Report from the Commission to the Council and the European Parliament - THE SINGLE MARKET IN 1995
Date: 1996-02-20
Institutions: European Commission
Subjects: Economic and Monetary Union, activity report, application of EU law, deepening of the European Union, single market

COMMISSION  OF THE  EUROPEAN  COMMUNITIES 

Brussels,  20.02.1996 
COM(96)  51  final 

THE SINGLE MARKET IN 1995 

- Report from the Commission to the 
Council and the European Parliament -

NOTE 

References in the body of the report to Council or Commission  legislation  and to Treaty  articles 
are followed by an asterisk* without  a footnote.  Full titles  and  references  of  legislation  and  the 
text of Treaty articles are given in Annex 2 to the report. 

^ 

Contents 

Introduction 

Section 1  - Overall assessment of the operation Of the Single market 

§ 1  -  Completing and streamlining the legislative framework of the Single 

Market 

§ 2 -  Making the Single Market work 

§ 3 -  Confirming the Single Market as the cornerstone of Economic and 

Monetary Union 

§ 4 -  Securing a Single Market for the citizen 

§ 5 -  Adapting the Single Market to technological and other change 

§ 6 -  Preparing the Single Market for enlargement 

§ 7 -  Conclusion 

Section 2 - Managing the single market 

§ 1 -  Implementation of Community law: transposai 

§ 2 -  Enforcement of Community law 

A.  Cooperation on enforcement of Internal Market rules 

B. Penalties for infringements of Community law 

§ 3 -  Access to justice and judicial cooperation 

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A.  Training and information provided for the legal professions in the field 

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of Community law 

B. Access to justice for consumers 
C. Free movement of judgements 

§ 4 -  Evaluation of the effectiveness of the legislation 

§ 5-  Statistics 

§ 6-  Regulatory policy and simplification 

A.  Regulatory policy and simplification of legislation 
B. Legislative and declaratory consolidation 

§ 7-  Communication and information policy 

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THE SINGLE MARKET IN 1995 

CONTENTS 

Section  3 - Free movement of persons 

§ 1 -  Abolition  of controls at internal frontiers 

§ 2 -  Free movement  of persons  in the Community 

A.  Right of residence 

B.  Recognition of qualifications 

C.  Employment services in cross-border regions 

Section 4 - Free movement  of goods 

Instruments  provided for by Community  law for ensuring free movement of 
goods 

§ 1 -  Articles 30 to 36 of the  EC Treaty 

A.  Introduction 

B.  The main fields in which the Commission acted to eliminate obstacles 

to trade in 1995 
a)  Road vehicles 
b)  Food 
c)  Chemical  products 
d)  Pharmaceutical  and medical  products 
e)  Other types of obstacle 

C.  Action by the Court of Justice 

§ 2 -  Technical  harmonization  and standardization 

A.  Adoption and implementation  of legislation in the various sectors 

a)  Agricultural  products 

•  Veterinary and zootechnical legislation 
•  Plant health and other legislation relating to crop products and animal 

nutrition 

•  Plant variety rights 
•  Complaints 
b)  Capital goods 
c)  Foodstuffs 
d)  Pharmaceutical  products 
e)  Chemicals 
f)  Motor vehicles 

B.  Special free movement  arrangements 

a)  Dual-use goods 
b)  Agricultural  products 

C.  Standardization policy 

D.  Quality,  certification, and conformity marking policy 

§ 3 -  Prevention and control  instruments 

A.  Prevention of new obstacles - Procedure 83/189/EEC* 

B.  Enforcement of the mutual recognition principle 

Section 5 - Freedom to provide  services and right of establishment 

§ 1 -  Services  in general 

§ 2 -  Financial services 

A.  Credit institutions 
a)  Derivatives 
b)  Interpretative  communication  on the interest of the general good 

B.  Insurance services 

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THE SINGLE MARKET  IN 1995 

CONTENTS 

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C.  Cross-border credit transfers 

Section 6 - Free movement of capital 

Section 7 - Taxation 

§ 1 - 

Indirect taxation 

§ 2 -  Direct taxation 

Section B - The business environment 

§ 1 -  Intellectual and industrial  property 

A.  Intellectual property 

B.  Industrial property 

§ 2 -  Company law and financial  information 

§ 3 -  Commercial communication 

§ 4-  Media 

A.  Media ownership 

B.  Legal protection  of encrypted services 

C. Audiovisual policy 

§ 5 -  Protection of personal data 

§ 6 -  Information Society Services 

Section 9 * Public procurement 

§ 1 -  Application of the Community  rules 

A.  Action by the Commission 

B.  Decisions by the Court of Justice 

§ 2 -  Development of Community  legislation 

§ 3-  Other activities 

A.  "SIMAP" project 

B.  Improvement of participation of SMEs in public procurement 

C.  Defence Procurement 

Section 10 - Transport, Energy and Telecommunications 

§ 1 -  Transport 

A.  Airtransport 

B.  Road transport 

C. Inland waterways 

D.  Maritime  Transport 

E.  Railways 

§ 2 -  Energy 

A.  New Internal Energy Market Legislation 

B.  Free Movement of Goods 

C.  Transposition 

D.  Standardisation 

§ 3 -  Telecommunications 

§ 4 -  Trans-European  Networks 

THE SINGLE MARKET IN 1995 

CONTENTS 

Section 11 - The Internal Market and other Community policies 

§ 1 -  Competition policy 

§ 2 -  Social dimension of the internal market 

§ 3 -  Consumer policy 

A.  Consumer behaviour - cross-border purchasing 
B. Consumer policy priorities  1996-1998 

§ 4 -  Environmental policy 

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A.  Integration of environment and single market policy 
B. Approximation of laws and other Community legislation in the environ- 

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mental field 

§ 5 -  Small and medium-sized enterprises 

§ 6 -  Education and Training 

§ 7 -  Research 

Annexes 

1 - Abbreviations and acronyms 

2 - Community provisions cited 

A.  EC Treaty 
B.  Official Journal - references 

3 - Judgements of the Court of Justice cited 
4 - Recent reports, studies and surveys on the single market 

64 

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THE SINGLE MARKET IN 1995 

X 

Introduction 

This is the third Commission  report  on the  operation of the single market.  In accordance with 
the request of the  Brussels European  Council of  1993 that a  report  be submitted to the Euro 
pean Council at the end of each year, a short report on the Single Market is 1995 was submit 
ted to the European Council in Madrid  on 15-16 December.  It is reprinted here as Section  I of 
this report. 

THE SINGLE MARKET IN 1995 

3 

Section 1 - Overall assessment of the operation of the single 
market (1) 

1. 
The  completion  of  the  Single  Market  is  of  central  importance  for  the  Union  given  its 
potential to  contribute  to  European  growth  and job  creation. In  1995 a growing  awareness  has 
emerged of the Single Market's centrality  in paving the way for Economic and Monetary Union, 
strengthening  European  industry's  competitiveness  and  stimulating  economic  growth  on  the 
basis  of  sustainable  development.  Indeed,  the  Competitiveness  Advisory  Group,  chaired  by 
Mr. Ciampi, emphasised the urgency  of accelerating  the Single  Market  process. The  prosperity 
of our citizens and the improvement  in their quality of life depends on its full realisation. 

2. 
Even  if,  taken  as  a  whole,  the  Single  Market  is  working,  there  are  still  problems  in 
specific  areas.  In  1995 we  have  seen  steady  progress towards the  achievement  of the  Single 
Market.  Evidence  from  many  quarters  clearly  shows  that  most  companies  believe  that  the 
Single  Market  is  bringing  them  benefits.  Concerns  remain,  however:  they  include  continuing 
technical  barriers to trade; incomplete  legislation  on key  issues such  as taxation  and  company 
law; uneven  or over-bureaucratic  enforcement  of  legislation; the  need to  continue  to  reinforce 
competition  policy,  in particular  in the  area  of state  aids and the  liberalisation  of  public  utilities; 
and  demands  for  compensatory  measures  arising  from  monetary  disturbances.  Even  more 
important, the Single  Market  has not yet been sufficiently  focused on the  needs of the  citizens, 
who often are not fully aware of the opportunities  it offers to them. 

The  policy  of  the  Commission  in  1995  has  been  organised  along  six  lines  of  action, 

completing and streamlining the legislative framework of the Single Market; 

3. 
designed to give a fresh impetus to the Single Market: 
(i) 
(ii)  making the Single Market work; 
(iii) 
(iv) 
(v) 
(vi) 

confirming the Single Market  as the cornerstone of Economic and Monetary Union; 
securing a Single Market for the citizen; 
adapting the Single Market to technological and other change; and 
preparing the Single  Market for  enlargement. 

This  report  reviews  the  progress  made  under  each  of  these  headings  during  1995.  It 

4. 
focuses on the main developments or problems. 

§ 1 - Completing and streamlining the legislative framework of the Single 

Market 

5. 
Our  first  priority  must  be  the  completion  of  the  legislative  framework  for  the  Single 
Market,  including  the  hard  core  of  proposals  from  the  1985  White  Paper  and  liberalisation  in 
sectors  not covered  by that  programme.  A  number  of examples  may  be cited. European  busi 
ness cannot yet benefit  from the  European  Company  Statute the absence of which the  Ciampi 
Report  estimated to cost  business  ECU 30 Billion  a year.  Similarly,  companies  and cross-fron-

(1 ) 

This section is the text of the report on the Single Market in 1995 which was submitted to the European Council for its 
meeting in Madrid on 15-16 December 1995. 

THE SINGLE MARKET IN 1995 

SECTION 1 - OVERALL ASSESSMENT  OF THE OPERATION OF THE SINGLE  MARKET 

tier  workers  increasingly  complain  about  the  problems  of  double  taxation.  Yet,  the  Commis 
sion's  proposals  on  these  issues  remain  blocked  despite  the  European  Council's  repeated 
insistence  on  the  importance  of  improving  the  fiscal  and  legal  environment  for  business,  in 
particular  SMEs. Furthermore,  financial  services  across frontiers  are  inhibited  by widely  differ 
ent fiscal  regimes depriving  our  citizens  of  new  products  at  competitive  rates. The  rejection  in 
March  1995  by  the  Parliament  of  the  draft  directive  on  the  protection  of  biotechnological 
inventions (2)  means that  our  industry  is  at  a  significant  competitive  disadvantage  The  Com 
mission has now put forward a new initiative  in this key area (3). 

6. 
Although  the  interim  regime  has  proved  its  value,  the  remaining  problems  reported  by 
traders with the implementation  of Value Added Tax  can only  be resolved with the  introduction 
of a definitive  regime. This will  require fundamental  changes to  allow  intra-Community sales to 
be treated  in the  same way  as domestic  sales, while  ensuring that  Member  States'  VAT  reve 
nues remain at current levels. 

7. 
1995  saw  continuing  problems  with  regard  to  controls  on  people  crossing  our  internal 
borders. However, significant  steps towards  achieving the free movement  of people  have  been 
taken. In July, the Commission  presented three  proposals to  eliminate  such controls (4), on the 
clearly stated condition that they would  enter  into force  only when the essential  security  meas 
ures have  been implemented. The  Council  also  adopted two  regulations  relating to free  move 
ment of  people: the  first  (Regulation  (EC)  No.  1683/95*)  established  a model type  of  visa, the 
second  (Regulation  (EC)  No.  2317/95*)  agreed  a  list  of  third  countries  whose  nationals  must 
have a visa to enter Community territory. 

8. 
Competition  policy  is  particularly  important  in certain  key  areas  if the  full  advantages  of 
the  Single  Market  are  to  be  realised.  In  the  telecommunications  sector,  the  deadline  of  1998 
remains as the date  by which full  liberalisation  will  have  been achieved, while the  use  of  alter 
native  infrastructures  for  liberalised  services  will  be  allowed  two  years  earlier.  In  1995,  there 
has been a welcome  acceleration  in the  pace  of  liberalisation  and competition  in the  telecom 
munications sector, enabling  it to  play  its  pivotal  role  in the creation of a European  Information 
Society.  Further  progress  in the  gas  and  electricity  sectors  is needed. And, although the  basic 
framework  of the  single  transport  market  is  in  place, further  measures  are  needed,  especially 
for  airport  ground-handling  facilities,  railways  and  inland  waterways.  The  Commission  has 
tabled proposals to this effect during  1995. 

However, completing the legislative  framework  is not the whole story. There  is a growing 
9. 
awareness that regulators at national and Community  level must also ensure better and simpler 
regulation.  The  Commission  has  prepared  a  report  for  the  European  Council  on  better  law 
making. Codification  proposals  involving  the  repeal  of  about  350  instruments  were  before  the 
Council and Parliament  by the end  of  1995. The  Molitor  Group has also  reported  on  legislative 
and administrative  simplification.  The  application  of these  principles  in the  Single  Market  area 
is of  key importance, given  that the whole  objective  of Single  Market  legislation  is to  eliminate 
regulatory  barriers to free  movement.  The  considerable  efforts  now being  made  at  Community 
level  must  be  mirrored  at  national  level.  It  is  a  cause  for  concern,  for  example,  that  438 
proposals for technical legislation at national level were notified to the Commission in 1995. 

§ 2 - Making the Single Market work 

10.  Our  citizens  and  business  must  be  able to  make  full  and effective  use of the  rights  that 
have  been  created  under  Single  Market  law.  The  Commission  is  therefore  committing  major 
resources  to  monitor  implementation  of  agreed  legislation  and  ensure  its  full  and  effective 
enforcement. 

(2) 

(3) 

(4) 

COM (95) 661 final, not yet published. 

See footnote (92) of 1994 report. 

COM (95) 346, published in OJ C306; COM (95) 347, published in OJ C289, COM (95) 348, published in OJ 307. 

THE SINGLE MARKET  IN 1995 

SECTION  1  - OVERALL ASSESSMENT  OF THE OPERATION OF THE SINGLE  MARKET 

11.  One of the  main tools to  achieve  an effective  and speedy  resolution  of  problems  as they 
arise  is through  increased  co-operation  between  national  administrations. A  network  of  contact 
points  in  all  national  administrations  covering  priority  sectors  is  now  largely  in  place  and  it 
should  increasingly  help  in  resolving  administrative  and  other  problems  across  the  Single 
Market. 

12.  Among the  developments  in  1995 was the  proposal  by the  Commission  of the  Customs 
2000  action  programme  (5)  to  modernise  customs  administrations  and  support  cooperation 
between them. The Council  responded  positively  to the Commission's  request  that  appropriate 
sanctions  are  set  to  penalise  infringement  of  Single  Market  rules.  Furthermore,  the  Council 
recently  agreed  a  new  notification  system  for  national  measures, to  come  into  effect  in  1997, 
thereby strengthening the means available for tackling  illegal restrictions on the free  movement 
of goods across frontiers and ensuring that the principle of mutual recognition is respected. The 
need for such an instrument  is clear: the  number  of complaints  about such  measures  received 
increased from 202 in  1994 to 259  in  1995. The  free  movement  of goods  has also  been facili 
tated  by  progress  on  European  standardisation  and,  in  the  pharmaceuticals  sector,  by  the 
opening of the European Agency for the Evaluation of Medicines. 

13.  Transposing  Community  directives  into  national  legislation  in  all  15 Member  States pro 
ceeded  steadily  in  1995. Taken  overall,  by  December  1995  the  Member  States  had  adopted 
93.4% of the national measures required  in order to implement the Community's  Single  Market 
legislation.  Member  States  levels  of  transposition  of  Single  Market  legislation  vary  consider 
ably:  Denmark,  the  Netherlands,  Spain  and  Sweden  are  substantially  above  the  Community 
average  of  93.4%; Greece,  Germany  and Austria  are  substantially  below.  Regrettably,  imple 
mentation  of  agreed  Community  law  remains  seriously  flawed  in  some  key  sectors  as  it  was 
last  year  (notably  public  procurement,  intellectual  property  and  insurance).  Failure  by  Member 
States to honour their commitments  is all the greater cause for concern the longer they persist. 

During  1995, the  Commission  increasingly  concentrated  its attention  on the quality  of transpo 
sition. To that end, while the Commission  remains committed to seeking to resolve  problems in 
full  co-operation  with  Member  States,  it  has  shown  that  it  will  not  hesitate  to  initiate  infringe 
ment  proceedings for  incorrect  or incomplete  transposition, and indeed in  1995 there  has been 
a  significant  increase  in the  number  of  proceedings  concerning  the  1985  White  Paper  meas 
ures. 

14.  The  Commission  also  intends  to  react  quickly  to  complaints  by  individuals  and  busi 
nesses  and  to  take  prompt  action  to  ensure  that  their  rights  under  Community  law  are 
respected. 

§ 3 - Confirming the Single  Market as the cornerstone of Economic and 

Monetary  Union 

15.  Economic  and  Monetary  Union  means  a  Single  Market  working  with  a  single  currency, 
and until this is achieved the full  benefits  of a Single  Market will  not be realised. The Commis 
sion's Green Paper on the single  currency  (6) has given considerable  impetus to the debate  on 
the scenario for its introduction. 

Financial  institutions  and  markets  have  responded  with  comments  and  suggestions  on  all 
aspects  of the  draft  reference  scenario  for the  changeover  to  a single  currency  outlined  in the 
Green Paper. All interested  parties,  including  consumers, were  invited to discuss the  issues in 
detail during the autumn, providing valuable suggestions for the Commission. 

(5) 

COM (95)  119 final, OJ  No C 301, 13.11.1995  as amended by COM (95)  451  final, OJ  No C 327, 7.12.1995  as 
amended by COM (95) 576 final, not yet published. 

(6) 

COM (95) 333 final of 31.5.1995. 

THE SINGLE MARKET IN 1995 

SECTION 1 - OVERALL ASSESSMENT  OF THE OPERATION OF THE SINGLE  MARKET 

In  the  period  before  EMU  is  achieved,  significant  currency  fluctuations,  such  as  those 
16. 
that have occurred in recent years, could  impair the  proper functioning  of the Single  Market.  In 
October 1995, the Commission firmly  rejected demands for compensatory  measures that would 
imply  new  barriers  to  trade,  and  considered  that  increased  budgetary  discipline  and  conver 
gence  of  economies  -  that  is,  exactly  those  guidelines  that  are  needed  to  achieve  the  condi 
tions for the single currency - are the only appropriate  response. 

§ 4 - Securing a Single Market for the citizen 

17.  The Single  Market  has often  been  perceived  as benefiting the citizens of the  Union  only 
indirectly, mainly through lower prices and wider choice of goods and services. More should  be 
done, if the citizen is to perceive that  he or she is central to the Single  Market. The creation  of 
a  Single  Market  which  benefits  the  citizen  to  the  full  is  a  key  objective  of  this  Commission. 
Besides  the  removal  of  frontier  controls  and  the  remaining  obstacles  to  free  movement,  this 
includes  heightened  consumer  protection,  improved  access  to  justice  and  the  settlement  of 
consumer disputes  in the  single  market,  as well  as an  improvement  to the  social  and environ 
mental dimension of the Single  Market. 

