EU leaders agree to dilute services plan-diplomats

BRUSSELS, Mar 24 (Reuters) European Union leaders agreed today to water down a reform to ease cross-border competition in the bloc's vast market for services, an EU diplomat said as a two-day summit ended.

''The leaders have decided that the European Commission should base its text on parliament's compromise,'' the diplomat said.

Last month the European Parliament diluted the bill to appease west European labour unions, removing the principle under which service-providers could work everywhere in the EU on the basis of their home country laws.

The Commission, which authored the reform, will present a revised draft on April 4.

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