The European Parliament recently adopted the services directive after almost two years of bitter debate. This gives the green light for the liberalisation of services in the European Union (EU). While the barriers to the free movement of people and goods had long been abolished, the latest directive seeks to facilitate the provision of services. The directive, also known as the Bolkestein directive, after the former internal market Commissioner, has been dubbed the ?Frankenstein directive? by its opponents. It met such opposition when it was first proposed that its current form needed over 300 amendments before it got a reading in the Parliament.

Though all the debates have remained fairly focused on the effects of the directive on the EU, its context is wider. In fact, it has its origins in the GATS (General Agreement on Trade and Services) of the WTO (World Trade Organisation). Thus, the visits of free-market dignitaries from these organisations to Mauritius coincide with the coming liberalisation of services. Can it be mere coincidence that the IMF folks were present at the same time? Or will their expertise be applied to steer us closer to greater liberalisation in the next financial year? Let us give the minister for Finance the benefit of the doubt that he brought the Article IV Consultations to their previous pre-budget slot.

However, now that Europe has adopted the services directive, it will certainly push for all countries to embrace the open-doors policy. We should not be surprised if within the next few years, a range of public services are privatised.

In fact, the services directive is a taste of what Mauritius can expect under GATS. It stipulates that EU member states must remove all barriers and restrictions to the provision of services by businesses. The European Commission (EC) contends that the directive will create over 600 000 jobs, boost economic growth and give consumers greater choice. It will also facilitate the setting up of businesses, since much of the hated red tape will be removed. Thus entrepreneurship will become more recognised and will get its fair due. This doctrine is at the heart of the neo-liberal project, which dictates that increased competition is beneficial to everyone; ?a rising tide lifts all boats?.

If, according to the PR department of the EC, the directive is to bring such prosperity to the EU, then what explains the staunch opposition in some quarters? The problem with the directive (and GATS) lies in its vague description of services. It covers every activity that involves remuneration. The EC claims the directive will not interfere with the cultural, educational and social activities of a state. Since no service is provided without remuneration, this is self-contradictory. Provision of everything from education to healthcare will fall under the constitution of the directive. So will water, electricity and social services. The rule to remove barriers (defined as ?... any measure that is liable to prohibit, impede, render more costly or onerous or otherwise render less advantageous service provision between member states?), will mean that collective agreements will be meaningless. Labour laws, obligatory training and mandatory pension contributions will be rolled back.

<B>Radical privatisation in Europe</B>

While the services directive and GATS supposedly allow countries to choose which component of society is liberalised first, in the long run, every sector must be open to competition. Once an EU directive is passed, it becomes law and all member states have to implement it, failure of which results in fines. On the international stage, the same rules apply under GATS. If in the future, probably a not too distant one, Mauritius refuses to open its electricity or water services to international competitors, then severe consequences will follow at the WTO tribunals. The voting of the services directive by the European parliament further revealed the European elites? contempt for the people?s wishes. Last year, to save the European constitution from the people?s scorn, Jacques Chirac announced that the Bolkestein directive was dead and never to be revived. However, less than a year later, here it is in full health under a new name, despite its rejection by a majority of the French population.

The neo-liberal pill</B>