Several  developments  in  1995  contributed  to  this  objective.  New  rules  on  cross-border  credit 
transfers (7)  will  ensure  a  more  efficient  service  to  the  citizen  and  small  and  medium  busi 
nesses  and  provide  for  compensation  where  losses  occur.  The  EURES  network  is  facilitating 
the free  movement  of workers  by  ensuring  co-operation  between  public  employment  services. 
Rulings  by the  Court  of  Justice  confirmed  that  individuals  who  live  in  one  Member  State  but 
earn most of their  income  in another  must  be granted the  same tax treatment  as residents (8). 
However,  the  recognition  of  qualifications  is  of  equally  fundamental  importance  for  citizens 
wishing to take full advantage  of  Single  Market  employment  opportunities. While  thousands  of 
individuals gain recognition of their diplomas  under Community directives each year,  1995 saw 
an  increase  in  the  number  of  complaints  to  the  Commission.  The  Commission  will  shortly 
propose a major simplification of the relevant legislation. 

18.  The  Union  must  also  communicate  more  effectively  with  the  individual  citizen  to  make 
clear what Europe has to offer.  Substantial  preparatory work was carried out in 1995 to  prepare 
the  launch  in  1996  of  a  new  initiative  designed  to  inform  citizens  about  the  advantages  and 
opportunities they enjoy  in the Single  Market. The  Commission  is collaborating  closely with the 
Member  States  and  the  European  Parliament  in  preparing  ten  guides  for  the  general  public. 
Each will provide  useful general  information  on a particular theme, such as the citizen's right to 
live  and work  in  another  Member  State  and to  enjoy  health  provision  and  equal  opportunities, 
travelling  in the  European  Union  and  buying  goods  and  services  across  frontiers.  Information 
sheets are  now  being  prepared which will  provide  much  more detail to  help citizens  know  and 
exercise their rights. 

§  5  -  Adapting  the  Single  Market  to  technological  and  other  c h a n ge 

19.  The Single Market is not static - it will develop and our regulatory  approach and adminis 
trative  procedures  must develop with  it. A  particular  challenge  is to  ensure that this  regulatory 
environment  can keep pace with technological  progress: new services and new ways of provid 
ing them are confronting the Community with new challenges. 

(7) 

(8) 

Common Position SEC (95) 1976 final. 

Case of Wielockx - See para. 135. 

THE SINGLE MARKET IN 1995 

SECTION 1 - OVERALL ASSESSMENT OF THE OPERATION OF THE SINGLE  MARKET 

20.  For the Information Society  an appropriate  regulatory framework is essential; it will give 
the  market the  confidence  it  needs to  allow the  necessary  investments  in the  networks to  be 
made,  whilst  enabling  the  services  using  the  networks  (such  as teleshopping,  home  banking 
and distance  education)  to  benefit  fully  from  the  opportunities  offered  by the  Single  Market. 
During  1995  major elements of legislation were agreed.  In July the Council and the  European 
Parliament adopted a directive on the protection of individuals with regard to the processing of 
personal data and on the free movement of such data (Directive 95/46/CE)*.. The Council also 
reached  a  common  position  on  the  proposal  for  a  directive  on the  legal  protection  of  data 
bases (9). However, there are  many other issues arising in this field which need to be tackled, 
and the  Commission  has this  year  produced  Green  Papers  and  carried  out  consultations  on 
issues such as copyright and related rights in the Information Society (10) as well as the protec 
tion of pluralism in the media (11). 

21.  The successful  realisation  of trans European  Networks, with greater  participation  of pri 
vate  investment  where  possible,  is  also  necessary  to  achieve  the  full  potential  of the  Single 
Market.  The  Commission  submitted  a  separate  report  to  the  European  Council (12)  on  this 
subject. These  Networks will,  however,  only achieve  their full  potential  if the  services  offered 
over them are open to competition and do not remain in the hands of monopoly suppliers. 

§ 6 - Preparing the Single Market for enlargement 

22.  A major challenge is to prepare for the successful integration of the associated countries 
of Central and Eastern Europe into the Single  Market. A key element of the Community's pre-
accession strategy is the Commission's White  Paper on the Single Market (13) which was pre 
sented to the Cannes European Council. It provides guidelines for the associated  countries to 
help them align their legislation and administrative structures with those of the Union. A Tech 
nical  Assistance  Exchange  Information  Office  has  been  established  in  Brussels  to  provide 
practical help and advice. 

In addition, the Union continues to help Malta and Cyprus to assimilate the acquis communau 
taire in anticipation of the opening of accession negotiations. 

23.  The European Union is also working towards affirming beyond its present and future bor 
ders the principle of open access on which its Single Market is founded. In the field of financial 
services important  progress was achieved  in July  1995,  at the  initiative  of the  Union, with the 
WTO interim agreement for the liberalisation of financial services. 

§ 7 - Conclusion 

24. 
In  1995 the  Commission  identified  six  major  lines of action on the  Single  Market.  Pro 
gress has  been  made  towards each  of the  objectives,  but there  is  much  unfinished  business 
ahead. 

The Commission will in 1996 present a more complete analysis of the impact and effectiveness 
of the  Single  Market  since  its  inception,  which  should  provide  the  basis  for  fine-tuning  and 
developing tomorrow's agenda. 

(9) 

COM  (92)  24  final,  OJ  No  C  156,  23.6.1992  as  amended  by  COM  (93)  464  final,  OJ  No  C  308,  15.11.1993 
Common position No 20/95, OJ No C 288, 30.10.1995. 

(10)  COM (95) 382 final of 19.7.1995. 

(11)  COM (92) 480 final of 16.12.1992. 

(12)  CSE(95)571. 

(13)  COM (85) 310 final of 14.06.85. 

THE SINGLE MARKET IN 1995 

SECTION 1 - OVERALL ASSESSMENT OF THE OPERATION OF THE SINGLE  MARKET 

25.  However, the priorities for action are clear. They centre on the completion of the Single 
Market for the citizens, promoting a more effective Single Market for business, especially small 
and medium-sized enterprises, achieving the liberalisation of gas and electricity markets and of 
telecommunications,  preparing  for  the  information  society,  accelerating  work  on Trans-Euro 
pean Networks, assisting Central  and Eastern  Europe to adapt to Single  Market  requirements 
and ensuring equivalent enforcement. 

To  this  list  must  now  be  added  the  challenge  of  streamlining  the  regulatory  requirements 
imposed on businesses and individuals, in order to establish an effective, single economic and 
civic area without internal frontiers. There must be less but better regulation at all levels: local, 
regional and national as well as the Community level. 

26.  We  must all step up our efforts. The Commission has done so in 1995, and now looks to 
the Council and the Pariiament for decisions on the proposals already before them, to Member 
States for effective application of Single Market law, and to all interested  parties for continued 
support for and commitment to the goal of a Single Market. 

THE SINGLE MARKET IN 1995 

Section 2 - Managing the single market 

§ 1 - Implementation of Community  law: transposai 

27.  For the  Council  meeting  on the  Internal  Market  on 20 November  1995 the  Commission 
has prepared  its  latest  report  on the  state  of  play  in  national  transposai  of  the  White  Paper 
measures and other legislation that is critical for the functioning of the internal market (14). 

The report  includes, for the first time,  comprehensive  information  on the  new Member States, 
including Austria. 

28.  Transposing  Community  directives  into  national  legislation  in  all  15  Member  States 
proceeded steadily in 1995. Taken overall, by December 1995 the Member States had adopted 
93.4% of the national measures required in order to implement the Community's Single Market 
legislation.  Member  States  levels  of transposition  of  Single  Market  legislation  vary  consider 
ably:  Denmark,  the  Netherlands,  Spain  and  Sweden  are  substantially  above  the  Community 
average  of 93.4%; Greece,  Germany  and Austria  are  substantially  below.  Regrettably,  imple 
mentation  of  agreed  Community  law  remains seriously  flawed  in some  key  sectors  as  it was 
last year (notably  public procurement,  intellectual  property and insurance). Failure  by Member 
States to honour their commitments  is all the greater cause for concern the longer they persist 
(see table  I). 

As in past years, most infringements result from failure to notify national measures, sometimes 
because the deadline for their  adoption  has not been met. The  delay  is often  because  of the 
legislation's  technical  complexity,  combined  with  procedural  problems  specific  to  the  deci 
sion-making  process  in  each  Member  State.  In  the  new  Member  States,  delays  sometimes 
occurred because their national authorities needed first to devise appropriate working methods. 
Once a directive has entered into effect, the Commission routinely monitors its implementation 
at  national  level.  Increasingly,  it  is also  assessing  measures  adopted which  are  notified  to  it, 
with a view to improving the quality of transposai. This may result in the Commission undertak 
ing consultations with  Member  States that  have  failed  to  comply  fully  with  the  requirements, 
and instituting infringement proceedings where it considers this necessary. 

29.  With regard to the new Member States, a large proportion of the directives relating to the 
internal market were  already  included  in the Agreement  on the  European  Economic Area  and 
subsequently in the EEA Joint Committee's Decision No 7/94  amending Protocol 47 and certain 
Annexes  to  the  EEA  Agreement (15).  The  transposition  measures  for  these  directives  were 
therefore  to  be  notified  to  the  EFTA  Surveillance  Authority,  which  initiated  infringement 
proceedings  where  it  found  this  to  be  necessary.  These  procedures  were  transferred  to  the 
competence of the Commission (art 172 para 2 of the Treaty of Accession). 

In respect of Community  measures that were  not included  in the Agreement,  the  Commission 
will examine on a case by case basis whether or not to initiate infringement procedures.. 

(14)  As in its previous reports, the Commission used a different statistical basis for assessing the transposai of the White 
Paper measures. This is to reflect the changes over the years to the 282 measures: ones that became obsolete were 
abandoned or  replaced.  Furthermore,  each  measure  proposed did not  necessarily  lead to  the  adoption  of  a  single 
piece of legislation: in some cases several pieces of legislation were adopted in order to implement just one measure, 
while  in  other  instances  the  converse  was  true.  In  total,  276  pieces  of  legislation  have  now  been  adopted  in 
implementation of the White Paper. 

(15)  Decision of the  EEA Joint Committee  No 7/94 of 21 March 1994 amending  Protocol 47 and certain Annexes  to the 

EEA Agreement (OJ No L 160,28.6.1994). 

THE SINGLE MARKET IN 1995 

10 

SECTION 2 - MANAGING THE SINGLE MARKET 

TABLE I 

State  of Implementation  of the White  Paper  Measures 
276 provisions in force / 222 requiring national implementing measures 
Breakdown of Situation by Member State # 
(31  December 1995) 

Measures 
notified 
217 
214 
211 
203 
207 
207 
210 
209 
193 
200 
198 
198 
193 
194 
184 

OK 
NL 
E 
S 
L 
P 
UK 
F 
FIN 
B 
1 
IRL 
EL 
D 
A 

Not applicable 

Derogations 

3 
2 
1 
4 
6 
3 
2 
1 
6 
2 
4 
4 
3 
3 
3 

0 
0 
2 
7 
0 
3 
0 
0 
4 
0 
0 
0 
3 
0 
7 

Measures not 
notified 
1 
5 
4 
7 
9 
7 
3 
7 
10 
11 
15 
16 
21 
11 
18 

partial 
notification 
1 
0 
1 
1 
0 
0 
4 
3 
9 
2 
2 
2 
1 
4 
10 

Infringement for non 
conformity 
0 
1 
3 
0 
0 
2 
3 
2 
0 
7 
3 
2 
1 
10 
0 

# The situation regarding transposition in the new Member States is being reviewed in the light of bilateral meetings in early 1996. 

220 il 

200 4 

180 J 

a 

91 11 
Si 

a 

D N E S L P U F F I B I M E 1 . D A 0E 
K  L 

K 

N 

L 

Th  U 

O Derogations 

•  Not  applicable 

O Measures  notified 

OK 
NL 
E 
S 
L 
P 
UK 

99.1% 
97.3% 
96,4% 
96,4% 
95.9% 
95.9% 
95.5% 
94.6% 

FIN 
B 
I 
IRL 

EL 

O 

91.4% 

91.0% 

91.0% 

91.0% 

89.6% 

88,7% 

87.4% 

0 EU  93.4% 

O Infringement for  non-conf ormity 

•  partial notification 

O Measures  not  notified 

D K N L E S t . P U K F F i e i l R e i . OA 

EU 

THE SINGLE MARKET IN 1995 

SECTION 2 - MANAGING THE SINGLE MARKET 

11 

30.  The extent of transposai also varies between sectors (see table II). Those in which there 
are considerable delays include: 

• 

Insurance: the persistent delays are not in the new Member States, where transposi 
tion is proceeding fairly satisfactorily. But some progress is being made in transposing 
the "third generation" Directives establishing a single market in insurance: Directives 
92/49/EEC* (non-life)  and  92/96/EEC* (life). Greece  is now the only  Member State 
not to have notified  measures transposing these  Directives.  However, this  is not to 
say that  their transposai  elsewhere  is full  and satisfactory  in  all  cases: there  have 
been several instances of incomplete notification and incorrect transposition, and the 
Commission has already initiated some infringement proceedings against the Member 
States concerned. 
It  should  also  be  noted  that  the  Court  of  Justice  found  against  Greece  for 
non-transposal of Directives 90/618/EEC* (freedom to provide services in respect of 
motor insurance), 88/357/EEC* (second non-life Directive) and 90/619/EEC* (second 
life Directive) (16). 

•  Public  procurement:  the  deadlines  for  transposai  are  rarely  met  and there  have 
been several  cases of  incorrect  transposai.  Measures  are  regularly  notified several 
months  late  or more. There  are  currently  15 instances  of  directives  not  yet  having 
been transposed despite the deadline having passed, in some cases years ago. This 
is particularly true of the services Directive (92/50/EEC*), the new supplies Directive 
(93/36/EEC*)  and  the  new  excluded-sectors  Directive  (93/38/EEC*),  which  remain 
untransposed  by five,  five  and four  Member States  respectively.  In  1995, some 26 
infringement cases have resulted from failure to notify national measures adopted in 
implementation  of the  Directives.  In addition, examination  of the  measures  notified 
has resulted in 14 further infringement  cases for incorrect transposai, making a total 
of 30 such cases currently under consideration. Some of these are so fundamental as 
to call into question the openness of public contracts already awarded in the Member 
States concerned. 

•  New technologies and services: the relevant Directives have been transposed with 
considerable delay and often after infringement proceedings were instituted. In some 
cases,  there  are  genuine  problems  of  interpretation:  for  example,  Directive 
90/387/EEC* was  long  regarded  by  a  number  of  Member  States  as  a  framework 
directive that did  not have to  be transposed. Also, several  Member States that are 
currently  in the  process  of  overhauling  their  general  regulatory  framework  for tele 
communications have chosen to transpose the complex Directives (91/263/EEC* and 
92/44/EEC*) in a piecemeal fashion. This approach can give rise to ambiguities owing 
to a lack of consistency between the various national measures chosen to transpose 
one and the same  Directive.  On the  whole, telecommunications  law  has  not  been 
satisfactorily  implemented, causing delays in the achievement  of the general objec 
tives of European telecommunications policy. Various actions are being taken by the 
Commission  in  order  to  improve  the  state  of  implementation,  and  to  ensure  that 
application  by  Member  States  is  more  correct  and  effective.  This  includes  both 
stricter  application  of  internal  operating  procedures  and reinforcement  of  necessary 
bilateral contacts, as well as efforts to increase  (through specific workshops) aware 
ness  of  the  need  for  full  implementation  of  telecommunications  legislation  and to 
stress also in this context the  importance  of the direct  effect  principle  as a remedy 
against  both the  failure  to  implement,  and  incorrect  implementation  of  Community 
telecommunications directives. 

• 

Intellectual and industrial property: transposai is subject to quite significant delays 
and often  follows the  institution  of  infringement  proceedings.  More  particularly,  the 
delay  in transposing  Directive  89/104/EEC*  on trade  marks was  influenced  by the 
adoption of the Regulation on the Community trade mark. 

(16) 

Joined Cases C-109/94, C-209/94 and C-225/94; judgment delivered on 29 June 1995. 

THE SINGLE MARKET IN 1995 

12 

SECTION 2 - MANAGING THE  SINGLE  MARKET 

TABLE II 

State  of  Implementation  of  the  White  Paper  Measures 

Situation  by  sector 

( 31  D e c e m b er 

1 9 9 5) 

physical  barriers 

veterinary controls 

plant health controls 

controls on individuals 

specific controls (fuel tanks, waste) 

t e c h n i c al  b a r r i e rs 

special arrangements 
(arms, cultural works) 

new approach (standards) 

motor vehicles 

tractors and agricultural machines 

foodstuffs 

pharmaceuticals 

chemical products 

construction and construction Hems 

technical harmonization (other items) 

banks 

insurance 

transactions in securities 

new technologies and services 

transport 

company law 

intellectual and industrial property 

company taxation 

public procurement 

free movement of persons 

t ax  h a r r i e rs 

VAT 

excise duties 

100%  ; 

0% 

10% 

20% 

30% 

40% 

50% 

60% 

70% 

80% 

90% 

100% 

THE SINGLE MARKET IN 1995 

SECTION 2-MANAGING THE SINGLE MARKET 

13 

§  2  -  Enforcement  of  C o m m u n i ty  law 

A. 

Cooperation  on  enforcement  of  Internal  Market  rules 

31.  Homogeneous  enforcement  of  Community  rules on the  internal  market  across the  Union 
remained  a  high  priority  for  the  Commission  during  1995. The  main  tool  used to  achieve  this 
was the  promotion  of  mutual  confidence  between  national  enforcement  authorities  by  helping 
them to operate in partnership with one another and with the Commission. 

32.  Under  the  Council  Resolution  of  16  June  1994  on  the  development  of  administrative 
cooperation  in  the  implementation  and  enforcement  of  Community  legislation  in  the  Internal 
Market (17) the Commission  had been called upon to play a leading role in the practical organi 
zation  of  cooperation  between  the  competent  administrations  of  the  Member  States  and  the 
Commission to this effect. The  Member  States, for their  part, had been called  upon to  notify  to 
the Commission  by the  end of  1994 contact  points  and essential  information  on their  adminis 
trative structures  (for enforcement  of the rules). The Member  States and the Commission were 
called  upon to  pursue  actively  their  programme  of  discussions  aimed  at  identifying  needs  and 
agreeing on practices  sector-by-sector. 

This  exercise  concentrated  initially  on  eighteen  priority  areas  and  contact  points  for  the  vast 
majority  of these  areas were  notified  by  the  Member  States  during  1995.  However,  very  little 
information  on enforcement  structures  was  provided. The  Commission  incorporated  this  infor 
mation  into  a  database  and  distributed  the  lists  for  each  area  of  legislation  to  the  Member 
States' representatives on the committees and working groups concerned. 

