Category Archives: Internal market: general framework

The internal market is one of the pillars of the European Union. Completed in 1992, the single market is an area without internal frontiers in which persons, goods, services and capital can move freely, in accordance with the Treaty establishing the European Community. The internal market is essential for prosperity, growth and employment in the EU, contributing to the achievement of its objectives under the Lisbon strategy. As an integrated, open and competitive area, it in fact promotes mobility, competitiveness and innovation, interacting in particular with the EU sectoral policies. To ensure that everyone, citizen or business, can make the most of the advantages of the single market, the EU concentrates on dismantling barriers still impeding its operation. It seeks to harmonise legislation in order to improve its response to the challenges of globalisation and to adapt to advances, such as the new technologies.

Internal Market

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Internal Market

Internal Market Contents

  • Internal market: general framework
  • Living and working in the internal market: Free movement of people, asylum and immigration, free movement of workers
  • Single Market for Goods: Free movement of goods, technical harmonisation, product labelling and packaging, consumer safety, pharmaceutical and cosmetic products, chemical products, motor vehicles, construction, external dimension
  • Single market for services: Free movement of services, professional occupations, services of general interest, transport, Information Society, postal services, financial services, banks, insurance, securities markets
  • Single market for capital: Free movement of capital, economic and monetary union, economic and private stakeholders, fiscal aspects, combating fraud, external relations
  • Businesses in the internal market: Company law, public procurement, intellectual property

See also

Living and working in the internal market.
Overviews of European Union: Internal market.
Further information: the Internal Market and Services Directorate-General of the European Commission.

Interim report on the single market in the 21st century

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Interim report on the single market in the 21st century

Outline of the Community (European Union) legislation about Interim report on the single market in the 21st century

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Internal market: general framework

Interim report on the single market in the 21st century

Document or Iniciative

Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions issued 21 February 2007 – “A single market for citizens – interim report to the 2007 Spring European Council” [COM (2007) 60 final – not published in the Official Journal].

Summary

This interim report presents a vision of the 21st century single market. The single market represents one of the greatest and most tangible successes of the European Union (EU). It enables Europe to benefit from a more dynamic and competitive economy, where social rights are guaranteed alongside high standards of health, safety and the environment.

The single market makes consumers and businesses equal winners:

  • Consumers benefit from a wider choice of products and services at lower prices and with higher levels of quality/safety;
  • Businesses operate within a common set of rules and benefit from a market which has 500 million consumers.

Nevertheless, the reality of the single market is constantly developing: it will never be “finalised”, nor will it be “complete”. On the contrary, it is necessary to confront the new types of barriers and challenges (globalisation, structural developments, EU expansion, etc.) that emerge as markets develop. To do this, the single market of the 21st century is expected to make markets work better and deliver even greater tangible benefits to European citizens in an enlarged European Union.

A vision for the 21st century

The real challenge for the single market in the 21st century is to adapt the application of the existing regulatory framework and to respond appropriately to the dynamism of the world economy. The document identifies six key aspects:

  • a single market for consumers and citizens
    Benefits for consumers need to be even more tangible, within a framework of significant enhanced protection and quality for European products and services as well as for imports;
  • a single market for an integrated economy
    A single integrated market is essential to ensure fair and effective competition among businesses. A greater role for SMEs, creation of a European labour market, the spread of the use of the euro, more significant pan-European financial markets and investment in trans-European networks contribute to the further integration of the European economy;
  • a single market for a knowledge society
    Markets for highly knowledge- and technology-intensive goods and services need to be supported by confronting their fragmentation;
  • a single market for a well regulated Europe
    Now is the time to examine how all rules applicable throughout the whole Community are implemented, check if they are having the desired effects and, if necessary, make the required changes;
  • a single market for a sustainable Europe
    It is vital to both recognise and support the social and environmental aspects of the single market, by anticipating and supporting the process of globalisation;
  • a single market open to the world
    Europe must continue to act as a global standard-setter in the commercial and investment sectors.

Making the vision a reality

In order to make the vision of the single market a reality, the EU will make more efficient and consistent use of a range of instruments from various policy domains (domestic market, competition, tax and customs, etc.), reducing unnecessary administration costs.

The EU will need to adopt new approaches, which will benefit from a greater evaluation of the requirements of those within the single market and of the social impact of further integration.

Given the increased diversity in a Union of 27 Member States, it will be advisable to use a range of diverse and flexible instruments (harmonisation – mutual recognition, directives – regulations), with greater reliance on networks and by enhancing the ownership of the single market in the Member States.

The opportunities of the single market need to be better communicated and more accessible to citizens, businesses and local and regional authorities. Furthermore, priorities for the single market need to be linked to the global agenda, including the recent round of bilateral trade negotiations.

The EU will have recourse to the neighbourhood policy; it will reinforce benchmarking and bilateral cooperation on rules and will ensure that consumers benefit properly from the openness to global markets.

The annex to the Communication contains actual examples of what the single market has accomplished.

Background

This interim report aims to present the guidelines for an in-depth review and a new vision for the single market of the future. It is based on the findings of a public consultation, “Eurobarometer” polls and a public hearing as well as on input from other EU institutions. A full review of the single market, based on various studies and analyses, will be completed before the end of 2007.

Associated Acts

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions – The European Interest: Succeeding in the age of globalisation – Contribution of the Commission to the October Meeting of Heads of State and Government [COM (2007) 581 final – not published in the Official Journal].

This Communication, produced as part of the preparation for the informal meeting held on 18 and 19 October 2007 with Heads of State and Government, indicates the course Europe should follow in order to deal with globalisation and reveals how the Lisbon Strategy for Growth and Jobs represents the cornerstone of its approach.

Strategy for the internal market

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Strategy for the internal market

Outline of the Community (European Union) legislation about Strategy for the internal market

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Internal market: general framework

Strategy for the internal market

To define a strategy for the internal market for the period 2000-2004, based on four major objectives: to improve the quality of life of citizens, to enhance the efficiency of Community product and capital markets, to improve the business environment and to exploit the achievements of the internal market in a changing world.

Document or Iniciative

Communication from the Commission to the European Parliament and the Council of 24 November 1999 – Strategy for Europe’s Internal Market [COM(1999) 624 final – Not published in the Official Journal].

Summary

This Communication sets out the Commission’s strategy for the Union’s internal market for the next five years. It follows on from the 1997 single market action plan.

This strategy proposes four major strategic objectives:

  • to improve the quality of life of citizensto enhance the efficiency of Community product and capital marketsto improve the business environmentto exploit the achievements of the internal market in a changing world.

In order to attain these objectives, target actions are planned; these will run for a period of 18 months. Initially there will be 100 target actions (of which 30 will be new initiatives). These actions will be subject to review, beginning in April 2000 and continuing on an annual basis.

Strategic objective 1: To improve quality of life (Citizens)

The completion of the internal market must take into account citizens’ demands in terms of quality of life and sustainable development. Three operational objectives have been set:

Citizens 1: To ensure that the internal market contributes to sustainable and balanced development.

