Friday, May 27, 2011

MONEY MAKING KNOW-HOW to CHANGE your LIFE | O2 | European Union strategy for Single Market

Eugene Eteris, European Studies Faculty, RSU, Riga
The EU Single Market strategy is still the nucleus and the core economic driving force in European integration. It also remains the most effective means of responding to the current economic crisis. In mid-April 2011, the Commission adopted “strategic aims” for the optimization of the Single Market, SM, which consisted of 12 main “projects” providing stimulus for prospective growth in 2012. Twelve instruments of growth, competitiveness and social progress range from worker mobility to SME finance and consumer protection, via digital content, taxation and trans-European networks.

The Commission argues, however, that the Single Market (SM) growth potential has not yet been fully exploited, despite the progress made since it was created in 1992. The Single Market must therefore open the doors to new, greener and more inclusive growth. The Single Market Act adopted in mid-April 2011 by the European Commission aims to deliver twelve projects on which to relaunch the SM progress for 2012.

These twelve instruments of growth, competitiveness and social progress range from worker mobility to SME finance and consumer protection, via digital content, taxation and trans-European networks. Their aim is to make life easier for everyone on the Single Market, i.e. in businesses, citizens, consumers and workers. See: Press Release-IP/10/1390.

Commission’s leaders on SM in 2012

The President of the European Commission, Jose Manuel Barroso declared that: “The Single Market has always been the driving force behind our economic development and prosperity and, now more than ever, it remains our best asset in facing the crisis. The twelve projects that we are launching in April will make it possible to give it new momentum which will significantly benefit businesses, workers and consumers. Our objective is a stronger Single Market in 2012”.  

The Commissioner for Internal Market and Services, Michel Barnier added: “Our proposal is a coherent response to the shortcomings of the internal market and aims at a sustainable and inclusive growth model. The Commission calls on all concerned, first and foremost the Member States and the European Parliament, to make this action plan their own by quickly adopting the twelve key measures by 2012, so as to give the initiatives of Single Market players a greater chance to benefit fully from the opportunities on offer”.

Twelve EU-wide projects: “initiative instruments”

During about four months the Commission conducted a public debate, processed opinions and conclusions among the EU institutions (more than 850 contributions were received). This enabled the Commission to identify twelve instruments for stimulating growth and boosting citizens’ confidence. Each instrument is accompanied by a flagship initiative on which the Commission undertakes to make proposals during the coming months, the aim being to gain final approval from the European Parliament and the Council before the end of 2012. Each instrument also contains other, equally important proposals which should benefit from the momentum generated by the flagship initiative in order to make progress – sometimes in parallel and sometimes at a slightly slower rate, acknowledged the Commission.

1. Access to finance for SMEs
This is a crucial measure for over 20 million small and medium-sized European enterprises which, lacking finance, often have difficulty in recruiting staff, launching new products or building up their infrastructure. The aim is therefore to put in place common rules for venture-capital funds, enabling those established in one member state to invest in any other member state and thus to provide innovative SMEs with funding combined with the necessary expertise and at an attractive price.

2. Worker mobility in SM
It is known that in 2009 about 5,8 million Europeans, equivalent to 2,5 percent of the EU active population, worked in another member state. It is recognized that the enhanced mobility for qualified workers would help the European economy to be more competitive.

The fact that many posts for highly-qualified personnel remain vacant makes this all the more urgent. By removing legal, administrative and tax obstacles, which still prevent Europeans from working where they wish to work, the Commission intends to modernise the rules for recognising professional qualifications so as to simplify procedures, review the scope of the regulated professions, and strengthen confidence and cooperation between the member states, first and foremost by issuing a European Professional Card.

3. Intellectual property rights, IPR
Intellectual property has become an important issue for consumers and businesses (as raw materials or the industrial base for production). It is calculated that between 44% and 75% of the resources of European businesses are linked to it; the IPR is a strong comparative advantage of the European Union. It is thus crucial for European competitiveness to provide unitary patent protection for inventions for as many member states as possible, the aim being to grant the first unitary patents in 2013.
See:  the BC’s analytical article on the EU patent (17 May 2011) as well as IP/11/470 and MEMO/11/240, 13 April 2011.

