# C_2007161EN.01004001.xml

| 13.7.2007 | EN | Official Journal of the European Union | C 161/40 |
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13.7.2007

EN

Official Journal of the European Union

C 161/40

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Opinion of the European Economic and Social Committee on the Proposal for a Directive of the European Parliament and of the Council repealing Council Directive 71/304/EEC of 26 July 1971 concerning the abolition of restrictions on freedom to provide services in respect of public works contracts and on the award of public works contracts to contractors acting through agencies or branches

COM(2006) 748 final — 2006/0249 (COD)

(2007/C 161/12)

On 13 December 2006 the Council decided to consult the European Economic and Social Committee, under Article 95 of the Treaty establishing the European Community, on the above-mentioned proposal.

The Section for the Single Market, Production and Consumption, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 7 February 2007. The rapporteur was Mr Wilms.

At its 434th plenary session held on 14/15 March 2007 (meeting of 14 March), the European Economic and Social Committee adopted the following opinion by 87 votes to one, with 13 abstentions:

1.   Introduction

| 1.1 | Fifty years of continuous development without any consistent consolidation has made European legislation — in the form of treaties, directives and regulations, recommendations, European Court of Justice case law and other Community documents — highly complex and very difficult even for specialists to fathom. |
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1.1

Fifty years of continuous development without any consistent consolidation has made European legislation — in the form of treaties, directives and regulations, recommendations, European Court of Justice case law and other Community documents — highly complex and very difficult even for specialists to fathom.

| 1.2 | In some areas, for instance, new directives have been adopted without any consistent checks on whether the body of directives already in place is thereby rendered obsolete or whether the relevant provisions can be incorporated into the new text, thus making it possible to repeal the earlier directive on the same subject. Similarly, certain facets of a particular legal area that, in essence, belong together have, over the years, come to be dealt with separately in an increasing number of new and independent directives. Or again, certain directives have, over time, been partially amended by various legal instruments without the adoption of any new and legally binding consolidated text. |
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1.2

In some areas, for instance, new directives have been adopted without any consistent checks on whether the body of directives already in place is thereby rendered obsolete or whether the relevant provisions can be incorporated into the new text, thus making it possible to repeal the earlier directive on the same subject. Similarly, certain facets of a particular legal area that, in essence, belong together have, over the years, come to be dealt with separately in an increasing number of new and independent directives. Or again, certain directives have, over time, been partially amended by various legal instruments without the adoption of any new and legally binding consolidated text.

| 1.3 | The time therefore really is ripe for change in this field. There can be no objection to a technical consolidation of the existing directives, provided this is carried out with the best of intentions and is not done for any ulterior motive, such as to settle old scores with other institutions and to push through a particular viewpoint that has thus far failed to secure acceptance in the political process.
  The Commission's declared intention is to tidy up Community law from a purely technical angle and it is thus, in principle, to be welcomed. |
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1.3

The time therefore really is ripe for change in this field. There can be no objection to a technical consolidation of the existing directives, provided this is carried out with the best of intentions and is not done for any ulterior motive, such as to settle old scores with other institutions and to push through a particular viewpoint that has thus far failed to secure acceptance in the political process.

The Commission's declared intention is to tidy up Community law from a purely technical angle and it is thus, in principle, to be welcomed.

| 1.4 | In the same way, the Commission's declared intention of simplifying European law in a bid to cut red tape and reduce useless effort in the Member States can only be welcomed. |
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1.4

In the same way, the Commission's declared intention of simplifying European law in a bid to cut red tape and reduce useless effort in the Member States can only be welcomed.

| 1.5 | The relevant Commission proposals for directives to repeal or amend existing legislation as part of this process must, however, be examined in the light of the two considerations mentioned above. |
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1.5

The relevant Commission proposals for directives to repeal or amend existing legislation as part of this process must, however, be examined in the light of the two considerations mentioned above.