To achieve this objective, the following target actions are planned:

Legislative actions
– Commission proposal for a European Parliament and Council Directive amending the insolvency Directive (80/987/EEC)
June 2000
– Adoption by the European Parliament and the Council of a Directive on the promotion of electricity from renewable energy sources in the internal market in electricity
– Adoption by the European Parliament and the Council of a Directive on information and consultation of workers in the EC		 December 2000
Non-legislative actions
– Interpretative Commission Communication to clarify how environmental considerations may be taken into account in public procurement
June 2000
– Second Cohesion Report examining the effects of the internal market on cohesion
– Commission Recommendation on how to integrate environmental considerations into financial reporting		 December 2000
– Publication of a guide to the application of Articles 28-30 of the Treaty to national environmental measures
– Incorporation of environmental considerations into the activities of the European standards bodies		 June 2001

Citizens 2: To enhance citizens’ health and safety and promote their economic interests.
To achieve this objective, the following target actions are planned:

Legislative actions
– Implementation of the financial services action plan (see also “Markets 2”)
– Adoption by the European Parliament and the Council of a proposal in 2004 to repeal the Directive on general product safety (92/59/EEC)
– Adoption by the European Parliament and the Council of a Directive on the manufacture, presentation and sale of tobacco products
– Commission proposal to amend the Directive on door-to-door sales (85/577/EEC)
– Commission proposal to amend the Directive on misleading advertising (84/450/EEC)
– Commission proposal to amend the consumer credit Directive (87/102/EEC, as amended by Directive 90/88/EEC)
June 2000
Non-legislative actions
– Commission Communication on commercial communications and sales promotion (see also “Business 4”)
Commission White Paper on food safety
– Commission Communication on the safety of services
– Commission Communication on overindebtedness
– Commission Recommendation on horizontal consumer aspects of services of general interest
– Commission Communication on passenger protection in air transport
– Commission Communication on legal aid in civil matters
– Commission Communication on priorities in European road safety
June 2000
– Commission Green Paper on access to justice and redress for consumers
– Commission Recommendations on “green claims” (environmental promotion)
– Commission Communication on increasing administrative cooperation in health and consumer protection		 December 2000
– Implementation of a Community safety system in the air transport sector June 2001

Citizens 3: To reinforce and promote the full use of the rights of citizens.
To achieve this objective, the following target actions are planned:

Legislative actions
– Adoption by the European Parliament and the Council of a proposal to extend the scope of Regulation 1408/71 on the coordination of social security schemes to include non-EU nationals
– Adoption by the European Parliament and the Council of a proposal to replace Regulation 1408/71 on the coordination of social security schemes with a new simplified and modernised Regulation
– Commission proposal for a Regulation on a common format for the EU passport
June 2000
– Commission proposal to amend the Directive on the second general system for the recognition of professional qualifications (92/51/EEC) December 2000
– Commission proposal for a Regulation to revise the Directives on the right of residence (90/364, 90/365, 93/96, 68/360)
– Commission proposal for a Regulation on a common format for residence permits		 June 2001
Non-legislative actions
– “Dialogue with Citizens and Business”:
– Promotion campaign to be launched in January 2000
– Publication of a guide on exercising rights in the single market
– Commission Communication on the effects of the “Dialogue”
– Launch of a new “Citizens” website on rights and opportunities in the internal market
Publication of a guide to data protection
June 2000
– Commission Communication on the future of recognition of professional qualifications
– Provision of a complete “self-service” package for jobseekers and employers on the EURES website, with a personalised service from Euro-advisers
– Provision of a complete and updated database for citizens on living and working conditions and on labour markets in the Member States		 December 2000

Strategic objective 2: To enhance the efficiency of Community product and capital markets (Markets)

In order to enhance the competitiveness of its economy, the EU needs competitive goods, services and capital markets. The economic reform process agreed by the Cardiff European Council will play a part in this.

Markets 1: To encourage economic reform in the interests of market efficiency.
To achieve this objective, the following target actions are planned:

– Annual adoption of the Commission Communication on economic reform – Report on the functioning of product and capital markets in the EU (Cardiff Report)
– Annual implementation by the Member States of country-specific recommendations on the reform of product and capital markets contained in the Broad Economic Policy Guidelines

Markets 2: To ensure financial services deliver their full potential.
To achieve this objective, the following target actions are planned:

– Implementation of financial services action plan

A number of actions in the action plan may help to meet other operational objectives, such as those relating to consumer interests, the digital age, the multilateral trading system, company law and the fight against criminal activities in the internal market

Markets 3: To maximise the benefits to the internal market of the digital age.
To achieve this objective, the following target actions are planned:

Legislative actions
– Adoption by the European Parliament and the Council of a Directive on electronic commerce

– Adoption by the European Parliament and the Council of a Directive on copyright and related rights in the information society
– Commission proposal for a Directive on the patentability of software
June 2000
– Commission proposal to guarantee compatibility of the current VAT system with electronic commerce December 2000
Non-legislative actions
– Commission Communication concerning rules on access to cable for broadcasting and information society services
– Action to support initiatives for on-line out of court redress
June 2000
– Establishing a dialogue with industry and consumers as part of the development of the integrated framework for electronic commerce June 2001

Markets 4: To encourage creativity and innovation by adequately protecting industrial and intellectual property rights.
To achieve this objective, the following target actions are planned:

Legislative actions
– Commission proposal for a Regulation on the Community patent
– Adoption by the European Parliament and the Council of a Directive on utility models- Adoption by the European Parliament and the Council of a Directive on artists’ resale rights
June 2000
– Adoption by the Council of the proposal for a Regulation on Community designs June 2001
Non-legislative actions
– Commission Communication as a follow-up to the Green Paper on counterfeiting and piracy
June 2000

Markets 5: To secure effective market-opening legislation in the utilities and transport sectors, whilst preserving universal services.
To achieve this objective, the following target actions are planned:

Legislative actions
– Follow-up to review of existing telecommunications legislation: Commission proposal for a framework Directive and four specific Directives
– Adoption by the European Parliament and the Council of a Directive establishing rules on airport charges
– Adoption by the European Parliament and the Council of Directives to amend Directives 91/440/EEC and 95/18/EC and to replace Directive 95/19/EC (rail revitalisation package)
June 2000
– Commission proposal for a European Parliament and Council Regulation amending Council Regulation (EEC) No 1191/69 (public service in inland transport) December 2000
– Adoption by the European Parliament and the Council of a Regulation updating the TENs guidelines June 2001
Non-legislative actions
– Due transposition and full implementation of Directive 97/67/EC on the liberalisation of postal services
– Due transposition and full implementation of Directive 96/92/EC concerning common rules for the internal market in electricity.
June 2000
– Due transposition of Directive 98/30/EC concerning common rules for the internal market in natural gas
– Interpretative Commission Communication on concessions		 December 2000
– Sixth Commission report on the implementation of telecommunications rules
– Implementation of the Communication on the creation of a single European airspace		 June 2001