4. Consumers: important SM players
Consumers confidence in the Single Market greatly depends on their rights’ guarantees, argued the Commission. This means, first of all, a proper developing of alternative approaches to dispute settlement and putting in place non-judicial means of redress. Through this approach, consumers will have access to easier, quicker and cheaper procedures. This is essential to online trading, in which increased consumer confidence in cross-border electronic commerce would yield an economic gain estimated at € 2,5 billion.

5. Services: strengthening standardization
Services are the driving force behind job creation in Europe: while EU growth averaged 2,1percent per year from 1998 to 2008, the services sector grew by an average of 2,8 percent per year. Employment in the sector grew by 2 percent per year, compared with 1 percent for the economy as a whole. To make the most of this asset, the Commission proposes to revise the legislation on the European standardization system to extend it to services and make standardisation procedures more effective, efficient and inclusive.

6. Stronger European networks
Transport, energy and electronic communications networks are the backbone of the Single Market. High-performance infrastructures are the means to fast and reasonably-priced free movement of persons, goods, energy sources and data. The Commission suggested to adopt legislation on energy and transport infrastructures in order to identify strategic projects of European interest.

7. Digital Single Market
Boosting confidence in electronic transactions is a sine qua non for the development of a Digital Single Market that will fully benefit citizens, businesses and authorities, declared the Commission. It is expected that new legislation to guarantee mutual recognition of electronic identification and authentication across its territory, and a revision of the e-signature Directive to permit safe and unobstructed electronic interaction would be adopted soon.

8. Social entrepreneurship
Alongside ways of legitimately seeking financial profit, certain businesses in the EU also choose to pursue the general-interest objectives of social, ethical or environmental development. This sector generates growth and employment too. In order to encourage this, the SM needs to take full advantage of the formidable financial tool which is the European asset management industry. The Commission will propose a European framework for mutual investment funds, so as to amplify the effect of the existing national initiatives by offering these funds the opportunities provided by the Single Market.

9. Taxation
EU tax legislation no longer meets the needs of the Single Market of the 21st century or the challenges of sustainable development, argued the Commission. This situation does not give sufficient encouragement to the most energy-saving or environmentally friendly business practices. With this in mind, the Commission intends to put forward a revision of the Energy Tax Directive, aiming to guarantee consistent treatment of the various energy sources and thus take better account of the energy content of products and their CO2 emissions.
See more details in:  IP/11/468 and MEMO/11/238.

10. More social cohesion in the Single Market
To boost social cohesion in Europe, the Commission intends to make a legislative proposal for strengthening the application of the Posting of Workers Directive, so as to prevent and penalise any abuse or circumvention of the rules. It will also clarify the exercise of fundamental social rights as part of the exercise of economic freedoms.  

11. Regulatory climate for business
Businesses in Europe still too often view the Single Market as an area of constraints, not of opportunities. The company’s lives must be simplified by reducing regulatory and administrative constraints. To achieve this, the Commission is therefore proposing a simplification of the accounting Directives as regards financial reporting obligations, and a reduction of the administrative burden, especially for SMEs.

12. Public procurement
The public authorities spend some 18 percent of the EU’s GDP on goods, services and public works; such public expenditure is an essential tool for growth. European and national legislation has opened up public contracts to fair competition, giving citizens better quality at the best price. The Commission proposes to modernise this legislative framework in order to arrive at a balanced policy sustaining the demand for environmentally friendly, socially responsible and innovative goods and services, provide contracting authorities with simpler and more flexible procedures, and give SMEs easier access.


At the end of 2012 the Commission promised to make a proper analysis of the progress of this action plan and would present a new program for the next stage. Its considerations will be fed by a large-scale economic study, the results of which should help to identify any areas with still unexploited growth potential and, where appropriate, pinpoint new drivers of growth in the European Union and the member states.

Further information:
- MEMO/11/239
- Michel Barnier’s website:
- The Single Market Act:
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