Ahead of the coming week's debate and vote in Strasbourg which winds up Parliament's first reading, MEPs from the two largest political groups, the PES (socialists) and the EPP-ED (christian-democrats and European democrats), have reached an agreement which apparently eliminates once and for all the "country of origin" principle. "We have found a third path", said rapporteur Evelyne Gebhardt at a press conference 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 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".