Single market integration and pillar

After the 2013 and 2014 reports on integration in the single market, we noted the absence in the blog entry Annual Growth Survey 2015 without Single Market integration report. The blog entry Promised report on integration of Single Market reminded us of the promise by the (old) Commission and of the two resolutions of the European Parliament (based on the Andreas Schwab report and Sergio Gaetano Cofferati report) calling for a legal act on a Single Market Pillar of the Annual Growth Survey and the European Semester.

Single Market Pillar study   

The European Parliament has not only called for improvements to the report on single market integration, as part of the Annual Growth Survey (AGS) and the European Semester, but has actively tried to strengthen the intellectual underpinnings through research. In September 2014 the EP published a study:  

Indicators for Measuring the Performance of the Single Market - Building the Single Market Pillar of the European Semester (107 pages)

This study for the  Committee on the Internal Market and Consumer Protection (IMCO) was administrated by the Directorate-General for Internal Policies, Policy Department A: Economic and Scientific Policy, and written by Jacques Pelkmans and other researchers at the Centre for European Policy Studies (CEPS): Andrea Renda, Cinzia Alcidi, Giacomo Luchetta and Jacopo Timini.  

Monitoring and Evaluation tool

After presenting the essential aims of the Andreas Schwab and the Sergio Gaetano Cofferati reports, the study evaluated how far the Commission had progressed with regard to the challenge of identifying which information is best suited as a Monitoring and Evaluation (M&E) tool for the Single Market and designing an M&E tool that is able to trigger policy changes (page 11):

Since the 2013 edition of the Annual Growth Survey, the European Commission has started to address this request. Single Market Reports have been attached to the Annual Growth Survey, focusing on key policy areas. These reports represent a step forward toward better Single Market governance, as they are comprehensive Commission-wide annual reviews of the state-of-the-art of the internal market. However, a comprehensive set of economic and non-economic indicators have not yet been developed to support this analysis. To move one step forward, a systematic set of M&E indicators should be designed by the EU institutions, in order to provide the Single Market governance and policy making process with an as solid as possible evidence base.

Economic and regulatory performance

On page 15 the research team presented an overview of the scope and the contents of the study:

The research team distinguished between economic performance when the assessment concerns the economic outputs, outcomes and impacts; and regulatory performance when the assessment concerns inputs, processes and policy outputs.

This study is concerned with both aspects: namely, how to measure the economic performance of the Single Market, a question that is addressed in Chapter 5, and how to measure the regulatory performance, which is addressed in Chapter 6. Sectoral policies, a topic that mixes both economic and regulatory assessment, are addressed in Chapter 7. As preliminary steps to the analysis of possible M&E indicators, two additional issues are dealt with: the stock-taking exercise of existing M&E tools for Single Market policies and the consequent gap analysis, which is summarised in Chapter 3; and a discussion about the advantages and challenges of composite indicators, which is included in Chapter 4. Chapter 8 concludes the report and summarises the policy recommendations for each of the topics addressed in this study.

EP resolution P8_TA(2015)0067

On its own initiative the European Parliament started a procedure 2014/2221(INI), with Dariusz Rosati as rapporteur for the Committee on Economic and Monetary Affairs (ECON), leading to the:

European Parliament resolution P8_TA(2015)0067 of 11 March 2015 on the European Semester for economic policy coordination: Annual Growth Survey 2015

The EP resolution continued to press the point of a report on single market integration as a part of the Annual Growth Survey, reminding the other institutions of the analytical tool and indicators it had explored:

3. Highlights the importance and added value of the Single Market Integration reports in the previous years, contributing to the overall priorities set in the Commission’s Annual Growth Survey and the identification of country-specific recommendations in the context of the European Semester; finds it, therefore, most deplorable that the Single Market Integration report has been omitted for 2015;

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21. Believes that the Member States and the Commission have not yet delivered on their commitment to complete the single market, especially the single market for services and the digital economy;