2.   Gist of the Commission proposal (1) and Directive 71/304/EEC

1

| 2.1 | The Commission is proposing a new directive (2) to repeal Directive 71/304/EEC. |
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2.1

The Commission is proposing a new directive (2) to repeal Directive 71/304/EEC.

2

| 2.2 | The purpose of Council Directive 71/304/EEC of 26 July 1971 was to oblige the Member States to remove restrictions affecting the right to enter into, award, perform or participate in the performance of public works contracts on behalf of the state, or any public entities or legal persons for the benefit of cross-border service providers. The directive sought to combat direct or indirect discrimination against non-national service providers in the awarding of public contracts by the Member States. It also obliged Member States to ensure that non-national enterprises should have access to credits, grants and subsidies under the same conditions as nationals and that non-national enterprises should ‘have access without restriction and in any event under the same conditions as nationals’ to (state-controlled) ‘supply facilities’ that are essential for the performance of their contract. |
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2.2

The purpose of Council Directive 71/304/EEC of 26 July 1971 was to oblige the Member States to remove restrictions affecting the right to enter into, award, perform or participate in the performance of public works contracts on behalf of the state, or any public entities or legal persons for the benefit of cross-border service providers. The directive sought to combat direct or indirect discrimination against non-national service providers in the awarding of public contracts by the Member States. It also obliged Member States to ensure that non-national enterprises should have access to credits, grants and subsidies under the same conditions as nationals and that non-national enterprises should ‘have access without restriction and in any event under the same conditions as nationals’ to (state-controlled) ‘supply facilities’ that are essential for the performance of their contract.

| 2.3 | The Commission says the current proposal is needed because this directive is now obsolete, given the changes that have taken place since it was adopted. |
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2.3

The Commission says the current proposal is needed because this directive is now obsolete, given the changes that have taken place since it was adopted.

| 2.3.1 | As the Commission notes, the field of public procurement is now covered by Directives 2004/17/EC and 2004/18/EC, which supersede the directive under discussion here. |
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2.3.1

As the Commission notes, the field of public procurement is now covered by Directives 2004/17/EC and 2004/18/EC, which supersede the directive under discussion here.

| 2.3.2 | As Directive 71/304/EEC also relates in general terms to the freedom to provide services, the Commission further notes that European Court of Justice case law in this area has changed substantially. To back up this statement, the Commission, in a footnote, quotes verbatim from Case C-76/90 Säger, ECR I-4221, which states that Article 59 [now Article 49 — freedom to provide services] of the Treaty requires not only the elimination of all discrimination on grounds of nationality against providers of services but also the abolition of any restriction, even if it applies without distinction to all providers of services regardless of their place of origin, ‘which is liable to prohibit or otherwise impede the activities of a provider of services established in another Member State where he lawfully provides similar services’. |
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2.3.2

As Directive 71/304/EEC also relates in general terms to the freedom to provide services, the Commission further notes that European Court of Justice case law in this area has changed substantially. To back up this statement, the Commission, in a footnote, quotes verbatim from Case C-76/90 Säger, ECR I-4221, which states that Article 59 [now Article 49 — freedom to provide services] of the Treaty requires not only the elimination of all discrimination on grounds of nationality against providers of services but also the abolition of any restriction, even if it applies without distinction to all providers of services regardless of their place of origin, ‘which is liable to prohibit or otherwise impede the activities of a provider of services established in another Member State where he lawfully provides similar services’.

Säger

| 2.3.3 | In its explanatory memorandum, the Commission sums up the case law in question, noting that the ECJ has made clear that ‘Article 49 of the EC Treaty prohibits measures that apply indiscriminately and that are likely to impede the freedom to provide services’. |
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2.3.3

In its explanatory memorandum, the Commission sums up the case law in question, noting that the ECJ has made clear that ‘Article 49 of the EC Treaty prohibits measures that apply indiscriminately and that are likely to impede the freedom to provide services’.

| 2.4 | In the recitals, the Commission again refers to the new public procurement directives and the Säger judgment, stressing that, thanks to them, it has been possible to achieve a level of protection for economic operators that is just as good as that provided for under the directive that is to be repealed. |
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2.4

In the recitals, the Commission again refers to the new public procurement directives and the Säger judgment, stressing that, thanks to them, it has been possible to achieve a level of protection for economic operators that is just as good as that provided for under the directive that is to be repealed.

