Friday, 24 February 2017

House of Lords or European Single Market?

Is there a difference between the internal market defined by the EU treaties and the internal market the respected European Union Committee of the House of Lords campaigns for?

Single Market Act background

During the preparatory stage leading up to the Single Market Act SMA, actors and students had access to materials, notably:

The study by professor Mario Monti: A new strategy for the single market at the service of Europe’s economy and society (9 May 2010; 107 pages)

The European Parliament resolution of 20 May 2010 on delivering a single market to consumers and citizens P7_TA(2010)0186, based on the IMCO report drafted by Louis Grech  

The consultation paper (green paper) from the European Commission:

For a highly competitive social market economy
50 proposals for improving our work, business and exchanges with one another
Brussels, 11.11.2010 COM(2010) 608 final/2 (45 pages)

In addition, more than 800 contributions to the public consultation, conclusions of the Council of the European Union and the European Council, as well as three late resolutions by the European Parliament vied in order to influence the communication:  
Twelve levers to boost growth and strengthen confidence
"Working together to create new growth"
Brussels, 13.4.2011 COM(2011) 206 final (26 pages)  

Re-launching the Single Market

The European Union Committee of the House of Lords - @LordsEUCom on Twitter - has a long track record of clear and informative reports on strategically important EU subjects.

On 4 April 2011, less than two weeks before the publication of the Single Market Act (SMA), the House of Lords, European Union Committee, issued its 15th Report of Session 2010–11:

Re-launching the Single Market; HL Paper 129 (63 pages)

Much of the text is admirably readable on the earlier development of the common market, later officially the internal market, but most often - perhaps aspirationally - referred to as the single market in English.

Published so close to the SMA communication from the European Commission, the report from the UK select committee was less of a contribution to the EU Commission and more of a British policy paper on how to deal with internal market issues in the future.  

The EU Committee was honest enough to discuss (pages 14-17) the “historic compromise” Mario Monti had proposed in order to get market fundamentalists and proponents of a social model to join forces in order to re-ignite the single market. The EU Committee rejected this approach (page 17):

36. The relationship between the economic and social aspects of the EU is complex and politically charged. While the social aspect is important, we believe that it should not be seen as trade-off against market liberalisation. Any proposal on either aspect should be treated strictly on its merits. The case should be made separately for the economic benefits of the Single Market, especially given the urgent need for all Member States to stimulate growth in the aftermath of the financial crisis.

37. We believe a more fruitful approach is that advocated by the European Parliament Committee on the Internal Market and Consumer Affairs, in regarding citizens simultaneously as entrepreneurs, workers and consumers, and therefore as beneficiaries of the Single Market. Member States and the European Institutions should make the case strongly that it presents an opportunity rather than a threat.  

Britain seems to have a long tradition of national consensus regarding a single market designed for enterprises. Market reforms lead to jobs and economic growth, which decreases resistance to functioning markets. A dynamic labour market with high employment brings in more taxes for public services and requires less income transfers to compensate for unemployment.

Social market economy

Correct as these assumptions may be, I wonder if the EU Committee and Britain more generally have not evaded presenting the development of European Union as agreed among the member states through treaties, recently the Treaty of Lisbon, which entered into force 1 December 2009.  

Increasingly individuals, in various shapes and roles, are seen as the beneficiaries of EU legislation and actions.

A few quotes from the preamble of the Treaty on European Union (TEU), which acts as the sextant for navigating the union:

CONFIRMING their attachment to fundamental social rights as defined in the European Social Charter signed at Turin on 18 October 1961 and in the 1989 Community Charter of the Fundamental Social Rights of Workers,
DETERMINED to promote economic and social progress for their peoples, taking into account the principle of sustainable development and within the context of the accomplishment of the internal market and of reinforced cohesion and environmental protection, and to implement policies ensuring that advances in economic integration are accompanied by parallel progress in other fields,
RESOLVED to facilitate the free movement of persons, while ensuring the safety and security of their peoples, by establishing an area of freedom, security and justice, in accordance with the provisions of this Treaty and of the Treaty on the Functioning of the European Union,

The union’s compass is nowadays Article 3 TEU, which sets out the main aims of the EU.  The Lisbon Treaty set the internal market on a new course, encapsulated as a “highly competitive social market economy”, more focused on the individual, in Article 3(3) TEU:

3. The Union shall establish an internal market. It shall work for the sustainable development of Europe based on balanced economic growth and price stability, a highly competitive social market economy, aiming at full employment and social progress, and a high level of protection and improvement of the quality of the environment. It shall promote scientific and technological advance.

