Mario Monti (2010): A new strategy for the single market

We are on the reform trail.

The free movement of goods, persons, services and capital and the comprehensive prohibition of all discrimination on grounds of nationality, are means to achieve a highly competitive social market economy. The internal market, which now consists of 31 countries with a total population of 515 million, is often (aspirationally) called the single market.

When we want to study the development of the internal market during this decade, the obvious time to start is Europe Day 2010 and the document to read is the study by professor Mario Monti: A new strategy for the single market at the service of Europe’s economy and society (9 May 2010; 107 pages).

Rereading Monti’s report brought back the image of the  “historic compromise” he wanted to forge among dedicated market proponents and reticent players (here from page 9):

The new comprehensive strategy outlined above should be seen as a "package deal", in which Member States with the different cultural traditions, concerns and political preferences could each find elements of appeal important enough to justify some concessions, relative to their past positions.

In particular, Member States with a tradition as social market economies could be more prepared to a new commitment on fully embracing competition and the single market, including a plan with deadlines on putting in place the single market in areas where it is still lacking, if Member States in the Anglo-saxon tradition show readiness to address some social concerns through targeted measures, including forms of tax coordination and cooperation, while there is no need to pursue tax harmonisation as such.

The magic treaty formula of a highly competitive social market economy was evoked already in the mission letter by José Manuel Barroso, the president of the European Commission.

Monti sketched opportunities for dynamic reform and remedies for social concerns at a strategic level, not only general enough but also penned finely enough to remain astonishingly fresh today.

Since the  margins available for budgetary stimuli were very limited, Monti reminded all actors that making the single market more efficient was Europe's best endogenous source of growth and job creation.

While summing up his proposals, Monti recalled that the member states had made the bold decision to share the same currency (page 107):

That requires, at the very least, a high degree of sharing effectively a single, integrated, flexible market, a prerequisite for an optimum currency area and a vector for improvements in productivity and competitiveness.

Finally, he called for the single market to be placed as a key item on the agenda of economic government, “the latest expression of the EU’s ambition to control its economic fate”.  

Ralf Grahn  

EU: Your Single Market?

Mario Monti (Wikipedia) did not serve European integration only as the commissioner for the internal market and later competition. Recently he participated in the reflection group chaired by Felipe González, which produced the report: Project Europe 2030 – Challenges and opportunities. In parallel Monti prepared a report of his own, commissioned by José Manuel Barroso: A new strategy for the Single Market – At the service of Europe's economy and society.


Towards a Single Market Act

On the basis of the Monti report the European Commission, where Michel Barnier is responsible for the internal market and services, prepared a consultation paper. The communication is available in 22 languages; in English:

Towards a Single Market Act: For a highly competitive social market economy - 50 proposals for improving our work, business and exchanges with one another; Brussels, 27.10.2010 COM(2010) 608 final (45 pages)


Your Single Market?

If you want a quick introduction, you can read the 27 October 2010 press release (IP/10/1390) and the background information in Single Market Act – Frequently Asked Question(s) (MEMO/10/528).

With Your Single Market?, a 40-page booklet aimed at a wide public, the Commission presented some of the planned reforms and tried to get citizens (consumers, workers and professionals) as well as small and medium-sized enterprises on board.

The proposed actions outlined for the coming Single Market Act (SMA) fell into three groups:

* How to re-launch strong, sustainable and equitable growth
* How to put citizens at the heart of the single market.
* How to foster better governance and dialogue in the single market.

Ralf Grahn
public speaker on EU affairs

P.S. Multilingual Bloggingportal.eu aggregates the posts from 940 Euroblogs, which represent an important part of the emerging European online public space, across national and linguistic borders. Contributing is my current blog trio, Grahnlaw (recently ranked fourth among political blogs in Finland), Grahnblawg (in Swedish) and Eurooppaoikeus (meaning European Law, in Finnish). Besides democracy, institutional issues and EU politics, I increasingly write and speak about the challenges of growth (EU2020) and the (digital) single market in the making.