22. Reiterates its call on the Commission to improve the governance of the single market; urges the Commission to align the aims of the Single Market with those of the European Semester and to ensure consistency between the monitoring mechanisms of both; believes that a separate analytical tool, composed of indicators measuring the implementation of the single market, can provide useful guidance in relation to country-specific recommendations and the Annual Growth Survey; highlights the importance and added value of the Single Market Integration reports in the previous years, contributing to the overall priorities set in the Commission’s Annual Growth Survey and the identification of country-specific recommendations in the context of the European Semester; finds it, therefore, deplorable that the Single Market Integration report has been omitted for 2015; calls on the Commission to make full use of all existing measures provided for in EU law to enforce the implementation of the European Semester;

EP resolution P8_TA(2015)0069

The same day, with Ildikó Gáll-Pelcz as rapporteur for the Committee on the Internal Market and Consumer Protection (IMCO), the European Parliament closed another own-initiative procedure, 2014/2212(INI), even more closely dedicated to the theme at hand:

European Parliament resolution P8_TA(2015)0069 of 11 March 2015 on Single Market governance within the European Semester 2015

Internal market studies

For those interested in research on the internal market, the European Parliament highlighted three reports published in September of the previous year, the study on indicators we mentioned above and two other papers on the internal market:

• The Cost of Non-Europe in the Single Market, commissioned by the IMCO Committee

• Indicators for Measuring the Performance of the Single Market - Building the Single Market Pillar of the European Semester, commissioned by the IMCO Committee

• Contribution of the Internal Market and Consumer Protection to Growth, commissioned by the IMCO Committee [although the version I linked to is dated December 2014]

Follow-up

The European Parliament mentioned its earlier resolution P7_TA(2013)0054  (Schwab report) of 7 February 2013 with recommendations to the Commission on the governance of the Single Market, and referred to the Commission’s follow-up thereon adopted on 8 May 2013, and the EP mentioned its resolution P7_TA(2014)0130 (Cofferati report) of 25 February 2014 on Single Market governance within the European Semester 2014, and to the Commission’s follow-up thereon adopted on 28 May 2014.

However, in both cases the Commission’s follow-up remained unexplained.

Call for Single Market pillar

The European Parliament renewed its call for a Single Market pillar and adequate analytical tools, and the EP explained its views in detail in paragraphs 1-22. I present only a few of them:

1. Reiterates its call on the Commission to improve governance of the Single Market by developing a set of analytical tools to more properly measure the economic and regulatory performance of the Single Market within the framework of the Single Market pillar of the European Semester; believes that such an analytical tool could provide useful input for the CSRs, the Annual Growth Survey (AGS), the European Council’s guidance to Member States, and the national action plans aimed at implementing the Single Market guidelines;

2. Highlights the importance and added value of the Single Market integration reports of previous years, given their contribution to the overall priorities set in the Commission’s Annual Growth Survey and the identification of CSRs in the context of the European semester; finds it therefore most deplorable that the Single Market Integration report has been omitted for 2015;

3. Further finds the omission of the Single Market integration report regrettable since it comes at a time when Parliament and the Commission have been engaging in developing specific indicators to assess internal market integration and all potential benefits of further targeted integration in key growth areas; calls, therefore, for the stepping-up of efforts to ensure better implementation and enforcement of the rules already in place;

4. Calls on the Commission to clarify the restructuring of the Annual Growth Survey 2015, and to explain why it failed to publish a contribution study on the current state of play of Single Market integration with regard to the key areas with greatest growth potential; asks the Commission to publish at least the data gathered on the Single Market in order to complement this year’s AGS;

5. Calls on the Commission to present, as early as possible in 2015, a report on the state of Single Market Integration so that such a report can set the course for the Single Market pillar of the European Semester 2015; stresses, however, that in the future the timing of the report will need to be reconsidered; is of the view that for maximum impact, also with regard to the CSRs, such a report should be published together with the AGS;  

Commission SWD(2015) 203

To date, I have not noticed or received any information about a formal Article 225 TFEU reply from the Commission, but what happens if we open SWD(2015) 203, the second working document accompanying the single market strategy, with internal market integration and competitiveness analysis, available through the legal portal Eur-Lex in three parts, or alternatively downloadable from a Commission web page as a whole “printed” publication:.

Single Market integration and competitiveness in the EU and its member states - Report 2015; SWD(2015) 203 final (112 pages)?