Strategic objective 3: To improve the business environment (Business)

The removal of barriers to the free movement of goods, services, capital and people will only have the desired effect if the business environment is favourable. Five operational objectives have been set:

Business 1: A shared determination of the Commission and Member States to ensure that market integration is not undermined by anti-competitive practices.
To achieve this objective, the following target actions are planned:

Legislative actions
– Commission proposal to modernise the rules on competition for the application of Articles 81 and 82 of the EC Treaty
– Adoption by the Commission of block exemption Regulations for state aid to SMEs, for training aid and on the de minimis rule
– Commission proposal for a European Parliament and Council Regulation amending Council Regulation (EEC) No 1107/70 (state aid for inland transport)		 December 2000
Non-legislative actions
– Adoption by the Commission of guidelines to the block exemption Regulation for vertical restraints
June 2000
– Review of the Commission’s policy on horizontal cooperation agreements
– Follow-up to the Commission Communication on the application of state aid rules to measures relating to direct taxation of companies		 December 2000

Business 2: To eliminate tax barriers to the internal market and unfair tax competition.
To achieve this objective, the following target actions are planned:

Legislative actions
– Adoption by the Council of the Directive on taxation of savings
– Adoption by the Council of the Directive on interest and royalties

– Adoption by the Council of the Directive on energy taxation
June 2000
– Commission proposal for consolidation of the sixth VAT Directive (77/388/EEC)

– Commission proposal for modernisation of VAT legislation in the internal market
– Commission proposal for a comprehensive package of measures to modernise the system of excise duties in the internal market
– Commission proposal for a comprehensive package of measures against tax provisions which restrict taxpayers’ access to the internal market		 December 2000
Non-legislative actions
– Code of conduct on unfair tax competition: agreement on withdrawal or amendment of tax measures which are harmful according to the code
– Commission report on company taxation in the EU
June 2000
– Commission report to the Council on the system of excise duties in the internal market on mineral oils, tobacco and other goods December 2000

Business 3: To improve the effectiveness of the legal framework.
To achieve this objective, the following target actions are planned:

Non-legislative actions
– Launch of pilot project offering Community support to national initiatives in the field of administrative cooperation
June 2000
– All Member States to reduce their transposition deficit to less than 1.5 % December 2000
– Commission Communication on a comprehensive EU strategy on administrative cooperation to promote effective application of rules June 2001

Business 4: To eliminate the remaining obstacles to cross-border trade.
To achieve this objective, the following target actions are planned:

Legislative actions
– Commission proposal for a legislative package on public procurement
June 2000
– Adoption by the European Parliament and the Council of Directives on the EC service provision card December 2000
Non-legislative actions
– Commission Communication on commercial communications and sales promotion
– Commission Communication on patent agents
– Implementation of specific measures contained in the Council Resolution on standardisation
June 2000
– Follow-up measures to Green Paper on product liability (85/374/EEC)
– Commission report evaluating the implementation of policy on products conformity marking
– Agreement on 50 harmonised standards relating to construction products		 December 2000
– Implementation by Member States and the Commission of specific measures contained in the Commission Communication and the Council Resolution on mutual recognition
– Assessment of the results of the forthcoming study on remaining barriers to trade in business services		 June 2001

Business 5: To reduce the regulatory burden on business, particularly SMEs, and help business take advantage of internal market opportunities.
To achieve this objective, the following target actions are planned:

Legislative actions
– Adoption by the European Parliament and the Council of a Directive to combat late payments in commercial transactions
June 2000
– Commission proposal to amend the first and second Directives on company law (post-SLIM) (68/151/EEC and 77/91/EEC) December 2000
– Adoption by the Council of the proposed Regulation and Directive on the European company statute and associated proposals (Statute for a European Association, Statute for a European Cooperative Society, Statute for a European mutual society) June 2001
Non-legislative actions
– Evaluation of projects to promote better regulation (SLIM and the Business Test Panel)
– Implementation of BEST action plan
– Dialogue with Citizens and Business:
– Commission Communication on access for SMEs to public procurement markets
June 2000
– First report on the quantitative results of the Business Feedback Mechanism December 2000

Strategic objective 4: To exploit the achievements of the internal market in a changing world (External)

The internal market must be considered in the context of the global economy. Furthermore, the future enlargement of the Union also represents a challenge to the operation of existing rules. Two operational objectives have been set:

External 1: To contribute to the shaping of the multilateral trading system for the next century.
To achieve this objective, the following target actions are planned:

Legislative actions
Commission to complete negotiations with the Council of Europe on:
– a draft Recommendation on the protection of personal data collected and processed for insurance purposes
– a draft protocol concerning Community accession to Council of Europe Convention 108 on the processing of personal data
– an additional protocol to Convention 108 in accordance with Directive 95/46/EC

– Commission Decision, based on Article 25(6) of Directive 95/46/EC, assessing the adequacy of the level of data protection in some third countries
June 2000
– Adoption of a Council Decision on ratification of the WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT) on behalf of the EC December 2000
Non-legislative actions
– Continuing work to set minimum standards at international level, notably within the Word Intellectual Property Organisation, on protection of audiovisual performances, broadcasters’ rights and non-original databases
June 2000
– Identification and promotion of instruments developed in the internal market which could be applied in the context of multilateral trade agreements, such as a transparent regulatory environment with procedures and principles which aim to harmonise standards December 2000

External 2: To ensure that the internal market contributes to a successful enlargement of the Community.
To achieve this objective, the following target actions are planned:

Non-legislative actions
– Joint meeting of the Internal Market Advisory Committee and representatives of the applicant countries
– Joint meeting of heads of the coordination centres and representatives of the applicant countries
– Collaboration with the applicant countries with a view to establishing a coordination centre in each one
December 2000
– More targeted use of pre-accession strategies, such as intensification of twinning arrangements on internal market issues June 2001

Related Acts

Commission Communication from the Commission to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions – 2000 Review of the Internal Market Strategy [COM(2000) 257 final – Not published in the Official Journal].
This Communication provides a first review of the actions targeted by the Internal Market Strategy and identified in the original document. It also aims to carry forward the objective set at the Lisbon European Council, i.e. to make the EU the most competitive and dynamic knowledge-based economy in the world. This calls for major structural improvements which depend, in particular, on developing the internal market.
The Communication therefore focuses on actions which make a significant and immediate impact on improving the working of the internal market. These priority actions relate in particular to enhancing the efficiency of Community product and capital markets, improving the quality of life of citizens and exploiting the achievements of the internal market in a changing world.
In addition to providing an initial review of the target actions (some of which have a deadline of 30 June 2000), this Communication proposes shifting the half-yearly deadlines from June and December respectively so as to align them with the timing of the annual review.

