PUBLIC CONSULTATION
ON A
FUTURE SINGLE MARKET POLICY
SUMMARY OF RESPONSES
1
TABLE OF CONTENTS
EXECUTIVE SUMMARY ............................................................................................ 3
INTRODUCTION AND APPROACH .......................................................................... 5
PART I: OVERVIEW OF RESPONDENTS ................................................................ 7
I.1 Representative Organisations .............................................................................................. 7
I.2 Individual Businesses .......................................................................................................... 9
I.3 Member States and Public sector ........................................................................................ 9
I.4 Geographical distribution.................................................................................................. 10
I.5 Conclusions ....................................................................................................................... 10
PART II: OVERVIEW OF MAIN RESULTS .............................................................. 11
II.1 Current state of the Single Market, its achievements and challenges.............................. 11
II.2 Priorities for future Single Market policy........................................................................ 14
II.2.1
General comments received ............................................................................... 15
II.2.2
Ensuring that Single Market policies effectively facilitate market entry and
innovation ........................................................................................................................... 16
II.2.3
Better Regulation: Stepping up efforts to ensure a high-quality framework ..... 23
II.2.4
Ensuring that Single Market rules are correctly implemented and applied in
Member States .................................................................................................................... 26
II.2.5
Responding effectively to the increasingly global environment ........................ 29
II.2.6
Information and communication to citizens and businesses .............................. 30
2
EXECUTIVE SUMMARY
The public consultation aimed to stimulate a wide debate and was designed as an
open forum welcoming comments from all stakeholders. It will feed into a discussion
on the Single Market in the 21st century and a review of the Single Market to be
prepared by the Commission by June 2007. The report attempts to do justice to all
responses received without being a statistically representative survey. Out of 1514
replies, 1272 were identical (‘standard’) responses from trade unions and citizens. The
remaining 242 responses were distinct replies sent in mainly by organisations
representing a great variety of business and non-business interests. All Member
States replied. Overall, the consultation was well received, although only few
stakeholders from new Member States, as well as few regional or local authorities
participated.
Stakeholders broadly agree that the Single Market has brought many benefits,
although some (e.g. consumer organisations, SMEs) question whether it has brought
direct advantages for consumers and small businesses. Although respondents
express overall support for the Single Market, many, in particular businesses, point out
that the Single Market is not yet complete and that ‘gaps’ need to be addressed in
services, retail financial services, insurance, transport, energy, taxation, free
movement of workers and intellectual property. Many note problems with
implementation and enforcement, and some underline the need to develop the ‘social
dimension’ of the Single Market.
Respondents strongly support the choice of priorities proposed by the public
consultation to further pursue the completion of the Single Market, namely: fostering
market dynamism and innovation; better regulation; better implementation and
enforcement; taking better account of the global context; investing more in
communication and information. They call on the Commission to develop a clearer and
more comprehensive overall vision on the Single Market along with concrete
proposals, firm economic analysis and a good communication strategy to rally the
necessary support. Some refer to the communication approach taken for the 1992
programme as an example. Businesses in particular stress the importance of the
Commission's leading role in building the Single Market.
Respondents stress that EU business environment does not sufficiently foster
innovation and many argue that Single Market policy could best help to improve the
situation by focusing on its main task of creating a barrier-free market. Others call for
more attention to be given to SMEs as main engines of the EU economy.
Furthermore, respondents offer concrete proposals on how the Single Market could
better support innovation, as well as SMEs, both essential to the success of the EU
economy (e.g. by reducing red tape, ensuring better synergy between Single Market
and competition policy, or better assessing the impact of policy proposals on
businesses).
Regarding the impact of particular policy areas on fostering innovation and market
entry, various respondents see the benefits of standard-setting in specific service
sectors, provided it is market-driven and introduced on a case-by-case basis. Others,
3
however, express reservations. Many argue that improving the intellectual property
framework should be treated as a priority, in particular in patents and copyright.
Finally, many see the opportunity for fostering innovation through public procurement
rules (including for SMEs) and stress the need for increased awareness-raising for
public authorities and SMEs, and better implementation and enforcement.
Overall, respondents applaud the Commission's efforts under the Better Regulation
agenda (e.g. increasing use of consultations). They suggest that consultations should
be made more accessible and some call for better feedback showing how
stakeholders' views were taken into account. Trade unions and consumer
organisations ask for more involvement in Single Market policy-making. Respondents
also suggest practical improvements to impact assessments and evaluations. Many
stress the need to think about alternative forms of legislation or alternatives to
legislation. There is broad agreement that better regulation efforts should be
undertaken both at the EU and national level and support for the idea of screening
national rules.
Better implementation and enforcement are widely acknowledged to be a key
priority for the future, with Commission and Member States sharing this responsibility.
Businesses, however, call for more Commission action and guidance in this field.
More attention needs to be given to increasing cooperation between and within
Member States, and creating more visible and coordinated responsibilities for the
Single Market at a national level. Given many cases of incorrect transposition, the
Commission is urged to provide more and earlier guidance on correct transposition to
national administrations (e.g. via transposition workshops). Some businesses express
concerns about the effectiveness of the enforcement at the national level and call for
more involvement and support from the Commission, and speedier infringement
procedures. Many support additional funding and publicity for SOLVIT.
All respondents highlight the importance of the global dimension of Single Market
policy although there is little concrete discussion of individual aspects. They stress that
EU rules should not create a competitive disadvantage for EU businesses globally and
are generally in favour of further extending EU regulatory dialogues. Divergent views
are expressed regarding EU's participation in international standard-setting
organisations.
Many respondents underline the need to step up efforts to inform citizens and
SMEs about the opportunities offered by the Single Market and its potential.
Communication is seen as most effective at the national, regional or even local level,
preferably in national languages, and in this context, stakeholders encourage the
Commission to think of better ways to reach citizens and businesses. For instance, the
Commission's representations could play an important role, along with information and
support networks, which need to be rationalised and better funded.
4
INTRODUCTION AND APPROACH
On 11 April 2006, Commission services (under the aegis of DG Internal Market and
Services) launched a consultation aimed at stimulating a wide and public debate on
future Single Market policy. It was designed as a quest for views and ideas on the
Single Market and therefore, was deliberately open to all stakeholders. The results of
the consultation will feed into the ‘fundamental review of the Single Market’, called for
in the Commission's Communication on ‘A Citizen's Agenda’,1 with a view to a
discussion at the June 2007 European Council about how Single Market policy can
best respond to the challenges of the 21st century. They will also feed into reflections
on the future development of the individual policy areas related to the Single Market.
The consultation addressed a wide range of stakeholders: citizens (as consumers and
workers), businesses, associations and representative bodies, public administrations
in Member States, other EU institutions as well as academia and think tanks.
Most respondents replied by mid-July 2006. Generally speaking, this public
consultation has been well received. It attracted an important number of replies from a
wide range of stakeholders. The comments received cover a broad spectrum of Single
Market policy issues and are a rich source for further debate. Commission services
welcome such a broad response, as the Single Market belongs to everyone and a
concerted effort will be needed to make the most of it for the future. At the same time,
this consultation follows earlier specialised consultations carried out for instance, in
the area of financial services, or patent policy. Therefore, its results do not reflect the
whole range of views on these policy areas2.
The consultation document had deliberately been worded in an open manner, asking
questions about stakeholders' experiences and their views on possible priorities,
rather than consulting on detailed options for future policy. It was not a ‘green paper‘
inviting ‘pros and cons’ on individual measures. This open approach left respondents
much leeway to come up with their own suggestions and raise additional ideas. The
present report reflects that open nature of the consultation.
Given that replies were received from a wide range of stakeholders, the report does
not aim to provide a statistically representative survey of opinions.3The views of
respondents described in this report do not necessarily present in all cases the
opinions held by the majority of stakeholders of a certain sector of the economy or of a
certain group of the population.
