Opinion of the Economic and Social Committee on the 'Report from the Commission to the Council and the European Parliament on the Single Market in Europe in 1995`

(96/C 212/10)

On 1 March 1996, the Commission decided to consult the Economic and Social Committee, under Article 198 of the Treaty establishing the European Community, on the 'Report from the Commission to the Council and the European Parliament on the Single Market in 1995`.

The Section for Industry, Commerce, Crafts and Services, which was responsible for preparing the Committee's work on the subject, adopted its Opinion on 8 May 1996. The Rapporteur was Mr Vever, the Co-Rapporteur Mr Pasotti.

At its 336th Plenary Session (meeting of 29 May 1996), the Economic and Social Committee adopted the following Opinion by 87 votes to 7 with 6 abstentions.

1. Introduction

1.1. The Committee congratulates the European Commission on having presented its third annual report entitled 'The Single Market in 1995` as early as February 1996. This advance on deadlines is a reflection of the Commission's eagerness to closely monitor this key area of European Union activity.

1.2. The third report, which provides a great deal of information on current trends and on the principal lines of action pursued in 1995, will not however affect the conclusions and additional policy lines to be proposed by the Commission in 1996 in a special report on the impact of the Single Market. The Committee therefore hopes that its comments on this third report will help the Commission in preparing its overall assessment.

1.3. The years 1996-1999 provide a threefold opportunity for breathing fresh life into the task of completing the Single Market, namely current Intergovernmental Conference negotiations, the final preparations for Economic and Monetary Union, and the last few remaining years before the next round of enlargement. These opportunities will not be repeated. If they are not seized and decisive progress is not made, the goal of achieving a Single Market in the near future is likely to be irremediably compromised, which in turn will have adverse consequences on the conditions for introducing EMU.

1.4. The Committee also believes that, in seeking to complete the Single Market, priority should be given to drastically improving the employment situation. This can be achieved through the additional competitiveness and economic growth generated by this optimization as well as through the use of all the structural and macroeconomic resources available. To this end the Committee considers that:

- the Confidence Pact for Employment currently being prepared should refer to the still under-exploited potential of the Single Market and should incorporate a commitment by all its parties to speed up the pace of completion;

- the Confidence Pact for Employment should give impetus to a more effective structural policy, taking account of the social dimension, in order to support Member States in their action against unemployment and in order to ensure that the speeding up of the final introduction of the Single Market fully incorporates social adjustments to change with a view to promoting employment in Europe.

2. General comments on the situation

2.1. The Commission's third annual report differs from the second annual report in several respects:

- it concerns a large number of Member States following enlargement from 12 to 15 at the beginning of 1995;

- it redefines and develops lines of action compared with those set out in the previous report. The 1994 report focused on a double priority: 'completion` and 'application`. The 1995 report adds a further four lines of action: links with EMU; the role of citizens; adaptation to change; preparations for future enlargement. The Committee is thus delighted that the Commission has taken more account of the various concerns voiced by the ESC in its previous Opinion of November 1995 on the second annual report.

2.2. In its previous Opinion the Committee was chiefly concerned about the lack of dynamism in completing the Single Market. Despite sporadic progress in 1995, this general impression has not changed on reading the third report. The Commission itself recognizes that a great deal still remains to be done. It cites in particular the following needs: to complete the Single Market for both ordinary citizens and businesses; to liberalize the gas, electricity and telecommunications markets; to adapt to the information society; to accelerate work on the Trans-European Networks, and to help the countries of Central and Eastern Europe (CEEC) prepare for entry into the Single Market. The Commission also underlines the need for less but better legislation.

2.3. The Committee would emphasize that, in view of current difficulties, there should be a detailed assessment of the effects of implementing the Single Market and of the nature of the difficulties encountered. Having said this, the Committee would also emphasize that in 1996 the reasons for stepping up the pace of completion of the Single Market are more pressing than ever.

