The core of the Union
Most households in Europe are free to choose their electricity supplier.
The single market is the core of today’s Union. Yet getting it up and running took seven years. The hundreds of laws needed to sweep away the technical, regulatory, legal and bureaucratic barriers that stifled free trade and free movement were finally approved in 1993.
According to the Commission, the single marked has created several million jobs since its launch and generated more than €800 billion in extra wealth. Phone calls in Europe cost a fraction of what they did 10 years ago, many air fares in Europe have fallen significantly and new routes have opened. Households and businesses are now able to choose who supplies them with electricity and gas.
How does it work?
When trade barriers are removed and national markets opened, more firms can compete against each other. This means lower prices – and wider choice – for the consumer. Firms selling in the single market have unrestricted access to nearly 500 million consumers in the European Union.
The way out of the crisis
Skilled professionals can work anywhere in the EU.
The single market is a valuable shield against the current economic crisis. It prevents beggar-thy-neighbour policies in which countries try to pass problems on to neighbours instead of tackling them themselves. EU countries have avoided narrow protectionist measures that would have worsened the crisis and have instead agreed a joint recovery plan. The aim is to stimulate demand though public investment, to better regulate the financial sector and to create sustainable jobs.
Some way to go
The successes of the single market must not blind us to its shortcomings. The services sector, for instance, has opened up more slowly than markets for goods, although a major new law was adopted in 2006 enabling companies to offer a range of cross-border services from their home base.
Delays have also affected financial services and transportation, where separate national markets still exist. The fragmented nature of national tax systems also puts a brake on market integration and efficiency.
Most financial services have been liberalised. As a result, it is easier for consumers to use credit or debit cards abroad and to transfer money to another EU country. Bank charges for cross-border payments have also been reduced.
The EU has also decided to open the market for postal services. The aim is to increase competition, lowering prices and improving quality of service. Full market opening will also create jobs in new postal companies and in the industries dependent on the postal sector.
Protecting the single market
Whereas the single market chiefly relies on competition and regulatory authorities to guarantee the free movement of goods and services, the free movement of people is guaranteed under the Schengen agreement (named after the small Luxembourg town where it was signed). This removes checks at most of the EU’s internal frontiers and strengthens controls at the EU’s external borders. Free movement inside the EU depends on secure external frontiers.
There are no border controls when travelling by land between 22 EU member states. Five countries currently retain national border controls for travel within the EU: Cyprus, Ireland and the United Kingdom, plus Bulgaria and Romania. Removing barriers to trade and free movement is a huge plus for those engaged in commerce or travel for legitimate reasons. But criminals of all sorts seek to turn the system to their advantage. The EU has responded to cross-border crime by creating a system of frontier-free police and criminal justice cooperation. Europol, the European police force, is part of that response. So is the Schengen Information System whereby national police exchange information on wanted or suspected wrongdoers. Under the Eurojust project, member states second senior prosecutors, policemen and lawyers to a central team working to fight organised crime.
