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Review of the Single Market

On 30 January 2007 the DTI, together with HM Treasury, issued a report "The Single Market: A vision for the 21st century" to feed into the Commission's current review of the Single Market. The report outlines the challenges that the Single Market faces - globalisation, climate change, demographic change - and the principles that should be followed to ensure that the Single Market continues to deliver for Europe's consumers and businesses. It makes recommendations for specific actions that the EU should take to generate further substantial benefits.

It is published alongside research produced by Copenhagen Economics for the DTI - "The potential economic gains from full market opening in network industries." This research, which examines the extent to which markets have been opened in key economic sectors, suggests that targeted action could create a further 350,000 jobs across Europe and increase EU GDP by 1.7%."

To view these reports click on related document link on right

Background to Improving the Single Market

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 2003, the Commission (DG Internal Market) published their Internal Market Strategy Priorities 2003-2006. The Commission want the Strategy to focus on bridging gaps in the Internal Market, particularly in the field of services. The Commission have since produced two annual reports - the First Report on the Implementation of the Internal Market Strategy in January 2004, and the Second Implementation report of the Internal Market Strategy in January 2005.

The Second Report forms part of an ‘Implementation Package’ of three reports also including one on the Broad Economic Policy Guidelines and the Employment Guidelines, which will go to the Spring European Council 2005. The Second Implementation Report focuses on what stage of implementation the Strategy is at, and what else remains to be done, as well as an update on the Internal Market Scoreboard.

Priorities in the Strategy that the UK particularly support include liberalising the services sector (through further progress on the Services Directive); reaching agreement on the Community Patent, and trying to achieve synergies with other Community policies. The Commission see a strong link between strengthening the Internal Market and the Lisbon Agenda in order to raise competitiveness in the EU, and the UK support their attempts at trying to raise the profile of the Internal Market in this context.

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.

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 - UK Solvit acts only as a contact point for UK business and citizens.

The Four freedoms

The free movement of goods, persons, services and capital is a fundamental principle of the European Union. It is these four freedoms as set out in the EC Treaty, 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.

 Some benefits of the single market

Transposition of Single Market Directives

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 2nd 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 (5th to 7th position) until 2001, when it dropped to 12th 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 3rd 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 (98.5% and 5th place).

In July 2004 we transposed 98.8% of Single Market Directives placing us third in the ''league table''. Our performance dipped slightly in the January 2005 Scoreboard, we had a placing of joint tenth and 97.5% of directives transposed, in the most recent Spring Scoreboard in March 2005 we improved slightly with 97.7% of directives transposed and we were one of only two Member States that managed to achieve the additional 0% target, set by the Commission, this is the number of directives that should be unimplemented two years after the transposition deadline.

For the Scoreboard in July 2005, the UK again achieved the 1.5% target with 98.6% of Single Market Directives transposed on time, ranking us in 11th place. We did not achieve the 0% target however, this was due to 5 Directives that were over 2 years past the transposition deadline. Three of these were directives were subject to major external circumstances that have delayed their transposition.

Most recently, the UK maintained this good performance for the November 2005 Scoreboard when, as in the previous Scoreboard, we transposed 98.6% of Single Market Directives on time. Although we again missed the 0% target, 3 of the 4 Directives concerned were notified soon after the deadline. This is generally a good result all round; the UK joined 16 other Member States who also met the 1.5% target (compared to only 11 for the July 2005 Scoreboard) which is good news for working towards a level playing field in the Single Market.

Scoreboard reports and further information are available from  European Commission's Scoreboard web pages (see related links).

Enforcement of Single Market rules

A framework for ensuring the even and effective enforcement of Single Market rules has been established, involving 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 - UK Solvit 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.

There are a number of options open to businesses when, in the course of marketing their products in another Member State, they consider that they have encountered trade barriers related to national regulations. 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).

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. As mentioned above, the UK’s Co-ordination Centre is known as the "Action Single Market unit" and is based in the European and World Trade Directorate of the Department of Trade and Industry.

The Competitiveness Council

Agreements between Member States on legislation and administrative co-operation measures to improve the single market are largely focused on the EU Council of Ministers and its various formations. Up until June 2002 Single Market dossiers were considered by the Internal Market Consumers and Tourism formation (although Telecoms and Energy were also important). Following the Seville European Council in June 2002 it was agreed to reorganise a number of Council formations and Internal Market dossiers are considered by a "Competitiveness Council" which brings together the Internal Market, Industry, and Research formations. The aim of the reorganisation is in part to create a stronger micro-economic Council in which the Lisbon economic reform agenda could be driven forward and competitiveness considerations in other areas could be underlined.

Contacts:                                           

Single Market/Competitiveness Council:

Angela Piearce
Tel: 020 7215 2748
Fax: 020 7215 2234
Email:Angela.Piearce@berr.gsi.gov.uk  

Jerome Glass
Tel: 020 7215 3534
Fax: 020 7215 2234
Email:jerome.glass@berr.gsi.gov.uk  

SOLVIT/Action Single Market:
Celia Kissoon/Christine Korcz/Shirley Crump
Tel: 020 7215 2800/2833/3861
Fax: 020 7215 2234
Email:Celia.Kissoon@berr.gsi.gov.uk
        Chris.Korcz@berr.gsi.gov.uk
        Shirley.Crump@berr.gsi.gov.uk

Single Market Transposition:

Angela Piearce/ Chris Korcz / Shirley Crump
Tel: 020 7215 2748 /2833 /3861
Fax: 020 7215 2234
Email:Angela.Piearce@berr.gsi.gov.uk 
        Chris.Korcz@berr.gsi.gov.uk
        Shirley.Crump@berr.gsi.gov.uk