EPSU is a European trade union federation representing over 190 public service unions organising approximately 8 million workers in more than 33 countries (EU, candidate countries and the European Economic Area). It is a member of the ETUC. EPSU’s key areas of activity: national and European administration, regional and local government, public utilities (electricity, gas and water, waste) and health and social services.

The following 10 points spell out our main concerns regarding the proposed directive.

1) Citizens want a “balanced” Europe

The public hearing on the draft services directive is taking place at a key moment in the construction of the European Union. Will it be possible to manage the enlarged EU while continuing to build the political, and above all the social, European Union? Or will the ideology of competition at any price obliterate other concerns? This is not a question of being anti-European, anti-foreigners, anti Internal Market, or anti anything else: it is a question of being for human rights, for social justice, for a Europe that reconnects with citizens. In this vision of a sustainable Europe, social, environmental, and economic polices will develop together and competition will be balanced with the other European values, principles and standards that are also found in the Treaty.

2) Promises have not been kept: the draft directive cuts short the debate on services of general interest

In the White Paper on Services of General Interest (SGI) the Commission promised to consult widely with civil society on the freedom of social services, - i.e., social protection systems, healthcare services, social housing, long-term care, education, social assistance - to fulfil their responsibilities unshackled by the chains of competition policy. This consultation must take place before the Commission and Council propose other measures affecting their operation. A positive legal framework on SGI is needed first, as also called for by the European Parliament.

The impact of the draft Directive on public services is just one of the many criticisms concerning the Commission’s proposal. Even organisations that initially welcomed the draft services directive added, almost in the same breath, a long list of questions and concerns. This list has become progressively longer. It is legitimate to ask at what point will the concerns outweigh the principled support for the directive For a directive which champions the cause of service providers the business response has been rather muted, with UNICE for example in its initial comments stating “there is a need for clarification on many issues” and the UK’s CBI calling for the proposal to be amended so that “it clearly and explicitly states that a service provider operating solely in one member state is not subject to its requirements."

3) The proposal is not balanced

EPSU believes that there is little to be gained and much to be lost in terms of time, energy and resources in trying to make the best of a bad proposal. The Commission should learn from it mistakes, withdraw its proposal and go back to the drawing board - this time consulting adequately on the objectives, means and instruments which need to be developed in relation to services and the Internal Market.

4) Public service standards, good employment conditions, collective agreements -these are gateways, not obstacles, to quality

When the Commission carried out its study in 2002 to identify barriers to cross-border trade, it made no attempt to identify the “good” barriers (i.e., those which protect workers, citizens and consumers or which prevent unfair competition) from the “bad” barriers (i.e., the unnecessary red tape). Nor was much thought given to the particular characteristics of service provision. People are an intrinsic part of services - and this makes services different from goods. Language differences, for example, were identified in the 2002 study as an important barrier to the cross-border service provision. However, the draft directive does not tackle this very real issue.

Rather than launch a “big bang” proposal in an attempt to meet the Lisbon deadlines, a different path should be followed to develop growth, employment and sustainability in service provision - a path which reflects the broad public interest and not only that of particular groups. Much of the draft directive focuses exclusively on the interest of service providers and steamrolls over other concerns: e.g., single contact points are put forward as an instrument for simplification for service providers, no red-tape etc. when at the same time labour, environmental and other inspectorates risk to be disenfranchised.

5) Quality: the missing ingredient

EPSU like many other organisations has many questions on how the directive will affect the quality of all services, not just public services. What quality standards will cross-border providers adhere to? In the absence of EU standards, how will the level of services provided to consumers and citizens be maintained let alone improved? The draft directive only deals with these issues in passing. Certainly codes of conduct will not be sufficient (as indeed the Parliament has recognised, for example in calling for a binding code in relation to arms sales). EPSU also has concerns about effectively monitoring and supervising cross-border service providers from the country of origin. This is one more issue in the long list of growing concerns about the directive’s content and impact.

6) Services of general interest must not become a ghetto

The Commission has said that the draft directive does not open up SGI to competition or affect the rights of Member States to define what they consider to be SGI and how they should function. However, if the directive leads to Member States removing regulations that protect such services from competition and if it prevents them from planning the future of these services, then the consequences will be the same. EPSU considers that the challenges that the EU faces regarding healthcare or eldercare are too important to leave to the market. Public authorities must be able to exercise control.

7) ‘Economic’ or ‘non-economic’ is not the point

It is not necessary to be a lawyer (indeed it may be an advantage not to be one) to know that all activities have an economic aspect. This is not the point. What counts is whether these activities have dominantly commercial or non-commercial aims. In asserting that the draft Directive will have no effect on ‘non-economic’ SGI, the Commission is throwing up a smokescreen in order to allow the reach of the Internal Market to extend as far as possible.

8) Public and private providers are not equal

The Commission claims to be ‘neutral’ on the ownership of the service provider. This ‘neutrality’ is however not interpreted in the sense of positive subsidiarity, i.e., leaving it to national, regional and local levels to determine the organisation of public services. Rather, the Commission understands ‘neutrality’ as the ‘equal treatment’ of public and private providers of services of general interest, subject to the same rights and obligations. EPSU strongly rejects this concept of ‘neutrality’. The public sector cannot abdicate from its responsibilities to citizens, whereas private operators can both chose, and limit, theirs. In the draft Directive the Commission is not neutral when it includes in the list of barriers to freedom of services regulations, for example, that limit public subsidies in healthcare or other social services to non-profit organisations, or ‘economic test’ requirements.

9) The ECJ’s case law should not be the sole source of inspiration

While the case law of the ECJ should certainly be taken seriously (and this should also be true regarding the Simap, Jaeger and Pfeiffer cases on working time) it should not have formed the main basis of the draft directive. Case law is, self-evidently, based on specific cases whereas the draft directive proposes a broad (de)regulatory framework. In trying to turn the specific into the general the proposal has caused a great deal of confusion (e.g., definitions regarding ‘establishment’ or ‘hospital’ and ‘non-hospital’ care). It also is unable to provide answers to key questions (e.g. when does the temporary cross-border provision of a service become a permanent one?).

10) Solidarity and subsidiarity are needed

To meet future challenges, a positive European approach on SGIs is needed. Today there are separate but overlapping debates, on SGIs, Public Private Partnerships, public procurement, in-house activities, state aid, the draft directive on services. A legal framework on SGI would bring these debates together. It would secure common solidarity requirements for health and social services and provide the necessary long-term protection of subsidiarity, the right to local self-governance, and it would support the objective to improve public services. Public service principles of equality, affordability, accessibility, continuity, efficiency, accountability and citizens’ participation - and including financing guarantees - are the starting point for such a debate. It is difficult to inject these principles into a proposal that has a fundamentally different origin and whose objective is to have a deregulatory impact.

In spite of the different initiatives affecting public services that are now on the table, there is still no Commissioner or Council responsible for SGI. SGI remain in the shadows of Community policies even though they are clearly the targets of Internal Market and competition objectives. The background paper drafted for the Social Protection Committee in preparation of the Communication on social services of general interest expected early next year states, “some actors in the social sphere have expressed concerns that the application of internal market rules and competition rules has the effect of creating legal uncertainty... The present document will therefore concentrate on these elements of Community rules....” (p.3). So much for public service principles being the starting point!

28.10.04

EPSU Contribution - EN

EPSU Contribution - FR

EPSU Contribution - GE

EPSU Contribution - SP

EPSU Contribution - SWE