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[03.01.2006] ‘Frankenstein’ directive passes EU Parliament

By Laura Petricola, People's Weekly World
The “Directive on Services in the Internal Market,” otherwise known as the Bolkestein Directive, passed in a European Parliament vote Feb. 16. Despite mass protest and mobilizations by trade unions and grassroots organizations, the EU Parliament’s two biggest groups, the EPP-ED (conservative) and PSE (socialist) collaborated to get an amended version adopted in the EP plenary.

The directive aims to further increase the profit margin of big monopoly groups in the service industry field. It would remove the legal and administrative barriers that hinder businesses from setting up shop in other EU countries. It covers a wide range of businesses such as construction, hotel and restaurant, advertising, car hire and estate agencies as well as certain public services such as social care and environmental services.

The Parliament excluded a number of areas, including temporary employment agencies, social services, public transport and public — but not private — health care. Significantly, the services involved make up 70 percent of the GNP and 58 percent of employment in the European Union.

The most controversial section is the “Country of Origin Principle,” Article 16, which would allow a firm to cross the border, set up operations in another country and yet operate according to the rules and regulations of its home country. The quantity, quality, and pricing of services, as well as wages and workers’ rights, are based on current legislation and standards in the firm’s base country.

In this way, monopoly groups can declare as their base EU countries with low labor standards, low wages, and the weakest environmental protection laws, health and safety regulations. As a result, the monopolies can reap huge profits by exploiting the workers of these countries while at the same time drastically lowering the labor standards of the countries they are newly operating in. This would be the equivalent to giving U.S. companies the full legal right to import and employ Latin American workers in New York City while paying them Latin American wages.

The discussion of the Bolkestein Directive in the full EP plenary started Feb. 14, as more than 30,000 trade unionists from all EU countries were demonstrating on the streets of Strasbourg, demanding its withdrawal. While conservatives and socialists jointly sought to prettify the measure without changing its reactionary essence, the workers with their militant demonstrations demanded the absolute rejection of the directive or any amended version that would challenge labor’s gains for the benefit of big capital. Labor organizations across the EU have been mobilizing for months to defeat the measure, which constitutes one more stepping-stone for the creation of a monopoly capitalist paradise in Europe.

In an effort to diffuse opposition, supporters tried to mask the Country of Origin Principle by changing its name, and saying it is “recommended” that companies “respect minimum wages that are defined by law or national practice of the country in which they will be operating.” Clearly, there are many exemptions to the “recommendation.” For example, collective bargaining agreements in this context would not apply to construction workers, dock and ship workers, outsourced laborers hired for short periods or for projects with limited time-frames, etc.

The measure will be discussed by EU leaders at their March Summit. The European Commission states that it will issue a new version by April. It could be passed this year but would take at least two years to pass into national law.

The struggle of organized labor against the Bolkestein Directive will become more effective as it gains anti-imperialist, anti-monopoly characteristics and as it becomes intrinsically linked with demands that aim at the root of the evil — capital’s profiteering and the governments that support it.

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