Examination of Witnesses (Questions 423
- 439)
THURSDAY 13 DECEMBER 2007
Ms Jacqueline Minor and Ms Marian Grubben
Q423 Chairman: Good afternoon.
This is the afternoon session of the Select Committee on the European
Union, Sub-Committee B, on the internal market. We have to help
us this afternoon Jacqueline Minor, Director at DG Internal Market
for Directorate B, Horizontal Policy Development, and Ms Marian
Grubben, Team Leader, SOLVIT. I am going to ask you where you
are in the organisational structure of the Commission and the
European Union, and once that has happened the Committee initially
would like to learn more about what SOLVIT does and Lady Eccles
will be leading off the questioning.
Ms Minor: We both work in DG Internal Market
and Services, which is responsible for only part of the single
market, it has to be said: financial services, public procurement,
intellectual property and free movement of services. My directorate
deals with horizontal questions, namely, economic analysis, policy
co-ordination and enforcement issues, and that is where the SOLVIT
team fits in. We obviously deal with traditional infringement
proceedings which you heard about this morning but some years
ago we recognised that infringement proceedings were a rather
large sledgehammer with which sometimes to crack some small nuts
and that what business and citizens needed was a simple, swift,
inexpensive, in fact, free way of resolving problems quickly,
and that is when SOLVIT was conceived. It celebrated its fifth
anniversary this summer and Marian is its very competent and effective
Team Leader.
Ms Grubben: The SOLVIT team consists of six
people, so we are a fairly small team, and the network that we
run consists of 30 national SOLVIT centres. SOLVIT was established
in 2002. Each EU Member State has its own SOLVIT centre and the
three EEA states, Norway, Iceland and Lichtenstein, are also part
of the network. All the SOLVIT centres are part of the national
administration so they are not some sort of independent organisation
but are all based in either a ministry or another part of the
administration. This is left to the choice of the Member State.
The objective of SOLVIT is to try and solve problems that arise
with the application of EU rules, EU single market rules in particular,
in the Member States caused by national authorities and to try
and solve these problems quickly and free of charge. The deadline
that SOLVIT has set itself is to try and solve problems within
ten weeks and over the past years SOLVIT has done quite well in
reaching that target because right now the average case handling
time is around 50-55 calendar days, so that is not bad, I think,
if you look at normal administrative procedures. SOLVIT deals
with a very wide range of problems. As Jackie has just told you,
DG Internal Market is only concerned with financial services and
services in general and the application of the treaty principles,
but SOLVIT has a wider span than that. We deal also with problems
concerning taxation, social security, employment rights, free
movement of persons, residence rights, the market for products,
so it really covers the entire internal market, as is set out
in the treaty. The strong point of SOLVIT, I think, is the fact
that we can operate on a purely informal basis. If you normally
have a problem which crosses borders you would have to go via
the hierarchy and write formal letters. Member States have a tendency
to just defend the position which they have taken in the past
and it then becomes really difficult to solve things. SOLVIT was
set up from the beginning as an informal network. There is not
even a formal legal basis; there is just a Commission recommendation
that was endorsed by the Council of Ministers. In a way Member
States are just committing to the SOLVIT principles on a purely
voluntary basis and so far that has served us very well. In practice
it means that in order to solve a problem it is enough for two
people within two different Member States at the operational level
to contact each other and try and sort out the legal merits of
a particular case, to address the authority that has caused the
problem and try and convince them to come up with a proper solution.
In addition to that, another essential element for SOLVIT is the
fact that we have a very powerful IT tool. We work with a database
to which all the SOLVIT centres and the Commission are connected,
and this database allows us first of all to have a complete file
of all the cases that are going on. Of course, because of that
it also provides an enormous amount of transparency and with that
transparency you see a lot of peer pressure emerging in the network.
No SOLVIT centre wants to be at the bottom of the list when it
comes to resolution rates or case handling times and they can
all see what the others are doing. This is one of the things that
we have managed to achieve through the database. Another thing
is that because we can see the cases that are being processed
in the database, we can also keep a good eye on the quality of
the solutions that are proposed because sometimes solutions proposed
by Member States may not be entirely compatible with EU law and
that is where we from the Commission side are often called in
to come up with informal legal advice to check whether what is
being proposed is really compatible with EU principles. That gives
us an important handle on the quality of the system. Finally,
the database helps us to ensure that in all Member States a sort
of minimum type of procedure is followed and this is about informing
the clients about what is going on, about, as I said, the quality
of the solution, but also about the contacts between the SOLVIT
centres. It is with these elements that we have managed to achieve
a fairly impressive resolution rate of around 80%. As I just said,
also the average case handling time is quite good with a current
average over the past year of around 55 days.
