COMVIISSION OF THE EUROPEAN COMVIUNITIES 
C0M(93) 256 final 
Brussels, 2 June 1993 
COMMUNICATION FROM THE COMMISSION TO THE COUNCIL 
AND THE EUROPEAN PARLIAMENT 
REINFORCING THE EFFECTIVENESS OF THE INTERNAL MARKET 
WORKING DOCUMENT OF THE COMMISSION 
ON A STRATEGIC PROGRAMME 
ON THE INTERNAL MARKET 
Communication from the Commission to the Council and the Parliament 
REINFORCING THE EFFECTIVENESS OF THE INTERNAL MARKET 
INTRODUCTION 
1. Article 8a of the Treaty has defined the Community's internal market as a 
space without internal frontiers where the free circulation of goods, services, capital 
and persons is assured. In June 1985, the Commission submitted to the Milan 
Council its White Paper on the completion of the Internal market; it thus launched a 
process of European integration which has fundamentally influenced Community 
policy in the course of the last 8 years. This result was able to be attained thanks to 
the Single Act, the White Paper and the deadline of 31 December 1992. It 
constitutes the basis of economic and monetary union and a European citizenship 
whose success resides in the Treaty on European Union. In this respect the single 
market is the pedestal for the building of the community, its dynamism will underpin 
the dynamism of the economic and political integration of the Community. 
2. The legislative programme established in 1985 has now been more than 95% 
completed; as a result of this, the legislative work of the Community will decrease in 
future years. This programme in itself constituted one of the mobilising elements for 
economic operators and it has profoundly modified the environment within which 
they must henceforth operate. It is now possible for goods, services and capital to 
move freely across the entire community. Formalities for crossing frontiers have 
been removed, one system of certification has replaced the 12 systems that 
previously were obligatory; companies have gained the right to bid for public 
procurement contracts in other Member States.Citizens also, even if they have not 
benefited entirely from the freedom to cross borders without controls, have the right 
to stay for private reasons in another Member State and can have their diplomas 
recognised so that they can exercise their profession. 
It is true that the domain of the free movement of persons, on the other hand, is one 
which has experienced significant delay, in that controls on identity still carried out at 
internal frontiers are a constant reminder of their existence. 
3. If the assessment of the legislative activity for the last eight years can 
therefore be considered positive, the Commission is not underestimating certain 
retarding factors in the expected effects of the internal market: 
in several sectors, the new community regulation envisages transitional 
periods and, once in force, will only produce their economic effects after a certain 
period of time has elapsed; 
uncertainties concerning a rigorous and homogenous application ot 
community legislation by all the Member States seem to compromise its 
effectiveness in terms of the protection afforded to citizens and in guaranteeing 
competition; 
the adoption of a legislative programme which is so vast, in such a short 
space of time, may create the impression of bureaucratic interference in the conduct 
of affairs at national level. 
For these diverse reasons, the establishment of the internal market should be 
pursued, explained and motivated still more, so that it becomes a reality on the 
economic front and can be widely accepted on a political level. 
4. This process must develop in a context encompassing three major difficulties 
to which the Community must propose a response: 
the maintaining of controls at the frontiers on the identity of persons 
unquestionably marks a delay with respect to the objectives set out in the 
Single Act and, in particular Article 8a. This delay sustains the impression 
that the building of the community is done exclusively for the benefit of 
enterprises and business circles, even if the citizen, as a consumer or a 
professional, also benefits from the free movement of persons. The 
Commission, with the support of the European Parliament, will endeavour, 
within the limits of its competence, to obtain the complete application of 
Article 8a before the end of this year. 
the entering into force of the measures envisaged in the White paper 
programme is developing against a background of a substantial slowing-up of 
economic growth, monetary instability and the difficulties encountered in the 
process of the ratification of the Maastricht Treaty. The process of job 
creation, which got underway in anticipation of the creation of the Internal 
Market has been reversed. The view is heard that the Internal Market itself 
contributes to the growing tensions in Community markets, particularly the job 
market, instead of contributing to the improvement of the economic and social 
lives of the citizens and the competitivity of enterprises. Without a new 
momentum, defensive reflexes risk damaging the unity of the market. 
the increasingly world-wide nature of trade and the enhanced competition 
introducing new economic and social phenomena which call for a response, 
taking into account the Community's own economic interests, and the 
imperatives of development and growth in the developing countries. 
5. The Commission considers that it is now incumbent upon the political 
authorities of the Community to respond, on the one hand to the fears and 
uncertainties of the citizens and European enterprises, as to the real effects of the 
decisions already taken in the context of the internal market, and to offer on the 
other hand, perspectives for the future development of this market. The simple 
management of the acquis cannot impart the dynamism and impulse necessary for 
the political credibility of this action for integration. The Commission has therefore 
taken on board the suggestion of the European Parliament for the elaboration of a 
strategic programme which would not only be oriented towards the management of 
regulations but which would equally maintain a dynamic for the development and 
deepening of the Internal Market. 
COLLECTIVELY DEFINING A STRATEGIC PROGRAMME 
6. It is true that the internal market is part of a global Community policy and in 
this respect cannot be appreciated independently of the other Community policies 
which allow the community space to function without internal frontiers: 
the free movement of persons is closely linked to the development of the 
concept of European citizenship and to the co-operation on internal and judicial 
affairs which is found at the heart of the Treaty on European Union, but also to the 
putting into effect the social charter; 
the free movement of goods, services and capital are not only linked to the 
development of economic and social cohesion and to the putting into effect of 
competition policy instruments but also to the establishment of economic and 
monetary union; 
the internal dimension of the internal market is itself closely linked to the 
strengthening of the external personality of the Community and its capacities for 
negotiation. 
7. It is this global nature of the approach to the work undertaken since 1985 
which gives it a political dimension far beyond the technical specifics of each of the 
sectors. It is the maintenance of this global aspect which gives the management of 
the internal market its political dimension; it is also this global dimension which will 
put all the available instruments at the service of management. The Commission 
proposes the establishment of a strategic programme for the internal market to 
preserve this global approach, to ensure transparency in its action and to associate 
the all the operators. 
8. This communication represents a first step towards the definition of such a 
programme. Its purpose is to launch a debate which will not be limited to the 
community institutions but which will also encompass economic and social circles. 
The working document accompanying this communication, which takes up in detail 
the different elements of a strategic approach to the management and development 
of the internal market, will be widely circulated in order to give rise to reactions as to 
its content. In the light of these reactions, as well as those from the Community 
institutions, the Commission will prepare a strategic programme which will orient the 
Community's actions in future years. 
9. The Commission has chosen this procedure because it reflects the necessity 
to engage all parties concerned in the definition of the objectives and the methods to 
achieve them. To ensure for the Community economy the effects of the measures 
adopted in the framework of the White paper legislative programme, there must be 
organised: 
on the one hand, a partnership between the Commission and the Member 
States in the application and the effective management of the rules; 
on the other, the mobilisation of the economic operators to contribute to 
action for the development of the internal market. 
This presumes as wide as possible a consensus on the priorities, without however 
allowing that the search for this consensus should affect the launching of the most 
urgent initiatives concerning particularly transparency in the functioning of the 
internal market. 
THE CONTENTS OF THE PROGRAMME 
1 ) Objectives 
10. The objective of the Community remains, obviously, the improvement of the 
living conditions of its citizens; the functioning of the internal market can only be 
approached from this perspective. A coherent and global strategy for the 
management and development of the single market should therefore ensure that the 
legislative framework of the Community becomes an integral and favourable part of 
the environment for the citizens, the economic operators and the administrations. 
First objective : to respond to the expectations of the citizen 
11. The Internal market should bring advantages for citizens as well as for 
enterprises, supporting job creation and economic growth. The citizen needs to be 
assured that the opening of the markets will lead to an improved level of social 
protection and of working conditions as well as of his health, his safety, his economic 
interests and his environment. He should be assured, particularly through credible 
information, that the abolition of frontier controls is not going to expose him to new 
risks. 
Second objective: to ensure a competitive environment for enterprise 
12. The community must guarantee free movement and the functioning of the 
single market, however its legislative interventions must be limited to those domains 
in which mutual recognition cannot guarantee the protection of the essential 
requirements; it must ensure a surveillance on the operation of these rules and their 
adequacy to respond to the objectives. 
Third objective: to ensure in the single market the dynamic for economic and 
social development. 
13. The Community must not only ensure the coherence of the legislative acquis 
in the face of national initiatives which could have the effect of re fragmentation of 
the market, but it must also bring an added value to that acquis in acting upon the 
factors for dynamism in the market, such as the tax environment for enterprise, 
industrial quality and trans-European networks; the objective of this should be the 
improvement of social conditions in the Community. 
2) The instruments 
14. These three objectives are presented in the working document attached to 
this communication, together with precise lines of action for an effective application 
of the regulations and a dynamic development of the internal market. 
a) For an effective application 
(i) Better adapted controls: The instruments of control with respect to community 
obligations are found in the Treaty and the acts in application; they will be fully 
utilised and indeed reinforced to offer the appropriate means for the prevention of 
barriers. 
The Commission must also take on assisting measures which will allow a convergent 
application of the regulations. These assisting measures will principally rely on the 
transparency of transposing acts at national level, the common interpretation of 
regulations, exchanges of information between the administrations and information 
activities. 
The national courts should be have a greater capacity for ensuring the respect of 
community obligations; this is why actions for the education and training for judges 
and the legal professions and the improvement of access to justice constitute the 
most appropriate lines of action. 
(ii) Overseeing the functioning of the regulations : the Member States must be 
assured that surveillance of the functioning of the regulations is carried out. In this 
regard, the Commission must equip itself with the means to evaluate the 
effectiveness of the regulations; in effect the legislative framework must respond at 
once to the objectives of free movement and the respect of the essential 
requirements, but also to the objectives of economic and social development. 
(iii) The organisation of partnership with the Member States: initiatives are 
envisaged in the domain of administrative co-operation between the Member States, 
and between the Member States and the Commission, in order to ensure the 
effective application of community law. This concerns better definition of the 
methods of co-operation by sector and to identify the measures of support necessary 
at Community level. 
The extension of scientific and technical co-operation should equally be reinforced. 
Training actions and the exchange of national civil servants are an indispensable 
element for integrating the community dimension in the functioning of the national 
administrations. 
(iv) Transparency of community actions : the Commission proposes to increase 
the transparency of existing legislation (notably through consolidation) and has taken 
steps to ensure a better internal co-ordination in order to improve information on the 
development of its policies (the annual report on the functioning of the internal 
market). It has also adopted means for a better transparency in the preparation of 
legislative proposals. 
b) For dynamic development 
15. The dynamic development of the internal market must be placed in the 
context of many community initiatives, in particular the initiatives for growth and for 
jobs, and policies relating to cohesion between the regions. This development also 
relies on the pursuit of certain current actions : the Commission intends for example 
to continue the work underway in the domain of intellectual property and data 
protection, to develop a much greater use of voluntary European standardisation in 
industrial circles as well as to orient support programmes for SME's towards an 
improvement of their participation in the opening up of markets. 
16. In parallel, new initiatives are envisaged by the Commission, and in particular: 
an improvement in the tax environment for enterprises so as to eliminate 
obstacles to co-operation and cross-border activities; 
the promotion of quality products within European industry; 
the external aspect of the internal market; 
an integrated approach to the development of trans-European networks in 
order to promote private financing and instruments of interoperability. 
Conclusion 
17. The Commission therefore informs the Council, the European Parliament and 
the Economic and Social Committee of the orientations contained in this 
communication. It invites the economic and social circles, as well as the Member 
States to make contributions towards the definition of the strategic programme on 
the basis of the working paper attached to this communication. It is in the light of 
these contributions that the Commission will establish, for the month of October 
1993, the strategic programme. 
WORKING DOCUMENT OF THE COMMISSION 
TOWARDS A STRATEGIC PROGRAMME 
FOR THE INTERNAL MARKET 
TABLE OF CONTENTS 
INTRODUCTION 
SECTION A: ADMINISTRATION OF THE COMMUNITY AREA 
I. ACHIEVEMENT OF THE SINGLE MARKET 
H. MANAGING COMMUNITY RULES 
(a) Monitoring transposition 
(b) Monitoring application 
(i) Monitoring by the Commission 
Organisation of controls in the Member States 
Handling of complaints 
(ii) Monitoring by national administrations 
Assistance to the Member States 
Control framework 
(iii) Access to justice 
III. SUPERVISING THE OPERATION OF THE SINGLE MARKET 
(a) Preventing obstacles to trade 
(i) Goods 
(ii) Services 
(b) Evaluating the effectiveness of Community rules 
IV. ORGANISATION OF PARTNERSHIP WITH THE MEMBER STATES 
(a) Scope of partnership 
(i) Freedom of movement for persons 
(ii) Protection of essential requirements 
a) Early-warning systems for dangerous or non-conforming goods 
and services 
b) Adapting regulations to new risks 
(b) Partnership instruments 
(i) Administrative co-operation 
(ii) The adaptation of authorities to the rules for the operation of the single 
market 
V. TRANSPARENCY OF COMMUNITY MEASURES 
(a) Transparency of Community legislation 
(b) Communication and information measures 
(i) Annual report on the internal market 
(ii) Communication and information initiatives 
SECTION B: DEVELOPING THE SINGLE MARKET 
I. A BARRIER-FREE ENVIRONMENT 
(a) Improvement of the regulatory environment for businesses and citizens 
(i) Rules on the protection of intellectual property 
(ii) Protection of personal data 
(c) Company law 
(d) Simplifying cross-border payment facilities 
(b) Ongoing approximation of tax regimes and the creation of a favourable 
tax environment for businesses 
(i) Indirect taxation 
(ii) Direct taxation 
II. AN ACTIVE POLICY ON STANDARDISATION 
III. A POLICY IN THE AREA OF QUALITY 
IV. MEASURES TO ASSIST SMEs 
(a) Creating information packages for SMEs 
(b) Helping SMEs to adapt to standardisation and certification procedures 
(c) The opening-up of public procurement to SMEs 
V. A DYNAMIC AND OPEN EXTERNAL POLICY 
(a) Strengthening the Community's external competence 
(b) Improved trade-policy instruments 
(c) Convergence of legal rules and economic systems 
(d) Management of the Community's external frontier 
(i) Ensuring the external security of the internal market 
(ii) Prevention of infractions 
SECTION C: TRANS-EUROPEAN NETWORKS 
I. TRANS-EUROPEAN NETWORKS: OBJECTIVES 
II. FRAMEWORK FOR THE WORK TO BE CARRIED OUT 
III. PROGRESS REPORT 
(a) Network plans 
(b) Community financing 
IV. THE NEED FOR ÇQ-QRPINATIQN 
V. THE MEANS TO ACHIEVE THE END 
INTRODUCTION 
1. The completion of the Internal Market, i.e., the effective application of the four 
freedoms of movement set out in the Treaty, has made a fundamental impression on 
Community policy over the past eight years. Never has the Community decision­
making process reached such a level of dynamism; never has Community integration 
so attracted the attention of political and economic leaders. 
2. The environment constituted by the Community is one of open markets and thus 
of free competition. The abolition of all customs, fiscal, veterinary, phytosanitary and 
statistical formalities on crossing borders, the substitution of one system of 
certification for the 12 systems which were previously obligatory, the right to 
participate in public procurement in other Member States, the right to stay for private 
reasons in another Member State, and, finally, the recognition of qualifications 
permitting the exercise of the right of establishment, gives firms, workers, and, in a 
general way, citizens, a new area of freedom. The strengthening of competition 
rules strengthens the protection of SMEs, in particular, against the consequences of 
agreements and mergers on the operation of the market. The abofition of 
discriminatory national measures and the placing of national systems in competition 
with one another have resulted in a self-discipline against the abuse of the rules. 
3. The Commission has its role to play, firstly because certain proposals must still 
be made or certain proposals are still pending before the Council, and then, above 
all, because it is the Commission that must promote confidence between the netional 
administrations. The priority for the Commission is to ensure that the Internal Market 
works and the conditions for its operation are achieved by means of full 
implementation of the rules, a set of measures designed to develop the Internal 
Market and, finally, a set of trans-European networks giving the rules the support of 
infrastructures adapted to their implementation. A "wait-and-see" policy will not do; 
simple administrative management of what has already been achieved cannot give 
the dynamism and impetus which the credibility of the action demands. Balance in 
the operation of the Internal Market can only be found in movement; this movement 
is what the preparation of the strategic programme seeks to ensure. 