It shall combat social exclusion and discrimination, and shall promote social justice and protection, equality between women and men, solidarity between generations and protection of the rights of the child.

It shall promote economic, social and territorial cohesion, and solidarity among Member States.

It shall respect its rich cultural and linguistic diversity, and shall ensure that Europe's cultural heritage is safeguarded and enhanced.   

A social market economy, social progress, social justice and protection, economic and social cohesion, solidarity, just to name a few key words.

Not only for businesses and money, Article 26 TFEU aims for the free movement of goods, persons, services and capital.

Addressed to the member states as well as the EU institutions, Article 4(3) TEU lays down the principle of sincere (loyal) cooperation, encompassing both active and passive obligations regarding the objectives of the union.

The Charter of Fundamental Rights of the European Union, legally binding on the EU, reminds us of various rights of humans (not only corporations and property), relevant to the internal market.

Horizontal clauses

Article 18 Treaty on the Functioning of the European Union (TFEU) prohibits any discrimination on grounds of nationality.

In addition, Title II of Part One contains a number of provisions having general application (horizontal clauses), some of which are relevant to legislating for the internal market and to the application of its rules.

Here I am going to quote the social clause, which calls for integrating these aspects into EU legislation and administration:  

Article 9 TFEU

In defining and implementing its policies and activities, the Union shall take into account requirements linked to the promotion of a high level of employment, the guarantee of adequate social protection, the fight against social exclusion, and a high level of education, training and protection of human health.  

Politics is often partisan, but given the Treaty of Lisbon, is it legitimate for a member state deliberately to bypass a loyal presentation of the treaties or to try to exclude social aspirations from the creation of a dynamic single market, defined as a social market economy?  

Forgetting social

On 18 March 2011 the UK prime minister David Cameron and eight other EU heads of government sent a letter (reproduced in the HL Paper pages 60-62) to the president of the European Council Herman Van Rompuy and the president of the European Commission José Manuel Barroso, calling for the delivery of the full and untapped potential of the Single Market.

The letter remains a valuable reminder of concrete priorities just ahead of the SMA  in order to create more pan-European markets, but the prime ministers - including three Nordic ones - did not find a kind word to say about social aspects or the reasons for business regulation.

Social market economy: And they twain shall be one flesh.   

Ralf Grahn

Wednesday, 22 February 2017

Twelve Single Market Act key actions

Our stroll down memory lane took us from the consultation paper Towards a Single Market Act COM(2010) 608 final/2 to the European Commission’s 2011 Single Market Act (SMA) communication:
Twelve levers to boost growth and strengthen confidence
"Working together to create new growth"
Brussels, 13.4.2011 COM(2011) 206 final (26 pages)
The SMA communication did not forget the fifty proposals of the green paper, but highlighted a first wave of twelve priority measures (“levers”) intended for adoption by the end of 2012, pomp and circumstance provided by 20 years of the European Single Market.

Here I am content to recall the key actions listed in Annex 1 (pages 24-25):

1 Legislation designed to make it easier for venture capital funds established in a Member State to invest freely in any other Member State, without obstacles or additional requirements  

2 Legislation modernising the system for recognising professional qualifications

3 Legislation setting up a unitary patent protection for the greatest possible number of Member States and a unified patent litigation system with the objective of issuing the first EU patents in 2013

4 Legislation on Alternative Dispute Resolution. This action will also include an electronic commerce dimension.

5 Revision of the legislation on the European standardisation system, to extend it to services and make standardisation procedures more effective, efficient and inclusive  

6 Energy and transport infrastructure legislation serving to identify and roll out strategic projects of European interest and to ensure interoperability and intermodality

7 Legislation ensuring the mutual recognition of electronic identification and authentication across the EU and revision of the Directive on Electronic Signatures