2.3.1. Despite progress, particularly in implementing Directives, the Committee notes that the process of completing the Single Market is still sluggish and some way from completion. As the Committee has already underlined in its previous Opinion on the 1994 Annual Report, key dossiers have either been delayed or blocked. Member States also continue to enact many new national regulations without paying too much heed to their impact on the operation of the Single Market.

2.3.2. The Committee is concerned about this partial introduction of the Single Market, noting that it has failed to live up to the hopes originally placed in it. The failure to optimize the Single Market, exacerbated by the continuation of structural disadvantages hampering international competitiveness - the two factors being directly interrelated - explains to a large extent why the European Union has not yet managed to return to more satisfactory growth and employment rates, notably compared with those of its major international competitors.

2.3.3. The Committee also notes that the cohesiveness of the Single Market is still highly sensitive to currency disturbances, notably because of the major exchange-rate differentials between European currencies which have emerged in the last few years as a result of the lack of economic convergence and aggravated by the effects of an undervalued dollar. It is particularly afraid that unless a special effort is made to reinforce economic and monetary convergence, these currency tensions may grow in the run-up to the final phase of EMU, which would inevitably do much economic and psychological damage to the Single Market.

2.3.4. The Committee therefore trusts that, in order to give clear assurances about the future of the Single Market, signals will be rapidly sent to:

- ordinary members of the public who are likely to be tempted to draw an unfortunate parallel between the high levels of unemployment currently witnessed and the Single Market, nobody yet having sufficiently made clear to them that the Single Market was incomplete when introduced in 1992 and was also victim of the cyclical down-turn at the time which prevented it from reaping any benefits; there should also be a response to concerns about employment, social developments, public obligations, the different aspects of competition policy, the quality of education and training, and the scale of research and development;

- economic operators, who are unable to perceive clearly what is to be gained from the rapid completion of the Single Market - something which is harmful to the development of trade, investment and business strategies;

- the social partners, who have a role to play in improving the effectiveness of production processes and industrial organization;

- the Member States on the subject of EU-level fiscal harmonization. The Monti report has pointed out that by not acting in concert, the Member States will become less effective in this sphere, principally because of the globalization of the economy and the worldwide movement of capital;

- third countries, with the spread of free trade areas between the EU and other countries or regional groupings. Discussions are needed to work out a genuine trade strategy, which implies an evaluation of the impact of such agreements on all branches of industry and trade.

2.4. The Committee reiterates the clear commitment made in its November 1995 Opinion on the second annual report, to a programme designed to restore the momentum of the Single Market and therefore revive confidence: this would entail a renewed political commitment on the part of the Member States to speed up the process of completing legislation, with an extension of majority voting and a precise timetable for adopting the final key measures between now and 1999. This priority would appear to be more topical than ever before with the opening of the Intergovernmental Conference (IGC) on the revision of the Treaty on European Union.

2.5. The Commission has thus far only reacted indirectly and partially to this recommendation:

- In its third report the Commission proposes a number of strategic guidelines for completing and consolidating the Single Market but without making them part of an actual timetable.

- On the other hand, in its Opinion of 28 February on the run-up to the Intergovernmental Conference, the Commission pleads in favour of a general extension of qualified majority voting. This would consequently affect all aspects of completion of the Single Market.

- The Commission also recommends in this Opinion on the IGC that the Community's powers be extended, with majority voting on various questions relating to the free movement of persons; this would clearly have a highly beneficial effect on one key area of the Single Market.

2.6. For its part, the Committee would reiterate its request that the Intergovernmental Conference examine ways and means of:

- extending qualified majority voting to areas of Community competence concerning the Single Market, such a voting system becoming the rule whenever there is an obstacle to the operation of the Single Market: this means that the Social Protocol must become an integral part of future Treaties;

- extending Community powers, with majority decision-making not only on questions relating to the free movement of persons but also on matters concerning cooperation between customs administrations.

