EU ministers agree services deal

A new EU agreement to open up the European services market will benefit Britain by about £5 billion a year, the government has said.

Ministers from 24 of the 25 European Union countries finally approved the EU services directive last night, which will allow the providers of services such as advertising, catering and construction, to work across the union with fewer restrictions.

Britain has been a strong advocate of the directive, but the original draft faced major opposition from some states, in particular a clause which would allow service companies to operate under their own country’s laws.

There were fears that this ‘country of origin’ proviso would see eastern European states undercut providers in the richer states – the directive was widely seen as one of the reason why the Dutch and French rejected the EU constitution this time last year.

As a result, a revised version of the agreement which did not include this clause was put to the European parliament in February, and agreed by EU ministers last night. The deal will now return to the European parliament for its second reading.

There was also a compromise to appease France, one of the main opponents of the new agreement, which will see the rules phased in over three years, rather than the usual two-year period for implementing EU legislation.

Legal services will come within the scope of the directive, although businesses working in the healthcare, private security, gambling, broadcast media and social services sectors will be excluded.

Britain’s trade and industry minister, Lord Sainsbury, said the agreement was “excellent news” for UK businesses and consumers, and said it would create many job opportunities.

“It has been a long time coming and I am pleased that the government’s continuous support for this directive has now been rewarded,” he said.

“This commitment by member states will protect workers’ rights while providing opportunities for British business across Europe.”

Announcing the deal last night, Austrian economy minister Martin Bartenstein – who led the latest round of negotiations – said the directive would create “hundreds of thousands” of jobs.

He also stressed it showed that EU states could work together, saying: “We show citizens we can take decisions which will help growth and employment.”