A footnote I had forgotten provides a de facto even if not de jure reply about the role of this single market integration and competitiveness report, according to the European Commission, nor does it present reasons (page 6):

This report replaces the Report on European Industrial Performance of Member States – produced in the past in the context of Art. 173 TFEU - and the Single Market Integration Report – previously annexed to the Annual Growth Survey. It also incorporates information produced by the Commission in 2014-2015 in the context of monitoring EU competitiveness (including the EU Structural Change Report 2015) and financial market integration (European Financial Integration Report).

Open questions

We are left wondering what the Commission’s follow-up was, as well as waiting for its formal reply.

Also, the new report was assigned enough daunting tasks to raise expectations, but how did the European Parliament take the cold shoulder with regard to the Single Market Pillar of the Annual Growth Survey and the European Semester?  

Ralf Grahn

Second Single Market integration report 2014

The second Annual Growth Survey (AGS) related report on the state of single market integration, for 2014, came under a slightly different name than the first one, presented in the blog post Single Market integration 2013 report:

A Single Market for Growth and Jobs: an analysis of progress made and remaining obstacles in the member states - Contribution to the Annual Growth Survey 2014; Brussels, 13.11.2013 COM(2013) 785 final (24 pages)   

The Commission started by underlining the need for deep structural reforms in Europe.  It recalled the proposals at EU level, but quickly brought on the need for internal market rules to work in practice (page 1):

The Single Market Acts I and II lay down a set of legislative proposals and other measures to boost growth and employment in Europe. The Commission has also issued recent proposals to further complete the digital Single Market. Swift adoption of all remaining proposals is needed to effectively unlock the full potential of the Single Market and make the Single Market fit for the 21st century.

For the Single Market to function well however, reforming the EU legislative framework is not sufficient. For citizens, consumers and businesses to effectively reap the benefits of the Single Market, rules must work in practice. Vigorous and consistent efforts are needed to ensure that markets function well and remaining barriers are lifted.

The aim of the report on single market integration was then presented, the focus shifting to the internal market reforms in the member states, where businesses and consumers feel the effects of obstacles (page 1):

This report aims at reviewing in the context of the Europe 2020 strategy the way the Single Market functions within the various Member States. It takes stock of where progress has been made since the start of the crisis and seeks to identify where bottlenecks remain and defines a set of policy priorities on that basis. The report thus contributes to the overall priorities set in the Commission's Annual Growth Survey 2014, and to the further identification of country-specific recommendations in the context of the European semester.

As in the first report on single market integration (for 2013), the second report (for 2014) focussed on key areas with the greatest growth potential: services, networks and the digital economy (page 1). These were discussed in the first part of the report, supported by studies about market performance and obstacle to EU integration. Each section was concluded by policy priorities:

• Services markets (pages 3-7)
• Financial services (pages 7-12)
• Energy markets (pages 12-14)
• Transport markets (pages 14-17)
• Digital markets (pages 18-21)

The second part of the report dealt with  the state of single market integration, based on an analysis of value chains, i.e. the supply and purchase of production inputs (pages 21-23), followed by a one page annex with an internal market enforcement table (page 24).

Competitiveness Council

The Competitiveness Council (Internal Market, Industry, Research and Space) 2 and 3 December 2013 17141/1/13 REV 1 debated the European Semester 2014: industrial policy, single market and smart regulation (pages 10-11). With regard to the single market:

The Council adopted conclusions addressing three main strands that will lead to a better functioning internal market: governance of the single market; steps to unlock the full potential of the services sector and action to promote the transition to electronic procurement (16443/13).

Furthermore, the Commission presented the second edition of the annual "Single Market integration" report (16171/13).

The Council Conclusions on Single Market Policy 16443/13 started by emphasising single market governance. The Council greeted the single market integration report, but also wished for future improvements:

1. REITERATES that urgent measures are needed at the level of EU and Member States in order to boost growth and jobs and make Europe more competitive as a location for production and investment. RECOGNISES that deepening the Single Market by removing remaining unjustified barriers will be a key factor in order to achieve these objectives; HIGHLIGHTS the importance of streamlining existing structures in order to increase visibility and effectiveness of the Single Market policy.

2. WELCOMES the Annual Growth Survey and the second Annual Commission Report on the state of Single Market integration, and LOOKS FORWARD to a discussion on the policy priorities set out therein for both EU and Member State action.