It is important to stress that this report only attempts to give an accurate summary
account of the responses as they were presented to the Commission's services. It
does not take position as to the comments received and does not seek to correct any
of the misunderstandings or factual inaccuracies, which occasionally seem to underlie
the views expressed by some respondents. Therefore, the report does not express the
1
COM (2006) 211 of 10 May 2006
Please refer to the following website to find more information about consultations related to the Single Market:
http://ec.europa.eu/internal_market/consultations/index_en.htm
3
To complement the present consultation, the Commission has also carried out statistically representative
surveys of citizens' and businesses' perceptions of the Single Market to be published shortly.
2
5
views of the Commission services (nor do the Commission services necessarily agree
with all the views expressed therein).
The Commission's feed-back on how the results of the consultation have been taken
into account will be expressed in the above-mentioned Single Market review as well as
in relevant initiatives in the policy areas related to the Single Market.
Given the wide range of topics the public consultation raised, it is impossible to do full
justice to the richness of the replies in a summary report. Those interested in reading
more are invited to consult the individual responses to the consultation 4 using the
following link: http://ec.europa.eu/internal_market/strategy/index_en.htm .
The remainder of this report is organised as follows. The report consists of two main
parts. Part I presents an overview of the number and types of replies received. Part II
summarises the main comments made by the respondents on the issues raised in the
consultation document. The consultation paper5 asked for an assessment of the
current state of the Single Market and invited comments on five possible priorities for a
future Single Market policy, including on sector-specific policies in the context of
innovation and market entry. Part II reproduces this structure and presents the
comments received on each of these topics.
4
Almost all stakeholders consented to their contributions being made public (only 10 respondents asked for their
replies not to be published). For those who requested an anonymous publication (30 respondents), we have deleted
references to their identity. To facilitate consideration of the replies, we have grouped them by broad categories of
respondents. Replies that are of particular interest for a certain sector will be considered by the officials
responsible for that sector, e.g., the unit dealing with copyright issues will continue analysing those replies
specifically on copyright issues.
5
http://ec.europa.eu/internal_market/strategy/index_en.htm
6
PART I: OVERVIEW OF RESPONDENTS
Overall, 1514 responses were received. 1272 replies were identical 'standard' replies
(the reply was drafted by national and EU level trade unions and then was submitted
by individual citizens, members of national trade unions in several Member States and
candidate countries). The rest of the replies (242) were distinct, sent in mainly by
representative organisations, but also by Member States and public sector, academia,
as well as individual businesses and citizens, all with extensive comment on the Single
Market. The standard replies criticised the lack of a proper 'social dimension' in the
Single Market. The rest of replies provided comments to a large majority of questions
posed in the public consultation document (for instance, in case of Member States),
with specialised associations or businesses mainly focusing on questions directly
relevant to their activity.
Breakdown of 242 distinct responses (excluding standard
replies)
Member States and
Public Sector
9 9
47
147
30
Individual
Businesses
Representative
Organisations
Academia/Think
tanks
Citizens
I.1 Representative Organisations
Out of the 147 representative organisations that replied, 49 operate at EU level. Most
of the main EU business organisations replied, including UNICE, UEAPME,
Eurocommerce, Eurochambres and SmallBusinessesEurope. Amongst those active at
the national level, most replies were sent by British, French and German
organisations.
7
Representative Organisations - Geographical Breakdown
60
50
49
40
30
20
20
16
13
9
10
1
HU
LU
CZ
1
1
2
1
1
1
US
2
NO
2
LI
2
RO
2
SL
3
PT
3
CY
4
EL
4
SE
5
ES
5
0
FI
BE
IT
DK
AT
DE
FR
UK
EU
Representative Organisations - Categories
Business
Organisations
11
13
Chambers of
Commerce
2
Trade Unions
15
106
Consumer
Organisations
NGOs
Replies came from a large variety of business sectors, in particular finance and
insurance, manufacturing, information and communication (including radio and TV
activities, telecoms and publishing), professional activities (including legal, accounting
and architectural services), construction and health. A few replies have also been
submitted by representatives of the ‘social economy’.
8
Business Sectors
16
15
15
15
14
11
12
10
10
8
6
6
6
4
4
2
4
3
3
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Thirteen Chambers of Commerce, including one from Romania, also supplied their
replies (including Eurochambers, Danish Chamber of Commerce).
Consumer organisations (including BEUC, ANEC, Which), non-governmental
organisations (e.g. European Citizen Action Service) and trade unions (including
ETUC, EPSU and British TUC) also showed considerable interest in the consultation.
Twelve consumer organisations and nine trade unions responded.
I.2 Individual Businesses
Thirty three individual businesses responded, most of them large enterprises active at
international level, such as Philip Morris, Microsoft, IBM, Philips Electronics and
Barclays.
I.3 Member States and Public sector
All Member States contributed to the consultation, including one acceding country
(Romania) and one EFTA state (Norway). Some Member States sent in official
governmental responses, often after due internal consultation, while others responded
at the level of individual departments. Some resubmitted their contributions to previous
debates on future Single Market policy within the Internal Market Advisory Committee
(IMAC)6 as official responses. Some regulatory authorities also participated in the
consultation. However, there have been hardly any responses from regional and local
authorities.
6
An advisory committee of Member States representatives run by DG Internal Market and Services
9
The Economic Policy Committee, a committee of the ECOFIN Council, also provided a
contribution. Several academic institutions and think tanks, as well as individual
citizens also sent in replies.
I.4 Geographical distribution
Despite the Commission's efforts to alert citizens, businesses and organisations in
new Member States to the consultation, the level of responses from the representative
organisations in new Member States is disappointing, e.g., only 6 new Member States
representative organisations replied, out of the total of 147. This appears to be in stark
contrast to the active participation of new Member States' public sector. It is
encouraging to see Romania, one of the two acceding countries, quite active in all
categories (Member States, public organisations, representative organisations,
individual business and even citizens).
The following chart shows the breakdown of distinct replies received from EU-15 and
EU-10, excluding public sector responses.
EU-15/EU-10 Breakdown (excluding public sector responses)
5%
2%
EU 15
EU 10
Romania
93%
I.5 Conclusions
Taking into account the wide ranging nature of the subject-matter under consultation,
the Commission's services consider its outcome to be very positive, given the
significant number of replies received and the depth of analysis in many responses.
The overwhelming majority of respondents come from the EU-15. In particular, very
few representative organisations or businesses from the EU-10 replied – as such, this
is a source of concern and an issue to be analysed and addressed in the future
consultations and policy-making.
As far as the public sector is concerned, responses came mostly from central
governments. There were few replies from regional or local authorities – again a point
to note for the Commission's future communication and consultation efforts.
10
PART II: OVERVIEW OF MAIN RESULTS
II.1 Current state of the Single Market, its achievements and challenges
The consultation paper started by presenting the current state of the Single Market
and the challenges it faces. It asked whether respondents agreed with the
Commission's analysis and what were their experiences of benefits from and
shortcomings of the Single Market’
The Single Market has, as a general matter, brought many benefits …
In general, most respondents agree that the Single Market has brought many benefits.
The Single Market has been a major source of economic growth in the European
Union – this is stated most explicitly by stakeholders and authorities from Member
States that acceded to the European Union recently. Many stakeholders also believe
that further market integration, along the lines of the priorities defined in the
consultation document, can help boost the EU economy.
However, some national trade unions tend to come to a different analysis. They
believe that so far economic competition and monetary stability have taken
precedence in the development of the Single Market, with too small attention being
paid to the welfare state and employment promotion.
… but they are not always tangible for citizens and small businesses
Whilst there is broad agreement that the Single Market brings important benefits, there
is less agreement on who benefits. Some say the Single Market has mainly or
exclusively promoted the interests of big business. For citizens and small businesses,
the benefits are less tangible, or - in some cases - less known. The Swedish Board of
Trade refers to a recent study indicating that individuals and most businesses make
very little use of their rights under the Single Market.
