The draft services Directive – should we be worried?

Penny Clarke, European Federation of Public Service Unions

 

EPSU is a European trade union federation representing over 185 public service unions organising approximately 8 million workers in more than 34 countries (EU, candidate countries and the European Economic Area).

 

At international level public service trade unions have a long history of international cooperation and the Public Service International (PSI) was founded back in 1907. At European level it was not until the European integration process was well under way that unions began to take European cooperation more seriously. EPSU was founded in 1978 but it was with the adoption of the Single European Act in 1986 that EPSU really began to “blossom”. EPSU’s key objectives are to:

 

EPSU’s has a number of sectoral groups bringing together unions organising in different public service areas:

 

What trade unions think about healthcare

 

European healthcare systems have been considered a national responsibility but they are all based on common values of solidarity and universal cover. Increasingly, and especially as regards their organisation and financing, they are being affected by European policies. National responsibility is slowly but certainly being eroded by a wide range of internal market policies. For example;

 

For the ETUC and the EPSU (and for organisations like the European Health Policy Forum where EPSU is a member), the priority and objective of any European approach must be access for all to quality health care. M easures must not subordinate the social approach to economic and financial imperatives. Social protection is a productive factor that contributes to growth and social cohesion. We want accessible and financially sustainable health care of high quality organised on the basis of solidarity.

 

As for workers in healthcare, they need the means to provide a quality service, which requires taking into consideration patients’ needs and not only economic constraints, and ensuring that the personnel recruited benefit from the working conditions, wages, training and qualifications necessary to allow them to provide quality care services; cost control must not be to their detriment. Collective bargaining has an important role to play, also at EU level where EPSU is working towards a social dialogue in the hospital sector.

 

Why the draft services directive is unacceptable

 

In 2000 the Commission published a Communication recognising the growing importance of services in the EU economy (estimated at 50% of EU GDP and some 60% of employment) and launching various Community initiatives to increase cross-border trade in services. In so doing the Commission aimed to extend the benefits of the Internal Market to the services sector.

 

The Directive is horizontal in nature, which means that it covers everything that is not explicitly excluded. The Commission says that this approach is necessary to avoid inconsistencies between separate regulatory initiatives and unnecessarily detailed prescriptive pan-European rules. These are basically the same arguments we use to support a legal framework on Services of General Interest.

 

The aim of the Directive is to remove the “barriers” to cross-border trade in services. These barriers are identified in the note accompanying the Directive as “… any measure that is liable to prohibit, impede, render more costly or onerous or otherwise render less advantageous service provision between Member States.” No distinction is made between “good” and “bad” barriers, or to reflecting on the main barriers identified by the Commission itself in its 2002 report on the state of the internal market for services, namely: language differences; distance-related factors, and need for local presence to provide aftercare. This is an important omission since it is these “natural” barriers - which are far more important in the provision of services than goods – which should prevent a simple “cut-and-paste” of the Internal Market Strategy onto the services sector.

 

In terms of content, the Directive:

 

A proposal to introduce include an “Internal Market compatibility test”, to be applied to all legalisation at national level, was dropped but the Commission says in its Internal Market Communication that it will return to this.

 

Key concerns

 

Lack of consultation and informed debate

 

The speed and manner in which the Commission has rushed through its proposal raises concerns about governance. On Services of General Interest we have a Communication, a Green Paper, a possible White Paper etc etc before ever getting to a legislative proposal whereas the Services Directive can appear out of nowhere and circumvent the consultative process launched by the SGI Green Paper.

 

And this is, in fact, the one of the reasons why we should indeed reject the draft Directive. Europe should not adopt laws that are incomprehensible. Europe cannot demand better regulation from others and then come up with this mish-mash of a text, a text which is now being accompanied by an even longer list of “clarifications” from the Commission. Europe needs to take people with it. The White Paper on Governance stated that the Commission would take care not to introduce “unwieldy” regulatory texts….

 

Ambiguity in the definition and concept of “services”

 

In the development of the internal market strategy for services the Commission has never defined “services” in a way that it is possible to see what is, and what is not, being discussed.

Terms such as “market services”, business-related services,” “economic services” have been used interchangeably with “services”. Nowhere have “public services”, or “services of general interest”, or “services of general economic interest” been referred to explicitly.

