The Services Directive aims to realize the EU's objective of a single market for services. The proposal prescribes simplification of formalities and the "country of origin principle": that the service provider's home country's rules apply to the approval and performance of the service. The responsibility for controlling the service lies with the home country of the service provider. For this to work, the host country must assist the home country in controlling the operation of the service, but only at the home country's request.
Reactions to the proposal have focused on social dumping. It is claimed that the country of origin principle means that companies can disregard working environment and wage regulations in the host country, and that increased trade in services means increased competition on price and thus. . .
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