Consumer organisations broadly agree that the Single Market is, in theory, good for
consumers, since it should secure a greater choice of high quality and safe products
and services at a lower price. However, some respondents doubt whether these
benefits do in fact materialise. In areas such as the automobile sector, important price
differences remain. In other areas, such as utilities, consumers do not get the best
deal because of information asymmetries. More would therefore need to be done in
some areas in order to improve the functioning of the Single Market, to ensure that
possible benefits are passed through.
Finally, some stakeholders (public authorities and some representative organisations,
including trade unions) argue that there is an urgent need to pay more attention to
citizens’ needs and interests in the Single Market. Citizens will have confidence in the
Single Market only when they feel it serves their needs. As one trade union mentions:
‘Si l’on constate (…) une diminution d’appui des citoyens pour le marché intérieur, ce
n’est pas parce qu’ils le considèrent comme un acquis, mais, au contraire, ils ne voient
pas de bénéfices promis, ni en terme du nombre d’emplois (…), ni pour les aspects de
sécurité, de santé et de qualité de travail.’
11
…in addition, the businesses say that the Single Market is not complete yet
When drawing up a balance of Single Market results, a majority of respondents
appreciate and support the developments in the Single Market so far. However, many
stakeholders underline that the Single Market is far from complete yet.
Goods markets are well integrated, but some problems remain
Many stakeholders refer to the considerable achievements made in the goods
markets. Cross-border trade in goods is, in general, functioning rather well. Yet many
see no cause for complacency. Various difficulties are raised. First, some say that the
regulatory framework for goods remains too fragmented. According to an engineering
organisation, this is due, on the one hand, to uncertainties and inconsistencies in EU
rules, but on the other, to the frequent practice of ‘gold plating’ at the national level.
Member States frequently add product-related requirements to European standards,
with the view to meeting additional environmental and social concerns.
At the EU level, the biggest issue appears to be environmental legislation, which some
say creates unjustified burdens and leads to market fragmentation. Some
representatives of industry refer in this respect, to the difficulties encountered in the
implementation of the waste electrical and electronic equipment (WEEE) and the
restriction of the use of certain hazardous substances (RoHS) directives, which would
cause significant fragmentation problems. The choice of legal basis (article 175 of the
EC Treaty, instead of article 95) is claimed to be at the root of the problem in the
former case, as the environmental legal basis leaves more leeway to Member States
to create divergent requirements when implementing the legislation. Some
respondents feel that the Commission ought also to ensure that environmental
legislation takes better account of the Single Market dimension. In addition, it should
consider more harmonisation, on the basis of the ‘New Approach’ model, of productrelated worker protection requirements.
A second, major hurdle affecting goods markets is claimed to be weak application of
the rules and their enforcement, in particular in the non-harmonised sectors. According
to some, mutual recognition does not function well, leading to extra administrative
controls and tests, and the current system of market surveillance needs considerable
improvement. The initiatives the Commission is currently developing in this respect are
welcomed, although some say more analysis of the situation on the ground is needed
before proposals are put forward.
Finally, consumer organisations criticise the CE-marking system. The CE-mark is
directed towards the market surveillance authorities and not consumers. Yet,
consumers often misunderstand the CE mark and think of it as a ‘quality’ label.
However, in some other areas, significant ‘gaps’ are raised in the Single Market
framework
Whilst stakeholders agree that the legal framework for goods markets, and in other
areas such as public procurement or telecoms, is largely in place, it is generally felt
that important gaps remain in other areas. The following views were put forward:
12

The Single Market in services lags seriously behind. Respondents think that
the forthcoming Services Directive will, by and large, be an improvement, but it
is deemed insufficient to create well-functioning services markets. In addition,
many areas have been excluded from its scope;

Retail financial services remain very fragmented, with particular problems in
the banking and payments areas;

In general, many respondents claim that retail markets do not function well yet
on a cross-border basis in the EU. In this connection, EU retailers refer to a
recent study that compares the performance of Europe’s retail sector vis-à-vis
that of the US. It came to the conclusion that at least half of the gap is the result
of inappropriate regulation. In particular, the lack of integrated services and
payment markets, labour markets, environmental and social restrictions, and
restrictive planning/licensing laws prevent the development of proper retail
markets in the EU.

Insurance is another area where much remains to be done to create an
effective Single Market. As French insurers put it: ‘Le marché intérieur …
demeure encore très fragmenté dans le secteur de l’assurance. S’il est en
principe possible d’opérer dans tous les pays de l’UE, on constate que les
marchés financiers restent totalement cloisonnés… en fait, c’est la coexistence
de cadres réglementaires très différents qui compromet à ce jour cette
intégration.’

Transport in the European Union could also benefit from more and better
market integration. Some are of the view that Trans-European networks are still
not functioning, and domestic markets such as rail are not yet sufficiently open.

The Single Market in energy is still not a reality and deserves to be a priority
area for attention.

Although the consultation document did not address taxation issues, a fair
number of respondents from the public and private sector say that tax
disparities are a major obstacle to the implementation of the internal market. In
this context, there are in particular calls for a greater harmonisation in the VAT
area as well as for more harmonisation in the company taxation area. It is
argued that the existence of 25 different tax systems hampers the cross-border
establishment of companies and results in high costs, which also harm the
global competitiveness of the EU companies. Some also call for a better
cooperation amongst national tax authorities. Finally, trade unions and
consumer organisations denounce what they refer to as the ‘race to the bottom’
created by fragmented tax regimes within the EU.

The EU should also do more to ensure the free movement of workers,
including researchers, which could encourage more innovation. It is claimed to
be difficult to hire and transfer employees within the EU because of the lack of
portability of pension rights and differences in social security systems.
Importantly, many new Member States and businesses criticise the delays in
the free movement of workers from the new Member States. In this context,
13
reference is made to a recent Commission report showing that important
benefits can flow from labour movements from new Member States.

An area where stakeholders call for urgent attention is intellectual property.
The current IPR regime, in particular as regards patents and copyright, is not
considered satisfactory by some.
Implementation and enforcement also remain too weak
Even in sectors where the regulatory framework is largely in place (e.g. goods, public
procurement, telecoms), many report problems of implementation and enforcement.
Many stakeholders, including public administrations, also refer to cooperation
problems between administrative authorities belonging to different Member States.
According to some, the Single Market also lacks an adequate ‘social dimension’
Finally, some stakeholders, including trade unions, ‘social economy’ representatives7,
some consumer organisations and some Member States, say that the Single Market
lacks a ‘social balance’. Single Market policy is, they argue, too often simply about
liberalisation and deregulation. A number of respondents quote in this context the
Services Directive, which they perceive as too ‘liberal’. Therefore, the Single Market
needs harmonised policies in fields such as worker protection and worker
representation to avoid social dumping (in particular in view of enlargement).
In addition, some also say that a horizontal initiative is needed to safeguard the
continued provision of high quality public services in increasingly open markets. In the
words of EPSU (European Federation of Public Service Unions): a ‘European legal
framework on the protection of services of general (economic) interest is urgently
required to safeguard the participation rights of Member States, regions and
cities/municipalities in the design, organisation, financing and execution of their tasks.’
II.2 Priorities for future Single Market policy
The consultation document discussed five possible priority areas of attention for future
Single Market policy:





7
Fostering market dynamism and innovation – to ensure an innovation-friendly
market which business can access quickly;
Better Regulation – to ensure a high quality legislative and regulatory
framework;
Better implementation and enforcement – to make the most of the framework
already in place;
Taking better account of the global context – to ensure a better fit between the
internal and external environments; and
Investing more in information and communication about citizens' and
businesses' rights and benefits in the Single Market.