Säger

| 2.5 | The directive itself has only four articles. Article 1 repeals Directive 71/304/EEC. Article 2 enjoins Member States to bring into force the laws and administrative provisions necessary to comply with this directive, the purpose of which is to repeal another directive; to communicate to the Commission the text of the provisions and a correlation table between the directive and the national provisions; and to make due reference to this directive in the measures themselves or on the occasion of their official publication; the Member States themselves are to lay down the methods of making such a reference. Article 3 sets the entry into force of the directive as the day of its publication, while Article 4 states that the directive is addressed to the Member States. |
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2.5

The directive itself has only four articles. Article 1 repeals Directive 71/304/EEC. Article 2 enjoins Member States to bring into force the laws and administrative provisions necessary to comply with this directive, the purpose of which is to repeal another directive; to communicate to the Commission the text of the provisions and a correlation table between the directive and the national provisions; and to make due reference to this directive in the measures themselves or on the occasion of their official publication; the Member States themselves are to lay down the methods of making such a reference. Article 3 sets the entry into force of the directive as the day of its publication, while Article 4 states that the directive is addressed to the Member States.

3.   Assessment of the Commission proposal

| 3.1 | The proposal for a Directive repealing Directive 71/304/EEC unfortunately fails to fully meet all the criteria set out in point 1 of this opinion. |
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3.1

The proposal for a Directive repealing Directive 71/304/EEC unfortunately fails to fully meet all the criteria set out in point 1 of this opinion.

| 3.2 | As a general point, it should be noted that the proposed directive, the purpose of which is to repeal another directive, is one of the first of a whole series of directives of this kind. It would be well, therefore, to ask whether the most effective way of implementing the work programme for the repeal of a large number of now-obsolete directives over the coming months and years really is to adopt a separate new directive repealing every single obsolete directive. In the ongoing implementation of the work programme, consideration should again be given to whether, as an alternative, it might not be possible — and also more efficient — to repeal several directives at once via a single new directive. Since Member States frequently adopt legislation transposing a number of directives at once, such an approach could be a way of avoiding having to amend the same laws of the Member States repeatedly over a short period of time. |
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3.2

As a general point, it should be noted that the proposed directive, the purpose of which is to repeal another directive, is one of the first of a whole series of directives of this kind. It would be well, therefore, to ask whether the most effective way of implementing the work programme for the repeal of a large number of now-obsolete directives over the coming months and years really is to adopt a separate new directive repealing every single obsolete directive. In the ongoing implementation of the work programme, consideration should again be given to whether, as an alternative, it might not be possible — and also more efficient — to repeal several directives at once via a single new directive. Since Member States frequently adopt legislation transposing a number of directives at once, such an approach could be a way of avoiding having to amend the same laws of the Member States repeatedly over a short period of time.

| 3.3 | With regard to the proposed directive under discussion here, further consideration should be given to the question as to whether the transposition arrangements set out in Article 2 really do brook no alternative, or whether, to attain the desired objective, it might not be enough to ask the Member States to check their body of law for any changes that might be necessary and to implement those changes where appropriate. |
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3.3

With regard to the proposed directive under discussion here, further consideration should be given to the question as to whether the transposition arrangements set out in Article 2 really do brook no alternative, or whether, to attain the desired objective, it might not be enough to ask the Member States to check their body of law for any changes that might be necessary and to implement those changes where appropriate.

| 3.4 | After all, the main purpose of the 1971 directive that is to be repealed was to eliminate discriminatory laws and rules in place in the Member States at that time and to enforce general principles of Community law in the field of public procurement — principles that have been reiterated and further fleshed out in directives adopted in the intervening years. |
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3.4

