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Brussels, 27 February 2007

A new Consumer Strategy: Consumers must lead the drive for growth and jobs

Today in Brussels at the "Growth and Jobs Summit" organised by the "Lisbon Council" think-tank, European Consumer Commissioner Meglena Kuneva called on EU political leaders to rally behind her drive to redefine EU Consumer policy so it most effectively contributes to two central EU goals - creating economic growth and employment as well as reconnecting Europe to its citizens. The work on a new Consumer Strategy is already underway, with the Review of EU Consumer Protection Rules (the legislative "acquis"), launched in February. The broader strategy, which aims to revise EU Consumer Policy so it can face up to new challenges - including global markets, liberalised services and the technological revolution of internet and digital shopping - will be presented by Commissioner Kuneva in Strasbourg on March 13. The overall aim is to empower and inform consumers and to give them more choice and better prices through safe access to new markets. Consumers making free and informed choices will lead the drive to make markets more efficient, effective and innovative.

"The crucial role of Consumer policy in generating growth and creating jobs is not well understood at EU level", said Commissioner Kuneva. "Consumer Policy is just as important as competition policy in making markets work. A competitive retail sector is essential to competitiveness. But relatively little has been done at EU level. I hope to unleash the potential of a completed retail internal market. The contribution of consumer measures to competition is sometimes misunderstood: informed and empowered consumers can turn up the competitive pressure. Markets that are responsive to consumer needs are essential to the modern knowledge–based economy. Consumers are often the source of inspiration for new technologies and a key driver of innovation. I strongly believe that consumer policy should be included in the next version of the Lisbon guidelines for Growth and Jobs."

Contributing to growth and jobs

Contributions EU consumer policy can bring to growth and jobs include:

  • The completion of the internal market, notably the retail or "business-to-consumer" (B2C) part.
  • The intrinsic benefits of consumer policy measures in stimulating competition.
  • EU economic performance can also be improved by giving a greater weight to consumer welfare considerations in many areas across the policy spectrum, from Competition Policy and Internal Market to Trade, Energy, Transport and Telecommunications.

The retail internal market

The EU internal markethas the potential to be the largest retail market in the world in economic terms. However it remains largely fragmented with most transactions still taking place within national markets, and with a lack of competitive pressure to reduce price divergence. An integrated retail internal market where consumers could compare and purchase from retailers throughout the EU would significantly sharpen competition and reward the most efficient retailers. It could also help boost the EU's external competitiveness if it became an attractive destination for e-commerce shoppers from around the world.

The value of consumer protection measures

Information asymmetries in the market, especially for non-repeat purchases, create an imbalance between the information available to the retailer and the consumer. Information may be incomplete – or even deliberately untruthful, misleading or deceptive. Consumer legislation to require all advertising and commercial practices to be truthful, accurate and non-misleading and non-deceptive is required. Better informed consumers who are able to make a free choice are essential towards the efficient functioning of the market. They can drive forward a more efficient allocation of resources and higher economic welfare. Consumers also incur search costs in obtaining information. Market transparency about price, quality, choice and after-sales services is also essential. But this information also needs to be comparable as well as accurate and transparent.

Consumer Strategy 2007-2013

The Competitiveness dimension will be at the heart of the forthcoming consumer policy strategy 2007-2013. The three main objectives of the Strategy will be:

  • to empower Europe's consumers. This means creating the right market conditions for them to be able to make informed, considered and rational choices and equipping them with the tools to do so.
  • to enhance the economic and non-economic welfare of Europe's consumers, in terms of price, choice, quality and affordability.
  • to protect consumers effectively. Market failures for consumers fall into two categories – those that individuals cannot address and those that they should address themselves. It is more efficient for public policy to tackle the former problems.

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