Barnier finalising draft ‘EU Single Market Act’


The European Commission is preparing a new Single Market Act designed to boost job creation and stimulate growth, according to an internal paper seen exclusively by EURACTIV.

The overhaul of the single market contains a raft of around 30 proposals, including new legislation in areas like taxation, counterfeiting and helping small businesses.

Internal Market Commissioner Michel Barnier chaired a subgroup of nine EU commissioners which met twice in June to finalise the report. The final document is expected on 6 October.

Barnier indicated in July that revised rules on translating patents would be amongst the features of the new Act (EURACTIV 02/07/10), which is likely to have some overlap with the Small Business Act and the EU's forthcoming innovation strategy.

The Commission is promising a concrete blueprint for revitalising the single market 25 years after the Single European Act. The timetable for implementing the new Act will be 31 December 2012 – the 20th anniversary of the internal market.

Monti report 'inspired' Single Market Act

A spokesperson for the Commission told EURACTIV the document will contribute to the goals set out in the Europe 2020 growth strategy, especially the flagship initiatives on innovation and industrial policy.

The report by former Competition Commissioner Mario Monti, which is seen as the inspiration for the Single Market Act, proposes closer tax coordination between member states but stops short of calling for a fully harmonised tax system (EURACTIV 26/02/10).

Monti highlighted a range of bottlenecks and missing links that are holding back the completion of the single market. Tackling these will be a priority between now and 2012.

According to an unpublished Commission paper seen by EURACTIV, the Single Market Act will give particular attention to the role played by Europe's 500 million citizens in the EU economy. "Markets need to work for citizens, not the other way around," the document says.

Small firms central to growth in internal market

SMEs are likely to be at the centre of the EU executive's thinking as it finalises the Act. Initiatives designed to facilitate SMEs' access to capital, reforms to public procurement, "smarter regulation" and a review of the Small Business Act are all in the mix as the Commission prepares to sign off on the single market overhaul.

Some of these have already been flagged as being central to the forthcoming innovation strategy, although Innovation Commissioner Geoghegan-Quinn was not among the Barnier's subcommittee of commissioners.

Industry Commissioner Antonio Tajani, Competition Commissioner Joaquín Almunia, Taxation Commissioner Algirdas Šemeta, Trade Commissioner Karel De Gucht, Digital Agenda Commissioner Neelie Kroes, Transport Commissioner Siim Kallas, and Economic and Monetary Affairs Commissioner Olli Rehn were the core group that worked on the new Act.

Consumer Affairs Commissioner John Dalli and Employment Commissioner László Andor also fed proposals into the document. The College of Commissioners endorsed the key features of the Single Market Act on 20 July following a detailed discussion with Mario Monti.

Ageing population a threat to social market economy

A Commission working paper setting out the rationale for completing the single market warns of "considerable risk that economic growth and job creation in Europe will stagnate for some time".

It cites the ageing population and declining active workforce as threats to Europe's social market economy and social welfare system.

"The Single Market and its four freedoms of goods, services, people and capital is one of Europe's main competitive advantages. Its further deepening and development will be one of Europe's best sources for smart, sustainable and inclusive economic growth," according to the Commission.

The Single Market and its four freedoms for circulation of goods, services, people and capital is one of Europe's main competitive advantages. However, progress on the single market has stalled in recent times and business leaders have pressed for its completion in order to tap into the EU's full potential.

In October 2009, José Manuel Barroso, president of the European Commission, tasked Mario Monti, a former European commissioner, with preparing a report on the future of the single market.

Giving the mandate to Monti, Barroso said that the recent crisis had revealed a strong temptation - particularly when times are hard - to roll back the single market and seek refuge in forms of economic nationalism.

The single market report needs to be seen in the context of the EU's new strategy for sustainable growth and jobs, dubbed 'Europe 2020' (EURACTIV 24/02/10). That strategy, presented in February, puts innovation and green growth at the heart of its blueprint for competitiveness, but will have to include tighter monitoring if it is to succeed where the Lisbon Agenda failed.

The Monti report was published in May and urged the EU to put the single market "back on track" (EURACTIV 11/05/10).

  • 6 Oct. 2010: Publication of EU Single Market Act.

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