Cooperatives, mutual societies, associations/voluntary organisations, foundations and social enterprises.
14
The consultation document asked whether respondents agreed with these priorities
and whether in their opinion the Commission took sufficient account of costs of its
Single Market reforms.
II.2.1 General comments received
Respondents overwhelmingly agree with this choice of priorities. Some say that
meeting the globalisation challenge should be the biggest, overriding priority. Some
New Member States ask the Commission also to take account of their specific
situation as an additional priority (without however, giving much detail on how to
implement this priority).
However, a fair number of stakeholders say these priorities are not sufficient in
themselves. Many stakeholders, in particular representatives of industry, call on the
Commission and expect it to develop an overall vision on the Single Market,
more political leadership and ambition to carry it forward, and a good
communication strategy to rally the necessary support for it. For instance
Eurocommerce states, the ‘number one priority’ for the Commission should be
‘providing the leadership and commitment necessary for the completion and
successful operation of an effective Internal Market’. The same level of attention
should be given to communicating the benefits of the Single Market to citizens and
workers since ‘anyone under 40 is unlikely to remember life before the Internal Market
so they cannot be expected to enthuse over its benefits without stimulus and
encouragement.’ A similarly strong message is given by the Danish Chamber of
Commerce, who suggests that there is an ‘absolute need for providing political
leadership and commitment necessary for the completion and successful operation of
an effective internal market. We expect the Commission to take on this leadership role
more actively, especially when the national governments fail to do so.’
Businesses in particular stress the importance of the Commission’s role in building the
Single Market. They argue that developing more of a partnership with Member States
and Member States' taking ownership should not stop the Commission from vigorously
exercising its right of initiative.
According to those respondents, the Commission should develop a clear vision on
how to take the Single Market forward. Such a vision must be based on a thorough
economic analysis of the current situation (the analysis presented in the consultation
document is considered insufficient and should be complemented by more detailed
studies and reports). The Commission should identify areas of action on the basis of
analysis where real problems are occurring and look at areas which can provide the
biggest economic benefits.
Some stakeholders (in particular business) suggest that developing such evidencebased vision will require a change of culture within the Commission and in particular in
DG Internal Market and Services: ‘away from developing legislation towards vigorously
attacking the 'real' problems the Single Market is confronted with’.
Some also stress the need for clearer communication. In this context one respondent
stresses that communication cannot be treated as an afterthought and placed at the
15
bottom of the list of priorities but needs to be a starting point which determines the
success or failure of a policy. The Commission is called upon to draw lessons from the
1992 project, which was a clear communication success.
Various Member States (in particular Scandinavian countries) also urge the
Commission to present an action plan with concrete proposals for future Single Market
policy. Such a plan should clearly indicate what must be done by the Commission and
what falls to the Member States, and include a clear timetable for delivery.
Whilst many call on the Commission to develop a vision on the Single Market, there is
no consensus on what such a vision should actually be. As some point out, the Single
Market is not an end in itself (quoting former Commission President Jacques Delors
who said that ‘one cannot fall in love with the common market’). Some stakeholders
(businesses) tend to focus on the barrier-removing capacity of the Single Market,
enabling businesses to enjoy economies of scale. Others argue in favour of greater
synergy between the Single Market and industrial policy, or say that building the
Single Market should make SMEs the primary beneficiaries.
As mentioned before, various stakeholders including some Member States,
representatives of the ‘social economy’, trade unions and some consumers'
associations ask for a better acknowledgment of the social dimension of the Single
Market. Building a Single Market should not be about ‘market opening’ alone; in their
view, market opening should be accompanied by strong positive integration
(harmonisation) in the field of taxation, services of general interest and workers’
protection. Building up such social dimension would, they argue, be necessary to win
back the support of citizens for the Single Market.
Businesses frequently say that the Commission should take better account of the
costs of adapting to new regulatory requirements. It should thoroughly assess and
weigh those costs before proposing new legislation, and also provide, where
necessary, for transitional measures where costs risk being unreasonably high. Once
rules and regulations are in place, they argue that the Commission should not change
them – certainly not for the sake of driving through an agenda such as ‘simplification’.
A certain stability of the regulatory framework is important.
II.2.2 Ensuring that Single Market policies effectively facilitate market entry and
innovation
The consultation document explained the need for Single Market policy to facilitate
market entry and encourage innovation in order to ensure growth in the changing
economic circumstances. It asked whether the Single Market was seen by the
respondents as "innovation-friendly" and whether it offered sufficient opportunities for
businesses. In addition, it raised more specific questions about possible measures to
enhance market entry and innovation in EU markets in certain policy areas, such as
for instance services, IPR and public procurement.
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The Single Market should be rendered more innovation-friendly
Respondents overwhelmingly agree that European business environment does not
sufficiently foster innovation. Too often innovative ideas are developed in the EU but
are exploited or commercialised elsewhere. The Commission is called upon to have a
close look at how to promote more innovative businesses in the EU.
However, there is no agreed definition of innovation. Various stakeholders warn
against interpreting innovation too narrowly: for instance, more attention is needed to
non-technological forms of innovation, such as an innovative ‘business model’.
Further, innovation often does not happen in isolation but through collaboration; it
results for instance from the interplay between creators and users. ‘Perhaps the most
important innovation occurring today is in the changing nature of innovation’. Against
this background, many respondents welcome the proposed Commission Working
Paper on innovation in services.
Many stakeholders argue that Single Market policy can best contribute to innovation
by focusing on its core business, i.e., the creation of a barrier-free market with a stable
and level playing field. Many stress that a ‘stable’ and level playing field does not
necessarily mean a ‘uniform’ playing field however, as regulatory competition can also
be a strong driver for innovation. The better the Single Market works, the easier it will
be to realise the Lisbon targets (and the 3% Barcelona goal) because companies will
invest in R&D if there is output (and a market for it) as a result. There should be a
technologically-neutral approach towards regulation (‘the Commission must not
legislate for yesterday's problems, for a specific business model or a specific
technology’).
Many concrete suggestions are made on how the Single Market could promote
innovation, for instance by:

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
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


reducing red tape and assessing better the effect of policy proposals on
businesses;
improving IPR protection, in particular through ensuring a more affordable and
efficient patent protection system at EU level;
making it easier for SMEs to start up a business and operate within the Single
Market;
ensuring a better synergy between Single Market policy and competition policy to
bring down market entry barriers and ensure vigorous competition between
companies;
further opening up services markets;
improving the free movement of researchers;
ensuring the effective implementation of procurement law and enhancing
awareness and competence of public authorities to pursue innovative solutions
when procuring (in this respect, the proposed Commission's handbook on
innovative procurement is very much welcomed).
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Single Market policy should also do more for SMEs
To be more innovation-friendly, the Single Market should also be a more welcoming
environment for start-ups and SMEs. There is much attention paid to SMEs in the
responses to the public consultation.
Many respondents – not only those organisations representing SME interests, but also
other business organisations, public authorities and consumer organisations – argue
that Single Market policy should do more for SMEs as the backbone of the EU
economy. Therefore, Single Market policy should regard SMEs as its primary
beneficiaries. This should not mean creating special, tailor-made rules for SMEs, or
treating SMEs in a different fashion than larger companies. There should rather be a
consistent effort to ‘think small first’ when developing Single Market policy. SMEs
‘should be the rule, not the exception’. Measures that are not burdensome for SMEs
will not be burdensome for larger companies whereas the reverse is not necessarily
true. Focusing more on SMEs has consequences for the way policies are designed.
As one representative organisation puts it, it ‘should not only be a question of whether
the internal market offers many opportunities for businesses, but more importantly
whether businesses can exploit those opportunities.’