2.7. The Committee also calls upon the Commission, when the latter draws up its report in the second half of 1996 on the impact of the Single Market, to lay down:

- a timetable for adoption of the last remaining measures, taking fully into consideration the key aim of achieving EMU in 1999;

- a methodology for adopting such measures based on types of problems; the Committee makes a number of recommendations to this effect below (cf. point 3.1.2).

3. Comments on the six lines of action for 1995

The Commission begins its third report by setting out the six lines of action which guided its action in 1995. It commented on these at the Madrid European Council in December 1995, the latter reacting positively to the presentation. The Committee's Opinion on the whole of the third report revolves round these six principal lines of action.

3.1. Completing the Single Market

3.1.1. The Committee hopes that the Commission will in future include in its report a general chapter containing a detailed list of the main legal provisions still in need of adoption if there is to be a genuine Single Market.

3.1.2. The Committee is well aware of the number and diversity of such measures. That is why it recommends that the Commission separate out the principal types of problems so that they can be more satisfactorily resolved in the next few years.

3.1.3. The Commission should first and foremost focus attention on the hard core of measures which have still not been adopted because of the great difficulty, or impossibility, of meeting current requirements of unanimity. This would seem to justify a re-examination of the unanimity rule.

3.1.3.1. The main dossiers falling under this first type of problems are quite varied. We would mention in particular the European company statutes; the rules governing mergers of firms; the removal of double taxation systems; the definitive VAT system and excise duties; the free movement of persons; the definitive reinforcement of external customs cooperation. The entry into force of the Community patent also remains subject to a unanimity vote insofar as it is covered exclusively today by the legal framework of an international convention.

3.1.3.2. The Committee hopes that an extension of majority voting will make it possible for most of the remaining decisions in these areas to be adopted between now and the year 1999, i.e. before EMU is in place and before any further enlargement of the Union.

3.1.3.3. Whilst recognizing that a unanimous decision is still desirable in the most sensitive areas, notably fiscal, the Committee considers that a qualified majority voting system (which could be adjusted where the most sensitive issues are involved) is in the last resort preferable to the persistent lack of a decision, which is prejudicial to the Single Market. At any event it is essential that all these questions be settled in the near future.

3.1.3.4. In the field of taxation it is particularly important to demolish Member States' arguments that the abolition of double taxation would result in a loss of income: their arguments are no more acceptable than budgetary reasons for maintaining intra-Community customs duties. The European Commission should therefore put a figure on the economic price to be paid by insufficient tax harmonization in areas of key importance to the operation of the Single Market.

3.1.4. Secondly, the Commission should stress the importance of solving equally urgent problems, whose persistence is not due in this case to the unanimity requirement but to the persistent difficulty in reaching Community convergence on national administrative practices.

3.1.4.1. The Committee hopes to see a basic, positive change of direction in these areas between now and 1999 even if many of the long-term projects will need extended deadlines to be brought to fruition. The aim would be to halt current trends and create a momentum in favour of irreversible Community convergence. This would involve, among other things:

- intensifying the production of European technical standards: by doing so firms would be spared the costs of having to produce goods to meet double and even triple standards, and European standards would have a decisive influence on international standards;

- embarking without delay on action to enforce the principle of mutual recognition both in regulated areas covered by Directives on the harmonization of legislation and in non-regulated areas where there are other potential obstacles (by training local administrators and making them aware of the practical application of this principle of mutual recognition); in the field of technical obstacles the Committee would recall its previous Opinion on the usefulness of providing a sufficient number of approved centres locally so that operators on the ground can effect controls at centres situated at a reasonable distance, which is far from being the case at present;

- monitoring Member States' compliance with key product safety requirements, notably the deliberate use of the CE label and the efficiency of policing procedures for the market; ()

- backing the expansion of the activities of the recently created Community Trade Mark Office;

- taking better account, in continuing the general policy of liberalizing monopolies; of the specific features of the sectors concerned, in accordance with the individual recommendations of the Committee;

- putting an end to the delays in putting in place the trans-European networks which are of prime importance for the operation of the Single Market.