Internal market Strategy – Priorities 2003-2006

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Internal market Strategy – Priorities 2003-2006

Outline of the Community (European Union) legislation about Internal market Strategy – Priorities 2003-2006

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Internal market: general framework

Internal market Strategy – Priorities 2003-2006

The aim of this strategy is to strengthen the internal market to take full advantage of an enlarged market counting 25 Member States. To this end, the strategy draws up a list of priorities and a work schedule for the period 2003-2006.

Document or Iniciative

Internal Market Strategy – Priorities 2003-2006 [COM(2003) 238 final – Not published in the Official Journal].

Summary

The strategy is aimed at strengthening the foundations of the internal market: barriers to trade in goods and services must be eliminated, and it must be ensured that European legislation is applied and implemented correctly. The strategy therefore sets out a list of priorities and a schedule for putting them into practice. This should be regarded as a joint work schedule to which the Council, the Parliament and the Member States should devote all their efforts.

Priorities

Facilitating the free movement of goods. Technical obstacles continue to hamper the free movement of goods between Member States and cross-border trade still remains more costly and complex than doing business within a Member State. Free movement of goods (and services) is based above all on confidence in the controls carried out by other Member States. There is therefore a need for measures that strengthen this confidence in the operation of the legal framework for the free movement of goods.

The Commission is proposing the adoption of a new Community Regulation that establishes the key principles of mutual recognition, particularly mandatory notification when mutual recognition is refused. The Commission will first of all consult widely with all parties concerned. With regard to the new approach in the field of technical harmonisation, the Commission has set out the improvements it intends to make in a recent communication on the new approach. The development of European standards could be speeded up through better cooperation among the European standardisation organisations. The Commission will sign partnership and performance contracts with these organisations in 2003. When it comes to sustainable economic development, the Commission plans to take measures, particularly the adoption of a communication and a framework directive, which ensure that environmental requirements are not an impediment to free movement. As regards product safety, the Commission will report on the application of the new reinforced directive in 2006.

Integrating services markets. In the field of services, there are still considerable differences between Member States in their detailed legislation, which is a barrier to the free movement of services. These barriers affect all stages of the business process from the establishment of the business right through to after-sales service, which deters companies, and particularly small and medium-sized enterprises (SMEs), from operating in another Member State.

The Council and Parliament should adopt the proposed regulation on sales promotion and the directive on the recognition of professional qualifications. In 2003, the Commission will also make a proposal for a directive on services in the internal market which will establish a clear and balanced legal framework. Subject to the results of a feasibility study, there are also plans to propose the extension of the screening mechanism for draft national technical regulations (to cover services other than information society services). The remaining Financial Services Action Plan (FSAP) measures, notably the Prospectus Directive, the Investment Services Directive, the Transparency Directive, the Consumer Credit Directive, and the Retail Financial Services Directive should be adopted. The plans for 2003 also include a communication on clearing and settlement in the single European payments area and facilitating cross-border share trading. In early 2004, the Commission will propose a new capital adequacy directive.

Setting up high quality network industries. Over the past ten years, network industry markets have opened up significantly thanks to technological developments and Community legislation. Network industries are subject to specific public service obligations. The Commission will shortly publish a Green Paper in order to launch a wide-ranging debate on the issues to be resolved in this field.

Massive investment will be needed to raise the quality of the infrastructure in Europe, particularly in the accession countries. A closer partnership between the public and private sectors would be useful in generating this investment although some questions still need to be answered.

With regard to the transport sector, the Council and Parliament should rapidly adopt the “second railway package”, the proposal on controlled competition for public transport, the package designed to create a single European sky and access to port services. The Commission is to negotiate an open skies agreement with the USA. The Commission intends to bring forward proposals to open the passenger transport market. The Council should rapidly adopt and implement the “energy package” to liberalise the gas and energy markets completely by 2007. The Commission will also undertake a review of the situation in the water and waste-water sector. The directive on opening up substantial sections of the postal services market to competition should be implemented in full.

Reducing the impact of tax obstacles. The existence of 25 different systems of corporate taxation poses a problem for the smooth operation of the internal market. Problems such as the current system of VAT, transfers between two companies in the same group, different tax rates between Member States (e.g. on dividends) and others act as a strong disincentive to cross-border commitments in the internal market.

To reduce tax obstacles, the Commission proposes a revision of the Parent/Subsidiary Directive and of the Merger Directive. In the longer term, the Commission aims to introduce a common consolidated corporate tax base at EU level. On VAT, the Commission will issue a communication setting out measures to modernise and simplify the existing system. On vehicle taxation, it recommends that registration tax should be phased out. On dividends, the Commission will take action to ensure non-discriminatory treatment.

Expanding procurement opportunities. Cross-border participation in contract award procedures is still limited. This lack of competition in the field of public procurement leads to lost business opportunities and, especially, the inefficient use of taxpayers’ money. The various national rules should therefore be simplified and harmonised as regards competitive tendering procedures. Public-private partnerships should be encouraged.

The Council and Parliament should adopt the legislative procurement package. Transposition of this legislative package into national law could provide an excellent opportunity for Member States to streamline and simplify their legislation and applicable procedures. The Commission will suggest that Member States confer onto an existing national surveillance authority (or onto another national body) the power to bring cases before a review body or court to seek effective remedies. The recently established public procurement network should be extended to include all Member States and the European Economic Area (EEA). The Member States should ensure that all their operational e-procurement systems are in full compliance with the requirements of the legislative package by the time it enters into force. In the area of European defence procurement, the Commission will present an interpretative Communication of the European Court of Justice’s most recent rulings on such matters, as well as a Green Paper on European defence procurement in 2004.

Improving conditions for business. The policy measures required to foster entrepreneurship and innovation are within the direct control of Member States. The Commission organises exchanges of experience and best practice in this field through its BEST programme. However, Internal Market policies are also directly relevant to boosting entrepreneurship and innovation within what is an increasingly knowledge based economy.

The Council should rapidly adopt the final version of the Regulation providing for a Community patent. Likewise, the Directive to strengthen the enforcement of intellectual property rights and the Directive on the patentability of computer-implemented inventions should also be adopted quickly. State aid should be cut back. The Commission will adopt an action plan on company law and corporate governance in the EU. Shorter term actions will include proposals on company law, cross-border mergers and cross-border transfers of seat. The take-over bids Directive should be adopted without delay.

Meeting the demographic challenge. The ageing of the population presents a challenge for pension systems, economic growth, public finances and health systems. Certain measures at Community level can play a useful role as regards occupational pensions, particularly in establishing a prudential framework allowing pension funds to operate efficiently in the Internal Market.

Member States must implement the Pension Funds Directive as planned. After consulting the social partners, the Commission might propose a Directive on the portability of occupational pensions. In addition, the Commission will continue its determined action to tackle tax discrimination against pension funds established in other Member States. In the area of health services – upon which the free movement of persons in the internal market has an impact – the Commission will launch a consultation process in order to develop a shared vision with the Member States.

Simplifying the regulatory environment. Improving and simplifying the regulatory environment is essential for competitiveness. It is also important when transposing European legislation into Member State law.

