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Charlie McCreevy

European Commissioner for Internal Market and Services

Opening remarks by Commissioner McCreevy

Public Hearing on Future Single Market Policy
Brussels, 29 November 2006

Good morning Ladies and Gentlemen,

Can I begin by expressing my warm gratitude to all of you for taking the time to come here today. Your insights experiences and views are very important to us in shaping the future of the single market. The stakes are high and we have to get it right.

50 years ago, the Treaty of Rome called for a gradual dismantling of national barriers in Europe. Quite a visionary achievement in post-war Europe. 20 years ago, the Single Market Programme provided a new impetus. In the years leading up and beyond the watershed year of 1992 a great number of directives were adopted. In most cases, European rules came to replace divergent national rules, thus eliminating the worst obstacles to trade. And mutual recognition meant that citizens and businesses could explore opportunities beyond the borders of their home states without facing unnecessary hurdles.

The story to date has been overwhelmingly positive, but there have shortfalls too. We have come a long way in goods, but have made less progress on services – though I hope the adoption of the Services Directive two weeks ago will have provided a much needed boost.

But broadly speaking, few would argue that the balance sheet is not a very positive one. Over the period 1992-2006, our GDP levels have risen by an additional 2,1 percent, and 2.6 million extra jobs have been created thanks to the opening up of frontiers.

But more telling than economic figures, are the effects of the Single Market on our every day lives. Let us not forget how far we have travelled. Long queues at the border are a long-forgotten thing of the past. Low-cost air travel has allowed millions of us to travel to places we would never previously have thought to visit. Competition in the telecoms sector has driven prices down and opened up real choice for the consumer. More and more of us have studied, worked or lived in another Member State in a way that would have been impossible for previous generations.

Yet there is no room for complacency.

In spite of signs of recovery, Europe's economic performance is not what it should be. The world we are living in is rapidly changing. It is turning into a global village. Europe cannot take its place for granted. It has to be competitive if we want to maintain our European way of life. We need to look outwards, not inwards.

I am absolutely convinced that the Single Market is our best response to globalisation. It creates opportunities to grow at a pan-European level, to benefit from lower costs and economies of scale. But we must make sure that our policies meet the demands of our time. Yesterday's recipes may no longer be good enough to deal with today's challenges.

That is why the Commission has started a fundamental and forward-looking reflection on Single Market policy. It will set out its broad thinking in an 'interim report' in the spring, with a more comprehensive report to follow. As Commissioner for the Single Market I am fully committed to the success of that exercise. That is where you come in.

Last April, I launched a public consultation on future single Market policy. It provided us with very rich material and much food for thought. Let me share some of the results with you.

First of all, there is a clear message that more political leadership and vision are required. That, I think, is something we are obliged to take on board. So what should our vision for the Single Market be?

In the past, it was possible to see the construction of the Single Market as an end in itself. For some the project was economic, others chose to view it in a political light. But the dismantling of internal barriers was what it was all about.

This is no longer enough. If we want to rise to the challenge of globalisation, the Single Market should become a real instrument for creating opportunities: for entrepreneurship, for social mobility, for the development of human capital and for innovation.

The future is about using the Single Market as a means – a means to advance the interests of European citizens in the new world – rather than as an end.

The Single Market can help to give us more strength and influence on the world stage. Internal competition helps to hone external competitiveness. An outwardly focussed Europe allows us to promote and protect European values in the world.

Globalisation is the big picture against which everything should be seen.

Of course, globalisation is not all upside. There are downsides too - particularly to those sectors which are loosing their competitive edge. We have to equip all of our people to cope in a world where change is constant and skills and knowledge are essential. This is a real challenge where we all need to work together.

We should also set out to show to our citizens that the Single Market is not more important than its people – it is their servant, and making it work is our shared investment in the future.

This brings me to a second point. Replies to the public consultation show a general appreciation for what the Single Market has achieved. But some say we have been too focussed on the market and not enough on people. There is also a feeling that the high level achievements haven't always trickled down to benefit citizens.

People have asked for leadership and guidance. But there is no point in offering leadership if nobody is prepared to follow. We have to take citizens with us when we move forward. That means engaging their minds and capturing their imagination. That is a challenge, especially to us in Brussels. Explaining ourselves hasn't always been our strong suit.