3.1.4.2. The Committee also hopes that the Commission will launch a debate on ways and means of ensuring that Member States do not add to regulatory disparities at source but try instead to increasingly harmonize legislation in a wide variety of areas. This question, which is directly linked to the operation of the Single Market, is analyzed hereafter.

3.2. Making the Single Market work

3.2.1. The Commission notes that by the end of 1995 93.4 % of the national measures required to transpose and legally enforce Single Market legislation had been notified by the Member States. This average cannot conceal, however, the fact that levels of transposition vary from one Member State to another. The new Member States find themselves in a situation similar to the rest of the European Union, which is a fine achievement.

3.2.2. Implementation remains seriously flawed, principally in the following sectors: insurance, public procurement, services relating to new technologies, intellectual and industrial property.

3.2.3. We would put on record our satisfaction with the administrative cooperation between Member States regarding application of the rules of the Single Market. The Committee emphasizes in particular the importance of cooperation in the customs field given that the cohesion of the Single Market as a whole depends crucially on uniform external border controls. The Committee underlines the need for socio-economic operators to be directly involved in this cooperation between Member States: their role should therefore be assessed at its true value in the Commission report.

3.2.4. The Committee would point out that at present there are few instruments for dealing swiftly with complaints about the practical obstacles facing socio-economic operators in their daily contacts with the Single Market. The appeals procedures laid down under the Treaty, particularly the submission of complaints to the Commission, are relatively easy to follow but the time needed to arrive at a solution is much too long. For the purpose of solving concrete problems it would therefore be useful if there were mechanisms for ensuring that the authorities responsible for free movement in the Union were able to react rapidly to the complaints of socio-economic operators.

3.2.5. The Committee supports the Commission's guidelines regarding the use of effective sanctions to clamp down on infringements. It suggests that a Commission report be drawn up in the near future on the real situation in individual Member States.

3.2.6. The Committee is most concerned about the constant increase in technical rules enacted at national level and about the remedies available. Despite the introduction of the Single Market, the number of national notifications made in accordance with the procedures laid down in Directive 83/189 rose from 362 in 1992 to 438 in 1995 and seems to trigger less and less response from the Community, be it in the form of comments, detailed Opinions or especially the stated intention of drawing up Directives (down from 43 in 1992 to 6 in 1995). This is a worrying trend even if the gap which seems to emerge from the Commission's report can also be explained by a number of different or fortuitous factors. But as the Commission itself recognizes, these national regulations pose problems regarding their effects on the Single Market, and are even susceptible of undermining the Market itself. The Committee therefore calls on the Commission to initiate without delay an overall analysis of this worrying and increasingly dominant trend towards national regulations in Europe - a topic which has not been tackled during work recently carried out on simplifying and lightening the burden of regulations but which must be tackled without delay because of its extremely harmful effects on the functioning and credibility of the Single Market.

In the wake of this analysis, measures should be rapidly agreed by the Community institutions in liaison with the Member States in order to find remedies at source.

3.2.7. As far as public aid and its effects on conditions of competition in the Single Market are concerned, the Committee fully approves the May 1995 Communication in which the Commission declares its intention of using all its powers to exercise more effective controls. The Committee likewise hopes that identical controls will be carried out in respect of public aid granted by the Community itself. Such aid has expanded considerably over the last few years and, like State aid, is also likely to distort conditions of competition in the Single Market.

3.2.8. The Committee would emphasize the importance of positive action to assist SMEs and craft industries so that they too can reap the benefits of the Single Market. What are needed in particular are mechanisms that facilitate information and cooperation.

3.3. Confirming the Single Market as the cornerstone of EMU

3.3.1. The Committee underlines the crucial importance of currency disturbances in the cohesiveness of the Single Market. The Commission is too wont to use the conditional tense in this area whereas the problems are already with us today and are perfectly verifiable. Since 1992 exchange-rate differentials between the Member States have risen as high as 20 to 30 points, with adverse and distorting effects on trade, investment, growth, employment and the stability of transnational incomes, including social security payments.

