinction between services of general interest or SGI (which were not included in the Commission proposal) and services of general economic interest or SGEI (which were covered by the Commission proposal) has been the main bone of contention.
At the committee vote, Members of the EPP-ED and ALDE groups opposed any global exclusion of services of general economic interest such as postal services, the distribution of electricity, gas and water and waste collection but also social services where these are of an economic or commercial nature. Discussion has now come to focus on social services, which could finally be excluded from the scope of the directive following the plenary vote if the EPP-ED and PES groups can agree on a definition. The compromise provides for domestic social services (e.g. for elderly people) to be excluded. Another compromise amendment proposes excluding temporary employment agencies.
Industries covered by legislation specific to their sector are also excluded, e.g. financial services, electronic communications services and networks, and transport. Other areas excluded are legal services, health care, audiovisual services, gambling and lotteries, and professions and activities linked to the exercise of public authority (e.g. notaries) and tax services.
What's next?
After the plenary vote, it will be up to the Council of Ministers, as joint legislator with Parliament, to decide its position on the directive and the amendments adopted by MEPs. If all Parliament's amendments are acceptable to the Council, the legislation will be adopted in its modified form. If the Council rejects any of Parliament's amendments or adds any of its own, the text will return to Parliament for a second reading.
