This article is part of our special report Jobs and Growth.
This week offers us an opportunity to look back at the significant achievements that have been made in opening up Europe's markets. There is no doubt that it has provided new opportunities to businesses and consumers, who can take advantage of a market place that boasts over 500 million consumers, writes Malcolm Harbour.
Malcolm Harbour is a European Conservatives and Reformists group MEP from Britain and chairman of the European Parliament's Internal Market and Consumer Protection Committee.
"This week we are commemorating the 20th anniversary of the 1992 Single Market programme. This project was triggered by a 1985 White Paper, written at time when 300 pieces of information had to be collected by customs whenever goods crossed EU frontiers!
The 287 proposals to complete the first phase of the Single Market were agreed by member states and Parliament in 1988, and largely completed by the end of 1992.
They focused on removing barriers, mutually recognising (and sometimes harmonising) technical standards and qualifications, and putting in place a framework to encourage businesses large and small to take advantage of these new opportunities.
The European Parliament actively promoted this programme, and was given significant new powers to amend and approve single market rules. This week offers us an opportunity to look back at the significant achievements that have been made in opening up Europe's markets. There is no doubt that it has provided new opportunities to businesses and consumers, who can take advantage of a market place that boasts over 500 million consumers.
Many of those opportunities have been taken. But there remain too many barriers, too many areas where the rules are not being observed, too much complex regulation where compliance costs are too high.
Unless we develop its promise, we cannot deliver more competitive EU economies and greater economic growth. In 1992 the focus was on free movement of goods, capital and people. Services were not seriously tackled until the Services Directive was passed in 2006.
This legislation targeted the many formal and informal barriers that actively discouraged service companies from trading cross border.
However, to date, its implementation has been patchy and piecemeal across the EU. An economic analysis shows that its implementation will generate an additional 0.8% of EU GDP over the next 5–10 years.
But this figure could be increased to 2.6% if member states increase their level of ambition in opening up their services covered by the directive. The Services Directive is just one of a number of initiatives that are not being fully implemented at national level. And even when they are, many national authorities are not doing enough to encourage businesses to take advantage of them. The commission has begun to take a much stricter approach with countries that do not live up to their Single Market obligations. In the European Parliament, many MEPs are not just supporting stronger enforcement measures, but furthering the ambition of the Single Market. There is a great deal of political support for doing so.
Just after the last European elections Mario Monti (before he became Italian Prime Minister) was charged with producing a report on the future of the Single Market.
It is great to have such a strong advocate in Italy, adding his voice to the chorus of national leaders pushing for reform. In parallel with his report, the Internal Market and Consumer Protection Committee in the European Parliament carried out a similar exercise.
One of our major suggestions was a 'Single Market Act' – a headline political initiative aimed at putting the Single Market back at the heart of the EU's economic policy. Our suggestion was taken up and last year the commission published an 'Act', which is not a single legislative proposal but a package of legislative and non-legislative actions to better enforce the current provisions, and to move the Single Market into the digital age.
In the European Parliament, we are hard at work to deliver then Single Market commitments. Already we have carried out some major pieces of work to improve the mutual recognition of professional qualifications, to make setting technical standards for goods and services more transparent and accessible to SMEs, and to improve rights for consumers – especially online.
We are progressing a major reform of EU public procurement rules so that the way public bodies procure goods and services – currently worth more than 16% of the EU’s GDP – is made smarter and more open to smaller and innovative businesses. This ongoing effort to reboot the Single Market as a major political project, not just a taken-for-granted reality, was given a boost earlier this year when 12 EU leaders from north, south, east, west; Conservative, Christian Democrat and Liberal – including David Cameron – sent a letter to the EU Commission and European Council presidents setting out a renewed 'Agenda for Growth'.
Central to the letter was the development of a digital Single Market, the opening of the Single Market in energy and research, cutting red tape for businesses, and linking up our internal market with the rest of the globe through new Free Trade Agreements. Thanks to these actions, the Single Market is undergoing a renaissance. It is back, firmly on the political agenda of the EU. The Single Market Act is the first major political programme since 1992 to set out an agreed programme of targeted actions and deadlines.
Just a few weeks ago we saw the commission publish proposals for Single Market Act 2, which reflected the "12 PMs" letter well.
Among its proposals were:
- Opening domestic rail services to competition from across the EU;
- Not requiring goods transported into EU seaports to be subjected to the same formalities as goods arriving from outside the Single Market;
- Accelerating the Single European Sky to improve efficiency;
- Better enforcement of the third energy package to ensure consumers have access to deals across the single market;
- Facilitating easier access to investment funds; cutting the cost of high speed communication infrastructure;
- Making switching bank accounts easier, with clearer information on banking fees;
- More coherent market surveillance rules for safer products for consumers;
- Making e-invoicing standard for public procurement so as to reduce waiting times for payments and save public authorities money.
There is no shortage of initiative here. The question is whether national governments will take the bold steps required to make these proposals reality. When I became chairman of the Internal Market Committee in 2009, my commitment was to put the Single Market back at the centre of the EU.
Thanks to the incredible work of the committee, and a strong degree of cross-party support, it is no longer something that we take for granted. Instead, it is a political tool for delivering new jobs and economic growth. As we struggle to create both, it is time we were – once again – single-minded about the Single Market.
So, please do get involved in Single Market week and help us to spread word about the myriad of opportunities that there are."