Q424 Baroness Eccles of Moulton:
That has been a very helpful introduction. Thank you very much.
We are building up our corpus of knowledge about SOLVIT and other
ways of helping cross-border co-operation. One of the areas that
we have been concentrating on, and I think the Commission's review
has paid quite a lot of attention to it, is the situation regarding
SMEs and the extent to which SOLVIT is involved in the solving
of problems that particularly arise for SMEs and whether there
are problems in that area which affect SMEs more acutely than
other sectors. Could you tell us a bit about that please?
Ms Grubben: If we look at the origin of cases
in SOLVIT right now, two-thirds are submitted by citizens and
one third by businesses. We also last year looked at what types
of businesses we normally get in SOLVIT and the vast majority
are SMEs because probably the bigger companies have their own
ways to address this type of problem. They can afford lawyers
and they do not really rely on instruments like SOLVIT. SOLVIT
therefore has an important role to play for SMEs and if you look
at the types of problems they have submitted over the past few
years, many of them concern the provision of services, the terribly
complicated procedures they are faced with in other Member States,
all sorts of documents they have to provide. It is very difficult
sometimes in different languages to provide proof of the fact
that a document is genuine. It can cause all sorts of difficulties.
Another obvious area is marketing products. Although, according
to treaty rules, if your product is marketed in one Member State
and complies with EU standards, then you should be able to market
it in all other Member States as well, but the reality quite often
is not as rosy as that and companies are quite often faced with
demands to do re-testing of their products which can be extremely
costly and sometimes even prohibitive. What we also see are a
lot of problems in the area of taxation. One recurring problem
is late repayment of VAT and this does cause a problem for SMEs
because sometimes it concerns very big amounts which for SMEs
can be really important in terms of their bookkeeping. In these
areas SOLVIT has established quite a record and has become quite
competent in finding fast solutions.
Q425 Baroness Eccles of Moulton:
So within the regulations that exist which businesses need to
operate within in the single market is it possible for SOLVIT
to identify particular hurdles or problems that SMEs have to contend
with and therefore start a process by which improvements can be
made within the existing regulations, or is it all now so tightly
regulated, as it were, that, apart from giving guidance wherever
possible, the situation is so fixed that SMEs are always going
to have to struggle?
Ms Grubben: Of course SOLVIT in principle only
deals with problems when SMEs have already gone through the process
of finding out what they can do and what their rights are and
then still cannot enforce these rights. In SOLVIT, if you look
at the on-line complaints forms that come in, of which only 20%
are accepted as SOLVIT cases, and you then look at the other 80%,
quite often they are about the impossibility of finding decent
information about what the rules are or what they should do to
market a product. This is maybe the single most important problem
for SMEs, that if you are based in the UK and you then want to
sell your product, let us say, in Germany how do you go about
finding out what you need to do? Especially if you take the example
of Germany, a lot of things are decentralised and you really do
not know where to go and what to do first. Apart from the problem-solving
which SOLVIT does at the end of this process, there is an enormous
need for more user-friendly, targeted information for businesses
just about practical things—where do I go to achieve this,
what sort of forms do I need to fill in, that sort of thing. We
have been looking recently into the information that is provided
on the Commission Europa website and I think all services concerned
agreed that this information is not up to date, it is not complete
and it is not user-friendly. We have also been looking at examples
of similar sites that have been done by the Member States and
there we have found a couple of examples which are very good.
There is a site in the UK called Business Link. You probably know
that site. It is excellent. It is a very pragmatic way of informing
businesses about what to do and where to go and I think what we
should do at EU level is take more notice of these very good examples
that are around and try to model our own website on these examples.
Q426 Baroness Eccles of Moulton:
Can SOLVIT do that on its own or does it really have to be done
through the Commission?
Ms Grubben: This is not something that SOLVIT
does at all but it is a problem SOLVIT is confronted with because
we have these 80% of queries coming in which are not for us. So,
rather than do the signposting for 80% of the incoming complaints
it would be much better if the information tools were improved
so that we would not get all these requests for information and
that is why we were brought into this. There is another initiative
which is part of the Single Market Review. I do not know whether
that has already been mentioned.