4. This strategic programme wouid indicate the wish of the Commission to improve 
the present framework rather than to develop the legislative activity of the 
Community. This strategic programe would also indicate the wish of the Commission 
to participate in an active partnership with the national administrations and economic 
operators for the management of the Internal Market; this is why the publication of 
the present document can represent only a first step intended to gather all reactions, 
observations and contributions. It is on this basis that the strategic programme 
defining the priorities and the means of action will be drawn up in the second half of 
this year. 
5. The principal aim of the approach proposed is to situate the actions related to 
the operation and development of the Internal Market in an overall context, giving 
these actions a political, an economic, a social, and an industrial dimension: 
from a political point of view, it is important to make it be apparent that the 
Internal Market is a whole; an overall approach is the only one capable of 
responding to the diversity of the problems and of the sectoral interests and to 
offer a balanced treatment of all of these problems; 
from an economic point of view, experience with the White Paper has shown 
that an action on the market can only have a macroeconomic effect if it 
mobilises all sectors; 
from a social point of view, it is important to ensure, on the one hand, the social 
rights of workers following the 1989 social charter and the the Commission's 
programme of social action, and, on the other, the development of a 
Community strategy for employment; 
from an industrial point of view, it must be possible to put into operation 
horizontal instruments from which all sectors and professional categories will 
benefit. 
The objective of this document is to seek the observations and the contributions 
of all agents and all private and public bodies on the priorities for action to 
administer and to develop the Internal Market so as to make it an instrument of 
economic and social development to the benefit of citizens and firms. On the 
basis of these contributions, the Commission will draw up, for October 1993, a 
strategic programme on the Internal Market with which all the partners will be 
called on to associate themselves. 
SECTION A: ADMINISTRATION OF THE COMMUNITY AREA 
I. ACHIEVEMENT OF THE SINGLE MARKET 
7. The process of achieving the single market, as provided for in the White Paper, 
has been completed. Even though new aspects have been added to the programme 
set out in the White Paper, in particular in the energy field, the Community's activity 
has, over the last eight years, not once deviated from the programme, more than 
95% of which has been implemented. Admittedly, considerable slippage has 
occurred as regards freedom of movement for individuals, since, although tax 
controls have been abolished and the right of establishment and residence 
recognised, police controls at frontiers remain a fact of life for the general public. 
However, firms can now operate in an environment that allows them to trade in 
products and services and fosters closer integration of co-operation and hence of the 
industrial fabric. 
8. Implementation of the White Paper programme has been carried out 
progressively: 
• Harmonisation of technical rules as provided for in the White Paper has now 
been completed; initially confined to specific limited areas, it was extended to 
cover entire sectors such as agricultural and food products, pharmaceutical 
products and motor vehicles. Harmonisation of essential product safety 
requirements, backed up by a policy of certification, and the general provisions 
on product safety and liability for defective products mean that all manufactured 
products marketed in the Community are now covered. 
• The measures have been adopted to permit public contracts to be open to 
competition from firms in other Member States, irrespective of whether such 
contracts are awarded by public authorities or public services and are intended 
for the purchase of supplies, the purchase of services or the carrying-out of 
work. The relevant directives include provisions on appeal procedures allowing 
national courts to review matters. 
• Freedom to provide services will soon become a reality, where this is not the 
case already, with the gradual entry into force of the directives and regulations 
adopted on transport, financial services, telecommunications, recognition of 
diplomas, and the equivalence of professional qualifications. Although final 
decisions have yet to be taken on road cabotage because of the link with the 
taxation of transport, cabotage has become a practical reality on the basis of the 
annual quotas allocated by the Commission. 
• Since it is not enough simply to provide for freedom of movement and since 
firms must also be in a position to derive full benefit from it through corporate 
restructuring and the restructuring of their business strategies, the proposals on 
company law, company taxation, and industrial and intellectual property formed 
an integral part of the programme. The relevant objectives have been only 
partially achieved since, although most of the harmonisation measures relating 
to industrial and intellectual property have been adopted and although certain 
forms of double taxation have been eliminated, the key proposals are still before 
the Council, i.e. those relating to the European company statute, the 
establishment of a trade marks office and the complete elimination of taxation at 
source on interest and royalty payments and taking into account of losses 
suffered abroad. 
• Such measures relating to the opening-up of markets to flows of products, 
services and capital from other Member States have been made irreversible by 
the elimination of all administrative checks at intra-Community frontiers. The 
abolition on 1 January 1993 of the single administrative document in intra-
Community trade and the entry into force of a series of provisions reorganising 
tax, veterinary, plant-health, health, safety and statistical controls have made it 
possible to do away with checks at frontiers. 
• Freedom of movement for individuals properly speaking has not yet become a 
reality. Individuals also benefit from the dismantling of customs and tax controls 
at internal frontiers, and Community nationals may now work in any other 
Member State thanks to recognition of their diplomas or qualifications and may 
reside in any other Member State regardless of any economic activity. Despite 
this, checks on persons are still carried out at internal borders although these 
have already been lightened. The Commission has frequently deplored this 
situation, particularly to the European Parliament. The Commission hopes that 
substantial progress will be made in 1993, under the Schengen agreement, 
perhaps in such a way as to spur on the other Member States, so as to avoid 
these delays which are particularly noticeable to the general public and which 
tend to overshadow the considerable achievements which have been made in 
other fields. 
9. However, the legislative process cannot be allowed to come to a halt with the 
completion of the White Paper programme since the programme carries within itself 
a momentum for integration that goes beyond the present framework. 
• Firstly, it is for the Commission or the Council to implement the provisions that 
have been adopted. This is particularly so with regard to technical rules, for 
which "framework" provisions have been adopted while the Commission or the 
Council have been unable to adopt the implementation measures; this is the 
case in the of foodstuffs, veterinary, and phytosanitary areas and in the area of 
construction. Thus, in the veterinary field, although all the measures set out in 
the White Paper - and therefore essential for the completion of the Internal 
Market - have been adopted (apart from pets travelling with their owners) a 
number of important implementing measures still have to be adopted by the 
Council or the Commission. 
• The removal of frontier checks justifies taking action either in order to organise 
trade within the Community without affecting national arrangements or in order 
to harmonise such national arrangements. The most urgent measures have 
been adopted with regard to cultural goods, explosives and conformity checks at 
external frontiers; other proposals are awaiting decisions in the following areas: 
(i) Checks on the export of dual use goods (goods or technologies with military 
and civilian uses): in spite of the commitment made by the Council in 
December 1992 to try to reach agreement before 31 March 1993, political 
and technical problems have blocked progress on this dossier. 
(ii) The measures taken on indirect taxation need to be completed by the 
adoption of proposals on the taxation of transport of passengers. However, 
the most important proposal, whose adoption is a matter of urgency, is that 
on VAT arrangements applying to second-hand goods, works of art, 
antiques and collectors' items. 
The removal of frontier checks requires particular vigilance on the part of 
the Commission and the Member States, with regard to some goods that 
are not subject to harmonisation requirements, in order to ensure that 
differences in rules and regulations do not result in fraud or in difficulties for 
consumers. It is, for example for this reason also, the Commission has 
stated that it will draw up a proposal on the certification of precious metals 
and that in the customs area a proposal has been presented to combat 
fraud in the area of commercial and agricultural trade. 
(iii) With regard to transport, since the main priorities have been covered, 
measures should be introduced on freedom to provide special transport 
services such as the transport of dangerous and perishable goods, taxi 
services, transport carried out by security firms, transport by ambulance, 
own-account transport and car hire. The Commission's attention has also 
been drawn to the administrative complications involved in the transport of 
bodies; measures should be taken to relieve families of the burden of 
formalities to be completed in such circumstances. 
(iv) The environment is a key element in the achievement of the internal 
market; the adoption of high environmental standards at Community level and 
their uniform application will strengthen the process of convergence and 
cohesion and remove the fears of many countries against products of other 
Member States, allegedly produced under lax environmental conditions. It may 
also allay different fears of the less environmentally spoiled Member States that 
they may be invaded by the pressures of industrialisation and 
commercialisation; we should also emphasise the use of environmental 
regulations as very subtle means of foiling the internal market, purportedly on 
very praiseworthy grounds. This is a phenomenon that can particularly be 
observed with regard to waste and packaging in its broadest sense. 
There are solutions and various important options in connection with these 
matters. One would be harmonisation of "environmental " national legislation. 
Another one would be the application of the principle of "conditional 
equivalence" which means that the various national systems should be made 
equivalent from the economic point of view. 
The development of cross-frontier activities, the need for firms to be able to 
take advantage of all the management flexibility afforded them by the 
Community dimension, and the need to preserve the public interest from the 
effects of disorganised competition have prompted the Commission to extend 
the rules on the operation of the single market to other spheres not initially 
covered in the White Paper, notably telecommunications services, postal 
services and energy. 
(i) With regard to telecommunications services, and alongside its action on the 
mutual recognition of the approval of telecommunications terminals, the 
opening-up of public contracts and European standardisation, the 
Commission is pressing ahead with its work on the opening-up of the 
markets for services by proposing, in parallel with the implementation of the 
ONP (Open Network Provisions) framework Directive, that markets be 
completely opened up by 1 January 1998. The Commission's proposal here 
has been drawn up following wide-ranging consultations with all the parties 
concerned based on the report presented by the Commission in 1992, as 
provided for in Council Directive 90/387/EEC (ONP) and Commission 
10 
Directive 90/388/EEC (services other than voice telephony). 
(ii) With regard to postal services, following its Green Paper published in 
May 1992, the Commission has drawn preliminary conclusions from the 
wide-ranging consultation process under way. 
(iii) With regard to energy, the Commission, while applying the Treaty in the normal 
way to deal with rules and regulations that are incompatible with it and inappropriate 
conduct on the part of enterprises in the energy sector, has developed a step-by-
step approach on electricity, natural gas and hydrocarbons. For instance, it has put 
forward a proposal on the harmonisation of the conditions for access to exploration 
for, and extraction of, hydrocarbons. In the case of gas and electricity, the 
Commission's approach is geared to three objectives: freedom of movement and 
freedom of establishment; industrial competitiveness; and security of supply. In order 
to achieve these three objectives, an initial set of measures was adopted on transit 
and price transparency; a second set of measures on the opening-up of markets for 
large consumers is still before the Council and Parliament with the objective of 
abolishing remaining obstacles to strengthen competition, effectiveness and 
transparency in the Community's energy markets. 
II. MANAGING COMMUNITY RULES 
10. The management of Community rules breaks down into three areas: 
transposition and application of these rules, monitoring compliance with them by 
businesses or administrations, imposing sanctions. In each case the Commission will 
be concerned, in exercising its own responsibilities, to: 
• provide the Member States with such assistance as they might need in order to 
take account of their own particular difficulties and organise exchanges of 
experiences in specialised committees on a regular basis; 
• ensure transparency of the transposition legislation in the Member States and of 
application methods so as to prevent difficulties which businesses could 
encounter, and in particular to ensure mutual confidence between national 
administrations through improved knowledge of the diversity of national 
systems. 
(a) Monitoring transposition 
11. The Commission has laid great stress on the urgency and importance of 
transposition. Since 1989, in the fields covered by the White Paper, it has carried out 
systematic follow-up of the technical and political situation in bilateral and 
multilateral bodies. This has produced clear results since almost half the directives 
which required transposition have been transposed in all the Member States and, in 
May 1993, more than 85% of transposition measures have been taken. Considerable 
efforts were required on the part of national parliaments and administrations to 
achieve this result; in a number of sectors, in particular financial services, 
telecommunications and transport, major structural changes were necessary. The 
monitoring of transposition is often hindered by the complexity of the systems of 
transposition and by the lack of consolidation of the national texts. 
11 
12. Until 1989 transposition was monitored on a strictly bilateral basis, except for 
certain aspects of information at the reasoned opinion stage, but since that date 
(information in the Official Journal) each Member State has been able to ascertain its 
position relative to the others and realise that, as soon as a directive has been 
transposed in most Member States, the arguments it presents for postponing 
transposition become irrelevant. Each Member State can also obtain copies of the 
national transposition legislation on the basis of published references. However, this 
element of transparency can be improved by making the legislation itself available. 
This operation would be easy if there were no language constraint. That is why the 
Commission will evaluate , on the basis of the interest expressed by users of 
Community rules, the possibility of proceeding in two stages: 
• as a first step, it would publish all the transposition legislation by specific sector, 
obviously taking account of the potential usefulness of such publication; the 
narrower the margin of discretion allowed by the directives, the less useful 
publication of transposition legislation will be; 
• subsequently it would be willing to consider any proposal for co-operation 
presented by private-sector publishers with the aim of publishing these 
collections of legislation in the different Community languages. In the context of 
such an initiative, it could encourage the establishment of a European Economic 
Interest Grouping to enable analysis, translation and publication facilities to be 
pooled. 
13. The Commission is also responsible for monitoring the conformity of 
transposition measures. The heavy workload borne by national administrations in 
formulating transposition measures is shifting to Commission departments. In the 
fields covered by the White Paper, more than 2 000 pieces of legislation in the nine 
official languages of the Community have to be checked. In addition, transposition 
measures are contained in a succession of texts of different legal hierarchy, 
sometimes issued by different authorities on the basis of their level of responsibility, 
as is the case, for example, in the transposition of the Directive on mutual 
recognition of diplomas or the veterinary Directives. Nor can monitoring of 
compliance be restricted to a simple comparison of texts, but must also take account 
of the overall legal system, such as for company law, or of the administrative 
framework, in the veterinary sector. In addition, monitoring of transposition is 
frequently hampered by the complexity of the methods of transposition and the lack 
of consolidated national texts. The complex nature of monitoring compliance explains 
the diversity of the methods used: 
• in most areas, the Commission has the draft transposition measures analysed 
by its services in order to prevent infringement situations and especially to 
ensure a convergence of interpretation; 
• in a number of highly technical areas, the Commission reacts to complaints from 
operators and the Member States to establish that the transposition measures 
are inadequate. This is generally the case in the field of products and veterinary 
and plant health rules, where in any case the frequency of committee meetings 
in the fields of veterinary and zootechnical legislation, and legislation on 
vegetable product and animal feedingstuffs ensures permanent follow-up of the 
operation of the rules and therefore of the quality of transposition; 
• in other fields, the Commission entrusts the analysis of transposition measures 
to experts and , where necessary, initiates the resulting infringement 
12 
proceedings; 
• in a limited number of fields, detailed, and in certain cases public, reports on the 
transposition and implementation of directives have been made where the 
information obtained highlights particular problems. In such cases, the 
Commission launches investigations, as it did recently into the application of the 
Directives on hormones, artificial insemination, transport of livestock, veterinary 
fees, etc.; 
• in other areas, Community legislation itself has set up committees with the task 
of assisting the Commission to monitor transposition (e.g. the VAT Committee, 
the Committee on Excise Duties, the Standing Committee of Heads of National 
Revenue Departments). This method was particularly effective for the follow-up 
to the transposition of the Directives on VAT and excise duties which 
guaranteed that, despite a number of delays in transposition, it was possible to 
take the administrative measures to ensure the effective entry into force of the 
new arrangements on 1 January 1993, even in relation to the simplification 
measures adopted as late as the end of December; 
14. This does not, however, enable the Commission to guarantee a systematic 
monitoring of the conformity of transposition measures to give all the Member States 
and businesses a guarantee that a product or service from another Member State 
complies with Community legislation. It would be useful to undertake such checking 
of the conformity of the transposition measures sector by sector, in the framework of 
bilateral meetings with the Member States, but the development of this approach will 
depend on the resources devoted to this action. 
