Single Market

Introduction

The free movement of goods, persons, services and capital is a fundamental principle of the European Union. It is these four freedoms which form the basis of the Single Market.

The Government believes that the single European market benefits the economy of each Member State, and that the removal of trade barriers leads to a reduction in business costs as well as increasing competition and stimulating efficiency, benefiting consumers and encouraging the creation of jobs and wealth.

The legislative framework of the Single Market was largely complete by the end of 1992. However, there is an ongoing process of improvement, which involves proper enforcement of the rules, making sure regulations are easy to understand and apply, and strengthening the Single Market in certain sectors. The Lisbon European Council in March 2000 provided further impetus towards economic reform, highlighting the need to press ahead to enable Europe to compete effectively in the changing global market place. The European Council in Stockholm in March 2001 took steps to speed up the implementation of European single market directives in each Member State by agreeing a target that 98.5% of due directives should be transposed by the European Council in Barcelona in March 2002. Only seven Member States, including the UK, achieved that target. The Council called for further efforts to meet the target and agreed an additional target that all directives whose implementation was more than two years overdue should be transposed by the Thessalonika European Council in spring 2003

Some benefits of the single market

• The Single Market is a wider market for UK goods comprising nearly 380 million consumers and making up 40% of world trade. Such a huge market gives consumers greater choice.
• The greater competition and liberalisation the Single Market has helped bring about has led to lower prices. Take air fares for example: cheap airlines such as Easyjet would not have been possible without the Single Market. Also airlines can now fly where they want, without national restrictions. This has helped British Airways become the second largest domestic airline in France.
• The Single Market provides for better consumer protection; for example the Toy Directive means that all toys sold in the EU must be safe for children. Another example is the Fourth Motor Insurance Directive on which political agreement was reached by Member States in December 1998. This Directive will make it easier for those involved in motor accidents in other Member States to make an insurance claim when returning to their state of residence.
• The Single Market principle of mutual recognition of standards means British manufacturers can sell their products all over Europe without expensive re-testing in every country .
• For business there has been a significant reduction in export bureaucracy. The Single Market is in effect a domestic market for European business.
• UK citizens have the right to work, study or retire in all the other Member States - there are around three-quarters of a million Britons living in other countries.

The Internal Market Strategy

Since the creation of the Single Market, work to improve its operation and effectiveness has been ongoing. Priorities include improving implementation and enforcement of Single Market rules; lightening the burden of regulation on businesses; and liberalisation in areas such as utilities, services and public procurement. Nevertheless, there remain weak areas in the Single Market, due to non-implementation of some directives, or inadequate enforcement, or because better co-operation is needed between Member States.

In 1999, the European Commission first put forward its Internal Market Strategy, setting out a long-term strategic vision and framework for measures aimed at achieving better functioning of the Single Market. The Commission reviews its Strategy annually and at the May 2002 Internal Market, Consumer and Tourism Council, the UK and other Member States recently endorsed the 2002 Review of the Internal Market Strategy. The Strategy largely reflects the UK’s views on priorities for action to further improve the operation of the Single Market, including completion of work by the end of 2002 on the Community Patent and the Public Procurement legislative package. We are also keen to move forward with other key dossiers such as the Commission’s Internal Market Strategy for Services and we welcome the Commission’s recent interim report on the State of the Internal Market for Services which will serve as a basis for further discussion with the European Parliament, other Member States and interested parties.

The Commission’s Single Market Scoreboard has been an important tool in focusing the attention of European Union governments on speeding up the transposition of European directives into national law. It ranks the performance of Member States in terms of the number of directives not transposed by the due dates and also shows performance on infringement cases arising from those directives as applied in national law (here the UK record is a very good one).

