Opinion of the Economic and Social Committee on "PRISM 2001"

(2002/C 80/01)

On 12 July 2001, the Economic and Social Committee, acting under Rule 23(3) of its Rules of Procedure, decided to draw up an opinion on PRISM 2001.

The Section for the Single Market, Production and Consumption, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 17 December 2001. The rapporteur was Mrs Sirkeinen.

At its 387th plenary session (meeting of 16 January) the Economic and Social Committee adopted the following opinion with 91 votes in favour and one abstention.

1. General remarks

1.1. The European Single Market Observatory (SMO) has chosen, as one of its main lines of work, to highlight voluntary measures and initiatives within the Single Market. In order to inform and motivate others, the database PRISM (Progress Report in Initiatives in the Single Market) is drawing up an inventory of "best practices".

1.2. Voices calling for the EU to be brought closer to citizens grow in strength. PRISM has a role to play here. It can help to deliver the message that the EU is much more than regulations from Brussels.

1.3. PRISM is an integrated part of the total work programme of the SMO. This work is presently focused on three planks, the "three Es" of Euro, Enlargement and E-commerce. A fourth E for Entrepreneurship should be added, as a horizontal feature.

1.3.1. On the first of January 2002, 12 national currencies, and with them much of the visible borders within Europe, will cease to exist. This brings the internal market into a new phase, making it a tangible reality for citizens and enterprises in the Union. Whilst making price comparisons and commercial transactions over the Member State borders significantly easier, it is expected to intensify trade and, in general, enhance the utilisation of the four freedoms. This, in turn, creates new requirements for information about the internal market and related problem solving mechanisms.

1.3.2. The foreseen enlargement of the Union will change the situation even more, adding to the internal market not only tens of millions of people but also widening the variety of underlying legislative, productive, commercial and behavioural cultures. Again, more and better information and problem solving are needed.

1.3.3. The development and proliferation of e-commerce still owes much to measures in the spheres of regulation, education and information. With time, sooner rather than later, e-commerce has an enormous potential of further lowering barriers on the internal market.

1.3.4. Entrepreneurship in its broad sense, as a spirit of initiative, at all levels, needs to be strengthened in Europe, aiming at making optimal use of the internal market to benefit the consumers but also to strengthen our competitiveness in order to promote prosperity and increase the quality of life of all citizens, in accordance with the principle of sustainable development.

1.4. In the work of the SMO three trends are prevailing: Simplification, Security and Synergy. A fourth, overreaching S stands for Society, as reflected in common European values.

1.4.1. Following the Simplification trend, an Opinion, including a Code of Conduct, from October 2000(1) was further developed into an Opinion(2) approved by the Committee in November 2001. A Communication on developments in the area has been presented by the Commission to the European Council at Laeken in December 2001.

1.4.2. The Synergy aspect means more emphasis on bottom-up approaches, cooperation between different levels and the involvement of organised civil society. Work on self- or co-regulation has been proceeding and is gaining more support, as further presented in paragraphs 3.3 and 3.4.

1.4.3. Concerning Security work has been done in the areas of fighting fraud and food safety. There is more focus on control at the EU level in order to avoid re-nationalisation of certain policy issues. Meanwhile the issue of security has risen into a new dimension as the question of overall security of our societies against wilful attacks was put in the centre of attention and action following the tragic events on 11 September.

1.4.4. Effective protection of our citizens against attacks is naturally of foremost importance. Actions aiming at security should however be in line with central values of our societies and common principles of the Union. A balance must be found between measures for security and basic rights of freedom and privacy as well as free movement of citizens.

1.5. The purpose of this Opinion is to update information on the PRISM and present views on further developments linked to it. The Opinion also presents some observations, deserving attention and relevant action, taken from the PRISM findings, visits to National Single Market Coordination Centres as well as hearings arranged by the SMO.

2. The PRISM database

2.1. The PRISM database groups Single Market initiatives under the following four headings:

A) Information and support;

B) Problem-solving processes;

C) Partnership;

D) Agreements and codes of conduct.

2.2. The initiatives listed by PRISM are voluntary and not directly profit-making. Initiatives of commercial nature are excluded as well as those representing sectoral or local interests, if they provide no specific value added. In addition to initiatives concerning the Single Market of 15 those initiatives which involve the three other countries of the European Economic Area, as well as countries applying for accession to the EU are included.

2.3. Criteria applied to the choice of initiatives are in particular:

- exemplarity (originality, innovation);

- cost benefit effects;

- impact (direct effects for the participants, potential effects for non-participants); and

- prospects (sustainability, potential synergy effects).

2.4. In December 2001 the PRISM database included 106 initiatives and 21 were under final preparation. They were fairly evenly distributed under the four headings with some concentration, under heading C), Partnership and D), Agreements and codes of conduct. The addition of new initiatives has slowed down during the last 6 months, partly due to application of the above mentioned restrictions and criteria.

