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A single market for 21st century Europe

The single market for the 21st century can be even more integrated, open and competitive. Its potential should be tapped more effectively through further development of knowledge and innovation and the social and environmental dimensions, especially to respond to globalisation. Its optimisation must also be results-oriented, which calls for the definition of a new approach to evaluation and achievement. The single market will in this way offer greater choice for consumers and opportunities for businesses.

ACT

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 20 November 2007 entitled: "A single market for 21st century Europe" [COM(2007) 724 final – Not published in the Official Journal].

SUMMARY

The single market is beneficial for consumers and businesses. It has supported job creation and stimulated growth, competitiveness and innovation. The single market has also been essential for the smooth functioning of the economic and monetary policies of the European Union (EU). However, it still has untapped potential.

HARNESSING THE POTENTIAL

The Commission proposes a single market for the 21st century which is strong, innovative and competitive. Building on its existing strong foundations, the single market must concentrate on key areas with potential added value in order to face up to new challenges.

Consumers and businesses

The single market needs to deliver better results and benefits to respond to the expectations and concerns of consumers and businesses. The guarantee of high standards has enabled consumer protection to be ensured in terms of choice and quality of goods, prices, rights, fighting unfair commercial practices and abuse of dominant positions, etc. Nevertheless, the single market can offer more in key sectors of the daily life of consumers, such as energy or telecommunications, and sectors which are fragmented or typified by a lack of effective competition.

The safety and quality of goods and services and market surveillance also need to be strengthened. Food safety, pharmaceuticals and retail financial services are areas in which consumers must be educated and empowered in order to derive full benefit from the single market. In this respect, consumer rights, and especially contractual rights, and redress should be re-examined to move towards a simple, comprehensive protective framework.

In addition, small and medium-sized enterprises (SMEs) are not integrated in the single market in the same way as large enterprises. Their participation is impeded mainly by tax fragmentation and language, cultural and consumer barriers. The initiative of the Small Business Act, based on the principle of "think small first", and improvement of the tax environment should provide an appropriate response to this problem.

Coping with globalisation

In a constantly changing international context, the single market presents many advantages in terms of innovation, competitiveness and choice, whilst respecting labour, health, safety and environmental standards. Through its nature, it has attracted foreign investments and firms.

The EU must continue this process to cope with globalisation, concentrating on the pillars identified in the Communication "Global Europe competing in the world (BG) (CS) (ET) (GA) (LV) (LT) (HU) (MT) (PL) (RO) (SK) (SL)", i.e.:

  • the trade and competition policy instruments which guarantee a competitive space by responding to foreign subsidies and other unfair practices;
  • promotion of cooperation on multilateral and bilateral norms. The EU must take inspiration from international standards and its own standards must serve as a world reference, ensuring it a leading role, especially if it speaks with one voice;
  • ensuring that the benefits of market openness reach European citizens, especially in terms of choice and price, but also by following up on trade agreements.

Making knowledge and innovation the "fifth freedom"

The single market, which was originally based on primary products and manufactured goods, has to provide for the greater integration of services, which are assuming a growing role in a knowledge-based economy. In this way, it must tap the potential offered by the new technologies for the benefit of a "fifth freedom", i.e. free movement of knowledge and innovation.

The Services Directive is the lynchpin of this process. Nevertheless, the removal of barriers and strengthening of competition must be continued to offer more choice at lower prices to consumers and to boost innovation. Initiatives have been taken along these lines, especially with regard to the network industries (energy, postal services, transport, telecommunications, etc.). Information and communication technologies (ICT) are also an asset for the development of interoperable services in the context of the "e-Internal Market" (electronic invoicing, online public procurement and electronic customs), without creating new "e-barriers".

The mobility of workers, researchers and students must be guaranteed to promote knowledge-sharing. The 7th Framework Research and Development Programme (7th FRDP) and the plan to introduce a "researcher passport" form the foundations of mobility and the development of research networks within the European Research Area (ERA).

Social and environmental dimension

Market opening has social and environmental impacts. The Commission will improve its impact assessments to anticipate market changes more effectively.

The development of the single market goes hand in hand with the European social agenda. Economic and social cohesion, based on the Structural Funds, allows citizens and businesses to be empowered and the benefits of the market to be spread to all regions of the EU. In this respect, the "European Grouping for Territorial Cooperation" (EGTC) offers new possibilities for cross-border cooperation in areas such as health, environment and infrastructures.

Workers’ mobility receives further support under the Job Mobility Action Plan. However, this must respect the fundamental rights of workers, including equal opportunities. The European Works Council will be adapted along these lines.

The development of "eco-industry" (pharmaceuticals or car manufacturing) contributes to the environmental dimension of the single market. Further investments are still needed, especially to contribute to fighting climate change.

DELIVERING RESULTS

An enlarged, diversified EU depends more than ever on the single market working well. The EU must concentrate on the evidence and the impact of the markets, giving priority to where markets do not deliver and where there are maximum chances of improvement. Market monitoring will be stepped up to determine the reasons for market failures and their potential on the basis of competition sector inquiries, lead markets and joint technology initiatives. The consumer scoreboard, which will be integrated into the Single Market Scoreboard from 2009, will provide additional information on the performances of these markets from the point of view of consumers and economic and social requirements.

Simple, appropriate tools will allow the single market to be more targeted and better enforced, without ending up with more regulations. Recourse to existing instruments and procedures under the various policies must be rationalised to achieve an optimum result. This also applies to the tools for the evaluation and implementation of Community legislation. The Commission will reconsider ineffective or superseded Community interventions.

All levels of governance, authorities and stakeholders must be involved on the basis of greater decentralisation, fostering ownership and mutual trust in the context of new working relationships and approaches. The networks, which could be based on "single market centres", are essential in this respect to ensure enforcement of Community legislation and cooperation, promoting exchanges of experience and good practices.

Communication and access to information form the basis for transparency and knowledge of the Community rules. Member States are responsible for this. Achievement of these objectives will be based on the "single market ambassadors" pilot project (prominent persons in business and trade), a "one-stop shop" for the various services available to citizens and businesses (Europe Direct, Your Europe, SOLVIT, Citizens' Signpost Service, EURES, the new integrated business support network, etc.), as well as a Single Market Scoreboard adapted to allow better evaluation of performance.

Last updated: 26.05.2008

See also

For further information on the review of the single market, please consult the website of the Directorate-General for the Internal Market and Services.

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