A4-0160/97

Resolution on the Commission's communication to the European Parliament and the Council entitled 'The Impact and Effectiveness of the Single Market' (COM(96)0520 - C4-0655/96) and on the Commission Staff Working Paper: 'The 1996 Single Market Review' (SEC(96)2378 - C4-0007/97)

The European Parliament,

- having regard to the Commission communication (COM(96)0520 - C4-0655/96),

- having regard to the Commission Staff Working Paper (SEC(96)2378 - C4- 0007/97),

- having regard to its resolutions of 15 November 1995 on the Commission's 1994 report on the Community internal market ((OJ C 323, 4.12.1995, p. 51.)) and of 13 November 1996 on the report from the Commission to the Council and the European Parliament on the single market in 1995 ((OJ C 362, 2.12.1996, p. 140.)),

- having regard to its resolutions of 10 April 1997 on simpler legislation for the internal market (SLIM) ((Minutes of that sitting, Part II, Item 3.)) and 24 April 1997 on the strengthening of the impact assessment system ((Minutes of that sitting, Part II, Item 17.)),

- having regard to its resolution of 12 July 1995 ((OJ C 249, 25.9.95, p. 71.)) on the deliberations of the Committee on Petitions during the parliamentary year 1994-95 and of 19 July 1996 ((OJ C 261, 9.9.1996, p. 195.)) on the deliberations of the Committee on Petitions during the parliamentary year 1995-96,

- having regard to the report of the Committee on Economic and Monetary Affairs and Industrial Policy and the opinions of the Committee on Legal Affairs and Citizens' Rights and the Committee on Employment and Social Affairs (A4- 0160/97),

A. whereas the 1985 single market project is the only comprehensive supply-side programme since the creation of the EU, seeking to:

(a) apply fully the four basic freedoms to all spheres of economic life of the EU,

(b) attain a high level of job creation and sustainable growth and improve the EU's competitiveness,

(c) establish the largest economically integrated area in the world,

B. whereas the Commission claims to have gathered sufficient evidence of the positive economic effects of the single market, arising from five economic synergies:

(a) growing competition between companies in manufacturing and services,

(b) an accelerated pace of industrial restructuring,

(c) a wider range of products and services,

(d) an efficient cross-border deliveries system,

(e) greater mobility of persons,

C. whereas the Commission has assessed the abovementioned five economic synergies and claims that the Single Market Programme (SMP) has resulted in:

(a) the creation of between 300 000 and 900 000 more jobs,

(b) an extra increase in EU income of 1.1 to 1.5% over the period 1987-1993,

(c) a fall in inflation rates by 1.0 to 1.5%,

(d) economic convergence and cohesion between EU regions,

D. whereas the Commission holds the view that delays in applying and enforcing single market rules at national level have prevented the single market from making its fullest possible contribution to growth, competitiveness and job creation,

E. whereas, according to the Commission documents, the single market legislative framework concerning the free movement of goods is essentially complete, but EC migration has been modest and only confined to specific professional occupations, such as managers, doctors or specialised technicians,

F. whereas lack of labour mobility at national level should be zealously addressed by innovative and imaginative programmes to help favour mobility, including improved and tailored education and training for the single market,

G. whereas the absence of a single legal redress procedure undermines EU-wide legal security; whereas the existence of in effect seventeen different legal systems (the UK comprising three different internal legal domains) creates significant extra direct and indirect costs, and impedes equal and effective access to justice for both individuals and business; whereas this has the effect of making business transactions in some EU markets much more risky and costly than in others, this being exemplified by the debt collection/late payments problems encountered in intra-EU trade,

H. whereas EU-wide rules on media ownership are essential to the proper functioning of the Single Market in this sector,

I. whereas it is debatable whether significant progress on the removal of border controls on the movement of individuals can be made if legislation is based on existing intergovernmental agreements,

J. whereas attaining the objectives of Article 2 of the EC Treaty, seeking to promote a 'sustainable and non-inflationary growth respecting the environment', means that environmental policy and the single market should be complementary,

K. whereas various barriers to trade and investment, delays at frontiers, preferential contracts, legal and fiscal complications have penalized the consumer who has paid high prices and has had limited choice,

L. whereas the EU's 120 million children are vulnerable because of the development of the single market in a variety of ways associated with the free movement of people, goods and services,

M. whereas serious progress has been made by removing restrictions affecting service markets, yet the fiscal aspects of such liberalisation have not been addressed,

N. whereas the Single Market Programme of more than 280 directives has eliminated about 100 000 national standards, labelling laws, testing procedures and consumer protection measures, and whereas 60 million customs and tax formalities have been scrapped,

O. whereas management of Community legislation in the single market area still rests in the realm of management committees, which raises serious problems of how scientific expertise is taken into account and creates unavoidable conflict with the European Parliament over the issue of commitology,