15. The current difficulties of monitoring the transposition of directives raises 
questions about the approach to be taken in future. Of course, the previous 
proposals for improving transparency of transposition measures will allow mutual 
supervision of the quality of the measures taken. However, as the Commission has 
pointed out on a number of occasions, the use in certain circumstances of a 
regulation in place of a directive should be facilitated. The Commission, while 
favouring directives, considers, in fact, that regulations could contribute to 
transparency and the sound application of the rules, without adversely affecting the 
specific features of national legal or administrative systems, in two cases: 
• first, as proposed by the Sutherland report, when the work of harmonisation has 
been completed in a particular area and the situation regarding application by 
the Member States is convergent, directives could be consolidated in the form of 
a regulation. This could apply to the strictly technical provisions in the areas of 
tractors, motor vehicles and pharmaceutical products; 
• second, national transposition procedures could be simplified if the 
implementation measures for directives could take the form of regulations. In 
these cases, the national systems have been adapted as part of the 
transposition of the basic directive, the implementing legislation laying down 
only the procedures for intervention. Where the basic texts allow it, this 
approach could prove particularly useful in fields requiring many implementing 
measures such as veterinary and plant health rules. 
16. Tris streamlining of transposition procedures would be all the more easy since 
only a lifted number of cases pose genuine problems. Without giving an exhaustive 
list, a few examples are the Directives on the mutual recognition of diplomas, on the 
13 
opening-up of public procurement, and on the provision of broadcast television 
services. 
17. The entry into force of the Treaty on European Union will enable the 
Commission, on the basis of Article 171, to have fines imposed on Member States 
which do not comply with the judgements of the Court of Justice. The criteria on 
which the Commission will set the level of fines to be proposed to the Court have yet 
to be determined. 
18. The operation of the Internal Market depends, not only on Community law, but 
also on the inter-governmental conventions which, by facilitating judicial co-operation 
and by organising administrative co-operation, should also facilitate free movement 
within the Community. Worrying delays, often attributable to ratification procedures, 
are evident in the implementation of these instruments. Of the 21 inter-governmental 
conventions concluded at Community level, only two are effectively in force, and still 
only between ten Member States. The entry into force of the Treaty on European 
union, Title IV of which organises co-operation between the Member States in the 
areas of justice and internal affairs, should give the Commission the possibility to 
play a role by providing an impetus in this matter, if necessary by using its right of 
initiative where this has been granted to it. 
(b) Monitoring application 
19. In addition to the transposition of rules there is the question of monitoring their 
application both by government departments and businesses which must comply 
with the obligations laid down by these rules. Monitoring methods are essentially a 
matter for the Member States even if, in exceptional cases, the Commission has 
been entrusted with carrying out individual on-the-spot inspections and checks. 
(i) Monitoring by the Commission 
20. Under Article 155 of the EEC Treaty, the Commission has a general 
responsibility for monitoring compliance with the obligations created by Community 
law and, under Article 5, the Member States must give it any assistance necessary. 
To make it more effective in this role, it can make on-the-spot inspections in a 
number of fields. 
• Organisation of controls in the Member States: under a series of Council 
Directives, there are specific obligations on the Commission to carry out 
inspections in a wide range of sectors, for example, fresh meat, meat based 
products, poultrymeat, dairy produce, fish products etc in order to ensure that 
the public health requirements and the rules on animal health are observed. 
Corresponding obligations apply in the phytosanitary sector. These obligations 
are linked to the functioning of the Internal Market and take account of the 
change in approach towards a system based on controls on production and 
marketing requirements carried out at the place of origin or, in the case of goods 
imported from third countries, at the external border. In 1992, these new rules 
led to the setting-up within the Directorate-General for agriculture of the Office of 
Veterinary and Phytosanitary Inspections and Control. The capacity of the 
14 
Commission to discharge its responsibilities in these sectors is a matter of 
concern. The Member States have been given recently a full account of the 
problems facing the Office in the light of changing animal and public health 
requirements, and of the limitations within the Commission on the recruitment of 
personnel. The major sectors where little progress can be made in the 
foreseeable future have been indicated: these include fish products, 
poultrymeat, meat based products and animal welfare. The resources available 
to the Office are not consistent with the responsibilities devolved on the 
Commission for managing these aspects of the Internal Market. The 
Commission is considering how this problem could be overcome. 
It has to be stressed that, as far as its activities within the Community are 
concerned, the inspection function of the Office does not substitute for controls 
carried out by the Member States; the objective is to ensure that controls are 
functioning correctly and that confidence is thereby maintained in the single 
market. On the other hand, the Commission's inspection function in third 
countries is intended to subsume the role of Member States, which; in the new 
situation of the single market, cannot maintain different approaches to trade with 
third countries. But in dealing with third counties, the approach will be to make 
more responsible veterinary and phytosanitary services in the third countries 
concerned, with the emphasis on reciprocity and equivalence rather than on 
maintaining the more traditional intensive approach to inspection of individual 
premises. 
This is why the option chosen in a draft directive in the process of being adopted 
by the Council in the area of foodstuffs was to provide for the nomination and 
mandating of officials to cooperate with the competent authorities of the Member 
States for the purpose of monitoring the evaluation of equivalence and efficacity 
of official control systems applied by these authorities. It is therefore a power of 
audit or evaluation of the operation of the control systems that will be put in 
place. 
An intermediate solution could be the establishment of a body of inspectors in 
each Member State which could be involved in inspections organised in another 
specific Member State under arrangements yet to be determined. This method 
was introduced in the administrative agreement concluded with Switzerland on 
the arrangements for road traffic and would allow the results of the inspections 
to be published and ensure mutual confidence in their effectiveness. 
Handling of complaints: the Commission receives a large number of 
complaints which is tending to increase with the development of Community 
legislation and its transposition and with the awareness of firms and the 
integration of their activities. These complaints mainly concern the free 
movement of goods (Article 30 of the EEC Treaty), but those relating to public 
procurement are now on the increase. The growing number of complaints and 
the difficulties experienced by Commission departments in investigating cases 
have led to the Commission to advise complainants to raise the matter with the 
national authorities in the first instance, particularly when the complaint refers to 
measures taken on the spot. In addition in some areas the Commission uses 
the powers of discretion granted to it under Article 169 of the EEC Treaty to act 
in the interest of the law. 
The Commission has always aimed to strengthen co-operation between its 
services and national administrations in order to ensure and improve the 
enforcement of the fundamental principles governing free movement. The 
15 
Commission will follow this approach, particularly by continuing to organise 
regular meetings with Member States to try to seek consensual solutions to 
problems that arise. This is intended to make sure that problems are dealt with 
effectively and to foster a climate of confidence. 
In the same spirit, with the Member States, it has set up, since 1 January 1993, 
within the Advisory Committee for Co-ordination in the Internal Market Field, 
rapid procedures for processing cases connected with the abolition of frontier 
controls. It would be desirable if these working methods could develop in the 
context of mutual assistance between administrations, as has long been the 
case in the veterinary and zootechnical fields. 
These problems are usually brought to the Commission's attention on an 
informal basis, either by businesses themselves or by Commission networks, in 
particular the Euro Info Centres, even if a more systematic analysis would 
sometimes be desirable. 
(ii) Monitoring by national administrations 
21. Except in cases such as those of company law and competition law, where the 
application of the rules is placed under the direct control of the courts, it is the 
national administrations that usually carry out inspections and take action against 
infringements of Community rules; it is for them to organise themselves with 
reference to their constitutional or administrative system. This decentralisation of 
checks must remain the central element of the Community system, but it clearly has 
a drawback - the risk of divergences in the exercise of these responsibilities. The 
question therefore arises of how and under what conditions this system of checks 
can operate without leading to risks of distortion, and especially without 
compromising mutual confidence between administrations and businesses. A certain 
homogeneity or equivalence of the control structures put in place by the Member 
States is an essential condition to avoid risks of distortion and to promote mutual 
confidence between administrations and between economic operators and to create 
confidence on the part of consumers in the product made available to him. The 
Sutherland report proposes a framework for inspections, but more informal methods 
are also possible. 
• Assistance to the Member States: the Commission must provide the Member 
States with the assistance they need to ensure consistent application of the 
rules. This assistance may take different forms such as joint interpretation of the 
rules or a co-operation network between inspection authorities. 
(a) To guarantee convergent application of the rules, every administration must 
be provided with a similar interpretation of them. Of course, interpretative 
documents cannot replace the legal instrument itself, which alone can 
guarantee legal certainty for businesses and citizens, even though the 
Court of Justice has recently relied on an interpretative document to reject 
an action against incorrect transposition. A series of precautions should be 
taken so that interpretative communications and documents can have the 
desired effects: 
they must be prepared in close liaison with the Member States and 
both sides of industry so that the diversity of national situations is 
taken into account; 
16 
they must be made public to enable everyone to make use of them; 
they must be updated regularly with reference to developments in 
national legislation, the jurisprudence of the Court, administrative 
organisation and experience. 
For a long time the Commission has published guidelines for controls on 
pharmaceutical products, drawn up in close co-operation with the industry 
and the Member States. In 1993 it will publish a guide to applying the new 
approach, and one on public procurement. In the customs field, a number 
of interpretative communications and other instruments and guides have 
been prepared to facilitate uniform application of the legislation. There are 
also plans to publish the decisions and opinions of the Customs 
Committees. In the field of recognition of diplomas, a guide will be prepared 
in 1993 for administrations, contact points and the beneficiaries of the 
system of recognition. 
(b) As is already the case in the areas of customs and indirect taxation, the 
Commission must organise the functioning of networks of information 
exchange and co-operation to deal with the inspection problems arising 
from freedom of movement. These networks must also support 
administrative co-operation. As a result of the free movement of goods, 
services, capital and persons, every control administration will be faced with 
new situations in which the normal control function will be impossible 
without the information held by the home country administration. In the 
absence of this information, there is a risk of either subjecting businesses 
to disproportionate checks or rendering checks ineffective. 
The Commission is facing a new situation since it is now dealing with 
different parties in the Member States. Whereas to date those parties were 
the departments of central administrations which issue regulations, from 
now on they will be mainly in inspection or implementation departments 
which have had only sporadic contact with Community institutions and 
which are often decentralised. 
Control framework: 
(a) A number of methods of providing a framework for controls have been 
tested, from simply identifying the control authorities to laying down 
principles governing these controls: 
Identification of the control authorities is the approach adopted in the 
Directives on public procurement, firearms, television and recognition 
of diplomas. It is accompanied by the obligation to report on the 
application of the Directives to enable the Commission to compare the 
different national measures, assess the effectiveness of the Directives 
and identify any special initiatives needed. 
In the field of foodstuffs, monitoring departments in the Member States 
must be identified and notified, the monitoring arrangements must 
comply with the joint principles such as monitoring at the production 
stage and not only on the market, and the organisation of co-ordinated 
monitoring programmes. These various arrangements are currently 
being improved, in particular by the establishment of quality standards 
in official control laboratories, the unification of general criteria for 
methods of analysis and the fields of training of national inspectors. 
17 
In the field of transport, there are rules on the level of controls to be 
carried out on compliance with technical rules and working hours 
legislation on the roads. These provisions supplement the rules for 
harmonising controls on the conformity of vehicles, ensuring 
compliance with the most important technical rules. 
In the banking sector, the Member States have established, in 
application of a Commission recommendation, an ombudsman 
responsible for facilitating the settlement of disputes arising from 
cross-border transfers. 
(b) The need for mutual confidence between the Member States justifies the 
establishment of control arrangements suited to the specific nature of each 
field, based on the following guidelines: 
unification of a number of principles of control and arrangements for 
control where this proves necessary to ensure uniform and effective 
application; 
use of audits of national control systems to provide better evaluation of 
the problems and clearer identification of the need for approximation 
and ways of achieving it. 
(c) In the field of public procurement, the proposal set out by the Sutherland 
report is to appoint a mediator who, under strict confidentiality, would make 
representations to the awarding authority to correct procedural errors and 
would also suggest possible remedies in such a case. He should provide 
complete guarantees of independence and should adhere strictly to the 
rules of confidentiality. Establishing such a system will require an 
assessment of national systems to avoid creating an additional layer of 
bureaucracy and interfering with existing means of redress. The 
Commission will therefore have to proceed cautiously with such an 
approach, and will as a first step call on the Member States to designate a 
contact point in the national administration who would be responsible for 
informing and advising businesses. 
ii) Access to justice 
22. It is the domestic courts who have to decide at first instance whether a particular 
enactment or conduct is in accordance with Community law. They have a crucial role 
to play in ensuring that due regard is had to Community law in litigation and that 
Community law is applied in an increasingly consistent manner. The subject 
deserves a cohesive work programme all to itself covering the wide range of other 
measures aimed at ensuring that Community law is widely known, clearly set out and 
properly understood. Such a programme would have to be concerned with more than 
just the single market since the problems referred to in this paper are equally 
relevant in such areas as social affairs, customs and the environment. Consideration 
of this issue should be situated within the wider framework which will be opened by 
the entry into force of the Treaty on European Union, Title VI of which fully 
associates the Commission with the judicial co-operation of the Member States, and 
opens to it a right of initiative in civil matters. Nevertheless, and without prejudice to 
more general developments which will arise in this context, the requirements for the 
management and development of the Internal Market enable some avenues of 
18 
reflection to be opened up. Private individuals can have difficulty in enforcing 
maintenance orders or obtaining damages. Businesses, particularly SMEs, may 
encounter problems in securing timely payment for sales in other Member States 
and such situations are likely to arise more often given the greater mobility of people 
and free movement of goods and services. 
(a) A primary area for consideration is that of the means of redress open to 
injured parties, the effectiveness of the remedies open to them and the 
information about them which is available: 
The only case in which the Community has taken the view that specific 
remedies were needed to ensure compliance with Community 
obligations is that of public procurement; 
There are other areas in which the Community rules expressly provide 
for judicial review. The Customs Code, for example, entitles any 
person to appeal against a customs decision which concerns him 
directly and individually. Similar provision has been made with regard 
to the mutual recognition of qualifications, where decisions must 
contain a statement of reasons and may be challenged in the courts; 
such an approach has also been adopted in the area of cultural goods 
and financial services; 
in most other areas no special provision appears to be needed, given 
the ordinary legal remedies which exist in all the Member States. But, 
as Community rules are concerned with the operation of the market, it 
ought to be possible for consumers and firms to bring actions before 
the courts if those rules are to be properly enforced. This may be 
difficult where, for example, the court has no power to award costs to 
the successful party or consumer associations cannot act in their own 
right or on behalf of their members. The Commission will accordingly 
be examining the entire question in a green paper on access to justice 
for consumers which it will be publishing in the course of 1993. 
(b) The transparency and consolidation of, and information on, the rules of the 
single market , together the networks for the dissemination of this 
information, will help to ensure sound interpretation and application of those 
rules by the national courts. In December 1992 the Commission adopted a 
communication on co-operation between the Commission and national 
courts in applying Articles 85 and 86 of the EEC Treaty ; the communication 
is shortly to be supplemented by an explanatory booklet outlining the 
procedural rules for the application of these provisions by the courts in the 
Member States. A vital role will be played here by the measures taken to 
improve the Celex database following the European Council in Edinburgh 
and by measures to improve access to Community databases in general. 
These measures have become even more important with the judgement of 
the Court of Justice in the Francovich case, the implications of which have 
been highlighted in the Sutherland report and elsewhere: the Court 
accepted, within certain limits, that an injured party was entitled to 
compensation for non-transposition of Community law.. Quite 
independently of the penalties which the Treaty on European Union 
provides for in the event that a Member State fails to fulfil its obligations, it 
is important that persons subject to the law should be able to take 
advantage of the existing possibilities which the Court of Justice has 
19 
opened up here; the Commission is awaiting the outcome of two other 
applications for preliminary rulings currently before the Court of Justice and 
will then draw up a notice on the interpretation of Francovich. working in co­
operation with the Member States in order to take account of the specific 
features of each legal system. 
(c) Penalties are an integral part of a system of enforcement. There would be 
no point in bringing the enforcement mechanisms more closely into line if 
the penalties imposed were inconsistent. The measures taken are very 
vague in this respect; obviously, they require the department responsible 
for supervision to take appropriate measures when a product is not in 
conformity with a directive; in a few isolated cases, notably veterinary 
policy, insider dealing and money laundering, Member States are required 
to establish appropriate systems of penalties. But, as consumer 
associations and the European Parliament have pointed out, there are 
areas where divergent penalties may damage the collective interest of the 
Community, examples being the ban on hormones , insider dealing and 
company law; fines for infringement of the rules on the export of dual-use 
goods range from no more than ECU 16 000 to an unlimited amount and 
with terms of imprisonment ranging from 2 to 7 or even 15 years. Generally 
speaking, the Commission does not propose to try to harmonise penalties 
as this would involve looking at the specific features of civil and criminal 
proceedings and the scale of offences and penalties in each Member State. 
