12 Interim review of the Single Market
|Commission Communication: A single market for citizens Interim Report to the 2007 Spring European Council
|Document originated||21 February 2007
|Deposited in Parliament||27 February 2007
|Department||Trade and Industry
|Basis of consideration||EM of 27 March 2007
|Previous Committee Report||None
|Discussed by European Council||8-9 March 2007
|Committee's assessment||Politically important
Purpose of the Interim Report
12.1 The legal base for the European Community's "single"
or "internal market" is Article 14 of the EC Treaty.
It requires the Community to adopt measures to establish an internal
market without internal frontiers and in which the free movement
of goods, persons, services and capital is ensured.
12.2 The purpose of the Interim Report is to set
out the Commission's vision for the single market in the 21st
century. It will be followed in the autumn by a Final Report and
proposals for action. The Commission says that the Interim Report
builds on the findings of its public consultations, a Eurobarometer
poll, a public hearing and contributions from other Community
12.3 The Interim Report summarises the Commission's
assessment of the benefits so far of the single market for individuals,
businesses, the economy and the environment. It goes on to argue
that the development of the market will never be complete or final.
Gaps remain in the regulatory framework and the rules are not
always or everywhere fully implemented and enforced. Moreover,
the existing rules need review and adjustment to make the single
market work better. And the market needs to continue to evolve
to take account of new developments such as globalisation, the
enlargement of the EU, climate change and technological innovation.
The Commission's vision of the single market
12.4 The Interim Report says that, in the Commission's
view, the single market in the 21st century should
- "A single market
for consumers and citizens",
which provides even more benefits for consumers and gives them
greater confidence in the quality and safety of products.
- "A single market for an integrated
economy" in which the Euro will
become the currency of most Member States and there is a flexible
pan-European financial market.
- "A single market for a knowledge society",
which encourages the development of new high-tech goods and services,
removes remaining barriers to effective competition in new business
sectors with a high knowledge content and improves the law on
intellectual property rights.
- "A single market for a well regulated
Europe" in which there is continuous
effort to implement, enforce, simplify, update and (where appropriate)
repeal existing EC regulatory legislation.
- "A single market for a sustainable
Europe", which recognises people's
concerns about "the perceived disruptive impacts of globalisation".
The Commission believes that "[r]ecognising both the social
and environment aspects of the single market are key conditions
for gaining public confidence in the single market as a means
to improve the quality of life
Market opening must therefore
be accompanied by regional development, employment, lifelong learning,
[and] social and environment policies that equip people, businesses
and territories to adapt to and benefit from change".
- "A single market, open to the world".
The Community needs to look outwards to the rest of the world
and to capitalise on the attractions of the single market to investors
and companies from outside the EU.
12.5 The Interim Report goes on to outline ways in
which to achieve the Commission's vision. They include:
- better assessment of consumer's,
the public's and businesses' needs;
- closer monitoring of the performance of the market;
- improved assessment of the social impact of further
integration and greater competition;
- better regulation;
- closer cooperation and coordination of regulation
between the responsible authorities of Member States and between
them and the EC's trading partners;
- greater international regulatory convergence;
- better market information for consumers and SMEs.
12.6 The Commission says that, in the autumn, the
report on the full review will:
"focus on what needs to be changed or done
differently to ensure that future single market policy is designed
to take advantage of and to influence globalisation in the direction
supported by EU citizens. Wherever possible the review will be
accompanied by practical proposals, [and] if needed legislative
proposals. Where this is not immediately possible the review will
indicate the steps and the timing which will lead to concrete
12.7 When the European Council considered the Interim
Report on 8-9 March 2007, it took note of the Commission's vision
of the single market and invited it "to submit an ambitious
and comprehensive review of the Single Market as early as possible
in the second half of 2007." 
The Government's view
12.8 The Minister of State for Trade, Investment
and Foreign Affairs at the Department of Trade and Industry (Mr
Ian McCartney) tells us that the Government strongly favours strengthening
the operation of the single market. He says that the Commission's
"is very much in line with UK thinking,
as set out in the recent DTI/HMT publication, 'The Single Market:
A vision for the 21st century'. That document emphasised
the need for Single Market policy to focus on the goal of promoting
growth and jobs, to prioritise actions that will bring real and
significant benefits to citizens, consumers and businesses, to
base interventions on sound understanding of markets and economic
evidence, to use the full range of Single Market tools available,
including pro-active competition policy, and not to reach automatically
for legislative solutions, to adhere to better regulation principles,
and to improve implementation and enforcement. The UK also called
for more market opening in the network industries (energy, telecoms,
postal services) and in financial services and it published new
economic evidence about the benefits that this could bring to
the wider economy."
12.9 We draw the Interim Report to the attention
of the House because of the importance of the single market. But
we consider that it would be premature to recommend it for a debate
because it contains no specific proposals for action. We look
forward to seeing the Final Report in the autumn and will scrutinise
its specific proposals in detail. Meanwhile, there are no questions
we need put to the Minister about the Interim Report and we clear
it from scrutiny.
28 Interim Report, page 6, last line. Back
Ibid, page 7, second full paragraph. Back
Ibid, page 10, second full paragraph. Back
European Council meeting on 8-9 March 2007, Presidency Conclusions,
paragraph 7. Back