In January 2004 the European Commission proposed a directive on services in the internal market, named after Frits Bolkestein, the Dutch commissioner who drafted it. Services make up about 70 percent of the EU economy, yet cross-border trade in services lagged far behind goods. The directive aimed to remove national barriers so that a company from one member state could offer services in another without new authorisations.
The country-of-origin principle
The controversial core was the “country of origin principle”: a service provider would be subject to the law of the country where it was established, not the country where it worked. Critics argued this would let a firm registered in a low-wage member state undercut local wages, safety rules and collective agreements across the Union. The figure of the “Polish plumber” became shorthand for the fear in France. Trade unions, the European Trade Union Confederation and researchers on both the left and in the social-democratic mainstream argued that public services, healthcare and temporary work agencies had to be excluded.
The constitution referendum
The directive was debated in parallel with the ratification of the Treaty establishing a Constitution for Europe. In the French referendum of 29 May 2005 the two questions merged: opponents presented the constitution as locking in the kind of market liberalism the Bolkestein text represented. France voted no by 55 percent, the Netherlands followed three days later, and the constitution was abandoned; most of its institutional content later returned as the Lisbon Treaty of 2007.
The directive as adopted
The European Parliament rewrote the proposal in February 2006. The country-of-origin principle was replaced by a “freedom to provide services” clause that lets host states impose requirements justified by public policy, security, health or environmental protection. Healthcare, temporary work agencies, audiovisual services, gambling, social services and services of general economic interest such as water and energy were excluded. The Services Directive 2006/123/EC was adopted in December 2006 and had to be implemented by the end of 2009. Its practical legacy is the “points of single contact”, the online portals where a company can complete formalities in another member state, and a ban on many authorisation requirements.
This site is an independent reference on globalisation and European affairs and is not connected to the former research unit URFIG.
