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MEMO/02/231

Brussels, 11th November 2002

Internal Market has brought big gains in last ten years, but more needed, say citizens and companies

European citizens and businesses recognise that the Internal Market without frontiers has brought them significant benefits since it began on 31 December 1992, but would like to see more and quicker progress, according to surveys undertaken for the latest Internal Market Scoreboard (see IP/02/1644). For example, 80% of citizens feel that the Internal Market has increased the choice of products available, three-quarters welcome the increased competition which the Internal Market has introduced in many areas and two-thirds say it has made it easier to travel to other Member States. Four times as many businesses (46%) see a positive impact on their company as perceive a negative one (11%). Companies from smaller Member States, especially Ireland and Greece, are generally more positive than those from larger Member States of the latter UK companies are the least enthusiastic and Italian companies the most. Exporting companies are more positive than non-exporters but an overwhelming 84% of all companies think that improving the functioning of the Internal Market should be a key priority for the EU. Citizens in France and Luxembourg come out top of the class in knowing their Internal Market rights. The surveys were based on replies from 7500 citizens and 5900 businesses in all 15 Member States.

Internal Market Commissioner Frits Bolkestein commented: "These surveys make fascinating and encouraging reading. Support for the Internal Market remains very strong but both citizens and businesses want us to do more. The surveys support my firm belief that the Internal Market is good for citizens and businesses alike and that ten years on from 1992 we must move up a gear in the fight to secure our Internal Market freedoms."

What citizens think

The citizens' survey reveals that EU citizens view the overall impact of the Internal Market on their daily lives as very positive. Two-thirds of them recognise that it is now easier to travel from one Member State to another than it was ten years ago. Three-quarters of them welcome the increased competition which the Internal Market has introduced in a number of areas like transportation, telecommunications, banking or insurance services.

Citizens believe that the Internal Market has been generally positive for consumers. 80% believe that the range of available products has increased. 67% believe that the quality of products is better too. However, only 41% believe that prices have gone down.

Percentage of citizens who believe that the effect of the Internal Market has been rather positive or very positive concerning:

ABDDKEELFFINIIRLLNLPSUKEU15
Prices34483643412148463437523344465141
Quality43696546746767486883677064586967
Range of products77828375827582848190868178707380

There are some possible explanations for the variation in perceptions between Member States of the Internal Market's effect on prices. Price differences amongst Member States have narrowed over the past ten years. This has occurred largely because the more expensive countries have moved closer to the EU average. This would explain the positive perceptions in countries, such as Finland and Sweden, where prices tend to be higher. Other variations may be due to factors which are not directly related to the Internal Market. In the UK, for example, the strength of sterling inevitably means that imported goods appear to be less expensive and this may partly explain the positive responses given. The more negative perceptions in Ireland may simply be due to their relatively high inflation rate within the euro zone.

How much do people know about their Internal Market rights?

Respondents were also asked how well informed they think they are about the Internal Market.

Percentage of citizens who feel well or very well informed in respect to their rights within the Internal Market

A

BLDEDKIRLPSUKNLFINELFIEU15
61575753525049484544434239383345

And in order to test their actual level of knowledge, respondents were then quizzed about their basic Internal Market rights.

Percentage of correct answers in quiz about Internal Market rights

F

LIRLEFINSBIDKPADNLUKELEU15
61615654545453535252515050474152

There is only a limited degree of variation from one Member State to another. The results show that only 38% of French respondents believe themselves to be well or very well informed (only Italy had a lower score at 33%). However, when it came to actually being questioned about their rights, the French achieved the highest average score.

61% of Austrian respondents believe themselves to be well or very well informed. This was the highest score of any Member State but their average score on the quiz was unexceptional at 51%. Greece registered the lowest average score on the quiz at 41%. This ties in with their own perceptions; a majority (59%) of Greek respondents believe themselves to be rather uninformed or not informed at all.

Citizens interested in knowing more about their Internal Market rights can visit the Dialogue with Citizens website (http://europa.eu.int/citizens) or call the Europe Direct Call Centre, which has a single freephone number valid in all Member States: 00800 67891011.

Are citizens taking advantage of Internal Market opportunities?

The survey shows that slightly more than half of the respondents (53%) would certainly or probably consider going to another Member State to buy a product or a service because it is cheaper or better. The figure is higher in Luxembourg (74%) and in the UK (66%), the latter figure may reflect differences in taxation levels (for alcohol and cigarettes) or exchange rate considerations.

Of those who said that they would certainly or probably not be prepared to go to another Member State to buy a product or a service, the majority pointed to travel costs, language problems or the time needed to do so as the main barriers. Factors which policy makers can more easily influence such as administrative costs, after-sales service or enforcement of consumer rights are cited as being much less important.

Respondents were also asked about moving to another Member State to study or work. Only 6% have already done so. 67% have never thought of it. 15% are thinking of moving in future and a further 11% said that they had thought about it but had given up the idea. The main reasons cited for giving up are family considerations and language barriers, followed by a lack of information and difficulties in finding an appropriate job.

