Single Market Governance - guide
27 February 2012by eub2 -- last modified 28 February 2012
Last April, the Commission adopted the Single Market Act. It identified 12 key areas with the most growth potential in the Single Market and associated new proposals to exploit untapped potential. Today, the Commission presented an update of these efforts aimed a delivering growth, social progress and competitiveness.
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Report: Delivering the Single Market Act (SMA): State of Play
1. What is the Single Market Act?
The Single Market Act adopted in April 2011 aimed to deliver twelve projects on which to relaunch the Single Market for 2012. These twelve instruments of growth, competitiveness and social progress range from worker mobility to SME finance and consumer protection, via digital content, taxation and trans-European networks. Their aim is to make life easier for everyone on the Single Market: businesses, citizens, consumers and workers.
The Commission committed itself to make proposals quickly so they could be negotiated and agreed by the Member States and the European Parliament by end 2012.
2. What is the main finding of the European Commission report on the implementation of the SMA?
In line with its commitment in the SMA, the Commission presented proposals for ten of the twelve key actions by the end of 2011. Proposals for the remaining two key actions - proposals to improve the posting of workers in the single market and a legislative proposal on e-identification, e-authentication and e-signature - will be presented in March and in the second quarter of 2012 respectively. In addition, by 15 February the Commission had either tabled proposals for or completed 28 of the remaining complementary 50 actions announced in the Single Market Act.
The Commission report also shows that sustained efforts are required by all European institutions to ensure that the proposals for the twelve key actions are adopted by the European Parliament and the EU Council by the end of 2012 in line with the commitment made at the European Council.
3. Which key actions has the European Commission proposed since the adoption of the SMA?
The European Commission has proposed 10 out of 12 of the key actions in the SMA:
To improve the access to finance for the 21 million European SMEs, the Commission presented a legislative proposal to create a single market for venture capital. The European Parliament and the EU Council aim to reach an agreement on the Commission proposal by the summer.
To make it easier for citizens to seek work in another Member State, the Commission has proposed to modernise the system for the cross-border recognition of professional qualifications.
- To support research and innovation, the Commission has presented two legislative proposals establishing unitary patent protection. In parallel, discussions among Member States are ongoing to find an agreement on the creation of a Unified Patent Court (UPC) through an international agreement. The European Council has committed to reaching at the latest in June 2012 a final agreement on the last outstanding issue in the patent package.
To help consumers and businesses settle contractual disputes in a simple and inexpensive way, the Commission proposed legislation on alternative dispute resolution and online dispute resolution.
To make it easier to adopt European standards, including on services, the Commission proposed a revision of the standardisation system. The European Parliament and the EU Council aim to reach an agreement on the Commission proposal by the summer.
To improve transport, energy and telecommunication infrastructures, the Commission presented the Connecting Europe Facility package, a set of proposals for the identification and funding of transport, energy and telecommunication network projects.
To facilitate social entrepreneurship, the Commission presented a proposal to establish a recognised EU brand for social entrepreneurship funds. The European Parliament and the EU Council aim to reach an agreement on the Commission proposal by the summer.
To green the single market, the Commission has proposed a revision of the Energy Tax Directive to ensure a consistent tax treatment of different energy sources.
To reduce the administrative burden of companies, the Commission presented a proposal to simplify the two accounting directives. The European Parliament and the EU Council aim to reach an agreement on the Commission proposal by the summer.
To make it simpler, faster and cheaper to carry out public projects, and to foster demand for environmentally sustainable, socially responsible and innovative goods the Commission has proposed to modernise EU public procurement legislation.
4. Which key actions announced in the SMA does the Commission still need to propose?
To ensure that social rights are applied across the single market, the Commission will make proposals to improve the enforcement of rules governing the temporary posting of workers from one Member State to another. The proposal is planned for Spring 2012.
To develop the digital single market, the Commission will propose legislation to ensure that electronic identification, authentication, signatures and other ancillary trusted services can be used across borders. The proposal is planned for the second quarter of 2012.
5. Which other actions has the Commission carried out to implement the SMA?
In the SMA, the Commission announced 50 complementary actions. Of these, the Commission had either tabled proposals for or completed 28 actions by 15 February 2012. Examples include the proposal for a common consolidated corporate tax basis, the presentation of an action plan to develop e-Commerce, a White Paper on Pensions, the launch of the Social Business Initiative and the proposal for a European contract law instrument.
