Charlie McCreevy, Member of the Commission. Mr President, I am pleased to be here to set out the Commission’s intentions on the services proposal. I have taken note of the reports referring to a possible withdrawal of the proposal by the Commission. I can confirm to you that the Commission has no intention of withdrawing the proposal currently on the table.

Based on my consultations and having listened carefully to all sides of the argument, I identified a number of areas where I believe changes would be required for the broad consensus I would like to see emerge. Many of you have urged me to clarify the Commission’s position on these points in the interest of facilitating Parliament’s own deliberations.

Members may recall that during my hearing before the European Parliament, I promised to consult and listen carefully before making any pronouncements on the draft directive, which the previous Commission brought forward. Since then I have been meeting extensively with MEPs, social partners and ministers.

I was heartened by the degree of support there is across the political spectrum for opening the services market. If we want to achieve the levels of growth necessary for sustainable development then a vibrant services sector is a prerequisite. Yet, the single market in services is often still a distant ambition, rather than a reality. If we are to let our economies develop and grow we must maintain a clear focus on the services market.

The services directive is a key element in our efforts to relaunch the Lisbon Agenda. Getting the full benefit that services can bring to the EU economy will boost growth and jobs. If we are serious about the Lisbon Agenda, we must be serious about the services market.

After my initial round of contacts, I went to President Barroso and said that I believed the current proposal would never be adopted unless we were prepared to accept modifications. That is why in presenting the Commission’s views on the Lisbon Strategy to you some weeks ago, President Barroso indicated that the Commission believed some changes would be necessary to ensure success.

Opening up the services market is an ambitious project. The proposal to achieve this is innovative. To be successful we need a broad consensus. There are aspects of the current draft that are giving rise to serious concerns. The debate had become too polarised. Many of you have raised such concerns and it is clear that shortcomings have to be addressed.

I had the opportunity to outline my views briefly to the Conference of Presidents last week and I am happy to discuss this further with you today. Let me reiterate the areas I have identified. The directive will have to be clear that conditions and standards for workers will not be affected in any way. The text will have to be watertight on this point. There will be no change to the existing situation in this regard. I do not want to hear any more talk about so-called 'social dumping'. This is not what this proposal is about and we should put an end to this confusion.

Another area I have identified is the exclusion from the scope of the directive of sectors such as health and publicly funded services of general interest: for obvious reasons, people regard these sectors as particularly sensitive.

We should address concerns about the operation of the country of origin principle. We need to maintain this if we want to promote the cross-frontier provision of services. To do so we will need to address key issues such as giving greater confidence and certainty to businesses and consumers on what law will apply to cross-border transactions. We also need to build the trust and confidence between Member States necessary for it to operate effectively.

The above points reflect the principal areas emerging from my own consultations. It is of course up to you in Parliament to make your own decisions. Clearly, it is your responsibility to decide on the amendments you want to bring forward. On behalf of the Commission, I am merely signalling our willingness to work openly and constructively with you.

Yesterday at the Council of Ministers for Competitiveness there was an exchange of views on the services proposal. The presidency welcomed the clear statement that no new proposal would be presented by the Commission. It endorsed the suggestion that health and social services of general interest be excluded from the proposal. It agreed that the current text needed to be modified if it was to be adopted. I hope we can now move the discussion in the European Parliament and Council onto the positive elements that this proposal can bring.

Many aspects of the proposal have met with broad support and we should build on these. Removing the red tape currently strangling efforts to establish or provide services on a cross-border basis will make a real contribution to entrepreneurship, growth and job creation. Ensuring that companies have easy access to information on requirements they have to comply with will contribute to this, as will the simplification of authorisation procedures. Service providers and their customers and consumers should not see their desire to benefit from the single market frustrated by being subjected to discriminatory and disproportionate requirements.

Recipients of services should also have easy access to information on service providers and their services. It should be easier to choose a service provider from another Member State. Quality of services should be guaranteed and simple access to dispute settlement must be available. We need to develop the cooperation, confidence and assistance between Member State administrations.

This is what the single market in services is about. It will increase competition, stimulate entrepreneurship and provide new opportunities for service providers, which will give a much-needed boost to the EU economy. By ensuring that we deliver on this we will give the services economy the boost it requires. We will fulfil the commitment set out in the Lisbon Agenda.

