EN Official Journal of the European Union CE 78/308

(2004/C 78 E/0310)

WRITTEN QUESTION E-3659/03

by Glyn Ford (PSE) to the Commission

(9 December 2003)

Subject: Free movement of goods and services

Whilst I fully support the idea that the free movement of goods and services requires common European rules and regulations governing large companies which export their products to other countries, does the Commission not feel that some of the burden should be lifted from small companies with low turnovers which operate locally and regionally within one Member State? Does the Commission have any idea of the costs which such SMEs incur as a result of regulation of the single market and does the Commission have any plans to exempt such companies, given that local knowledge is a sufficient safeguard of reliability to the public?

Answer given by Mr Bolkestein on behalf of the Commission

(26 January 2004)

The Commission believes that the Internal Market offers considerable opportunities for small and medium-sized enterprises (SMEs). It believes that in certain fields the lack of an integrated European regulatory framework prevents SMEs from being able to grow and extend their activities across Internal Market borders (1).

The Commission fully agrees with the Honourable Member's view that Internal Market harmonisation should not give rise to excessive compliance costs. Internal Market harmonisation always has as its primary objective the facilitation of free movement. Where national restrictions applied to incoming firms or products are disproportionate, that free movement is achieved by applying the principle of mutual recognition whereby the firm from the country of origin can supply its goods and services to the host country on the basis of its own domestic rules. Such application of Internal Market principles does not add to the business compliance burden. On the contrary, it reduces it significantly since the cross-border operator only has to work to one rather than two to fifteen (soon to be twenty five) sets of rules.

When Community harmonisation is required to protect, for example, consumers and the environment, it must also comply with the principle of proportionality. In other words, it must take the form of provisions that ensures the required high common level of protection in the least trade-restrictive manner. Such harmonisation does not necessarily add new rules to national operators but typically modifies existing rules such that they achieve their desired public interest objectives effectively whilst allowing for free movement.

In order to ensure that this principle of proportionality is adhered to, proper assessment of compliance costs and administrative burdens of Community intervention is essential. Although the Commission has no systematic information on compliance costs and administrative burdens relating to older Community legislation, the assessment of these costs and burdens plays an important role in the new impact assessment procedure put in place by the Commission (2). The new impact assessment procedure will integrate into a single system all existing impact assessment mechanisms in the Commission, including the business impact assessments which the Commission has conducted on its legislative proposals since 1986. The new impact assessment procedure provides, for each proposal concerned, a systematic analysis of the problem being addressed, the objective, the alternative options to reach the objective and their likely impacts. Consultation of stakeholders including SMEs on major proposals will form an important part of the process.

In conclusion, in pursuing the goal of achieving a smoothly functioning Internal Market, the Commission aims to account fully for business compliance costs. The Commission, therefore, cannot agree with the Honourable Member's suggestion that small firms should be allowed to deviate from harmonisation provisions seeking to attain the required high levels of protection of public interest objectives such as the protection of public health, consumers or the environment. This would not only undermine the protection of valid public interest objectives to the detriment of Union citizens but would also undermine trust and confidence in the operations of Union SMEs in general.

(1) For example, in its report on the State of the Internal Market in services [COM(2002)441 final], the Commission identified SMEs as the main victims of the current fragmented European regulatory framework.

(2) COM(2002)278 final. See http://europa.eu.int/comm/governance/suivi_lb_en.htm.