I will, therefore, be particularly interested in what you have to say on how matters can be improved.

We need to look at communication, consultation and how we can achieve a greater involvement by the wider public in what we are doing.

Citizens must be able to understand, seize and invest in the many opportunities the Single Market can bring them. They must feel welcome to participate in the European project. Become active players, not just spectators. Be critical and ready to engage. Only then can the Single Market deliver.

That is why two panels today focus on citizen issues. One panel should give us guidance on how we can better reach out to those who do not currently engage in debate on European interests. If we are not careful, Brussels can become a bubble in which the same people talk to each other over and over and debate takes place in a hall of mirrors. If they are to have legitimacy, our policies choices should not just reflect the views and inputs of insiders.

The other panel should give us insights on how to do a better job on communication. I am eager to learn what the panellists, and what you –their audience- will have to tell us.

Another lesson to draw from the public consultation is the need to have a closer look at the way we put our policies into action. It is clear that people do not feel that we need new rafts of legislation. But the results point to a number of sectors where improvement is needed – services markets, retail banking, insurance, retailing, transport, energy.

To make progress in these fields, we need to be smart. And we need to start from a sound economic understanding of what happens on the ground. That, for me, is the essence of the Better Regulation agenda to which this Commission attaches so much importance.

Obstacles to functioning markets are not just legal. They come from segmentation of infrastructures and networks, from industrial practices, from lack of standardisation, from regulatory fragmentation, from anti-competitive practices and from information asymmetries for consumers.

Faced with such variety of barriers, legal harmonisation cannot be the only answer. And it may not always be politically realistic in a Europe of 27. We must be more imaginative. Use the instruments at our disposal in a concerted way to remove remaining rigidities. So what I have in mind for the future is analysing areas to detect what barriers exist on the ground, and using all instruments together, in a holistic way and at the same time, to create a critical mass for change. We have started to follow such approach in the retail financial services sector.

Adopting a smarter approach does not mean we will no longer propose legislation where it can be demonstrated to be absolutely necessary. But it does mean that it shouldn't be our first and only resort.

It is one thing to shape policies. But it is yet another to make sure they are properly implemented and applied on the ground. Here again, the public consultation has given us a clear message. We must do better.

The Single Market must work in daily life, not just on paper. This is not about legal formalities. When the single market doesn't work, citizens' rights are not respected and business incurs unnecessary costs. Europe, as a whole, loses credibility.

Now that we 25, soon to be 27, we have to be realistic. Not everything can be run from the centre – it's not desirable and, anyway, it wouldn't work.

The Commission acts as a guardian of the Treaties and maintains discipline, but it falls on national administrations and, ultimately, on judges to make the Single Market a reality.

I am committed to pursuing a vigorous and smart infringement policy to tackle situations where single market rules are abused or ignored. But let us be honest about this. In the first place, Brussels is simply not in a position to monitor closely every corner of our expanding Union all of the time. Nobody could. Secondly, Europe is a joint venture, it belongs to the Member States and to citizens, not just to the Commission. Everyone has to play their part. And thirdly, infringements only arise when things go wrong. How much more sensible and easy it would be to avoid problems in the first place.

The future has to lie in a more engaged and deep partnership with and between Member States. The first priority has to be to avoid problems in the first instance, the second to solve them as quickly and efficiently as possible when they do.

With this in mind, we have created SOLVIT - an informal problem solving network, in which EU Member States work together to solve problems caused by the misapplication of Single Market rules.

SOLVIT Centres handle complaints and work towards finding real solutions to problems of citizens and businesses within ten weeks.

But to strengthen the prevention side of things, and to facilitate greater partnership between Member States themselves, we are developing an internal market information system, or 'IMI'. This will enable national authorities to be in contact with each other in a quick and effective manner. Again, we can only facilitate here – it is the Member States that will have to develop stronger contacts and networks, to make sure all share in the benefits of the Single Market.

But I have spoken long enough. Today is about hearing from you. I look forward to your ideas and hope that the discussion is a lively and thought-provoking one.

Thank You.

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