The European Parliament has voted to adopt a watered-down version of a controversial bill to open the European Union's vast market in services to cross-border competition.
The measure is designed to boost growth and generate jobs in the enlarged European Union.
MEPs approved the Services Directive by 394 votes to 215 with 33 amendments. They rejected the contentious ‘country of origin’ principle that would have allowed companies to provide services abroad under the regulations of their home state.
As amended, companies will instead be free to provide services in any EU state but must respect the labour, health, safety and environmental standards of the host country.
Known as the Bolkestein directive after the former EU Internal Market Commissioner, Frits Bolkestein, it sparked bitter opposition among trade unions and the left, and was partly blamed for France’s rejection of the EU Constitution.
Mr Bolkestein's successor, Charlie McCreevy, called the parliament vote ‘a real advance, a step that no one would have believed possible just 12 months ago’.
The EU Commission says opening up services could generate 600,000 jobs and boost the EU’s economy by 1-3%. However, the main European business lobby group, UNICE, said the amended version would lose most of that benefit.
The EC, which tabled the legislation, said in a statement it would start work on a modified proposal based on the parliament vote.