The  programme  of  discussions  has  continued  and  the  practices  employed  in  those  sectors 
where  cooperation  was  already  well  developed,  such  as  veterinary  and  foodstuffs  controls, 
customs  and  taxation,  have  been  examined  to  see  whether  aspects  of  them  could  be  trans 
ferred to  other  sectors.  In  particular,  the  introduction  of  computerized  networks,  including  the 
use of electronic  mail,  has become  more widespread. This was given  a further  impetus  by the 
agreement  in  the  Council  on  a  Decision  adopting  a  multiannual  Community  programme  to 
support  the  implementation  of  trans-European  networks  for  the  interchange  of  data  between 
administrations  (IDA)  (Decision  95/468/EC*).  This  decision, which  was  to  be  adopted  early  in 
November  1995,  will  provide  funding  for  a  number  of  enforcement  networks,  including  the 
SHIFT system for veterinary  controls on the external frontiers. 

The  Commission  services  have  prepared  a  progress  report(i8)  which  addresses  the  questions 
of: 

•  completing the notifications of contact  points and administrative  structures as soon as 

possible and keeping them  up to date; 

• 

• 

• 

investigating  the  use  of  online  versions  of the  lists  (with suitable  security  measures), 
and monitoring the use of the contact  points for cooperation on enforcement; 

the  establishment  by  the  Member  States  of  contact  points  for  the  public,  especially 
small and medium-sized  enterprises  (in line with the Council Resolution of  10 October 
1994 (19)), in order for the  system of inter-administration  contact  points to yield its full 
benefits; 
the  provision  of  further  support  measures  for  cooperation,  including  seminars  and 
exchanges  between  enforcement  officials,  such  as  are  currently  provided  under  the 
Karolus and Matthaeus  programmes. 

(17)  OJ No C 179, 1.7.1994, p. 1. 

(18)  COM (96) 20, 29.01.1996 

(19)  Council Resolution of  10 October  1994 on giving  full scope to the  dynamism  and innovatory  potential of small and 
medium-sized enterprises, including the craft sector and micro-enterprises, in a competitive economy, OJ  No C 294, 
22.10.1994- last dash of section III, p.7. 

THE SINGLE MARKET IN 1995 

14 

SECTION 2 - MANAGING THE SINGLE  MARKET 

33.  The customs, indirect taxation and veterinary sectors have programmes of exchanges 
between enforcement officials  in their areas (Matthaeus, Matthaeus-Tax  and the veterinary 
exchange  programme).  The  Karolus  programme  applies to  other  areas  of  internal  market 
legislation, for which priorities are fixed in annual decisions. 

Two successive reports were received on the programme from the European Institute for Public 
Administration  in  Maastricht,  which  holds  a  contract  for  administration  of  the  programme. 
These reports indicated that considerable benefit had been gained by those taking part, among 
which the acquisition of contacts in the host administrations were particularly mentioned. 

By December 1995, 193 exchanges had taken place since the programme began in 1993, the 
largest numbers being of officials concerned with supervising the award of public procurement 
contracts and with foodstuffs control. This was less than the number planned, and discussions 
were held in October 1995 with the Karolus Committee and other interested parties to see if the 
aims of the programme, which are to promote more even-handed enforcement, would be better 
served if the rules were changed. In particular, the use of Karolus funds for training activities 
such as seminars was discussed. 

34. 
In the customs field, the Commission put forward a proposal in April 1995 for a Decision 
of the European Parliament and the Council on an action programme for Community customs 
(Customs 2000) (20). The objective  of the  proposal is to establish a framework for the devel 
opment and modernisation of customs administrations over a five-year period. It would support 
the actions undertaken by the Member States to strengthen the essential cooperation between 
their customs administrations and between them and the Commission  in order to ensure uni 
form application of Community  law at every  point on the external border. The Council's com 
mon position was adopted on 21 December 1995. 

B 

Penalties for infringements of Community law 

35.  By adopting, on 3 May 1995, a communication on the role of penalties in implementing 
Community  internal  market  legislation (21), the  Commission  called  on  the  Council  and  the 
European Parliament to support the work being undertaken with a view to improving the trans 
parency and ensuring the effectiveness and efficiency of the penalties imposed in the event of 
infringement of the common rules 

The Council responded very positively to that request by adopting, on 29 June 1995, a resolu 
tion on the effective uniform application of Community law and on the penalties applicable for 
breaches of Community law in the internal market (22). 

In essence, the  Commission  communication  highlighted the  following: without  excluding  the 
possibility of proposing that common penalties be laid down where necessary, the Commission 
confirms  that  the  principle  of  recourse  to  national  systems  of  penalties  should  be retained. 
There was no apparent reason to suppose that national penalties imposed in respect of Com 
munity or national rules would not be effective and proportionate and act as a deterrent, since it 
was in each Member State's interest to ensure that the rule of law was properly upheld on its 
territory so that it did not lose the confidence either of its own citizens or of the general public 
elsewhere in the Union. 

36.  Nevertheless, given the - in some cases - significant differences  noted by the Commis 
sion  when  examining  the  transposai  and  application  of  the  common  rules,  particularly  as 
regards public procurement, it stressed the importance of ensuring a degree of transparency in 
the national penalty systems, in order to confirm that they were effective, proportionate and a 
sufficient  deterrent.  To  that  end, the  communication  sets  out the  Commission's  intention  of 

(20)  COM (95)  119 final, OJ  No C 301, 13.11.1995 as amended by COM  (95)  451 final, OJ  No C 327, 7.12.1995  as 

amended by COM (95) 576 final, not yet published. 

(21 )  COM (95) 162 final of 30.5.1995. 

(22)  OJ No C 188, 22.7.1995, p. 1. 

THE SINGLE MARKET IN 1995 

SECTION 2 - MANAGING THE SINGLE MARKET 

15 

including in future proposals for regulations and directives a clause expressly requiring notifica 
tion of the penalties to be applied in the event of a breach of the internal-market rules. 

By means of the communication, the Commission called on the Council and Parliament to: 
take note of its initial guidelines on penalties in the internal market field; 

• 
•  confirm the need for national systems of penalties in this area to be transparent; 
•  give  a firm  commitment  to  supporting  work  on  penalties,  particularly  in  respect  of 

public procurement and customs legislation; 

•  undertake  to  discuss  openly  and  constructively  the  sectoral  proposals  which  the 
Commission will be bringing forward during the coming months in order to ensure that 
penalties for breaching the internal-market  rules are effective  and proportionate and 
have deterrent effect. 

In its resolution of 29 June 1995, the Council responded favourably to the above requests. 

37.  The Commission services continued their work on penalties in the customs field, on the 
basis FO the mandate which they  had received, which covers the examination  of the range, 
classification and degree of gravity of customs infringements, taking account of the provisions 
of the Community Customs Code. 

§ 3 - Access to justice and judicial  cooperation 

A. 

Training and information provided for the legal professions in the field of 
Community law 

38.  Within the framework of the Strategic Programme "Making the Most of the Internal Mar 
ket" (23), the  Commission  organised  in  March  and  October  1995  two  meetings  of  experts 
(judges, lawyers and academics from every Member State) to discuss possible initiatives to be 
launched in order to improve the training  and information of all legal practitioners  in order to 
improve the application of Community law within national jurisdictions. 

As a direct result of these meetings, the Commission is now preparing a new targeted action 
plan called the "Robert  SCHUMAN Action", which will encourage the teaching of Community 
law in the educational establishments which have responsibility for the initial or continuing edu 
cation  of judges,  magistrates  or  lawyers. The Action will  also seek to  develop  all  means  of 
information  in  Community  law  in  the  places  where  legal  practitioners  carry  out  their  duties 
(Courts, Bars, vocational schools etc.). 

B.  Access to justice for consumers 

39.  As regards access of consumers to justice  and the settlement  of consumer disputes in 
the  Single  Market, the  Commission  developed  a  balanced  approach  as  a  follow-up  to  the 
Green Paper published on 16 November 1993 (24). 

40.  The envisaged initiatives  mainly focus on self-regulation  and cross-border cooperation, 
accompanied by possible legislation on some specific problems of infringement of Community 
law. 

(23)  COM (93) 632 final of 22.12.93. 

(24)  COM (93) 576 final of 16.11.1993. 

THE SINGLE MARKET IN 1995 

16 

SECTION 2 - MANAGING THE SINGLE MARKET 

These initiatives aim to simplify the settlement  of cross-border  individual disputes by  promoting 
the  creation  of  out-of-court  procedures  and  better  cooperation  between  the  existing  relevant 
bodies. 

41.  Some  legally  binding  measures  may  also  be envisaged  in order to  ensure that  swift  and 
effective  remedies exist, throughout the  European  Union, against  certain  unlawful  cross-border 
practices which are detrimental to the  interests of consumers  as well  as to the  proper function 
ing of the Single  Market. 

C. 

Free  movement  of  judgements 

42.  Further  progress  has  been  made towards the  adoption  of two  conventions dealings  with 
jurisdiction,  recognition  and  enforcement  of  judgements  relating  to  bankruptcy  and  divorce, 
annulment  and  legal  separation. These two  areas  were  excluded  from  the  scope  of  the  1968 
Brussels  Convention.  The  Bankruptcy  Convention  was  initialed  by  all  the  Member  States  on 
25 September  1995  and  signed  by twelve  of  them  on  23 November.  The  remaining  Member 
States, Ireland, the  Netherlands and the  United  Kingdom, are due to  sign  by 23 May  1996. As 
regards family law, working groups have continued to work on the draft text of a convention. 

43.  Negotiations started  on the text  of  a convention  on the simplification  of the  transmission 
of legal documents. The aim of the  convention  is to  provide for the direct transmission  of  legal 
documents between Member States. 

§  4  -  Evaluation  of  the  effectiveness  of  the  legislation 

44.  As requested by the Council  in 1992 and as foreseen in the Strategic  Programme for the 
Internal  Market  of  1993, the  Commission  is carrying  out  a major  evaluation  of the  impact  and 
effectiveness  of  single  market  legislation.  Over  40  independent  studies  got  under  way  during 
1995 and these will form the  basis for  a report  in  1996. This  analysis will  permit  the  Commis 
sion to  orientate  its single  market  strategy  in the  last  years of the  century  and to  fine-tune  the 
legislative framework.  It will include: 

•  a business survey of 12,000 EU companies 

•  a business survey  among  representatives  of European associations  of  manufacturing 

industry and service sectors 

•  a series of studies into trade  barriers (technical  barriers, public  procurement,  customs 

and fiscal formalities, industrial property  protection) 

•  studies  into  trade  and  investment  (foreign  direct  investment  flows,  intra  and  inter 
industry flows, competitiveness/trade  creation and diversion, external market  access) 

•  studies  of  competition  and  economies  of  scale  effects  (pan-European  markets,  com 

petition in the internal market, economies of scale, intangible  investments) 

•  studies  into the effects  of  regional  policy, social  and labour  policy,  capital  market  lib 

eralisation, multi-currency  management  and macro-economic  modelling 

•  sectoral studies (food, drink & tobacco, pharmaceuticals, textiles & clothing, construc 
tion  site  equipment,  chemicals,  motor  vehicles,  processed  foodstuffs,  télécoms 
equipment, insurance, banking, air transport, distribution, road freight,  liberalised tele-
corns  services,  advertising,  audiovisual  services,  information  services,  energy  and 
the cost of inadequate transport  infrastructure). 

The results of the survey are expected to be published in the last quarter of 1996. 

THE SINGLE MARKET IN 1995 

SECTION 2 - MANAGING THE SINGLE MARKET 

17 

§  5  -  Statistics 

45.  The  need for  reliable  statistics  on the  Single  Market  is influencing the  statistical work  of 
Eurostat,  both in the short and long term. 

46.  The short term objective  relates to the need to provide  unbiased and reliable data for the 
1996  review.  Quantitative  as well  as qualitative  data  either  from  Eurostat  directly  or  from  the 
Member  States  was  prepared  for  the  "1996  study"  between  January  and  October  1995,  col 
lected  from  existing  databases  at  Eurostat  and  in the  Member  States  and  from  a  longitudinal 
study at enterprise survey  in the pre-95 Member States. 

47.  The  long  term  goal  is to  improve  current  data  collection.  This  concerns  above  all  in  a 
series  of  service  industries,  where  more  detailed  information  would  help  administrations  and 
economic agents to assess the development  and to make efficient  use of the Single Market. 

§ 6-  Regulatory policy and simplification 

A. 

Regulatory  policy  and  simplification  of  legislation 

48.  Throughout  1995, increasing interest was evident on the part of business,  administrations 
and the  Community  institutions  in  ensuring  better  and simpler  regulation,  both  in the  prepara 
tion of new regulation and in evaluating the appropriateness of existing legislation. 

49.  The  Commission  prepared  General  Guidelines  on  Regulatory  Policy (25)  which  have 
been  issued to  all Commission  services. They  emphasise the  need for  adequate  consultation, 
impact  evaluation,  ensuring  coherence  between  different  Community  policy  objectives  and 
consideration of the proposal in the light of the principles of subsidiarity and  proportionality. 

50.  The  report  of the  Group on  Legislative  and Administrative  Simplification (26), chaired  by 
Mr. Bernhard  Molitor,  made  many  specific  recommendations  on  possible  simplification  of 
Community  legislation.  In  its  comments  on  the  report,  published  in  November (27), the  Com 
mission  broadly  welcomed  the  general  recommendations  of  the  report,  which  favoured  an 
approach  to  new  legislation  similar  to  that  which  is  now  set  out  in  the  General  Guidelines, 
insisted  on  the  need  for  timely  and  correct  transposai  of  Directives  by  Member  States  and 
advocated  greater  efforts towards the  consolidation  of Community  law. However, the  Commis 
sion indicated that  it would have welcomed  more commitment  from the Group in analysing  and 
assessing the  impact  of  national  legislation. The  UNICE Regulatory  Report (28), prepared  with 
financial  assistance  from  the  Commission,  confirmed  that  much  of  the  regulatory  burden  on 
business is the responsibility  of Member States rather than of the Community. 

51. 
The  Commission's  report  to  the  European  Council, "Better  Law-making? (29)  deals  with 
developments  in  1995 and priorities for  1996 with  regard to the  application  of the  principles  of 
subsidiarity  and  proportionality,  simplification  and  consolidation  The  Committee  on  Improving 
and  Simplifying  the  Business  Environment  will  also  be  involved  in  following  up  some  of  the 
recommendations  of the  Molitor  Report, where they impinge  on small and medium sized  enter 
prises. 

(25)  SEC (95) 2255.17.01.1996. 

(26)  COM(95) 288 final/2, 21.06.1995. 

(27)  SEC(95) 2121, 29.11.1995. 

(28) 

"Releasing Europe's Potential through targeted Regultory Reform" - Brussels, 1995. 

(29)  Doc. No CSE (95) 580. 

THE SINGLE MARKET  IN 1995 

18 

SECTION 2 - MANAGING THE SINGLE MARKET 

B. 

Legislative and declaratory  consolidation 

52.  Technical advances and a new accelerated working  method, which was adopted in the 
Intennstitutionai  agreement  of 20 December  1994, are contributing to progress in the area of 
legislative  and  declaratory  consolidation.  Some  10  proposals  for  formal  consolidation  were 
adopted  by  the  Commission  in  1995,  including  areas  such  as  telecommunications,  animal 
health, animal feedingstuffs and seeds and plants. Work is well advanced on further proposals, 
including those on banking, life-  and  non-life  insurance  and stock-exchanges  and securities, 
which will be presented in 1996. 

53. 
Intensified work on informal consolidation has resulted in the consolidation of some 140 
sets of  legislation, combining  nearly  1500 original  instruments.  These texts will  be available 
through the Publications Office and its distribution network early in 1996. 

§ 7-  Communication and information policy 

54.  The  effective  operation  of  the  single  market  requires  adequate  flows  of  information 
between the Community  institutions,  Member States and participants in the single market. In 
1995, the Commission undertook a number of actions designed both to promote awareness of 
single market opportunities among individuals and enterprises and to inform itself of their views 
and experiences. 

55.  Following the success of the internal market weeks organised in the then twelve Member 
States in 1994, similar events were held in the three new Member States in 1995. These events 
provided opportunities for Commission officials, representatives of national administrations and 
single market participants to exchange views on the situation with regard to the single market in 
each of the countries concerned. 

56.  The  Commission  continued  to  publish  a  number  of  periodicals  relevant  to  the  single 
market, including DG XV News,  now redesigned with a wider circulation under the title  Single 
Market News. 

57.  Another survey of the experiences of SMEs (30) in the single market was carried out with 
the aid of the Euro-Info Centre Network. 

58.  The Commission  increasingly  explored the  potential of electronic  media. It produced a 
first  CD-ROM (31) on the  Internal  Market  based  on the  350  Questions  and Answers  on the 
Internal  Market  contained  in the  Database  Info 92. The  possibility  of a more  comprehensive 
CD-ROM publication is being examined. As a first step towards making single market informa 
tion available on the  Internet, the  Commission created a window on this topic on the Europa 
server (32). 

59. 
In his speech  before  the  European  Parliament  in January  1995, President  Santer  put 
forward the idea of an initiative designed to demonstrate the advantages and opportunities of 
the single market - the key achievement of Community integration to date - for individual citi 
zens: hence the title of the initiative, "Citizens First!". 

Substantial preparatory work was carried out in 1995 with a view to launching the exercise next 
year. Several guides will be produced to help individuals towards an awareness of their single 
market rights, the means of exercising them in each Member State and the avenues for obtain 
ing redress if they are denied. 

(30)  May be obtained on request from DG XV. 

(31 ) 

"The Internal Market - Everybody's business!". This may be obtained on request from DG XV, unit A1. 

(32)  WWW address: http://www.cec.lu/. 

THE SINGLE MARKET IN 1995 

l°l 

Section 3 - Free movement of persons 

§ 1 - Abolition of controls at internal frontiers 

60.  There  still remain gaps in the  complete  implementation  of an essential objective  of the 
Treaty, the  free  movement  of  people.  However,  the  Commission  has for  its  part, decided to 
submit  to  the  Council  and  the  European  Parliament  the  last  proposals  that  complete  those 
which are  already  on the  Council table.  If these  gaps are  not closed, they  could damage the 
political credibility of the European Union. 

61.  While  many problems remain regarding border controls on individuals, the Commission 
has noted some  advances  under the  Schengen  agreements.  Seven  of the  Member  States of 
the  Union  (Germany,  Belgium,  Spain,  France,  Luxembourg,  the  Netherlands  and  Portugal), 
have  applied  between them, in an  irreversible way, from  1 July  1995, the  Schengen Conven 
tion  aimed  at the  abolition  of all  controls on  people  crossing their  common  borders  (33). The 
implementation  of  the  Convention  represents  an  important  stage  in  the  completion  of  the 
objective of article 7A* of the EC Treaty. 

62. 
in  parallel,  the  Commission  adopted,  on  12 July  1995,  three  proposals  for  Directives 
aiming at the abolition of controls on people on crossing internal borders throughout the Euro 
pean  Union  as a whole.  In the  opinion  of the  Commission, the  internal  market  must  function 
under the  same  conditions  as  a  national  market,  where  intra-Community journeys  should  be 
undertaken just  like journeys  between  regions  or  provinces  of  a  Member  State.  But  until the 
internal frontier controls are abolished, the internal market will not be a  reality for Community 
citizens.  Of  course, the  abolition  of  the  internal  frontier  controls  should  in  no way  involve  a 
reduction in the safety of the European citizen. On the contrary, it is specifically  provided for in 
the proposals that the abolition of the controls will not enter into force unless the essential sup 
porting measures to ensure the maintenance of a high safety level in the area without frontiers 
is definitively  adopted and satisfactorily  implemented. All these  measures  are  on the  Council 
table. 