By the first Scoreboard in November 1997, the UK had transposed 96.5% of Single Market directives and was ranked 2^nd in the transposition "league table". Subsequently, the UK’s transposition performance was fairly consistent, fluctuating between 97.9% and 96.2%, and its position in the league table remained in the upper middle range (5^th to 7^th position) until 2001, when it dropped to 12^th position. By the Barcelona European Council in March 2002, following concerted efforts across Government Departments and the Devolved Administrations, the UK improved its transposition performance, achieving 98.7% and 3^rd place in the league table and meeting the 98.5% target set at the Stockholm European Council. It maintained its performance at around this level for the May 2002 Scoreboard (1.5% and 5^th place). In addition, a framework for ensuring the even and effective enforcement of Single Market rules has been established. This involves encouraging co-operation between national administrations, setting up contact points for businesses and citizens, and improving the efficiency of the Commission’s complaints procedure. In the UK, the DTI’s Action Single Market acts not only as a contact point for UK business and citizens but also as a first port of call for similar units in other Member States when Single Market problems arise. Initiatives for simplifying national and Community rules include SLIM (Simpler Legislation for the Internal Market) and the European Business Test Panel which allows for consultation of business during the drafting stage of new legislation.

How is Single Market work taken forward ?

Agreements between Member States on legislation and administrative co-operation measures to improve the single market are largely focused on the Internal Market Consumer and Tourism formation of the EU Council of Ministers ("IMCTC") although other formations such as the Telecoms and Energy Councils are important. Melanie Johnson attended the most recent IMCTC under the Spanish Presidency on 21 May 2002. Highlights included:

• Political agreement on the public sector procurement directive covering public works, supplies and services contracts, and on the European Co-operative Society Statute;

• Council agreement that there would be further work on the Community Patent based on a package of proposals from the Presidency;

• Resolutions were agreed on the Future of European Tourism and supporting the Commission’s approach to better regulation.

There was also a policy debate on the draft sales promotion regulation and Commission briefings on consumers and the euro, the follow-up to the Green Paper on EU Consumer Protection, services of general economic interest and on the proposal for a consolidated directive on the mutual recognition of professional qualifications. The Commission presented its recently adopted Consumer Policy Strategy 2002-2006 and there was a short discussion on the 2002 Review of the Internal Market Strategy, the Single Market Scoreboard and the Joint Work Programme of the Three Presidencies. In addition there was a Presidency briefing on the proposal for a regulation on Food Hygiene and presentation on the fourth European Consumers’ Day in Madrid.

Following the Seville European Council 21/22 June it was agreed to reorganise a number of Council formations. Internal Market dossiers will now be considered by a "Competitiveness Council" which brings together the Internal Market, Industry, and Research formations.

Working in other member states of the EEA

Citizens of member states of the EEA have the right to work on an employed or self-employed basis in any other Member State on the same terms as nationals of that member state. A free EU information service, Europe Direct, offers advice on people's rights in a Single European market, a job database, e-mail response to individual queries and a signposting service for further contacts. A series of fact sheets and guides on practical questions is also available. Access to Europe Direct is at europa.eu.int/citizens or on a freephone 0800 58 15 91

If you wish to work in a profession where certain qualifications are required by law - for example, teaching and healthcare professions - the DTI/DFEE booklet Europe Open for Professions explains the mechanisms for obtaining recognition of your British qualification in other member States and has annexes with useful contact details.

Copies can be obtained from Bay 212, Kingsgate House, Victoria Street, London, SW1E 6SW; tel 020 7215 4648

Working in other member states of the EEA and Switzerland

Citizens of member states of the EEA and Switzerland have the right to work on an employed or self-employed basis in any other Member State on the same terms as nationals of that member state. A free EU information service, Europe Direct, offers advice on people's rights in a Single European market, a job database, e-mail response to individual queries and a signposting service for further contacts. A series of factsheets and guides on practical questions is also available. Access to Europe Direct is at europa.eu.int/citizens or on a freephone 0800 58 15 91

Diplomas & Certificate Unit

If you wish to work in a profession where certain qualifications are required by law - for example, teaching and healthcare professions - the DTI/DFES booklet Europe Open for Professions explains the mechanisms for obtaining recognition of your British qualification in other member States and has annexes with useful contact details. Copies can be obtained from Bay 212, Kingsgate House, Victoria Street, London, SW1E 6SW; tel 020 7215 4648

Mutual Recognition and Technical Harmonisation

The principle of mutual recognition

The principle of Mutual Recognition is one of the cornerstones of the Single Market. It was developed by the European Commission on the basis of the European Court of Justice’s (ECJ) "Cassis de Dijon" judgement (Case 120/78 Rewe-Zentrale v Bundesmonopolvwerwaltung fur Branntwein [1979 ] ECR 649), which was given in connection with the application of what is now Article 28 of the EC Treaty (formerly Article 30), which relates to the free movement of goods within the internal market.