Merkel denies eurozone remedies twice

In concrete terms the French president Nicolas Sarkozy and the German chancellor Angela Merkel accepted the invitations from the Italian prime minister Mario Monti to visit Rome in a near future.

At the mini-summit in Strasbourg (Elysée video) president Sarkozy repeated the promise of treaty modification proposals from France and Germany ahead of the European Council 9 December 2011. He did not offer any concrete information about the contents.

Merkel dug in her heels, by stressing the independence of the European Central Bank and by showing no greater willingness to adopt eurobonds than before. She welcomed the Commission proposals regarding fiscal discipline, but was negative towards eurobonds which could level the bond rates in Europe.

Essentially Merkel repeated what she had said in the Bundestag debate on the German federal budget for 2012 the previous day. A short quote from the press release shows one Yes and two times No:

Den Vorschlag der Europäischen Kommission zur Einführung von Euro-Bonds lehnte die Kanzlerin ab. Vielmehr müsse es begrenzte Änderungen der EU-Verträge und eine bessere Überwachung der Euro-Stabilitätsregeln geben. Es gebe bei Verstößen gegen den Stabilitäts- und Wachstumspakt bisher keine Möglichkeit einzugreifen.

Beim Euro-Rettungsfonds EFSF müssten Leitlinien festgelegt werden, die die Investoren überzeugten. Am Mandat für die Europäische Zentralbank dürfe nichts geändert werden, so Merkel.

Monti saw the need for a fiscal union which guarantees stability. In this context eurobonds are worth exploring.

Atlantico has interviewed the French EU expert Jean-Luc Sauron, who sees the need for growth as well as for repression in the eurozone.

***

Our national leaders never have time sort out the unanswered questions about European level democracy and legitimacy.

But I wonder if there is going to be a eurozone to save by the time our national leaders get around to effective solutions, unanimously adopted and ratified within an intergovernmental framework adored by the French leadership.


Ralf Grahn

EU Digital Single Market

In July 2011 I wrote about how Mario Monti confronted the lack of an EU Digital Single Market. I looked at how Monti's proposals became a part of the Europe 2020 growth strategy (EU2020) and its flagship initiative A Digital Agenda for Europe.

Various aspects of the Digital Agenda, including the Digital Single Market, are covered in the blog posts mentioned in my 17 July and 24 July roundups.


Consultation on distribution of audiovisual works

One of the issues with relevance for the Digital Agenda is the ongoing consultation on the green paper concerning the distribution of audiovisual works in the European Union. Issues relating to the single market, as well as copyright and neighbouring rights are handled by the Commission DG for the internal market and services, so this is where you find the needed information. The deadline for contributions is 18 November 2011.

The Green paper on the online distribution of audiovisual works in the EU is available in 22 official EU languages; the English pdf version:

GREEN PAPER on the online distribution of audiovisual works in the European Union: opportunities and challenges towards a digital single market; Brussels, 13.7.2011 COM(2011) 427 final (19 pages)

You can stay updated by following @DigitalAgendaEU and @EU_Markt on Twitter and Digital Agenda on Facebook.



Ralf Grahn

EU Digital Single Market in Europe 2020 strategy

Ensuring the free movement of goods, persons, services and capital is an ongoing work in Europe, since the launch of the common market by the 1957 EEC Treaty. Professor Mario Monti assessed the need for progress in his report to Commission president José Manuel Barroso:

Mario Monti: A new strategy for the single market – at the service of Europe's economy and society (9 May 2010)

Telecommunications and digital services have become essential drivers of economic growth. We looked at Monti's proposals in the blog post yesterday: Mario Monti on EU Digital Single Market.


Monti recommendations

Monti saw the need for an integrated European-wide market for electronic communications, a pan-European online retail market and a single market for online digital content.

Monti's key recommendations were (page 46):

Telecommunications services and infrastructures

⇒ Review of the sector to prepare proposals for creating a seamless regulatory space for electronic communications, including proposals to reinforce EU level regulatory oversight, to introduce pan-European licensing and EU level frequency allocation and administration.


