A4-0323/96

Resolution on the report from the Commission to the Council and the European Parliament on the single market in 1995 (COM(96)0051 - C4-0146/96)

The European Parliament,

- having regard to the Commission's report on the single market in 1995 (COM(96)0051 - C4-0146/96),

- having regard to its resolution of 15 November 1995 on the Commission's 1994 report on the Community internal market (( OJ C 323, 4.12.1995, p. 51)),

- having regard to the report of the Committee on Economic and Monetary Affairs and Industrial Policy and the opinion of the Committee on Transport and Tourism (A4-0323/96),

A. whereas the completion and proper functioning of the internal market represents the foremost foundation for progress towards an increasingly coherent and satisfactory Union and is the prime instrument for ensuring greater efficiency and competitiveness in the European economic system and thus promoting prosperity, employment end sustainable social policies,

B. whereas faster progress towards full completion of the internal market is vital in order to ensure that the forthcoming introduction of the single currency is a complete success,

C. whereas a properly functioning internal market, as a fundamental factor in economic growth, also has a vital role to play in supporting the 'pact of trust' proposed by the Commission to tackle the serious problem of unemployment in the European Union,

D. whereas there are certain sectors and spheres of fundamental importance where progress has for some time been unsatisfactory, to the detriment of the interests of Union citizens and businesses, and whereas the problems involved are common to the Union as a whole rather than to individual Member States,

E. whereas it is becoming increasingly important to give the non-monetary management of the economy the Community dimension needed by an increasingly integrated system, with due respect for the subsidiarity principle,

F. whereas one particular area which is largely responsible for holding back further progress towards the completion and proper functioning of the internal market is the persistent problem of achieving progress towards greater tax harmonization, both for indirect and direct taxes, as is clearly shown by the distortion which has occurred,

G. whereas it is vital for the internal market to be seen by both businesses (particularly small- and medium-sized ones) and citizens as a great opportunity for improving the economic outlook and standards of living,

H. whereas the internal market is also a vitally important instrument for promoting mutually beneficial economic relations with countries applying to join the Union and, more generally, with third countries,

I. whereas the Intergovernmental Conference currently in progress should also have the objective of assessing the adequacy and effectiveness of the instruments currently available for ensuring the completion and proper functioning of the internal market and should therefore look at how they can be made more effective and satisfactory in the light of the experience so far gained,

J. whereas the Union institutions must give greater weight to the requirements for the completion and proper functioning of the internal market and should therefore seek to avoid actions and decisions which block or slow down the process,

K. whereas the impact of the single market as regards inequalities between men and women has not been taken into account,

L. whereas precise deadlines and a timetable of commitments need to be established for measures still to be defined or adopted,

M. whereas the European Parliament called for an annual report to be drawn up on the progress achieved and the problems that have arisen and whereas the first two such reports dealt with the years 1993 and 1994,

N. whereas the annual report should not only be a useful informative instrument for all those concerned as to the progress made towards completion of the internal market, but should also offer a valuable opportunity for an overall assessment not only of the advances made, but also of the main problems to have arisen, in the light of developments in the internal and international economic situation,

O. whereas the uniqueness, cohesion and proper functioning of the single market should be defended by instruments at least as effective as those used to safeguard free competition,

Content of annual report

1. Welcomes the Commission's third annual report on the internal market in 1995, considers that the information and analysis it contains will enable a proper assessment to be made by all those concerned of the progress achieved and the problems outstanding, and believes that the report offers a sound basis for more detailed discussions on the many matters of substance directly or indirectly concerning the completion and smooth functioning of the internal market;

Coordination with other Community Policies

2. Points to the fact that Community policies for completion of the internal market also play a major role in the competitiveness of the European economy, but are rarely viewed as instruments of industrial policy;

3. Asks, therefore, that future reports on internal market policies should take due account of this dimension of Community policy by assessing the interrelation between internal market and industrial policies in terms of competitiveness;