The free movement of goods

Under the principle of mutual recognition, no Member State has the right to forbid the sale on its territory of any product, which has been lawfully produced and marketed in another Member State, even if that product has been produced according to different technical or quality standards from those applied to its own products. This means that any product imported from a Member State should, in principle, be allowed entry into another Member State’s territory if it has been lawfully produced i.e. if it is in conformity with the regulations and with the production processes of the exporting country, and marketed within that country. Member States may only act against this principle in very limited circumstances, which involve "overriding requirements of general public importance" for example public health, protection of consumers or the environment. Any measures taken by Member States must also be both necessary and proportionate.

Mutual recognition v harmonisation

The principle of mutual recognition means that not all sectors need to be harmonised, or harmonisation may be restricted to the "essential requirements". This ensures the free movement of goods within the single market while at the same time allowing diversity of products and services to be maintained.

Directive 98/34/EC and Decision 3052/95/EC

Mutual recognition and free movement of goods are reinforced by two specific instruments Directive 98/34/EC and Decision 3052/95/EC. Directive 98/34/EC seeks to prevent the creation of new technical barriers to trade by laying down a procedure for the provision of information in the field of technical standards and regulations. For further details and information about how to discover what other Member States are proposing see http://www.dti.gov.uk/strd/directiv.htm. Decision 3052/95/EC obliges national authorities to notify the Commission, who in turn notifies other Member States, when they take action which impedes or prohibits marketing of products which have been lawfully produced or marketed in another Member State. This aims to ensure the transparency of individual decisions on the application of the mutual recognition principle through a straightforward information exchange procedure. For more information about this procedure see http://www.dti.gov.uk/strd/refusals.htm.

Mutual Recognition of Professional Qualifications

Those regulated professions not covered by the sectoral directives or directive 99/42/EC fall under the General System for Mutual Recognition of Professional Qualifications, which is operated by Directive 89/48/EEC (known as the First Diplomas Directive) and Directive 92/51/EEC (known as the Second Diplomas Directive).

The General System is founded on the presumption that an individual qualified in one Member State to exercise a specific profession should be regarded in principle as qualified to exercise that same profession in another Member State without having to requalify from scratch. It rejects the principle of relying on harmonised training across all Member States, and thus requires mutual trust in the validity of professional or vocational training anywhere in the EU or EEA. The consequence for the migrant is that his or her qualification should benefit from recognition in any Member State, with the proviso that where substantial differences are identified between the education, training and experience of the migrant and the requirements of the host Member State the migrant may be asked to compensate for these differences in accordance with mechanisms laid down in the directives. Further information is available on the website: www.dti.gov.uk/europe/open.pdf

Workers, Establishment and Services

Following its judgements on free movement of goods, the ECJ has also developed similar ‘mutual recognition’ case law to apply to the free movement of workers, freedom of establishment and freedom to provide services.

Trade barriers-exercising Single Market Rights

There are a number of options open to businesses when, in the course of marketing their products in another Member State, they encounter national regulations or trade barriers. This problem solving network seeks to enable businesses to exercise their Single Market rights and various options exist including:

• making a confidential complaint directly to the European Commission, who may, where appropriate, take legal action against the Member State concerned (known as infraction proceedings). Guidance on how to contact the Commission can be found on their website at: www.europa.eu.int/comm

• taking action through the national courts;

making a complaint to the Co-ordination centre, which can facilitate problem solving through various routes for example through bilateral discussion with its counterparts in the other Member State or through it’s extensive network of contacts across Whitehall. The UK’s Co-ordination Centre is known as the "Action Single Market unit" and is located in the Department of Trade and Industry’s European Policy Directorate. Further information can be found on the website at: www.dti.gov.uk/europe/asm/09.pdf

Last updated 11 July 2002