6. What progress has been made on ensuring single market rules are implemented on the ground?
Progress in strengthening the governance of the single market has been mixed to date. On the one hand, considerable advances have been made in stepping up the involvement of civil society and in better informing citizens and businesses of their single market rights. To improve the partnership between Member States' authorities and their cooperation in implementing the single market on the ground, the Commission has tabled a proposal for an expanded use of the Internal Market Information system (IMI) and is presenting an initiative to strengthen SOLVIT.
Only little progress has been made on the other hand in improving the effective application and enforcement of single market rules. This is despite the fact that citizens and businesses alike believe this is one of the most important shortcomings of the single market today. In the Single Market Act, the Commission made concrete proposals to address these shortcomings. In particular, continuing the work on reducing transposition and compliance deficits to 0.5% and providing hard evidence of transposition by way of correlation tables or equivalent. In line with similar calls by the European Parliament, Member States should reconsider these proposals.
7. The SMA announces a second phase for beyond 2012. What are the Commission plans?
As announced in the Single Market Act, the Commission will launch a new stage in the development of the single market by the end of 2012. It is the objective of the Commission to announce a second phase of ambitious priority proposals to further strengthen growth, employment and confidence in the single market.
8. What is Single Market governance?
The governance of the Single Market refers to 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.
The Single Market Act highlights the importance of the Single Market governance for the successful functioning of the Single Market.
The annual governance check-up presents an integrated approach to how the Single Market has performed at all stages of the governance cycle. The report is part of a continuous effort to improve the overall performance of the Single Market.
9. What is different about this report?
The annual governance check-up is the first of its kind: it presents in an integrated form how the Single Market works at each level of the governance cycle. The report looks at results obtained in the application of the tools that have been developed at both EU and Member State level to help the functioning of the Single Market.
It aims to highlight the complementarity of the various governance tools that are currently in place and which, whilst pursuing each a distinct objective, interplay and generate synergies as part of a Single market governance cycle.
The reports illustrate how each of the existing instruments play their specific role in making the Single market function better. These instruments ensure a proper governance of the Single market in that they help to:
monitor the correct implementation of Single Market rules (the "Internal Market Scoreboard"): Member States have reduced the number of directives remaining to be transposed and have improved their enforcement performance with respect to long-overdue directives. But the transposition target of 1% was missed for the second time since May 2008 and the average transposition delay has increased to almost 8 months.
inform people about their rights under EU law: significant efforts have been made in providing user friendly information and advice to citizens and businesses about their rights. This is reflected in the increasing number of visitors for the multilingual Your Europe portal (more than 200.000/month) and in the use of Your Europe Advice (15.000 enquiries in 2011).
enable people to make use of their rights by simplifying and speeding up administrative procedures, both at home and across borders, through online eGovernment portals (such as the "Points of Single Contact" PSCs). However in only one third of Member States can a significant number of procedures be completed online.
connect competent authorities across borders in order to improve cooperation between them (thanks to the "Internal Market Information (IMI) system"): Cooperation of national competent authorities via the IMI system has been extended on a pilot basis to the area of posting of workers. However, activity in the system in the area of services remains very low.
solve the problem when EU rights have been breached, through informal or formal procedures (the "SOLVIT" network, the pre-infringement tool "EU Pilot" and infringement proceedings): In 2011 SOLVIT handled more than 3100 cases. SOLVIT managed to solve a large proportion of the cases (89 %). SOLVIT thus continues helping a large number of citizens and businesses to get their Single Market rights recognised by national public administrations. But the average time needed to deal with the cases increased last year.
The number of infringement cases relating to the internal market has decreased by 31% compared to November 2007 and by 8% compared to six months ago. Almost 50% relate to areas of taxation and environment. The improvement in the cooperation of Member States and the Commission at the pre-infringement stage ("EU Pilot project") could lead to a further reduction of the number of infringement proceedings.
evaluate the situation based on real-life feedback from all preceding stages of the cycle. The evaluation in turn feeds into the decision-making process that determines which measures need to be taken and whether it is necessary to do so.
The report also looks at synergies that have been achieved already between the existing tools and how these could be better explored.
10. What are the main results?
The report shows that significant progress has been made in 2011 in increasing the "fitness level" of the Single Market, [i.e. in improving its governance. However efforts still need to be made to make the Single Market deliver at its full potential.
11. What are the results of the different Member States?
An overview table summarizes the performance of the Member States on all areas covered by the annual check-up, on the basis of the most relevant indicators of each area. It highlights where performance is above average (green), average (amber) and below average (red) – showing at a glance where each Member State needs to invest more effort and resources.
Estonia is the only country that performed better than average in all areas. Sweden and Latvia, Denmark also has very good results. It is positive to note that no country has a uniformly bad record. Weaknesses relate rather to individual issues that seem to cause specific problems at national level.
