SPEECH/02/461
David BYRNE
European Commissioner for Health and Consumer Protection
The Single Market delivering the promise
Annual Assembly of Consumer Associations
Brussels, 8 October 2002
Ladies and Gentlemen
Once again it is a pleasure for me to address this important Assembly and in particular at such a crucial time, as we stand at the threshold of the most ambitious enlargement yet of the European Union.
I would like to start by picking up from where I left off at last year's Assembly.
In my concluding remarks, I summarised my hopes for the Single Market by saying:
« I would like to see a European Internal market where consumers can feel as confident in shopping cross-border as in the local high street ».
I still hold true to this vision. You will no doubt be keen to hear what we are doing towards achieving our goals.
Today I want to focus on three areas in particular:
- our activities with regard to the candidate countries;
- progress on fair commercial practices, including bringing down the barriers; and
- a specific measure for the financial services sector.
All of these form part of the new Consumer Strategy for 2002-2006 helping to make the Single Market more relevant and more tangible for millions of European consumers.
Enlargement
It is heartening to see so many representatives from the candidate countries here today.
I hope you found the special Seminar on Monday informative and relevant to developments you are pursuing back home.
I hope also that you share my conviction that the promise of the Single Market is not an illusion, but a real benefit to consumers.
State of play
Allow me to summarise the current situation as regards enlargement and consumer protection.
As you know, the main priority of the current Danish Presidency is to complete negotiations with up to ten new Member States by the end of this year.
The Commission has been working intensively to prepare the 2002 version of the annual Regular Reports on progress of the candidate countries towards accession.
These reports are due to be adopted tomorrow, 9 October. I am pleased to say that the importance of consumer issues will have a higher profile in this year's individual reports.
Negotiations have been completed and the consumer protection chapter (chapter 23) has been provisionally closed with all ten countries.
I should stress that although discussions on consumer policy have been uncontroversial in comparison with some other sectors, this does not mean that consumer policy is any less important, or easier to put in place.
The current emphasis is on:
- monitoring transposition of consumer legislation in the candidate countries;
- ensuring the administrative capacity is in place to enforce the Chapter 23 "acquis"; and
- promoting the development of local consumer movements.
Enlargement has been explicitly integrated into the Consumer Policy Strategy. The Strategy's three key objectives of a high common level of consumer protection, of effective enforcement, and of proper involvement of consumer organisations in EU policies are designed with enlargement very much in mind.
Situation on the ground
We have also dedicated significant efforts to the evaluation of the situation on the ground.
The General Product Safety Directive has been the subject of a series of "peer reviews". Regional training programmes have been started in the area of market surveillance for non-food consumer products.
Meetings with representatives from the missions of the candidate countries in Brussels have proved most constructive in explaining EU consumer policy and establishing direct dialogue.
Increased involvement of candidate countries
It is my firm intention to further the involvement of the candidate countries in our discussions on consumer issues next year.
This view is shared by the Consumer Committee, the consultative committee of representatives of European and national consumer organisations, who advise the Commission on issues of consumer policy.
So is the Single Market promise being delivered for the candidate countries?
In terms of the legal framework, I would say "yes". But legal provisions only go so far. The proof of the pudding will be in the eating.
We will see how the practical reality unfolds over the coming years. I fully expect the Consumer Associations from the candidate countries to be active in helping us to identify any shortcomings so that appropriate action can be taken.
The promise for consumers all over the EU (before and after enlargement) is not only wider choice and better prices, but also better protection as regards their health, safety, as well as their economic and legal interests.
Services of General Interest
The theme chosen for your seminar with candidate countries is of paramount importance Services of General Interest.
In services such as telecommunications, postal services, the supply of energy, and transport, there is a need to maintain public services obligations. European citizens expect a choice of accessible and high quality services, at affordable prices.
The Commission is reflecting further on this issue at the request of the European Council. We are reinforcing our evaluation mechanisms to assess the performance of these services.
Services of general interest are of fundamental importance to citizens and businesses. It is very important that consumers in candidate countries also see that the liberalisation process in their economies is accompanied by effective protection for consumers.
Funding actions for candidate countries
I have just sketched an outline of all that stands to happen in the legislative front, and on the substance of consumer protection relative to candidate countries.
But I am aware that some of you have concerns regarding the ability of consumer organisations in candidate countries to fully play their role and the means at our disposal to help them.
This matter is of concern to us, and we have spent some time during the past year on trying to further strengthen the efforts already underway. I would not like to run through every single detail here, but let me give you a few examples:
First of all, we are already providing funding through the PHARE programme. And we have launched an intensive series of contacts with our Delegations in the Candidate Countries to make sure that this money is spent effectively.
Second, we are trying, within the existing financial rules, to expand what we are doing for consumers in the candidate countries, through preparatory actions to be launched in the next year.
Finally, from 2004 onwards, a new legal base for the implementation and thus spending on consumer policy actions will be in force. This instrument includes specific provisions for the candidate countries, as long as it will still be needed.
But all this can only be effective with the help of all consumer organisations, including those in the Member States and of course those in the Candidate Countries. Also, government authorities who need to recognise the importance of a strong consumer movement.
Bringing down the barriers
The Single Market has for too long been primarily associated with business interests, with insufficient regard for consumers. The focus is now shifting and rightly so.
The economic importance and position of consumers is now better understood. As you know, I want consumers to be as confident when shopping across borders as they are at home.
As yet few consumers have taken the plunge. More has to be done.
Remove the practical barriers and I believe the psychological barriers will follow.
