Memorandum by Business for New Europe
INTRODUCTION:
— Business for New Europe (BNE) welcomes
the opportunity to respond to the House of Lords Internal Market
Sub-Committee on the Reform Treaty's impact on issues affecting
the Internal Market.
— BNE is an independent coalition of
UK business leaders. Our aim is to support the UK's active engagement
in Europe, and to promote a reformed, enlarged and free-market
EU. We recognise the benefits from cooperation with our European
partners. Since our launch in March 2006, we have become a leading
pro-Europe organisation in the UK, gaining a good deal of media
coverage for our views. We have a number of leading business figures
serving on our Advisory Council (for more information, see www.bnegroup.org
).
— BNE has submitted a more general
response to the Lords committee focusing on issues of institutional
reform. It is also part of the Coalition for the Reform Treaty
(CRT), which has submitted a response to the committee's general
inquiry on institutional reform.
— This response has been prepared by
the BNE Executive.
BNE AND THE
SINGLE MARKET:
— BNE believes that the European single
market is one of the great successes of international economic
cooperation in recent times, comparing favourably with any other
regional bloc embracing economic integration.
— The Treaty of Rome (1957) identified
the European project with four freedoms, namely goods, services,
capital and labour—and these have produced significant benefits
for the UK and the European economy. In particular, the single
market has eliminated tariff barriers, abolished border controls
and introduced mutual recognition for product standards.
— The European market has the largest
GDP of any economy in the world. The value of the single market
was $1.2 trillion in 2005 and it accounts for 40% of global trade.
With the EU's enlargements of 2004 and 2007 into eastern Europe,
it now reaches almost 500 million consumers.
REFORM TREATY
AND THE
SINGLE MARKET:
— As a business-based organisation,
BNE welcomes the fact that, with the Reform Treaty, the EU is
adapting it institutions to its enlarged membership. Such an exercise
would be undertaken by any business which had suddenly doubled
it size, as the EU has increased its membership from 15 members
in 2004 to 27 members today. In general, business supports attempts
to improve the efficiency of EU institutions and procedures
— The agreement reached brings to a
close a period of legal uncertainty on the EU institutions, particularly
since the defeat in referenda on the European Constitution in
France and the Netherlands in 2005. Business requires certainty
to invest long-term in European markets. This removal of doubt
and uncertainty should be helpful to the single market, which
has grown to almost 500 million consumers, and we regard as the
fundamental building block of the EU.
— Once the Treaty is ratified in all
member states, the EU will be better able to focus on its agenda
of policy delivery, a key part of which will be strengthening
the single market. The European Commission has been focusing on
this recently, publishing its legislative package on the single
market in November 2007.
— The reform of institutions is seen
by many countries as a pre-requisite before further enlargement
can take place. Therefore, the single market has already benefited
from recent enlargements, providing new opportunities and markets
for British business. We recognise that if enlargement is to continue,
the institutional reforms in the Treaty need to take place.
— In all, the Reform Treaty does not
have a dramatic impact specifically on the internal market. Most
of the areas of EU economic policy, such as the single market
and trade, are already subject to QMV, though the changes in some
areas affecting business could have some welcoming consequences.
ENERGY
— The Treaty does not herald a major
change on energy policy. The specific section on energy in the
Treaty grants the EU a clearer role to secure objectives including
proper functioning of energy markets, security of supply and promotion
of energy efficiency/renewable energy, which is something we welcome.
— The changes in the Treaty will make
it easier for the EU to take decisions on liberalisation and security
(however member states will retain control on crucial issues like
energy mixes). This is particularly important for the British
business community, which has long called for liberalisation of
energy markets and met resistance from some protectionist forces
on the continent.
— The inclusion of the solidarity clause
translates what already exist in the NATO Charter to the field
of energy. Since Russia has already shown its willingness to use
energy as a political tool against Belarus and the Ukraine, the
EU will be better configured to send a strong message when member
states are threatened by third parties.
RESEARCH AND
DEVELOPMENT / INTELLECTUAL
PROPERTY:
— This applies the principle of the
single market to research. It will enable "researchers, scientific
knowledge and technology circulate freely." In this way,
the barriers to research will be dismantled.
— One of the challenging aspects of
the EU's future economic prospects is the relatively low level
of R&D at EU level. For instance, in 2005, only 1.84% of GDP
was spent on R&D in the EU27, which is markedly lower than
the level for the US or Japan. This is a long way short of the
3% target of expenditure on R&D envisioned in the Lisbon agenda
of 2000.
COMPETITION:
— The impact of the change in wording
on competition generated a lot of comment, but is likely to be
of symbolic rather than substantive significance.
— The protocol on competition has gone
a long way to meeting the concern from business.
— A key point is that the status quo
has not been altered. The change of wording is one from the defunct
Constitutional Treaty to the Reform Treaty.
CONCLUDING COMMENT:
— BNE believes that, while the Treaty
does not impact fundamentally on the single market, it does include
some positive changes, which should enable the future widening
and deepening of the internal market.
12 December 2007
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