Sweden yesterday threatened to withdraw its support for plans to liberalise services within the European Union following an attack on the Swedish labour market model by Charlie McCreevy, the EU's internal market commissioner.
The latest conflict between Brussels and a national government comes as the European Commission is embarking on a deregulation drive to help boost Europe's economy as well as its own image. It is also a further blow to the prospects of the EU services directive only days after a committee of the European parliament decided to delay a vote on the controversial draft legislation, which is designed to dismantle barriers to cross-border trade in services.
Thomas Ostros, the Swedish industry minister said: "When he [ Mr McCreevy] attacks one of the most successful labour models in Europe, that is very serious. It will send a very powerful signal to all of Europe's trade unions that the services directive is a threat to the labour market.
"If this is the Commission's opinion, Sweden will turn from one of the driving forces behind the directive to one of the countries that resists the services directive."
The dispute follows a visit this week by the European commissioner to Sweden, during which Mr McCreevy said the Commission would side with a Latvian construction company in its challenge against the Swedish government in front of a European court.
The company, Laval un Partneri, complained that Sweden's tight collective bargaining model, and a subsequent blockade of the site by Swedish workers, had unfairly prevented it from operating there.
On a recent visit to Stockholm, Krisjanis Karins, Latvian economy minister, said Swedish trades unions had not understood that the idea of the EU was to create a common market.
Mr Ostros wrote to Mr McCreevy and will also raise the issue at a meeting with his EU counterparts next week. He said Mr McCreevy's intervention was fresh evidence of a gulf between Brussels and public opinion across Europe and warned that such criticism of the Swedish collective bargaining model could "really turn the [ anti-EU] debate to very high volumes".
He pointed out that the preservation of Sweden's peculiar way of negotiating wages between employers and unions was one of the key conditions for Sweden joining the EU in 1995.
Mr McCreevy dismissed the attack. He told the Financial Times: "Every member state has the right to its own social model. But it is one of the basic rights of the EU treaty that companies and citizens can be active in the market of another member state. We have to stand up for the principles of the internal market."
The commissioner also stressed the Latvian case had nothing to do with the services directive.