8 Legislation setting up a European framework for social investment funds

9 Review of the Energy Tax Directive in order to ensure consistent treatment of different sources of energy, so as to better take into account the energy content of products and their CO2 emission level

10 Legislation aimed at improving and reinforcing the transposition, implementation and enforcement in practice of the Posting of Workers Directive, together with legislation aimed at clarifying the exercise of the freedom of establishment and the freedom to provide services alongside fundamental social rights

11 Simplification of the Accounting Directives  

12 Revised and modernised public procurement legislative framework

Flying start

Main points about the twelve projects of the Single Market Act are on offer in most official EU languages through the press release IP/11/469, with some background  information, in English only, in MEMO/11/239 and SPEECH/11/263.

The SMA got off to a flying start. The same day the Commission published proposals concerning two of the “levers”: unitary patent protection IP/11/470 and MEMO/11/240, as well as energy taxation IP/11/468 and MEMO/11/238 and SPEECH/11/265.

Ralf Grahn

Tuesday, 21 February 2017

Single Market Act SMA

What did the EU institutions  do during the public hearing and the preparatory stage following the fifty proposals of the consultation paper (green paper):

For a highly competitive social market economy
50 proposals for improving our work, business and exchanges with one another
Brussels, 11.11.2010 COM(2010) 608 final/2 (45 pages)?  

I looked at the opinions from the Council, the European Council and the European Parliament in ten blog entries on my Finnish blog Eurooppaoikeus (beginning here), but on Grahnlaw we are going to fast-forward to a few remaining resources.

Regardless of your language choice the Commission’s  Single Market Act page has been trimmed down to offer you text and links to a few documents in English.

The access page to the original contributions to the public hearing, promised by the Commission Staff Working Paper (CSW), can not be found.

Regarding the contributions we are restricted to the 32 pages of the CSW published, in English only, on the same day as the Single Market Act (SMA) communication:

Single Market Act COM(2011) 206

By the time the European Commission published its 2011 Single Market Act (SMA) communication, it had pared down the fifty proposals of the green paper to a first wave of twelve priority measures (“levers”) intended for adoption by the end of 2012:
Twelve levers to boost growth and strengthen confidence
"Working together to create new growth"
Brussels, 13.4.2011 COM(2011) 206 final (26 pages)  
In practice, the Commission aimed at a second SMA a year later and the rest of the fifty proposals remained on the work programme (pages 4-5):

On the basis of the contributions made during the public debate, the views and conclusions of the European Parliament and Council, and the opinions of the Committee of the Regions and the European Economic and Social Committee, the Commission has identified twelve levers. In order to boost growth and reinforce citizens' confidence, the Commission proposes that the EU should adopt a key action for each lever by the end of 2012.

In 2011 the Commission will present the necessary legislative proposals for the implementation of those key actions, so that the Parliament and Council can respond to the invitation from the European Council to adopt a first series of priority measures to relaunch the single market by the end of 2012.

This priority-setting does not mean that the Commission is giving up on other actions identified in its Communication "Towards a Single Market Act" that will enable the Single Market to become the platform for growth and job creation. While responding to the urgent need to act for growth and jobs, the Action Plan is only a first step in that direction.

Work will have to continue and we should prepare as of now for the next step. The Commission will present further measures that respond to the needs identified and make a significant contribution to the relaunch of the Single Market. At the end of 2012 it will take stock of the progress of the current Action Plan and will present a programme for the next stage. All these measures together will provide a coherent political response to the gaps in the Single Market by presenting a model for sustainable, smart and inclusive growth in the framework of the Europe 2020 Strategy.
This was how the European Commission later wanted to commemorate and to highlight the benefits of 20 years of the European Single Market.

Ralf Grahn

Monday, 30 January 2017

Focused and strategic approach ahead of the Single Market Act (2011)?

What did the contemporaries think about the fifty proposals of the consultation paper (green paper):
For a highly competitive social market economy
50 proposals for improving our work, business and exchanges with one another
Brussels, 11.11.2010 COM(2010) 608 final/2 (45 pages)?

SEC(2011) 467

The different language versions of the Commission’s Single Market Act pages - English here - offer us links to three distilled documents about the public consultation.