3.3.2. The Committee would underline that its proposal to have in place the bulk of Single Market legislation by 1999 would make it possible to synchronize the Single Market with the introduction of EMU. EMU is a key element in the process of completing the Single Market. The Committee would reaffirm its support for EMU since only a single currency can guarantee conditions of equality and transparency in terms of competition, investment and terms of trade in the Single Market.

3.3.3. The Committee fully shares the Commission's view that budgetary discipline and economic convergence need to be increased to remedy exchange-rate disturbances and prepare the transition to the final phase of EMU. To achieve this, further studies and practical measures are called for. It is essential that the entry of a limited number of Member States in the final phase of EMU in 1999 does not have adverse effects on the cohesion of the Single Market because of the uncontrolled coexistence of a Euro-zone and a non-Euro zone: temporary limits to the number of hard-core EMU Member States must not be allowed to create a schism within the Single Market. This implies that everything is done:

- to secure the widest possible participation of Member States in phase III;

- to ensure that the stability pact between Member States participating in the single currency is shored up by a mechanism ensuring economic and monetary convergence with the other Member States so that the latter are able to join the inner circle as soon as possible.

3.3.4. The Committee would finally stress that the advent of the final phase of EMU will open up new areas of cooperation and increased harmonization between the Member States, notably in budgetary, fiscal, quasi-fiscal and social domains. This increased economic and social convergence within a single-currency European Union should have direct and positive effects on the integration of the Single Market. More consideration will need to be given to this at the appropriate juncture.

3.4. Securing a Single Market for the citizen

3.4.1. The European Union has time and time again expressed the wish that European citizens be brought closer to Europe. The Committee would re-emphasize the urgent need to translate this into concrete reality.

The Committee agrees with the Commission that social policy remains integral to the completion of the internal market, but regrets that too little attention is paid to the social dimension in the Commission's report. If the Union is to be relevant to its citizens, more needs to be done than simply providing information; concrete measures have to be undertaken.

The Committee would also like consumer protection and protection of the environment to be taken into consideration as part of the process of completing the Single Market. The ESC would accordingly refer to the various Opinions it has adopted in the past in this area. The Committee now intends to study in greater detail the complex relationship between the free movement of goods and services and the public's justified demands for a high level of protection.

3.4.2. If ordinary citizens are to become actors of the Single Market, genuinely interactive information services need to be placed at the service of civil society, starting with its socio-economic operators, and effective networking needs to be introduced for all actors involved in European information services on the ground (Euro-Info Centres, social Euro-info counters, consumer Euro-info counters, etc.) The adequate provision of information for ordinary citizens presupposes the deployment of substantial and effective means; the actual form this will take must be worked out by the parties concerned not only at Community and national levels but also at regional level since the regional impact of European policy is considerable despite the fact that it is hardly taken into account at present. Here the Economic and Social Committee, representing the socio-economic components of the Union, could establish permanent contacts with ordinary citizens and be in a position to convey their feelings. Over the last few years the ESC has already held a number of hearings and conferences to promote the Citizens' Europe, particularly with regard to the various aspects of the Single Market. This activity could be enhanced through information emanating from Regional Economic and Social Councils or equivalent assemblies throughout the length and breadth of the European Union.

3.4.3. In this respect the Committee would reiterate its recommendation that Single Market Observatories be set up in individual Member States. These Observatories, which would principally be set up at borders and at regional level, would involve local socio-economic operators. As a preeminent partner of these regional Observatories, the Committee would, through the constant stream of information passed on, be able to strengthen its role for the benefit of the other institutions as a filter of the daily experience of the Single Market.

