Development of the EU Services Directive

The Directive is part of the Lisbon Economic Reform Agenda, which was agreed by European leaders in 2000, in response to a specific request from the Council to make the Internal Market work for services as well as goods, people and capital.

Initial Consultation (March 2004)

The UK Government launched a consultation on the proposals in March 2004. It sought views from interested parties to inform the UK Government position for the forthcoming negotiations. The consultation period ended on 30 June 2004. A summary of the 116 responses received was published along with the Government Response - see Related Documents on right of page.

European Parliament 1st Reading (February 2006)

Significant technical progress was made during the UK Presidency of the EU, but it was the European Parliament's first reading in February 2006 that provided the vital step forward needed to reach agreement. The adopted position contained compromises on the key issues of scope, free movement of services and labour law. The provisions of the Establishment chapter remained largely unchanged.  The text is available on the Parliament website - see External Links on right.

Commission's response (4 April 2006)

The Commission responded with an amended draft proposal (see External Links on right) that built on the Parliament's work and on discussions that took place in Council under the UK Presidency.  The subsequent Council text followed the Parliament's First Reading compromise text in responding to concerns about workers and a possible "race-to-the-bottom" by excluding labour law, removing articles on posted workers, and replacement of the Country of Origin Principle by a new mechanism.  It retained virtually all of the Parliament's derogations: only general legal services were re-integrated into the scope.

UK Scrutiny (22 May 2006)

The motion lifting scrutiny on the amended EU Services Directive proposal was passed in the House on 22 May 2006. The House of Lords also held a debate and published their report on 24 July 2006 - see External Links on the right of this page. For the Explanatory Memorandum and most recent partial Regulatory Impact Assessment (RIA) see Related Documents on right of this page.

Political Agreement (29 May 2006)

Under the determined lead of the Austrian Presidency, outstanding issues were resolved in just four weeks. Major progress resulted in political agreement at the Competitiveness Council on 29 May 2006.  A common position was adopted on 24 July and made available on the Commission's website (see External Links).

European Parliament 2nd Reading (15 November 2006)

The lead European Parliament Committee on Internal Market recommended the Council's common position to plenary without changes in the light of the Commission's commitment to issue declarations on the possibility of future harmonisation, and clarification of the exclusions for social services and criminal law. The common position text was agreed at the European Parliament's Plenary on 15 November 2006 with only three technical amendments to bring the Directive in line with the new comitology with scrutiny procedures for EU Directives.  The final Directive is substantially the same as that agreed at the Competitiveness Council on 29 May 2006.

Directive adopted (11 December 2006)

The Directive was then adopted at the Transport, Telecommunications & Energy Council on 11 December and thereafter published in the European Commission's Official Journal on 27 December 2007 - see External Links for a copy.