First: On eight pages the first overview of responses gives us a picture of the 840 respondents and highlights some of the preferences of different stakeholder groups: individual citizens, trade unions, industry federations, individual companies, consumer organisations, non-governmental organisations, other organisations and public authorities.

Second: The statistical charts of the public consultation (44 pages) dealt with the 740 responses given on the Commission’s form.

Potentially interesting with regard to internal market challenges would be the 366 who thought that the green paper proposed adequate measures only partly; likewise the 245, 228 and 151 respectively for the different chapters wishing for other issues to be addressed.
Third: We are not directly invited by the SMA page to study the individual contributions, and the access page promised by the Commission Staff Working Paper (CSW) can not be found. Thus, we are restricted to the 32 pages of the CSW published, in English only, on the same day as the Single Market Act (SMA) communication:

Beside the statistical basics covered in the earlier documents, the discussion about the wishes of member states, local authorities and European Economic Area (EEA) countries offers us some interesting nuggets.  

In addition to many positive calls from industry federations with regard to ongoing actions or promised proposals, we take note of this paragraph (page 15):

A large number of respondents in this category welcome the comprehensive approach of the SMA. Some of them invite the European Commission to adopt a more focused and strategic approach, and to seek coherence with the other policy areas and the EU 2020 flagship initiatives.

Single Market Act

I did not notice that the Commission would have elaborated on the theme of  strategic level in the SEC(2011) 467 document, but perhaps we can hope that the Commission’s proper potential strategic level response was the communication published in the official EU languages (here to the English version):
Twelve levers to boost growth and strengthen confidence
"Working together to create new growth"
Brussels, 13.4.2011 COM(2011) 206 final (26 pages)

Ralf Grahn

Friday, 27 January 2017

Towards a Single Market Act (2010)

On this blog, we traced Mario Monti’s new strategy for the Single Market and the European Parliament’s resolution on delivering a single market to consumers and citizens (here and here).

For the first semester of 2010 we still needed to check on the collective views from the EU member states, namely the conclusions of the Council of the European Union and the European Council:

Economic and Financial Affairs (Ecofin) 16 February 2010 (6477/10)

Competitiveness (Internal Market, Industry and Research) 1-2 March 2010 (6983/1/10 REV 1)

European Council 17 June 2010 (EUCO 13/1/10 REV 1)

COM(2010) 608 final/2

It came to pass in those days , when José Manuel Barroso was president of the European Commission and Michel Barnier was commissioner for the internal market,  that the EU Commission responded to the strategy, the resolution and the conclusions  by publishing a communication on 27 October 2010.

However, about two weeks later the English language version was replaced by a new and corrected text:

For a highly competitive social market economy
50 proposals for improving our work, business and exchanges with one another
Brussels, 11.11.2010 COM(2010) 608 final/2 (45 pages)   

The other language versions remain unaffected.
On page 2 we find a reminder that this is a text with relevance to the European Economic Area (EEA) and the Commission’s credo that during the past two decades, the creation of the single market and the opening of borders have been two of the main driving forces behind economic growth in Europe.

Consultation paper  

The European Commission presented this consultation paper (“Green Paper”) hoping that the relaunch of the single market would become the subject of a wide-ranging public debate for four months throughout Europe.

After this discussion, the Commission intended to invite the other institutions to give their formal agreement to the final version of the Act.

The Commission saw the future adoption of the Single Market Act as a dynamic way to commemorate the 20th anniversary of the single market at the end of 2012.

The Commission also recalled that the Single Market Act and the EU Citizenship Report 2010 were meant to complement each other (page 5), with the Citizenship Report dealing with non-economic rights (page 20).

The drawbacks of market fragmentation were among the problems the Commission underlined (page 6):

Businesses often cite the fragmentation of the single market as a handicap to their competitiveness and, indeed, the variety of different national regulations places a considerable burden on them, delaying investment, limiting economies of scale and synergies and raising barriers to market entry. It is therefore important for markets to be integrated and obstacles removed by precisely identifying the areas where a lack of coordination and harmonisation are hampering the proper functioning of the single market.

Fifty proposals!

Rereading the fifty proposals after all these years still makes me wonder if I see an emerging strategy or a mythological cornucopia. I still feel at a loss to present this loosely structured collection of good intentions, an inventory of actions for the internal market.