By contrast, some respondents (in particular trade unions) tend to question whether
Single Market policy should really focus on SMEs. They say SMEs are not really
interested in cross-border establishment or cross-border trade and argue that cross
border provision of services by SMEs is hindered more by cultural and language
barriers than trade barriers as such. What SMEs really need is better language
training. Single Market policy should recognise and respect this (‘the four freedoms
were never meant to be obligations’). There should also be a consistent effort to
ensure that the Single Market framework does not go against the interests of SMEs
that remain local (one contribution proposes a ‘de minimis’ test for applying EU rules
to SMEs that only occasionally operate cross-border).
Furthermore, some stakeholders draw attention to the fact that there are many
differences between SMEs. In particular, the EU regulatory framework does not
sufficiently recognise the existence of different corporate structures and cultures – in
general too little attention is paid to the cooperative companies and mutual societies
(present, in particular, in the sectors belonging to the so-called ‘social economy’).
Many suggestions are made on how Single Market policy could help SMEs, for
instance by:
 a radical implementation of the Better Regulation programme, in particular
cutting red tape and evaluating impacts;
 further reducing complexity and regulatory difference as regards tax, social and
labour law requirements, and further facilitating cross-border payments;
 making patents cheaper, strengthening the quality and enforceability of patents
for SMEs;
 improving the mobility of SMEs in the EU, for example through the creation of
a European Private Company Statute;
 improving the access of SMEs to procurement opportunities, in particular
through better training of contracting authorities and SMEs, as well as by strict
implementation of public procurement rules;
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
improving access to information and redress. The Commission could, for
instance, enhance the role of one-stop-shops or single points of contacts for
SMEs.
Innovation and market entry might be fostered through standard-setting in some
services sectors, provided it is market-driven
The consultation document raised the question whether more standardisation in
services would help render services markets more innovation-friendly. Many
respondents see the benefit of developing more standards for services, as standards
may offer a benchmark for service providers and users, and serve as guidelines which
foster innovation. Some even argue in favour of developing a ‘New Approach’ type of
initiative in the services sector (the harmonisation of essential requirements relating to
health, safety and consumer protection, leaving detailed standards to self-regulation
by the sectors concerned).
Having said this, most proponents of standards for services would not seem ready to
follow the example of standardization in the goods sectors. Virtually all responses
stress that standards should be market-driven (i.e. only when and where the market
needs standards) and on a case-by-case basis (i.e. only in sectors where there is
evidence of added value brought by standard-setting. In particular, there should be
evidence that standards improve the cross-border provision of services). Standards
should also be truly voluntary, and should be drawn up by stakeholders themselves.
Other respondents warn that standards are not widely used in services and that it is
not the Commission's job to organise standards. Benchmarking is more useful than
standard-setting. Representatives of the direct marketing and selling industry, for
instance, ‘fear standardisation could become a soft-law layer of regulation on top of
the legal requirements business has to observe’. Some also doubt whether current
standardisation bodies (specialised in goods) are competent for services and
sufficiently ‘representative’ of stakeholders. They do not like the fact that the
Commission has already given mandates to standardisation bodies such as Comité
Européen de Normalisation (CEN). Some stakeholders also warn against a possible
distortion of competition, and say that if standardisation is considered, one must
ensure that the standardisation process can keep pace with technological innovation.
Sectors where respondents would welcome standards are private employment and the
health sector. In particular, the representatives of the private employment agency
industry state that voluntary standards are increasingly used in that sector to illustrate
the quality of the service provided. National authorities also mention sectors such as
sanitary services, environmental services, leisure, construction, IT, social services and
education. But industry organisations provide examples of sectors where standardsetting would be difficult and hamper innovation since the service provider’s
competitive edge is to offer services distinct from his competitor’s services. In
particular standards would not be beneficial, it is argued, for the consulting and
tourism sectors. Pharmacist organisations, for their part, say that professional codes of
conduct deliver better results than voluntary standards.
Consumer organisations generally take the view that standards in services cannot be
an alternative for proper regulation, but otherwise tend to be divided on the added-
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value of standards. As one puts it: ‘from our experience, voluntary standards in the
services sector have so far not improved transparency, service quality and price
effectiveness’. Other consumer organisations are more in favour, whilst arguing that
standard-setting should only come on top of general EU legislation safeguarding the
interests of consumers – such as a horizontal framework on the safety of services and
on the liability of service providers. Consumer organisations also wish to be involved in
standard-setting, if and when undertaken.
There is also some controversy surrounding the liberal professions. The professional
organisations themselves (lawyers, architects) are very sceptical about further
services liberalisation, which risks undercutting the quality of service. They stress the
EU regime is already very liberal if compared to other systems. But others strongly
argue in favour of more competition in professional services. Breaking away artificial
barriers is essential to foster innovation, which in turn has a positive effect on the
quality of services. And, as one consumer organisation remarks, ‘(m)arket-restricting
professional rules are generally designed to protect the professionals rather than the
consumer’.
The health sector actively participated in the public consultation and showed an
interest in the forthcoming Commission initiative on the health sector. Many call for
regulatory intervention, given the current uncertainty as to how Single Market
principles in such a sector would work. Many also stress the benefits of more
standard-setting in the health sector, which, albeit voluntary, could instil more
confidence in patients about the level of care. Some also call for the better
mainstreaming of health issues in other EU policies, for instance by paying more
attention to health-related aspects when conducting impact assessments.
Finally, Danish industry and some Member States stress the need to improve
statistics in services, as a means to improve our knowledge about services markets.
Many call for more accessible, less costly, more effective and more innovationfriendly intellectual property regimes
Intellectual property is a much discussed area in the responses to the public
consultation. There is a sense of urgency in many replies. As a representative of the
chemical industry puts it, ‘the EU is lacking a coherent approach to IPR that is
supportive of innovation throughout the Internal Market.’
Patents: As the consultation on a future Single Market policy came in the wake of the
patent consultation, many contributors refer to points of view expressed in that
context. For the same reason, the patent issue will not be discussed here in much
detail.8 Many contributors call for the adoption of a Community Patent (COMPAT), but
express disagreement with the latest political developments on this issue as too many
compromises have diluted its benefits for users. Some consider that COMPAT is not
indispensable as better patent protection can also be achieved by, for example, the
adoption of the European Patent Litigation Agreement (EPLA); and costs of patents
can also be reduced by the rapid ratification of the London Agreement by certain
8
The preliminary findings from the patent consultation are available on the following link:
http://ec.europa.eu/internal_market/indprop/patent/hearing_en.htm
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Member States, reducing translation requirements for patents granted by the
European Patent Office (EPO). Some respondents also mention the need for
compulsory licences or national provisions to facilitate the dissemination of knowledge
and ideas. Whilst some are in favour, others (including UNICE) argue that
dissemination is sufficiently ensured through the publication of patent applications. It is
only the commercial exploitation of patented inventions which requires a licence.
Design Rights: Representatives of the automobile repair industry ask the
Commission to examine the question of design rights and copyright protection in
secondary markets. This is particularly important for some Member States, where
copyright law is used by car manufacturers to monopolise the spare parts market.
Copyright laws should therefore contain a ‘repairs clause’ in order to remedy this
situation.
Confidentiality: Representatives of the chemical industry ask for better protection of
confidential business information. The EU institutions should adopt a general
framework spelling out the principles underlining the protection of data. Furthermore,
the mechanisms for disclosure if so demanded by the public interest (i.e. the freedom
of information), the minimum criteria according to which this must be done and the
parameters used to strike the balance between the different interests at stake, should
be clarified.
