Wednesday 6 October 2010

EU: What is the Single Market Act? Preview by Barnier

On Europe Day, 9 May 2010, professor Mario Monti delivered his report on the internal market to the president of the European Commmission, José Manuel Barroso: A new strategy for the Single Market – At the service of Europe’s economy and society (107 pages).

On 17 June 2010 the European Council endorsed Monti’s report and called for concrete Single Market proposals from the Commission. The European Council promised to discuss the matter in December.

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

Single Market Act

On 16 September 2010 Michel Barnier, the Commissioner responsible for the Internal Market and Services, offered an outline of what the promised Single Market Act is going to be. Some of the remarks are specific to the forum, a conference on the Baltic Sea Strategy in Tallinn (Estonia), but most of the section on the Single Market Act is relevant to businesses, from large corporations to small and medium-sized enterprises (SMEs). Naturally they are important for politicians, public authorities and interest groups in the thirty nation strong European Economic Area (EEA) as well.

In his preview, Barnier was at pains to demonstrate that the Single Market Act will bring direct benefits to citizens of the EEA countries, too:

Services and e-commerce are important initiatives that have to be completed.

But I feel we have to go further.

I do not know if one can "fall in love with the Single Market", to quote the words of Jacques Delors.

But what I know is that the Single Market is there for the people; it was made for them and it must work to their benefit.

Students, workers or pensioners, consumers or public services users… Everyone experiences obstacles to the Single Market in everyday life. And then they wonder: "what's the point of all this, if it does not work when I need it?"

This is a very serious challenge that we face, and it needs an ambitious response. This response I propose to you today is the 'Single Market Act'. To save and consolidate our common economic and social space of life, and to fight against so many tendencies of protectionism and populism.

This Single Market Act will be a framework communication setting out what the Commission intends to do by 2012.

And what is expected of the other public authorities – meaning you.

I have never believed that Europe could be made by Brussels or some institutions in isolation. Europe is not an abstraction; it is everywhere, here in Tallinn as much as in Berlin or Madrid.

The EU has much more to offer to its people than institutions and rules: it is first and foremost about freedoms and opportunities.

This is the meaning of the Single Market Act.

The Single Market Act will put a strong focus on business and SMEs. SMEs make up 99% of businesses and employ 90% of the work force in Europe.

The Single Market Act will stress the urgency of improving the capacity to innovate of European companies – and I hope we will soon find a solution on patents; my aim is that the first European patent be granted in 2014.

We will also step up the fight against piracy and counterfeiting. These practices do not empower consumers, as some demagogues could make people believe. Quite on the opposite; they ultimately impoverish them by stopping innovation. Why would you take your time and money to create something for which you will not be rewarded?

It will propose ways to help businesses get easier financing. I think of helping out venture capital funds, creating regional stock exchanges for SMEs, and simplifying EU rules on public procurement.

More generally, the Single Market Act will attempt to reduce red tape especially – but not only – for cross-border activities, including in the field of taxation and standardisation policy.

We will act abroad to ensure that European companies get fair access to third country markets, especially public procurement procedures.

The other pillar of the SMA will be to show that Europe works for all citizens.

It will notably concern services of general interest, universal access to banking services or patients' rights to the provision of health services.

We will also ensure that consumers are not discriminated against simply because they do not live in the "right" country. Give them more efficient means of redress in case of cross-border abuse.

Finally, we will improve the free movement of workers by reforming the system of recognition of professional qualifications.

And – I know this is a major issue in the Baltic Sea region – we will try to improve the implementation of the Posting of Workers Directive. We must find the right balance between fundamental social rights and equally fundamental economic freedoms to provide services and set up a business in the EU.

Last but not least, the Single Market Act will be about making all stakeholders better informed: if citizens do not know their rights and if practitioners and national administrations do not enforce those rights, there is no point changing the rules in the first place.

This will in turn allow us to develop a clearer view of the malfunctioning in the single market. For that purpose, the Commission will be holding an annual Single Market Forum from 2011 onwards, which is a very good proposal of the European Parliament.

This will start with publishing a list of the "Top 20" of single-market related sources of dissatisfaction for citizens. That way, we can concentrate on what really matters to them and what national obstacles still are to be lifted.

And indeed what we are doing here today, is a kind of a Single market forum at the regional basis for the Nordic countries. I think it is extremely useful and I would like to thank you for this initiative.

As a conclusion, let me say that the Single Market is not all about economics, competition and market opening. It is also about building bridges based on human values, dialogue, understanding, living together – in several nations but in one Europe. A Europe that is united, but not uniform.

I want to listen and understand the challenges you face, especially in the regional context of the Baltic Sea. My services and I are fully committed and available to support you, and I am now eager to hear how we can further help.

Road ahead

The Single Market Act, promised during October 2010, is going to be a framework communication about actions by 2012. In addition to enterprises, the Commission clearly wants to bring tangible benefits to consumers in general and in cross-border situations, as well as mobile citizens.

Barnier’s list of Gordian knots is impressive, even if mentioned only as examples. However, only the Commission’s concrete proposals will reveal its reform ambitions, and the European Council the prospects for progress.

For now, Mario Monti’s report remains the main public source for the reasons behind and the scope for the coming proposals.

Ralf Grahn

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