But reading continues to make sense as an immersion into the different aspects related to achieving a real single market in some distant future. If they keep going like this, a lot of patient grunt work is going to be needed from here to something close to eternity.
Eternal harmonisation or a real upgrade through unitary market rules of strategic importance, is the question that nags me.

With regard to the public consultation, the Commission asked for the contributions by 28 February 2011, in order to turn the 50 measures into a Single Market Act, comprising a definitive policy action plan for 2011-2012. (page 35). A second phase was promised for later (page 36).

Ralf Grahn

Wednesday, 18 January 2017

A single market to consumers and citizens (2010) continued

The United Kingdom used to project itself as a champion of the EU single market, but if you take a closer look, you are about to detect a paradox.   

If you compare what the European Parliament said in May 2010 about lowering and eliminating barriers in the internal market, with what the UK prime minister Theresa May said on 17 January 2017 about her government’s priorities to create new obstacles to the four freedoms of movement, depriving British and other EU citizens of rights, it offers you a certain perspective on the United Kingdom’s incompatibility with single market aspirations.

Sadly, bad examples are catching. Even some government ministers in EU member states have started to sound like English tabloids with their calls to roll back EU achievements for citizens.

Resolution P7_TA(2010)0186
After a short introductory blog post, we return to the European Parliament resolution of 20 May 2010 on delivering a single market to consumers and citizens P7_TA(2010)0186, which underlined (11):

that the relaunch of the single market should achieve concrete, measurable, achievable, relevant and timed targets, which must be achieved by proper and effective policy instruments based on the four freedoms of movement that are available to all EU citizens;

The European Parliament also highlighted (12):  

the fact that the single European market is in dire need of a new momentum, and that strong leadership from European institutions, especially the Commission, and political ownership by the Member States is required to restore credibility and confidence in the single market;

In addition, the European Parliament called for (18):

a new paradigm of political thinking, focusing on citizens, consumers and SMEs in the relaunch of the European single market; holds the view that this can be achieved by putting European citizen at the heart of European Union policy making;

Citizens would have to be better informed about their rights, the European Parliament called (65):

on the Commission and the Member States to develop a targeted communication strategy focusing on the day-to-day problems that citizens encounter when settling and taking up employment in another Member State, especially when undertaking cross-border transactions moving, shopping or selling across borders, and the social, health, consumer-protection and environmental-protection standards on which they can rely; considers that this communication strategy should expressly include problem-solving methods such as SOLVIT;

Single Market Act

The resolution had already mentioned the Small Business Act (SBA) a few times, before it introduced the concept Single Market Act, accompanied by reform values and guidelines:

76. Believes that in order to establish an effective single market, the Commission must produce a clear set of political priorities through the adoption of a ‘Single Market Act’, which should cover both legislative and non-legislative initiatives, aimed at creating a highly competitive social market and green economy;

77. Encourages the Commission to present the ‘Act’ by May 2011–- well ahead of the 20th anniversary of the 1992 Single Market Programme – putting citizens, consumers and SMEs at the heart of the single market; emphasises that it should be looked upon as a blueprint for future action if we are to achieve a knowledge-based, highly competitive, social and environmentally friendly, green market economy which also ensures a credible level playing field;

78. Calls on the Commission to incorporate in the ‘Single Market Act’ specific measures aimed at, but not limited to: - putting the consumer interests referred to in Article 12 TFEU and social policy based on Article 9 TEFU at the heart of the single market; - making the single market fit for the future by improving consumer and SME access to e-commerce and digital markets; - supporting the creation of a sustainable single market based on Article 11 TFEU through the development of an inclusive, low-carbon, green, knowledge-based economy, including measures to further any innovation in cleaner technologies; - ensuring the protection of services of general economic interest on the basis of Article 14 TFEU and Protocol 26; - creating a strategy for better communication of the social benefits of the single market;

The European Parliament wanted the Commission. in preparing the ‘Single Market Act’, to take into account the various EU institutions’ consultations and reports (EU 2020, Monti, Gonzales and IMCO reports, etc.), and to launch an additional wide-ranging public consultation, with a view to bringing forward a coordinated policy proposal for a more coherent and viable single market (79).

Ralf Grahn