McCreevy to put forward new proposals

New proposals to open up the EU services market will be unveiled today by internal market commissioner Charlie McCreevy.

A revised services directive is to be presented by Mr McCreevy to the European Parliament in Strasbourg, which voted in February to remove controversial elements of the directive as initially proposed.

The aim of the directive is to enable firms to provide services across the EU's 25 member states without having to encounter local barriers or red tape.

Unions and left-wing politicians, however, argued that the directive brought forward by Mr McCreevy's predecessor, Frederik Bolkestein, would undermine employment standards.

They highlighted in particular the directive's "country of origin principle" which, it was claimed, would enable companies to operate according to labour laws applying in their home country.

For example, it was claimed, companies with headquarters in Latvia could employ workers in Ireland on Latvian pay rates.

Supporters of the directive denied it would have this effect, but the European Parliament voted to remove the country of origin principle in February. MEPs also voted to limit the scope of the directive by excluding health, social services, labour law and security services from its remit.

A compromise formula was approved by the parliament. Mr McCreevy is not obliged to cater for the parliament's view in the directive to be published today, but he is likely to do so.

The directive will then be considered by economic ministers, including Minister for Enterprise Micheál Martin, before returning to the European Parliament. In the absence of any delays, it could be adopted by the Council of Ministers before the end of the year.