The European Commission is proposing to focus efforts on sectors with the largest growth potential. In 2012-2013, the sectors identified are services and network industries. In these areas, the Commission calls on EU Member States to commit to zero tolerance for late and incorrect transposition of Directives. The Commission, for its part, says it will provide enhanced transposition assistance in order to smooth out potential problems. In case of infringements, procedures should take no more than 18 months on average (currently 25.5 months) and Member States should comply with Court rulings within 12 months. To make the Single Market work more effectively, the Commission recommends making better use of IT tools to empower citizens and businesses. It calls on Member States to strengthen problem-solving tools and set up Single Market Centres to better monitor how Single Market rules work.
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1. What is governance of the Single Market?
Governance of the Single Market is the set of institutional mechanisms, rules and practices to design, implement, apply and enforce the Single Market regulatory framework. In other words, the way in which the Single Market works in practice and delivers concrete results for those for whom it was created: individuals and businesses who want to work, shop, travel, invest or do business across borders.
2. What is the situation today and what would the benefits of better governance be?
The Single Market is a key driver for growth, but its potential is not fully exploited when rules are not implemented or do not work in practice. Evidence shows that there is much room for improvement.
A recent report shows that the average transposition deficit has risen from 0.7 to 1.2%. Where EU law is breached, infringement procedures take on average 25.5 months to be resolved. Even where rules are correctly transposed, they do not always work well in practice. Businesses and citizens often do not understand their rights and encounter many difficulties in trying to exercise them.
Based on the assessment of the progress made by the Member States on the implementation of the Services Directive, an economic analysis shows that its implementation will generate an additional 0.8% of EU GDP over the next 510 years. But this figure could be increased to 2.6% if Member States increase their level of ambition in opening up their services covered by the Directive.
Furthermore, it has been calculated that better transposition and implementation of EU legislation could promote growth by reducing administrative burdens for businesses by a third, leading to an overall saving of nearly 40 billion euro.
3. What is the Commission proposing to improve the situation?
Making what we have work better is a ‘quick win’ for growth. But expected gains are bigger in some areas than others. The Commission is therefore proposing a dual course of actions:
A targeted approach to focus efforts in key areas, where actions and targets will allow quick growth gains.
Horizontal actions to improve the way all single market rules are made, transposed, implemented and enforced looking at the entire governance cycle.
4. What are the measures proposed in the key areas?
For legislation in place in areas with the highest growth potential, the Commission calls on the Member States to commit to zero tolerance for late and incorrect transposition of Directives. The Commission, for its part, will provide enhanced transposition assistance in order to smooth out as many problems as possible before they arise.
Where problems persist, Commission will use its enforcement power with utmost vigour, and calls on Member States to cooperate to put a rapid end to breaches of EU law. The aim is to shorten the duration of infringement procedures in key areas to 18 months on average (currently 25.5 months). Member States should also ensure compliance with judgments of the Court of Justice within 12 months on average. If they do not, penalty payment procedures will be launched.
5. How are the key areas selected?
The key areas are selected based on economic indicators. They are areas where economic analysis shows that significant growth potential can be unlocked if the single market were to function better.
For the period 2012-2013, the areas include the services sectors and network industries (transport, energy and digital market), but the Commission intends to review the list of key areas on a regular basis.
6. What are the horizontal measures proposed for improving the functioning of the Single Market across the board?
The Commission renews its call on all EU institutions and the Member States to commit to smart regulation principles. New pieces of legislation should be clear and easily implementable; they should not cause unnecessary burdens for citizens and businesses.
Member States and the Commission should also commit to make a better use of IT tools that are already in place. The development and linking of information portals at national and EU level, the consolidation of e-government platforms, and a greater interconnection of administrations ‘behind the scene’ will ensure that citizens and business can more easily exercise their rights in the Single Market.
In addition, citizens and businesses should have easy access to problem-solving mechanisms or redress systems, at national level, for any law-related problem in the Single Market. The Commission therefore recommends that Member State set up first line help centres that will allow for a more efficient treatment of complaints. The national SOLVIT Centres provide a good basis for such first line help function, but should be expanded to ensure that no one is left unaided when facing a problem in the Single Market.
Finally, the Commission recommends the creation of ‘Single Market Centres’ to better oversee and monitor the functioning of the Single Market at the national level.
7. How will progress be monitored?
The Commission will prepare an Annual report on the integration of the Single Market, which will provide an analysis of the state of Single Market and look at the way it functions in practice, with a special focus on the key areas. The report will identify challenges and make policy recommendations for the coming year at both national and EU level. The report will be published on the occasion of the Annual Growth Survey (AGS), and will contribute to the definition of country-specific recommendations in the context of the European Semester process.
The first Annual report on the integration of the Single Market will be issued in time for the AGS 2013.
Source: European Commission
