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Abstract

In January 2005, the European Commission put forward a proposal, the European Union (EU) Services Directive, to ensure free flow of services across the borders of its 25 member states and transform Europe into a ?dynamic and knowledge-based economy? by 2010. The country of origin clause, which is one of the key principles of the directive, has sparked a vigorous debate in certain political groups, like the trade unions and the EU parliament, which are strongly supported by France and Germany, as they fear that free flow of services would lead to heavy social and fiscal dumping, which in turn would lead to dilution of social and health benefit standards. However, most East European nations view the directive favourably as they expect to rake in profits by doing business with the West European nations and leveraging on their cheap labour. The case focuses on the issues that have stirred a major controversy over the EU services directive and takes a glimpse at its probable future. It also discusses the challenges faced by the present European Commissioner, Jose Manuel Barroso, and his role in shaping the future of the directive.
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12 March 2005

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Abstract

In January 2005, the European Commission put forward a proposal, the European Union (EU) Services Directive, to ensure free flow of services across the borders of its 25 member states and transform Europe into a ?dynamic and knowledge-based economy? by 2010. The country of origin clause, which is one of the key principles of the directive, has sparked a vigorous debate in certain political groups, like the trade unions and the EU parliament, which are strongly supported by France and Germany, as they fear that free flow of services would lead to heavy social and fiscal dumping, which in turn would lead to dilution of social and health benefit standards. However, most East European nations view the directive favourably as they expect to rake in profits by doing business with the West European nations and leveraging on their cheap labour. The case focuses on the issues that have stirred a major controversy over the EU services directive and takes a glimpse at its probable future. It also discusses the challenges faced by the present European Commissioner, Jose Manuel Barroso, and his role in shaping the future of the directive.

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Location:
Other setting(s):
12 March 2005

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