BRUSSELS: The European commissioner for industry and enterprise has asked MEPs not to make so many changes to a controversial plan to liberalise the EU market in services that it will lose its impact.
Günter Verheugen told the European Parliament's Internal Market Committee that any revision of the services directive must ensure that service providers can operate freely throughout the EU.
"We cannot have an internal market if we don't have mutual recognition," he said.
The MEPs were discussing a proposal from Evelyne Gebhardt, a German Socialist, to redraft the directive comprehensively, replacing the controversial "country of origin" principle with a system of mutual recognition.
Critics of the original directive fear that allowing companies to operate throughout the EU according to the rules of their home country could push down wages and erode workers' protection.
Ms Gebhardt's proposed new text makes clear in its very first article that the directive should not affect workers' rights.
"This directive shall have no effects whatsoever on labour law - including collective agreements and other legislation applicable to employment - or on social insurance legislation in the member states," she said.
The new draft would exempt all services "guaranteed or funded in whole or in part by a member state or by regional or local authorities with a view to securing or maintaining public interest objectives" from the scope of the directive.
It would also exempt commercial services with a public service requirement, including healthcare, education, social welfare, cultural services and audiovisual services.
MEPs from the Socialist and Green groups expressed support for Ms Gebhardt's proposal and Liberals offered some support.
But Malcolm Harbour of the European People's Party (EPP-ED), the European Parliament's largest group, said the proposal was unacceptable.
"Ms Gebhardt's proposals will significantly complicate the services directive proposal and will tie business down with red tape. Ms Gebhardt will therefore have to redraft her report, otherwise she will not get any support from the EPP-ED group," he said.
MEPs in a number of other committees will discuss the services directive during the next six weeks and a revised directive is expected to face a vote in the entire European Parliament in September or October. It is unlikely to come into force before 2010.