The survey covered 7500 citizens in all 15 Member States. The citizens ranged in age from the 15-25 age group to the over-55s. They were drawn from a wide range of socio-economic categories and live in different localities (metropolitan, other town/urban centres and rural areas). There were equal numbers of men and women.

What businesses think

Four times more EU companies (46%) feel that the Internal Market has had a positive effect on their business than perceive a negative effect (11%). The Internal Market, by increasing competition, aims to benefit consumers by ensuring that companies that provide attractive products and services at low prices win more business at the expense of those who do not, at least until the latter respond by improving their own performance. So the fact that so many companies feel they have benefited and so few that they have lost out indicates that the overall effect of the Internal Market has been to open up new opportunities for many thousands of businesses and probably also to raise standards.

The fact that 42% of businesses feel that it has had no impact, on the other hand, shows that there is much work for the EU to do not only in bringing down remaining barriers to the free movement of goods and services but also in informing businesses - particularly small and medium-sized ones - of the cross-border opportunities that are opening up to them and in helping them to take advantage. In July 2002, the Commission launched its new SOLVIT problem-solving service with this aim (see IP/02/1110), complementing the Dialogue With Business service launched in 2000 (see IP/00/391).

There are some significant variations between Member States. Companies in the UK are least enthusiastic about the Internal Market - only 26% of them rated its impact on their business as positive. In two of the other larger Member States Germany and France the number of companies rating the impact as positive was also relatively small (42% and 35% respectively). Companies in smaller Member States tend to be keener on the Internal Market, perhaps because their home markets are obviously more limited - 69% of businesses in Ireland and Greece rated its impact as positive. But businesses in Italy are also enthusiastic about the Internal Market, with 68% of them saying that its impact has been positive.

Percentage of businesses who believe that the overall impact of the Internal Market has been rather or very positive (negative)

IRLELIPLESBNLDKAFINDFUK
Positive696968645953535252494847423526
Negative974614441294135141417

There were also some significant variations according to company size. 44% of smaller companies rated the impact of the Internal Market on their business as positive. For medium-sized companies, this figure rose to 55% and for large companies to 67%. Over half (56%) of small companies also said that their company was thinking in more European terms than before because of the Internal Market. So did 63% of medium-sized companies and 68% of larger companies.

Percentage of businesses who rate the overall impact of the Internal Market positive or negative

Employees10-4950-249>250
Positive445567
Negative11116

The survey generally shows that, although many firms of different kinds have benefited from the Internal Market, it is exporting companies which are the most enthusiastic and feel that they have benefited the most. 76% of companies exporting to more than five EU countries rated the impact of the Internal Market on their business as positive. Over 60% of these companies said that it had contributed to their exporting success. And nearly 37% of them believe that it has helped to increase their profits.

Percentage of businesses who rate the impact of the Internal Market positively in terms of:

Non-exporting companies

Exporting to 1-5 EU countriesExporting to more than 5 countries
Increase of

sales to other EU countries

64061
Increase of profits

16

2637
Positive overall impact of the Internal Market325776

Do businesses know how to use the Internal Market?

42 % of businesses said that they feel very well or well informed about their company's rights in the Internal Market. Businesses in Luxembourg, Denmark and Austria feel most confident - 69 %, 62 % and 61 % of respondents from those countries said that they feel very well or well informed. The Germans, the British and the Spanish are the least confident - only 34 %, 40 % and 40 % of respondents from those countries feel very well or well informed. This lack of information may partly explain why relatively few German and British companies are positive about the impact of the Internal Market. Information concerning Internal Market rules is available from the One Stop Internet Shop for Business (http://europa.eu.int/business), part of the Dialogue with Business initiative.

Percentage of businesses who feel well or very well informed in respect of their companies' rights within the Internal Market

LDKAPBNLSELIRLFINFIEUKDEU15
69626157515151494746454540403442

Businesses want the Internal Market to work better

83% of smaller companies, 90% of medium-sized companies and more than 92% of larger companies believe that improving the functioning of the Internal Market should be a key priority for the European Union in future. Companies believe that the priority should be to ensure that they can do business throughout the Internal Market on the basis of one set of rules, not 15.

Large numbers also cite the need to ensure fair competition and the need to more closely align national tax systems. This shows that, even ten years after Europe's internal borders were in principle dismantled, business people understand that much remains to be done in order to make the Internal Market function better and that Internal Market policy must therefore remain at the top of the political agenda.

The business survey covered 5900 businesses in all 15 Member States across a broad range of sectors. These businesses ranged in size from small (i.e. those employing 10 49 people) to medium-sized (i.e. those employing 50-249 people) and large (i.e. those employing more than 250 people). Businesses surveyed included both exporters and non-exporters.

More information on the surveys of citizens and businesses can be found in the full text of the Internal Market Scoreboard n° 11. Detailed statistical background tables are available on the Commission web-site at:

http://europa.eu.int/comm/internal_market/en/update/score/index.htm


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