Copyright is an area where controversy is prevalent. Many respondents say that
much work still needs to be done, including to keep pace with technological (digital)
developments. Given the growing importance of copyright-based activities for
economic development, the EU institutions are called upon to secure a better balance
between right holders’ rights and limitations and exceptions to those rights. In
particular, the retail entertainment industry argues that excessive right holder
protection hampers the proper development of new markets, such as that for the legal
downloading of music. Representatives of the digital technology industry point to the
monopoly of collecting societies as a major market distorting element in many
European copyright systems. ‘Now that copy protection technology, like digital rights
management (DRM) is available, copyright levies on digital products are an outdated
form of taxation that penalise consumers, artists and industry alike.’ Consumer
organisations voice similar criticism: ‘The levy system, supposedly to compensate for
private copying, is the greatest absurdity. It takes a great deal of effort to develop a
system that manages simultaneously to be anti-consumer, anti-manufacturer and antiSingle Market’.
Representatives of media and creative services are critical of possible initiatives to
‘streamline’ the way copyright content is licensed within the EU. In their view, dictating
a single model or a restriction on the industry's freedom to licence would penalise
creators and eliminate market-driven incentives to invest in the right sort of new and
diverse content that can drive new business models, products and services. So what
is needed is a flexible system based on contractual freedom, not a one-size-fits-all
solution.
Yet the criticism of the current system of copyright protection is not universally shared.
Licensing and collecting societies call for stronger copyright protection and
enforcement. They also call for the better alignment of copyright policy with other
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policies – for instance, to ensure that the country of origin principle does not apply to
copyright and to ensure that the application of competition policy is well attuned to the
realities of copyright. Publishers, for their part, are in favour of the current copyright
regime, which they see as balanced.
The enforcement of intellectual property rights also receives some attention.
Businesses criticise the ‘widespread’ practice of counterfeiting and piracy. They highly
appreciate the amended proposal for a directive on harmonising criminal measures
aimed at ensuring the enforcement of IPR. Representatives of the music industry also
point at the need to better tackle on-line piracy. The International Trademark
Association stresses the need to combat counterfeiting in the field of trademarks.
Innovation and market entry (in particular for SMEs) can also be fostered
through stepping up awareness-raising, implementation and enforcement of
public procurement rules
Stakeholders generally do not consider that new legislation is necessary to foster
market entry and innovation. In the opinion of most respondents the 2004 legislative
package functions well and already contains the appropriate instruments (a small
number, however, criticize it for not being flexible enough).
Much emphasis is given to securing the proper implementation and enforcement of
procurement rules. Several respondents point out that there is still a practice of direct
award without public procurement rules being followed at all (inter alia by interpreting
the ‘in house’ exception too widely) and that too often procurement procedures are
biased in favour of national undertakings.
Another major point raised is the lack of awareness of public authorities on how to use
the different public procurement instruments and procedures. Public authorities should
therefore be trained to use procurement in a more efficient way. In particular, public
authorities should be made better aware of ways to procure innovative solutions,
through improving guidance and organising exchanges of best practice. In this
context, many respondents welcome the preparation of a Commission's handbook on
innovation in procurement. Some stakeholders also refer to the use of regional
‘centres for excellence’ or the Public Procurement Network as possible fora for
exchanging best practice.
Some respondents argue in favour of using public procurement rules to achieve aims
such as (eco-) innovation. One contributor from the construction industry suggests
encouraging contracting authorities to authorise variants in bids and ensuring the
effective protection of confidential information presented by bidders, to avoid ’cherry
picking’. Others say that modern procurement concepts such as Private Public
Partnership (PPP) and electronic procurement can also help to promote innovative
solutions.
Many stakeholders argue that SMEs should be provided with better access to public
procurement. For instance, UEAPME claims that some tenders still allow only one
contractor to participate, there are still hidden barriers which protect national business
champions in some markets and therefore that needs of SMEs should be addressed
(in particular in the area of subcontracting). However, opinion is divided on what
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exactly needs to be done. The vast majority of respondents argue that access of
SMEs to procurement opportunities can best be enhanced through increased and
better training of public authorities and SMEs themselves. Some mention the need for
better enforcement of public procurement rules and call on contracting authorities to
ease certain tender requirements (e.g. of financial guarantees). A small number of
respondents ask the EU to consider the adoption of the European equivalent of the US
‘Small Business Act’ (with reserved percentages of public procurement contracts for
SMEs). Diagnostic manufacturers, for their part, do not like the use of central
purchasing systems by public hospitals – as this in their opinion provides limited
competition and has led to dominant positions, to the detriment in particular of SMEs.
Other industries express similar criticism of central purchasing systems.
II.2.3 Better Regulation: Stepping up efforts to ensure a high-quality framework
The consultation document described the Commission's views and policy as regards
consulting stakeholders, carrying out Impact Assessments and evaluations, and
discussed Member States' role in this area (e.g. national screening). It asked
respondents for their feedback on how ‘Better Regulation’ in of each of these aspects
is implemented in the context of Single Market policy making.
As a general rule, the Commission's efforts under the Better Regulation agenda are
very well received. Business representatives stress there is an urgent need to reduce
regulatory and administrative burdens on industry (for instance, the Austrian Chamber
of Commerce claims that the costs of excessive regulation amount to 4-6% of EU
GDP). Member States put much hope in improved impact assessments and better
consultation. Trade unions and consumer organisations call for better consultation and
say that more attention should be paid to their interests. Many stakeholders also ask
the Commission to rethink its instruments for intervention, to ensure that the right tools
are used. There seems to be much support for more systematic screening of rules and
regulations at the national level.
Consultation
In general, stakeholders praise the Commission's increasing practice of conducting
consultations. However, the Commission should strive to make its consultations more
accessible, e.g. by giving more time for replies (many say a 12 week answer period
should be a minimum). Short, specific consultations with well-targeted questions are
preferred over longer and wider ones. The Commission should also look for means to
consult early with stakeholders (e.g. by preparing 'scoping papers' or by consulting on
impact assessments). Many say the Commission should always strive to consult with
an 'open mind', not with a pre-determined option in mind. However, others say,
including some Member States, that the Commission should prepare its consultation
document in close cooperation with its main stakeholders (Member States and others).
Consumer organisations criticise the practice of offering stakeholders the possibility
not to publish their replies, which does not enhance the transparency of the decisionmaking process.
Whilst consultations are welcomed, some stakeholders question the capacity of the
Commission to listen. Many say the Commission should do a better job on reporting,
23
to demonstrate that it really analyses and assesses stakeholders' views. When the
Commission decides not to follow what its stakeholders recommend, it should offer
reasons for doing so. Some business organisations are also critical of the use of
closed questionnaires (such as Interactive Policy Making) or on-line consultations via
the European Business Test Panel (EBTP). They say that on-line consultations of
businesses by-pass traditional representative organisations and may lead to
fragmented and biased consultation results.
Trade unions generally express the feeling of being 'left out' of debates on the
Single Market. In this context, the UK's Trades Union Congress (TUC) points out that
public consultation document at issue here ‘frequently directly addresses ‘business’
and ‘firms’ but the words ‘trade unions’ and ‘social partners’ are never used.’ Some
advise the relevant Commission services to organise more specific and structural
discussions with trade unions. Trade unions refer in this context to the EC Treaty,
which in their view safeguards a right for social partners to be consulted on actions
having an effect on social policy. The practice of regular meetings between the
financial services component of DG Internal Market and Services and trade unions is
welcomed, although it does not constitute a formal means of consultation.
Consumers also ask for more involvement in Single Market policy-making. Some
argue that existing bodies (FIN-USE) are still too much business oriented and
recommend setting up an EU financial services consumer panel, modelled on a similar
UK panel, and consumer-representation in the Lamfalussy process. Some national
authorities also recommend considering setting up consumer advisory panels or
verifying consumer satisfaction levels.
Representatives of German financial institutions suggest the practice of setting up socalled ‘Fachgremien’, i.e. round tables bringing together all stakeholders to discuss
specific issues, in particular financial supervision. Other businesses call for
stakeholder group meetings, at EU and national levels, as an alternative to publishing
consultation documents.
