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EU: Germany Seeks Limits On Candidate States' Services

Germany appears to be seeking further restrictions on East European candidate states to the European Union. This time the issue is access to EU markets for East European companies offering services. RFE/RL Brussels correspondent Ahto Lobjakas reports that any limitations in this area are likely to be poorly received by the candidate states.

Brussels, 20 April 2001 (RFE/RL) -- Barely a week after the EU shocked candidate countries with a proposal to shut its borders for Eastern workers for up to seven years after enlargement, another rebuff may be in the offing.

The European Commission yesterday denied rumors that it is being pressed to extend similar restrictions on candidate states' companies freedom to provide services within the whole EU after enlargement.

The EU has provisionally already closed talks on a chapter of negotiations entitled "the free movement of services" with five leading candidate countries: the Czech Republic, Estonia, Hungary, Poland, and Slovenia. In no case did the EU request any transition periods to limit candidate companies' access to EU services markets after enlargement.

But German Chancellor Gerhard Schroeder, together with some regional leaders, has said that Germany wants to bar candidate companies from certain sectors of the country's services markets. Germany is concerned companies in candidate countries could circumvent the seven-year ban on labor movement by using their right to provide services in the entire EU.

Any attempt to ban services would likely be seen by the candidate countries as a second snub, following the Commission's recent proposal to restrict labor access.

Jean-Christophe Filori, a spokesman for the EU's enlargement commissioner, said yesterday in Brussels that the Commission has no intention of reopening the services chapter since it believes Germany's concerns have already been addressed.

"The Commission does not intend at this stage to propose restrictions on the free movement of services for candidate countries [after enlargement], knowing that the proposal we made [last week to restrict] the free movement of labor [from candidate countries after enlargement] resolves all possible problems that can occur after enlargement."

Filori says existing EU directives would ensure that all Eastern workers entering the EU in the employment of candidate country companies would be subjected to EU employment laws. This, he said, would avoid any possibility of what he termed "social dumping" by candidate countries where wage costs are lower.

However, Commission officials privately admit that as enlargement talks are held on a bilateral basis between current and future members, the Commission cannot prevent a determined current member from reopening chapters that have already been provisionally closed.

An EU diplomat told RFE/RL -- on condition of anonymity -- that Germany considers the unfettered freedom of prospective new members to provide services everywhere in the EU to be a danger to its labor market. The source said Germany does not believe the EU directives would protect its markets for labor and services because the country's proximity to new members would allow Eastern companies to ferry workers in and out of the country on a short-term basis.

According to the diplomat, Germany allowed the closure of the "free movement of services" chapter on the understanding that the Commission would address its concerns on services within the framework of last week's proposal to restrict worker movement in general.

Germany has so far not officially said whether the Commission proposal goes far enough. But the increased diplomatic pressure Berlin is bringing to bear on the Commission may indicate the proposal falls short of its expectations.