And, as said last year, my goal is to devise at EU level a simpler, but more effective, consumer protection regulatory regime.
The history of EU consumer protection measures is largely one of minimum harmonisation. The Member States wanted to retain discretion to add national provisions to those laid down by EU law.
However, the downside of this approach has been to dilute the harmonising benefits of EU legislation and also to provide a backdoor means by which internal barriers can be created not only in relation to business, but also to consumers.
Agreeing fundamental principles at EU-level
The time is right to have a thorough debate on this issue. Progress in reforming current EU rules and plugging the important gaps depends on agreeing general fundamental principles of consumer protection at EU-level.
Harmonisation of consumer protection would demonstrate that the EU can make a significant and visible contribution to the daily lives of all its citizens.
It will increase their opportunities and guarantee protection of their rights. This is of increasing importance in the context of enlargement.
But harmonisation does not mean regulating everything at EU level.
I am a pragmatist. I want to see results.
We have set ourselves a very ambitious objective of common high level of consumer protection, but to achieve our goals we should always choose the most appropriate instruments. The right tools for the job in hand.
Fair trading
Allow me to turn to the subject of fair commercial practices or 'fair trading'. This is a priority under the New Consumer Policy Strategy.
At the General assembly last year, I presented the Green paper on consumer protection. This triggered a very lively, and also extremely rich, exchange of views between stakeholders on some key aspects of consumer policy.
The responses to the Green Paper gave the Commission clear support for developing a proposal for a framework Directive on fair commercial practices. In particular, a very large majority of the Member States supported this option.
However there was a general feeling that more information, clarification and consultation on the content of any such framework Directive was needed.
We therefore decided to embark on a further round of consultation on the substance of a framework Directive, before moving on to the stage of making proposals. Hence the follow up communication.
So what might a framework Directive look like?
Possible content of a framework Directive
The framework Directive would contain a general clause prohibiting unfair commercial practices detrimental to consumers.
However, we recognise that a general clause alone would not be sufficient to provide consumers, or business, with sufficient legal certainty.
The general clause would therefore be supplemented by a number of specific rules covering the different categories of unfair commercial practices both before and after a transaction.
These categories would range from misleading advertising and aggressive marketing methods, to failure to provide after-sales customer assistance and effective handling of complaints.
In addition, a non-exhaustive list of examples could be attached to the Directive in order to illustrate the scope of application of the general clause, and how the specific rules work in practice.
Two other mechanisms are outlined in the follow-up communication codes of conduct and non-binding guidance.
The combination of these instruments is the best way to reconcile the twin goals of legal certainty and freedom to innovate.
Some have thought that it would be possible to simply apply the "country of origin" principle in the area without harmonisation. The response to the Green Paper showed that this is clearly not the case for consumer protection.
Enforcement
An integrated internal market needs integrated enforcement to ensure consumer and business confidence. The confidence to shop and trade across borders depends upon the assurance that traders acting unfairly or dishonestly will be stopped. Wherever they operate from, whatever their nationality and whomsoever they target.
The new opportunities for e-commerce in particular are matched by new opportunities for rogue traders to target consumers across borders.
Currently, barriers exist which hamper the efficient co-operation or mutual assistance between public authorities. To address this situation we intend to propose next year a framework for administrative co-operation.
Financial services
As I have said, we should use the most effective instruments to reach a high level of protection, in any given field. For financial services, we have used the more traditional approach of regulating to reach full harmonisation.
The long awaited directive on distance selling of financial services was adopted earlier this year.
Last month, the Commission adopted an ambitious proposal for a new Directive on credit to consumers to replace the existing Directive dating from 1987.
The scope of the new Directive would be enlarged to cover all forms of credit including overdrafts and mortgage backed credit (equity release) but not including mortgages.
At this stage the Code of conduct of March 2001 for pre-contractual consumer information on "home loans" agreed between industry and consumers organisations and endorsed by the Commission, should be allowed to continue to see how it works in practice. However I regret that in 3 Member States ES, FR and UK the Code of Conduct has not been taken up.
The Directive would aim to ensure genuine transparency and comparability of credit offers, in particular by harmonising further the calculation of the "Annual Percentage Rate" (APR), that is to say the total cost of credit to the consumer.
It would also place a new emphasis on "responsible lending."
This measure will help to fulfil the promise of the Single market.
Conclusion
Ladies and Gentlemen, I started by recalling my words from last year. I also said last year that I "counted on you to help identify where the Single Market is not serving consumers and where their interests are not being protected." Such feedback is vital.
But more than this, the involvement of consumers is now enshrined in the new Consumer Policy Strategy.
I have already spoken to you at length about the first objective of achieving a high common level of consumer protection.
This goes hand in hand with the second objective of making sure that there is effective enforcement of consumer protection rules. There is no point in having good law laid down in statute books if it is not properly implemented.
And last, but by no means least, the third objective to provide fully for the involvement of consumer organisations in EU policies.
In order for consumer protection policies to be fully effective, consumer representatives must have an opportunity to contribute to the development of the policies that affect them. Not only in consumer policy as such, but also in other EU policies.
Integrating consumer concerns into other EU policies is high on my priority list for the years to come.
I want all consumer organisations, large and small, to have the opportunity to make a full contribution to the defence and advocacy of consumer interests.
I am determined to ensure that consumers are placed on an equal footing with other stakeholders in all policy areas.
By working together we can turn the promise of the Single Market into reality to the benefit of all European consumers, of the present and of the future.
Thank you.