The first of the new proposals gives concrete expression to the abolition of controls, and clari 
fies the scope of the prohibition on carrying out controls and on imposing formalities at internal 
borders (34). This proposal confirms that all persons, whatever their nationality, are the benefi 
ciaries of the abolition of internal frontier controls. A "safeguard clause" is envisaged for when a 
Member State is confronted with a sufficiently serious material threat to public order or safety. 

A  second  proposal  for  a  directive  aims  to  modify  secondary  legislation  in  the  field  of  free 
movement  of  people  so as to  eliminate  from  these  texts  any  provision  making  it  possible to 
carry out controls on persons at the time of crossing an internal border (35). 

Lastly, a third proposal aims to grant to nationals of third countries, who are legally in a Mem 
ber State, the right to make a short visit to the territory of the other Member States if they are 
equipped with a  residence  permit or  a  visa  valid  for  all the  Member  States  of the  Union (36). 
This  is  also  an  inseparable  supplement  to  the  proposals  that  the  Commission  submitted  in 

(33)  However,  France  has  applied  the  safeguard  clause  allowing  the  temporary  reinstatement  of  border  controls  for 

reasons of public order and national security. 

(34)  COM (95) 346 final, OJ No C 306,17.11.1995. 

(35)  COM (95) 347 final, OJ No C 289, 31.10.1995. 

(36)  COM (95) 348 final, OJ No C 307,18.11.1995. 

THE SINGLE MARKET IN 1995 

20 

SECTION 3 - FREE MOVEMENT OF  PERSONS 

December  1993 as regards crossing  external  borders (37), by  envisaging  equivalence  between 
a residence  permit  and a visa delivered  by a Member  State, as well  as the  mutual  recognition 
of visas. By this  measure, several  million  foreign  residents will  be able to go to different  coun 
tries  of the  Union without  being  forced  to  equip themselves with  a visa  beforehand, which  will 
encourage tourism and cross border acquisition of goods and services. 

63.  The Council adopted this year two  regulations, that of 29 May  1995 establishing  a  model 
type of visa  (Regulation  (EC)  1683/95*),  and that  of 25 September  1995 determining the  list  of 
third countries whose  nationals must  have a visa to enter Community territory  (Regulation  (EC) 
2317/95*). 

§ 2 - Free movement of persons in the Community 

Right  of  residence 

Letters of formal  notice were  sent to  9  Member  States  regarding their  incorrect  transpo 

64. 
sition of some or all of the three directives on rights of residence. 

B. 

Recognition  of  qualifications 

65.  Between  1991 and the end of  1994 nearly  10,000 European citizens obtained  recognition 
of their diplomas  under  Directive  89/48/EEC* and a further  5,000  or so each year take  advan 
tage of the sectoral directives  (for doctors, dentists, veterinary  surgeons, nurses responsible  for 
general care, midwives, pharmacists and architects). 

66.  However,  1995 witnessed  a  marked  increase  in the  number  of  complaints  registered  by 
the Commission from migrants who had encountered difficulties  in obtaining  recognition of their 
diplomas.  It  is  impossible  to  judge  whether  this  increase  reflects  a  real  deterioration  by 
comparison with  previous  years  or whether  it  is caused  by a greater  awareness  on the  part  of 
would-be migrants of their rights under Community law. 

The majority  of the complaints  concern the general system for the  recognition  of diplomas  and 
professional  qualification  established  by  Council  Directives  89/48/EEC*  and  92/51 /EEC*.  In 
some cases difficulties can be attributed to the absence of implementing  legislation, particularly 
in relation to the latter directive which should have been transposed by 18 June  1994 but which 
is only fully  operational  in seven  Member  States. As  regards  Directive  89/48/EEC*,  one  Mem 
ber State, namely  Belgium, has, nearly  five years after the deadline for  implementation, still to 
take any effective  measures in national  law. Other problems stem from difficulties  encountered 
in interpreting the basic concepts contained  in the directives  (such as "diploma", "higher educa 
tion", "regulated profession")  and the application of the recognition mechanism  itself. 

67.  To  remedy  this  situation  the  Commission  will  seek  to  ensure  that  those  responsible  for 
applying the directives arrive at a better understanding of them and that those who seek to  rely 
on the general system are made fully aware of their rights. 

In order to  make  Community  legislation clearer  and simpler, the Commission will  shortly 
68. 
present  a  proposal  for  a  directive  aimed  at  consolidating  the  main  provisions  of  35  existing 
directives concerning professional  activities and creating a recognition mechanism for  diplomas 
relating to those activities not covered by other directives. 

(37)  COM (93) 684 final, OJ No C 11,  15.1.1994. 

THE SINGLE MARKET IN 1995 

SECTION 3 - FREE MOVEMENT OF PERSONS 

21 

C.  Employment services in cross-border  regions 

69.  1995 was the first full year of operation of the EURES network, which was launched in 
November 1994 with the objective of facilitating the free movement of workers within the Euro 
pean Economic Area. EURES is a partnership made up of the Commission, public employment 
services and representatives of the social partners in cross-border regions. During the year, it 
has  facilitated  the  exchange  of  experience  and  good  practice  between  network  members. 
Cooperation between public employment services is already beginning to go beyond what was 
foreseen at the outset. 

THE SINGLE MARKET IN 1995 

22> 

Section 4 - Free movement of goods 

Instruments provided for by Community law for ensuring free 
movement of goods 

§  1 - Articles  30 to 36* of the  EC  Treaty 

A. 

Introduction 

70.  Articles  30  et  seq.*  of  the  EC  Treaty  prohibit  quantitative  restrictions  on  imports  and 
exports,  as well  as  measures  which  have  an  equivalent  effect.  Actions  undertaken  by  the 
Commission to check Member States' adherence to these articles aim to eliminate obstacles to 
trade, in particular by a dialogue with the Member States. 

71. 
In  1995 the  Commission  recorded  258  new cases, which were  either  detected  in the 
course  of  the  Commission's  work,  or  resulted  from  complaints  by  economic  operators  or 
professional associations. The increase in comparison to 1994 can be explained mainly by the 
accession of Finland, Austria and Sweden. 

During the same period, 238 files were terminated. It should also be noted that only two were 
the subject of a referral to the Court of Justice, confirming that the partnership advocated by 
the Commission with the aim of finding non-contentious solutions to cases submitted to it has 
proved  profitable.  This  year,  meetings  were  organised  in  Spain,  in  France,  in  Italy,  in  the 
Netherlands,  Germany,  Greece  and  for  the  first  time,  in  Belgium.  This  exercise  will  be 
extended to the new Member States, Austria, Finland and Sweden. These "package meetings" 
give the framework  necessary for a detailed dialogue  between the Commission and Member 
State departments, and made it possible to find a solution for 60 files. 

B. 

The  main  fields  in  which  the  Commission  acted  to  eliminate  obstacles  to 
trade in 1995 

72.  As can be seen from the statistics appearing in the table III extracted from the 258 new 
files registered, the main areas in which government measures are likely to have the objective 
or the effect  of restricting intra-Community trade are those of road vehicles, food, chemicals, 
and pharmaceutical and medical products. 

As in 1994, the most numerous difficulties were noted in the food and road vehicles sectors. 

THE SINGLE MARKET IN 1995 

24 

SECTION  4  -  FREE  MOVEMENT  OF  GOODS 

TABLE III - COMPLAINTS CONCERNING OBSTACLES  TO TRADE RECORDED IN 1995 (ARTICLES 30 ET SEQ.) 

Member 
State 

Road vehicles 

Foodstuffs 

Chemicals 

Pharmaceutical 
& medical 
products 

Telecom 
munications 

Construction 

Other 

TOTAL 

B 

DK 

D 

EL 

E 

F 

IRL 

I 

L 

NL 

O 

P 

FIN 

S 

UK 

6 

2 

4 

2 

4 

23 

0 

10 

3 

1 

1 

2 

2 

7 

4 

6 

0 

21 

3 

7 

10 

0 

5 

0 

3 

1 

1 

1 

8 

0 

1 

1 

4 

1 

1 

1 

0 

1 

0 

0 

2 

0 

0 

3 

0 

1 

1 

0 

2 

1 

0 

0 

3 

0 

0 

1 

0 

0 

0 

1 

TOTAL 

71 

66 

15 

10 

0 

0 

2 

1 

0 

1 

0 

3 

0 

2 

0 

0 

0 

0 

0 

9 

1 

0 

2 

0 

0 

0 

0 

0 

0 

0 

2 

0 

1 

0 

0 

6 

2 

1 

21 

0 

13 

13 

0 

10 

0 

9 

3 

2 

1 

1 

5 

17 

5 

54 

9 

26 

48 

0 

32 

3 

15 

10 

5 

5 

19 

10 

81 

258 

73.  All  the  Member  States,  except  for  Ireland,  are  involved.  It  is  significant  in  this  respect 
that the situation of the  new Member  States, Austria, Finland  and Sweden, reflects the  general 
situation  found  in the  other  Member  States.  Indeed, the  majority  of the  complaints  concerning 
these three countries concern regulations relating to the registration of the vehicles, the  market 
ing of food and the  marketing of pharmaceutical  products. The  nature of the  obstacles encoun 
tered  by economic  operators  and the objectives  pursued  by the  Member  States vary  from  one 
sector  to  another,  but  are  not  markedly  different  from  the  obstacles  which  the  Commission 
identified in previous reports. 

a) 

Road Vehicles 

74. 
It is in the road vehicle sector that the Commission  recorded most cases this year. These 
difficulties,  which  mainly  concern  vehicles  which  have  previously  been  registered  in  another 
Member  State, as  in  1994,  originate  primarily  in the  non-application  of  the  principle  of  mutual 
recognition  by vehicle  inspectors  and  national technical  standards,  as well  as the  non-recogni 
tion  of documents  delivered  in  another  Member  State,  despite  their  containing  the  necessary 
information. The  Commission  is therefore  paying  particular  attention  to  this  situation, which  in 
many  cases  challenges  a  right  that  the  Internal  Market  grants  to  the  Community  citizen. 
Examples  of the  results  obtained  following the  intervention  of the  Commission  are the  greater 
flexibility  introduced  by  France  on  registration  procedures  for  second-hand  vehicles,  and  by 
Spain on its regulation on individual approval of right hand drive cars. 

In order to  make the  national  authorities  aware of their  obligations  regarding the  registration  of 
vehicles  and  to  inform  the  general  public  of  the  rights  and  guarantees  they  enjoy  under 
Community  law,  the  Commission  adopted  on  20 December  1995  an  interpretative  notice 
regarding  the  procedures  for  the  type  approval  and  registration  of  vehicles  previously  regis 
tered  in another  Member  State (38). The  main  aim  of the  new notice  adopted  by the  Commis 
sion is to explain the  principles  and  procedures which  national  authorities should follow  so that 
motor vehicles  previously  registered  in a different  Member  State  can  be  registered  simply  and 
efficiently  in their countries. The notice  provides a clear  account of the  practical  consequences 
for  national  authorities  and  private  individuals  flowing  from  both  the  introduction  of  EC  type 
approval for vehicles and the Court's decisions. 

(38)  SEC(95) 2262, not yet published. 

THE SINGLE MARKET  IN 1995 

SECTION 4-FREE MOVEMENT OF GOODS 

25 

b) 

Food 

75.  The  Commission  noted  that  in  1995,  as  in  1994, the  principle  obstacles  lie  in  national 
procedures  requiring  prior  authorisation  aimed  at  checking  the  composition  of  food,  and  par 
ticularly the presence of food supplements (nutrients, vitamins) and/or additives. In this respect, 
and  in  order to  be  in  a  position  to  better  guarantee  compliance  with  Community  rules  on  the 
matter, the Commission asked the authorities of the Member States to provide  it with details on 
the national procedures currently  in force. 

The  Commission  stressed  that  the  imperative  requirement  of  consumer  protection  does  not 
involve the  banning of products on the grounds of  national "quality". Thus, for example,  follow 
ing the  intervention  of  the  Commission,  Greek  authorities  amended  the  regulation  in  force  in 
order to  make  possible  the  marketing  of  certain  drinks  containing  a  low fruit juice  content,  as 
long as their labelling specifies this content. 

c) 

Chemical products 

76.  Some of the obstacles about which the  15 complaints were received derive from prohibi 
tions on the  importation  or use of  products which the  Member States consider as posing  a risk 
for  public  health  and  for  consumers.  But  most  are  related  to  the  authorisation  procedures  for 
marketing and, in the case of parallel  imports, to the procedures for verifying that the  imported 
product is identical with the products the marketing of which has already been authorised. 

d) 

Pharmaceutical and medical  products 

77.  The barriers to the free movement  of pharmaceutical products mainly have to do with the 
procedures  for  authorisation  of  the  marketing  and  difficulties  related  to  parallel  imports.  The 
Commission  has intervened  on many occasions to facilitate the parallel importation of  products 
manufactured  in another Member State and already  marketed, or of medicines with therapeutic 
characteristics identical to medicines existing on the market (39). 

e) 

Other types of obstacle 

78.  The  Commission  noted  in  1995 as  regards  commercial  regulation  an  upsurge  in  regula 
tions necessitating the  use of the  national  language  for certain  information  found  on the  label 
ling  of  products.  Thus,  for  example,  the  Commission  stated  that  the  obligation  to  ensure  that 
bottles carry the  indication  "no deposit"  in  Dutch  as well as a logo indicating  a separate  collec 
tion  of  these  bottles  was  a  disproportionate,  excessive  obligation  in  comparison  to  what  the 
consumer needed to know. 

79.  The Commission  also had to examine  certain regulations  relating to the marking  of  place 
of  origin  leading  to  barriers  to  trade.  For  example,  following  a  complaint  against  the  require 
ment by Danish legislation for clothing imported and sold under the name of a Danish company 
or under a Danish mark to carry labelling mentioning that they were imported or their country  of 
origin, the Commission concluded these  requirements as regards labelling for imported  clothing 
were  equivalent  to  a  restriction  on trade  between  Member  States,  contrary  to  the  rules  of  the 
EC treaty  (Article 30*). 

(39)  Communication on parallel imports in the pharmaceutical specialities sector, 0J  No C 115, 6.5.1982. 

THE SINGLE MARKET IN 1995 

26 

SECTION 4 - FREE MOVEMENT OF GOODS 

C.  Action by the Court of Justice 

80.  The jurisprudence of the Court of Justice is an important instrument for the uniform and 
effective application of the Community rules in the area of Article 30 et seq.* of the EC Treaty, 
as the  concept  of  "measures  having  an  equivalent  effect  to  a quantitative  restriction"  is not 
defined by the Treaty. 

81.  The following were among the main judgements of the Court of Justice in 1995: 

•  Television advertising for goods on behalf of the distribution sector (40) 

Article 30* of the Treaty does not apply to a case where a Member State prohibits by 
legislative or regulatory  means the dissemination of advertising messages on behalf 
of the distribution sector of the economy. Such a measure is not intended to regulate 
the exchange of goods between the  Member States  but concerns  methods  of sale, 
and applies to  all  economic  operators without  distinguishing  between  products  and 
does  not  affect  the  sale  of  products  coming  from  other  Member  States  differently 
from that of home products. 

•  Setting of maximum levels for pesticide residues (41) 

Directive 90/642/EEC* of the Council, of 27 November 1990, regarding the setting of 
maximum levels for pesticide residues on and in certain products of plant origin, does 
not prevent national regulations from setting the maximum levels authorised for resi 
dues of chlorpropham and propham and the methods for monitoring compliance with 
these  levels. The  Court  nevertheless  made  it  clear that  such  a  regulations  should 
respect the provisions of Articles 30 and 36* of the Treaty. 

• 

Importation of a drug (diamorphine) (42) 
A prohibition on importation could not be allowed on the basis of Article 36* if justified 
on the grounds of the need to ensure the survival of a business. On the other hand it 
can benefit from the derogation provided for in Article 36* when the protection of the 
health  and  life  of  people  is  in  question  and this  objective  cannot  be  achieved  as 
effectively by measures less restrictive of intra-Community trade. 

•  Presentation of a product which might limit the freedom to set resale prices and mis 

lead the consumer (43) 
A prohibition on the putting into circulation in a Member State of products carrying the 
same  advertising  references  as are  used  in  other  Member  States  is of  a  kind that 
hinders intra-Community trade because it may force the importer to adapt the presen 
tation  of the  products  in  a different  way  depending  on the  place  in which they  are 
offered for sale and to incur additional packaging and advertising costs . 

(40)  Case C-412/93; judgement delivered on 9 February 1995. 

(41 ) 

Joined cases C-54/94 and C-74/94; judgement delivered on 23 February 1995. 

(42)  Case C-324/93; judgement delivered on 23 March 1995. 

(43)  Case C-470/93; judgement delivered on 6 July 1995 (not yet published). 

THE SINGLE MARKET IN 1995 

SECTION 4 - FREE MOVEMENT OF GOODS 

27 

§  2  -  Technical  harmonization  a nd  standardization 

A. 

Adoption  and  implementation  of  legislation  in the various  sectors 

a) 

Agricultural  products 

Veterinary and zootechnical  legislation 

82. 
Important  decisions  were  taken  during  1995  in  the  area  of  veterinary  and  zootechnical 
legislation.  These  include  Directive  95/29/EC*  on  the  protection  of  animals  during  transport, 
three  decisions  on  salmonella  tests  for  certain  animals  and  animal  products  destined  for 
Finland and Sweden (Decisions 95/409/EC*. 95/410/EC* and 95/411/EC*) and modifying  direc 
tives  on  trade  in  fresh  meat  and  on  trade  in  cattle  and  pigs  (Directives  95/23/EC*  and 
95/25/EC*). 

83.  The Commission also submitted proposals to the Council on a number of matters, includ 
ing meat-based products and protective  measures against certain zoonoses. 

84.  The  Commission  adopted  several  implementation  measures  regarding  the  measures 
adopted to  complete  the  single  market.  It  also  adopted decisions to  harmonise  the  conditions 
for the importation  of fish products and live  bivalve  molluscs (Council Directive 95/22/CE*), the 
provision  of  Community  financing  for  the  eradication  of  animal  diseases  and  restraining  the 
development  of  such  diseases,  with  particular  regard  to  classic  swine  fever  in  Germany  and 
foot-and-mouth disease in Greece  (44). Safeguard clauses were implemented to avoid the intro 
duction  of  disease  into  the  Community,  particularly  on  the  appearance  of  foot-and-mouth 
disease in Russia and of dourine in Mexico. 

85.  The  Commission  organised  a major  conference  in Brussels  at the  beginning  of  Decem 
ber,  in order to  review the scientific  evidence  and  evaluate the  present state  of  knowledge  on 
the use of growth activators in meat production. 