After all, the main purpose of the 1971 directive that is to be repealed was to eliminate discriminatory laws and rules in place in the Member States at that time and to enforce general principles of Community law in the field of public procurement — principles that have been reiterated and further fleshed out in directives adopted in the intervening years.

| 3.5 | The abolition of discriminatory rules in force in the Member States was undertaken back in the 1970s as part of the transposition of Directive 71/304/EEC — or, for those countries that joined later, in the course of their adoption of the Community aquis. The planned repeal of this directive does not of course mean that the abolition of these earlier discriminatory national rules is to be rescinded. The repeal of the directive does not therefore necessitate any changes to the national legislation adopted at the time to abolish discriminatory rules, as that legislation has by and large fulfilled its purpose (i.e. the discriminatory rules have been abolished) and, in any case, the Treaty and all the more recent directives require such discriminatory rules to stay abolished or to be prohibited. |
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3.5

The abolition of discriminatory rules in force in the Member States was undertaken back in the 1970s as part of the transposition of Directive 71/304/EEC — or, for those countries that joined later, in the course of their adoption of the Community aquis. The planned repeal of this directive does not of course mean that the abolition of these earlier discriminatory national rules is to be rescinded. The repeal of the directive does not therefore necessitate any changes to the national legislation adopted at the time to abolish discriminatory rules, as that legislation has by and large fulfilled its purpose (i.e. the discriminatory rules have been abolished) and, in any case, the Treaty and all the more recent directives require such discriminatory rules to stay abolished or to be prohibited.

aquis

| 3.6 | At the latest after the adoption of Directives 2004/18/EC and 2004/17/EC, the public procurement legislation of the Member States was in most cases brought to a level reflecting the changes in European law since 1971. Where this has not yet happened, the Commission can still enforce the new directives. Since all directives are anyway addressed to the legislatures of the Member States, simply repealing Directive 71/304/EEC at European level and requiring the Member States to carry out the necessary checks would obviously in this case be quite enough to achieve the desired effect. In the majority of cases, this will, at most, involve the deletion, wherever they are still in place, of any references to the now-obsolete Directive 71/304/EEC. |
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3.6

At the latest after the adoption of Directives 2004/18/EC and 2004/17/EC, the public procurement legislation of the Member States was in most cases brought to a level reflecting the changes in European law since 1971. Where this has not yet happened, the Commission can still enforce the new directives. Since all directives are anyway addressed to the legislatures of the Member States, simply repealing Directive 71/304/EEC at European level and requiring the Member States to carry out the necessary checks would obviously in this case be quite enough to achieve the desired effect. In the majority of cases, this will, at most, involve the deletion, wherever they are still in place, of any references to the now-obsolete Directive 71/304/EEC.

| 3.7 | Although it is too late to do anything about it, it is nonetheless regrettable that Directive 71/304/EEC was not repealed in conjunction with the adoption of Directives 2004/17/EC and 2004/18/EC. It is therefore suggested that, for all future directive proposals, checks should always, as a matter of principle, be made on whether the new directive does not render earlier directives obsolete and whether such obsolete directives should not be repealed straight away. This measure too could progressively lead to clearer and more coherent European law. |
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3.7

Although it is too late to do anything about it, it is nonetheless regrettable that Directive 71/304/EEC was not repealed in conjunction with the adoption of Directives 2004/17/EC and 2004/18/EC. It is therefore suggested that, for all future directive proposals, checks should always, as a matter of principle, be made on whether the new directive does not render earlier directives obsolete and whether such obsolete directives should not be repealed straight away. This measure too could progressively lead to clearer and more coherent European law.

| 4. | The EESC therefore recommends that the proposal for a Directive should be amended so as to simply note the repeal of the Directive and to ask the Member States to check their body of law for any changes that might be necessary and to implement those changes where appropriate. |
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4.

The EESC therefore recommends that the proposal for a Directive should be amended so as to simply note the repeal of the Directive and to ask the Member States to check their body of law for any changes that might be necessary and to implement those changes where appropriate.

Brussels, 14 March 2007.