E-commerce

⇒ Present proposals to end the fragmentation of EU consumer legislation and introduce in particular harmonised rules for delivery, warranty and dispute resolution.

⇒ Present proposals to simplify the business environment for cross-border retail transactions, including VAT rules, the cross border management of recycling rules and of copyright levies on blank media and equipment.


Online digital Content

⇒ proposals for an EU copyright law, including an EU framework for copyright clearance and management

⇒ proposals for a legal framework for EU-wide online broadcasting.

During his work, Monti consulted widely with EU institutions and member states. Mutually supportive actions do not come as a surprise.


Europe 2020 strategy

In March 2010 the European Commission had presented the Europe 2020 growth strategy in a communication:

EUROPE 2020 A strategy for smart, sustainable and inclusive growth; Brussels, 3.3.2010 COM(2010) 2020 final

In accordance with the three priorities – smart, sustainable and inclusive growth – and the five EU headline targets, the Commission promised seven flagship initiatives to promote progress. Among these we find (on page 6):

"A digital agenda for Europe" to speed up the roll-out of high-speed internet and reap the benefits of a digital single market for households and firms.

According to the Commission, smart growth means strengthening knowledge and innovation as drivers of our future growth. Among other things, the Commission saw the need for European action with regard to the digital society (page 11-12):

Digital society: The global demand for information and communication technologies is a market worth € 2 000 billion, but only one quarter of this comes from European firms. Europe is also falling behind on high-speed internet, which affects its ability to innovate, including in rural areas, as well as on the on-line dissemination of knowledge and on-line distribution of goods and services.

Digital Agenda for Europe

The EU2020 communication went on to present the essentials of the coming flagship initiative A Digital Agenda for Europe (page 14):

Flagship Initiative: "A Digital Agenda for Europe"

The aim is to deliver sustainable economic and social benefits from a Digital Single Market based on fast and ultra fast internet and interoperable applications, with broadband access for all by 2013, access for all to much higher internet speeds (30 Mbps or above) by 2020, and 50% or more of European households subscribing to internet connections above 100 Mbp


At EU level, the Commission will work:

– To provide a stable legal framework that stimulate[s] investments in an open and competitive high speed internet infrastructure and in related services;

– To develop an efficient spectrum policy;

– To facilitate the use of the EU's structural funds in pursuit of this agenda;

– To create a true single market for online content and services (i.e. borderless and safe EU web services and digital content markets, with high levels of trust and confidence, a balanced regulatory framework with clear rights regimes, the fostering of multi-territorial licences, adequate protection and remuneration for rights holders and active support for the digitisation of Europe's rich cultural heritage, and to shape the global governance of the internet;

– To reform the research and innovation funds and increase support in the field of ICTs so as to reinforce Europe's technology strength in key strategic fields and create the conditions for high growth SMEs to lead emerging markets and to stimulate ICT innovation across all business sectors;

– To promote internet access and take-up by all European citizens, especially through actions in support of digital literacy and accessibility


At national level, Member States will need:

– To draw up operational high speed internet strategies, and target public funding, including structural funds, on areas not fully served by private investments;

– To establish a legal framework for co-ordinating public works to reduce costs of network rollout;

– To promote deployment and usage of modern accessible online services (e.g. e-government, online health, smart home, digital skills, security).

Having scanned the Digital Agenda for Europe in embryonic form, we continue towards the birth of the Agenda and the early life of the digital single market.



Ralf Grahn



P.S. In the footsteps of Polish prime minister Donald Tusk, the Letters from Europe blog asks if Europe is the best place on Earth to be born. How do you comment on the conclusions and the reasons offered?

EU: From Monti report to Single Market Act

In his ”State of the Union” speech, the president of the European Commission, José Manuel Barroso, outlined the Commission’s Work Programme for 2011.

With regard to the economy, including the internal market, Barroso set the tone during the introduction:

Now is the time to modernise our social market economy so that it can compete globally and respond to the challenge of demography. Now is the time to make the right investments for our future.