Ms Minor: We mentioned it briefly this morning.
Ms Grubben: It is an initiative to try and streamline
all the services that we now have made available which are still
working very much in parallel. The websites certainly are not
all that user-friendly and there is enormous scope for improvement.
Q427 Baroness Eccles of Moulton:
So is that the one-stop shop?
Ms Grubben: Yes.
Q428 Baroness Eccles of Moulton:
Being able to use the internet, presumably you can see ways in
which the systems can be improved and life can be made considerably
easier for that part of the business world, which is encouraging
because that is possible to be done, is it not, and that would
mean that the 80% that you tell us about could be better accommodated
than they are now, but that is beyond your scope for dealing with?
Ms Grubben: Yes.
Ms Minor: It is beyond the scope of SOLVIT.
Q429 Baroness Eccles of Moulton:
Yes, that is what I mean.
Ms Minor: It is being addressed, perhaps not
as quickly and as vigorously as we might like but it is being
addressed as part inter alia of the reworking of the specifically
enterprise-biased network, and I still cannot remember the name
of it.
Ms Grubben: It is now Enterprise Europe Network.
Q430 Baroness Eccles of Moulton:
Where do the points of single contact come in in that arrangement?
Ms Minor: For the Services Directive?
Baroness Eccles of Moulton: Yes.
Q431 Chairman: It is only
the Services Directive.
Ms Minor: They are only for the Services Directive.
I think one of your questions was whether this was being combined
with SOLVIT. We take a fairly diffident line, which is to say
that we encourage Member States to regroup all of the different
contact points, information centres, problem-solving bodies within
their administration, ideally in some kind of single market centre—it
does not have to be a physical centre—to get the economies
of scale and the crossover of expertise of all the people, as
they do, for example, in the Czech Republic. They all have offices
down the same corridor and then they can talk to each other in
the simplest human terms. That is what we are saying, for example,
about single points of contact, that Member States might like
to consider whether these could be regrouped with the SOLVIT centres.
There are also points of contact with free movement of goods and
various other networks, but for some Member States it is a very
delicate question as to where these different bodies are situated
in their national administration, so we have to tread a little
carefully.
Q432 Baroness Eccles of Moulton:
I suppose that the existence of the web must make getting good
helpful messages across the 27 Member States easier. Can you imagine
life without it?
Ms Minor: No, not for many things.
Q433 Chairman: Can you tell
us a bit more about the Enterprise Europe Network?
Ms Grubben: It is a network run by DG Enterprise,
so that is probably why they called it that. It is based on a
merger of two existing networks. One is the Euro Info Centres;
I do not know whether you have heard of them. It is a network
of 400 different national centres which are supposed to provide
assistance to SMEs and help in finding partnerships across borders
and things like that. They have recently been merged with innovation
relay centres which also cater for SMEs to help them to turn good
ideas into practice using innovative techniques and things like
that. As of 1 February, I believe, they will start as a newly
merged network called Enterprise Europe Network, but they will
very much have the same vocation as the two separate networks
had in the past. From the SOLVIT perspective we intend to strengthen
our co-operation with this network because it is of crucial importance
that all the centres know about SOLVIT and that if SMEs come to
them with SOLVIT-able problems they know where to send these people.
Q434 Chairman: Could you just
give the Committee a couple of examples, without necessarily mentioning
confidential information about the names of the applicant or the
company, of SOLVIT cases which were solved?