2.5. The initiatives can be split into "positive" and "negative" ones. The positive initiatives have a constructive approach in promoting information, innovation and cooperation. They are mainly found in categories A), C) and D). Initiatives dealing with problems and their possible solutions would be the "negative" ones, included in category B), but also to some extent in D). One feature of interest is also that a clear majority of initiatives in category A) and a large part of those in C) are initiated and even more frequently financed by the Commission. Recently initiatives for Codes of Conduct and other self- or co-regulation have increased fast.

2.6. At its public launch the PRISM web site attracted great interest with 3250 visits in January 2001. Immediately after the number of visits fell sharply but has since climbed steadily to approx. 1000 per month and is still rising.

2.7. Against the backdrop of these figures PRISM now will be further developed in order to exploit its full potential. Efforts will be made to considerably widen the contents of the database using available channels to various civil society organisations. Links to other databases and services on the internal market will be developed. In particular, a connection to the SOLVIT Network to be launched by the Commission (see paragraphs 3.7.3 > 3.7.6) is essential. Possibilities of better marketing and accessibility of the database will be explored, including simplifying its web address.

2.8. The Single Market covers all 18 member states of the EEA, and organisations from Norway, Iceland or Liechtenstein participate in more than 30 % of the initiatives currently in the PRISM-database. In December 2001 the SMO organised a hearing in Oslo with the socio-economic organisations of the EFTA countries as well as representatives of the EFTA Consultative Committee. On this occasion PRISM was presented and it was noted that it could be of great assistance to the EFTA in making the Single Market real.

2.9. Enlargement is a key challenge of the Union as well as the ESC. The SMO for its part, seeks to assist the candidate countries in adapting to the internal market as well as possible. To individuals and organisations in the candidate countries PRISM could serve as a useful vehicle on their roads towards full participation in the internal market. It can transfer necessary information and ideas. In particular, PRISM can serve as a gateway to contacts and networks with organisations in Member States. Candidate country organisations already participate in some initiatives within PRISM. The database must be developed and marketed particularly taking the needs of enlargement into account.

3. Areas for more work and initiative

3.1. At meetings and hearings of the SMO a few problem areas in the Single Market have repeatedly been underlined, by commentators from different backgrounds. These are:

- free movement of people, in particular problems with mutual recognition of diplomas/qualifications;

- self/co-regulation;

- services, in particular insurance and construction;

- enlargement; problems of market access and the need to enhance the information and problem solving capacity in the candidate countries at an early stage;

- general awareness of problem solving bodies and their activities.

3.2. The Committee has touched upon the problem of mutual recognition of diplomas in an Opinion(3). This topic has become more significant in the light of enlargement, given the potential movement of professional people from the candidate countries. The problem of recognition of diplomas is becoming more pressing. The Commission is also presenting new work and initiatives in the area. The developments would require an in-depth own-initiative Opinion by the Committee.

3.3. Co-regulation has been under discussion in the Union for some time. Recently signals of political support for co-regulation as a complement to legislation, or even the alternative of preference, have been heard in particular in front of the European Parliament. The role of co-regulation is an important ingredient of the issue of European Governance.

3.4. The Committee organised a colloquium on Co-Regulation in the Single Market - Which role for the Socio-Economic Actors in May 2001. The starting point of the colloquium was to place this discussion in the wider framework of Governance. The increasing criticism of "classic" regulation leads to a need for simplification and an increasing need for involving socio-economic actors.

3.4.1. Referring to the ESC Opinion on Simplification(4) elements in the discussion were grouped under five different headings:

- norms and technical standards;

- the European financial area;

- the agreements of social partners;

- consumers' protection;

- the environmental sector.

3.4.2. The presentations and discussions at the colloquium lead to the following conclusions:

3.4.2.1. The co-regulation practices emerging in the Single Market still differ substantially. In some areas (standard setting, social), they are already well thought out, structured and tested at European level. In others (consumer affairs, environment, financial area) they are still in the very early stages, haphazard and decentralised, despite having considerable development potential. Strong efforts must be put into developing co-regulation in these areas.

3.4.2.2. Generally, they have the advantage of simplifying rules, taking the strain off the legislative machinery, speeding up adjustment to change and at the same time fostering co-responsibility among economic and civil society actors, thereby consolidating the foundations of the European venture. To be successful, they require margins for manoeuvre by business and organised civil society, partnership with the public authorities, representative players, transparent procedures, effective implementation and stringent monitoring of their impact and follow-up, including by public authorities.