3. AGREES that the results of the Annual Report should be fed into the European Semester process on a regular basis, both at EU and at Member State level. RECOGNISES the need for a stronger role of the High Level Group on Competitiveness and Growth in monitoring and providing guidance in that regard.  

4. NOTES that the analytical framework used as a basis for the Annual Report can still be strengthened with a view to getting a more comprehensive and operational picture as regards the functioning of the Single Market, including the application of its legal framework in the priority sectors for growth and jobs, and allowing for more evidence-based policy conclusions. INVITES the Commission to deepen the evidence base by also taking into account the perspective of businesses, in particular SMEs, and consumers.

5. WELCOMES the new online Single Market Scoreboard as a useful tool to monitor the application of EU law. INVITES the Commission together with Member States to put forward by the end of 2014, based on currently existing sources and data available to the Commission, a set of qualitative and quantitative indicators aimed at measuring inter alia the economic effects of application of the Single Market rules.

6. URGES Member States to properly and timely implement and enforce the rules of the Single Market so as to further unlock its growth potential. CALLS UPON the Commission for systematic monitoring of implementation and better enforcement of the Single Market rules, inter alia through the Country Specific Recommendations under the European Semester, in particular where those rules provide a significant contribution to the structural reforms.

7. HIGHLIGHTS the responsibility of the co-legislators and the Commission to ensure, throughout the legislative process, the consistency and quality of the EU legal framework without unnecessary regulatory burdens. The latter should be designed to enable businesses to sell goods and provide services everywhere in the EU, including online, without unjustified or disproportionate barriers. It should allow consumers to have access to the widest possible choice, whilst benefiting from a high level of consumer protection

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European Parliament

In the European Parliament, Sergio Gaetano Cofferati prepared a report for the Committee on the Internal Market and Consumer Protection (IMCO) on Single Market governance within the European Semester 2014 A7-0066/2014, which recalled that the IMCO Committee had drafted a legislative own-initiative report aimed at strengthening the governance of the Single Market so as to improve its functioning and contribute to driving forward the economic growth and job creation in Europe. A resolution with specific recommendations to the Commission was adopted in plenary on 7 February 2013.

[I mentioned the Andreas Schwab report A7-0019/2013 and the EP resolution P7_TA(2013)0054 with recommendations to the Commission on the governance of the Single Market in the Grahnlaw blog entry Single Market integration 2013 report and presented it in Swedish in the Grahnblawg post Europaparlamentet om styrningen av den inre marknaden.]

The European Parliament resolution of 25 February 2014 on Single Market governance within the European Semester 2014 P7_TA(2014)0130:

• welcomed improvements made between the Commission’s first and second report on single market integration, but
• called for further improvements, with regard to the Single Market as the third pillar of the European Semester,
• considered that key sectors identified by the Commission – services, financial services, transport, energy and the digital market – remained decisive, but
• also called for  a genuine European industrial policy, and
• found that the Commission had made improvements of the kind the Parliament had called for in its 7 February 2013 resolution.

Ralf Grahn

Single Market integration 2013 report

In the communication Better governance for the Single Market; Brussels, 8.6.2012 COM(2012) 259 final; the European Commission promised (page 5) an Annual Report on Single Market integration as part of the Annual Growth Survey, to be discussed by the Council and the European Parliament and be endorsed by the Spring European Council. The Annual report would contribute to the definition of country-specific recommendations, which would be based on a more in-depth analysis of performance in each Member State, in the context of the European semester process.

The European Parliament responded by its resolution of 7 February 2013 with recommendations to the Commission on the governance of the Single Market P7_TA(2013)0054, based on the IMCO report prepared by Andreas Schwab.

Based on the Parliament’s indirect right to propose - Article 225 TFEU - it asked for more:

1. Requests the Commission to submit as soon as possible, whilst considering as the possible legal basis all relevant provisions of the TFEU relating to the internal market, including Article 26(3) TFEU, a proposal for an act aimed at strengthening the governance of the Single Market, following the detailed recommendations set out in the Annex hereto;

Indeed, the annex contains detailed recommendations as to the content of the proposal requested (pages 14-19).  