I am prepared to be constructive and positive. From the meetings I have had with many of you, I have learned a great deal and very useful and constructive suggestions have been made. I remain open and available to all of you to discuss particular ideas, concerns or proposals you may have.

I believe that with this I have outlined the Commission’s position and our desire to work loyally within the codecision process.

One thing I have learned in my political life is that it is always easier to come up with reasons not to do something than it is to do something. Secondly, I believe that there is never a right time to take a new or brave initiative. There are always good reasons not do anything. May I also say that it is easier for ministers or Commissioners to sit in their offices and say that they will do absolutely nothing, because the only way to avoid making bad decisions is to make no decisions! But we in Europe do not have the option of sitting on our hands and praying and hoping that something will turn up, as in Beckett’s novel. We have to do something to galvanise the European economy.

I respect the views of people on the left and on the right. I respect the political philosophy of people who have looked at things differently from me over the years. I respect the different economic philosophies that can be pursued with legitimacy. I have my own particular ideas in that regard. But no matter where you stand on this particular problem regarding the European economy, you have to conclude that standing still is not an option.

And if 70% of the European Union’s economy comes from services, you do not need a higher degree in economics to realise that you must do something about services in Europe in order to galvanise the European economy.

For a number of years, the European economy has been growing at a rate less than its full potential. That will not allow us to sustain the social model that we have built up, or to have sustainable development, unless we do something dramatic to galvanise economic activity in the Union. Whatever perspective you take, if we keep heading in the present direction we will not be able to do the things we have taken for granted for many decades. Nor will we be able to do things in the future, such as dealing with our ageing populations, unless we do something about the economy.

The services directive, as proposed by the previous Commission, was a noble and very innovative attempt to do something dramatic in this vital area. I could take a pristine, pure view of this – as some Commission officials might want – and stand in my office on the ninth floor of the Berlaymont, open the window, get a trumpet and broadcast that ‘this is wonderful! I am going to stand on the barricades for ever and ever and defend this proposal from the last Commission! It is absolutely brilliant and I am going to defend it from now until death – and into the Valley of Death I would ride!’ However, I realise that the services directive as initiated has not a snowball’s chance in hell of getting through either the Council of Ministers or the European Parliament. I could be pristine and pure and say that I will make great speeches about it, get nothing through, offer no services directive at all and do nothing to address the problems facing us all over Europe.

However, I have taken the pragmatic view. I have listened to what parliamentarians have to say. I have been here on many occasions. I have met people individually and collectively and at committees and they have given me very good ideas as to what we should do. Some people strongly believe we should continue as we started, but that will not succeed either. Therefore, I have taken everybody’s views into account and have stated that the Commission is willing to listen and to accept changes to ensure that we will end up with a services directive that does something positive for the European economy. That is why I am here today, and that is what I set forth here this afternoon and last week.

It is a very important point I must say that the members of any organisation – be it a local political party, a local sports club, a local trade union or a local employers’ organisation – all like certainty and do not like change. We always like change for the other person but not for ourselves. Politicians are the same. We would prefer not to have to face another election but just be elected time after time. That would be great for the politician, but very bad for democracy. Therefore, we do not want to create the impression that we are going to deny the new Member States that recently joined the Union the same opportunities that the existing 15 have had for a long time, including the country I know best.

I respect the views of people who look at this problem from a different perspective. However, we cannot be here just as the voice of the ‘ins’ and forget about the ‘outs’. That is not what social democracy, as I know it, is meant to be. We must guard against people who are lulled into defending the interests of the status quo. It is the easier political thing to do, because they are the people you are certain of and who probably voted for you before. However, remember that there are millions of people coming on to the job market who are waiting for the opportunity to have a decent standard of living and social inclusion. They must be given the same opportunity as the rest of us have been given.

It is important that we come up with a services directive that makes a positive economic impact and takes on board genuine concerns. I am prepared to take those on board and to work with the European Parliament on getting a services directive through. It is now for the European Parliament to deal with the matter. I will be as constructive as possible. I hope to be able to come up with the best solution possible, based on the broadest consensus, because that is what we and Europe need.