Juncker joins attack on EU services liberalisation

Jean-Claude Juncker, who also chairs the powerful group of 12 euro zone finance ministers, said he wanted a draft law by the European Commission amended to remove any risk of "social dumping" -- undercutting European social standards.

"The Luxembourg presidency is firmly committed to liberalising the services sector in Europe, we realise how necessary this is," he told members of the European Parliament.

"I am not saying we need to withdraw the directive. What I am saying is we must remove any proposals that open us up to the danger of social dumping, tax dumping or regulatory dumping."

Juncker joined French President Jacques Chirac and German Chancellor Gerhard Schroeder in demanding either the withdrawal of or far-reaching changes to the draft directive, which in its present form would allow companies to offer services throughout the EU based on their home country's rules.

Critics see this "country of origin" principle as bound to undercut wages, labour and environmental standards in West European countries, but European Commission President Jose Manuel Barroso insisted on Monday he would not withdraw it.

In an interview in the French daily Le Figaro on Wednesday, Juncker warned that -- as it stands -- the bill risked turning public opinion against the ideal of European integration.

He also took an apparent swipe at Barroso: "You cannot praise the European social model's virtues from every podium and ignore the reality of measures that weaken solidarity".


ADVICE TO CHIRAC: SHUT UP

But he later insisted that he held the same view as Barroso, whose Commission has already agreed to reconsider parts of a proposal that would remove barriers to a vast range of services, from employment agencies to doctors, lawyers and hairdressers.

"There is no difference here between the position of the president of the Commission and the action of the presidency (Luxembourg)," he told the European Parliament.

Barroso infuriated France by affirming his determination to press ahead with the liberalisation of services and saying the EU executive would not protect the 15 old member states against competition from the 10 new ones.

"Some people think the European Commission is there to protect the 15 against the new 10 - it is not," Barroso told the Lisbon Council, a business-funded pressure group. "It is there to promote the general interest of Europe."

Chirac, fearing that hostility to the proposal could scupper a French referendum on the EU constitution on May 29, telephoned Barroso on Tuesday to brand it "unacceptable", his office said.

The Lisbon Council slammed Chirac's "misinformed, demagogic rhetoric" and threw back a comment he made of eastern European states when they sided with Washington over the war in Iraq.

"To use his own, tired old phrase, he would be well advised to simply shut up," the group said in a statement on Wednesday.

The French parliament passed a non-binding resolution on Tuesday calling for the directive to be "re-examined", with the opposition Socialists and Communists voting against and arguing the legislation should be completely scrapped.

European trade unions plan a demonstration in Brussels on Saturday, three days before an EU summit on economic reform, to oppose the services directive.

Source: Reuters