On the basis of an extensive consultation process, Monti has drawn a map of new legislative proposals to improve the EU's single market that the Commission should present by July.
Presenting his report to European Commission President José Manuel Barroso before the European Parliament's internal market committee yesterday, Monti urged the EU to remove the remaining bottlenecks that are hampering innovation and dampening Europe's growth potential.
"There is now a window of opportunity to bring back the political focus of the single market," he argued.
Fighting economic nationalism
His report proposes a new strategy to safeguard the bloc's free trade area from the risk of economic nationalism and to extend it into new areas that are key to Europe's growth.
"Many policies traditionally not regarded as policies for the single market have to be integrated into a single market strategic objective," he stressed, outlining new initiatives to build a stronger market.
These include creating a digital single market, and harnessing the potential of the system that is already in place to support green growth and Europe's transition to a low-carbon, resource-efficient economy.
Much has been done since the launch of the single market in 1992, but Europeans have not fully exploited its potential in many areas, including free circulation of persons, goods and services. A lot of work remains to ensure effective geographical labour mobility, said Monti.
Members states' grand bargain
Monti, who was European commissioner for internal market policy in the Santer Commission (1995-99) and competition chief in the Prodi Commission (1999-2004), said the success of his "package deal" would depend on the political will of member states to improve the single market.
Countries with different cultural traditions, concerns and political preferences should each find elements of the plan appealing enough to justify making concessions relative to their past positions, Monti said.
A few months ago, the former commissioner called for a new "grand bargain" between countries with "social market" and "Anglo-Saxon" outlooks. The latter would agree to curb tax competition (by signing up for the harmonisation of tax bases and minimum rates of corporation tax) and make sure that governments have sufficient revenue to pay for social policies.
His report further develops such thinking and points to several challenges, including conciliation between economic freedoms in the single market and workers' rights following the Viking, Laval and other rulings in the European Court of Justice.
The chairman of the European Parliament's internal market committee, Malcolm Harbour, who is a strong voice in the Conservatives and Reformists' group, rebuked Monti's "strong endorsement of tax co-ordination and co-operation in the context of addressing 'social concerns' within the single market". He warned that such an initiative would lead to tax harmonisation and reduce competitiveness.
Liberal Romanian MEP Cristian Busoi argued that the critical problem facing European companies doing business in the global market place is that Europe's high environmental and social standards are not always shared.
"There is an urgent case for exporting such standards to our trade and cooperation partners if we wish to remain competitive as well as innovative in the years ahead," Busoi said.