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José Manuel Durão Barroso

President of the European Commission

Speech by President Barroso: "Releasing the full potential of the Single Market to deliver smart, sustainable and inclusive growth"


Copenhagen, 23 April 2012

Dear Chair of EU Affairs Committee in Denmark, Ms Kjer Hansen,

Distinguished Members of the European Parliament and national parliaments,

Dear guests,

It is a great pleasure to join you for this COSAC meeting here in Copenhagen. Copenhagen is indeed very appropriate to have this meeting because as probably some of you know the Danish Parliament is one of the most supported national parliaments in the whole EU.

And today the COSAC has chosen to focus the discussions at this plenary on the future of the Single Market. The Single Market is the crown jewel of the EU.

Over the past two decades, the Single Market has transformed the way Europeans live, work, travel, do business and study. It has opened up opportunities for businesses to expand and learn how to become successful globally.

More importantly, it has allowed for human, cultural and social contacts across borders in a way, most of us could not have imagined. Most of us as young men or women we could not dream of what is happening today.

Today we take the Single Market freedoms for granted because they are such an integral part of the daily lives of 500 million European citizens and around 23 million European businesses.

But twenty years after 1992, it is important that we take a moment to pause and reflect. Reflect not only on what a tremendous achievement the Single Market is. But also on how we can best put this unique tool to Europe's best advantage as an engine driving forward sustainable growth and jobs.

The greatest economic, financial and social crisis the European Union has faced since its inception is still far from over.

Promoting a return to growth and competitiveness has been the central focus of the European Commission's work since the onset of the crisis. Yes, public finances must be put on a surer footing; yes, we need a more stable and responsible financial sector at the service of the real economy; yes, we need stronger economic governance and discipline; yes, European Member States must continue their efforts to deliver fundamental structural reforms for competitiveness; and yes, we must continue to support our Member States, namely Greece in resolving its problems and delivering solutions for its people.

That is why the Commission last week adopted a Communication entitled "Growth for Greece" that aims to unblock growth, create jobs and mitigate some of the social impacts of the crisis. These actions complement the efforts made by Greece in the last months to undertake the necessary measures to secure the second financial assistance programme it is now under.

But at the same time, these efforts must be accompanied by a comprehensive and ambitious strategy to unleash smart, sustainable and inclusive growth. We need fiscal consolidation, we need structural reforms we need all those difficult measures governments are now taking, but at the same time we need hope, we need investment for growth.

And Europe has such a strategy – the Europe 2020 strategy which was endorsed by the European Council, unanimously, and also that was strongly supported by the European Parliament two years ago and which we have been working to implement since then.

The Europe 2020 strategy's ambitious objectives are being addressed through seven flagship initiatives. These include initiatives on a digital agenda for Europe, on innovation, on resource efficiency and mobility for young people. Crucially, these initiatives also include an agenda for new skills and jobs.

As part of this, the Commission last week adopted a set of concrete proposals to boost job-creation, focusing on sectors with great potential, and lifting barriers towards a genuine European labour market.

All these initiatives are underpinned by targets at national level that are reflected in our Country-Specific Recommendations as part of the European Semester.

And our proposals for Europe's future investment budget, the Multi-annual Financial Framework, are also tied to these objectives, demonstrating the Commission's determination to use all tools available to us to drive this agenda – the agenda for growth and jobs. And that's the way the European budget should be understood, as a tool for investment in growth.

Getting the very most out of the Single Market is absolutely crucial to the success of this comprehensive growth strategy. The Single Market is the basis, without the Single Market properly functioning we cannot construct the building on stable foundations.

Ladies and gentlemen,

To release the full potential of the Single Market as an engine for growth and the Europe 2020 objectives, we need to further enhance it.

To build on its strengths, to adapt it to the digital era, to improve its infrastructure and ensure interconnectivity, to address residual legal and technical bottlenecks wherever they are holding back growth.

To take a concrete example: the digital Single Market could be a major driver for growth across Europe. Yet because of legal and practical barriers which undermine confidence, only 7% of e-commerce takes place across borders. This is extraordinary when we think that in the future most of the markets will be digital and not physical.

That means less choice for consumers and missed opportunities for creators and for businesses. We have failed to deliver a single European online market for films or music for example. Is it not strange that our young people cannot find what they want when they choose to buy digital, and that it is easier to get access to American sources than to European ones?

For e-commerce to thrive, we need to strengthen consumer and business confidence in the rules and tools, from parcel delivery to returns policies and payments safety.

One year ago, the Commission proposed a Single Market Act with twelve key actions to unlock growth. The priorities include proposals to help workers get their qualifications recognised in other countries, financing for SMEs, cheaper access to patent protection, simpler accounting requirements and developing precisely the Digital Single Market.

Eleven of these twelve proposals are now with the Council and the European Parliament, and the Commission will deliver the last proposal on e-signatures in the coming weeks.

Thanks to the active support of the Danish Presidency and the European Parliament, these proposals are being fast-tracked, and I hope that by the end of the year we will see them adopted and ready to release their growth-boosting potential.

And later this year, the Commission will come with a further set of measures to continue this on-going process of enhancing the Single Market. Our focus will be on measures which have the greatest economic potential to deliver growth, employment, and boost competitiveness.

However important these efforts to further develop the Single Market, it is also absolutely crucial that we make the most of what is already in place by implementing Single Market rules effectively on the ground.