P. whereas the failure of Member States to transpose the SMP into national law, combined with the Member States' practice of deviating from Community law, has resulted in excessive regulation at Member State level by introducing unnecessary additional national legislation,

1. Agrees with the Commission's policy recommendations concerning:

(a) the national administrations' responsibility for enforcing single market legislation and Treaty rules and for revising and reducing excessive national regulation which creates unnecessary red tape and excessive cost,

(b) the Community's responsibility for completing the 1985 SMP in key areas such as abolition of border controls on persons, taxation, company law and public procurement, and for updating Community legislation in areas such as competition, consumer policy and the environment;

2. Is of the view that the Commission should expose and name Member States which have failed to reduce home-grown legislation which impedes the development of the Single Market, and pinpoint those Member States which have failed to transpose Community legislation into national law, and those Member States which have subsequently complicated such Community law by introducing unhelpful national laws and practices;

3. Believes that, given that the SMP has created an extra 1.5% GDP, which could be translated into an addition of $130 billion in the EU's wealth in 1996, experience has demonstrated that completing the Single Market is the most efficient and effective way of creating sustainable jobs for citizens of the EU;

4. Is of the opinion that while the introduction of the Euro in 1999 will eliminate constraints arising from exchange rate risks and will increase price transparency and competition, it is also imperative that the consumer protection aspects of the single currency should be addressed;

5. Rejoices that the SMP has led to a significant positive economic impact, but considers that such economic evaluation needs to be qualified in that the size of the EU market has increased because of the accession of five new Member States, German unification and the new markets arising from the transformation of Central and Eastern Europe;

6. Believes that the Commission is correctly identifying some microeconomic effects resulting from the elimination of trade barriers (namely improvements in resource allocation, economies of scale and specialization) but emphasizes that trade liberalisation, unaccompanied by other policies, such as environmental and social protection, will not bring about the results aimed for in Article 2 of the Treaty; agrees that the Commission should be wary of anti-competitive behaviour and work to eliminate cartels, monopolies and abuses of dominant position;

7. Stresses the fact that the SMP has led to trade creation and to investment creation but also investment diversion from EFTA countries to EU Member States; points out that these economic effects and the resulting income redistribution and trade relations have not been analysed in depth by the Commission;

8. Is of the view that one may accept the logic that the SMP has fostered concentration, mergers and acquisitions because the larger size of the market enhances specialization and increases the number of efficient firms;

9. Is worried by the fact that small and medium-sized firms (SMEs) have not been able to benefit from the gains of a larger single market in the EU, nor have they been successful in participating in public projects; moreover, SMEs have been burdened by 415 additional EU directives on top of the 400 new proposals per year from Member States;

10. Believes that the Commission should produce a dedicated action plan, beyond the current 3rd Multiannual Programme for SMEs 1997-2000, aimed at helping SMEs participate in and benefit from the single market, and should produce a 'VADEMECUM' for single market legislative compliance to help business and industry, and especially SMEs;

11. Notes with interest that the Commission stresses the fact that labour mobility will be enhanced if social security protection (pensions, health insurance, family benefits) is adequate and sufficiently harmonized between Member States;

12. Calls on the Commission to develop European legislative proposals for the private pension insurance sector, similar to the legislation already in place for the personal liability and life insurance sectors, in order to ensure a proper functioning of the internal market for the insurance sector as a whole, and to facilitate the free movement of workers in the European labour market;

13. Stresses the fact that, to function smoothly, an efficient single market requires strong consumer organisations and redress and complaints procedures based on harmonized and simplified legislation; calls on the Commission to examine the feasibility of transforming the European Information Centres (EICs) into units of Redress and Complaints Centres (RCCs) in each Member State; the cost arising from a legal action before a national court may be borne by the RCCs;

14. Agrees with the Commission that national legislation in the environmental field may diverge if it is not based on EU standards and guidelines, and may result in the fragmentation of the single market; encourages the Commission therefore to scrutinize national regulation relating to: (a) emissions of solvents, (b) eco-label schemes and (c) waste management;

15. Is worried by the inadequate transposition of single market measures (only 56% of the 1985 White Paper measures have been transposed) into national legislation in key sectors such as public procurement, investment services and insurance, and by the divergent enforcement methods across Member States; equally the tendency of some Member States to prescribe new detailed technical regulations (some 450 new national technical rules are introduced annually) may present new obstacles to the completion of the single market;

16. Agrees with the Commission that an efficient single market presupposes a simplified taxation system at EU level, which does not allow double taxation, eliminates fraud and offers incentives to investment which brings the European economy closer to a model of sustainable development; emphasizes at the same time that the taxation system must be fair, comprise all sources of income and have the function of redistributing wealth in a socially responsible manner;