Plant health and other legislation relating to crop products and animal nutrition 

86.  These  are  areas which  has  been  subject  to  harmonised  legislation  for  many  years  and 
where there  is a  high  level  of  administrative  cooperation  between the  Member  States  and  the 
Commission. There have been no serious problems in 1995. 

•  Plant health - Certain "protected zones" were  recognised under Commission  Directive 
95/40/EC* as being exposed to  particular  plant  health risks and accorded special  pro 
tection,  while  Commission  Directive  95/44/EC*  detailed  derogation  provisions  from 
the  Community  plant  health  regime  for  trials,  scientific  and  varietal  selection  work. 
Consolidation of Council directive 77/93/EEC* is due to be completed in 1996. 

•  Seeds  and  Propagating  Material  -  The  Council  has  not  yet  adopted  the  proposal  to 
update the  7 basic seeds directives (45) to  ensure total compatibility  with the  internal 
market  and the  opinion  of  the  European  Parliament  is still  awaited.  It  is  unlikely  the 
proposal will be adopted before  mid  1996. Consolidation  of these 7 basic directives  is 
also due to be completed  in 1996. 

•  Pesticide  residues  -  The  Council  adopted  two  new  directives  (Directives  95/38/EC* 
and 95/61/EC*) which provide  for the fixing  of  maximum  pesticide  residue  levels  in a 
wide range of agricultural  products for seven additional  pesticides  not previously  cov 
ered by Community legislation. 

(44)  Not yet published. 

(45)  COM (93) 598 final, published in OJ C 39, 31 /1 /94. 

THE SINGLE MARKET IN 1995 

28 

SECTION 4 - FREE MOVEMENT  OF GOODS 

Plant variety  rights 

87.  The Community  Plant Variety  Rights Office  began functioning at a provisional address in 
Brussels,  in  the  absence  of  agreement  on  a  permanent  site.  The  Commission  adopted  three 
implementing  measures  relating  to  plant  variety  rights  under  the  basic  Regulation  (EC)  No. 
2100/94* (46). 

Complaints 

88.  The  main  obstacles  to  free  movement  of  agricultural  products  reported to  the  Commis 
sion  in  1994  were  technical  barriers,  such  as  the  Italian  authorities'  new  maximum  limits  on 
pesticide  residues  in  lemons,  or  their  stepping-up  of  point-of-arrival  checks  for  salmonella  in 
fresh meat from other Member States. 

The problems in trade  reported to the Commission were in areas in which the Community  rules 
are not yet complete or the harmonizing directive has not yet come into effect. 

b) 

Capital  goods 

89. 
In the field  of  capital  goods, the  Commission  has pursued  its activities  on the establish 
ment and application  of the  regulatory  framework  covering the various  sectors. The transposi 
tion period for 92 directives  in such sectors as mechanical and electrical  engineering,  personal 
protection  equipment,  gas,  pressure  vessels,  prepackaging,  legal  metrology,  and  medical 
devices will  have  expired  before  31 December  1995. Among these, the  directives  of the  "new 
approach" type  are  of  a special  importance,  from  both  a  legal  and  a  economic  point  of  view. 
The transposition  rate  is  good,  in  view  of  the  objective  complexity  of  the  transposition  of  the 
directives in this field.  In view of the  pre-existence  in the  Member States of detailed  legislation 
on  the  matters  covered  by  the  directives,  often 
in  connection  with  other  objectives 
(e.g.installation  rules, social  security), the  insertion  of the  principles  of  the  "new  Approach"  in 
the  national  systems  can  prove  complex,  requiring  interaction  between  the  Community  provi 
sions and the national systems. 

c) 

Foodstuffs 

90. 
In the foodstuffs  sector, the adoption  by the  European Parliament  and the  Council  on 20 
January  1995  of  Directive  95/2/EC*  on  additives  other  than  colorants  and  sweeteners 
completes  the  harmonisation  of  the  basic  rules  on  food  additives  within  the  Community.  The 
implementation  of the  new rules will  make  a major  contribution to the  operation  of the  internal 
market  in  this  sector.  In  addition,  the  Commission  adopted  two  directives  establishing  the 
criteria  of  purity  for  colorants  (Directive  95/45/EC*)  and  sweeteners  (Directive  95/31/EC*) 
respectively.  Further  substantial  progress  was  made  with  the  adoption  by  the  Council  of  4 
common  positions  on  the  labelling  of  foodstuffs,  novel  foods,  flavours  and  natural  mineral 
waters respectively. The  Commission  forwarded three  new proposals to the  Council  relating  to 
additives, two  of  which  provide  for  the  technical  updating  of the  existing  regulation, while  the 
third  establishes  the  list  of  traditional  foods  in  which  Member  States  may  restrict  the  use  of 
authorised additives (47). In addition, the services of the Commission  undertook the first  control 
missions to  Member  States  in the  framework  of  Directive  93/99/EEC* on  additional  measures 
for the official control of foodstuffs, while there was an increase in the range of tasks subject  to 
scientific cooperation  between the Commission and Member States. 

(46)  Three implementing measures publised in OJ Nos L 121,1.6.1995, pp. 31 and 37, and L 173, 25.7.1995, p. 14. 

(47)  COM (95) 126 final, OJ No C 134, 1.6.1995. 

THE SINGLE MARKET IN 1995 

SECTION 4-FREE MOVEMENT OF GOODS 

29 

d) 

Pharmaceutical  products 

91.  There were significant  developments  in the  pharmaceutical  products sector  in  1995. The 
new Community  system  for  the  authorization  of  medicines  for  human  use  and  veterinary  use 
came  into  effect  on  1 January  1995.  This  system  sets  up two  new  procedures,  a  centralized 
procedure, at the  end  of which  a  marketing  authorization  valid  for  all the territory  of the  Com 
munity  is issued, and a decentralized  procedure,  based on the  principle  of the  mutual  recogni 
tion,  with  Community  arbitration  in  the  event  of  disagreement.  The  requests  for  centralized 
authorization  and  for  arbitration  are  examined  by  the  European  Agency  for the  Evaluation  of 
Medicines, which  opened  at the  beginning  of  1995, and decided  on by the  Commission  at  the 
end of  a comitology  procedure.  So  far,  three  Community  marketing  authorisations  have  been 
granted for highly innovative  pharmaceutical  products. 

e) 

Chemicals 

92.  The  internal  market  for  chemicals  works  relatively  well.  The  marketing  and  use  of 
dangerous substances  is, however,  the  principal  sector where  Member  States  request  deroga 
tions  under  article  100 A  § 4*  of  the  EC treaty  in  order to  apply  stricter  internal  measures  for 
environmental  protection  and  health  reasons.  In  1995 the  Commission  received  requests  from 
the  Netherlands,  Germany  and  Denmark  regarding  creosote,  which  is  subject  of  directive 
94/60/EC* (14th  amendment  of  directive  76/769/EEC*  on the  limitations  of the  marketing  and 
use of dangerous substances). 

f) 

Motor  vehicles 

93.  The  internal  market  in  the  motor  vehicles  sector  is  based  on  a  number  of  Directives 
designed  to  replace  the  national  technical  regulations  concerning  the  construction  and  opera 
tion of motor vehicles. This Community  technical  harmonization, based on safety  and environ 
mental considerations, consists of a series of individual directives  covering the various  compo 
nents and entities  of  a vehicle  and  a framework  directive  organizing  the  overall  type-approval 
procedure  (Directive  70/156/EEC*), which  is destined to  substitute  for  all  national  procedures. 
The  application  of  this  system  enables  a  vehicle  validly  provided  with  a  Community  type-
approval  certificate  to  be sold  and  registered  in  any  Member  State, without  no further formali 
ties  of  a technical  nature.  This  system,  which  has  until  now  been  optional  for  manufacturers, 
will become obligatory  as regards  personal  vehicles from  1 January  1996. The same will  apply 
to other categories  of vehicles  as from the  adoption  of the  last  individual directives  concerning 
them. 

94. 
It  should  be  noted  that  this  system  is  intended  not  only  to  facilitate  the  marketing  and 
registration  of  new  vehicles,  but  also  generally  to  facilitate  the  free  movement  of  vehicles 
within the Union. Any vehicle which  has received type-approval  and has been registered  in one 
Member State should  be able to obtain type-approval  and registration  in another  Member  State 
automatically  on the basis of its Community type-approval certificate. 

95.  Besides  progress with  regard to technical  harmonization,  it  is clear that the  operation  of 
the internal  market for  motor vehicles  requires further  action  particularly  with  regard to the  tax 
aspects, which  may cause significant  disturbances  in the  normal operation  of the  internal  mar 
ket. The Commission  is currently  examining  the  possibility  of  moving towards the  beginning  of 
harmonization with regard to registration and road taxes. 

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SECTION 4-  FREE MOVEMENT  OF GOODS 

B.  Special free movement  arrangements 

a)  Dual-use goods 

96.  The  integrated  system  of  export  controls  on dual-use  goods  (Council  Regulation  No. 
(EC) 3381/94*), adopted by the  Council on 19 December  1994, became applicable  on  1  July 
1995. The key element of the system is that, by harmonising the requirements and establishing 
a common licence procedure for  exports from the Community, free  movement  is established 
for the vast  majority  of dual-use  goods within the Community. Although  a limited  number of 
highly sensitive items will still be controlled when transferred inside the Community, this will be 
done without the use of border controls. Article 5 still leaves room for national action. Thus, the 
principle of free movement  in the Community  is established in a sector which had previously 
remained an exception to the rules of the single market, although a good deal of work remains 
to be done to complete and finalize these rules. 

b)  Agricultural products 

97.  The proposals for new common organisations of the market for potatoes (48) as well as 
the proposal to include certain agricultural products of lesser importance (honey, chicory, pine 
apples,  coffee,  non-wine  vinegar,  cork)  within  the  scope  of  Council  Regulation  (EEC)  No. 
827/68* on the common organisation of the market in certain products listed in Annex II to the 
Treaty (49) ("catch-all" regulation) are still being deliberated upon at the Council. 

C.  Standardization  policy 

98.  The Commission has prepared a report (so) on the progress of European standardization, 
as announced at the  meeting  of the  Industry  Council  in  November  1995. This  has revealed 
some interesting data, and confirms the impression that in the areas of the New Approach and 
public procurement, significant progress has been achieved, though much remains to be done. 

99. 
In both these areas mandates continue to be issued for new work, though to some extent 
in these areas European standardization has entered upon a period of consolidation. It may be 
observed  that  with  the  development  of  the  internal  market,  European  standardization  has 
begun to  reach a critical  mass in  relation to  national and international standardization. While 
significant progress has been made in efficiency, and output is impressive, it remains true that 
delivery of standards is still too slow and further improvement is needed. 

100.  The Commission is undertaking a review of policy in European standardization. Of par 
ticular  importance  is the  area  of  information  technology  and telecommunications  in which a 
major review of activity  is already  underway following the issue of the Bangemann Report on 
the  Global  Information  society  and  the  outcome  of  the  conference  in  Genval,  Belgium,  in 
November 1994. As the economy  in this sector is integrated at world level, both the Commis 
sion and the industry recognise that international standards must have priority. 

(48)  COM (92) 185 final, OJ No C 333,17.12.1992. 

(49)  COM (91) 328 final, OJ No C 263, 9.10.1991, p.5. 

(50)  SEC (95) 2104 of 28.11.95. 

THE SINGLE MARKET IN 1995 

SECTION 4 - FREE MOVEMENT OF GOODS 

31 

D.  Quality,  certification,  and  conformity  marking  policy 

101.  The  Commission  is  pursuing  its work  on the  implementation  of  its  policy  of  quality;  the 
Commission departments gathered the  elements for the preparation of a Communication to the 
Council  and the  European  Parliament  on  a European  Policy  on the  Promotion  of  Quality.  The 
Industry Council of 6 November confirmed  its interest in this initiative. 

1995 saw the  entry  into  force  of  the  directive  on the  EC  mark  (Council  Directive  93/68/EC*): 
since  1 January  Member  States  have  been  required  to  accept  on  their  tem'tory  any  product 
conforming to the new harmonized rules. 

102.  Work  on  the  consolidation  of  the  internal  system,  i.e.  coordination  of  notified  bodies, 
organisation of an accreditation  system through  EOTC, has been accompanied  by the  opening 
of  negotiations  aimed  at  reaching  agreements  on  mutual  recognition  with  six  other  countries 
(USA,  Canada,  Australia,  New  Zealand,  Japan,  Switzerland).  Under  such  agreements,  tests 
and certificates of conformity  issued  by  recognised  bodies in those countries with  regard to the 
requirements  of  Community  directives  will  be  recognised  in the  Community.  Similarly,  confor 
mity assessment carried out by Community  bodies with regard to third country requirements will 
be recognised by the country  concerned. These arrangements will eliminate  much of the dupli 
cation and delays associated with testing and certification of products being traded. 

103.  Quality  policy  for  agricultural  products  and  foodstuffs  -  The  Commission  studied  the 
proposals  of  the  Member  States  regarding  European  protection  for  geographical  indications 
and designations of origin  recognised  by the  Member  States  before the  entry  into force  of  this 
system  of  protection  (Regulation  (EC)  No 2081/92*)  with  the  help  of  the  ad-hoc  Scientific 
Committee, and prepared the  list  of such  indications  and designations  as a basis for the  regis 
tration decision to be taken by the ad-hoc Regulatory Committee. 

§ 3 - Prevention and control  instruments 

Prevention  of  new  obstacles  - Procedure  83/189/EEC* 

104.  The  information  procedure  provided  for  by  Directive  83/189/EEC*.  in  particular  with 
regard to the  notification  by the  Member  States of their draft technical  legislation, continues  to 
be a fundamental instrument for the  prevention of obstacles to trade. Despite the completion  of 
the internal  market  at the end of  1992,  Member  States continue to adopt  a multiplicity  of  tech 
nical regulations concerning  products. 

Year 

Notifications (51 ) 

Observations 

1992 
1993 
1994 
1995(52) 

362 
385 
389 
438 

MS 
184 
134 
161 
102 

COM 
165 
139 
222 
114 

Reasoned opinions 
COM 
121 
137 
99 
57 

MS 
66 
75 
85 
60 

Directive intended 

43 
10 
9 
6 

The analysis of these national  regulations  raises questions  regarding their effects  on the  single 
market.  Indeed, they  risk  endangering  the  maintenance  of this  market  and the  integrity  of  the 
benefits it confers on economic operators. 

(51)  Data for  1992,  1993 and  1994 is  for  12 Member  States.  If Austria,  Finland and Sweden are included, the  figures 

become 466 in 1992,438 in 1993 and 442 in 1994. Data for 1995 is for the 15 Member States. 

(52)  The  figures  for  reactions  to the  notifications  cover  those  for  which  the  deadline  was  8  January;  the  last  date  for 

reaction on 95 Notifications being 31 March 96. 

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SECTION 4 - FREE MOVEMENT  OF GOODS 

105.  In the agricultural sector, 61 draft technical  regulations were notified by Member States 
and by EFTA  countries. The  analyses  of the draft  legislation  notified  led the Commission to 
request in most cases that amendments be made to ensure that its adoption did not create new 
obstacles to the free movement of goods. 

B.  Enforcement of the mutual recognition principle 

106.  The proposal for a European Parliament and Council Decision establishing a procedure 
for the exchange of information on national measures derogating from the principle of the free 
movement of goods within the Community (Council Decision 95/3052/EC*) was adopted by the 
Council at its Internal Market meeting on 23 November 1995. 

In essence, the Decision provides for the implementation, from 1  January 1997, of a procedure 
whereby  Member  States  have to  notify  the  Commission  of any  measure  preventing the free 
movement of a particular  model or type  of  product  lawfully  produced or marketed in another 
Member State where the direct or indirect effect of the measure is a general ban on the goods, 
a refusal to allow the goods to be placed on the market, the modification of the model or type of 
product concerned, or its withdrawal from the market 

This transparency  will  enable  problems  connected  with  the  free  movement  of  goods  to  be 
settled  more quickly,  either  by  adjusting  the  national  rules, or -  if  necessary  -  by amending 
existing Community legislation. 

On the basis of this notification, the cooperation established between the Member States, with 
the support of the Commission, will also help to ensure that Community action does not exceed 
what is necessary to attain the objective of free movement. 

THE SINGLE MARKET IN 1995 

33 

Section 5 - Freedom to provide services and right of establish 
ment 

§  1 - Services in general 

107.  The  rights,  recognized  by  the  EC  Treaty,  of  freedom  of  establishment  and  the  free 
movement  of  services within the  European  Union, as interpreted  by the  Court  of  Justice,  may 
be  asserted  directly  by  economic  operators.  The  many  approaches,  requests  for  information 
and above all complaints made directly to the European Commission are therefore a partial but 
significant  pointer to the way in which the  Internal Market is working in some areas. 

108. 
In  1995,  the  Commission  had  to  deal  with  a growing  number  of  complaints  from  firms 
which,  when  supplying  services  in  another  Member  State,  had  been  faced  with  barriers  con 
cerning the  secondment  of  staff  who  were  third-country  nationals,  but whose  employment  was 
perfectly  in order. 

109.  The  fairs  and  exhibitions  sector  was  the  subject  of  a  specific  check  concerning  free 
movement  of  services  and  goods  and  right  of  establishment,  the  results  of  which  will  be  the 
subject of a forthcoming  interpretative  Communication. 

§ 2 - Financial services 

Credit  institutions 

a) 

Derivatives 

110.  Derivatives  are  financial  contracts  whose  value  depends  on  the  value  of  one  or  more 
underlying  assets,  on a reference  rate  or  on  an  index.  Though  used  both  for  risk-hedging  and 
speculation  for  over twenty  years,  recent  events,  such  as the  Barings  Pic  case,  have  focused 
attention on derivative  products and markets. 

The report  of the  Bank of Englands' Board  of  Banking  Supervision  on the  Barings case (53) did 
not  suggest  additional  regulation.  However,  in  view  of  public  interest  and  debate,  Commis 
sioner  Monti  sent  communication  to  his  colleagues  on  derivatives  and  capital  movements 
which was published on 12 April  1995. 

Existing Community  legislation  already  covers many of the supervisory  problems and concerns 
(Council  Directive 
raised  by  derivatives. 
89/647/EEC*); which has been in force since  1991, and the Capital Adequacy  Directive  ("CAD") 
(Directive  93/6/EEC*),  which  is  to  be  implemented  by  1 January  1996,  require  banks  and 
investment  firms  to  hold  own  funds  against  credit  risks  and  market  risks  inherent  in  their 
derivatives activities. 

the  Solvency  Ratio  Directive 

In  particular, 

(53)  HMSO - published London 18.7.1995. 

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SECTION 5 - FREEDOM TO PROVIDE  SERVICES AND RIGHT OF  ESTABLISHMENT 

In  addition,  the  CAD  together  with  the  Investment  Services  Directive  (Directive  93/22/EC*), 
which  is  also to  be  implemented  by  1 January  1996,  oblige  institutions  to  have  adequate  risk 
monitoring systems in place. 