But the flow of information between Member States needs to be made 
more transparent, and they should be asked to specify the penalties they 
have provided for when they notify measures to implement Community law. 
If it proves necessary in the light of that information, the question of 
systems of penalties could be discussed at a later stage. 
(d) Once judgements have been delivered they must be enforced. This point is 
likewise fundamental to any consideration of the question of access to 
justice because, in an open market, it will more and more frequently happen 
that infringements committed or damage caused by a firm or individual 
based in one Member State are registered and prosecuted in another, even 
though it may be impossible to find in the latter a responsible person 
against whom the judgement can be enforced. There are numerous 
intergovernmental conventions on the subject, but they are not working as 
well as they should. Because they are intergovernmental conventions, the 
Commission has no right of initiative, at least until the Treaty on European 
Union enters into force; it can only monitor and encourage the work of 
ratification and play a part in the relevant working parties: 
The Convention on Jurisdiction and the Enforcement of Judgements in 
Civil and Commercial Matters is the principal instrument for the 
recognition of judgements; its extension to Spain and Portugal awaits 
ratification in Belgium, Denmark, Germany and Ireland. Its operation 
has been judged effective in the intergovernmental framework; the 
Commission plans to seek the views of business here, with particular 
reference to the rapidity of procedures for the transmission of 
judgements and to the scope of the Convention. The possibility of 
extending the Convention to include marriage and family law in general 
will also be examined in order to take account of the new situations 
created by the mobility of people, which has been facilitated and in 
20 
some cases encouraged by Community legislation. 
The Rome Convention on Contractual Obligations will have an 
increasingly important role to play as economic integration and 
freedom to provide services make cross-border contracts a normal 
feature of commercial life, giving rise to the problem of which law is 
applicable. The Convention applies throughout the Community, with 
the exception of Spain and Portugal due to delays in ratification in all 
Member States except the Netherlands. Its effectiveness will likewise 
be analysed, as will the usefulness of extending it to other areas of civil 
and commercial law. 
The entry into force of the Treaty of European Union, particularly Title 
VI,should be the opportunity for the Member States to strengthen their 
judicial co-operation and to give a new impetus to work in this area. The 
Commission will play its full part in these new developments and, in this 
context, will see to it that the internal market is extended where necessary 
by taking, if the case arises, the necessary initiatives. 
Once the Treaty of European Union is in force, this co-operation, whatever 
form it takes; will be organised within a framework of common action 
adopted by the Council in compliance with the terms of title VI of the Treaty, 
which the Commission will be able to initiate taking inspiration from the 
experience gained from the various initiatives currently in existence. 
(e) Lastly, the legal professions must not be excluded from the current or 
planned measures aimed at improving co-operation between national civil 
services. Co-operation here could pursue two objectives, namely making 
Community rules themselves better known and facilitating knowledge and 
understanding of the Member States' different legal and judicial systems. 
Several methods might be envisaged: 
the organisation of exchanges between training establishments, on the 
model of the Erasmus or FORCE programmes; 
encouraging the organisation of training courses for judges and law 
officers in the Member States; measures of this kind have been taken 
for these professions in France and Spain, subject to budgetary limits; 
if further budgetary resources were to be made available, the 
Commission could encourage such initiatives in suitable 
establishments (such as the College of Europe in Bruges, the 
European Institute of Public Administration in Maastricht, and the 
Universities of Trier and Oxford). 
the organisation of exchanges of judges and law officers by bringing 
them into the existing programme for the exchange of officials, which 
covers departments responsible for implementing Community 
legislation on the single market (KAROLUS programme); 
21 
III. SUPERVISING THE OPERATION OF THE SINGLE MARKET 
(a) Preventing obstacles to trade 
23. The Commission has a range of tools at its disposal for ensuring that national 
rules comply with the Treaty and for promoting mutual recognition and to eliminate 
barriers justified by the Treaty by legislative action. If the single market is to work 
properly, it is vital that the Commission should go on performing this preventive 
function, which it exercises in the first instance by applying the provisions of the 
Treaty, because there is a natural tendency in all Member States to introduce new 
rules and regulations, for quite legitimate reasons, without necessarily considering 
their impact on trade and because supervision of national rules and regulations 
enables the Commission to identify any areas where additional Community 
legislation is needed. Competition policy plays a central role in the prevention of 
obstacles to trade by preventing some markets from being distorted by cartels, 
abuses of dominant position, state aids or exclusive rights. 
(i) Goods 
24. Directive 83/189/EEC, which has applied to all goods since 1988, requires 
Member States to notify the Commission and the other Member States of any 
planned rules or regulations. It has become a useful instrument for preventing 
obstacles to trade. Notification initiates the vetting process, and the transparency it 
establishes launches a process of dialogue and co-operation between the Member 
States and the Commission. Gaps have been identified in the coverage of the 
Directive and in the procedures which it sets up. A proposal aimed at overcoming 
these is currently before the Council and Parliament. 
25. There is another measure which could make for greater transparency of mutual 
recognition procedures. Mutual recognition is not automatic; the natural tendency is 
for the national department responsible to check that a product entering the domestic 
market complies with its own rules, unless it can be shown that it complies with the 
rules of another Member State providing equivalent protection. It has to be shown in 
every case that there is equivalent protection, and the situation may change as the 
rules themselves change. It should be possible to ask Member States to declare all 
refusals to recognise the rules of other Member States. The Commission would then 
be able publicly to announce the cases where rules were not recognised by one or 
more Member States. This multilateral method of assessing equivalence would draw 
attention to any instance in which one Member State challenged national rules that 
were recognised by all the others. The Commission will be making an appropriate 
proposal shortly. 
26. Finally, particular attention must be given to problems in the veterinary and 
phytosanitary sectors, where the risk of national measures affecting trade in animals 
and animal products is ever present. Since January 1993, we have been witnessing 
a very unfavourable evolution of the animal health situation in the Community. This 
has given rise to tensions amongst the Member States and has prompted the 
adoption of unilateral national measures with the declared intention of preventing the 
22 
spread of serious diseases from other Member States and third countries. The 
Commission has succeeded in applying the necessary Community measures, 
compatible with the abolition of border controls; it should however be noted that the 
Member States have had a tendency to apply unilateral national measures. To 
guarantee maximum security from a health point of view there is a pressing need to 
provide resources and procedures which will allow the Community to react rapidly to 
disease outbreaks and to support disease eradication programmes effectively in the 
interest of achieving and maintaining the highest possible health standards. Without 
this, the single market in animals, and in animal and plant products, will not develop 
and prosper. 
(ii) Services 
27. The prevention of obstacles to trade in services is less well organised. Since 
1962 there has admittedly been a prior examination and consultation procedure for 
measures which Member States are planning to adopt in the field of transport. But a 
procedure of this kind is an exception in the services sector, and the Commission 
could envisage, outside the harmonised sectors, extending to the services sector the 
procedure followed for technical rules and regulations. 
28. More than the free movement of goods, the growing freedom to supply services 
places tax and social security systems in competition with one another. This is fully in 
line with the principles governing the single market, under which the law applicable is 
to be that of the country from which the service is supplied. The Commission must, 
though, seek to ensure that differences between social security and tax 
arrangements do not lead to situations which would be legally or politically 
unacceptable. To prevent the supply of services from becoming a means of 
sidestepping the social security requirements of the country in which the service is 
supplied, the Commission, acting in accordance with the Social Charter, has put 
forward a proposal on the posting of workers, which defines the conditions under 
which the law of the country in which the service is supplied is to apply. In the tax 
sphere the Court itself has drawn the Commission's attention to the need for 
Community action. The Commission is currently studying the question. 
(b) Evaluating the effectiveness of Community rules 
29. The Commission is sensitive to the concerns expressed by some Member 
States and industries are concerned about the availability of statistical information on 
intra-Community trade. The former method of collection based on customs 
declarations has given way to a new system based on direct declarations made each 
month by firms. The first results obtained from certain Member States lend support 
to the view that that the difficulties inherent in the launching of this system are 
transitory in nature and that the statistics provided will be of a kind and quality 
comparable with those which existed up to 1993. The Commission will therefore be 
in a position carry out, in similar conditions, the monitoring of the evolution of intra-
Community trade flows required to accompany any necessary policy decisions in the 
trade area. 
30. The effect of the single market on business, industries and the economy in 
23 
general has been descried in the Cecchini report and other academic studies. The 
next step will be to verify the analyses made in these publications, but that can be 
done when all the measures called for have entered into force. The bulk of the 
measures on the manufacture of goods are now in place and border controls have 
indeed disappeared, but a manufacturing firm remains dependent on the range of 
services it buys in order to organise the production and marketing of its products. 
Most of the measures concerning services particularly in the insurance, 
telecommunications, energy and transport fields, will enter into force only gradually. 
In its resolution of 7 December, therefore, the Council asked that such an 
assessment be carried out by 1996. 
31. The assessment of the economic and social impact of the single market has to 
overcome three types of difficulty: 
• In the first place, there will have to be information available that will make it 
possible to gauge the effects of the dismantling of frontier controls on the 
activities of firms and hence on the structures of their markets and their 
strategies: the "observatoire des entreprises" could provide information in this 
regard. Large firms provide clear illustrations of such changing markets and 
strategies, but it is more difficult to assemble information on business services 
and especially SMEs; 
• An assessment will also have to be made of the effects of the conduct of 
businesses, public administrations, consumers and workers, who themselves 
react to the effects of the single market and influence the level of knowledge 
and the conduct of firms, either amplifying or attenuating the consequences the 
single market would otherwise have had; 
• The study will also have to take proper account of the time it takes to respond to 
Community rules. 
Assessing the impact of the internal market is thus a long-term task. But it can 
be started at once, and the Commission proposes to launch this work at the 
beginning of 1994, subject to the budgetary resources available, on the basis of 
the preparatory work already under way; the exercise should last about three 
years. 
32. It is also necessary to ensure that the operation of the single market matches 
the needs and expectations of business and of the general public. But proper 
supervision is difficult because there is no general yardstick against which the 
working of the single market can be measured. A large number of committees have 
been set up to carry out assessments of this kind often on the basis of reports which 
the Commission is obliged to present to the Council and the Parliament.. These 
committees can be a useful channel for establishing whether the rules in force are 
what are needed. However, it is difficult to assess the economic, social and industrial 
impact of rules from the vantage point of a single sector because the environment of 
firms is determined by the totality of rules which determine the competitivity of this 
environment. The question arises as to how the Member States and economic 
operators concerned could organise themselves to monitor and assess the overall 
impact of the rules. 
33. It is not enough to assess the economic consequences of the single market as 
such; it must also be verified whether each of the rules adopted meets the 
24 
expectations of businesses, consumers and the general public. The Commission has 
at its disposal for this purpose the various working parties and committees bringing 
together government representatives, business people, consumers or 
representatives of those working in the field, one example being the veterinary and 
foodstuffs advisory committees, made up of representatives of the occupational 
categories involved and of consumers. For broader supervision of the operation of 
the single market, the Commission turns to the Advisory Committee on Co-ordination 
in the Internal Market Field to pass on any information, studies or observations on 
the working of the market; if necessary, therefore, this committee will be able to 
make up any shortcomings in communication between the Commission and 
Member States. As regards contacts with the economic and social groups 
concerned, the Commission, in line with Parliament's resolution of 
18 December 1993, is prepared to work through the Economic and Social 
Committee, which consists of representatives of all of these groups and thus 
combines technical knowledge with the political sensitivity needed for an assessment 
of this kind. 
IV. ORGANISATION Of PARTNERSHIP WITH THE MEMBER 
STATES 
(a) Scope of partnership 
(i) Freedom of movement for persons 
34. Freedom of movement for persons is governed by its own rules, which will 
change with the entry into force of the Treaty on European Union. But it is accepted 
that the Community has jurisdiction over capital or sensitive goods such as drugs 
destined for the licit market (medical and pharmaceutical), privately held weapons 
and capital. It is important in these areas that the Commission should preserve the 
contacts that exist between the Member States. It is likewise important that the 
Commission should provide a channel for the exchange of information in areas which 
are not regulated at Community level, such as psychotropic substances or the 
protection of public morals; it was in this context, and to this end, that the Council of 
8 February 1993 adopted a regulation to set up the European observatory on drugs 
and drug addiction. Leaving aside the question of co-operation between 
administrative departments in the application of Community rules, an exchange of 
information and experience is needed in order to build confidence between national 
administrations. The Commission will accordingly arrange regular seminars to 
facilitate convergence of national systems, without necessarily having recourse to 
Community legislation or international conventions in order to forestall any difficulties 
and to lead to the laying down of guidelines by the Council. 
(ii) Protection of essential requirements 
35. Solidarity between Member States in the management of the single market 
demands co-operation between administrations in order to ensure that consumers 
are protected against dangerous products or ones not in compliance with the rules 
25 
moving from one Member State to another. It also means that the Commission must 
be able to secure changes in Community rules in order to respond to new needs and 
must therefore have the necessary scientific information at its disposal. Lastly, 
solidarity in the fight against fraud is needed. 
a) Early-warning systems for dangerous or non-conforming goods and 
services: taking into account the several instruments establishing particular 
early-warning networks in specific directives and the entry into force in 1994 of 
the general product safety directive all consumer goods moving within the 
Community are covered. 
The first question is whether these different existing systems can work 
effectively and, if so, how. Experience to date shows that they are poorly 
understood by national administrations and applied inconsistently in the different 
Member States. The challenge facing the Commission and the Member States 
is to ensure that these emergency systems can operate on a routine basis. But 
with a large number of networks and contacts even inside the Commission, 
there is a danger that the system will not be transparent and will be rendered 
ineffective. A series of measures could be envisaged to improve the situation: 
acceleration of the speed of transmission of information 
stricter limitation of the use of the procedure to truly urgent cases; 
at least in certain sectors, more precision regarding the information to be 
supplied by national authorities; 
a more equal use by the Member States of the emergency systems; 
greater transparency regarding the reaction of the national authorities to the 
cases notified; 
greater Community co-ordination regarding the treatment of information 
(confidentiality/ publicity); 
more systematic organisation of the discussions at Community level 
regarding the treatment of the cases notified. 
The second question is whether such systems would be useful in the field of 
services, something which should be looked at together with the 
Member States. Such systems are devised on a pragmatic basis for the 
professions in cases where serious and specific situations arise which may have 
consequences for the practice of the profession. These methods are however 
still an exception in the case of services; but the growth of cabotage in the 
various forms of transport, for example, might justify informing all 
Member States of measures taken against a firm which might have 
consequences in the other Member States. The Commission will therefore be 
considering the usefulness of establishing early-warning networks for services 
too. 
b) Adapting regulations to new risks: the Commission must also have the 
means of ensuring that rules can respond effectively and rapidly to new 
demands. This flexibility must come into play not only when rules are drawn up 
or amended but also when they are applied in the Member States. These two 
levels are closely bound up with one another and interact, but the tasks and 
functions involved are different. 
26 
The drafting and amendment of regulations requires a capacity for technical 
or scientific evaluation and the establishment of legislative processes which 
are sufficiently streamlined to meet any needs that arise. It goes without 
saying that problems crop up with degrees of urgency that vary from one 
industry to another and from one type of risk to another. The more critical 
the risk, the greater are the demands placed on the Community machinery 
and the more structured co-operation between the Member States and the 
Commission has to be. This is the case with the different scientific 
committees in the veterinary, plant-health and food sectors, on which the 
leading independent European experts sit. The objective of these 
committees is to supply the Community with scientific analyses which are 
as incontestable as possible so that they can serve as a basis for drafting 
and amending Community legislation. Similar needs exist in other areas 
such as car safety, the safety of chemicals and consumer product safety. 
The performance of the Community machinery should be considered 
overall, taking in the entire decision-making process, which can last from 
three to five years depending on the type of legislation and the procedure to 
be followed. Such long periods may be incompatible with the seriousness of 
the danger and may justify considering the implementation in the meantime 
of national legislation which has the effect of fragmenting the market once 
again. The Commission thus needs procedures that are adapted to the 
Community's requirements and will enable it to take emergency measures 
in emergency situations; such a procedure is provided for under certain 
conditions in the directive on general product safety. 