The Commission will launch a wide-ranging reflection and consultation on the legislative architecture of the Internal Market and issue its conclusions in 2004. The idea of an Internal Market “compatibility test” will be developed with the European Parliament and the Council to offer guidance to legislators at national level as to how to reduce, in the longer term, the risks of the fragmentation of the internal market. The Commission invites the Council to establish a horizontal working group on “better regulation” with which the Commission could interact. Indicators will be developed in cooperation with the Member States to measure progress, particularly in reducing administrative burdens

Enforcing the rules. Member States must play an active role in the day-to-day management of the Internal Market in order to ensure the effective application of the measures taken. The only ways of resolving a problem are to lodge a complaint with the Commission, which could lead to infringement procedures against a Member State, or litigation at national level. These two options involve slow, and sometimes expensive, procedures. The Commission has developed the SOLVIT initiative that is intended to improve the proper application of internal market rules.

Member States should set more ambitious transposition targets to maintain the political pressure on the transposition of directives. The Commission will issue a Recommendation on “best practices” and intensify its preventive dialogue with the Member States. There could also be a case for obliging the Member States to notify the Commission of measures electronically and to provide it with concordance tables. A standard transposition period (2 years), standard sanctions clauses and standard clauses to put administrative cooperation on a stronger footing could all be developed. The Commission also asks Member States to half their number of infringements by 2006.

The Commission will set up a special section on the EUROPA web site informing citizens and businesses how to defend their rights under Community legislation. To improve consumer protection, the Commission will propose a Regulation which will establish a network of public enforcement authorities throughout the European Union.

Improving information policy. Citizens and businesses need to know about their internal market rights and opportunities so that they can make the most of this market. An information policy is thus vital to take the internal market forward.

Member States should develop national plans to raise general awareness of internal market opportunities among their own citizens and businesses. Special attention should be paid to the new Member States, with the existing information tools being expanded gradually. New Internet portals will be set up. The Euroguichets network will be extended so that there is at least one European Consumer Centre in each Member State.

Getting the best out of the enlarged internal market

Incorporating the Community acquis and the enforcement of Community legislation in the new Member States is no small task. There will inevitably be some problems during the initial post-accession period, but these will need to be solved at an early stage in order to avoid the need to invoke the safeguard clause. This clause, which is intended to protect the smooth functioning of the internal market, can be used by the Commission up until 1 May 2007.

The Accession Countries could notify the Commission of their implementing measures even before accession, which facilitates the process of notification and checking of conformity with Community law. The Commission urges the Accession Countries to quickly complete the screening of their legislation and to repeal any discriminatory rules and regulations. The competent authorities and enforcement officials looking at the implications of enlargement should be kept fully informed. The Commission urges officials from the Accession Countries to attend short-term traineeships.

International context of the internal market

Following enlargement, the next challenge for the EU is to develop closer relationships with our new neighbours – Russia, Ukraine, Moldova, Belarus and the Southern Mediterranean countries. Provided that they progressively align their regulations with ours, they could be offered better access to European markets. In today’s highly globalised economy, a regulation adopted in another country can have an impact in the EU. The result is that European regulators now need to be much more systematic about talking to their counterparts in our major trading partners.

To implement the “new neighbours” concept, new agreements could be concluded with these countries to supplement the Partnership and Cooperation Agreements or Association Agreements which already exist. The Commission will continue to promote and defend the EU’s regulatory approach within international bodies, such as the World Trade Organization (WTO) and the World Intellectual Property Organization (WIPO). The Commission will also strengthen the dialogue with the USA on financial markets. In addition, the Commission will seek to improve controls at external frontiers via a common risk management approach.

Monitoring

This strategy will be monitored on three levels. The first task is to check whether the proposed measures have been adopted on time. The second task is to ensure that the measures adopted are being properly enforced. Finally, the impact of these measures must be measured, i.e. their effect on markets, businesses and other economic operators.

The Commission already has some indicators to measure the effectiveness of its policies in certain specific sectors. An implementation report on the internal market strategy will be compiled to supplement the report on the functioning of product and capital markets (the “Cardiff” Report), the competitiveness report, and the different Commission Scoreboards.

29.The Annex to this Communication is made up of tables containing the measures for this strategy as well as a provisional timetable.

Background

The Internal Market Strategy is one of the key economic policy coordination instruments at EU level, alongside the Broad Economic Policy Guidelines (BEPG) and the Employment Guidelines (EG). This strategy will also be an important input into the work of the new Competitiveness Council. It is, moreover, a response to the European Parliament’s calls for a new initiative to speed up the delivery of key reforms.

The new internal market strategy should also provide a fresh boost in realising the ambitious objective set by the Lisbon process by 2010. Furthermore, with enlargement only a year away, the internal market needs to be strengthened in order to avoid the risk of fragmentation and to take full advantage of the opportunities this enlarged market offers to the Member States. Finally, the strategy should help press ahead with the structural reforms required in order to increase the growth capacity of Europe’s economies.

Related Acts

Communication from the Commission “Second Implementation Report of the Internal Market Strategy 2003-2006” [COM(2005) 11 final – Not published in the Official Journal].
The second report on the implementation of the Internal Market Strategy (2003-2006) states that in 2004 the integration of the Internal Market slowed down. The Commission stresses the importance of stepping up integration of the market in the Union of the 25, which offers scope for a significant increase in trade and investment in the short and medium term. The measures adopted in areas such as financial services, network industries or company law in the enlarged Internal Market will soon begin producing positive effects on the ground.

As for the legal framework for the Internal Market, two thirds of the legislative improvement measures that the Commission wished to see in 2004 were fully adopted. However, the report mentions that several important Commission proposals still need to be decided on in Council and Parliament – i.e. those concerning the Community patent, simplification of the recognition of professional qualifications, and pan-European sales promotions

The Commission therefore proposed that urgent action be taken on four fronts:

  • Completing the legal framework;
  • Taking better care of the existing framework;
  • Ensuring greater consistency and synergy with other Community policies;
  • Ensuring the Internal Market legal framework is better attuned to the global economic framework.

Communication from the Commission “Report on the implementation of the Internal Market Strategy (2003-2006)” [COM(2004) 22 final – Not published in the Official Journal].

In January 2004, the Commission presented its first report on the implementation of the Internal Market Strategy for 2003-2006. In general, the Commission noted that the results recorded in the first eight months after the strategy was adopted were mixed. Over half of the actions which were to be completed by the end of 2003 have been delivered on time. However, many of those which have been delayed are legislative files which are important, or even crucial, for the EU’s future competitiveness.

The Commission therefore proposed that urgent action be taken during 2004 on two fronts:

  • first, on the key legislative files such as the Community Patent, the enforcement of intellectual property rights, the recognition of professional qualifications, and the Financial Services Action Plan;
  • second, the development and implementation of the concept of “better governance”, and more specifically that Member States need to work together in partnership and perform the necessary tasks which are incumbent upon them (faster and better transposition of European law, stronger co-operation between national administrations, etc.).

