STRATEGY FOR EUROPE'S INTERNAL MARKET
(20553)
11788/99
COM(99) 464
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Commission Communication on the Strategy for Europe's Internal Market.
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| Legal base:
| — |
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| Document originated:
| 5 October 1999 |
| Forwarded to the Council:
| 7 October 1999 |
| Deposited in Parliament:
| 22 October 1999 |
| Department:
| Trade and Industry |
| Basis of consideration:
| EM of 9 November |
| Previous Committee Report:
| None |
| To be discussed in Council:
| 7 December 1999 |
| Committee's assessment:
| Politically important |
| Committee's decision:
| Not cleared; awaiting further information
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The Commission Communication
5.1 The Commission argues that, as the Internal
Market matures, the strategic emphasis needs to shift away from
establishing a legal framework and "completing the Single
Market" towards improving the operation of the Market and
ensuring that an integrated strategy delivers tangible benefits
to citizens, high levels of business performance and job creation.
The bulk of the harmonising legislation has been agreed and what
is now required is a shared vision of longer-term aims with agreed
short-term operational targets. These operational targets should
form part of a rolling programme and they should be regularly
monitored and reviewed. The Commission has therefore issued this
Communication as the basis for consultation on future strategy.
5.2 In advocating a new approach, the Commission
suggests that, in order to deliver its full potential, a successful
Internal Market policy must meet two overarching goals:
- to enhance the competitiveness of the European
economy; and
- to improve the quality of life of European citizens.
5.3 To achieve these goals, the Commission
selects four strategic objectives to aim for and, under each of
these, lists operational objectives:
To improve the life of citizens
- ensure sustainable development through further
integration of Internal Market and environment policies;
- protect the interests of consumers in the Internal
Market;
- support employment and ensure co-ordination of
social protection;
- ensure that European citizens make full use of
their rights; and
- ensure that the area of freedom, security and
justice becomes a reality.
To enhance the efficiency of Community Product
and Capital Markets
- encourage economic reform in the interests of
market efficiency;
- ensure financial services deliver their full
potential;
- complete the agreed legislative framework, supported
by a common understanding of the rules and building a shared commitment
to their active enforcement;
- eliminate existing or potential obstacles to
cross-border trade and improve the application of the mutual recognition
principle;
- secure effective market-opening legislation in
the utilities and transport sectors, whilst preserving universal
service; and
- encourage creativity and innovation by adequately
protecting industrial and intellectual property rights.
To improve the business environment
- share the determination to ensure that market
integration is not undermined by anti-competitive practices;
- eliminate tax barriers to the Internal Market
and unfair tax competition; and
- create an improved and simplified legal and administrative
framework which reduces the regulatory burden on business.
To exploit the achievements of the Internal Market
in a changing world
- contribute to the shaping of a multilateral trading
system for the next century; and
- ensure that the Internal Market contributes to
a successful enlargement of the Community.
5.4 Synergies between the Internal Market
and other common policies of the EU need to be maximised, the
Commission says. In particular, Internal Market policy should
be seen as part of the new framework for the co-ordination of
economic policy. The process of economic reform triggered by the
Cardiff European Council:
" ... adds a crucial
microeconomic strand to the policy recommendations formulated
by the Commission, for discussion in the ECOFIN Council. The strategy
outlined in this Communication seeks to ensure that, in the annual
updating, the detailed target actions for the Internal Market
proposed by the Commission are in line with the priorities defined
in the Commission's recommendations for the Broad Economic Policy
Guidelines."[25]
5.5 The Commission notes that an annual
cycle has started to emerge in which Internal Market policy is
developed, linked to the Cardiff process and ECOFIN's consideration
of the Broad Economic Guidelines. The analyses by Member States
and the Commission of the functioning of product and capital markets,
submitted in the first annual round of Cardiff reports[26],
were useful in identifying problem areas in the Single Market.
Other monitoring and analytical tools which the Commission has
added, such as the Single Market Scoreboard and the feedback from
the Dialogue with Citizens and with Business, have also proved
useful.
5.6 The Commission intends to build on this
cycle by presenting an annual review and update of targets for
discussion at the second Internal Market Council each year. It
will be crucial, it says, to ensure that the annual adjustments
to the targets are consistent with the priorities for structural
reforms in product and capital markets defined in the Broad Economic
Policy Guidelines. The results of the discussion of the Internal
Market Strategy at the first Internal Market Council of each year
will, therefore, be taken into account in the Commission's proposals
for revising the targets and its recommendations for the Broad
Economic Policy Guidelines. The onus will be on the Commission
initially, and later on Member States in the Council, to maintain
a coherent approach, the Commission says.
5.7 The annual cycle which the Commission
envisages is as follows:
5.8 The Single Market Action Plan (SMAP)
was largely successful, in the Commission's view. Its work continues
in some areas, such as the transposition of EU directives. It
showed that fixing clearly-defined priorities, establishing an
agreed time frame and rigorously monitoring progress were effective
methods of "generating the desired political momentum".
But, broader strategic objectives are now needed. Although these
are set out in this Communication, the Commission has not included
a list of suggested target actions. It intends to present these,
legislative and non-legislative, to the December Internal Market
Council and the Helsinki European Council, together with the final
version of the Strategy.
5.9 The deadline for responding to this
Communication was 7 November; the Commission acknowledged that
this was tight.
The Government's view
5.10 In her EM of 9 November, the Minister
of State for Energy and Competitiveness in Europe (The Rt Hon
Helen Liddell) says:
"The Government believes
that it is beneficial to the UK for the Commission to take an
active interest in improving the operation of the Single Market.
There are a number of weak areas of the Single Market which need
to be addressed and a strategy of this sort will assist in prioritising
the key issues and in making transparent the Commission's plans.
UK priorities for action which are reflected in the Strategy include:
utilities, reducing State aids, opening up public procurement,
liberalising services.
"It is also encouraging that the Commission
sees a strong link between the Cardiff process of economic reform
and the development of the Single Market Strategy. In a small
minority of areas, such as taxation, the UK does not accept either
the case for action made by the Commission on direct tax, or their
priorities for indirect tax, and we will need to make suggestions
to the Commission to improve the strategy in this area."
Consultation
5.11 The Minister says that business organisations
have been asked for comments on the draft strategy.
Conclusion
5.12 Although the consultation period
on this document was short, the Government should have been able
to provide us with the EM summarising its response before the
7 November deadline. The Commission intends to issue a final version
of the strategy paper before the Internal Market Council on 7
December, but this, too, leaves little time for effective scrutiny.
This version has not yet been deposited.
5.13 We ask the Minister to inform us
as quickly as possible of any proposal in the final version which
it regards as contentious, and in particular of any proposals
for action on taxation. We also ask her to provide an assessment
of the likelihood of the final version being endorsed by the Council,
perhaps in the form of Conclusions.
5.14 Meanwhile, we do not clear this
document.
25 See (20208) 8586/99: HC 34-xxiv (1998-99), paragraph
12 (30 June 1999). Back
26 (19805)
5474/99; see HC 34-xi (1998-99), paragraph 13 (24 February 1999). Back
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