Single Market integration 2013

At the end of November 2012 the Commission produced its report as a contribution to the Annual Growth Survey (AGS) and the European Semester 2013 exercise:

State of the Single Market integration 2013 - Contribution to the Annual Growth Survey 2013; Brussels, 28.11.2012 COM(2012) 752 final (22 pages)  

The first AGS related Single Market integration report outlined the situation concerning goods, services, capital and labour, before moving on to explain where it thought the Single Market potential was the greatest (from page 7):

Based on a number of economic indicators, services, financial services, transport, digital market and energy have been identified as key areas for priority policy action and enhanced implementation of the Single Market.

The priority sectors were discussed in a more detailed manner, leading to policy priorities for each:

• Services markets (pages 9-13)
• Energy markets (pages 13-16)
• Transport markets (pages 16-18)
• Digital markets (pages 18-21)

Spring European Council 2013

In the Spring European Council conclusions 14/15 March 2013 EUCO 23/13, point  

9, the European Council promised to give specific emphasis to some issues. EUCO hoped the member states would act on the recommendations and it welcomed the Single Market integration report for future AGS exercises (9(b)):

(b) the Single Market continues to be a key driver for growth and jobs. In this context, the European Council invites the Member States to take full account of the recommendations in the Commission's report on the state of integration of the Single Market and welcomes the Commission's intention to integrate such reporting into future Annual Growth Surveys. ---

Ralf Grahn

Single Market Act II reception

Yesterday we posted the entries Single Market Act blog posts, Single Market concerns and the Single Market Act II.

The year 2012 was the year of the 20th anniversary of the internal market (single market) and the birth of the SMA II:

Single Market Act II - Together for new growth; Brussels, 3.10.2012 COM(2012) 573 final (24 pages)

Today is the 60th anniversary of the signing of the Rome Treaties, but we continue to follow the efforts to improve the internal market during the 2010s. Here we look at the SMA II reception by the European Council (EUCO) and the Competitiveness Council late 2012.

European Council October 2012  

Under the Compact for Growth and Jobs, the European Council conclusions 18-19 October 2012 EUCO 156/12 encouraged the adoption of Single Market Act I and Single Market Act II proposals, as well as actions to improve transport, energy and telecommunications networks, plus a “fully functioning” Digital Single Market:

2. The European Council remains determined to stimulate growth and jobs, in the context of the Europe 2020 Strategy. The Compact for Growth and Jobs, decided last June, constitutes the overall framework for action at national, euro and EU levels, mobilising all levers, instruments and policies. All the commitments it outlines must be fully and rapidly delivered. Significant progress has been achieved so far, as shown in the letter from the President of the European Council of 8 October 2012 as well as in the reports from the Presidency and the Commission. However, greater efforts are required in certain areas, as set out below.

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(b) Deepening the Single Market: progress has been made on the Single Market Act I, but more efforts are required to complete work on the outstanding proposals including on accounting, professional qualifications, public procurement and venture capital funds. The Commission's new communication on the Single Market Act II sets out 12 further key actions which should contribute much to sustainable European growth, employment and social cohesion. The European Council welcomes the Commission's intention to present all key SMA II proposals by spring 2013 and calls for their rapid examination in order to allow their adoption by the end of the current parliamentary cycle at the latest. It is also important to take urgent action in line with the Commission's communications on implementation of the Services Directive and on Single Market governance.

(c) Connecting Europe: the future Connecting Europe Facility will constitute an important instrument to promote growth through investment in transport, energy and ICT links. In the field of transport, eliminating regulatory barriers and tackling bottlenecks and missing cross-border links is essential in order to guarantee the efficient operation of the Single Market and promote competitiveness and growth. Digital technologies and infrastructures are also an essential prerequisite. Recalling the need to complete the internal energy market fully by 2014 in accordance with the agreed deadlines and to ensure that no Member State remains isolated from the European gas and electricity networks after 2015, the European Council calls for rapid agreement on the proposal on energy TENs and looks forward to the forthcoming Commission communication and Action Plan to address the prevailing challenges.

(d) Achieving a fully functioning Digital Single Market by 2015: this could generate an additional growth of 4% over the period up to 2020. The European Council therefore calls for work to be accelerated on the proposals on e-signature and collective rights management and looks forward to the forthcoming proposals on reducing the cost of the deployment of high speed broadband and on e-invoicing. The forthcoming midterm review of the Digital Agenda should be used to identify areas where more work needs to be done. It is necessary to modernise Europe's copyright regime to facilitate access to content while upholding intellectual property rights and encouraging creativity and cultural diversity.