According to the Commission, success will help breathe new life into the ” Lisbon strategy” and strengthen the foundations of the internal market (more intra-EU trade, more competition, better productivity, etc.).

The Internal Market Information System

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The Internal Market Information System

Outline of the Community (European Union) legislation about The Internal Market Information System

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Internal market > Internal market: general framework

The Internal Market Information System (IMI)

Document or Iniciative

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 6 November 2008 “Delivering the benefits of the single market through enhanced administrative cooperation” [COM(2008) 703 final – Not published in the Official Journal].

Summary

The internal market information system (IMI) is an electronic tool designed to support administrative cooperation in the field of legislation relating to the internal market. The IMI helps competent authorities in Member States to overcome practical difficulties related in particular to differences in administrative culture, the use of different languages and the identification of partners in other Member States.

The IMI is a secure internet application, available to all administrations in the thirty countries of the European Economic Area (EEA). It is available in all European Union languages.

Principles

The IMI is based on three key principles:

  • it does not impose additional obligations on Member States in terms of administrative cooperation;
  • it is flexible enough to adapt to the diverse administrative structures and cultures in Europe;
  • it is a single system, designed to be able to integrate many pieces of Internal Market legislation which avoids a proliferation of information systems.

Benefits

The system offers many benefits. In particular Member States are able to manage a single relationship with the network instead of 29 separate bilateral relationships, communicate using a clear working method by joint agreement, reduce language problems, save resources and time, and improve service quality through increased transparency and predictability.

Data protection

As IMI is used for the exchange of personal data, relevant legislation fully applies to the system in terms of data protection. Moreover, Commission Decision 2008/49/EC lays down the functions, rights and obligations of IMI users.

Context

The creation of the IMI was motivated by the importance of administrative cooperation in setting up a dynamic single market, in accordance with the Lisbon Strategy. The IMI should also contribute to strengthening the application of Community law at national level, and therefore the implementation of the “Better Regulation” programme. It is also part of the i2010 eGovernment Action Plan.

A first pilot project was launched in November 2007 for four professions referred to in Directive 2005/36/EC on the recognition of professional qualifications. The system will be progressively extended to other professions.

A second pilot project was launched in January 2009 on the basis of the ‘Services’ Directive. It should last until 28 December 2009, at which date the Directive should be fully transposed by the Member States. The aim is to prepare the implementation of an operational IMI system, covering all service activities by the end of 2009. In the future, the IMI could also be used to strengthen administrative cooperation in other sectors covered by internal market legislation.

Related Acts

Commission Recommendation of 26 March 2009 on data protection guidelines for the Internal Market Information System (IMI) [Official Journal L100 of 18.4.2009].
This Recommendation invites Member States to take measures to implement the guidelines in the Annex. The guidelines concern data protection, the safeguards built into the system and the risks associated with its use.

National IMI coordinators are also encouraged to make contacts with their national data protection authorities with a view to implementing these guidelines in accordance with national law.

The European Commission is to be informed of the implementation of these guidelines not later than nine months after the adoption of this Recommendation.

Single market: improving its functioning

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Single market: improving its functioning

Outline of the Community (European Union) legislation about Single market: improving its functioning

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Internal market > Internal market: general framework

Single market: improving its functioning

Document or Iniciative

Commission Recommendation 2009/524/EC of 29 June 2009 on measures to improve the functioning of the single market (Text with EEA relevance).

Summary

This Recommendation aims to improve the functioning of the single market. It presents a set of measures intended to guarantee the application of the Community rules and to promote best practices which already exist in certain Member States.

Improving coordination and cooperation

This Recommendation invites Member States to designate a new authority or to use the existing structures in their national administration to ensure that a body assumes responsibility for coordination with regard to the single market. Government ministries and public bodies must also cooperate with each other.

The European Commission also considers it pertinent to bring together responsibilities for a number of single market related activities within a single authority.

Cooperation between national authorities is strongly encouraged, on the one hand in order to make the existing networks such as the IMI, RAPEX or RASFF more operational and, on the other hand, to ensure that the responses to Commission requests concerning the application of single market rules at national level are more effective. From this perspective, this Recommendation encourages Member States to follow the example of cooperation between Nordic and Baltic countries in the context of market surveillance.

Improving the transposition of single market rules

Member States are invited to prepare actively for the transposition, application and enforcement of single market directives at national level.

It is crucial that relevant information is communicated between national administrations and national, regional and devolved parliaments in order to raise awareness of negotiations and the process for the transposition of Community rules. To this end, some Member States draw up national impact assessments when a directive is tabled by the Commission.

Improving market monitoring and the application of rules

The Commission recommends that Member States take measures aimed at monitoring the market, by using analysis carried out by academics, consultants, National Statistical offices or complaint handling bodies.

Local stakeholders are also strongly encouraged to participate in the market monitoring process.

In addition, officials responsible for applying single market rules should be able to receive continued training on Community law in general and single market rules in particular.

Promoting problem-solving mechanisms

This Recommendation encourages Member States to develop non-judicial problem-solving mechanisms and to participate in existing Community systems such as SOLVIT.

As far as the national judiciary is concerned, Member States must provide to judges basic training in Community law and single market rules to enable them to take better account of the requirements of Community law in their judgments.

Assessing national legislation

It is important that Member States should ensure the monitoring and assessment of national legislation implementing single market rules in order to rectify any deficiency or error in the application of Community rules without delay.

The Commission proposes that Member States should develop ex-post impact assessment reports or audits to monitor the implementation of single market directives.

Informing citizens and businesses about their rights

Citizens and businesses can obtain information about their rights from the Community information services within national administrations. It is therefore vital to ensure increased coordination between the national contact points responsible for these Community information services.

The Your Europe portal should be more visible and provide clearer information online.

Information campaigns and programmes should be launched to report the benefits and opportunities offered by the single market.

Context

The Communication “A single market for 21st century Europe” emphasised a number of shortcomings of the single market due to poor application of and non-compliance with Community rules. The Commission has therefore reviewed the single market with the aim of proposing specific measures for citizens and businesses to ensure that they benefit from the economic advantages created by this market.

Single Market Act: improving our work, business and exchanges with one another

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Single Market Act: improving our work, business and exchanges with one another

Outline of the Community (European Union) legislation about Single Market Act: improving our work, business and exchanges with one another

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Single Market Act: improving our work, business and exchanges with one another

th anniversary of the introduction of the single market. During the past two decades, the creation of the single market, with the opening of borders, has been one of the main driving forces behind growth in Europe. Recent globalisation and technological change have created new challenges for the European Union (EU). This Single Market Act therefore proposes to meet these challenges by putting businesses and Europeans at the heart of the single market in order to create a reliable tool to promote growth.

Document or Iniciative

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 27 October 2010 – Towards a Single Market Act For a highly competitive social market economy 50 proposals for improving our work, business and exchanges with one another [COM(2010) 608 final – Not published in the Official Journal].