Ms Grubben: The UK helpfully sent me a case
which has been solved only this week, I believe. It is an interesting
case and it is a very typical case. It is about a UK company that
manufactures marine electronics equipment, like VHF radios which
are used on vessels, and these things have been tested for the
UK market. They have been selling them everywhere. They wanted
to expand to Germany and in Germany they were confronted with
a request to retest everything. They had been struggling with
this request for a year and they could not get past it. On the
other hand they could not afford to do the retest and so they
were really stuck with this. Apparently SOLVIT UK informed me
that they have now solved this together with SOLVIT Germany and
the Bundesamt fuer Seeschifffahrt has even decided to change its
rules so that from now on this sort of request will no longer
be made and they will accept the UK testing results. That is a
very upbeat success story, I think, also because the company has
estimated that having this problem solved has saved them one million
euros; I do not know exactly how much that is in pounds but it
is rounder in euros, I guess. This is a typical case. There was
another case also relating to a UK hairdresser. He had been running
a salon in the UK for ten years and he wanted to move also to
Germany, to Berlin, but in order to open his hairdressing salon
there he had to prove that he had experience, so he handed over
a certificate from the Department for Education and Skills in
Sheffield, but the Berlin chamber of commerce said, "We have
never seen this type of paper. We cannot accept that. It cannot
be true. You have to go to your local chamber of commerce",
and this hairdresser said, "That is not the way we do things
in the UK and the Department for Education and Skills can deliver
this", so he got really stuck; he could not open his hairdressing
salon. There again the UK SOLVIT centre stepped in and they explained
that there is an EU directive which says that there is an annex
which lists all these organisations which can provide these certificates,
so it was clarified in that way and then he could open his hairdressing
salon. This is a typical SOLVIT story in the sense that many of
these problems are just caused by lack of knowledge at a local
level about what EU rules are and how to apply them. At many of
these local levels of government they only come across cross-border
problems every once in a while so they do not have the opportunity
to develop an enormous amount of expertise, and that is where
many of the problems arise. For SOLVIT it is relatively easy to
solve this type of problem, though for the persons involved it
is not; they can be stuck with something like this for years.
Q435 Baroness Eccles of Moulton:
Does protectionism come into it anywhere ever?
Ms Grubben: I guess it comes in a lot, but if
you look at the 80% of cases that do get solved that would at
least suggest that there is also an enormous willingness to be
persuaded to apply the rules correctly; otherwise we would not
manage to solve so many cases. There is a bit of that, and there
certainly is a bit of that when there is a lot of money involved,
but so many problems are really small. They are big for the SMEs
concerned but they are relatively small, so therefore they are
fairly easy to solve provided that you have a system like SOLVIT.
Q436 Lord James of Blackheath:
Is there any element of the service you provide which effectively
becomes a sort of arbitration service? Are you always fact-based
rather than opinion-based?
Ms Grubben: I guess there is always a bit of
both.
Ms Minor: There are two ways probably that you
could argue that we as the Commission intervene to mediate. The
first is that sometimes we provide support to the SOLVIT centres
in analysing the problem, in telling them what the rules are,
because some of these cases can be very arcane. There are a lot
of recognition of diplomas cases, for example, where there are
some specific directives, and there are general system directives,
and sometimes it helps to have somebody from the Commission saying,
"It is this provision of this directive which applies and
it gives this result", so we get involved there as specialist
advisers, but we also have a residual responsibility to make sure
that the solutions which are arrived at by the SOLVIT centres
are not too far out of line with Community law because the fear
of some of our colleagues, let us be honest about this, initially
was that this would become a negotiation between Member States
and they would arrive at comfortable solutions for the Member
States which were not necessarily solutions compatible with Community
law. That fear has not materialised.
Ms Grubben: No, certainly not. One of the strengths
of SOLVIT is also that SOLVIT centres are really committed to
finding solutions. It does sometimes happen, for instance, that
there is an ongoing infringement procedure where the Commission
has taken a country to court or is about to take the country to
court, and then, of course, for the SOLVIT centre the margin in
which to come up with an informal solution becomes very narrow.
However, even in those cases we have a couple of examples where
SOLVIT centres felt that nevertheless they should find a practical
solution for the person who was suffering from this problem, so
they came up with quite imaginative solutions which might not
be entirely compatible with EU law, pending the infringement procedure,
but still gave the particular person a very good solution.
Q437 Lord James of Blackheath:
Suppose I came to you—and I will not—saying, "I
manufacture capacitors and I have an order for a lot of capacitors
to be supplied to a Middle Eastern country. Can you tell me whether
I need to get an end user certificate for them because they could
be used as triggers for a nuclear bomb?". Would that be the
sort of question you would get and could you solve that one?
Ms Grubben: No. It concerns the Middle East
and we do not do trade with third countries. That is the first
thing. Secondly, what you are mentioning now is really a request
for information and we would signpost that.
Q438 Lord James of Blackheath:
I was trying to cast you in the role of how the DTI as it used
to be would have provided information on request to ourselves
in the UK.
Ms Minor: I think the European Enterprise Network
would be able to provide you with that kind of information.
Q439 Lord James of Blackheath:
So that information is available in the system but not from yourselves?
Ms Minor: Yes.
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