FOREWORD—WHAT THIS
REPORT IS ABOUT
FOREWORD—What this Report is about
This report is about the need for the Commission and Member States to take action in order to prevent the Single Market project from failing to achieve expectations. Often referred to as one of the greatest achievements of the European Union, it must not be allowed to slip into decline by the failure of Member States to live up to their commitments and make the Single Market a reality for all.
Achieving the completion of the Single Market is fundamental to reviving support for the European Union: in order to create, as Commission President Barroso has said, "a Europe of results", action needs to be taken now.
Policy-making and Implementation
Increased competition, lower prices and a wider choice of products and services are the potential benefits to consumers; access to an enormous home market is the potential benefit to business. In reality the failure of Member States to implement important legislation has maintained barriers and prevented the fuller completion of the Single Market. This failure is aggravated by the growing trend towards economic protectionism in a number of Member States. Misguided attempts to protect domestic industries and safeguard national jobs are preventing consumers and businesses from reaping the full benefits of a truly open Single Market.
In order to move the Single Market project forward the EU needs to reassess the tools it uses. The legislative route is not always the most effective means for achieving Single Market goals. The increased use of other, non-legislative tools will help to overcome the difficulties of legislating for an expanded EU.
We believe that achieving consistent implementation begins with effective policy-making based on detailed sector-specific understanding. In addition to better consultation upstream in the legislative process the Commission has a role to play earlier in the implementation process as a facilitator and enabler. More resources should be devoted to providing practical assistance to Member States in the process of transposing legislation in order to avoid problems of interpretation, delayed implementation or failure to enforce later on.
The focus on assisting Member States early on in the process of transposition must not come at the expense of effective enforcement when necessary.
Regulatory Authorities
National Regulatory Authorities (NRAs) must be independent of government, especially where governments have financial interests in the major market operator or national incumbent. This is essential to generate consumer and market confidence, and is the best way to ensure a fair application of the rules.
There is no need for a 'super-regulator' at EU-level in any of the sectors we considered in this inquiry, which were energy, telecommunications and financial services. However, there is a need for greater and better coordination between NRAs, especially in matters regarding the cross-border provision of services. This is essential if market access is to become a reality—especially for consumers and SMEs.
Realising the Benefits for Businesses, Citizens and Consumers
Very few SMEs are engaged in cross-border activity and this is largely due to the regulatory barriers which remain in place, and the lack of reliable information to assist businesses. The Commission has made the objective of engaging small business in the Single Market the centre-piece of its Review and we welcome and support this aim.
We conclude that values and social benefits are as important to reconnect Europe with its citizens as are economic advantages. The Commission must ensure that clear and accessible information is available about social, as well as economic, benefits.
We are concerned by evidence of support for "national champions" in some Member States. Such practices are contrary to the principles of the Single Market and will not benefit consumers or businesses. We call for a renewed commitment to the importance of free and undistorted competition and the need to complete the Single Market for the benefit of consumers and businesses alike.
Energy
Having considered the evidence, we are of the opinion that full ownership unbundling in the energy sector more satisfactorily removes the incentives for discriminatory and uncompetitive behaviour by network operators. We note the argument that security of supply is important but we are not convinced that the creation of a more comprehensive Single Market in energy would necessarily weaken international supply.
Telecommunications
The Committee supports the Commission's proposal to enable NRAs to impose functional separation as a remedy to reduce further the market power of the national incumbents. Functional separation is where an operator places the provision of certain wholesale access products in an independently operated business unit supplying all market players on equal terms and conditions, including the operator's own retail business.
Financial Services
We believe that there should be a pause in the regulation of the wholesale banking sector so that the impact of existing measures can be assessed and implementation can be encouraged. It is important for any initiatives in the retail banking sector to have a consumer-oriented approach and should be based on research and consultation. Following such research and consultation the Commission should be more willing to develop a combination of market-led and regulatory instruments.
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