12. What is the follow-up of this initiative?
The Commission services will continue to monitor progress in all areas throughout 2012. In cooperation with Member States, they will report on the progress achieved in the next annual governance check-up, to be published in spring 2013.
The implementation of the Single Market will continue to be monitored – the next issue of the Internal Market Scoreboard will be published in the summer of 2012.
The single market allows citizens and businesses to get the best out of the European Union. It is the fundamental platform for new growth and sustainable job creation. But in order to be able to seize opportunities in the single market, citizens and businesses must be aware of their rights and capable of understanding them and exercising them effectively. And if something goes wrong, there must be fast and effective ways of correcting the situation.
13. What is SOLVIT?
SOLVIT is a network set up by national governments in the EU in order to provide fast and effective help to individuals and businesses who have been deprived of their EU rights in the single market. SOLVIT was launched in July 2002 and has developed significantly ever since. Today, SOLVIT handles around 1300 complaints a year and manages to find solutions for over 90% of its clients, with an average turnaround time of 9 weeks. SOLVIT has led to better compliance with EU law within Member States. In fact, evaluation results show that SOLVIT centres contribute to a 'culture change' in their own national civil service.
14. Why a new SOLVIT strategy is needed?
In 2012 SOLVIT is celebrating its 10th anniversary. Whilst the network has been very successful, it faces a number of challenges. In the 10 years of its existence, SOLVIT's caseload has increased tenfold and the performance indicators for 2011 suggest that the system is reaching its limits: case handling times are getting longer while case numbers are no longer on the increase. Whilst those who do use SOLVIT are generally satisfied with it, recent surveys also indicate that awareness about SOLVIT among citizens and businesses remains very low. In addition, the legal framework governing SOLVIT - a Commission Recommendation from 20012 - no longer adequately captures the functioning of SOLVIT. It is therefore time to take stock and consider the next steps for the future.
The European Parliament has repeatedly asked for a further reinforcement of SOLVIT. It has also stressed the need to develop an integrated approach to informal problem-solving by building stronger synergies between 'different problem-solving tools to ensure efficiency and user friendliness and avoid unnecessary overlaps.' In addition, it has become evident that for the single market to contribute to more growth and jobs, a renewed focus is needed on the way single market rules are implemented, applied and work in practice for individuals and businesses.
15. What is in the strategy?
Therefore, and as announced in the Single Market Act, the SOLVIT strategy puts forward 10 concrete proposals to unlock SOLVIT's full potential.
The Strategy starts from the premise that 'less is more'. It explores synergies between SOLVIT and other information and help tools, so as to enable SOLVIT to focus more effectively on its core business – providing fast and informal help. The Strategy also rolls out concrete plans to enhance quality of case handling and reporting and outlines measures to ensure that more people find their way to SOLVIT. Member States, for their part, are called upon to ensure that SOLVIT centres have sufficient and well-trained staff. Finally, the Strategy also proposes ways to better integrate SOLVIT into the work of the Commission. Commission staff should make better use of SOLVIT when receiving complaints. Together with Member States, they should also better monitor problems SOLVIT fails to resolve, as these often point to structural shortcomings in the single market.
In the coming months, the European Commission will have debates with the Member States and other political actors on the content of the strategy. These debates should result in a new political agreement on SOLVIT's role in a better governed Single Market.
16. What are the 10 concrete proposals in the Solvit Strategy?
The 10 ways forward include:
Actions to bolster SOLVIT's capacity to deal with breaches of EU law in the Single Market. SOLVIT is a unique tool, but could achieve even more if it were better integrated with other help and problem-solving tools (e.g., the CHAP system, which is a system used by the Commission to manage complaints, and the Administrative Commission in charge of handling social security complaints). At the same time, steps must be taken to ensure that SOLVIT can effectively concentrate on its core business, i.e. solving problems. SOLVIT currently deals with many requests for information and advice that can also be dealt with elsewhere, often in a more effective manner. We need to ensure that such information and advice request do not come to SOLVIT but are tackled elsewhere. So, by increasing synergies between various assistance tools that exist already, we can achieve efficiencies that allow SOLVIT to achieve even more results for businesses and citizens by spending less time and effort.
Actions to ensure that SOLVIT centres have sufficient staff and legal expertise;
Actions to further improve the quality of case handling and reporting;
Actions to increase awareness about SOLVIT, so as to ensure that those who need SOLVIT, also find SOLVIT
Actions to make better use of information we get through the operation of SOLVIT, with the view to improving the functioning of the internal market."
Source: European Commission