The President

of the European Economic and Social Committee

Dimitris DIMITRIADIS

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(1)  COM(2006) 748 final.

1

(2)  COM(2006) 748 final.

2

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APPENDIX

to the opinion of the European Economic and Social Committee

The following section opinion text was rejected in favour of amendments adopted by the assembly but obtained at least one-quarter of the votes cast:

| 3.9 | The explanatory memorandum and the second recital of the proposed directive implicitly try to promote a somewhat slanted interpretation of EU primary law. |
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3.9

The explanatory memorandum and the second recital of the proposed directive implicitly try to promote a somewhat slanted interpretation of EU primary law.

| 3.10 | As was already the case in the Commission's draft of the services directive, this is done in particular by giving an edited, one-sided account of the European Court of Justice's case law on freedom to provide services, in this instance the judgment of 25 July 1991 in Case C-76/90 Säger, which is summed up as having made clear ‘that Article 49 of the EC Treaty prohibits measures that apply indiscriminately and that are likely to impede the freedom to provide services’. This interpretation is backed up by a paragraph of the judgment cited in footnote 7. |
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3.10

As was already the case in the Commission's draft of the services directive, this is done in particular by giving an edited, one-sided account of the European Court of Justice's case law on freedom to provide services, in this instance the judgment of 25 July 1991 in Case C-76/90 Säger, which is summed up as having made clear ‘that Article 49 of the EC Treaty prohibits measures that apply indiscriminately and that are likely to impede the freedom to provide services’. This interpretation is backed up by a paragraph of the judgment cited in footnote 7.

| 3.11 | Apart from the fact that the Court of Justice was not referring in this paragraph very broadly to all measures that might apply, but only to discrimination and restrictions, the Commission's summary and selective quote fail to take account of another very important principle of the judgment, found in paragraph 15 thereof — which the Commission does not cite — and in many other judgments: while all direct and indirect discriminatory measures and obligations imposed by the Member States are clearly prohibited, the European Court of Justice still permits non-discriminatory measures and obligations imposed by the Member State if they are justified by imperative reasons relating to the public interest and are also appropriate and necessary to achieve the objectives and do not exceed what is strictly necessary. |
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3.11

Apart from the fact that the Court of Justice was not referring in this paragraph very broadly to all measures that might apply, but only to discrimination and restrictions, the Commission's summary and selective quote fail to take account of another very important principle of the judgment, found in paragraph 15 thereof — which the Commission does not cite — and in many other judgments: while all direct and indirect discriminatory measures and obligations imposed by the Member States are clearly prohibited, the European Court of Justice still permits non-discriminatory measures and obligations imposed by the Member State if they are justified by imperative reasons relating to the public interest and are also appropriate and necessary to achieve the objectives and do not exceed what is strictly necessary.

| 3.12 | But the point of the Commission's interpretation, implicit in its selective citing from the judgment, is obviously that no rules and obligations, or measures, of the contracting Member States should apply any more to cross-border service providers, even if they are absolutely compatible with the objectives of the European Treaties and other European legislation, are applied without any discrimination and clearly satisfy all the requirements of the European Court of Justice. |
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3.12

But the point of the Commission's interpretation, implicit in its selective citing from the judgment, is obviously that no rules and obligations, or measures, of the contracting Member States should apply any more to cross-border service providers, even if they are absolutely compatible with the objectives of the European Treaties and other European legislation, are applied without any discrimination and clearly satisfy all the requirements of the European Court of Justice.

| 3.12.1 | If this interpretation were correct, all obligations on service providers would have to be seen as illegal, even in the case of Member State projects with EU funding, including those based on explicit EU provisions under which EU funding is made available. The same would also apply to obligations which serve to secure compliance with certain standards in the as-yet non-harmonised area and also foster road safety, such as national rules on the colour, reflectiveness and dimensions of place-name signs. The same would go for exemplary national provisions on health and safety at work, covering, as in the Netherlands for instance, the maximum weight and dimensions of kerbstones in a bid to cut invalidity rates among road workers. |
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3.12.1

