Old Wine in New Bottles? From the ‘Country of Origin Principle’ to ‘Freedom to Provide Services’ in the European Community Directive on Services

This article considers the fate of the ‘country of origin principle’ in the Commission’s 2004 proposal for a services directive. It argues that although all references to this principle were removed from the final version of the Services Directive, it lives on under a new name ‘freedom to provide services’. The European Parliament was ultimately not prepared to amend this aspect of the Commission’s proposal in the radical way that Evelyne Gebhardt, rapporteur for the Committee on the Internal Market and Consumer Protection, advocated. Instead, the concerns voiced by the European Parliament over the deregulatory forces potentially unleashed by operation of the country of origin principle were addressed through the wholesale exclusion of a range of sectors and activities from the scope of the Directive. Questions regarding the legality of the particular form of negative integration created by the Services Directive remain: in particular, the suitability of Article 47.2 EC as a legal base for the Directive and the compatibility of the ‘freedom to provide services’ principle with Articles 12 and 50.2 of the EC Treaty.