Summary

This Communication sets out various measures proposed by the European Commission in order to relaunch the single market and make it a driving force for growth again, so as to promote a social market economy. These measures concern businesses, citizens and the governance of the single market. The Single Market Act is an initiative presented jointly with the EU Citizenship Report 2010.

Measures proposed for businesses

In the European Union (EU), 20 million businesses employ 175 million citizens and supply goods and services to 500 million consumers both in the EU and abroad.

The Commission hopes to encourage and protect the creative potential of businesses by combating piracy. The Commission therefore intends to propose an action plan against counterfeiting and piracy in 2010, as well as a framework directive on the management of copyrights in 2011.

The Single Market Act aims to promote new approaches towards sustainable growth. One of these approaches concerns the development of the market in services on the basis of the ‘mutual evaluation’ process set out in the Services Directive. It also provides for initiatives to develop electronic commerce. To enhance the ‘sustainable’ nature of growth, the Commission will revise the Energy Tax Directive in 2011. As a further step, the Commission will present an energy efficiency plan in 2011.

European small and medium-sized enterprises (SMEs) represent a significant source of innovation and jobs. To develop this potential, the Commission hopes to adopt an action plan in 2011 for improving SME access to capital markets. It also aims to link the Small Business Act with the 2020 strategy. In addition, it proposes a review of the accounting Directives to simplify SMEs’ financial reporting obligations.

To fund innovation and long-term investment, the Commission hopes to create project bonds to finance European projects. In addition, it proposes to eliminate any tax treatment that hampers cross-border activities and to make the awarding of contracts more flexible.

The Single Market Act lays the foundations of a business-friendly legal and fiscal environment. From this perspective, the Commission hopes to propose a Directive on a common consolidated corporate tax base (CCCTB) in 2011. A new VAT strategy is to be presented in the same year.

The EU must strengthen its competitiveness on international markets by further developing regulatory cooperation with its main trading partners. The idea is to develop an instrument which draws on the implementation of the EU’s international commitments.

Measures proposed for citizens

Public services and key infrastructure must be improved. To this end, the Commission intends to present a Communication including a series of measures on services of general interest. Concerning transport, the Commission hopes to adopt a revision of the guidelines for the development of the trans-European transport network. The Commission also intends to adopt energy infrastructure priorities up to 2020/2030.

In addition, it is of paramount importance to increase solidarity in the single market. The Commission must therefore conduct a systematic analysis of the social impact of proposed legislation. It also intends to re-examine the Directive on the activities and surveillance of pension funds in 2011, and to launch a consultation with the social partners in order to create a European framework for industrial restructuring.

One objective of the Single Market Act is to guarantee access to employment and lifelong learning. The system for the recognition of professional qualifications should therefore be reformed, based on an evaluation of the acquis in 2011. In addition, mobility for young people is to be encouraged by developing a ‘Youth on the Move’ card.

New resources for the social market economy must be developed. The first step in this respect must be to improve the quality of the current legal structures (foundations, cooperatives, mutual associations, etc.) linked to the social economy. The Commission also intends to launch a public consultation on corporate governance, and to propose a Social Business Initiative in 2011.

Consumers are also at the heart of the single act for the internal market. The Commission therefore intends to evaluate existing practices concerning price comparison websites and to draw up guidelines for these websites based on Member States’ best practices. It also intends to draw up a multiannual action plan for the development of European market surveillance. Its priorities also include identifying and eliminating tax obstacles.

Measures proposed for good governance of the single market

The Commission is responsible for enforcing the rules of the single market. Member States are therefore called upon to increase the rate of transposition of the single market directives and to notify the transposition measures.

Good governance of the single market must be based on a genuine electronic network for European administrations. The Commission therefore intends to present a strategy on extending the Internal Market Information System in 2011.

Dispute resolution must be improved. European consumers lose 0.3 % of Europe’s GNP each year due to sales of defective goods or sub-standard services. To overcome these problems, the Commission intends to adopt an initiative on the use of alternative dispute resolution in the EU, and a recommendation on the network of alternative dispute resolution systems for financial services.

To provide citizens and businesses with specific information on the internal market, the Commission hopes to develop the ‘Your Europe’ internet portal and to coordinate it with ‘Europe Direct’. The SOLVIT network must also be reinforced.

Finally, the Commission intends to consolidate dialogue with civil society (consumers, NGOs, trade unions, businesses, savers and local authorities).

Consultation

The Commission invites interested parties to submit their views on the relaunch of the single market by 28 February 2011.

Transposition into national law of directives relating to the internal market

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Transposition into national law of directives relating to the internal market

Outline of the Community (European Union) legislation about Transposition into national law of directives relating to the internal market

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Internal market > Internal market: general framework

Transposition into national law of directives relating to the internal market

Document or Iniciative

Recommendation from the Commission of 12 July 2004 on the transposition into national law of Directives affecting the internal market (Text with EEA relevance) [Official Journal L 98 of 16.04.05].

Summary

Due to their lack of rigour in transposing directives relating to the internal market, the Commission recommends that the Member States adopt better practices to ensure correct and timely transposition.

The directives are, by nature, measures that bind the Member States in terms of the results to be achieved. The Member States are, on the other hand, free to choose the form and means of achieving this result. To do so, the Member States have a deadline within which they must transpose the directives.

The correct and timely transposition of directives relating to the internal market is fundamental for the smooth operation of the internal market.

In a Union of twenty-five Member States, late or incorrect transposition of Directives can cause fragmentation of the internal market and make the European economy less competitive with respect to the prospects for growth and social cohesion.

Citizens and businesses should also be informed of the situation regarding the transposition of directives and the rights they have as a result.

It is entirely up to Member States to transpose Directives, in accordance with Article 10 of the EC Treaty. There are, however, procedures to encourage Member States to transpose Directives correctly and on time, and they are also monitored and penalised for incorrect or late transposition by means of:

  • infringement proceedings as provided for in Article 226 of the EC Treaty under which the Commission may take legal action before the Court of Justice against Member States for late or incorrect transposition;
  • the regular publication of the transposition records of Member States in the Internal Market Scoreboard.

Despite the effectiveness of these procedures, the Member States are not always rigorous in carrying out their obligations to transpose directives. The Commission therefore proposes a more proactive approach to remedy this. Since its 2002 Communication on better monitoring of the application of European Community law [COM(2002) 725 final], the Commission has provided assistance to Member States.

The Commission recommends in particular that Member States adopt good practices based on the examples set by certain Member States. It had already announced its intention to issue a recommendation setting out a number of good practices to ensure better and faster transposition in its communication on the Internal Market Strategy – Priorities 2003-2006. The Member States should thus focus on their procedures and national practices to ensure that they consistently meet this legal obligation, particularly by:

  • dealing with the underlying causes of incorrect or late transposition;
  • choosing the best designed and most effective procedures and practices with respect to the specific context of each Member State,
  • drawing up tables showing the correlation between directives and transposition measures;
  • refraining from adding to national implementing legislation conditions or requirements that are not necessary and which may hinder attainment of the objectives pursued by the directive.