Competitiveness Council December 2012

The Competitiveness (Internal Market, Industry, Research and Space) 10-11 December 2012 conclusions 17410/12 recorded progress regarding SMA I proposals, such as the unitary patent, public procurement rules, resolution of consumer disputes, professional qualifications and accounting rules (pages 9-14), but also adopted conclusions on the SMA II (page 15):

Single Market Act II – Council conclusions

The Council adopted conclusions on the second set of new priority proposals presented by the Commission on 3 October 2012 under the "Single Market Act II".

These proposals will supplement the first set of measures of the Single Market Act I package for deepening and strengthening the single market in order to create economic growth and jobs.

Inter alia, the conclusions highlight the need for the single market to rest upon a strong economic and social basis and the importance for the SMA II actions to address the concerns of citizens and businesses.

The conclusions are set out in document 16617/12.

From the general conclusions to the specific conclusions in Council document 16617/12, prepared earlier by Coreper, but formally adopted by the ministers:

Draft Council conclusions on the Single Market Act II - Together for new Growth 16617/12 (about four pages of text between the cover note and the annex list)

The Competitiveness Council called on the Commission to table the SMA II proposals and encouraged the member states and the European Parliament to adopt them before the end of the parliamentary term etc., but here I want to highlight the viewpoints on the integration of single market progress into the economic governance cycle called the European Semester, plus the need to monitor SMA I and SMA II progress:

11. STRESSES the need for its stronger role on Single Market issues in the context of the European Semester process with regard to sustainable growth and competitiveness enhancing measures, including the governance of the Single Market and, where appropriate, the adoption and implementation of the key actions of the SMA I and SMA II. Moreover, WELCOMES the Commission's first Annual Report on the State of the Single Market Integration, including the identification of actions in priority areas; and LOOKS FORWARD to the timely discussion of every annual Report in the Competitiveness Council and its preparatory bodies in the framework of the European Semester process.

12. UNDERLINES the need to monitor closely the progress on the key proposals of the SMA I and SMA II and in this regard INVITES the Commission to present a semi-annual report for discussion in the High Level Group on Competitiveness and Growth and subsequently in the Council; where progress is insufficient, ENCOURAGES the Presidency to take all necessary steps to speed up the process.

European Council December 2012

The 13-14 December 2012 European Council conclusions EUCO 205/12 bundled together its comments on the SMA I and the SMA II. EUCO also commented on the efforts to streamline business regulation:

17. The completion of the Single Market can contribute much to growth and jobs and constitutes a key element of the EU's response to the financial, economic and social crisis. The European Council took stock of the state of play as regards the priority proposals of the Single Market Act I and welcomed the agreement reached among participating Member States on the Unitary Patent as well as the agreement on Alternative Dispute Resolution and Online Dispute Resolution for consumer disputes. It calls on the co-legislators to conclude the remaining SMA I files as a matter of urgency. In particular, work should be speeded up on professional qualifications, public procurement, posting of workers and e-signature and e-identification. As regards the Single Market Act II, the European Council calls on the Commission to present all key proposals by the spring of 2013. It invites the Council and the European Parliament to give these proposals the highest priority with a view to their adoption by the end of the current parliamentary cycle at the latest. It is also important to take urgent action in line with the Commission's communications on implementation of the Services Directive and on Single Market governance. The European Council will keep progress on all single market proposals under close review.

18. The European Council calls for the rapid examination of the Commission's communication on "Smart Regulation" and looks forward to the publication of the first SME scoreboard. The European Council welcomes the proposals by the Commission to reduce regulatory burdens and scrap regulations that are no longer of use as part of its overall approach to "Smart Regulation". It looks forward to concrete progress and a report back at its March 2013 meeting.

Ralf Grahn

General sources:

General Report on the Activities of the European Union - 2012 (free to download at the EU Bookshop in all the official EU languages)

General Report on the Activities of the European Union - 2013 (you can download the annual report freely in your chosen EU language at the EU Bookshop)

Regeringens skrivelse 2012/13:80 Berättelse om verksamheten i Europeiska unionen under 2012  

Regeringens skrivelse 2013/14:115 Verksamheten i Europeiska unionen under 2013