Socialist Worker

Bolkestein: the monster haunting Europe

Simon Basketter looks at the Bolkestein Directive, which aims to liberalise services throughout the EU and led to the Irish Ferries dispute

Issue No. 1983

Irish workers take to the streets of Dublin in defence of migrant workers rights  (Pic: Richard Searle)

Irish workers take to the streets of Dublin in defence of migrant workers rights (Pic: Richard Searle)


At the end of last year, Irish workers took to the streets in their thousands to defend the rights of workers who had been outsourced. Irish Ferries had, in the spirit of the proposed Bolkestein Directive, replaced 453 workers with low paid migrant workers.

The draft directive on liberalisation of services is known by the name of its author, former European Union (EU) commissioner Frits Bolkestein, a one time head of Shell Oil and a right wing Dutch politician. Across Europe it has become known as the “Frankenstein directive”.

The European TUC has said the directive will “speed up deregulation, seriously erode workers’ rights and protection, and damage the supply of essential services to European citizens”.

The directive’s supporters claim it will ensure a single market in services. The European Commission wants to sweep away all systems of national industrial regulation. It argues that different regulations are a barrier for service providers moving from one country to another.

For years pro-European politicians have promised a “social Europe”, arguing that integration would mean harmonising social standards upwards, eventually aligning all member states with those having the highest levels of worker protection, wages and benefits.

But successive British governments — both Labour and Conservative — have sought to block all such efforts.

Central to the Bolkestein Directive is the “country of origin” principle. This is based on an existing EU rule stating that goods produced in an EU country can be sold in any other EU country.

Under Bolkestein, this rule would also apply to services. Services sold abroad would be subject to the rules of their country of origin. This means that companies in France or Germany, for example, could hire services from Poland or Slovakia, who are often paid lower wages and subject to less rigorous labour laws.

Roughly speaking, the principle means that the rules of the country in which a company is based, not the country in which it operates, apply. The obvious result will be that enterprising corporations will relocate their headquarters in countries where labour laws are weakest.

The text of the Bolkestein Directive makes it quite clear that the thrust is towards bringing standards down to the lowest levels. To illustrate the merits of his directive, Bolkestein told a French audience that he would be delighted to import a Polish electrician, since it was hard to find one for his vacation home in northern France.

The local members of the electricians’ trade union responded by demonstrating and cutting off the electricity to Bolkestein’s holiday home.

The directive also sets up what it calls “freedom of establishment”. This means that if a company or individual is able to provide a service in one EU country, they should be able to provide it easily in any other EU country.

So, after filling in one form, it should be possible for a dentist, a vet, or any individual or company that provides a service to set up anywhere in the EU. However, because there is no uniformity of standards for services in Europe, standards could decline as companies cut corners to increase their profits.

The directive also includes plans to abolish fixed minimum prices and prohibitions on sales below cost. That would throw the door wide open to the most predatory forms of competition between multinational corporations. They would be able to aggressively conquer new markets by delivering supplies at prices below cost to drive out the competition.

The directive puts the regulation of privatised companies in the hands of the European Commission.

The philosophy at the core of the Bolkestein Directive is the most vicious form of neo-liberalism, as practised by the World Trade Organisation (WTO). The directive bears a striking resemblance to the WTO’s the General Agreement on Trade and Services (Gats), which seeks to enforce the liberalisation of all services on a world scale.

Opposition

Across Europe there has been massive opposition to the Bolkestein Directive. That opposition has forced the EU to back down over some minor parts of the directive. It is likely that some environmental regulations and health and safety rules will be excluded from the directive — but the main thrust of the neo-liberal assault remains.

Bolkestein’s replacement as EU commissioner, Charlie McCreevy, has described the directive as flawed. But he is a committed neo-liberal and is pushing ahead with the directive.

There are protests planned at the European parliament on 14 February when it will be debating and voting on the draft directive.

“This directive will permit every firm delivering services to move freely within EU borders,” the Dutch Socialist MEP Kartika Liotard told Socialist Worker. “What is dangerous is the so called country of origin principle — the country where the company is registered will be the legal reference for its future operations.

“Big multinationals can move to a country with less restrictive rules and settle there, and the other EU countries have to accept the legislation of that country when the company is operating.

“As parliamentarians we are working to exclude the biggest number of services from the directive. It is important that civil society strongly opposes the law.

“We need a strong united battle of citizens and unions against the idea of privatised public service. And in the future money from taxes should not be used to finance wars, but to increase services to citizens.”

EU commissioner Peter Mandelson has bitterly attacked trade unionists and NGOs opposed to the directive. “They want to retain the right to lobby for protectionist rules on a national basis so that they can continue to charge high prices to consumers and lead a cosy life,” he said, adding that the European Commission should not “retreat in the face of illegitimate pressures”.

Marco Bersani from the Attac Italy group, which campaigns against neo-liberalism, said, “The directive is the most radical and most comprehensive attack to date on welfare states within the EU. Workers will not have any more basic guarantees.

“Firms can do everything that is allowed by the lowest labour legislation, simply by moving to a country with less social rights. There will be no social guarantees any more if we do not resist it.

“Now it is time for a strong campaign against liberalisation and privatisation of social services. If we want a different social model for Europe then we need to stop Bolkestein altogether.”

Jack O’Connor, general president of Ireland’s Siptu trade union, told Socialist Worker, “The Irish Ferries dispute provides a dramatic warning of the kind of onslaught we face on workers’ pay and conditions if the proposed EU services directive goes through.

“The scale of the threat to employment standards is still not widely appreciated, although it is no exaggeration to say that it is one of the most important issues to come before the EU institutions in the last 20 years.

“As it stands the directive serves the socially divisive agenda of driving down employment standards in whole sectors of the labour force in pursuit of ‘cheapness’ rather than ‘competitiveness’.

“It is critically important that civil society rejects the ‘law of the jungle’ and asserts the principle that in one of the richest countries in the world we don’t need our infrastructure to be built, our goods transported, or our services provided by paying people slave wages.

“Even if it was accepted and existing legislation to protect workers’ rights member states was excluded from the directive, it would offer little reassurance to workers here, because most of our labour standards are determined by collective agreements.”

In December Irish workers forced Irish Ferries to implement minimum labour standards. In November 50,000 Italian trade unionists marched against Bolkestein. This sort of action is what can turn back the neo-liberal agenda in Europe.


What is the Bolkestein Directive?

  • The directive will remove all barriers to cross-border provision of services in the European Union (EU).
  • It will reduce member states’ control over working practices, open the door for companies to bypass labour and environmental standards, impose barriers to state regulation, and put private pressure on public services.
  • The directive includes all activities in the service sector. It treats all service industries in the same way — regardless of whether they are essential services or not.
  • The “freedom of establishment” and “country of origin” principles will undermine regulation of the labour market in the service sector. They will generate a downwards spiral as companies re-establish themselves in other countries in order to avoid labour standards.
  • The directive will mean governments have to justify any existing regulation of the service sector, and give the European Commission a veto on new regulations.
  • Supporters of the directive claim that health services are excluded. But if the directive comes into force, it will be impossible to impose any of the following on providers of health services: compulsory minimum or maximum prices for medicines and fees, minimum standards for staff or quality standards relating to care.

Demonstrate against the draft services directive, 12 noon, Tuesday 14 February, in Strasbourg, France. Go to www.epsu.org/a/1652


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Features
Sat 14 Jan 2006, 00:00 GMT
Issue No. 1983
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