Impact assessments
In general, stakeholders consider impact assessments (‘IA’) to be very important and
say they have improved recently. Having said this, the following comments have been
made:
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
Some say it would be preferable that IAs are conducted by other staff than
those responsible for designing legislation, so as to avoid a conflict of interest;
likewise, they say others should evaluate the effectiveness of adopted
measures on an ex-post basis;
Some ask the Commission to publish the IA before the legislative proposal
itself. They fear that if proposals and their IAs are published at the same time,
the IA does not receive the attention required;
Some also ask the Commission to structure IAs better. In this context, some
ask for the development of cost-benefit analysis schemes. Some also refer to
the Dutch administrative costs model). IAs should also include a more detailed
assessment of the costs of adjustment as according to some respondents from
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the UK financial industry, the Commission has so far not taken these sufficiently
into account;
According to some, the Secretariat-General should play a stronger role in
coordinating the policy initiatives of various DGs;
Finally, it is stressed that IAs should also be done when legislative proposals
are amended during the legislative process.
Evaluations
Respondents say that the evaluation of EU rules has been traditionally weak, although
it is improving. ‘There is rarely a proper follow-up to ensure that policies actually work.
Instead the focus has been on getting legislation through the system regardless of
whether it is actually fit for its purpose and whether doing nothing might be a better
option.’ German industry suggests more systematic evaluations, that are planned well
in advance (to feed into the development of new legislation): ‘(Es) sollte jeweils
bereits in der Begründung von Regelungsentwürfen festgelegt werden, ob and nach
welchem Zeitraum zu prüfen ist, ob die beabsichtigten Wirkungen erreicht worden
sind, ob die entstandenen Kosten in einem angemessenen Verhältnis zu den
Ergebnissen stehen und welche Nebenwirkungen eingetreten sind’.
One Member State also recommends that the Commission integrates better the
results from tools such as SOLVIT and the Red Tape Observatory in its evaluations.
The EBTP could also be used for evaluation (and not just for preparing new
legislation).
Industry representatives repeatedly stress that Better Regulation efforts should
primarily target new legislation and not so much existing rules. Some doubt the added
value of the current simplification process, which gets a high political profile and
coverage. As the Confederation of British Industry states: ‘experience from previous
simplification projects has shown that revision of directives often ends up with changes
instead of simplification’.
Much support for national screening exercises
Many stakeholders agree that better regulation efforts at the EU level must be
complemented by similar efforts at the national level, in order to ensure that unjustified
barriers to cross-border trade and competition are effectively removed.
Many stakeholders, including many national governments, favour the idea of
screening of national rules and administrative practice by Member States in
order to check their compatibility with Single Market and competition rules. The
Commission should foster the exchange of best practice and dialogue between
Member States on this issue. Member States refer in this context to the IMAC as the
appropriate forum. Various industry representatives and some Member States refer to
the work of the Danish Taskforce for the Internal Market as an example to follow.
Some warn, however, that any possible screening exercises should be well-targeted.
In addition, they should be transparent, including the publication of results.
By contrast, a small number of stakeholders (speaking for SMEs or the 'social
economy') fear that screening obligations (such as those provided for in the draft
25
Services Directive) will create pressures on Member States which might weaken the
protection of specific interests.
The Commission should conduct a more conscious selection of intervention
instruments, in function of the needs of the markets
A number of respondents address the various intervention instruments in the Single
Market. Some say that public consultation pays too little attention to the issue of
instruments, which should get a more prominent place in a future Single Market policy.
As a general rule, stakeholders stress that intervention instruments should be chosen
depending on the needs of the markets. For instance, some of them argue that in retail
markets, legislation would not be of much use since the barriers are often cultural and
linguistic or due to anti-competitive practices. One business observes that the
Commission's main focus should be on creating more competitive markets, not simply
creating uniform rules. Others warn against a tendency to equate better regulation with
less regulation.
Opinion is divided on the effectiveness of mutual recognition, as a non-regulatory
instrument. Diverging views also exist on the respective merits of the country of origin
or harmonisation approaches to legislation. In general, businesses see little merit in
minimum harmonisation approaches, because barriers to trade remain. However,
maximum harmonisation may be difficult to achieve, and may lead to the imposition of
overly strict rules.
Therefore, various stakeholders stress the need to develop more flexible solutions (for
instance, ‘New Approach’ type rules, consisting of harmonisation at the level of broad
essential requirements, combined with further technical standardisation by the sectors
involved). Some recommend an extension of the Lamfalussy method, other than to
financial services, which is seen as a more flexible response to law-making. But others
say the Commission should evaluate Lamfalussy better before extending it to other
sectors. The greatest threat may, according to some respondents, come from the
regulators themselves who may be reluctant to give up their powers. Consumer
representatives feel that they have not been sufficiently involved in Lamfalussy type
rule-making.
Many stakeholders call for an increased synergy between the Single Market and
competition policy – in particular SMEs and consumers would benefit from greater
use of competition tools to ensure that market opening is not thwarted by anticompetitive practices.
II.2.4 Ensuring that Single Market rules are correctly implemented and applied
in Member States
The consultation document explained the need for a partnership with Member States
to ensure correct application of EU law and discussed means on Member Sates' and
Commission's side to best achieve this goal. It asked in which areas there should be
more cooperation between Member States; whether their responsibility for and
coordination of the Single Market should be enhanced; and about the role of national
supervisory and regulatory authorities. As regards enforcement, it inquired about the
26
state of national enforcement mechanisms and asked for respondents' experiences
with the Commission's infringement policy.
Better implementation and enforcement is widely recognised to be a key priority for
future Single Market policy. Stakeholders recognise that this is a shared responsibility
– falling on the Commission and on Member States. Businesses express more trust in
the Commission than they do in national authorities. In particular, practices of 'goldplating', a lack of coordination and knowledge at national level are frequently brought
up. As one industry organisation states: the biggest barrier for reaping the full benefits
of the Single Market is the ‘lack of real commitment of Member States to ensure the
functioning of the Internal Market’. Many stakeholders say they are also worried by
the protectionist attitudes of some Member States – in the EU-15 in particular, but also
in the EU-10. Some new Member States are said to be re-introducing laws that
specifically aim at creating barriers for foreign companies.
Member States ask, for their part, for a clearer division of tasks between the
Commission and Member States. They also ask for more guidance (in particular with
transposition) and support (for instance, to train national judges).
Implementation and administrative cooperation
As one Member State puts it, stepping up administrative cooperation between
Member States, and even within Member States, should be an absolute priority in the
years to come. Some refer to the Internal Market Information (IMI) system, currently
being developed by the Commission, as being of great benefit.
Many respondents also stress the importance of creating more visible and
coordinated responsibilities for the Single Market at a national level. Some call
for the set-up, at the national level, of an ‘Internal Market Watchdog’, responsible for
the better functioning of the Single Market, or for the creation of national coordinators
to verify the correct transposition and implementation of EU legislation into national
law. These organisations or offices in Member States could also be responsible for
informing businesses, in particular SMEs, of the opportunities offered by the Single
Market. Some businesses draw comparison with the 1992 era, recalling that at that
time, many Member States set up offices that were in charge of coordinating the
implementation of the 1992 agenda.
As regards transposition, a recurrent theme is the need for the Commission to
provide more guidance to national administrations. Transposition workshops should
become standard practice. As a general rule the more leeway Member States have
when implementing EU law, the more it is considered necessary for the Commission
to play a strong coordination role in order to ensure that national implementing rules
are compatible with the Single Market. In this context, one respondent calls on the
Commission to seek more actively a dialogue with Member States during the process
of adopting national legislation.
Transposition Scoreboards are considered useful for keeping Member States
disciplined on transposition. It is suggested that the Scoreboards could even go further
(e.g. by assessing the economic costs of late transposition or the failure to transpose).