3.4.2.3. Co-regulation cannot be a blanket solution for involving civil society more closely and improving the quality of regulation, and the legislative process will invariably have to continue to shoulder the essential prerogatives in its public interest role. On the other hand, diversified co-regulation approaches involving the socio-economic groups can make a valuable contribution in improving the workings of the Single Market in facing the threefold challenge of adjustment to widening, deepening and globalisation.

3.4.2.4. The Single Market Observatory has recently finished a report on progress made in simplifying regulation in Europe, in which it analyses in greater detail also the development and future prospects of co-regulation(5).

3.5. The Committee has dealt with services in the Single Market in several opinions, the most recent and comprehensive has recently been finalised(6). A new proposal on internal market issues of services is shortly due from the Commission.

3.6. Also as regards enlargement, the Committee has drawn up a number of opinions. Of special interest in relation to Single Market questions are the Opinion of 25 April 2001 on "EU enlargement: the challenge faced by candidate countries of fulfilling the economic criteria for accession(7)" and the somewhat older opinion of 22 September 1999 on "The impact of the enlargement of the European Union on the single market(8)". Given considerable developments since 1999, the Committee needs to renew its Opinion on the impact of enlargement of the EU on the Single Market.

3.7. A number of different systems for obtaining information and solving problems exist as regards Single Market matters, for the use of companies, citizens and organisations. On the initiative of the Commission - and often partly or wholly financed by Community funds - a number of bodies have been set up, especially the network of 284 Euro-Info-Centres, as well as the EURES and Euroguichet networks. In 1997, Contact Points for Business and for Citizens, as well as a Single Market Coordination Centre was set up in each Member State, with the specific aim of solving Single Market problems. If problems cannot be solved within one Member State, bilateral contacts with the relevant authority in another Member State are established. The Single Market Advisory Committee acts as a forum for exchange of views between the national Coordination Centres.

3.7.1. The hierarchy of the help given to actors in the internal market can be divided into four categories.

1) Information

2) Advice

3) Problem solving in cases of unintentional breach of law

4) Legal procedures in national courts or the Commission in cases of serious breaches of law.

3.7.2. It is obvious that the roles and services of the different bodies are not always sufficiently well known. For instance, SMEs used to turning to a Euro-Info-Centre for information may find it natural to ask them help resolve problems, too. On the other hand, a unit called Coordination Centre does not immediately bring to mind an authority whose role it is to help solve problems encountered in the Single Market.

3.7.3. The Commission's forthcoming Communication and Recommendation on effective problem solving in the internal market are clearly needed and therefore welcomed by the Committee. A study of the present functioning of the problem solving activities of the coordination centres reveal serious shortcomings and problems. Most coordination centres have in 1999 and 2000 dealt with very few problems, although the larger number of cases in Sweden and the UK clearly indicate that problems do exist. Even more serious is the fact that 66 % of cases have not been solved after one year.

3.7.4. In order to facilitate the necessary change the Commission will in March start the test phase of the network SOLVIT. This will interlink the coordination centres and set a systematic framework for dealing with cases of complaints. Responsibilities of different parties, timeframes and follow-up are to be defined.

3.7.5. Simultaneously a plan for information about the problem solving system will be presented and implemented. The need is obvious against survey results showing that only 3 % of citizens have even heard of national contact points or coordination centres. In order to be user friendly the name of the coordination centres should also be substituted by something better describing their function. The name SOLVIT could fit this purpose well, if it does not create problems having the same name for the Centres and their supporting database. Alternatively, the name "Action Centres" could be considered.

3.7.6. The Committee supports the plans of the Commission. In its view the following should be taken into account in this context:

- It is disappointing that two Member States representing the biggest markets of the Union, Germany and France, do not participate in the test phase of SOLVIT.

- The Commission must be strong on non-appliance with the principles of SOLVIT.

- A one-stop-shop principle is vital for both citizens and companies. The Commission should monitor that actions are taken to fulfil this in every Member State.

- Sufficient resources must be allocated to the coordination centres. This is an investment for a better functioning internal market.

- A spirit of cooperation, personal contacts, individual treatment and considerations as well as innovative partnerships should be enhanced under all circumstances - not even a perfect on-line network and the best rules and principles can or should replace these.

- Rename the coordination centres to SOLVIT Centres or Action Centres.

Brussels, 16 January 2002.

The President

of the Economic and Social Committee

Göke Frerichs

(1) OJ C 14, 16.1.2001, p. 1.

(2) OJ C 48, 21.2.2002.

(3) OJ C 116, 20.4.2001, p. 14.

(4) OJ C 14, 16.1.2001, p. 1.

(5) OJ C 48, 21.2.2002.

(6) OJ C 48, 21.2.2002.

(7) OJ C 193, 10.7.2001, p. 60.

(8) OJ C 329, 17.11.1999, p. 39.