111.  However,  legislation  must  keep  pace  with  the  development  of  markets.  Therefore, 
responding to needs  highlighted  again  in the  European  Parliament's  report  on financial  deriva 
tives  of  22 September  1995,  further  legislative  refinements  of  the  supervisory  treatment  of 
derivatives are under way: 

• 

• 

the Council adopted a common  position  in September  1995 on a draft directive which 
would  allow  Member  States  to  recognise  so-called  bilateral  netting  agreements (54), 
considerably  reducing  the  credit  risks  of  derivatives  traded  outside  recognised 
exchanges ("over-the-counter derivatives"); 

the Commission  is preparing  a draft  directive  which would  extend the capital  require 
ments  for  credit  risks  so  as  to  cover  all  types  of  over-the-counter  derivatives  and 
prohibit the use of certain types of  relatively  high  risk over-the-counter  derivatives  for 
institutions which do not have adequate risk controls in place; 

• 

in  consultation  with  the  Member  States,  the  Commission  is  also  examining  the 
national accounting standards for derivatives activities of financial institutions. 

to) 

Interpretative communication  on  the  interest  of  the general  good 

112. 
In  its  contacts  with  economic  operators,  the  Commission  has  noted  that  there  are  still 
differing  interpretations  and  uncertainties  as regards what  constitutes  provision  of services  and 
the scope  of the general  good  clause  in the  Second  Banking  Directive  (89/646/EEC*).  This  is 
jeopardizing freedom to provide services in banking. 

It has prepared a draft  communication  on these two points, which has been published for 

113. 
consultation in the Official Journal (55), in order to clarify the grey areas which remain. 

•  Cross-border  services  -  In  particular,  the  draft  Communication  defines  the  precise 
scope  of  Article  20  of  the  Directive,  concerning  the  obligation  on  credit  institutions 
wishing to  provide  cross-border services  to  notify  to  home  Member  State  authorities 
the  list  of  services  they  intend  to  offer  for  the  first  time  in  other  Member  States.  It 
clarifies  the  difference  between  provision  of  services  and  establishment,  and  elabo 
rates  on  a  number  of  situations  where  it  is  difficult  to  distinguish  between  the  two 
concepts.  It  then  gives  the  Commission's  views  on  the  nature  of  the  notification 
procedure  laid  down  in  Article  20  and  on  the  legal  implications  of  failing  to  comply 
with the  procedure. Lastly,  it  clarifies the  Commission's  view that  as soon as a  credit 
institution  has  notified  the  home  Member  State  authorities  of  its  intention  to  provide 
services,  it  can  commence  operations  by  way  of  the  freedom  to  provide  services, 
without  waiting  for  confirmation  of  receipt  of  the  notification  from  the  host  Member 
State authorities. 

•  General good  -:  The  draft  Communication  analyses  the  concept  of  "general  good" 
from  two  key  perspectives.  First,  the  Commission  gives  its  opinion  that  the  host 
Member State is not required to communicate  its "general good" rules to a credit  insti 
tution wishing to open a branch  in  its territory.  Second, in the  light  of the  case-law  of 
the  Court  of  Justice,  the  text  analyses  the  applicability  of  Member  States'  rules 
adopted in the interest of the  "general good" to Community  credit  institutions  carrying 
on within their territory  banking  activities  enjoying  mutual  recognition.  On  this  point, 
the  draft  Communication  notes  that  the  principle  of  mutual  recognition  should  be 
applied irrespective  of whether  credit  institutions  are operating  by way of the  freedom 
to provide services or through a branch. 

(54)  Common  Position No. EC 21/95. Passed by Parliament 4th December 1995: PE decision No. A4 -0309. 

(55)  OJ No C 291, 4.11.1995. 

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SECTION 5 - FREEDOM TO PROVIDE SERVICES AND RIGHT OF ESTABLISHMENT 

35 

In  addition,  the  Communication  describes  the  legal  framework  in  which  the  host  country's 
"general good" rules can still be applied against a Community credit institution. 

B. 

Insurance  services 

114.  The Third  Insurance  Directives  (Life  92/96/EEC* and  Non-Life  92/49/EEC*)  set  out to 
achieve greater choice of products, lower prices for consumers, and more competition between 
insurance companies and insurance markets  in Europe. The Single Market for insurance has 
now been operational for just over one year and these effects can already be observed in the 
marketplace. 

For example, in Germany consumers are now benefiting from increased competition amongst 
insurers  selling  motor  insurance.  Price  and  product  deregulation  have  led  to  a  much wider 
choice of motor insurance, at a lower premium, than was available only less than a year ago. 

Belgian customers are now buying capitalisation  life  insurance  products  marketed  by French 
insurance  companies. As  Belgian  insurers  have  always  been  restricted  by  law  from  selling 
these products, this type of life insurance has never been available for Belgian consumers. The 
single licence introduced by the Third Directives has changed this and has started to generate 
healthy competition between insurance markets in Europe. 

115.  In the field of insurance of large industrial and corporate risks, the single market came 
into being earlier (1.1.1990) and there is concrete evidence of increased competition. Risks that 
would have traditionally  been underwritten  by insurance companies from  an enterprise's own 
Member State have been seen to be placed with foreign insurers, simply because those insur 
ers  offer  better  terms.  In  some  markets  insurance  brokers  are  witnessing  that  because  of 
increased competition  between insurers  clients  are  more  assertive  in  negotiating  contractual 
terms and premiums with insurance companies. 

Where they see  longer term opportunities  in foreign  markets, insurance  companies  are also 
gradually  beginning to  position themselves  in other EU Member States too. A German com 
pany  has  acquired  a  health  insurance  company  in  the  Netherlands.  A  British  insurer  has 
announced that it intends to sell motor insurance through direct telephone selling in Italy. These 
instances, unthinkable until only very recently, are evidence that change is slowly but gradually 
occurring in Europe's traditionally closed insurance markets. 

116.  These encouraging observations may be made notwithstanding the problems with trans 
position referred to in Section 2 above. Even in the case of the "third" directives, transposition 
of which has been achieved in all Member States except Greece, transposition  is not always 
complete and satisfactory. The number of complaints addressed to the Commission as well as 
cases detected by the Commission has increased considerably in the field of insurance. 

117.  In October 1995, the Commission adopted a proposal for a Directive on the monitoring of 
insurance companies forming part of a group (56). The proposal aims to prevent double-count 
ing of the own funds of an of insurance group, to establish a check on the transactions taking 
place inside the group and to improve the competent authorities access to information concern 
ing insurance companies. The proposal stipulates that the provisions are to be transposed by 
1 January 1997 and implemented as from 1  July 1997. 

(56)  COM (95) 406 final, OJ No C 343, 21.12.1995. 

THE SINGLE MARKET IN 1995 

36 

SECTION 5 - FREEDOM TO PROVIDE  SERVICES AND RIGHT OF  ESTABLISHMENT 

Cross-border  credit  transfers 

118. 
In December  1995 the Council  reached a common  position  on the  proposed directive  on 
cross-border  credit transfers (57). The directive  establishes  rules  on transparency  and  perform 
ance  of  cross-border  transfers,  to  remedy  shortcomings  which  had  resulted  in  calls  for  Com 
munity  action  from  business  and  consumers.  The  Council  decided  that  the  directive  should 
apply to  cross-border  credit  transfers  in the  currencies  of the  Member  States  and the  ECU  for 
amounts  lower than 25.000  ECU. Coverage  would  be extended to transfers  lower than  30.000 
ECU two years after the date set for implementation  by Member States. 

The directive will require  an institution to  provide  its customers with written and easily  compre 
hensible information  indicating the time that will be taken to execute the transfer, the manner of 
calculation  of  rates  and  charges,  an  indication  of  the  value  date  if  any  and  information  on 
redress  procedures.  Customers  are  also  entitled  to  receive  specified  information  following  a 
transaction. 

Institutions will have to execute a credit transfer within the time scale agreed with the  customer. 
In the absence of such an agreement, funds are to be credited to the beneficiary's  institution  no 
later  than  5  banking  business  days  after  acceptance  of  the  order  and  made  available  to  the 
beneficiary  no later than the next  banking  business day.  Interest  is due to the customer  for  fail 
ure  to  execute  the  transfer  on  time.  Charges  not  authorised  by  the  originator  of  the  transfer 
may  not  be made,  and  compensation  is  payable  if  they  are. Where  transfers  fail  to  reach  the 
beneficiary's  bank, the originator  is to  be  reimbursed  up to  10.000  ECU, plus  interest,  charges 
and commissions. 

Member States must also ensure that adequate and effective  procedures exist to deal with cus 
tomer complaints. 

The directive should enter into force  no later than 30 months after  its definitive  adoption, which 
the Commission hopes will be achieved  by mid-1996, after the Second Reading by Parliament. 

(57)  Common Position reached 4.12.1995, contained  in a Communication  from the  Commission to the  Parliament:  SEC 

(95) 1976 final. 

THE SINGLE MARKET  IN 1995 

n-\i& 

Section 6 - Free movement of capital 

119.  The  monitoring  by the Commission  of the  movement  of capital  and the freedom  of  pay 
ments  within  the  Union  has  shown  that  the  situation  in  this  area  is,  in  general,  satisfactory. 
Community  law  has  been  transposed  by  Member  States  and  transitional  derogations  have 
lapsed. 

120.  There  remain,  however,  a  number  of  impediments  to  the  free  movement  of  capital. 
Although  they  do  not take,  in  most  cases, the  form  of  outright  restrictions  their  impact  on  the 
effective  capital  mobility  and  financial  integration  may  be  important.  Such  impediments  can 
take  the  form  of  conditions  for  the  admission  of  foreign  securities  in  the  domestic  capital 
markets  not  applied  to  domestic  securities,  provisions  in  privatization  laws  aimed  to  maintain 
control  over  privatised  companies,  constraints  on  investment  abroad  by  institutional  investors 
not  justified  by  prudential  rules,  tax  rules  favouring  investment  in  domestic  financial  instru 
ments and restrictions  on the  physical transfer  of funds. Procedures  have  been initiated  by the 
Commission  to  eliminate  such  impediments.  Such  action  has  resulted  in the  improvement  of 
the situation in some cases while in others the procedures are at an advanced stage. 

121.  The  available  data  show that  there  has  been  in  recent  years  a considerable  increase  in 
capital flows within the  EU and vis-à-vis the  rest of the world. There was, in particular,  a sharp 
increase  in  direct  and  portfolio  investment  capital,  a  sign  that  investors,  individuals  and 
companies, are profiting from the opportunities offered  by the free movement of capital and the 
Single  Market.  The  growth  of  portfolio  capital  gives  a  measure  of  the  integration  of  financial 
markets.  It  reflects  also the  increasing  sophistication  and attractiveness  of  national  equity  and 
bond markers, notably government  bond markets. For example the share of government  paper 
held by non-residents rose between  1987 and 1993 from 3 to  31%  in France, from 21 to 34% in 
Germany  from  36 to 5 1%  in  Denmark,  from  9 to  16% in the  Netherlands  and from  2 to 4%  in 
Italy. The need to tap the international  markets  had beneficial  effects on the domestic  financial 
markets: extensive  reforms have been introduced  and the liquidity, transparency  and  efficiency 
of the markets were  improved 

122.  The  volatility  of  foreign  exchange  markets  has  focused  attention  on  some  of  the  less 
desirable  effects  of  capital  movements,  often  associated  with  trading  in  derivatives  markets, 
and  a debate  has taken  place,  in  several  fora,  about  the  appropriate  policy  response.  Among 
the  proposals  advanced the  most  notable  were  i)the taxation  of  international  capital  flows  and 
ii)the  imposition  of  reserve  requirements.  The  Commission  had the  opportunity  to  express  its 
views  on the  above  issue  in  public  hearing  at  EP  committees  and in  a Communication  by  the 
competent  Commissioner.  The  Communication  stated  that  the  free  movement  of  capital  is 
guaranteed  by  the  Treaty  and,  in  consequence,  any  measures  involving  restrictions  on  the 
movement  of capital  not provided for  in the Treaty  are excluded. It also stated that  sound eco 
nomic  and  financial  policies  are  the  best  way  to  limit  destabilizing  capital  flows.  Technical 
measures  which  fail  to  address  the  fundamental  problems  which  lie  at  the  origin  of  currency 
instability would be ineffective. 

THE SINGLE MARKET IN 1995 

31 

Section 7 - Taxation 

§ 1 - Indirect Taxation 

123.  The Commission's objective  in this  area  (as in others)  continues to  be to consolidate  the 
internal  market  in  accordance  with  the  rules  of  the  Treaty  by  guaranteeing  fiscal  neutrality  in 
commercial trade  and thereby  creating  a genuine single  market.  Its assessment  of three  years 
of  operation  of  the  new  indirect  tax  arrangements  is  positive  insofar  as  the  setting  up  and 
implementation of the new rules is concerned. 

124.  Nevertheless  as regards Value Added Tax (VAT), experience  has shown that traders  are 
often  not  in  a  position  to  benefit  from  all  the  advantages  that  a  single  market  has  to  offer 
because  of the  problems  associated  with  implementing  the  requirements  of  the  tax  system  -
e.g. the need to distinguish  between domestic  and intra-Community  sales, the problem of  veri 
fying the status of customers  in other  Member  States, the difficulty  of  obtaining  proof  of trans 
port to other Member States, the different  declarations  and formalities that  must  be  completed 
for tax and statistical purposes, in every  Member State in which the trader carries out a taxable 
transaction etc. These problems are often exacerbated  by the different ways by which  Member 
States authorities  have chosen to transpose  Community  rules in national legislation  particularly 
where  Community  law  offers  them  the  possibility  of  selecting  from  various  options  when 
implementing these rules. 

In this  connection,  a survey  of  182 companies  in  15 Member  States  undertaken  by  the 
125. 
Euro Info Centres in 1995 revealed that 85% of the enterprises surveyed were satisfied with the 
working of the transitional VAT regime  although some  problems still need to  be solved  in order 
to increase their competitiveness.  The  main  advantages cited by the  respondents were  money 
and time savings  , easier and faster circulation  of goods, better access to  new markets. As  for 
areas where the companies still  have difficulties,  INTRASTAT,  fiscal  representation, recupera 
tion and reclaiming  of VAT, getting  approval of a VAT  number and triangular transactions were 
mentioned. 

126.  However, the real difficulties  underlying these problems stem from structural deficiencies 
in  the  nature  of  the  VAT  itself.  The  Commission  has  analysed  these  deficiencies  and  has 
concluded  that  they  cannot  be  resolved  within  the  framework  of  the  principles  of  the  present 
VAT  system.  The  Commission  has  tried  therefore  to  take  account  of  these  difficulties  in  its 
preparations for the introduction of the definitive VAT regime. It has concluded that any attempt 
to solve the underlying difficulties will  require  fundamental  changes to the present VAT  system 
as a whole so as to enable traders and business to treat domestic and intra-Community  sales in 
the  same  way  for  VAT  purposes  while  at  the  same  time  ensuring  that  Member  States'  VAT 
revenues continue to remain at their current  levels. 

As part of these preparations, the Commission  adopted a proposal in December  1995 to fix the 
minimum  and  maximum  levels  of  standard-rate  VAT  at  15%  and  25%  respectively  for  the 
period  1 January  1997 to  31  December  1998. This will  not  result  in the  need for  any  Member 
State  to  change  its  existing  rates,  but  will  ensure  that  the  range  will  not  grow  wider,  thereby 
facilitating the strict alignment of rates that will be needed under the definitive regime. 

127.  On the positive side, the  abolition  of frontier-related  fiscal formalities within the Commu 
nity  has  meant  that  Member  States  are  making  increasing  use  of  the  possibilities  offered  by 
Community arrangements for administrative  cooperation and mutual assistance to help them to 
control VAT, including VAT on intra-community trade. Exchanges of information and other  help 

THE SINGLE MARKET IN 1995 

40 

SECTION 7 - TAXATION 

between  the  competent  authorities  of  the  Member  States  have  become  an  integral  part  of 
Member States' VAT control strategy  and have  played a key  role in ensuring the smooth appli 
cation of VAT to  commercial  transactions within the  internal  market.  The  Commission  and the 
Member States are continuing to work closely together  in the  Standing Committee  on Adminis 
trative Cooperation to monitor and develop the effectiveness  of these  arrangements. The  habit 
of working together has been assisted by the Community  programme of training for indirect  tax 
officials known as Matthaeus Tax. 

128. 
In the  area  of  excise  duties, the  Commission  carried  out the  first  biennial  review  of  the 
minimum  rates  of  duty  which were  introduced  on  1 January  1993.  The  findings  of  this  review 
were presented in a report to the Council and the European Parliament on 13 September 1995 

The review considered the proper functioning of the  Internal Market, the real value  of the  rates 
of duty and the wider objectives of the Treaty. It identified a number of potential problem areas, 
most  notably  -  from  an  internal  market  viewpoint  -  in the  cases  of  products  subject  to  excise 
duty which  compete with  products  which  do  not  attract  the  duty.  The  Commission  also  noted 
that  even  comparatively  minor  adjustments  within  the  system  could  have  significant  implica 
tions for other policy areas. 

In addition to the problems identified in the report, it is clear that, at a more general level, 
129. 
there are differing views as to what the excise system  introduced on 1 January  1993 represents 
- for some, it gives full  effect  to  an  Internal  Market  for  excisable goods whereas  others  argue 
that it is simply a first step towards a market which more closely resembles a national  market.. 

130. 
In the circumstances, the Commission chose not to make any proposals for change  in its 
report;  rather  it  was  felt  that  wide-ranging  consultation  with  national  administrations,  trade 
representative  bodies,  and  other  interest  groups  was  necessary,  prior  to  any  legislative 
initiative. The purpose of this consultation would be to allow all parties to give all their views on 
the  basis  of  having  operated  the  Internal  Market  for  over  two  years,  and  to  react  to  the 
description of the situation as presented in the Commission  report. In addition, it would assist  in 
greater analysis of the interaction between excise duties and other policy areas, such as health, 
agriculture, environment, energy and transport. 

During the  last  quarter  of  1995, the  Commission  launched  such  a  consultation  process. As  a 
focal point, it arranged a conference  in Lisbon on 13,14 and 15 November, which was attended 
by  over  three  hundred  representatives  of  national  administrations,  industry,  consumer  and 
other interest groups. The conference  examined  each  product sector from the viewpoint  of  the 
functioning of the Internal Market, the role of excises as a source of revenue and the  interaction 
with other policy areas in a series of workshops. As a follow  up to the conference, and  another 
key  element  of  the  consultation  process,  all  interested  parties  were  invited  to  make  detailed 
written submissions. 

The  views  expressed  at the  Lisbon  Conference,  as well  as those  put  forward  in  submissions, 
will  be taken  into  consideration  by the  Commission  during  its work  on  excise  duties  in  1996, 
and in  particular  in the  preparation  of  the  second  review  of  excise  duty  rates which  is due  by 
31 December 1996. 