4. Points out that - while the Internal Market programme has yielded considerable gains in industrial competitiveness - it has not solved Europe's problem in this area; believes that these problems will only be solved if the Internal Market programme is complemented by a new industrial policy as well as competition rules; believes too that there is insufficient co-ordination between the policies which lie at the heart of the Internal Market project (industrial, competition, trade and internal market policies); calls for the creation of a separate service within the Commission charged with drawing up an annual report on the co-ordination of these four policies;

Progress and functioning of the internal market

5. Shares the Commission's view that the internal market is working, but is aware of problems that still have to be addressed and considers that the policy followed by the Commission in 1995 aimed at giving new impetus to the internal market is satisfactory;

6. Notes with concern that in 1995 the Council had still not made any great progress towards adopting certain important legislative measures, including the total abolition of frontier controls on persons, and points out also that the measures adopted by the Council in various sectors have not yet been transposed and implemented at national level in accordance with the timetables set;

7. Considers that, as already stressed in its abovementioned resolution of 15 November 1995, among the most serious problems impeding the completion and smooth functioning of the internal market and having adverse effects in terms of distortion of competition, the following are of particular importance:

(a) checks on persons at the internal frontiers have not been fully abolished;

(b) strengthening citizens' rights and providing access to the law in cases where the principles and provisions governing the internal market have been infringed are difficult and expensive;

(c) the failure to move towards a simplified and understandable fiscal and administrative environment which would enable SMEs to participate more successfully in the single market;

(d) no improvements have been made in public procurement in the Member States that would suggest that the sector has genuinely been liberalized;

(e) the Member States frequently fail to recognize the principle of mutual recognition;

(f) progress towards tax harmonization remains very disappointing;

(g) there are differences in the Member States' environment regulations;

(h) in general, divergent application of Community provisions under the Member States' legal systems creates distortion which hampers the smooth functioning of the internal market;

8. Welcomes the initiatives taken by the Commission during 1995 and stresses in particular the importance of:

(a) the Customs 2000 programme for cooperation between Member States customs officials;

(b) the entry into force of a series of rules for the technical harmonization of specific products (in particular motor vehicles, medicines for human and veterinary use, Community trademark);

(c) the Convention on Bankruptcy, an international legal instrument signed by the Member States on 25 September 1995, which will have a positive impact on the process of completing the internal market;

(d) establishment of a mutual information procedure regarding national measures derogating from the principle of the free movement of goods;

(e) the Council resolution of 29 June 1995 on the effective uniform application of Community law and penalties for breaches of Community law in the internal market;

9. Regrets that in a number of sensitive sectors the initiatives taken by the Commission have failed to ensure that Community provisions are properly transposed, notably in crucial sectors such as public procurement, insurance, intellectual property and company law, and that in others, such as pharmaceuticals, national price controls are still permitted seriously to distort the free market;

10. Considers therefore that measures must be introduced that go beyond the traditional instruments so far used (mutual trust, collaboration, cooperation between national administrations), which have proved inadequate and ineffective in these sensitive areas;

11. Points in particular to the limited effectiveness of the programmes promoted by the Commission to circulate information regarding public procurement tendering procedures because of the scant assistance offered by the Member States, with the result that the chances of small and medium-sized enterprises taking part were damaged;

12. Stresses its concern at the slow progress made in the field of company law, not least because of the reluctance of the Council, particularly as regards the failure to introduce the European company statute, with the serious economic damage this has caused to firms in the Union;

13. Points to its often repeated concern that the worsening situation in some Member States as regards late payments by debtors distorts trade within the Single Market in that it dissuades companies from doing business within Member States with a bad late-payments record or with lax or non-existent regulations to combat it;

14. Considers in particular that distortions of the free market caused directly by national pricing policies must urgently be addressed and mitigated;