 

In the Directive the Commission says that the term “service” means, “any self-employed economic activity, as provided by Article 50 of the Treaty, consisting of the provision of a service against consideration.” It lists examples of services covered by the Directive, including consultants, engineers, IT companies, advertising agencies, employment agencies, security providers, restaurateurs, retailers, travel agencies, construction companies, plumbers and carpenters, health services and personal domestic services, such as assistance for old people. It says that the Directive also covers liberal professionals such as doctors and lawyers. So the estate agent and the doctors do really have things in common!

 
No protection from competition for health and social services

There is no exemption of “non-economic” SGI but the Commission said form the start that it does not intend to cover non-economic SGI, which it defines as services provided directly by public authorities for no remuneration. Of course no one has – or can - define what these non-economic services really are. The Commission also said in the explanatory note that accompanied the Directive that it did not intend to deal with the question of service of general interest (SGI) or the question of opening up these services to competition. It added that it did not intend to affect the rights of Member States to define what they consider to be services of general interest and how they should function. Little by little the Commission has been pushed to clarify these explanations and has created more worries. On many occasion the Commission has said it is “just following the ECJ judgements” but this is not true. It goes beyond them and interpretes them from a different perspective – e.g., when the ECJ has considered an individual’s rights, say to cross-border medical treatment, the Commission has applied the same reasoning to a provider’s rights. (And the example of working time judgments on call hours show that the Commission does not always follow..)

 

As regards the healthcare sector the following are worrying areas:

 

Definition of an establishment

Authorisation measures

Restrictions to be removed or reviewed

Assumption of health care costs (Article 23)

Quality criteria for reimbursement

Definition of hospital and non-hospital care

 

Absence of quality standards

 

We have many questions too on how the Directive will affect the quality of services, including pubic services within the remit of EPSU such as healthcare and social services. For example, what standards will cross-border providers of childcare or eldercare services adhere to (eg staff/patient ratios)? What about the cross-border provision and access to health services? It is not clear how the Directive relates to the High Level Reflection Group’s recommendations on patient mobility and healthcare developments.

 

In the absence of European quality standards for these and other services (unlike goods where there is EU standardisation) how will the level of services in these areas be maintained let alone “harmonised upwards”? Host countries will have to “objectively justify” their own standards or restrictions on very narrow grounds. The draft Directive only deals with these issues in passing. Certainly codes of conduct will not be sufficient. Like the ETUC, we have concerns about the possibilities to effectively monitor and supervise cross-border services providers from the country of origin, but there are many other areas where problems will arise.

 

What we can do about it

 

The problems (highlighted in EPSU’s emergency Resolution) are hard to prove: lack of clear definitions, ambiguity about what is covered by the text, concerns that collective agreements may be seen as “obstacles” to cross-border trade, threats to healthcare and other public services… Even supporters of the Directive admit that its consequences are hard to predict. Now there is a debate underway in many of our countries – and action too like the one organised in Belgium on the 5 June when 5,000 men and women from trade unions, NGOs and political parties, protested against the Directive.

This is not a question of being “anti-European”, or anti-foreigners, or anti-patients… The Internal Market cannot become the sole driver of European integration. Other European values, principles and standards must be held up alongside competition rules. These other values are also in the Treaty.

 

What is at stake at this juncture is the general policy orientation for 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.

 

The discussion on Services of General Interest should be concluded before the Commission and Council adopt measures such as the Services Directive. A positive legal framework on SGI is needed as called for also by the European Parliament. This would include common solidarity requirements for health and social services. It would 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 –equality, affordability, accessibility, continuity, efficiency, accountability and citizens’ participation- including financing guarantees should be the starting point, not market expansion.

 

In the meantime the draft Directive is in the European Parliament. As well as the official text from the Commission there is a plethora of explanatory notes. The Dutch presidency is said to be drawing up an alternative version. There is a lot of support for the ideological principles underpinning the directive. 20 of the 25 Member States Governments want to take healthcare out of the Directive. But exactly what this means is not clear. In any case the problems of the internal market / competition pressures on healthcare and other public services or services of general interest will not go away until they are answered with a positive European framework which protects these services.