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BUSINESS NEWS: EU strikes deal over service sector liberalisation. By Dan Martin

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30th May 2006
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European leaders have finally reached agreement on controversial plans giving service companies the right to ply their trade across Europe.

The EU services directive, which has previously sparked strong opposition across Europe, means that from 2009 millions of service providers such as plumbers, estate agents, bakers and hairdressers will be allowed to set up business in any EU member state.

Politicians say the EU's economy will be significantly boosted as a result of cross-border competition.

The UK government, which was the main champion of the regulations, claims that the UK will be one of the main beneficiaries of the directive. It is expected to bring a £5 billion a year injection to the economy. Small and medium sized companies, which represent more than 90% of UK service providers, are particularly likely to benefit.

After fierce protests in France, the original directive was ditched. Critics, who led the successful 'No' campaign against the European constitution, were concerned that the rules would mean an influx of cheap Polish plumbers threatening local French firms.

The revised agreement, which still requires final approval from the European Parliament, has been watered down to accommodate French concerns. Under the rules, workers must abide the rules of the country they are working in, although member states will not be able to discriminate against foreign businesses.

"This commitment by member states will protect workers' rights whilst providing opportunities for British business across Europe."

Lord Sainsbury, trade and industry minister

UK trade and industry minister, Lord Sainsbury said: "This is excellent news for UK businesses and consumers and will provide many job opportunities for skilled British workers.

"It has been a long time coming and I am pleased that the government's continuous support for this directive has now been rewarded. This commitment by member states will protect workers' rights whilst providing opportunities for British business across Europe".

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