3.4.4. The Committee supports the 'citizen first` campaign which the Commission has decided to launch in tandem with the Single Market. The campaign's permanent concern will be to make citizens more aware of the construction of Europe in their daily lives. The Committee would underline in particular its interest in the work carried out on the initiative of the Commission by the high-level group chaired by Mrs Veil and would be pleased to offer its cooperation.

3.4.5. The Committee draws attention to the fact that all operators on the ground are strongly convinced that the objective itself of the Single Market needs to be clarified. It is time for the Commission - bearing in mind successive and future enlargements, continuing national legislation on technical matters (442 notifications in 1995), the debate on subsidiarity, and discussions on lightening the burden of Commission legislation - to make clear what it means by a Single Market 'progressing satisfactorily` for want of ever being a totally unified market. The Commission should make it clear which, in such a market, are considered to be areas of full harmonization, which areas regulated by mutual recognition, and which areas of diversity to which operators must adapt. It is also necessary to indicate the ways in which a completed Single Market will remain in good working order.

3.4.6. In this context, the Committee notes the Commission's announcement that it is preparing ten practical guides in different areas. Above all, however, it asks the Commission to prepare a basic practical guide on access to the Single Market which could serve as the cornerstone of information on the Single Market. This basic guide, as well as the accompanying sectoral guides, should respond to the concerns of ordinary citizens and businesses, particularly SMEs, and should present as concrete as possible a panorama of the freedoms and opportunities offered by the Single Market. The Committee might well be involved in the planning of such a guide, which needs to be universally comprehensible and accessible to all.

3.4.7. Finally, the Committee generally supports the Commission proposal on the need for 'better legislation` whilst making two comments:

3.4.7.1. First of all the Committee, in its capacity as representative of the socio-economic operators of the Single Market, the principal 'consumers` of European regulations, would like to be involved in the prior monitoring of Commission proposals.

3.4.7.2. Secondly the Committee would reiterate its previous comments on the proliferation of new and uncontrolled Member State regulations (cf. point 3.2.6), pointing out that this warrants a thorough analysis, as well as concrete proposals to remedy this hitherto neglected aspect of the drive to lighten the burden of regulations in Europe.

3.5. Adapting the Single Market to technological and other change

3.5.1. The Committee endorses the Commission's call for a harmonized regulatory framework for the information society, thereby facilitating the establishment of networks feeding the Single Market. It is pleased with the activities carried out in this field in 1995 and notes that these will be continued.

3.5.2. The Committee also draws attention to the delays in developing trans-European infrastructure networks as a whole - particularly those declared as a priority issue at the Essen European Council. These delays can largely be attributed to financing problems as a result of the need to reduce government deficits. The Committee hopes that innovative solutions will be found to move these network projects forward more quickly, e.g. in the form of:

- the greater use of mixed private/public financing schemes within the framework of case-by-case partnerships;

- mechanisms for ensuring that the policy on major networks is consistent with the goal of convergence;

- the use of surplus or unused items of Community budget expenditure, as recently proposed by the Commission.

3.6. Preparing the Single Market for enlargement

3.6.1. The Committee is aware that the future prospect of enlargement of the Single Market to include the countries of Central and Eastern Europe (CEEC) poses a dual challenge:

- for CEECs, in connection with which the Economic and Social Committee will shortly be issuing an Opinion on the basis of the Commission's White Paper;

- for the administration of tomorrow's enlarged Single Market which will have to allow for the increased diversity of all its constituent parts.

3.6.2. The Committee is delighted with the remarkable expansion of trade between the Single Market and CEECs, noting that in most sectors no customs duties or quantitative restrictions have been imposed. The Committee hopes that this mutual opening up of markets will continue to progress between now and the date of future enlargement. In the meantime, the Committee also expects the Commission to take steps to preserve the cohesiveness of the Single Market, notably by using all its influence to speed up the introduction of Community competition rules in CEECs and to ensure that CEECs gradually bring their policies into line with the Community's external trade policy vis-à-vis third countries.