Generally speaking, the Commission does not itself possess the technical 
and scientific capacity needed to evaluate the need for regulation. New 
working methods will therefore have to be devised under which particular 
tasks would be entrusted to groups of experts or laboratories designated by 
the Commission in agreement with the Member States. There is wide 
experience of such an arrangement in the pharmaceutical sector. 
(b) Partnership instruments 
(i) Administrative co-operation 
36. Administrative co-operation, in application of the principle of subsidiarity, is also 
justified for a diversity of reasons: to ensure a comparable level of protection of 
health and safety, to ensure mutual confidence and to guarantee competition. The 
abolition of administrative checks at the Community's internal borders highlights the 
additional risk of fraud where Community rules allow different national arrangements 
to coexist and make the crossing of borders subject to special procedures or 
conditions. There may also be a risk of fraud if controls are not carried out to the 
same level, as was shown by the Commission report on hormones. In such cases 
the intervention of authorities will have implications on the territory of other Member 
States. Owing to the abolition of customs checks, various authorities may be 
involved in the same case. 
37. Combating fraud is a well-known problem in relation to the Community budget. 
Fraud against the Community rules has always existed but each Member State has 
27 
claimed up to now to be able to keep it under control through its administrative 
procedures. Administrative co-operation instruments now need to be introduced in 
order to meet this threat. The development of informal initiatives gives rise to fears of 
a lack of transparency in the exchange of information and of an unequal treatment of 
cases. There would therefore be a number of advantages in introducing formal 
control machinery, in accordance with the proposals in the Sutherland report. It is in 
the interests of consumers and the public at large for mutual assistance between 
national authorities to be as efficient as that which exists within Member States. 
38. Co-operation between authorities may also be aimed simply at administering 
Community acts, which often requires information gathered in another 
Member State. This is the case with the majority of directives and is generally the 
function of committees at the Commission and of networks of responsible authorities. 
It is generally departments in the Member States administering internal rules which 
take part in the network but it may also be departments set up especially to 
administer directives, as in the case of the system for the general recognition of 
diplomas. 
39. The arrangements for co-operation may take various forms: 
(a) In certain fields the arrangements for mutual assistance are governed by 
detailed procedures managed by committees: this is the case, for example, in 
the foodstuffs, pharmaceutical and veterinary fields. The abolition of tax frontiers 
has led to the setting-up of bodies for co-operation between authorities within 
the Standing Committee for Administrative Co-operation and by the designation 
of liaison offices in each Member State; this structure will permit mutual 
assistance in carrying out checks in one Member State on behalf of another; the 
procedures for this mutual assistance are laid down in Regulation 218/92 on 
administrative co-operation particularly in relation to VAT; besides this, there 
exist provisions regarding mutual assistance in Directive 77/799/EEC which 
have been extended to the field of excise. In the area of foodstuffs, co-operation 
procedures establishing a contact point in each Member State and an obligation 
to cooperate are in the process of adoption in the context of a draft directive 
completing the directive on official control. Furthermore, a directive establishing 
scientific co-operation between the Member States and the Commission has 
been adopted. 
(b) In most other fields, Community texts restrict themselves to obliging Member 
States to ensure implementation without indicating the missions entrusted to the 
responsible authorities. 
40. Experience to date suggests an approach based on the following lines which will 
be developed in a specific communication: 
(a) notification by Member States of implementing measures in respect of 
Community acts, i.e. not just transposition measures which are generally notified 
once and for all, but also administrative implementing rules; 
(b) definition before the end of the year of objectives and procedures for 
administrative co-operation at the implementation stage for each area of 
Community legislation; these matters will be considered in each relevant group 
and committee; the aim will be to identify clearly the authorities responsible for 
implementing the legislation, to determine the objectives, needs and procedures 
28 
for administrative co-operation, assess the effectiveness of existing procedures 
in fields in which administrative co-operation has been introduced and, finally, 
identify ways in which the Commission can usefully contribute; 
(c) drawing up of guidelines for administrative co-operation possibly on the basis of 
a Commission proposal; the aim of this proposal would be, in fields where no 
specific provision exists, to introduce the basic elements of co-operation 
between authorities in a bid to avoid bureaucracy and duplication of bodies and 
to introduce a sufficiently flexible structure which can be adapted to the needs 
and specific nature of each field; 
(d) preparation by the Commission of a support programme for administrative co­
operation; 
(e) a report to the Council and Parliament in early 1994 on the position with regard 
to co-operation between authorities, accompanied by supplementary proposals 
as required. 
(ii) The adaptation of authorities to the rules for the operation of the single 
market. 
41. In order for co-operation between authorities to work and, more generally, for 
the rules to be fully observed in the interests of the security of both transactions and 
consumers, administrative structures must be brought into line with the commitments 
entered into. In order for the appropriate information to flow between authorities and 
for dialogue between the various bodies to be possible, national authorities at all 
levels need to have integrated the Community dimension into their operational rules 
and their organisation. The efficiency of administration is just as much a determining 
factor for the business environment as the content of regulation. 
(a) Changing the administrative infrastructure: freedom of movement within the 
Community has shown the importance of the control structure at its external 
borders. It is in the interests of the whole Community that the police, customs 
and health authorities have available at border posts the equipment they need 
for their task, because they are acting on behalf of the whole Community. 
Furthermore, the Commission has launched a survey among the Member 
States on the management of checks on persons at external borders. 
A comparable situation exists within the Community: authorisations for 
placement on the market and checks carried out on the market are made for the 
benefit of all consumers. This is particularly true in fields covered by the 
harmonisation of essential requirements for products, which requires 
laboratories and efficient testing departments. The Commission is currently 
carrying out a study on all testing, inspection and certification departments in the 
Community in order to assess the situation and, in the light of the findings, draw 
up a programme to strengthen these infrastructures in co-operation with the 
Member States. The credibility of certification bodies and mutual trust between 
national control systems inevitably presuppose a levelling-up of the skills of 
testing and certification bodies; it also entails the introduction of networks of 
mutual accreditation agreements with the full support of national and Community 
public authorities. 
There may well be scope, in particular under the Prisma programme, in force 
until 31/12/93 , for the Community to give financial support to the establishment 
29 
of infrastructures of test and calibration laboratories and testing and certification 
bodies. 
(b) Training of national authorities: national authorities are faced with new rules 
which they must administer in the light of the Community dimension. When 
carrying out checks on the market they must be able to understand the meaning 
of product markings and accompanying documentation in order to react in a 
manner consistent with Community rules. Similarly, in order to carry out an 
efficient and appropriate check on the load of a lorry from another Member State 
the police have to know which special documents the driver must produce. The 
problem of training, which has been highlighted with regard to access to justice, 
concerns all national authorities and particularly those involved in 
implementation. While measures have been taken to promote greater 
awareness of the Community dimension on the part of national authorities, 
these remain insufficient in relation to the needs. 
exchanges of officials constitute an essential instrument for co-operation 
and mutual trust between authorities. The scope for exchanges in relation 
to the administration of the internal market remains limited, but is 
expanding progressively. Exchanges have been undertaken in the 
veterinary field since 199-1, and are now possible in all fields governed by 
internal Community rules, under the Karolus programme, which has been in 
operation since 1 January 1993. Over five years the programme is intended 
to permit exchanges by 1 900 officials in fields to be determined annually in 
the light of experience. The scope for exchanges already exists in the 
customs area and has been extended on an experimental basis to the area 
of taxation which will be covered by a specific programme (MATTHAEUS-
TAX) which is under discussion in the Council. 
While these exchange programmes are accompanied by training schemes 
for participants, there is no systematic programme of training for national 
officials. Only in the veterinary field is there provision for courses of further 
training for veterinary inspectors; in the customs and tax areas the 
exchanges will be complemented by a significant programme of training 
seminars and by the development of common training programmes. It 
would be beneficial, as proposed in the field of training for judges, to 
promote exchanges of students and instructors in establishments for the 
training of officials. 
Finally, the Commission is studying the feasibility of a documentary and 
contact periodical aimed at national administrations. 
(c) Data-transmission networks between Member States: co-operation between 
authorities can work effectively only if it is based on data-transmission 
infrastructures. These needs were identified in 1991 by the Commission in 
various fields as a result of freedom of movement within the Community. Since 
then, besides the initiatives related to the management of the external borders 
(SID, TARIC), for the management of the Internal Market itself several initiatives 
have been taken in order to set up networks covering indirect taxation (Vies), 
veterinary control (Animo and Shift), plant health (Physan) drugs and drug 
abuse (REITOX) and intra-Community trade (Comedi); the reason for setting up 
these networks was the abolition of border checks. Other needs are now evident 
for example with regard the administration of export controls on dual use goods, 
Community type approval for cars, the opening up of public procurement, the 
30 
dissemination of job offers and requests, social security, the administration of 
authorisations for the marketing of pharmaceutical products and controls on the 
marketing of foodstuffs. As new directives enter into force new needs will arise. 
In order to avoid a scattering of initiatives, the Commission has presented to the 
Council the TNA-IDA programme, which aims to suggest guideline programmes 
for computer networks which would govern all transnational network projects, 
even those not involving Community funding, and introduces an instrument for 
funding network feasibility and implementation studies. 
Initial studies show that needs centre on three types of network: electronic mail 
networks, data file transfer networks and networks for consulting and updating 
databases. Each of these networks must operate in accordance with security 
and reliability requirements. All data-transmission networks require a consistent 
and integrated approach, both at institutional and national level, which must not 
be limited to the Community but must also cover the systems relating to the 
other pillars of the Treaty on European Union. In order to carry out a consistent 
and planned expansion of these networks over the next few years, a 
programme will be launched to draw up rules for a common architecture for an 
electronic mail service between the Community institutions and Member States, 
on the one hand, and between the Community institutions, on the other, this 
service will initially permit the exchange of documents relating, for example, to 
the conduct of meetings; in a subsequent phase, applications specific to 
particular fields will be added to the electronic mail service. 
(d) The Commission intends to pilot the operation of computer networks between 
authorities with the assistance of two bodies: the Advisory Committee for Co­
ordination within the Internal Market Field should be in a position to identify 
needs and priorities and assess the effectiveness of networks; the Telematics 
for Administrations Group (TAG) should permit management of the setting-up of 
the networks, including any technical, organisational and financial problems 
involved, while respecting the remits of sectoral committees. 
V. TRANSPARENCY OF COMMUNITY MEASURES 
42. The transparency of measures has become a major challenge for the 
Community for its image both internally and externally. This explains the emphasis 
which the European Council, at its Edinburgh meeting, placed on legislative 
consolidation, by requesting the establishment of an accelerated working method 
acceptable to all the Community institutions, to adopt proposals on legislative 
consolidation quickly and effectively. Transparency is not just a requirement for the 
political and social acceptability of rules adopted; it is also a requirement for their 
proper implementation in the Member States. Member States of course clearly have 
their part to play, though their effectiveness will depend on their ability to optimise 
their initiatives within the framework of joint measures undertaken with the 
Commission and other Member States. But the prerequisite for all communication 
and information activity lies in the transparency of Community legislation. These two 
themes have been the subject of Commission communications, two on transparency, 
of 2 December 1992 and 2 June 1992, and another on access to information, of 5 
May 1993. 
31 
(a) Transparency of Community legislation 
43. As announced in its communication of 2 December 1992 on the follow-up to the 
Sutherland report, the Commission will publish codification requirements in the light 
of the current position with regard to legislation and likely developments. Already, the 
1993 legislative programme provides for codification of a large number of acts in the 
internal market area. At the same time, it will make legislation available to the public 
in consolidated form on the Info 92 database; legislation on pharmaceuticals, 
foodstuffs and company law is currently available. This project will be progressively 
extended to cover all legislation. It should perhaps be stressed that these 
consolidated texts are available in the nine Community languages. Furthermore, 
informal consolidation will be developed thanks to the programme established by the 
Office of Publications from 1 January 1993. 
44. Concurrently the Commission will publish, also in the nine languages, 
compilations of legal texts by subject matter. The first publication of this type will be 
on foodstuffs and will include all legislation relating directly or indirectly to that field. A 
further one will be on pharmaceuticals. 
45. As stated earlier, the Commission is prepared to undertake joint publication 
which would enable not only Community legislation but also implementing legislation 
to be made available to specialists. Proposals to this effect are currently being 
examined at the Commission, but in order for the initiatives to meet the needs arising 
in each of the Community languages it is prepared to promote the establishment of a 
European economic interest grouping with publishers covering the nine languages 
and pooling their translation, research and publishing resources. 
(b) Communication and information measures 
(i) Annual report on the internal market 
46. The Commission has announced the publication of an annual report on the 
internal market. This report, without duplicating the Commission's general reports or 
the report to Parliament on the implementation of Community law, should permit 
policy-makers in the Community to determine priorities and businesses to obtain 
information on the current operation of the internal market. The purpose of the report 
will not be merely to give information on the stage reached in the decision-making 
process which are already given in the annual report, nor to examine the problems of 
transposition and implementation of legislation, which are dealt with in the report on 
the implementation of Community law, but to describe all aspects of the 
administration of the single market as set out in this paper. Consequently, the report 
will have to be drawn up in co-operation with Member States so that it can include 
information on the implementation of legislation there. Consideration could also be 
given to subsuming in this report all the other reports which the Commission has to 
make in compliance with specific directives, together with the reports which 
Member States have to drawn up. 
32 
(ii) Communication and information initiatives 
47. The Commission has adopted an approach to strengthen and reinforce 
information and communication actions for the single market which is in line with 
the conclusions of the Sutherland Report. In this context, the Commission, is 
establishing an inventory of its current activities by means of an interservice 
working group. This group will also make the necessary complementary 
proposals. Furthermore the group will make constructive recommendations in 
order to improve co-ordination between the services and with outside 
organisations and relays. This will permit clearer messages with greater impact 
to be passed to the general public and specific audiences. Some of the 
guidelines will include: 
(a) use of more modern and more high-powered communication media; 
(b) organisation of partnership with the Member States, Community institutions, and 
outside organisations and relays ; 
(c) review of publications and exploration of new opportunities 
(d) improvement of the dissemination of the INFO. 92 data base which will be 
available on a European general public network and which provides basic 
information on the operational rules of the Internal Market; it constitutes the 
basic instrument of Community information actions. 
(e) better targeting of actions 
33 
SECTION B: DEVELOPING THE SINGLE MARKET 
I. A BARRIER-FREE ENVIRONMENT 
48. Assuming that all the measures taken are correctly transposed and enforced by 
the Member States, we must ensure that they are in line with what is necessary for 
the operation of the single market. With the completion of the legislative programme 
set out in the White Paper, the basic structure of the Community legislation on which 
operation of the single market is based has been put in place. This does not mean 
that new needs will not continue to arise, in connection with the protection of health, 
safety, the environment or consumers, which will require either existing rules to be 
adapted or new rules to be prepared. While Article 8a confers on the Community 
clear and exclusive responsibilities for ensuring that the single market functions 
satisfactorily, this does not prevent the Community institutions from seeing to it that 
the principle of proportionality is complied with in a context of greater transparency. 
The fact that the principle of subsidiarity has been enshrined in the Treaty on 
European Union creates an even stronger obligation to ensure transparency as 
regards both the grounds for any initiative and the ways in which subsidiarity is to 
apply. In order to achieve such transparency, a methodology and an analytical 
framework must be established and used during the preparatory work, and there 
must be an information and consultation procedure which is open to all the parties 
concerned. 
49. The development of a methodology and an analytical framework makes it 
necessary first and foremost to define the criteria to be applied in assessing any new 
need for legislation, in terms of both the need for legislation itself and the choice of 
solutions that will achieve the greatest possible practical impact (effectiveness) while 
exerting the smallest possible constraint in relation to the objective pursued 
(proportionality). These criteria should serve several purposes: identifying the 
Community objectives at stake (removal of barriers to free movement or of 
distortions of competition, social objectives, technological harmonisation objectives, 
etc.), spelling them out with due regard notably to the way in which they interact (this 
will throw light in particular on the choice of legal basis), and defining the needs for 
action to fulfil these Community objectives. They should also relate to the method of 
assessing the economic importance of the legislative need and the cost of the future 
rules. Lastly, they should make it possible to define the type and content of the 
measure in the light of the needs and objectives identified, in particular by presenting 
a range of possible solutions suggested by experience in the Community. 
