Barnier launches four growth drivers for ‘Single Market Act II’

Michel Barnier July 2012.JPG

The European Commission yesterday (3 October) presented a new recipe to improve the functioning of the internal market with a focus on job-creation and growth in its Single Market Act II plan.

Despite its introduction 20 years ago, the EU's Single Market hasn't been fulfilled and needs revamping as it is still seen by the Commission as a central element of the European growth agenda and a way to get out of the current economic crisis.

From 1992 to 2008 the Single Market generated 2.77 million new jobs and added 2.13% to the GDP.

"Time is short. People are expecting growth. They are expecting economic hope," said Michel Barnier, EU commissioner for the internal market.

In its new proposal, the Commission has put forward 12 levers for rapid adoption to further develop the Single Market.

These actions are concentrated on four main drivers for growth, employment and confidence: integrated networks, cross-border mobility of citizens and businesses, the digital economy, and actions that reinforce cohesion and consumer benefits.

For example, the Commission wants to achieve a competitive rail passenger services market and create a single market for maritime transport. Today, a ship that goes from Rotterdam to Marseille is subject to the exact same regulation, problems and difficulties as a ship sailing from China to Marseille.

In terms of business, the Commission is proposing more modern EU insolvency rules and to develop rules of a 'second chance' as the company life-span in 50% of the cases don't exceed five years.

The digital economy will also play a key role in helping Europe out of the crisis. Still 35% of internet users don't buy online because of payment concerns, so the Commission is proposing ways to make payment services more efficient.

Single Market major asset if there is political will

In April 2011, the first Single Market Act was adopted, and came as a response to the economic crisis and the need to foster growth.

It proposed 12 actions to boost European competitiveness and to exploit the untapped potential of the Single Market to generate sustainable economic growth and additional employment.

However, the effects of the weak economy are still hitting Europe hard. According to the Commission, growth needs to be revived as unemployment is persistently high, in particular among young people, and a part of the European population is living in poverty.

"If we want to address the issue of the crisis, if we want to have a fiscal consolidation in Europe, and if we want to fight against unemployment we need to find growth in Europe. We need to find means of growth in the Single Market," an EU source said.

"We don’t have any natural resources, but we have one major important asset, our Single Market with 500 million consumers. And we need to fully exploit the Single Market," the source added.

On 4 October, the European Parliament and the Council will adopt the first proposal, on standardisation in services, and Barnier added that he expects five of the 12  proposals to be adopted by the end of the year "if there is political will".

"We would like to see Europe at a place where things are produced and not just consumed," Barnier said.

"All of this can be done if the floor we are building on is solid. If it’s not fractured into 27 fiscal, bureaucratic areas, competing administrations, the basis for growth is the Single Market. That basis has to be coherent and that is what we are trying to achieve through all these proposals," he said.

Barnier added that the Single Market Act II was based on a diagnosis of the strengths and weaknesses of the internal market which Mario Monti had carried out in 2011.

"Monti said this Single Market is more and more necessary and less and less popular, and I think that our role as politicians responsible for Europe … when something is necessary our role is to act in such ways to ensure it becomes popular," Barnier said.

Positions

Philippe de Buck, director general of BusinessEurope, the European employers' association, said: “For the Single Market Act II to deliver growth, it must be accompanied by a renewed commitment from Member States, institutions and stakeholders to ensure that single market rules work better in practice and are correctly applied throughout Europe. The new proposals should be carried out swiftly.”

"Nine out of ten cases in our study cite enforcement and implementation issues as Single Market barriers," said Fabian Delcros, chairman of the Single Market Task Force at the American Chamber of Commerce in Brussels (AmCham EU). "The Commission’s Single Market communication in June highlighted new enforcement initiatives. AmCham EU supports further progress toward effective implementation of EU legislation, especially in energy, transport and the digital economy," Delcros said.

British Conservative MEP Malcolm Harbour, chairman of the European Parliament's Internal Market Committee, said: "The real task for all of us: governments, the commission and MEPs, is to future proof the Single Market, building on full implementation of the rules and initiatives already in place. For too long we have paid lip service to the Single Market. In this time of crisis, we should embrace the Single Market as the greatest driver the EU has to deliver much-needed jobs and economic growth. It's time we were all single-minded about the Single Market."

Welcoming the new measures to further unlock the Single Market, Harbour said in a statement: "More Single Market means more growth for Europe, more opportunities for European citizens and businesses. I am delighted to see the broadening of the scope of the measures, thus taking Single Market to areas which were quite closed until now."

Background

This year marks the 20th anniversary of the Single Market. The European Single Market ensures that EU citizens can live, work, retire, study and shop in any country. EU businesses are free to sell their goods and services to 500 million consumers anywhere in the EU. This freedom means more choice and lower prices for consumers, more opportunities for businesses and more growth and jobs.

The Single Market is a main contributor to growth and employment in the EU. From 1992 to 2008 it generated an extra 2.77 million jobs and an additional 2.13% in GDP.

Despite these benefits, the Single market is never complete. It must respond to a constantly changing world where social, demographic and technological developments must be incorporated in policy thinking for the Single Market to contribute to deliver growth, jobs and social cohesion.

Timeline

  • 10 Oct. 2012: Online Google debate on Single Market.
  • 15-20 Oct. 2012: Single Market Week.
  • Spring 2013: The Commission will put forward all key legislative proposals of the Single Market Act II.
  • End 2013: Commission will put forward the non-legislative proposals.
  • Spring 2014: The European Parliament and Council are called upon to adopt legislative proposals as a matter of priority.

Further Reading

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