Service providers from software firms to caterers and plumbers will be able to ply their trade across the European Union with fewer restrictions after one of the EU's most important legislative initiatives this decade, according to Reuters. Services make up 70 percent of Europe's economy but the bulk of the sector is nationally based because of obstacles to cross-border competition that the new rules, to take effect in early 2010, aim to reduce. "We are here today making internal-market history," said Finnish Industry Minister Mauri Pekkarinen, whose country holds the EU's rotating presidency. The 25-nation bloc adopted the new rules to open services to increased cross-border competition with a final vote in the European Parliament, which rejected attempts by the hard left and the Greens to reject or amend the text. The rules are a much diluted version of the sweeping liberalisation plan proposed by former internal market commissioner Frits Bolkestein in 2004. Dubbed the Bolkestein or "Frankenstein directive", the original plan enraged left-wingers and labour unions in western Europe, sparking street protests and opposition in some countries, especially France. It was a factor in the French "No" vote to the proposed EU constitution last year. But some critics still describe the legislation as a victory for ultra-liberalism while others say it is so vague it will be up to the courts to decide how effective it will be. The debate pitted wealthy western European states keen to protect their companies from cheaper foreign labour against east European newcomers eager to break into their markets. Evelyne Gebhardt, a German Socialist steering the measure through the EU assembly, said a compromise reached earlier this year would ensure employees remained protected by domestic labour laws but also allowed simpler free movement of services. "We have ensured that protectionist measures in member states must be abolished," Gebhardt said before the vote. Consumers will have legal redress in their local courts against foreign service providers. "This is about encouraging growth and dynamism in the economy," centre-right assembly member Malcolm Harbour said, adding that the reform included specific measures to lower barriers to competition and to improve procedure. EU Internal Market Commissioner Charlie McCreevy said the new rules were crucial to fostering entrepreneurship by making it quicker and cheaper for businesses to expand in the bloc. "There will be a significant number of jobs over a period of time," McCreevy said, after critics questioned how much employment the reform would create and whether it will shrink the informal economy. "I think this will drive out rogue traders," said Arlene McCarthy, a British socialist lawmaker. EU business lobby UNICE said it wanted more radical reform. "We will be monitoring the implementation of the rules. For business, it's just the beginning," UNICE Secretary General Philippe de Buck said.