50. In applying this method of assessment and analysis when drafting its proposals, 
the Commission will be aiming for maximum coherence in the Community's 
legislative policy and for consistency between certain types of measure that pursue 
different Community objectives. Such consistency must be sought in the 
Commission's internal co-ordination, in the other Community institutions and even 
within national administrations. The transparency of the process of preparing 
Commission proposals should provide a tool for ensuring such co-ordination. As a 
first step, transparency has been improved through sounder preparation of 
34 
explanatory memoranda, through publication of the Commission's legislative 
programme and through the use of white and green papers; several green papers 
are currently being prepared by the Commission services on, for example, business 
communication or access for consumers to judicial review. Elsewhere, discussion is 
underway on the basis of green papers concerning media concentration and 
pluralism, as well as on the single market for postal services. 
• by giving notice in the Official Journal of the intention to prepare fresh 
proposals. The Commission will thus have to take a decision on the desirability 
of a measure in advance of any discussion on a specific proposal; 
• wherever appropriate, by framing an overall policy which should make it 
possible to ensure maximum consistency between certain types of measure 
pursuing particular objectives. Green papers are such general policy 
statements, and their publication can constitute an essential counterpart to any 
initiative to promote the transparency and consistency of the Community's 
legislative action. 
51. The results achieved to date leave some obstacles to trade that the Community 
must try to eliminate following the working methods described earlier and according 
to the priorities identified in the present document. Open consultation will enable the 
relevance of these priorities to be established. 
a) Improvement of the regulatory environment for businesses and citizens 
(i) Rules on the protection of intellectual property 
52. On the basis of the White Paper, many disparities between national rules which 
affected the free movement of goods or services have been eliminated. This action 
must continue with the aim of promoting innovation within the limits of the 
competition rules: 
• the free movement of goods must be encouraged through harmonisation of the 
rules on the protection of biotechnological inventions and new plant varieties (for 
which a proposal is before the Council) and industrial designs; 
• the freedom to provide services and the free circulation of goods should be 
facilitated by harmonisation of the rules on broadcasting by satellite and 
retransmission by cable, on the length of copyright protection and neighbouring 
rights and on the legal protection of data bases. 
53. However, in addition to the rules on harmonisation, new facilities should be 
introduced for enterprises offering them arrangements for protecting patents, 
trademarks, new plant varieties and industrial designs that are based on a single 
registration procedure and a Community system of protection. Proposals on 
trademarks and new plant varieties are already before the Council; a convention on 
the Community patent is on the point of being ratified; and a proposal on industrial 
designs will shortly be put forward by the Commission. 
35 
(ii) Protection of personal data 
54. A series of proposals is currently before the Council, including a proposal for a 
directive (modified in October 1992 following the opinion of the European Parliament) 
concerning the protection of individuals in relation to the processing of personal data 
and the free circulation of data. Flows of personal data (within and between firms, in 
the context of mutual assistance between administrations, between research 
centres, notably in the medical and epidemiological fields) are on the increase as 
integration and free movement proceed. The protection of citizens requires that their 
private lives be safeguarded from uses which might be made of data concerning 
them. 
(iii) Company law 
55. Adoption of the statute for a European company would provide an extra legal 
option for businesses wishing to take it up. It would also overcome a difficulty that 
has no place in the Community today: businesses based in different Member States 
cannot always merge without having to set up complex, costly legal arrangements. 
The situation is all the more anomalous in that the tax treatment of such mergers 
was dealt with by a Council Directive adopted in July 1990. The European company 
would thus be an extra option and would simplify matters for businesses. It would 
also be a strong symbol. Adoption of the statute would furthermore break the 
deadlock on other measures, such as the European cooperative statute and the 
tenth Directive on cross-border mergers on which the Parliament has suspended its 
opinion in order to attempt to find a solution to worker participation. 
(iv) Simplifying cross-border payment facilities 
56. Consumers and businesses are still baffled by the cost of cross-border 
payments, which can be disproportionate and non-transparent, particularly where 
small amounts are being transferred. While large firms generally find ways round the 
problem, for SMEs it is one of the factors penalising cross-border business most 
heavily. 
57. The Commission focused on this question among others in a communication 
dated March 1992, urging banks to take voluntary action aimed chiefly at improving 
the efficiency of the transfer systems and their interconnection, but also, for example, 
at making the cost of cross-border payments more transparent for their customers, 
thereby allowing comparisons to be made between financial institutions and 
stimulating competition between them. 
58. The Commission stated in that communication that it would review the situation 
in the first half of 1993 and that, if no progress had been made, it would draw the 
necessary conclusions, where appropriate in terms of legislative action; Parliament 
supports the approach of the Commission, whilst wishing to see more restrictive 
measures in some respects. 
36 
59. The hoped-for progress will, however, take time, time that will vary according to 
the complexity of the different problems to be overcome. The banks often argue that 
the amounts of cross-border payments are too small to justify automating the 
system, which is the only way to cut costs. The number of complaints remains high, 
and Parliament has enthusiastically taken up the problem. According to the 
Parliament, a new initiative, backed up by the threat of sanctions and, where 
necessary, including legislative action, should lay down an obligation to achieve 
results. 
(b) Ongoing approximation of tax regimes and the creation of a favourable tax 
environment for businesses 
(i) Indirect taxation 
60. The abolition of tax frontiers and the introduction of minimum rates for VAT and 
excise duties throughout the Community from 1 January 1993 has laid the 
foundations for the new developments that are expected in the internal market over 
the next few years. These developments involve the changeover to the payment of 
VAT in the country of origin, which is planned to take place on 1 January 1997. The 
opening-up of frontiers and market forces are pushing VAT rates closer together: 
this approximation has been tangible in recent years and must continue in the 
interests of consumers and economic growth. 
61. The minimum Community rates of excise duties on alcoholic drinks, tobacco and 
petroleum products can be revised every two years, and for the first time on 
1 January 1995, in order to pursue public health and environmental protection 
objectives in particular. 
62. As regards preparations for the changeover to the payment of VAT in the 
country of origin, a precise timetable was set by Directive 91/680/EEC (OJ No L 376 
of 31 December 1991). In line with this timetable, the Commission will present by 
the end of 1994 a report and proposals on which the Council is to act by the end of 
1995 so that the definitive VAT system can enter into force as planned on 
1 January 1997. The aim of the definitive system is to do away with any difference 
in tax treatment for VAT purposes between transactions carried out at purely 
domestic level and transactions involving two or more Member States. 
(ii) Direct taxation 
63. Strengthening of the internal market makes it necessary to create a tax 
environment conducive to business initiative. On direct company taxation, the 
Commission spelt out its approach in a communication it published in June 1992 in 
response to the report by the independent expert group chaired by MrRuding. 
These policy guidelines now have to be actively implemented in close co-operation 
with the Member States. Continuing regular meetings of the heads of the direct 
taxation administrations would be an appropriate tool for co-operation and could also 
be used to set in motion genuine co-ordination of national tax policies. Co-ordination 
in the direct taxation field is seen as all the more desirable when it is borne in mind 
that taxation is becoming a means of aiding businesses that is detrimental to the 
37 
conditions of competition. 
64. From a general standpoint, if the internal market is to work smoothly and 
effectively for businesses in the tax field, three aims must be fulfilled: The first 
objective is the elimination of double taxation on cross-border income flows. The 
second is the improvement of the tax environment for small and medium-sized 
enterprises (SMEs). The third has to be seen against the background of competition 
in the world economy; as far as at all possible, the overall tax burden on firms has to 
be lightened, and one way of doing this is to provide appropriate tax incentives. 
Eliminating double taxation of cross-border flows In July 1990 the Council 
adopted two directives, one on mergers and one on the abolition of 
withholding taxes on dividends paid by a subsidiary to its parent company in 
another Member State, along with a convention on transfer pricing; the 
Commission has since submitted two further proposals whose adoption is 
eagerly awaited by industry and is urgently needed in order to complete the 
single market. 
The first of the two new proposals is aimed at abolishing withholding 
taxes on interest and royalty payments made by a subsidiary to its parent 
company in another Member State. 
The second concerns the possibility for firms to take into account 
losses incurred by their permanent establishments and subsidiaries in other 
Member States. 
Other measures to underpin the single market are envisaged in the short 
term. Some are more especially concerned with SMEs (see below). Two 
others which are worth mentioning here follow on from the Ruding report: 
one would broaden the scope of the Mergers Directive and the Parent and 
Subsidiaries Directive in order further to reduce certain remaining cases of 
double taxation, and the other would simplify the procedures for the 
application of clauses in bilateral taxation agreements which provide for the 
reduction or elimination of withholding taxes. 
Tax environment of small and medium-sized enterprises : After the 
Ruding report, the Commission took the policy decision that firms which are 
not in limited liability form should be entitled to opt for taxation as companies. 
This would offer firms tax neutrality, regardless of their legal form. In most 
Member States company tax rates are lower than the marginal rate of 
personal income tax so that this option would facilitate the growth of 
self-financing capacity in all SMEs which do not have company status. The 
Commission is drawing up a proposal to this effect. 
The Commission is currently exploring two further avenues in the field of 
taxation and SMEs. 
The first is the tax treatment of transfers of undertakings, with 
particular reference to cross-border aspects. At a time when a 
generation of businessmen is due to retire and when the restructuring 
of firms is gathering pace, the transfer of firms is beset by serious tax 
obstacles which may result in the firm simply going under. 
38 
Another avenue to be explored is the abolition of tax obstacles to the 
development of venture capital. In most Member States, venture 
capital funds are obliged to resort to complex arrangements (or to 
seek establishment outside the Community) in order to avoid double 
taxation of the income generated (i.e. at the level of the fund and then 
in the hands of the investor himself). The difficulties are even greater 
in the case of transnational fund operations. 
Tax incentives : The problems of tax incentives are not straightforward. 
Since tax incentives are measures derogating from ordinary law, it is 
necessary to impose a set of access conditions which are restrictive enough 
to avoid abuses but not too difficult to apply. Lastly, it is often very difficult to 
assess the actual economic impact of a system of tax incentives, e.g. 
incentives for promoting investment. On the other hand, the large size of the 
overall tax burden on firms (i.e. taxes plus social security contributions) in 
certain Member States and, on average, in the Community, compared with 
most other countries in the world, is sufficient justification to examine possible 
incentives, especially those linked to job creation. Three areas in particular 
are being looked at by the Commission in the context of tax incentives: the 
creation and expansion of SMEs, which are the main source of new jobs, 
research and environmental protection. 
65. The taxation of persons residing in a Member State other than that in 
which they work, and in particular the tax status of frontier workers, has long posed 
problems. The opening-up of frontiers and the increasing mobility of workers are 
making discrimination in the income tax field, which bilateral tax conventions are not 
managing to eliminate, increasingly intolerable to citizens. Such discrimination, 
which currently affects several hundred thousand people, is a direct impediment to 
the freedom of movement. Discriminatory tax treatments can affect both employed 
persons and the professions. The Commission will endeavour, by appropriate 
means, to do away with existing discrimination and avoid the risk of new ones 
arising. 
II. AN ACTIVE POLICY ON STANDARDISATION 
66. European standardisation has been one of the cornerstones of work to build a 
single market in industrial products and a strong incentive for businesses to take part 
in the exercise. 
67. There is now a broad consensus on the importance of developing and 
strengthening this activity, both in the interests of the effective implementation of 
Community legislation (directives making reference to standards, and public 
procurement directives) and with a view to promoting an integrated technical 
environment to foster industrial activity. 
68. Nevertheless, despite this political consensus (confirmed by the Council 
resolution of June 1992, which was in response to the Green Paper on European 
standardisation) and although considerable progress has been made over the last 
39 
eight years, the fact remains that it is still too slow for the magnitude of the task and 
for the number of standards necessary if the single market is to function 
satisfactorily. 
69. In the Green Paper, the Commission already voiced the fear that the 
standardisation process might not prove able to deliver all the results expected of it 
within the time scales imposed by the completion and operation of the internal 
market. It stressed in particular the importance of strengthening the European 
standards bodies so that they could programme their resources on a multiannual 
basis, streamline their procedures for preparing and adopting standards, and benefit 
from the involvement and direct support of industry at European level under the 
impetus of those businesses which have already adapted their strategies to the 
single market dimension. 
70. Without reopening the discussion that followed publication of the Green Paper, 
notably on the practical scope for readjusting the balance between structures at 
national and European level, it is important to look into the political impact that could 
be achieved by Commission action aimed at: 
• ensuring that the European standards bodies are financed in a way that is 
commensurate with the scale of their task, without being over dependent on the 
Community budget or the contributions they receive from their national member 
bodies, one route to explore would be to base the financing on the sale of 
European standards, 
• examining, as the Council has requested, the possibility of making greater use 
of standardisation in Community legislative work; 
• making sure that the work programmes of the European standards bodies are 
more closely attuned to the needs and priorities of the single market, in terms of 
both the demand for standards for legislation and the general activities of 
businesses; 
• promoting gradual approximation of the quality-oriented policies pursued on the 
different domestic markets, by assigning an increasing role to European 
standardisation and certification structures and enhancing their impact on the 
behaviour of operators on the supply and the demand side alike. 
III. A POLICY IN THE AREA OF QUALITY 
71. For more than ten years the Commission, in parallel with the carrying out of its 
policy on standardisation, has been pursuing the implementation of a policy on the 
evaluation of conformity, in order to develop at Community level the use of 
instruments of quality (certification of products, certification of manufacturing 
processes, tests, metrological checks, accreditation systems for certification and 
testing authorities, etc.) both in the regulated and the voluntary areas. 
Standardisation policy and quality policy are, in fact, inseparable, since they both 
participate in the establishment of conditions which should facilitate the proper and 
effective functioning of the Internal Market and the promotion of industrial 
competitivity. The idea of "quality" should be taken here in its widest sense covering 
the whole of the characteristics and performance of a product, a service or a 
40 
production system, fulfilling requirements which may be regulatory and voluntary in 
nature. 
72. The strengthening of instruments of quality at Community level, the promotion 
of their use by firms and the dissemination of techniques of quality control throughout 
the whole of the Community's industrial production, therefore represent priorities 
which should find their expression in the definition of a concrete action programme to 
be drawn up in co-operation with the economic partners and the competent 
European authorities. 
73. Without pre-judging what the content of this programme should be, it appears 
that it should revolve around the following objectives: 
• the achievement of a greater coherence between Community legislative policy, 
including the operation of the systems for the reciprocal recognition of national 
regulations, and the procedures and instruments for the control of conformity 
which have been defined and put in place at Community level; 
• the promotion of convergence on national markets towards high quality 
objectives, to reduce the existing divergences which can result in difficulties of 
access of products originating in other Member States and which can be an 
obstacle to a consumer policy; 
• the reconciliation and rationalisation, within the competent European bodies, 
on a voluntary basis of the systems of branding, certification, labels etc; which 
are found side-by-side on the Community market, with meanings and scopes 
which are often difficult to compare, thereby creating an element of distortion 
both of competition and of the state of consumer information; 
• the development of a culture of quality on the Community market both on the 
supply and on the demand sides, as a factor of economic integration and of 
internal and external industrial competitivity. 
IV. MEASURES TO ASSIST SMEs 
74. Completion of the internal market has meant that enterprises have had to adjust 
to a new legal environment and increased competition. We should not underestimate 
the effort which the large majority of enterprises have been required to make, an 
effort which brings a cost to bear before any benefit can be drawn. This cost is all the 
greater in a period of declining economic activity. Thus, while the opportunities 
created by the single market are often stressed, SMEs, and in particular the very 
smallest of them, have remained a too far behind the European integration process. 
The complexity of this process has not allowed them to adapt their production 
facilities to the new requirements determined by competition or laid down by rules, 
because of financial restrictions or inadequacies of management. 