Many examples are given of instances where the Single Market does not
function as well as it could because of incorrect transposition. The music industry
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for example, points at many instances of incorrect implementation of the e-commerce
directive, and the food and beverages industry criticises Member States' lack of
compliance with the Packaging Directive.
The role of national supervisors and regulators, in particular in the financial
services sector, is highlighted. Many denounce a lack of coordination. Supervisory
authorities are also considered to be too powerful, in particular in the financial services
area. In the words of one organisation: ‘cross-border companies are burdened by a
bewildering array of supervisors that can all claim their powers and competences with
legal justification’. Some respondents from the insurance industry underline the need
to appoint a ‘lead supervisor’ for insurance companies operating on a cross-border
basis. There is also some debate on whether supervision is better at a national level or
at EU level. Since industries operate increasingly on a cross-border basis where there
is an increasing mismatch between EU-wide operations and national supervision. On
the other hand, whilst many call for supervision at EU level, others also acknowledge
that such ‘Europeanisation’ of supervision seems to run counter to the subsidiarity
principle.
The IT industry calls for more national cooperation to ensure network security.
Enforcement
As regards enforcement, the business community seems rather sceptical of the
possibilities offered at national level. The ‘partnership approach’ can only provide a
partial answer to the challenge of policing Single Market rules in an expanding EU –
many stress the need for a robust compliance policy, led by the Commission.
Many say that EU infringement procedures are unacceptably slow. Various
stakeholders (including Member States) plead in favour of an accelerated procedure
for cases of non-transposition (some refer in this context to the European Parliament
report, authored by Ms McCarthy MEP). Opinions are divided on priority-setting in
infringement policy. Some business circles regard priority setting with some suspicion,
as it may give the Commission even more ‘political leeway’ on infringements than it
currently enjoys. In fact, some respondents continue to deplore the fact that the
Commission has discretionary powers in the field of enforcement. For businesses,
absolute priority should be given to handling cases of non-transposition or incorrect
application, in order to fight unjustified instances of market fragmentation.
Some stakeholders ask the Commission to give greater visibility to the existence of an
infringement policy. The Commission should also devote more resources to
enforcement and give proper reward to officials conducting infringements in terms of
career development. One stakeholder comments that partnership should mean that
the Commission steps up its efforts on the communication of infringements, and that
Member States give a more systematic follow-up to infringement cases.
The SOLVIT instrument is widely praised but many say it is under-funded and underpublicised. Substantial efforts are required, at Commission and Member States' level,
to make SOLVIT deliver effectively. The Portuguese SOLVIT Centre not only mentions
that it has one of the highest rates of cases in the EU, but also gives concrete
examples of recurrent problems of Single Market policy that SOLVIT has helped to
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uncover. These include coordination between Member States on social security and
disability pensions; problems of double taxation of revenue; problems related to VAT
refunds; and access to job opportunities in the national administrations of other
Member States.
The contribution of national courts to ensuring compliance with EU rules is viewed
with some scepticism. National courts are said to lack the necessary expertise and act
too slowly. The Commission should concentrate on monitoring enforcement at the
national level, for instance by commissioning a study to assess the level of resources
that Member States devote to enforcement activity. One Member State also says it
intends to conduct an evaluation of enforcement practices at national level, with a view
to exchanging experiences and best practice, and would like to have a more in-depth
discussion on this issue.
II.2.5 Responding effectively to the increasingly global environment
The consultation document explored different ways of ensuring better correlation
between international and European policy developments in Single Market related
fields. It asked whether Single Market regulation took sufficient account of international
developments; about EU engagement in international standard-setting organisations;
and inquired about areas in which bilateral dialogues should be pursued with third
countries.
Stakeholders unanimously underscore the importance of globalisation which
constitutes an opportunity as much as a challenge – and call upon policy-makers to
define an appropriate response. However, there is little concrete discussion of this
topic in replies to the public consultation.
Some businesses call upon the Commission to ensure that EU rules do not create a
competitive disadvantage for businesses when acting globally. In this context,
they give various examples of instances where EU rules have, allegedly, failed to take
proper account of the international context (in the field of financial services: the
European savings tax directive, prospectus directive, ongoing work on UCITS; in the
field of food and drink, the EU's position as regards GMOs). Representatives of the
French authorities and French industry also ask the Commission to take better
account of the fact that some third countries have less stringent state aid policies. EU
state aid policy should be aware of this, in order to avoid creating competitive
disadvantage. The Belgian Employers Association calls for a better dovetailing of
external policy and industrial policy. The EU must focus on creating a level playing
field in sectors where its businesses have the biggest potential, or are likely to have
most competitive advantage.
On international standards and the EU's presence in standardisation bodies,
there is little agreement. Some stakeholders stress the need to ensure that EU
standards become the ‘lead’ standards. This is considered more important than the
issue of the presence of EU institutions or Member States in standard-setting bodies.
Various stakeholders mention that the Commission could be more active in promoting
its ‘New Approach’ type standards for goods world-wide. Others say that standards
ought to be truly international, and that the EU should forego the possibility of making
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its own standard when a better international standard already exists. Furthermore,
whilst some stakeholders take the view that the EU should be more present in
standard-setting bodies, others (and notably the UK insurance industry) take the view
that a heavier Commission presence in international regulatory and standard-setting
bodies is not necessary – because this would reduce the diversity of discussions and
the level of commitment of individual Member States. The responses appear to
suggest that a case-by-case approach is warranted.
There is a generally favourable view of regulatory dialogue, which should be
expanded further. The EU must push for more regulatory convergence with its main
trading partners that have demonstrated a willingness and capacity to open markets to
the EU, in particular with the USA, India, China, Japan, Argentina, Brazil and Russia.
Various stakeholders also say that trade considerations must be better taken into
account in the guidelines on impact assessments.
II.2.6 Information and communication to citizens and businesses
The consultation document discussed the need to inform EU citizens and businesses
about their rights in the Single Market and the current Commission's policy in this area.
It also stressed the Member States' role in promoting the Single Market. The
consultation document asked whether Member States and EU institutions did enough
to promote the opportunities presented by the Single Market.
Many respondents stress the need to step up efforts to inform citizens and also SMEs
on the opportunities offered by the Single Market. The Commission should develop a
clear communication strategy to overcome low support by citizens and boost their
confidence in the Single Market.
Communication is considered most effective if it is pursued at the national,
regional or local level. Various stakeholders see a possible role here for the
Commission Representations in Member States. They could be used as focal points
for the discussion of new EU-initiatives. In this way, the debate would move closer to
citizens. But respondents also call on Member States to develop national information
plans. Many stress the importance of the availability of information in national
languages. Local and regional newspapers are also recommended to communicate
about the EU at a grass-roots level. EU civil servants should also take part in national
public debates. As a Finnish academic states, ‘the traditional introvert culture of the
Commission should become extrovert also at the grass-roots level.’
Stakeholders note the various networks created by the Commission with the
purpose of providing information and assistance to citizens and consumers. Whilst
they generally say these networks are effective, there is also a feeling that ‘too many
networks have been created’. Commission-led networks need to be rationalised; they
should also be better funded to fulfil their roles. Amongst the various networks that
exist on the EU level, Chambers of Commerce cite the Euro Information Centres (EIC)
network and argue that it should be used more intensely for targeted communication
and assistance, as well as the Chamber network itself. Consumer organisations are
positive about the information role of the European Consumer Centres, but also say
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that they are under-funded. The Commission's website, which is considered to be rich
in information, is sometimes felt not to be sufficiently user-friendly.
Communication should not only focus on achievements, but also on the
potential of the Single Market. As a Danish industry representative says, the issue is
‘not so much communicating on existing victories as it is on gaining new ground. Also
the current trend towards increased protectionism towards third countries is damaging
to the European economy. It would take more than info points and communication
initiatives to reverse this tendency – and would require a very different level of
commitment and political courage.’
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