3.6.3. Finally, the Committee would underline that

- future enlargements of the European Union must not only incorporate the Single Market dimension, but also increase the transparency and efficiency of economic, industrial and social assistance so as to facilitate accession to the European Community;

- the present Member States should be able to rely on the fact that countries seeking membership will start adapting their legislation, etc., to the rules of the Single Market before the accession negotiations begin, with the aim of achieving complete adaptation to these rules by the time of accession;

- these prospects of further enlargement likewise justify the ESC's recommendation that the bulk of Single Market legislation be in place by 1999: by attaining this objective the Single Market of 15 Member States would be complete and the 'acquis communautaire` could be handed on to new members.

4. Conclusions

4.1. The Committee notes that progress has been made in 1995 in adopting new decisions affecting the Single Market and in implementing Directives. However the ESC

- finds that such progress is not yet enough to compensate for the persistent drawbacks in terms of global optimization, international competitiveness, economic growth, job-creation, currency stability, ease of understanding for ordinary citizens and economic operators;

- is also concerned about the effects on the operation of the Single Market of the increasing tendency of the Member States to introduce their own national regulations in parallel with the European Union;

- intends, particularly within the framework of its Single Market Observatory, to examine a number of major topics which have been too neglected by the Commission in its report, notably those concerning employment policy, SMEs, consumer protection and environment protection.

4.2. The Committee calls for decisive action to be taken in the course of the next three years to revitalize the process of completing the Single Market, seizing the opportunities offered by the Intergovernmental Conference, the achievement of Economic and Monetary Union, and the last few years before further enlargement.

4.3. The Committee calls for priority to be given, through completion of the Single Market, to improving the employment situation. This should be possible because of the increased competitiveness and economic growth generated by the process of optimization, whilst bearing in mind the structural and social adjustments that need to be made at the same time.

4.4. The Committee would like the Intergovernmental Conference to examine ways and means of extending qualified majority voting to all questions where obstacles to the operation of the Single market are concerned, accompanied by an extension of Community powers regarding the free movement of persons and customs cooperation.

4.5. The Committee calls upon the Commission, when the latter draws up its report in the second half of 1996 on the impact of the Single Market, to lay down a timetable for adoption of the remaining required measures, based on the key aim of achieving EMU in 1999, and including a methodology for imposing Community convergence on national administrative practices, even if some long-term projects might require extra deadlines.

4.6. The Committee supports the Commission's guidelines on the introduction of effective penalties to clamp down on irregularities. It also proposes that a report be drawn up by the Commission on the real situation in the different Member States.

4.7. Whilst supporting the Commission's idea of 'better legislation`, and expressing the hope that it might itself by involved in the prior monitoring of compliance with subsidiarity, the Committee underlines the role Member States might also play in lightening the burden of regulations in Europe: a Reflection Group should be set up to look carefully at this aspect, which has not so far been tackled, to examine ways of remedying upstream the dual problem of the proliferation and disparity of regulations in Europe.

4.8. The Committee endorses the Commission's declared intent to monitor national aid likely to affect the operation of the Single Market, whilst recommending that there be an identical monitoring of Community aid.

4.9. The Committee underlines the need to avoid monetary divisions in the Single Market, including any schisms when a limited number of Member States enter the final stage of EMU in 1999: an economic and monetary convergence mechanism in place throughout he European Union should guarantee that all Member States comply with the various disciplines and end up by joining EMU.

4.10. Finally, the Committee underlines the need to clarify the final organization and preservation of a Single Market that is 'progressing satisfactorily` (harmonization, mutual recognition, diversity); it would like to be involved in the planning of a clear explanatory guide for all citizens and reiterates its recommendation that the setting-up of Single Market Observatories be promoted in the different Member States, principally at borders and at regional level.

Done at Brussels, 29 May 1996.

The President

of the Economic and Social Committee

Carlos FERRER

() OJ No C 212, 22. 7. 1996, p. 7, paragraphs 4.2.4, 6.3.4, 6.7 and 6.8.