75. Restoring the confidence of SMEs in their ability to adjust to the single market 
should also form an integral part of the management and development of the internal 
market, and the Community must develop the instruments established in particular in 
the area of information, of co-operation and assistance to companies. It is moreover 
essential to emphasise the sound basis for the integration of SME policy in the 
framework of the Community growth initiative decided at the European Council in 
Edinburgh on 11 and 12 December. Since then, the Industry Council of 4 May 1993 
41 
has approved the content of the proposals presented by the Commission, intended 
in particular to strengthen the priority axis of the Community enterprise policy, whilst 
ensuring its continuity and its consolidation. This new programme has to enter into 
force from 1 July 1993 and thus to allow not only the achievement of an objective of 
support for the recovery of economic activity as well as all its positive effects on 
employment, but also to be an important contribution in terms of bringing to fruition 
the Internal Market. The totality of the measures foreseen in this programme will 
serve to strengthen the role of SMEs in the Internal Market. Without wishing to go 
into detail on them in this document, it is appropriate to emphasise that, within this 
programme, complementary measures can be developed to accompany certain lines 
of action mentioned above. But the Community does not have sole competence in 
this regard: it must, by its own initiatives, make full use of the Member States' 
measures, but it cannot and should not take their place. Thus for example, SMEs, 
generally partnerships, need to be protected from the risks, largely influenced by the 
relevant tax regime, involved in transfer of businesses; this situation would justify a 
Commission analysis with regard to taxation of the treatment of transfers of 
businesses including the cross- border aspects. 
(a) Creating information packages for SMEs 
76. Managers of SMEs still find it difficult to obtain information on the changes 
brought about by the single market and to adjust their strategy accordingly. This 
being the case, the new SME programme foresees a priority action for the EICs 
aiming to put at their disposal information adapted to their needs. Information 
products could be developed to cover in particular: 
• standards, tests, certification and CE conformity marking, 
• innovation and intellectual property, 
• participation in public-procurement procedures, 
• trade practices and competition law. 
(b) Helping SMEs to adapt to standardisation and certification 
procedures 
77. The requirements of Community directives and the European standards on 
which they are based make certification procedures particularly cumbersome for 
SMEs, sometimes even when they merely wish to remain on the national market. To 
help SMEs integrate effectively into the single market and to make it easier for them 
to take account of European standards, the following measures might be envisaged, 
some of which should be discussed with the standardisation bodies: 
• the guarantee, at the European level, that SMEs are represented in working 
parties responsible for drawing up standards within CEN/CENELEC/ETSI; 
• the improvement of information provided to SMEs on European standardisation 
policy, in particular by granting assistance to chambers of commerce, trade 
organisations and the Euro Info Centres; 
42 
(c) The opening-up of public procurement to SMEs 
78. As the Commission highlighted in its 1992 communication on SME participation 
in public procurement, SMEs are not on an equal footing with large enterprises when 
it comes to access to public procurement. It must be possible using existing 
procedures to make the Euro Info Centres and BC-Net play a role in identifying the 
difficulties specifically affecting SMEs. It should be possible for these structures, as 
is already sometimes the case, to report on cases notified to them where difficulties 
have been experienced in taking part in these procedures. Such reporting would 
allow account to be taken of the specific problems of SMEs when adapting 
Community rules, as is currently being done with the problems of calculating 
time-limits. Wider availability of the TED database would give SMEs new facilities. 
79. On a more basic level, SMEs find it difficult to devote time to training and, 
consequently, to reply to calls for tender, which often require skilled staff capable of 
analysing and understanding them. The Commission might consider launching a pilot 
project to encourage the development in the Member States of training courses for 
SME managers. 
V. A DYNAMIC AND OPEN EXTERNAL POLICY 
80. An important part of the external effects of the internal market, those favourable 
to the expansion of world trade, is being discussed in the Uruguay Round. A 
reasonable balance must be maintained between the constituent parts of the Internal 
Market and the exercise of the Community's external competencies. This is 
particularly true in some areas, such as services and more particularly transport or 
that of direct taxation. 
(a) Strengthening the Community's external competence 
81. The incompleteness of the commercial policy, as far as goods and services are 
concerned, whether as regards the elimination of quantitative restrictions or the 
limitation of bilateral agreements concluded by the Member States in the area of the 
recognition of certificates and the provision of services, could create difficulties for 
the functioning of the internal market. A solution can be found in strengthening the 
common commercial policy and in the area competition policy, in the case of States 
having such rules.. In this regard the Commission is trying, in bilateral and 
multilateral (OECD, GATT) fora to strengthen the approach known as "positive 
comity". This approach, which seeks to overcome obstacles raised by private 
enterprise to trade with third countries, allows those countries whose exporters are 
the victims of anti-competitive practices in a third country to request that the latter 
properly enforce their own competition rules to re-establish a level playing field. In 
this regard, the widespread development of effective systems of competition policy 
must be encouraged by all bilateral and multilateral means. 
82. The Community should therefore establish a genuine policy in these areas 
which is more coherent and effective. This policy will essentially be based on article 
113. Without prejudice to the discussion on the scope of article 113, it is evident that 
43 
the negotiation of all these external agreements falls exclusively within the 
competence of the Community. This implies, in the implementation of the common 
commercial policy, a close co-operation between the Commission and the Member 
States, as foreseen in the Treaty of Rome, in these very special cases, even a 
partnership. In the areas not covered by the common commercial policy, but for 
which the Community has acquired an external competence by virtue of the 
jurisprudence AETR, an identical route has to be chosen. 
(i) The exercise of the Community's negotiating powers. All the legislation 
adopted in the areas of certification of product conformity and the freedom to 
provide financial or transport services or services in the area of public 
procurement give the Community new powers intended to safeguard the internal 
"acquis" and the homogeneous functioning of the internal market. 
The need to open this market up must lead the Commission to enter into 
negotiations with the Community's main external partners with a view to 
guaranteeing equality of access. This is a particular problem in the area of 
product certification and transport. 
In its negotiations concerning the Single Market or in other negations, the 
Community has to maintain a coherent strategy according to its industrial, 
commercial and geographical objectives. The Commission has already 
proposed some guidelines for such a policy. 
(ii) Representation of the Community in international bodies. Many Community 
rules are the result of negotiations conducted within the context of international 
organisations. The Commission already represents the Community in a number 
of bodies (European Pharmacopoeia, FAO, OMS-WHO, Codes, OIE, IPPO, 
etc.); in other international circles the proper functioning of the Single Market 
requires a more active participation by the Commission, which co-operates in 
them often on the sidelines and in co-operation with the Member States. 
Following the entry into force of the banking and insurance directives the 
Commission must exercise its responsibilities within the competent international 
bodies. 
(iii) The management of bilateral and multilateral agreements. The Community, 
as signatory of certain agreements, has a responsibility in its own right to 
manage these agreements. In this respect, the entry into force of the Agreement 
on the European Economic Area will require a constant process of negotiation 
on the integration and management of the Community's internal rules in the 
EEA context; this Agreement alone is a challenge for the Commission since, in 
managing it, the Commission will have to ensure that the Community's internal 
functioning is not affected. Apart from this specific example, the cases in which 
the Commission is responsible for the management of agreements are limited, 
but may in certain areas be significant: for example, the Commission has sole 
responsibility for determining the health conditions which meat and animal 
products must meet to enter the Community. The draft agreement with the 
United States on public procurement will give rise to a considerable workload for 
the Commission in monitoring implementation of the agreement and conducting 
negotiations for its extension. 
44 
(b) Improved trade-policy instruments 
83. In a period of economic difficulty, Europe is not spared the temptation of 
protectionism: this spiral must be avoided at all costs. However, these recurrent 
urges are all the more easily overcome if the Community is ensuring the introduction 
for its enterprises of effective mechanisms for monitoring the fairness of trade. Such 
mechanisms also reinforce the rigorous competition policy pursued by the 
Community, and their main objective is a corresponding opening-up of third-country 
markets wherever unjustified barriers are maintained. 
84. The Community is facing a real problem as far as putting in place its 
trade-defence mechanisms is concerned: the general expectation is that it should 
fight with weapons equivalent to those of its main competitors. 
85 Firms complain of the burdens and delays imposed by anti-dumping procedures 
and under the new trade-policy instrument. They wonder about the consistency 
between a strong competition policy within the single market and what they perceive 
as a weak mechanism vis-à-vis dumping and unfair trade practices by third 
countries. It is essential that the Community's position be clarified in this area despite 
the dogmatic divisions which weigh down the debate in the Council.. 
86. The various proposals currently being discussed within the Council form a 
balanced "package": a radical opening-up to the outside world through the abolition 
of several thousands of quantitative restrictions following the opening of the single 
market, and a reform of the decision-making procedure in the area of trade-defence 
measures to make it more effective (time-limits, decision-making mechanism). 
Given the present blockage in the Council the risk of refragmentation exists through 
the re-emergence of applications for national quotas submitted on the basis of 
Article 115 EEC). 
87. In short.above all, we must restore effectiveness to the Community instruments 
of commercial policy. 
(c) Convergence of legal rules and economic systems 
88. The Community has an interest in promoting developments in third counties 
which parallel the single market. For the Community authorities, the benefits which 
will flow from the single market will be all the greater if there is a convergence 
between Community rules and those applied in third countries. The Community is 
already actively pursuing this convergence in the context of its contacts with the 
countries of North America, Japan, and with other Asian countries (e.g. China).The 
present approach, consisting of the creation of a convergence zone grouping the 
countries which are geographically proximate to the Community would be a 
particularly worthwhile investment in the long term to multiply the initiatives and links 
between the Community's and the Member States' institutions to promote our legal 
and economic standards in these countries. 
45 
(d) Management of the Community's external frontier 
89. Management of the Community's external frontier should be based on common 
instruments and permanent co-operation between the competent administrations, 
primarily the police and customs. 
(i) Ensuring the external security of the internal market 
90. The abolition of internal borders was accompanied by a strengthening of the 
efficiency of controls at the external borders of the Community. Provisions have thus 
been made by the Community and it Member States so that the Single Market is an 
area efficiently protected against fraud and international trafficking (drugs, 
terrorism...). This action, which is foreign to any idea of protectionism, has been 
given shape in particular by the adoption of a single customs code for the whole 
Community. 
91. The development of administrative co-operation between the Member States' 
customs authorities and with the Commission has led to the setting up of a new 
computerised network for information exchange, the Customs Information System 
(CIS). This system which has been operational since 1992 ensures close contacts, in 
the due time scale, by a computerised network between different customs offices in 
the ports and airports of the Community and at the external land borders. These 
direct links facilitate greatly the customs actions in the fight against fraud. In 1993, 
the CIS system will be the subject of further developments: a significant increase in 
the number of terminals linked to the system, the setting up of common data bases 
to be added to the accessible base in each Member State. 
92 Several other instruments in the management of the external border have been 
established for the application of quantitative restrictions in the areas of plant and 
animal health, dangerous and non-conforming products, drug precursors and drugs, 
and the export of cultural goods. Other measures will have to be developed with 
regard to the export of dual-purpose products. All these measures complete the 
customs rules which have recently been consolidated by the Council. Checks on 
persons will also be governed by common rules concerning asylum, visas and 
identity on the basis of the asylum convention and the convention on the external 
frontiers, once they have been signed and ratified. 
93. All of these rules relating to the management of the external frontier require the 
adaptation of control infrastructures and the training of officials. 
• In the area of infrastructures, besides the assistance that has been given under 
the INTERREG programme to improve telecommunications networks in external 
border regions the Commission has established a whole range of computerised 
instruments, e.g. 
the TARIC system giving up-to-date information on customs duties and 
agricultural levies, 
the "Binding tariff notice" system concerning goods-classification decisions, 
the QUOTA system on ceilings and quotas 
46 
the SIGL system (Integrated System for Centralised Management of 
Licences) to ensure an efficient monitoring of Community import restrictions and 
in particular the quantitative restrictions agreed in the framework of the textiles 
agreements; this system should be operational in the second half of 1993. 
In the area of training, the MATTHAEUS programme allows exchanges to take 
place between customs officials. This programme, in place since 1991, will, by 
the end of this year, have enabled more than 1 200 such exchanges to be 
organised. It also enables training seminars to be held at which experience and 
know-how can be pooled with a view to greater convergence between customs 
practices. Finally, joint training programmes have been organised since 1991 in 
national training centres. The creation of a joint training centre, intended to 
ensure co-ordination between the activities of customs colleges, is currently 
being examined. 
(ii) Prevention of infringements 
94. Prevention of infringements is now becoming a fundamental aspect of customs 
policy; it must be based on close contacts between Member States' competent 
national administrations, the professional organisations and with the main trading 
partners. 
• The Commission intends to strengthen the effectiveness of fraud prevention, in 
particular through a widening of mutual assistance. A proposal is currently 
before the Council. 
• Proper organisation of fraud prevention presupposes that co-operation is not 
obstructed by discussions on the limits of Community powers. Consequently, 
the Commission and the Member States have established mechanisms within 
the Mutual Assistance Group to combat drug trafficking based primarily on the 
Council Regulation introducing a compulsory export authorisation system for the 
list of substances drawn up in the G7 context. This co-operation has enabled 
data on the application of Community and other rules to be integrated into a 
single computerised system (SID). Some 130 terminals are currently in service 
in the Member States. 
• The efficiency of the fight against fraud calls for action vis-a-vis third countries. 
Such is the aim of the customs co-operation agreements concluded with the 
Community's main trading partners. Such agreements have been concluded in 
the framework of the European Economic Agreement and with the countries of 
Central and Eastern Europe. In 1993 negotiations are going to start in particular 
with the United States, Canada, Japan, Korea and Hong Kong. 
• There is now a need to improve Community arrangements concerning 
measures taken at borders to prevent infringements of intellectual property 
rights, such as trademarks, patents, and copyright (including designs and 
models). To do this, the Commission will propose an amendment to the 
regulation on combatting counterfeiting to strengthen its effectiveness. It should 
also be established how the Member States punish the production of counterfeit 
goods to ensure convergence of penalties in this area. 
• The Commission intends to strengthen the fight against fraud in the field of 
47 
imports of textiles subject to restriction. In the framework of a programme (TAFI: 
Anti-Fraud Initiative) of co-ordinated measures with the Member States and with 
the European textile industry, the Commission intends to undertake anti-fraud 
inquiries in six geographical zones where a strong presumption of fraud exists. 
In the context of GATT, the Community must ensure the existence of general 
measures to combat counterfeiting. 
48 
I. OBJECTIVES OF TRANS-EUROPEAN NETWORKS: 
95. The concept of trans-european networks in the fields of energy, transport and 
telecommunications is central to a number of key Community policies: the single 
market, economic and industrial growth, cohesion and integration of the European 
area. 
• The creation of trans-european networks is intimately connected to the 
completion of the single market. It is not surprising, therefore, that such a 
concept should have evolved from work done at the Council meetings on the 
internal market, for what would be the point public procurement rules if their 
enforcement was prevented by technical incompatibility? Or of creating a 
frontier-free area if obstacles are put in the way of the circulation of trains 
because of interoperability problems, as is currently the case with high-speed 
trains? In this sense, the networks are a logical development of the Single 
Market: having removed barriers from between Member States; the aim must be 
to build new links or improve existing ones as well as allowing for their extension 
to other European countries. 
• The setting-up of such co-ordinated networks is also of vital importance to 
competitiveness: by reducing inefficiency, by minimising transport times and 
overheads, by making business dealings faster and easier and by maximising 
the capacity of infrastructures, the networks will make an important contribution 
to industrial competitiveness. Moreover, by providing data banks and making 
services available on compatible databases, they will also make a contribution 
to common Community tasks without undermining subsidiarity. 
• The networks will also serve Community cohesion and regional policy. Helping 
to improve communications between remote or insular regions and the rest of 
the Community is probably the best way of reducing geographical 
disadvantages. 
• Establishing such co-ordinated networks will also mean taking on board certain 
planning options for the Community which will determine developments for 
decades to come. Environmental concerns will also constitute a key parameter 
here. 
II. FRAMEWORK FOR THE WORK TO BE CARRIED OUT 
96. The need to develop a trans-European network policy emerged from the 
Council's discussions on the internal market, in so far as it was felt that the setting up 
of the networks should be complementary to the introduction of rules on the 
operation of the single market. The importance of the networks was underscored at 
the European Council meetings held in Strasbourg (1989) and Dublin (1990)1. 