17. Invites the Commission to submit a report on taxation policy for the single market, which highlights in particular job-creation opportunities, encouragement of business initiative and an effective environmental policy;

18. Calls on the Commission, the Council and the Member States within the framework of the Intergovernmental Conference, in view of the extremely small impact of the single market on employment by comparison with the number of jobs lacking in Europe, to complement the single market with a common European employment policy;

19. Calls on the Commission to include the issue of reducing the tax burden on the labour factor and introducing ecological steering taxes in its efforts to harmonize company taxation;

20. Is persuaded, given the experience of the SMP, that in order for the preparation of legislative proposals to be independent of any vested interests - guaranteeing the best possible protection of health, security and the environment - the autonomy, structure and composition of the scientific committees should be changed in terms both of commitology and their accountability;

21. Calls upon the Commission to speed up, if necessary by amending proposals and existing legal provisions, the adoption of legislation in key areas concerning the free movement and freedom of residence of persons, the creation of a European company, the taxation of investment income, recognition of diplomas and vocational proficiency certificates, the networks for communication and the transmission of information and the completion of the single market in the energy field;

22. Encourages the Commission to continue its simplification efforts by eliminating unnecessary and burdensome regulations under the renewed SLIM initiative, to deal with two outstanding barriers, described by Commissioner Monti as the black hole of the Single Market, namely public procurement and state aid, and to complete the trans-European networks (TENs) in energy, transport and telecommunications;

23. Is of the opinion that the Commission, in its announced Action Plan, should define what constitutes the Single Market, indicating those areas which need: (i) regulations, (ii) directives, (iii) mutual recognition, (iv) to remain different and untouched;

24. Requests the Commission to submit to the Council and Parliament an Action Plan on the forthcoming legislative proposals in the field of the SMP, Commission measures intended to implement Parliament's resolution of 4 July 1996 on the Commission recommendation on payment periods in commercial transactions ((OJ C 211, 22.7.1996, p. 43.)), Commission initiatives to construct a new action plan for SMEs intended to increase transparency of SMP legislation and to help them realise their job- creating potential, and Commission action to propose the SMP as a model of development for the countries of Central and Eastern Europe;

25. Is of the opinion that the Commission should introduce an EU Monitoring System to oversee the proper, fair and continuing application of EU law by national control systems; in addition, the national authority responsible for application of European legislation should be named and listed to help transparency and the ready redress of problems;

26. Believes that the Commission should prepare an initiative to help the EU to modify its single market to take account of enlargement and the challenge of fresh world developments, especially in biotechnology, energy and information services, while bearing in mind that the transition to a new model of development, as outlined in the 10th Chapter of the White Paper on Growth, Competitiveness and Employment (COM(94)0700), is only to be achieved by an appropriate policy mix;

27. Calls on the Commission and Council to take measures to combat the additional environmental pollution arising from the increase in the volume of traffic in particular and to ensure compliance with the Community's environmental objectives;

28. Believes that the Commission in its on-going programme of reports and studies detailing the development of the single market should bring forward a study on the impact of the single market on the EU's 120 million children; national legislation on the protection of children should not be weakened; calls upon the Commission to submit to the Council and Parliament a proposal for legislation on product liability and safety, which will protect children from the adverse effects of the liberalization of the single market; the following aspects need particular attention: toy safety, car seats, dangerous substances, firework safety and security standards of domestic equipment;

29. Believes that the Commission should ensure that consumer policy is fully integrated into EU law at its creation and application; such policy should include proper labelling of goods, clear and simple redress procedures, crossborder guarantees, and active consultation of consumer groups in the framing and application of consumer policy;

30. Calls upon the Commission to carry out a special review of the single market in services, especially production-related services, ascertain to what extent it increases competitiveness and promotes employment in the Union, and draw up a Community action programme going beyond the field of the information society;

31. Welcomes the Commission's proposals on the completion of the legislative framework at Community level but takes the view that the following points should be added: measures to increase legal certainty in the information society, consumer protection measures in connection with financial services and the introduction of the euro, and measures to complete the insurance market;

32. Believes that persistent vigilance and continuing attention as to the application of the strictest measures to combat fraud in the single market is of the utmost importance in order to ensure the proper functioning of that market;

33. Requests the Commission to study the media industry in the context of the competition articles of the EC Treaty, and in particular Article 86, and then submit a legislative proposal to create an efficient single market in the media industry, which should do away with different sets of national laws on media ownership and make it transparent for cross-border investments, and guarantee pluralism while promoting the principles of Article 128 of the EC Treaty on culture;

34. Insists on setting a time-constraint on the Commission's initiatives intended to implement this resolution; all remaining legislative proposals should be submitted by the end of 1997 and transposition of SMP measures into national legislation be accomplished before the start of EMU;

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