No debate on 'Frankenstein' directive

Comment: Earlier this year the European Parliament and Council of Ministers told the European Commission to rewrite its proposed services directive. The draft directive aimed to introduce common EU rules for trade in services in much the same way as trade in goods is now regulated.

The proposed legislation was know as the Bolkestein Directive, after Fritz Bolkestein, the former EU internal market commissioner responsible for the original draft. But Dublin MEP Proinsias de Rossa dubbed it the "Frankenstein directive" because, as drafted, it would have undermined most existing collective agreements, national labour laws, environmental codes and public services.

European trade unions, consumer groups and environmental organisations are working to ensure revised proposals, due after the summer, do not become the "bride of Frankenstein" in terms of workers', consumers' and citizens' rights. Because, just as in the famous James Whale movies, if you use the same repulsive body parts to create a second monster, the results will be similarly catastrophic.

No one has a problem with common rules for trade in services, which now make up at least half the EU's economic activity. However, lurking inside the proposed directive was a nasty clause, which became known as the "country of origin" principle. It would have allowed companies to set up in any EU country and then trade across the continent using the labour and environmental laws of its country of origin.

Companies could have moved headquarters to a country with minimal legal rights for workers, consumers and the environment, and then traded across the EU on the basis of those meagre protections.

Right now, companies must obey the laws of the countries in which they trade. But, under these proposals, a business could set up in Latvia and employ staff in the Republic on the basis of Latvian laws.

It would have put decent employers and governments under immense commercial pressure to abandon successful and productive systems of industrial relations and environmental protection in a continent-wide race to the bottom.

The proposals were also strongly criticised for failing to distinguish between commercial services and "services of general interest" - Euro-speak for public services. European trade unions have long been calling for a framework directive to protect essential public services, which transcend a simple supplier-consumer relationship.

Put simply, the laws covering a cut and blow dry at the local hairdressers should not be the same as rules governing cancer treatment, education or residential childcare.

The decision to order a re-write of plans to liberalise services was a put- down for a commission acting with uncharacteristic arrogance. There was little consultation, within or outside the Brussels set, before the proposals emerged.

Commission president José Manuel Barroso scolded French politicians for failing to tell their electorate that the proposed directive was separate from the new European constitution, which French voters will judge shortly. He was right to differentiate, but naive to think that European workers and citizens will respect such fine distinctions when their livelihoods are at stake.

The proposed constitution, which will be the subject of an Irish referendum too, contains many safeguards for public services and workers' rights. But the commission - and the Government - are deluding themselves if they think that they can ignore these when dealing with commercial and market issues if they want to win public support for the constitution.

The Government supported the draft directive right up to the death. Like many national elites, it has mastered the art of quietly promoting an electorally unpalatable agenda in the closed cloisters of the commission and shrugging shoulders when, as a result, Brussels "compels" them to implement it at home.

But Irish unions are now telling them it's unacceptable to reach agreements on pay, working conditions and social standards in the Irish partnership process, while simultaneously supporting commission proposals that would fatally undermine them. The services directive is set to become a central issue among the social partners.

The task of rewriting the directive will fall to Irish commissioner Charlie McCreevy, who took over from Bolkestein. His statement, issued after the council's rejection of the original proposals, was reassuring. But only to a point. He said a new text would have to be "watertight" on the preservation of workers' conditions. But his view that "sectors such as health and publicly funded services of general interest" should be excluded from a new directive is ambiguous because there are very few countries where such services are fully publicly funded. Such a criteria wouldn't cover Irish education or elderly care services, for example.

The European Parliament, which rejected the initial proposals, will reconsider the issue after the summer and there are indications that it is trying to neutralise the Bolkestein approach. But there is little reason to think the commission has changed its view, although it's likely to lay low while national referenda on the constitution are under way. Meanwhile, European unions are lobbying to get an EU directive on services of general interest on the books before a services directive is adopted.

We often criticise the EU for being distant. But, in many EU countries, this has been an exciting chapter in national and European democracy. It's not often that such a direct change of tack is forced on the commission because national governments (including the French, German and Spanish) respond to popular outrage at its proposals.

But there remains a scary lack of debate in the Republic about legislation that would change all the rules on pay, employment relationships, environmental protections and consumers' rights. All but a small circle of politicians are either ignorant or silent on the issue.

This must change because, although the Frankenstein sequel is being played out on the European stage, the fiend may well prevail or be slain on the home front.

Bernard Harbor is information officer with Impact trade union.