Already, as a result of the discussions  in Lisbon, it has been decided to hold a special  seminar 
early  in  1996 for the  mineral  oil sector, which will  bring together  specialists  from  the trade  and 
national  administrations.  This  seminar  will  consider  ways  of  improving  the  control  and 
movement  of  mineral  oils  circulating  in  the  Internal  Market,  and  of  reducing  the  potential  for 
fraud. 

§ 2 - Direct Taxation 

131.  Diverging  national  tax  rules  are  becoming  an  increasingly  important  obstacle  to  the 
smooth  functioning  of  the  single  market,  as  other  regulatory  and  economic  barriers  are 
progressively  removed.  Citizens,  small  and  medium-sized  enterprises  and  multinational 
companies are equally concerned  by the  continuing  hindrances to the  free  movement  of  serv-

THE SINGLE MARKET IN 1995 

SECTION 5 - FREEDOM TO PROVIDE SERVICES AND RIGHT OF ESTABLISHMENT 

41 

ices, labour and capital and the freedom of establishment which result from existing distortions. 
For example: 

•  non-residents are often discriminated against; 
• 
• 
•  cross-border income flows suffer from double taxation and/or cash flow losses. 

the location of savings and investments is distorted; 
the cross-border provision of services is hampered; 

132.  Very little progress was made in improving this situation in 1995. Commission proposals 
remain  blocked  in the  Council  as a  result  of the  difficulty  of  reaching  agreement  under the 
unanimity voting principle. For example, discussions in the Council on the taxation of savings 
and the introduction of a common withholding tax among Member States have not yet resulted 
in agreement. The Commission continues to advocate a general withholding tax, at a low level, 
on non-residents within the Union as being technically the simplest solution and the one which 
is the  easiest for  other OECD partners to  adopt. The only success  at  Council  level was the 
signing in the Council of a Convention on the accession of Austria, Finland and Sweden to the 
Arbitration Convention, a Convention establishing binding arbitration in cases of transfer pricing 
disputes between Member States (58), at the end of December. The Accession Convention will 
enter into force, as between the States which have ratified it, after ratification by Austria, Fin 
land and Sweden and one other Member State. It will enter into force for  each State subse 
quently ratifying it. 

133.  Tax  competition,  for  business  activities  or  for  capital,  continues  to  pose  a  particular 
threat to the international tax system and to Member States' tax revenues. The Commission is 
committed  to the  consistent  application  of  the  Treaty  competition  rules  in the tax  area. An 
example of the seriousness with which the Commission views the dangers of fiscal degradation 
from  special  regimes  is demonstrated  by  its decision  of  12 April  in the  case of  the  Trieste 
scheme (59), on tax concessions for investments in Eastern Europe via Trieste. The Commis 
sion's approval of this scheme contains conditions in five key areas: a time limit of 5 years; the 
scheme will also be open to Italian residents; there will be a ceiling on the amount of loans or 
investments which can benefit from the advantageous tax treatment; there will be a ceiling on 
the amount of tax benefits given, defined as the difference between tax paid and the tax which 
would have been paid under normal Italian rules; and the Italian authorities will institute control 
procedures to ensure that funds are not directly or indirectly reinvested outside Eastern Europe. 
The last three conditions are all new elements in dealing with fiscal state aids. 

134.  Even in those areas where the Commission is seeking to promote common approaches 
through voluntary cooperation between national tax authorities, progress has been slow. Thus, 
for example, while there is agreement on the principle of the direct application of reduced rates 
of withholding tax on interest (60) (as opposed to a system of later reimbursement), the practical 
arrangements  for  implementing  this  principle  have  yet  to  be  agreed,  including  a  common 
approach to the certification of residence. 

135.  As the  Council  is not able to  reach agreement  on legislative  measures, taxpayers are 
increasingly  addressing the  Court  of  Justice to  find solutions for their  cross-border  tax prob 
lems. In 1995, the Court gave two important rulings on the taxation of cross-border workers, in 
February  1995  in  the  case  of  Schumacker  (C-279/93) (61),  and  in  August  in  the  case  of 
Wielockx  (C-80/94). The Court  ruled that  a non-resident taxpayer, whether employed or self-
employed, who receives all or almost all of his income in the State where he works is objec 
tively  in the same situation in so far as concerns income tax as a resident of that  State who 
does the same work there. If such a non-resident taxpayer is not given the same tax treatment 
as regards deductions  from  his taxable  income  as  a  resident,  his  personal  situation  will  be 

(58)  Convention  on  the  elimination  of  double  taxation  in  connection  with  the  adjustment  of  profits  of  associated 

enterprises, O.J. 20 August 1990, n" L 225, p. 19. 

(59)  Commission decision of 12 April 1995 on State aid in the form of tax concessions to undertakings operating in the 
Centra di Servizi Finanziari ed Assicurativi di Trieste pursuant to Article 3 of the Italian Law No 19 of 9 January 1991, 
OJ.  n° L 264,7 November 1995, p. 30. 

(60)  See 1994 Report, para. 235. 

(61 )  See 1994 Report, para. 238. 

THE SINGLE MARKET IN 1995 

42 

SECTION 7 - TAXATION 

taken  into account  neither  by the tax  authorities of the State where  he works -  because  he is 
not resident there - nor by the State of residence - because he receives no income there. Con 
sequently his overall tax burden will be greater and he will be at a disadvantage compared to a 
resident. Therefore, the Court ruled that such a taxpayer suffers discrimination, for which there 
is  no justification.  These  decisions  confirmed  the  principles  which  the  Commission  had  laid 
down in its Recommendation 94/79/EC* of December  1993. The necessary changes to the tax 
legislation of the Member States are under discussion with the Heads of National Tax Admini 
strations with  a  view  to  a  coordinated  approach  in  all  Member  States,  some  of  which  have 
decided to modify their legislation as a consequence. 

THE SINGLE MARKET IN 1995 

^3 

Section 8 - The business environment 

§ 1 - Intellectual and industrial  property 

136.  The Community  has a number  of tasks to  perform  in this  field:  ensuring  free  movement 
of goods and services  protected  by such  rights,  and  providing  a  level  playing  field  and  a  high 
level  of  protection  within  the  internal  market.  A  number  of  Community  measures  are  as  yet 
under discussion in Council and Parliament, while others have been adopted to ensure that  the 
regulatory  environment  keeps  pace  with  technical  progress,  such  as  developments  in  the 
information society. 

A. 

Intellectual  property 

137. 
In July  1995, the  Council  reached  a common  position  on the  proposal for  a directive  on 
the legal protection of databases (62), which seeks to harmonise the copyright  law applicable  to 
database  structures,  in  whatever  form.  It  also  envisages  the  introduction  of  a  new  economic 
right  which  would  protect  the  substantial  investments  of  database  makers.  Considering  the 
important  investment  of  human, technical  and financial  resources  necessary  to  create  a data 
base,  and  given  that  the  databases  could  be  copied  at  a  much  lower  cost  than  that  of  their 
development, such provisions are  important.  This  proposal, once adopted, will  be an  important 
step forward for intellectual property rights owners in the context of the Information  Society. 

138.  However, there  are many  other  issues arising  in this  field.  For this  reason, the  Commis 
sion published a "Green paper on copyright  and related rights in the  Information Society" (63) in 
July  1995. This Green  Paper examines  a range  of  issues arising  from the  impact  of  new tech 
nologies and the  Information  Society  on copyright  and related rights, particularly  as regards the 
effects  of  measures  in this  area  on the  free  movement  of  information  society  services.  It  will 
generate  a  wide  debate  with  all  interested  parties,  which  should  permit  the  Commission  to 
define  its  working  programme  for  the  future.  By  outlining  key  questions,  it  offers  a  basis  for 
reflecting  on the  pertinent  issues  not  only  within  the  European  Union,  but  also  at  international 
level. 

B. 

Industrial  property 

139.  An  important  step  was  taken  towards  to  opening  of  the  Office  of  Harmonisation  in  the 
internal  market  (trademarks  and designs),  situated  in Alicante,  Spain, with  the  adoption  of  the 
implementation  regulations  of  the  Community  Trademark  regulation  of  1994.  These  arrange 
ments are necessary to enable the  OHIM to start  its operations  at the  beginning  of  1996; once 

(62)  COM  (92)  24  final,  OJ  No  C  156,  23.6.1992  as  amended  by  COM  (93)  464  final,  OJ  No  C  308,  15.11.1993 

Common position No 20/95, OJ No C 288, 30.10.1995. 

(63)  COM (95) 382 final of 19.7.1995. 

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44 

SECTION 8 - THE BUSINESS  ENVIRONMENT 

open, the Office will  be competent  for  receiving  applications  for  Community  Trademarks  which 
will be valid for the entire Community when they are granted (64). 

140. 
In July  1995, the  Commission  adopted  a Green  Paper  on  Utility  Models (65) which  calls 
for  a  wide  consultation  of  all  interested  circles  on  this  specific  form  of  industrial  property 
protection for technical  inventions.  Utility  model protection, a form of industrial  property  protec 
tion at a lower  level than  patents,  is often  used  as a relatively  quick  and cheap  means to  pro 
tect  technical  inventions  which  are  not  particularly  innovative  (such  as  mechanisms  or  tools). 
This  is done  to  improve  innovative  activity  throughout  the  Community.  SMEs  are  particularly 
encouraged to comment  on this document. 

141.  At  the  end  of  the  year,  the  Commission  adopted  a  new  proposal  for  a directive  on  the 
legal protection of biotechnological  inventions (66), after the rejection of the first proposal  by the 
European  Parliament  in  March.  The  important  decision  to  present  a  new  proposal  was  taken 
after  a  in-depth  analysis  of  the  consequences  of  the  absence  of  a  legal  framework  for  these 
inventions  in the  European  Union. All  concerns  which  were  expressed  during  the  discussions 
on the first proposal were carefully taken into account in the drafting of the new proposal. 

142.  This  year,  the  United  Kingdom  has  deposited  its  instrument  of  ratification  of  the  Com 
munity  Patent  Convention  (67)  of  1989,  bringing  the  number  of  Member  States  having  made 
this formality to eight. The Community  Patent  is an important  element for the completion  of the 
Single Market and Member States which have not yet done so were encouraged to start without 
delay internal ratification  procedures so as to make the Community  Patent available to  users as 
soon as possible. 

§ 2 - Company law and financial  information 

143.  The European Company  Statute, still  not adopted  by the  Council, would  be an  important 
instrument  for  the  completion  of  the  single  market,  since  it  offers  companies  from  different 
Member  States  a  means  of  restructuring  their  business  and  a  mobility  within  the  Community, 
neither of which are available to them  under individual  national  laws. There is still  considerable 
pressure  from  business  for  the  adoption  of  the  regulation,  and  the  Competitiveness  Advisory 
Group, chaired by Mr Ciampi, stated in its report to the Cannes European Council: 

"One major  advance  would  be  the  adoption  of  the  European  Company  Statute. 
Even  more  important  than  the  potential  cost  savings  involved,  the  ease for  both 
smaller and larger companies to expand Europe-wide would greatly stimulate inte 
gration.  In  fact,  the  internal  market  will  remain  unfinished  business  so  long  as 
European companies  cannot  operate  across the  Union in a more flexible and effi 
cient way". 

The Council has still not  reached  a common  position on the  proposed  regulation  on the  statute 
for a European Company, due largely to persistent differences of opinion on the involvement  of 
the  employees  in  such  a  company.  However,  the  Commission  is  hopeful  that  Directive 
94/45/EC*, which  provides  for the  establishment  of  European Works Councils or procedures  in 
Community scale undertakings and groups of undertakings, can act as the basis for a resolution 
of this issue and lead to the adoption of the regulation  in the near future. 

It  is  hoped  that  a  resolution  of  the  issues  which  have  held  up  the  adoption  of  the  European 
Company  Statute  will  also  lead to  a  rapid  adoption  of  the  10th  company  law  directive  (68)  on 
cross-border  mergers of public limited companies. 

(64)  See 1994 Report, para. 210. 

(65)  COM (95) 370 final of 19/7/95. 

(66)  COM (95) 661 final, not yet published. 

(67)  OJL401 of 31/12/89. 

(68)  COM (84) 727. 

THE SINGLE MARKET IN 1995 

SECTION 8 - THE BUSINESS  ENVIRONMENT 

45 

144.  The  Commission  is  considering  the  preparation  of  a  proposed  directive  governing  the 
transfer of the seat of a company from one Member  State to another. This would enable such a 
transfer  to  take  place  without  the  necessity  (as  at  present)  for  the  company  concerned  to 
undergo  the  complex  and  costly  formalities  of  liquidation  in  its  state  of  original  incorporation 
and re-incorporation, as a new legal  entity,  in the state to which it wishes to transfer,  and would 
represent  an  important  contribution  to  the  free  movement  of  companies  within  the  single 
market. 

145.  The  Commission  has  also  been  following  closely  the  current  debate  on  wider  issues  of 
corporate  governance which is being conducted within the business community  at a European 
and  international  level, and  remains  vigilant  for  opportunities  for  simplification  in this  area.  In 
accordance  with  the  principle  of  subsidiarity,  however,  many  of  the  issues  involved  can  most 
appropriately  be settled at national level. 

146.  Large  European  companies  with  an  international  vocation, the  so-called  global  players, 
are faced with the  problem that  the  accounts  which they  prepare  on the  basis  of their  national 
legislation  following  from  the  Accounting  Directives  are  not  considered  satisfactory  when  they 
seek  capital  on the  international  capital  markets. As a  result, these  companies  are  required  to 
prepare  two  sets  of  accounts,  one  set  which  satisfies  domestic  requirements  and  another  set 
which satisfies the requirements of the  international capital markets. 

The  Commission  has  been  seeking  a  solution  for  this  problem  which  affects  the  competitive 
ness of  European  business. After  extensive  consultations  with  Member  States  and  with  inter 
ested  parties,  it  has  submitted  a  Communication  to  the  Council  in  November  1995  which 
contains a number of  proposals for  a new  accounting  strategy  (69). This  strategy  is fully  in  line 
with the principles of subsidiarity  and  proportionality. 

Rather than  amend  the  existing  Directives,  the  Commission  proposes  to  improve  the  present 
situation  by  associating  the  EU  with  the  efforts  undertaken  by  the  International  Accounting 
Standards  Committee  and  the  International  Organisation  of  Securities  Commissions  towards 
international  harmonisation  of  accounting  standards.  At  the  same  time,  it  is  proposed  to 
improve  the  coordination  of the  activities  carried  out  by the  various  bodies  in  Member  States 
which deal with accounting standards. Such coordination will allow the  EU to adopt  positions on 
accounting  issues  with  a  view  to  the  further  enhancement  of  the  comparability  of  financial 
information within the Union and the defence of those positions  internationally. 

As  an  immediate  step,  the  Commission  has  decided  to  set  up  a working  party  with  Member 
States  which  will  examine  the  compatibility  between  International  Accounting  Standards  and 
the Accounting  Directives. 

§ 3 - Commercial  communication 

147.  During  1995 work  has continued  on a Green  paper which will  cover  all  forms  of  market 
ing communications  including  advertising, direct  marketing, sponsorship, sales  promotions  and 
public relations.  Based on a wide-scale  consultation  undertaken  by the  Commission  at the  end 
of  1994 and the  beginning of  1995, the  Green  Paper, which should  be published  in early  1996, 
will provide  an analysis of the current  state of the  Internal Market  in this domain, and will  make 
suggestions as to the needs for the Community's future policy  in this area. 

(69)  COM (95) 508 final of 14.11.1995. 

THE SINGLE MARKET  IN 1995 

46 

SECTION 8 - THE BUSINESS  ENVIRONMENT 

§ 4 - Media 

Media  ownership 

148.  During the first half of  1995, the  European  institutions, the Member States and  interested 
parties  were  consulted  by  the  Commission  on  a  possible  initiative  on  media  ownership.  The 
results of this consultation  indicate a shift towards a rather more positive position in favour of a 
Community  initiative.  In  the  light  of  the  outcome  of  this  consultation,  the  Commission  may 
present  during the  first  months  of  1996  a  proposal  for  a directive  on  media  ownership,  which 
would  establish  an  equivalent  level  of  protection  of  pluralism  throughout  the  Community,  by 
harmonizing some of the specific national rules on access to media ownership. 

B. 

Legal  protection  of encrypted  services 

149.  As  stated  in  the  Communication  "Europe's  way  to  the  Information  society:  an  Action 
plan" (70)  of  July  1994,  the  Commission  is  currently  preparing  a  Green  Paper  on  the  legal 
protection  of  encrypted  services  in the  Internal  Market.  Working  within  the  perspective  of  the 
Information  Society, the Green  Paper will  examine to what  extent the  operation  of the  Internal 
Market, and more particularly the free  movement  of goods and services, is impeded by dispari 
ties  between  national  regulatory  approaches  to  the  legal  protection  of  encrypted  services 
against illicit reception. In 1995 a wide range consultation with the interested parties was  under 
taken.  On  the  basis  of  this  consultation  the  Green  Paper,  which  could  be  published  in  early 
1996, will examine options for Community action. 

C. 

Audiovisual  policy 

150.  On 22 March  1995 the Commission  adopted  a proposal  for  a Directive  amending  Direc 
tive  89/552/EEC* on television  without  frontiers (71). Its purpose  is to  provide  a stable  legal 
framework conducive to the development  of television  broadcasting activities in the Union. The 
proposal  clarifies  the  rules  determining  which  legal  system  is  applicable  to  broadcasters,  the 
rules on the  protection  of  minors  and on the  promotion  of  European works, and takes  account 
of  the  new  economic  realities  of  the  industry.  It  does  not  cover  certain  new  "point-to-point" 
services  such  as video-on-demand  (VOD), which will  be the subject  of  a Green  Paper  on  the 
development  of new broadcasting services. 

In February the Commission  adopted a Communication with the aim of creating  an  envi 

151. 
ronment which will stimulate  dynamic  growth  in the  European  programme  industry (72). It  is 
accompanied  by two  proposals for  Council  Decisions, one on a training  programme  for  profes 
sionals  in  the  European  audiovisual  programme  industry  and  the  other  on  a  programme  to 
two 
promote 
programmes  are  intended to  run for  five  years from  1 January  1996.  In July  1995 the  Council 
adopted the  Decision  on the  "development  and distribution" section  of  the  programme,  which 
will  be given  a  budget  of  ECU 265  million  over  five  years;  under the  cooperation  procedure  it 
approved  and  forwarded  to  Parliament  its  common  position  on  the  "training"  section  of  the 
Programme for which the budget is set at ECU 45 million. 

the  development  and  distribution  of  European  audiovisual  works.  The 

(70)  COM (94) 347 final of 19.7.1994. 

(71)  COM (95) 86 final, OJ No C 301,13.11.1995. 

(72)  COM (94) 523 final of 8.2.1995. 

THE SINGLE MARKET IN 1995 

SECTION 8 - THE BUSINESS ENVIRONMENT 

47  /  q.& 

152.  As regards the technological aspects, in June the Commission approved the first annual 
report (73) on  progress  in  implementing  the Action  Plan for the  introduction  of  advanced 
television services in Europe (74), the objectives of which are to encourage the emergence of 
a critical mass of advanced television  services in the  16:9 format  and a sufficient  volume of 
programming in the 16:9 format and with high technical quality. 