15. Is disappointed that, of the four basic freedoms, freedom of movement is the area in which the least progress has been made; while welcoming the Commission's recent proposals for directives (Monti package), stresses that serious difficulties still need to be surmounted as regards the implementation of the right of residence and the mutual recognition of diplomas and professional qualifications;

16. Considers that, with regard to the telecommunications sector and the information society in general, although the Commission should be commended for the considerable efforts it has made to regulate various sectors so as to achieve more dynamic forms of liberalization, there is a danger that the lack of coordination between the various directives adopted may result in the absence of a clear basic policy on the subject, which may have the adverse effect of delaying the legislative process and as a result producing provisions that turn out to be obsolete in a sector that is in continual change;

17. Strongly condemns the fact that national administrations sometimes apply Union provisions over-zealously, thereby complicating and reducing the effectiveness of the rules, increasing the burdens on firms, particularly small and medium-sized ones, and giving out the wrong signals to the public, so discrediting the legislative activity of the Union institutions;

18. Considers that the functioning of the internal market can be improved only if the rules governing it can be broadly simplified and codified in a manner that is clear, rapid, certain and accessible to all concerned;

19. Calls on the Commission to devote still greater efforts to ensuring the effective functioning of the internal market, notably by reducing the often excessive length of infringement proceedings, and stresses in particular the importance of improving the standard of transposal of provisions at national level, enhancing the effectiveness of infringement proceedings and making greater use of legal action, notably through increased use of Article 171 of the EC Treaty;

20. Welcomes the presentation of the so-called 'Monti package' intended to complete the legislative framework (abolition of frontier controls, European company statute, protection of biotechnological inventions, regulatory framework for the information society) and hopes that its adoption and implementation can be accelerated, since unless appreciable progress is made in these areas serious obstacles to the smooth functioning of the internal market will remain;

Internal market, economic and monetary union and taxation

21. Considers that a properly functioning internal market is a vital precondition for the successful launch of monetary union and that the two processes, which are closely linked, must be carried out rapidly and in close harmony;

22. Stresses that a successfully operating internal market and single currency can be achieved only if the other policies which interact with these developments can develop within a coherent framework, by means of a more effective approach and a better division of responsibilities between the Community institutions and the Member States;

23. Considers in particular that the inadequate progress so far made in harmonization of direct and indirect taxes is a glaring example of a major obstacle to the completion and smooth functioning of the internal market, because of the serious distortion caused to flows of goods and services, as well as capital, and stresses the damaging effects of such situations on employment, growth, competition and environmental protection;

24. Welcomes the new guidelines on taxation set out in Commission documents SEC(96)0487 and COM(96)0546, which reveal a promising approach to dealing with the obstacles still remaining in the field of tax harmonization; supports in particular the proposal to establish a permanent group with the task of carrying out an overall analysis of taxation policy, inter alia in relation to other Community policies, and to set up a permanent round table for discussion and exchange of information on the taxation policies of the Member States, with the aim of reducing the damaging effects of unfair taxation competition through instruments of coordination such as, for example, the establishment of rules of good conduct;

The internal market, industry and citizens

25. Agrees with the emphasis placed on the need to bring the single market to citizens (the 'Citizens First' programme), who have most to gain from the expected benefits and should be made clearly aware of the opportunities to be seized, the rights they enjoy and the procedures to follow when those rights are denied;

26. Calls for the European Parliament to be regularly involved in the implementation of the 'Citizens First' programme, either through actions by its Members on the ground or evaluation of the results obtained, and hopes also that the programme will encourage the European institutions to identify new and more rapid ways of ensuring access to the law for Union citizens;

27. Considers that a properly functioning internal market also requires appropriate consumer protection provisions and, while welcoming the initiatives so far taken in this field by the Commission, wishes to see these stepped up as part of an integrated reference framework which is widely known and applied in all Member States, including those where the legislation on the subject is most defective, so that European consumers can enjoy the same rights and the same protection throughout the Union;