The inter-related efforts, dealing with the economic crisis and governance, as well as restoring growth for jobs by accelerating the Europe 2020 (EU2020) reform agenda, were the first two major challenges Barroso mentioned out of five in all.

The 7 September 2010 speech in the European Parliament saw sound public finances as a means to an end: sustainable and inclusive growth for jobs. The aim of the Europe 2020 strategy is to get more people into jobs, boost the competitiveness of companies and deepen the single market.




Single Market Act



Barroso referred to the report by Mario Monti and he promised Commission proposals in October 2010 to deepen the internal market.



Barroso’s letter to the members of the European Parliament (MEMO/10/393) contained more detail about the draft Commission Work Programme (CWP) for 2011, to be adopted by the end of October.



After reminding the MEPs of the flagship initiatives of the EU2020 strategy, Barroso described the coming proposals to unlock the potential of the Single Market. The CWP 2011 will include:

- Measures to be set out in the Single Market Act
- A European framework of reference for contract law and action against the obstacles that businesses and citizens meet when trying to recover debt claims in other Member States. When access to capital is limited, rapid enforcement of claims is essential for the survival of businesses
- An assessment of progress on the development of roaming services
- Revised rules on the re-use of public sector information
- The conclusion of work on collective redress
- Defining how the EU can contribute to addressing the huge challenge of pension reform

Barroso also promised smart regulation, namely proposals to reduce the administrative burden on economic operators, especially small and medium sized enterprises (SMEs).




Ralf Grahn





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EU Single Market from Mario Monti report to real reform?

If this was the Official Journal of the European Union (OJEU), this would be called a text with EEA relevance.




On Europe Day, 9 May 2010, professor Marion Monti delivered his report to the president of the European Commission, José Manuel Barroso:



A new strategy for the Single Market at the service of Europe’s economy and society (107 pages)



If Project Europe 2030 of the Reflection Group, of which Monti was a member, received faint praise from the European Council, the heads of state or government showed a measure of commitment in their response to the proposals to reform the Single Market.



European Council conclusions



The conclusions of the European Council 17 June 2010 (document EUCO 13/10) mention Monti’s Single Market reform report in the context of a new European strategy for jobs and growth, under Finalising and implementing the Europe 2020 Strategy. Point 6, on page 4 tells us:

6. In particular, Europe's Single Market needs be taken to a new stage, through a comprehensive set of initiatives. The European Council welcomes the report presented by Mr Mario Monti on a new strategy for the Single Market and the Commission's intention to follow it up by presenting concrete proposals. The European Council will revert to this matter in December 2010.

Belgian EU Council presidency




If we look at the Programme of the Belgian Presidency of the EU Council (52 pages), it first mentions the Monti report under the strategic framework (‘Europe in action!’) on page 5:

The Belgian Presidency will continue the work set in motion by the Monti report dedicated to identifying the bottlenecks, missing links and new frontiers of the internal market.

The operational part of the Belgian presidency programme picks up the Monti report when it deals with the work in the Competitiveness Council (Internal Market, Industry and Research). The first paragraph of the section Internal market, on page 21, can be seen as a clear endorsement of future action:

Our primary concern is to strengthen the internal market. The Monti report contains recommendations relating to bottlenecks, missing links and new frontiers within the internal market. Based on this report, and the communication by the Commission referring to it, the Belgian Presidency will reopen the debate on the reinforcement and completion of the internal market, as well as the implementation of and compliance with its rules. This will involve preparing the ground for the Commission’s White Paper.

Future action?


If we believe what the European Council and the Belgian presidency of the Council of the European Union omit to tell us directly, and what they communicate in express terms, Project Europe 2030 languishes in limbo (as useful input), but the European Commission has been given a green light to prepare concrete proposals to reform the internal market (White Paper).



Pro captu lectoris, habent sua fata libelli.




Ralf Grahn

Economy at European Council 17 June 2010: Prudence and growth

The financial and economic storm hit the EU flotilla of economies hard. Public deficits ballooned to unsustainable levels and the debt levels of already indebted nations continues to rise alarmingly.