If this interpretation were correct, all obligations on service providers would have to be seen as illegal, even in the case of Member State projects with EU funding, including those based on explicit EU provisions under which EU funding is made available. The same would also apply to obligations which serve to secure compliance with certain standards in the as-yet non-harmonised area and also foster road safety, such as national rules on the colour, reflectiveness and dimensions of place-name signs. The same would go for exemplary national provisions on health and safety at work, covering, as in the Netherlands for instance, the maximum weight and dimensions of kerbstones in a bid to cut invalidity rates among road workers.

| 3.12.2 | These examples alone demonstrate the absurdity of any over-rigorous interpretation of freedom to provide services. Such an interpretation would make Article 49 of the EU Treaty — contrary to its wording and to the legal context in relation to other articles of the European Treaties — into a type of ‘super basic right’ for businesses operating across borders, which would obviate the entire framework of legislation that has been adopted for good reasons and in accordance with the general legal principles of the EU and its Member States in order to regulate company activities. This idea would be well-nigh impossible to uphold vis-à-vis the EU public and has already been rejected by all the other European institutions in connection with the services directive. |
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3.12.2

These examples alone demonstrate the absurdity of any over-rigorous interpretation of freedom to provide services. Such an interpretation would make Article 49 of the EU Treaty — contrary to its wording and to the legal context in relation to other articles of the European Treaties — into a type of ‘super basic right’ for businesses operating across borders, which would obviate the entire framework of legislation that has been adopted for good reasons and in accordance with the general legal principles of the EU and its Member States in order to regulate company activities. This idea would be well-nigh impossible to uphold vis-à-vis the EU public and has already been rejected by all the other European institutions in connection with the services directive.

| 3.13 | Such an interpretation would contradict not just the content of the more recent Directives 2004/18/EC and 2004/17/EC, but also the spirit and letter of the European Treaties, the provisions and supplementary protocols on the subsidiarity principle and the case law of the European Court of Justice. |
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3.13

Such an interpretation would contradict not just the content of the more recent Directives 2004/18/EC and 2004/17/EC, but also the spirit and letter of the European Treaties, the provisions and supplementary protocols on the subsidiarity principle and the case law of the European Court of Justice.

| 3.14 | Nor is it the task of the Commission or of any other European institution to provide binding interpretations of judgments delivered by the European Court of Justice. And it is certainly not their task to distort the content of those judgments, by citing only part of them, in a way which clearly runs counter to the intention of the European Court of Justice as expressed in the judgments. |
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3.14

Nor is it the task of the Commission or of any other European institution to provide binding interpretations of judgments delivered by the European Court of Justice. And it is certainly not their task to distort the content of those judgments, by citing only part of them, in a way which clearly runs counter to the intention of the European Court of Justice as expressed in the judgments.

| 3.15 | If such biased interpretations were to become part of European secondary law via a proposal for a Directive, new possibilities for interpreting the earlier Directives 2004/18/EC and 2004/17/EC would be opened up, which would produce not more legal clarity and certainty, but the opposite. |
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3.15

If such biased interpretations were to become part of European secondary law via a proposal for a Directive, new possibilities for interpreting the earlier Directives 2004/18/EC and 2004/17/EC would be opened up, which would produce not more legal clarity and certainty, but the opposite.

| 4. | The EESC therefore recommends that the proposal for a Directive should be amended so as to simply note the repeal of the Directive and to ask the Member States to check their body of law for any changes that might be necessary and to implement those changes where appropriate, justifying this on technical grounds only, i.e. the previous adoption of Directives 2004/18/EC and 2004/17/EC. |
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4.

The EESC therefore recommends that the proposal for a Directive should be amended so as to simply note the repeal of the Directive and to ask the Member States to check their body of law for any changes that might be necessary and to implement those changes where appropriate, justifying this on technical grounds only, i.e. the previous adoption of Directives 2004/18/EC and 2004/17/EC.

Outcome:

43 votes for deleting these paragraphs, 38 against, 12 abstentions.

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