# CE2004078EN.01010902.xml

| 27.3.2004 | EN | Official Journal of the European Union | CE 78/109 |
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27.3.2004

EN

Official Journal of the European Union

CE 78/109

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(2004/C 78 E/0110)

WRITTEN QUESTION E-2382/03

by Christopher Huhne (ELDR) to the Commission

(18 July 2003)

Subject:   Single market

Subject:

Will the Commission in future benchmark the success of the EU single market against the US single market, notably in the volatility and discrepancy of prices for differing goods and services?

Joint answer

to Written Questions E-2381/03 and E-2382/03

given by Mr Bolkestein on behalf of the Commission

(7 August 2003)

(7 August 2003)

To judge the success of the Internal Market, the Commission uses a variety of standard market integration indicators, both legal and economic; these cover price convergence, internal trade and internal cross-border investment as well as the legal transposition and application of Community law in the Member States.

Europe's results for each of these indicators can then be compared with the results that a successful Internal Market would be expected to achieve. The latter can be defined in a variety of ways: theoretically (see, for example, boxes 4 and 5 of the statistical annex to Directorate General Internal Market's Report on Product and Capital Markets 2001) or against the results achieved by an actual single market (often, but not always, the United States (US)).

In the case of price convergence, the Commission is already using the US as a benchmark in its monitoring of the single market. Whenever possible and suitable from a technical point of view, it will continue to do so. However, although the US is a relevant benchmark for the Union since the two areas are of approximately the same size, population etc, the Commission believes that it is sometimes more relevant to use a European benchmark, e.g. one of the larger Member States (Germany, France or the United Kingdom). The advantage of this is that the outlet structure, product availability and consumption patterns in these Member States is similar to that of the Union as a whole (more similar than what is found in the US).

So far, the picture as regards price convergence is a mixed one. For example, price dispersion in groceries has been significantly reduced in recent years (the coefficient of variation fell from more than 20 % in the early 1990s to around 10 % today). But it is still almost double than in the US (5,6 %). And it remains higher than the maximum price dispersion for these goods within individual Member States.

As well as measuring the degree of market integration achieved, it is also important to assess the benefits which have flowed from this integration for Community business and consumers. This is the purpose of the Commission's recent report to mark the 10th anniversary of the 1992 Internal Market. In particular, it estimates that the Internal Market has delivered nearly EUR 900 billion in extra wealth and 2,5 million extra jobs. It also demonstrates that consumers have benefited from the extra competition in the Internal Market through lower prices, better goods and services and increased choice.

Despite these successes, however, it is clear that the Internal Market is not yet complete. There is still a great deal to do, notably in services in general and financial services in particular. The Commission believes that, with enlargement just around the corner, it is especially important to make a determined push now to improve the Internal Market. To help this process, it has just launched its new Internal Market Strategy which sets out priorities for the next three years. To be effective, this Strategy requires the active support of the Council, the Parliament and the Member States.

Finally, building a fully integrated market is not a definite task with a finite end, but rather an ongoing process requiring constant effort, vigilance and updating. There are always new challenges and, as obstacles to making the Internal Market work are removed, other barriers come to light and have to be dealt with. It is therefore of the greatest importance that any new Treaty contains the necessary legal powers and competences to continue the work of building and operating an integrated market.

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