1 Council Resolution of 22 January 1990, OJ No 27, 6.2.1990. 
49 
Accordingly, in December 1990, the Commission put forward an action programme2 
accompanied by a draft Resolution on trans-European networks. 
97. The preparatory work done by the Council (internal market) failed to bring about 
its adoption, however, difficulties with regard to the financing of the infrastructure by 
the Community having proved a stumbling block. None the less, decisive progress 
was made at the European Council meetings in Maastricht and Edinburgh with the 
inclusion, in the Treaty on European Union, of a title (Title XII) dealing with 
trans-European networks, the enhancement of the value of the networks in the 
Delors II package (Cohesion) in the context of the structural measures, and the 
underpinning of the Community's industrial competitiveness in the context of internal 
policies. The networks were also central to the Community component of the 
initiative for growth which was also adopted at Edinburgh. 
98. The construction of trans-European networks should henceforth form part of the 
process of European union. The draft Treaty on European Union provides the legal 
instruments for setting up the networks, whereas the new financial prospects provide 
the necessary financial instruments. 
99. Such objectives can be achieved only gradually, in terms of a medium and 
long-term outlook. Accordingly following the signing of the Maastricht Treaty, the 
internal market Council, on 31 March 1992 adopted conclusions inviting: 
• "the Member States and the Commission to co-ordinate such actions as may 
have a significant impact on the establishment and development of trans-
european networks; 
• the Commission to submit to the Council guidelines concerning trans-European 
networks which can serve as a reference point for preparing, as soon as 
possible, the implementation of Title XII of the Treaty on Union 
• the Commission to submit regularly to the Internal Market Council a progress 
report which the Council undertakes to examine". 
100. This Communication is in response to the Council's wishes. Its purpose is to 
take stock of the situation as regards the work carried out and to underline the links 
that exist between the building of the trans-European networks and the operation of 
the single market and those that exist between the building of those networks and 
the economic growth strategy. 
III. PROGRESS REPORT 
101. As early as 1992, in line with the Council's wishes3 and Parliament's resolution,4 
2 See previous discussion papers on the trans-European networks (doc. SEC(89)1670, doc. COM(89)643 final and 
doc. COM(90)310 of 19.7.1990) and the Communication from the Commission to the Council and the European 
Parliament 'Towards Trans-European Networks - For a Community Action Programme" (doc. COM(90)585 final). 
3 Conclusions of the Council meeting on the internal market held on 31 March 1992. 
4 OJ No C 125, 18.5.1992, p. 87. 
50 
the Commission presented a first series of proposals on trans-European networks. 
102. The application of the network concept is already being discussed by the 
Community's Transport Ministers, on the basis of the proposed master plans for the 
high-speed train, road transport, combined transport and inland-waterway transport. 
It has also been discussed at informal meetings of the ministers responsible for 
regional development. Proposals were recently put forward regarding 
data-transmission networks between administrations and a declaration of European 
interest. 
(a) Network plans 
103. Guidelines produced in close co-operation with the Member States, Parliament 
and the economic operators concerned are a key element in helping to ensure the 
cohesion and transparency of Community action. Identifying investment projects 
geared towards trans-European networks is the clearest possible expression of the 
common interest. The mobilisation of firms in the sector concerned, of network 
operators and of equipment suppliers is a precondition for the revival of economic 
activity. 
(i) Transport infrastructure: on 10 June 1992, the Commission adopted master 
plans in three fields: roads, inland waterways and combined transport (see doc. 
COM(92) 231 final and doc. COM(92) 230 final), supplementing the existing 
network plan on high-speed trains. On 15 March 1993, the Council meeting on 
transport emphasised the importance of the network plans and expressed a 
favourable view of the work already done in the combined-transport, 
road-transport and inland-waterways fields. Work is proceeding on the 
drawing-up of master plans for air transport infrastructure, maritime 
infrastructure and conventional rail infrastructure. 
The network plans are accompanied by a proposal for a Regulation on the 
financing of transport infrastructure. In essence, it provides for an extension for 
the period 1993/94 of the validity of Regulation (EEC) No 3359/90, which 
expired at the end of 1992 and which is expected to be replaced when the 
Treaty on European Union enters into force. 
(ii) Energy infrastructure: the Commission adopted a communication on 
infrastructures for electricity and natural gas (COM(91) 548 final), which was 
used as a basis for discussions with the Member States and the various 
interests concerned. The draft proposal on the Commission guidelines 
concerned is being finalised and could well be presented to the Commission 
before the summer. The purpose of the guidelines is to ensure that the growth 
of the networks is orderly, so as to contribute to the completion of the single 
market, underpin economic and social cohesion and strengthen the security of 
the Community's energy supplies. 
(iii) Telecommunications infrastructures: in the field of telecommunications, 
the primary objective of the Community's policy is to set up trans-European 
networks of general application and of basic services. In a system of open and 
51 
competitive markets, action undertaken by the Commission should promote 
interconnection, interoperability of national networks, as well as access to these 
networks. 
With regard to these applications, in March 1993 the Commission adopted a 
communication to Parliament and to the Council, which was accompanied by a 
proposal for a Council Decision on a series of guidelines for trans-European 
data communications networks between administrations and a proposal for a 
Council Decision adopting a multiannual Community programme to support the 
implementation of trans-European networks for the interchange of data 
between administrations (IDA). Elsewhere, on the basis of the communications 
on the community strategy in the field of education and training (COM(93)183), 
the Commission considers that the modern telecommunications networks 
should be used for training, in particular for distance teaching applications. 
With regard to the telecommunications networks, a draft communication is being 
finalised which deals with the integrated services digital network (ISDN), its 
purpose being the development, throughout the Community, of a 
trans-European ISDN network featuring a set of services which is fully 
compatible with harmonised European EURO-ISDN standards. Consideration is 
also being given to a set of guidelines relating to the development of a 
broadband network. 
(b) Community Financing 
(i) Cohesion and structural measures 
104. The Community contributes substantially, via the Structural Funds (in particular 
the ERDF) - and will continue to contribute via the new Community Support 
Frameworks and the Community Initiatives from 1994 onwards- towards the 
financing of infrastructure, part of which will be eligible in the context of the 
Community's network plans or in the context of related initiatives allowing the regions 
covered to increase the impact of the infrastructure. 
In Member States which are eligible for aid from the Cohesion Fund, the Community 
can, with effect from 1 April 1993, help to finance specific transport infrastructure 
projects in the context of the Cohesion financial instrument and the Cohesion Fund 
once the Treaty on European Union enters into force. 
(ii) Loan and guarantee instruments 
105. The European Investment Bank provides long-term capital for financing 
infrastructure projects in the field of transport, energy and telecommunications. In the 
field of transport alone, in 1987-91 the EIB allocated no less than ECU 8 billion for 
the construction of trans-European networks, including ECU 3.8 billion in assisted 
regions. 
106. The role played by the EIB in the financing of networks is expected to be 
strengthened as a result of the growth initiative and the new financing instruments 
adopted in Edinburgh: 
52 
• the temporary loan mechanism for 1993-94, which totals ECU 5 billion; of this 
amount, ECU 2.2 billion has already been committed since the beginning of the 
programme; 
• the European Investment Fund, which has a total of ECU 2 billion, and whose 
purpose is to provide loan guarantees on a commercial basis. 
107. To a lesser extent, ECSC loans can be used to finance infrastructure in which 
steel is used, viz. in the case of the Rhine-Main-Danube canal, the "TGV 
Atlantique", natural gas in Greece, etc. 
(iii) Internal policies 
108. There are already numerous instances in which aid from the Community budget 
is allocated to trans-European networks by way of feasibility studies and pilot 
projects, interest rate subsidies and loan guarantees (European Investment Fund) 
under "network" budget headings (ECU 221.5 million in 1993). This applies mainly to 
the multiannual programme covering transport infrastructure and data 
communications networks between administrations. 
(iv) Other sources of financing 
109. Quite apart from those instruments, which relate to transport, the Agreement on 
the European Economic Area provides for financial assistance to promote cohesion 
(EEA Financial Mechanism), i.e. ECU 1.5 billion in loans with a 2% interest rate 
subsidy and ECU 500 million in subsidies financed by the contracting parties to the 
Agreement and implemented by the EIB. 
110.The Community also helps to finance individual network projects via EIB loans 
to central and eastern Europe (ECU 1 700 million in 1993) and the Action plan for co­
ordinated aid to Poland and Hungary (ECU 20 million in 1993). 
(v) Declaration of European interest 
III. Moreover, on 16 April 1993, in order to attract private investment, the 
Commission adopted a draft amendment to the proposal for a Regulation introducing 
a declaration of European interest to facilitate the establishment of trans-European 
networks in the transport, energy and telecommunications domains. The proposed 
amendment establishes among other things a link between the granting of the 
declaration of European interest and the possibility of financing from the Community. 
IV. THE NEED FOR CO-ORDINATION 
112. The setting-up of the trans-European networks depends largely on the adoption 
of the network plans by the Council and on their being put in place within a 
reasonable time scale, making these plans the equivalent of a medium-term 
infrastructure programme. The adoption of these plans is the strongest signal that 
53 
can be given to economic operators and the financial markets. 
113. However, each network is set up along its own lines and in its own time frame -
a compartmentalised approach which provides no guarantee that the different 
initiatives are sufficiently politicised or integrated into a global strategy under the 
heading of the maximum development of the European area, the functioning of the 
Internal Market and the development of economic activity. An attempt to develop the 
networks should respect the particularities of the three sectors as well as the 
decisional structures governing them; in this way the global strategy should 
complement new initiatives that have been agreed or will shortly be so. 
114. The approach followed hitherto has favoured network interconnection. However, 
there are limits to this approach, as the plans are not specific enough to guarantee 
efficient and effective communication systems, environmental and consumer 
protection throughout the network, or a legal framework for the development of co­
operation between the undertakings involved in building and operating the network. 
115. Development of the trans-European networks presupposes an integrated 
approach extending both to the different sectors concerned and to the instruments 
used. 
(i) There is a need not only for interconnection but also for interoperability, this 
being achieved by harmonisation of the technical standards for equipment and 
systems, which in turn will ensure operating efficiency and reduce equipment 
costs. 
For example, it has been estimated that the Paris/Brussels/Cologne/ 
Amsterdam high-speed rail network, which is having to be designed to 
accommodate several different types of power supply and control-command 
systems and to comply with different rules on safety, noise, electromagnetic 
compatibility and so on, has involved an increase of 60% per seat over the 
standard high-speed train running on the French network. 
In parallel to a harmonisation programme underway in certain sectors (TGV and 
air traffic equipment), a global strategy must therefore be implemented and new 
efforts made to overcome all the technical, regulatory and operational 
constraints impeding network interoperability and standing in the way of the 
development of a genuine internal market in services. 
(ii) There is also a need for co-operation between the undertakings involved in 
building, financing and managing the networks; co-operation between private 
enterprise and public authorities is vital in view of the scale of the investment to 
be agreed and the uncertainty linked to the materialisation of this sort of 
operation. Examples of such co-operation include: 
the development of combined transport based on equitable tariff 
agreements providing stability conducive to operator investment;5 
the Community-wide operation of mobile telephone networks based on the 
existence of cross-frontier operator agreements making possible network 
5 It is in this spirit that the Commission made financial undertakings towards pilot projects for 
combined transport drawn up and developed by the private sector in many Member States. Cf 
Commission Decision 93/45 of 22.12.1992 (JO L 16/55 of 25.1.1993) 
54 
interconnection, the sharing of the proceeds from subscriptions and a 
coherent system for invoicing the services provided in cross-frontier 
communications; 
the development of electronic data-transmission networks requiring inter 
alia the implementation of compatible administrative methodology and 
machinery, the formulation of common technical specifications and the 
harmonisation of standards. 
Co-operation of this nature will clearly be facilitated if Community rules, and 
in particular the procedures for implementing them in the Member States, 
are made more transparent, thus providing economic operators with a 
guarantee that Community law is being properly applied. 
Moreover, the adoption by the Council of various proposals on matters 
such as the European company statute, Community trade marks and 
patents, and the elimination of double taxation on business co-operation, 
may well have a positive mobilising effect. However, only a global approach 
covering interconnection, interoperability and market access will create the 
conditions conducive to emergence of the trans-European networks. 
(iii) A medium-term approach must be followed, for there are numerous obstacles 
to the emergence of Community-wide networks. The difficulties can be summed 
up under five headings: 
difficulties involved in establishing priorities and determining projects of 
common interest as a result of divergent national interests and priorities 
and the absence of an all-embracing vision for the future); 
time-consuming and complex decision-making and implementation 
procedures, due to the large number of parties concerned and the legal 
problems involved (regional planning policy, local particularities, 
expropriation, planning permission, litigation, and so on); 
financing problems resulting from attempts to achieve short-term 
profitability, a frequently negative rate of financial return, constraints on 
public finance, end-goals too remote to motivate political commitment, 
difficulty in mobilising private capital on a large scale because of the high 
degree of uncertainty, the clarity of the regulatory environment as a factor 
in investment security; 
short and uneven supply of financial and human resources at 
Member-State level as a result of differences in the respective situations 
and of the obstacles to cross-border co-operation; all this compounded by 
the absence of an overall vision for setting up the necessary Community 
instruments; 
absence of cross-border interoperability, due to differing standards and to 
the multiplicity and diversity of administrative structures and management 
rules, resulting in market fragmentation. 
116. Such are the difficulties that there is quite clearly a need to promote co­
ordinated action. If the trans-European network initiative is to make a contribution to 
economic growth transcending projects themselves and having an endogenous 
effect on industrial growth and competitiveness, a strategy must be adopted which 
supplements short-term macroeconomic incentives. 
55 
V. THE MEANS TO ACHIEVE THE END 
117. With regard to financing, there is an incompatibility between the long-term 
recoupment of investments in this infrastructure and attempts to achieve short term 
profitability, a factor which does not generally promote the creation of networks. 
Initial sector by sector estimates, based on the network plans proposed or under 
way, put investment costs at ECU 20 billion a year. In order to encourage such 
investment, it will certainly be necessary to ensure, on projects of common interest, 
the co-ordination of national, community and private financing. It will also be 
necessary to develop the tools, as set out in article 129, of title XII of the Treaty of 
Union; with respect to feasibility studies, interest payments and loan guarantees as 
the Community is currently doing with the European Investment Fund. 
118. At the same time, the drawing up of standards for the transport and 
telecommunications sectors has been seriously delayed, impeding network 
interoperability. For example the growth of air-traffic, together with the liberalisation 
in that sector, has come up against a lack of compatibility of air traffic control 
systems. Moreover, proposals on the achievement of a single market in the field of 
energy and transport are at a standstill at various stages in the procedure. For 
example the growth of air-traffic, together with the liberalisation in that sector, has 
come up against a lack of compatibility of air traffic control systems. 
119. Hence the need for the adoption of a new strategy geared not only to providing 
the instruments to carry out the projects but also to creating a climate of confidence 
among all the parties involved, public authorities, industrialists, bankers and network 
operators alike: 
• in the initial stage, there must be an approach putting the "sectoral" initiatives 
into perspective and making it possible to incorporate the investments in the 
network plans, thereby providing a greater degree of security; a presentation of 
these plans in their entirety will maximise their contribution to a regional 
planning policy. A political commitment on the part of the European Council in 
respect of the network plans in the various sectors would provide a clear signal 
to investors and the financial markets, possibly followed by the formal adoption 
of the different plans by the Council in its different compositions by a given date 
(say, the end of the year). In accordance with article 129 of the Treaty, and 
taking account of the particular importance of the master plans for regional 
development, the requisite actions will be taken following consultation with the 
Committee of Regions. 
• A second stage, which should be spread over a longer period, should consist of 
the creation of: 
(i) better conditions for the development of international cooperation between 
project promoters, network operators, investors and other economic 
operators concerned, with a view to the setting up, the financing, and the 
management of trans-European projects; 
(ii) the most effective conditions to ensure the inter-operability of the networks. 
ISSN 0254-1475 
COM(93) 256 final 
DOCUMENTS 
EN 10 
Catalogue number : CB-CO-93-289-EN-C 
ISBN 92-77-56495-4 
Office for Official Publications of the European Communities 
L-2985 Luxembourg