For no matter how ambitious and smart the rules, without a strong commitment to implementation and ownership on the ground, the Single Market will never deliver all it should do in the interests of European citizens.

A well functioning Single Market will only drive growth if there is a shared commitment to its governance by all stakeholders including the national parliaments, regional and local authorities, social partners, enforcement authorities, networks and in general business associations.

Member States' governments and national parliaments too need to play their part. The number of infringements of Single Market legislation is still far too high. In some cases, growth-boosting European rules are left waiting for several years – sometimes several years - before finally being transposed into national law. So we take decisions after long consultations but afterwards to see these decisions implemented on the ground it takes so many years.

When it comes to putting the rules into practice on the ground, experience shows that we need a more sustained approach to help Member States through the process. The experience of the mutual evaluation system under the Services Directive was positive in this respect.

But as the on-going performance checks are showing, we still have a long way to go to ensure full application of the Services Directive. This work has to be undertaken in partnership and it takes time.

But the results are clear: if the Services Directive was fully implemented, it would produce immediate results by facilitating cross-border provision of services, and could boost the European economy by 1.5% of its GDP. I could make other cases, very typical cases, for instance the European patent that we have been discussing in Europe for around 30 years. I hope it will be now under the Danish Presidency of the Council that finally we will come to an agreement for this essential part of our Single Market.

Following the Spring European Council, I believe there is a new sense of engagement on these issues from European leaders. There was a very in-depth discussion in the European Council. And there was a sense of urgency also because the EU Heads of State and Government understand how critically important it is to use all the elements we have now to boost growth. The Commission intends to build on this momentum and will present a range of ideas for improving Single Market governance and filling the implementation gap ahead of the June European Council, so in some weeks.

Ladies and gentlemen,

The path back to stability and growth is long and requires hard work and determination by all of us. COSAC is a crucial forum for partnership in the effort to get us out of the crisis.

Building partnership and ownership with national parliaments is essential not only to drive forward the Single Market and make sure its benefits are actually delivered on the ground, but also to promote Europe's future growth and prosperity across the board.

The scale of the economic crisis is ample proof of how interlinked and interdependent our economies have become, and I believe it is proof of how closely we need to work together to overcome it.

We must use these links to our advantage and use them to build a strong and united European economy.

That is why I launched the political dialogue with individual national parliaments almost exactly six years ago, even before the Lisbon Treaty was adopted, and why I very much welcome opportunities such as this to speak with representatives of the national parliaments and of course the European Parliament. And I am happy to see that this year with myself four members of the Commission will participate in your debates.

The Commission remains convinced that building constructive relations with you based on transparency, mutual trust and respect can contribute significantly to bringing about a qualitative change in the public debate on European issues.

The involvement of national parliaments in European policy making is essential, and it is precisely this approach that is enshrined in the European Semester – a process of economic policy coordination between Member States and the European Institutions that is currently in its second year.

The European Semester is a process of mutual discipline, support, practical guidance and workable solutions to the problems we face today.

Through the new economic governance framework we now have, the European Union is tackling its economic problems and taking its economic decisions in a more integrated and coordinated way than ever before.

We must also use this approach in implementing the Europe 2020 Strategy in a coherent and committed manner, with buy-in from all levels of society. One of the main tools for delivering the Europe 2020 growth strategy will be the European Union's future budget, the Multi-annual Financial Framework.

By investing in networks, in infrastructure and in research on a European scale, it will channel resources that can help to complete the internal market by filling the gaps that Member States alone would not.

That is why some investments must be front-loaded and that is why the Commission proposed launching pilot project bonds, even before the next Multiannual Financial Framework. The European Council agreed to this proposal in March, and I hope to see these large-scale projects getting off the ground very soon. Once again we also need targeted public investments at the European level.

The European budget can play a vital role in shaping our capacity to meet our common goal of creating a smart, sustainable and inclusive economy, and I look for your support in maintaining this level of ambition throughout the current negotiations.

On this note, I would like very sincerely to thank the Danish Presidency, and in particular Eva Kjaer Hansen, Chairwoman of the EU Affairs Committee of the Danish parliament, for their commitment to intensifying political dialogue between the Commission and the national parliaments.

We are equally determined to intensify contacts with national parliaments on Commission proposals and initiatives, in particular in the framework of economic governance. As I have said very often, we need two levels of democracy. We need European democracy, The European Parliament is so critically important, but we also need the national level of democracy. Only through cooperation between those two levels can we address important issues of legitimacy, ownership and leadership at European level. It would be a mistake to think that European Union can be lead only by Brussels, that is simply not our idea. We have to have the ownership of projects like Europe 2020, like the reforms of the Single Market at all levels, from European to the national level.

Ladies and gentlemen,

Let me conclude, we have a common goal - to get Europe's businesses growing again and to ensure our citizens have quality and sustainable jobs. This is, I think, the most important concern for our citizens – employment, jobs with quality. We have a strategy to achieve this goal – the Europe 2020 strategy. The strategy is comprehensive and flexible enough to support any kind of new initiative for growth at European level.

And we have a number of tools at our disposal to implement it. The Single Market is a central component of this growth strategy.

Lifting barriers requires little in the way of investment but can bring huge returns and deliver the economic benefit that our businesses and citizens need. Achieving it requires coherence, determination, but also partnership, real spirit of partnership. I know this sense of partnership is already well established between us and I have every confidence that we can enhance it in the months and years ahead in the pursuit of our common goal.

Thank you for your attention.

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