From Socialist Voice, December 2006

Services directive a victory for big business

When Irish Ferries announced plans to replace nearly six hundred Irish seafarers with labour from eastern Europe, at considerably lower rates of pay, we were given a glimpse of the sort of attack on wages and conditions that would happen when the EU Services Directive is implemented.
    The objective of the Services Directive is to ensure “free-market” competition in all economic services operating within the European Union. This includes health and education. Under the “country of origin” principle, service providers could operate according to the laws of their country of origin rather than those of the host country—setting in train a further race to the bottom in pay and conditions. This will allow companies registered in EU member-states with minimal labour standards to undercut pay and conditions secured by workers in other member-states.
    The Services Directive was passed by 405 votes to 105 on 15 November 2006. It is probably the most important EU law to be passed in decades, as the services sector encompasses more than 70 per cent of the economies of the EU countries. In opening the way for the commercialisation of almost all services within the European Union, it will deny millions of people the quality public services that they deserve. It is also a considerable blow against workers’ rights and social protections.
    The big question is: how has this situation come about? This directive was drawn up away from the public eye by Eurocrats and industrialists grouped in the EU employers’ federation (UNICE) and the European Round Table of Industrialists (ERT) to promote the free movement of services and labour throughout the European Union—regardless of the consequences.
    The ERT has been in the forefront of the drive for further EU integration for more than twenty years. It was founded in the early 1980s to kick-start further integration within the EEC. Wisse Dekker of Philips and the Industry Commissioner, Étienne Davignon, drew together a group of leading European CEOs with the objective of “relaunching Europe.” Dekker argued: “If we wait for our governments to do anything, we will be waiting for a long time. You can’t get all tied up with politics. Industry has to take the initiative. There is no other way.”
    The ERT now has more than fifty members, including Ericsson, FIAT, Renault, and Siemens. Membership is strictly by invitation only. The ERT is not just another pressure group lobbying the Commission: it was formed with the express intention of furthering EU integration and shaping it to benefit European transnational corporations. It has consistently supported the removal of national vetoes and other forms of “fragmentation” within the EU.
    The ERT differs from other lobbying groups, as it does not bother with detailed legislation: “We don’t deal with national issues. We only talk about the overall questions.” It is also distinctive in its ability to gain access to the decision-makers in the European Union, both at the national and the supranational level.
    The ERT’s web site boasts: “At European level, the ERT has contacts with the European Council, the European Commission, the Council of Ministers and the European Parliament . . . Every six months the ERT strives to meet the government that has the EU presidency to discuss priorities . . . At national level, each member communicates ERT’s views to its own national government and parliament, business colleagues and industrial federations, other opinion-formers and the press.”
    So the ERT’s objective is to form the agenda at the highest levels of the European Union, and especially in the European Commission. Evidence from the last two decades suggests that it has been extremely successful. In late 1984 a proposal by the European Commission to remove trade barriers within the EEC and create a single internal market elicited little enthusiasm from member-governments or much of the business sector. However, in 1985 the ERT published Europe 1990: An Agenda for Action, which proposed eliminating trade barriers, harmonising regulations and abolishing fiscal frontiers within the EEC by 1990. This plan was sent to EEC heads of state and laid out in precise terms the steps needed in four important areas: eliminating border formalities, opening up public procurement markets, harmonising technical standards, and fiscal harmonisation. Three days after that initiative Jacques Delors made a speech to the European Parliament that closely matched the proposals and expressed the opinion that the ERT was “one of the main driving forces behind the Single Market.” A few months later the white paper was published that became the basis of the Single European Act.
    The ERT has continued to press for further integration, calling for more powers for the European Commission. In January 2001 the Commission launched plans for the wholesale deregulation of entire industries. The commissioner for the EU internal market, Frits Bolkestein, claimed it was time to end the sector-by-sector process of privatisation “when so many of the necessary changes are common to a wide range of services.” A spokesperson for the Commission, Margot Fröhlinger, called for implementation because “we have come across all types of planning procedures which give discretionary powers to authorities which are clearly contrary to jurisprudence and are designed to protect local markets.” The genesis of Bolkestein’s Services Directive had begun.
    In 2002 the ERT told the convention on the future of the European Union that a stronger Commission was “vital,” as it was “the genuinely Europe-focused institution and the one most capable of articulating the common European interest above national and regional interests.”
    The ERT is now an extremely important force in moves to push us towards a de facto United States of Europe and has been able to achieve many of its aims in alliance with the European Commission, an undemocratic, bureaucratic and unaccountable body. Clearly the ERT is no friend of the rights of Europe’s peoples to democracy and self-determination. The bigger the “democratic deficit” within the European Union, the better it is for them.
    The Commission, urged on by the ERT, is using the free movement of labour, capital and services throughout the European Union, enshrined in EU rules, to dilute and even destroy labour standards that have been hard won over many decades by national labour movements. The Services Directive and other neo-liberal measures will only entrench these exploitative developments in Ireland by increasing “social dumping,” and feeding racism and the far right.
    The twenty-five members of the European Union now have three years in which to implement the directive. In the meantime, democratic movements in Ireland and throughout the European Union must campaign for their parliaments to refuse to implement such reactionary and damaging legislation; and Irish trade unions must re-evaluate the benefits of engaging in “social partnership” when the government is prepared to support such measures.

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