28. Considers that not enough attention is paid to the consequences which the single market with its four freedoms has for one particular category of citizens, namely children and young people; calls therefore for the impact on children and young people to be recognised and where negative to be remedied;

29. Regrets that small and medium-sized enterprises have failed to participate in the single market compared to large companies, especially since the former generate a very large share of EU GDP, endorses therefore the Commission's objective of launching information campaigns aimed at business manegement, particularly for small and medium-sized companies, whose full, conscious and satisfactory participation in the internal market is vital if it is to work properly;

30. Underlines once again in this context the urgent need felt by business for the establishment of a help desk by the Commission, from which business people would receive help within a fixed period;

31. Calls upon the Commission to analyse and correct the distortion of the Single Market from uneven implementation of EC Directives;

The internal market, future enlargement of the Union and third countries

32. Stresses that the internal market, as a basic instrument of cohesion for improving the efficiency and competitiveness of the European economy, must certainly not be seen as having a defensive function but, on the contrary, should be the basis for a correct and mutually beneficial approach to economic relations with third countries, particularly those which are candidates to join the Union in future;

33. Commends the efforts made by the Commission to contribute to the sound development of the WTO and to link the functioning of the internal market to the rules on international trade, so that economic operators in third countries can also benefit from the opportunities provided by the single market on a reciprocal basis, with a view to improving the multilateral trade system;

34. Stresses that, particular efforts should be made to rapidly prepare the applicant countries for future enlargements of the Union (countries of Central and Eastern Europe, Malta, Cyprus, Baltic States) for the provisions and procedures of the internal market, so that their integration into the EU can take place smoothly when the time comes and, in the meantime, satisfactory growth in economic relations can be achieved between these countries and the EU; also stresses the importance of similar efforts vis- à-vis other countries such as the Mediterranean countries or economic integration blocs such as MERCOSUR, with which the Union intends to step up it economic cooperation, so that the internal market will assist rather than hamper these processes;

The role of the Institutions and expectations of the Intergovernmental Conference

35. Considers that the Union institutions should show greater determination in addressing the need to define all the provisions necessary for the completion and smooth functioning of the internal market so as to ensure that the bottlenecks which have occurred previously can be avoided in future;

36. Considers that the IGC should improve the efficiency of the instruments available for the smooth functioning of the internal market, by extending their scope and quality in the broader context of non-monetary economic management and that the powers of the European Parliament and the Commission in this field should be strengthened along the lines of the existing provisions on competition in the EC Treaty;

37. Stresses, in this connection, the need for the internal market and the rules governing it to be capable, with reference to the basic underlying principles, to be swiftly adapted to technological progress and to the new goods and services deriving therefrom (e.g. in connection with the information society) so that full advantage can be taken of the opportunities they offer;

38. Stresses also the need to move away from the unanimity principle in areas related to the smooth functioning of the internal market, such as taxation, in favour of more flexible decision-making procedures which, while respecting the subsidiarity principle and certain vital interests of the Member States, make it possible for swifter and more coherent progress to be made towards shared objectives;

39. Considers that, given the growing importance that the non-monetary aspects of economic management have assumed and will continue to assume, in order to help better define the context in which the powers and responsibilities of the Union institutions should be exercised and identify those areas where greater Community intervention is needed, the Commission should draw up a document summarizing these questions, taking account of the general reference framework (annual economic report) and the main areas of Community action, including in particular competition policy, which is closely related to internal market issues;

40. Considers that, in drawing up the list of tasks directly or indirectly linked to completion of the internal market and ensuring its proper functioning, firm deadlines should be set so that progress towards their achievement can be properly monitored on the basis of qualitative parameters; calls also for the European Parliament to be kept regularly informed of the results, so that it can submit them to its competent committees for evaluation;

41. Instructs its President to forward this resolution to the Commission, the Council and the governments and parliaments of the Member States.