The Annex to the Recommendation provides details on the good practices which could be followed, i.e.:

  • making correct and timely transposition a permanent political and operational priority;
  • ensuring permanent monitoring and coordination of the transposition of internal market directives at administrative and political level;
  • ensuring that preparations for transposition take place at an early stage and that they have as their aim correct and timely transposition;
  • working closely with national, regional and devolved Parliaments involved in transposition of internal market directives to ensure correct and timely transposition;
  • taking action quickly, visibly and effectively to transpose Directives whose transposition is late.

In addition, as part of the transposition procedure, when Member States submit draft implementing provisions to their national Parliaments, and when these are notified to the Commission, they should be accompanied by:

  • a declaration concerning their compliance with Community law;
  • information as to which parts of the directive have been effectively transposed.

If the transposition of a Directive is part of a wider legislative exercise, the Member States should ensure that this procedure does not delay the application of the directive.

Finally, information on transposition should appear in a publication targeted at citizens and businesses. A website set up by each Government at national level could be the ideal medium. This information should specify:

  • the transposition deadline to show whether the directive is transposed on time or whether it is late;
  • the contents of this transposition, specifying whether the directive is transposed fully or partly;
  • the legal rights of citizens of businesses depending on how the directive was transposed.

 

Internal market: general framework

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Internal market: general framework

Outline of the Community (European Union) legislation about Internal market: general framework

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Internal market > Internal market: general framework

Internal market: general framework

The internal market is one of the pillars of the European Union. Completed in 1992, the single market is an area without internal frontiers in which persons, goods, services and capital can move freely, in accordance with the Treaty establishing the European Community. The internal market is essential for prosperity, growth and employment in the EU, contributing to the achievement of its objectives under the Lisbon strategy. As an integrated, open and competitive area, it in fact promotes mobility, competitiveness and innovation, interacting in particular with the EU sectoral policies. To ensure that everyone, citizen or business, can make the most of the advantages of the single market, the EU concentrates on dismantling barriers still impeding its operation. It seeks to harmonise legislation in order to improve its response to the challenges of globalisation and to adapt to advances, such as the new technologies.

Internal Market strategy

  • Single Market Act: improving our work, business and exchanges with one another
  • Single market: improving its functioning
  • Driving European recovery
  • A single market for 21st century Europe
  • Interim report on the single market in the 21st century
  • Monitoring consumer outcomes in the single market
  • The Internal Market Information System (IMI)
  • Internal market Strategy – Priorities 2003-2006
  • Strategy for the internal market

Mutual recognition

  • The mutual recognition principle in the single market

Conflict resolution

  • Internal Market Problem Solving System (SOLVIT network)

Transposal into national law

  • Transposition into national law of directives relating to the internal market

Monitoring consumer outcomes in the single market

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Monitoring consumer outcomes in the single market

Outline of the Community (European Union) legislation about Monitoring consumer outcomes in the single market

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Internal market > Internal market: general framework

Monitoring consumer outcomes in the single market

Document or Iniciative

Communication from the Commission of 29 January 2008 – Monitoring consumer outcomes in the single market: the Consumer Markets Scoreboard [COM(2008) 31 final – Not published in the Official Journal].

Summary

The single market is not exclusively an economic project – its aim is also to improve human health, the environment and the safety of Europeans. In order to produce better results for citizens, the Commission is creating a new tool to monitor the internal market, namely the European market scoreboard for consumer goods and services. Its aim is to assess the functioning of the internal market from a consumer perspective.

This Communication presents the methodology used to assess consumer markets and the first results of the scoreboard.

The process of monitoring the consumer goods markets is broken down into two phases: a selection phase followed by an analysis phase. The selection phase aims to identify the sectors which present malfunctions. The analysis phase aims to identify the causes of these malfunctions.

The market will be studied in three dimensions, summarised below.

Identification of consumer markets

The general performances of the different sectors will be analysed using the following five indicators:

  • consumer complaints: the number of complaints varies depending on the sector, the country, consumer protection traditions and the likelihood of success following appeal;
  • price levels: differences in standards of living from one region to another and customer service can admittedly affect prices, but certain disparities sometimes give rise to the suspicion of cartels and obstacles to free competition, or obscure pricing practices preventing consumers from making an informed choice. That is why it is necessary to examine not only differences in prices but also the reasons for these differences;
  • consumer satisfaction, which is measured, for example, through product quality, the choice offered to consumers, price transparency and after-sales service;
  • changes in supplier: changes in supplier can be used to evaluate consumers’ scope for choice. This varies depending on market transparency and obstacles to change;
  • the safety of products and services: an adequate assessment should be carried out of the number of accidents and injuries caused by products and services.

Evaluation of the integration of the single retail market

An integrated single market is a market on which consumers and retailers have as much confidence in cross-border purchases as in those made in their own country. The integration of the internal retail market can be measured by the presence of retailers from other countries, direct foreign cross-border investments and cross-border retail trade. Consideration should also be given to the attitude of people who make cross-border purchases and the problems they encounter.

Benchmarking the consumer environment in the Member States

Consumer protection varies from one Member State to another. In order to assess the consumer environments of the Member States, the following aspects need to be examined:

  • the enforcement of legislation, i.e. the quality of enforcement regimes, compliance with legislation and the resources dedicated to enforcement (for example, inspections carried out);
  • redress, and consumer perceptions of redress;
  • the role of consumer organisations and consumer confidence in them;
  • the degree of consumer empowerment: in particular levels of education, information, competence and awareness.

The analysis phase

The analysis phase aims to determine the causes of market malfunctions. Identifying the causes of malfunctioning will subsequently make it possible to choose the best instrument to solve the problem, for example, competition policy for abuse of dominant position, sectoral regulation to abolish certain barriers to entry into a market, consumer policy to ensure transparency of information, etc.

Points to be studied during the analysis phase include:

  • consumer empowerment;
  • the prejudices suffered by consumers;
  • the relationship between import prices and consumer prices;
  • legislative indicators;
  • compliance with legislation;
  • quality, in particular the degree of innovation, health and the environment;
  • accessibility and affordable prices;
  • interoperability, i.e. the capacity of a system or product to function with other products.

The first consumer markets scoreboard

The first scoreboard has thrown light on a number of malfunctions in the consumer markets. It reveals, for instance, that the internal retail market of the EU is far from being integrated. In fact, Europeans still prefer to buy goods and services in their own country. Furthermore, the consumer environment differs too dramatically from one Member State to the next.

In order to improve the scoreboard, which is still incomplete owing to a lack of comparable data, the Commission intends to take the following measures as of 2008:

  • establish a harmonised classification of consumer complaints at Community level;
  • develop comparable data on prices, in cooperation with Eurostat and the national statistical offices;
  • increase the number of sectors covered.

Background

This new instrument is a continuation of the modernisation of the internal market, launched in November 2007, which has already helped to achieve progress in the telecommunications and energy sectors.