Generally, a firm but gradual correction towards fiscal prudence seems called for, even if some member states have been forced to take or prepare more sudden budget cuts to stave off disaster.

At least we can say that there is activity on several fronts.

The rescue package for Greece and the new stability instruments for the EU and the eurozone have been agreed.

Improved macro level surveillance has been proposed by the Commission, and the task force chaired by Herman Van Rompuy is preparing improved economic governance.

Better regulation and supervision of financial institutions is in the pipeline.

However, mere budget slashing does not create the wealth of nations, or the European Union. Growth and jobs are needed, and here the EU has an opportunity to show leadership.


The Europe 2020 strategy for jobs and growth is about to be approved. Hopefully the lost decade of the Lisbon strategy and the current challenges finally get the member states’ governments moving.

When they draft and implement their National Reform Programmes (NRPs), there is a lot of EU level material (much of it little known) they can draw inspiration from. Among these are the reports by the Reflection Group and by Mario Monti.




We have presented some aspects of these important reports in the blog entries EU Reflection Group delivered report: Project Europe 2030 (10 May 2010) and European Council and Project Europe 2030: Challenges and opportunities (14 June 2010), as well as Mario Monti: A new strategy for the single market (11 May 2010).

It is time for the European Council to put Europe on the track towards smart and sustainable growth.

At the same time, the EU institutions need to communicate the actions planned and taken in a more comprehensive manner, from clear overviews to detailed decisions.




Ralf Grahn

Mario Monti: A new strategy for the single market

The European Union and especially many of the member states squandered the decade of the Lisbon strategy for growth and jobs. Are we going to fare any better under the new Europe 2020 strategy taking shape?




Yesterday, 10 May 2010 we took a first look at the proposals by the “Wise Persons” in EU Reflection Group delivered report: Project Europe 2030. Yesterday, one of these twelve Wise Persons, Professor Mario Monti, completed a mission of his own.

Monti presented his report on a new strategy for the single market to the President of the European Commission, José Manuel Barroso.



For some additional material, you can go to the dedicated web page of the Bureau of European Policy Advisers (BEPA).


The main thing is, of course, Mario Monti’s report:



A new strategy for the single market – At the service of Europe’s economy and society (symbolically dated 9 May 2010; 107 pages)


What does Mario Monti propose as we approach the 20th anniversary of the project to complete the Single Market (1992)?


Monti’s report examines the challenges that an initiative to relaunch the single market faces today and outlines a comprehensive strategy to make such a new beginning politically successful and economically and socially viable (page 6).


Monti distinguishes three challenges for the single market:

• The erosion of the political and social support for market integration in Europe

• Uneven policy attention given to the development of the various components of an effective and sustainable single market

• A sense of complacency, as if the single market had been really completed and could thus be put to rest as a political priority


The report proposes a new strategy to safeguard the single market from the risk of economic nationalism, to extend it into new areas key for Europe's growth and to build an adequate degree of consensus around it.


It contains three broad sets of initiatives:


1. Initiatives to build a stronger single market;

2. Initiatives to build consensus on a stronger single market;

3. Initiatives to deliver a stronger single market.



Historic compromise


According to the Lisbon Treaty, one of the main aims of the European Union is to work for a highly competitive social market economy, aiming at full employment and social progress (Article 3 TEU).


What Monti proposes is no less than a historic compromise, a life-enhancing convergence of views at a higher level (page 9):

In particular, Member States with a tradition as social market economies could be more prepared to a new commitment on fully embracing competition and the single market, including a plan with deadlines on putting in place the single market in areas where it is still lacking, if Member States in the Anglo-saxon tradition show readiness to address some social concerns through targeted measures, including forms of tax coordination and cooperation, while there is no need to pursue tax harmonisation as such.

Monti points out that there is little room for budgetary stimuli, given the sad state of public finances. The proposed qualitative reforms to achieve a more efficient single market offer the best endogenous, self-engendered source of growth and job creation.


Is Europe mature enough to act on Monti’s wise vision of new dynamics, or is the EU going to wither under the command of the die-hards of ideological trench warfare?




Ralf Grahn