§ 5 - Protection of personal data 

153.  The Council  and the  European  Parliament  adopted  Directive  95/46/CE* of  24 October 
1995 on the protection of individuals with regard to the processing of personal data and on the 
free movement of such data. 

This Directive is a contribution to the smooth functioning of the internal market which is particu 
larly  important  at  a time  when  view  data  services,  such  as teleshopping,  home  banking  or 
insurance services, distance education, and interactive video and audio services are develop 
ing in the context of the information society. 

154.  Differences in national laws in this area may create barriers to the free flow of data since 
a Member State could legitimately oppose the free movement of data on the grounds of inade 
quate or non-existent protection in the Member States of origin or destination. 

Such barriers would have been particularly detrimental to the functioning of the internal market, 
one effect of which is precisely to generate flows of personal data. Aligning national laws on the 
text  of the  Directive will  mean that  the rights of  individuals will  have  an equivalent  level of 
protection  throughout  the  Community,  with  Member  States  being  prevented  from  erecting 
barriers to the circulation of data. 

155.  The Member States have a period of three years from the adoption of the  Directive to 
transpose it into national law. The Commission is also to report on its implementation at regular 
intervals. 

Its  report  could  be  accompanied  by  proposals  for  further  harmonization.  As  a  framework 
instrument leaving the Member States a degree of leeway, the Directive  might require further 
legislation in particular areas, taking account of how the internal market functions. 

§ 6 - Information Society Services 

156.  As explained in a Communication  by Messrs Bangemann, Monti and Oreja of 22 March 
1995 to the Commission, the regulatory framework for Information Society Services has to be 
anchored in the well proven principles of the Internal Market. While it is important to avoid any 
over-regulation  at Community  level, it is also vital to  prevent  any future fragmentation  of the 
Internal  Market  arising  from  disparities  between  national  laws.  In  this  respect  work  was 
launched on a regulatory transparency mechanism, which should guarantee that future national 
legislation will not create new obstacles to the free circulation of such services. 

(73)  COM (95) 263 final of 16.6.1995. 

(74) 

JO No L 196, 5.8.1993, p. 48. 

THE SINGLE MARKET IN 1995 

L\C\ 

Section 9 - Public procurement 

157.  During the  year, the  application  of the  public  procurement  rules  intensified  considerably 
because the  rate  at which  Community  texts  were  transposed  into  national  laws  improved  and 
potential complainants were more familiar with their rights. A major step was taken towards the 
completion of the internal market in the field of public  procurement. 

The  Commission  also  made  proposals  to  amend  the  public  procurement  directives  following 
the Agreement  on Government  Procurement. 

§ 1 - Application of the Community  rules 

158.  As well  as  continuing  to  investigate  cases  in  which  transposai  measures  had  not  been 
communicated  or were  incorrect  (see  section  2.1),  the  Commission  stepped  up  its  checks  on 
application  of the  rules  by contracting  authorities  and contracting  entities  in  each  of the  Mem 
ber States. 

159. 
It also dealt with  infringements,  discovered  as a  result  of  complaints  or through  its  own 
investigations, in the application of the rules of Community  law that can be relied on in the pub 
lic  procurement  field  (directives  and  Treaty  articles).  There  are  now  214  cases  in  which  an 
infringement  procedure for misapplication  of the directives has been opened (see table below). 

TABLE IV -  INFRINGEMENTS FOR MISAPPLICATION OF PUBLIC PROCUREMENT DIRECTIVES: 214 

THE SINGLE MARKET IN 1995 

50 

SECTION 9 - PUBLIC  PROCUREMENT 

Action  by the  Commission 

160.  Of the  244  cases dealt  with  in  1995  (including  92  new cases  opened),  the  Commission 
settled matters with the Member  State concerned  in 38 cases before the  infringement  proceed 
ings had run their full course. To that  end, it set  up procedures for dialogue and consultation  (in 
particular  through  bilateral  meetings  with  individual  Member  States  to  discuss  a  range  of 
issues)  in  order  to  offer  Member  States  the  legal  and  technical  assistance  they  need  and  to 
endeavour to find mutually  acceptable solutions to disputes in accordance with Community  law. 

161.  A few examples are worth mentioning: 

•  Two  municipalities  in the  Netherlands  had  stated  in  contract  notices  concerning  the 
development  of  specialized  transport  systems  that  suppliers  of  services  must  be 
members  of the  Dutch transport  organization  and that the training  of their  employees 
must  meet  the  requirements  laid  down  by  that  organization.  These  two  conditions 
contravened  Community  provisions  and  were  dropped  following  requests  by  the 
Commission. 

•  An  Italian  law (75)  contained  a  provision  which  required  contractors  to  accept  a 
reduction  in remuneration during the contract  if they did not wish to  be excluded  from 
other  contracts  or  risk  the  termination  of  the  contract.  The  law  also  provided  that 
maximum  reference prices were to be observed for all future  public contracts.  Follow 
ing  intervention  by  the  Commission,  these  provisions,  which  infringed  the  general 
principles  of  proportionality,  legitimate  expectation  and  non-discrimination  as well  as 
several  provisions  of  the  public  procurement  directives, were  repealed  and  replaced 
by a new set of provisions which complied with Community law. 

•  A public hospital in Greece launched a procedure for the supply of oil during which, at 
the stage  of awarding the  contract,  it  rejected a supplier's tender  because  he  had  not 
presented  certificates  relating  to  his  own  suppliers.  Rejection  of  the  tender  when  it 
was  being  evaluated  ignored  the  distinction  made  by  the  directives  between  the 
selection  and award stages.  Following  contacts  made  by the  Commission, the  Greek 
authorities undertook to adopt general measures to prevent the recurrence of this type 
of difficulty, which is fairly frequent  in Greece. 

B. 

Decisions  by the  Court  of  Justice 

162.  The following decisions by the Court of Justice may be noted: 

•  As  regards  admissibility  of  review,  for  the  first  time  the  Court  decided,  in  its judge 
ment  of  24  January  1995 (76)  (Commission  v.  Kingdom  of  the  Netherlands),  on  the 
possible  impact  of  the  procedure  laid  down  by  Article  3  of  the  Review  Procedure 
Directive  89/665/EEC* on the  procedure  laid down  by Article  169* of the Treaty.  The 
Court stated that this  procedure  was  a preventive  measure which  could  not  derogate 
from or replace the powers of the Commission  under Article  169* of the Treaty, which 
gives  the  Commission  discretion  to  refer  the  matter  to  the  Court  when  it  considers 
that  a  Member  State  has  failed  to  fulfil  an  obligation  under  the  Treaty  and  that  the 
Member  State  concerned  has  not  complied  with  the  reasoned  opinion  of  the  Com 
mission.  The  Court  confirmed  this  principle  in  its  judgement  of  4 May  1995(77) 
(framework agreement for the supply of dressing material (Commission  v.  Republic  of 
Greece)) 

(75) 

Law N° 537/93, Art. 6. 

(76)  Case C-359/93; judgement delivered on 24 January 1995. 

(77)  Case C-79/94; judgement delivered on 4 May 1995. 

THE SINGLE MARKET IN 1995 

SECTION 9-PUBLIC  PROCUREMENT 

51 

Failure  to  transpose  Directives  89/440/EEC*  and  88/295/EEC*:  before  the  expiry  of 
the period set in the reasoned opinion, Directives 89/440/EEC* et 88/295/EEC* had in 
Germany  been the subject  only  of  administrative  rules. The  Court  reiterated  its  case 
law  concerning  the  transposition  of  directives:  the  need  for  a  full  application  of  the 
Directive  in  a  sufficiently  clear  and  precise  manner,  so  that,  where  the  Directive  is 
intended to create rights for  individuals, the  persons concerned  can  ascertain  the  full 
extent of their rights and, where appropriate, rely on them before the national courts. 

§ 2 - Development of Community  legislation 

163.  The  new  World  Trade  Organization  Agreement  on  Government  Procurement  requires 
limited amendments to Community  Directives on public procurement to avoid  reverse discrimi 
nation which would penalize European firms and operators and to make the  Directives easier to 
apply following the Agreement. 

These  amendments  were  the  subject  of  two  draft  proposals  for  European  Parliament  and 
Council  Directives,  one  amending  Directives  92/50/EEC*.  93/36/EEC*.  and  93/37/EEC*,  and 
the  other  amending  Directive  93/38/EEC* (78). These  drafts were  adopted  by the  Commission 
on 29 March 1995 and are under discussion in Parliament  and the Council. 

§ 3 - Other activities 

"SIMAP"  project 

164.  An  important development  in the  public  procurement  area during  1995 was the launch of 
two  pilot  projects  as  part  of  "SIMAP"  (Système  d'Information  pour  les  Marchés  Publics  or 
Information System for Public  Procurement). 

In the first  pilot  project, 75 contracting  entities designated  by the  Member  States will  use  elec 
tronic  mail to send  notices of tender  opportunities  and contracts awarded  for  publication  in the 
Official Journal of the EU and in its on-line equivalent TED (Tenders Electronic Daily). 

The second pilot project will provide tools to give suppliers easier on-line  access to  information 
on tender  opportunities  and contracts  awarded,  plus other information  already  available  in  the 
Member States which can help them  respond  more competitively to  public  procurement  oppor 
tunities.  Examples  of  such  information  include  tenders with  a value  lower than  the  thresholds 
specified  in EU legislation, environmental  issues, information on local conditions and practices, 
price  levels,  help  for  business  in  finding  local  partners  when  bidding  for  contracts  in  other 
Member  States,  help  in  the  translation  of  calls  for  tender,  standards  and  electronic  product 
catalogues. 

All Member  States, with the  exception  of  Belgium  and  Italy, are  participating  in the  first  of  the 
two  pilot  projects.  Norway  and  Iceland,  as  EEA  members,  are  also  participating,  and  interest 
has also been expressed by Switzerland. 

The  Commission  is disappointed  about the  lack  of  participation  in the  second  pilot  project,  for 
which only three Member States have  proposed  participants. The Commission  emphasizes the 
importance  of  this  project:  suppliers  often  complain  about  the  inadequacy  of  the  tender  infor 
mation which is available to them, and this pilot project  is intended to develop and test ways of 
providing better and more reliable data, thus contributing to more efficient  public purchasing. 

(78)  COM (95) 107/1 & 12 final, OJ No C 138, 3.6.1995. 

THE SINGLE MARKET IN 1995 

52 

SECTION 9-PUBLIC  PROCUREMENT 

B. 

Improvement  of  participation  of  SMEs  in public  procurement 

165.  Following an exhaustive analysis of actions to support SMEs, the Commission will shortly 
be  in  a  position  to  present  a  Communication  setting  out  a  range  of  practical  measures  that 
might  be taken. No simple  solution  exists which would  enable  SMEs to get the  best  out  of  the 
opening up of public procurement.  It is advisable, rather, to rely on containing action in a range 
of  areas  in  order to  help those  SMEs  with the  necessary  dynamism  to  take  advantage  of  the 
opportunities open to them. This will  imply  a concerted approach by all the actors  involved: the 
Commission,  the  Member  States,  contracting  authorities,  the  enterprises  themselves  and 
others. 

Defence  Procurement 

In  reaction  to  the  international  developments  in  recent  years,  all  Member  States  have 
166. 
decided  to  cut  their  defence  budgets.  This  has  created  renewed  interest  in  applying  good 
procurement  practices also to defence  purchasing, in order to get the best value out of  reduced 
military budgets. 

In  June  1995  an  informal  study  group  consisting  of  representatives  from  the  Western 
167. 
European  Union  (WEU),  the  Western  European  Armaments  Agency  (WEAG)  and  the  Euro 
pean Commission submitted  a final  report, which  included  recommendations  to  open  up Euro 
pean defence  markets to competition  and suggested  EU procurement  rules  be adopted to  real 
ize that objective. 

THE SINGLE MARKET  IN 1995 

£3 

Section 10 - Transport, Energy and Telecommunications 

§  1  -  T r a n s p o rt 

168. 
The basic legal framework of the Internal Transport  Market is in place and the rules are 
being incorporated  in national  legislation. However,  some  of the most  important  measures  are 
only  gradually  being  phased  in. This  is  particularly  the  case  in  the  cabotage  field  where  air 
transport cabotage will be fully liberalised  by 1 April  1997 and road haulage cabotage on 1 July 
1998.  Maritime  cabotage  has  a  number  of  transitional  rules:  for  example,  liberalisation  of  a 
very substantial part of domestic Greek services will only take place on 1 January 2004. 

169.  Certain  issues  of  secondary  importance  which  were  not  included  in  the  1992  priority 
programme  or which were  not anticipated will  have to  be addressed  and some  existing  meas 
ures  require  follow-up  actions. This  is  particularly  the  case  in  the  railway  field  where  the  first 
liberalisation  step  is  being  followed  by  technical  and  non-technical  measures  required  to 
encourage the development of railways in the Internal Market. 

170.  While some  progress  has been  made with  regard to the external  dimension  of  transport 
services, widespread  reluctance  by  Member  States  means that  overall  progress  is  unsatisfac 
tory.  Substantial  work  and  political  will  is  needed  to  achieve  a  balance  between  intemal 
achievements and hitherto unsatisfactory  implementation of the external dimension. 

A. 

Air  transport 

171.  Member  States and airlines  have  reacted  positively to the Third  Package  of  liberalisa 
tion (79), which  has  implemented, since  January  1993, the  freedom to  provide  services  in  the 
field of airtransport.  In 1995, the Commission  has received few complaints.  The  most  notable 
case  concerned  again the traffic  distribution  rules  at  Orly: the  Commission  decided,  in  March 
1995, that the new rules were compatible with Community  law, with the exception  of some dis 
proportionate provisions (so). 

172.  The  progress  of  the  intemal  market  in  the  air  transport  sector  has  been  thoroughly 
analysed  in  the  British  Civil  Aviation  Authority's  last  report  The  Single  European  Aviation 
Market:  Progress  So  Far  (September  1995) (81). The  survey  shows that  important  competitive 
developments  have taken  place since  1993. Although there  is stilll  room for  more competition, 
it concludes that the practical success achieved in implementing  liberalisation through the Third 
Package  is cause  for  optimism  about  the  future  of  airline  competition  in  the  EU,  particularly 
after  1997, when domestic  cabotage  is fully  liberalised.  In particular,  the  CAA  study  positively 
acknowledges the effectiveness of the action undertaken by the Commission to enforce  internal 
market legislation. 

(79)  OJ No L 240, 24.8.1992. 

(80)  OJ No L 162,13.7.1995. 

(81)  CAP 654. 

THE SINGLE MARKET IN 1995 

54 

SECTION  10 - TRANSPORT.  ENERGY AND TELECOMMUNICATIONS 

The  Council  and  Parliament  are  discussing  the  Commission's  proposal  of  December  1994  on 
the liberalisation  of groundhandling  services (82), which are often the  monopoly  of the  national 
carrier or of the airport authority at Community airports. 

B. 

Road  transport 

173.  Here  a  number  of  Member  States  have  taken  encouraging  action  to  improve  compli 
ance with common rules. This will  improve the functioning  of the internal  market, enhance  road 
safety and bring conditions of competition closer together, especially through the stepping-up of 
checks. 
In  consultation  with  government  experts,  the  Commission  also  embarked  upon  measures  to 
improve access to the trade of  road  haulage. This should lead to a proposal for  legislation, the 
main aim of which should be to improve the quality of services supplied. 

C. 

Inland  waterways 

174. 
In  September  1995  the  Council  had  a  preliminary  discussion  of  the  proposal  for  a 
Regulation  for  Community  rules  of  access  to  inland  waterway  transport  between  Member 
States (83), implementing the principles of freedom to provide services. The discussion showed 
that the Council was broadly in favour of the proposal. 

The Commission submitted to the Council on 23 May 1995 comprehensive  proposals on inland 
waterway transport, in particular with regard to a progressive liberalization  of the  market  by the 
year 2000 and  a  new scrapping  action  for  reducing the  existing  structural  overcapacity  in  this 
sector.  With  a  view  to  promoting  inland  waterway  transport,  the  Commission  also  proposed 
enabling  Member  States  to  co-finance  investment  in  terminals,  and  fixed  and  mobile 
equipment  needed for  loading  and  unloading. The  Council  agreed  in  principle  on  7  December 
1995 on the Commission's approach. 

D.  Maritime  Transport 

175. 
The  first  report  on  the  application  of  the  single  market  rules  on  maritime  cabotage 
(Regulation (EEC) 3577/92*) was adopted by the Commission in September  1995. It shows that 
the economic effects  of the  liberalisation,  have, up to  now, been inconclusive.  Only  6% of  the 
22  million  tonnes  of  cargo  which  was  liberalised  was  transported  on  ships  flying  other  than 
national  flags.  This  volume  represents  only  1% of  the  total  cabotage  trade  of  the  southern 
Member States. Nevertheless, the  more the sector  is liberalised, the  more  it will  be possible to 
increase the efficiency  and the future role of short sea shipping in Europe. 

176. 
Infringement  procedures  were  continued  against  different  Member  States  for  breach  of 
Regulation (EEC) 4055/86*: these infringements concerned mostly cargo-sharing  arrangements 
in bilateral agreements with third countries. 

E. 

Railways 

177. 
The  progressive  application  of the  principle  of freedom  to  provide  services  in the  rail 
way sector,  under Directive  91/440/EEC* created rights of access which open the  possibility  of 
new enterprises  entering  the  market  and  of  several  enterprises  using the  same  infrastructure. 
The Community therefore considered it  necessary to define the general conditions for  applying 
the  access  rights  and,  in  June  1995,  adopted  two  complementary  directives:  the  first  on  the 
licensing  of  railway  enterprises  and the  second  on the  allocation  of  railway  infrastructure  and 
the charging of infrastructures fees (Directives 95/18 EC* and 95/19 EC* respectively). 

(82)  COM (94) 590 final, OJ No C 142, 8.6.1995. 

(83)  COM (95) 167 final, OJ No C 164, 30.6.1995. 

THE SINGLE MARKET IN 1995 

SECTION 10 - TRANSPORT,  ENERGY AND TELECOMMUNICATIONS 

55 

178.  The  Commission  now  believes  that  it  is time  to  take  a second  step  in  creating  an  inte 
grated market, while fully recognising the specific character of the railways. In a communication 
to the Council, adopted  in July,  it  proposed the extension  of these access rights to  cover  inter 
national  passenger  services  and  all  freight  services,  domestic  and  international.  It  considers 
that this  extension  will  help  increase  competitiveness  of  rail transport,  particularly  at  Commu 
nity level, by attracting new capital and enterprises to the sector. 

§ 2 - Energy 

A. 

New  Internal  Energy  Market  Legislation 

179.  Since early  1994 the  Council  has been discussing the amended  proposal for the  internal 
market for  electricity  (84). In November  1994, the Council  requested the Commission  to  exam 
ine the possibilities of co-existence  and reciprocity  between the Single  Buyer and the  Commis 
sion's negotiated Third  Party Access  approaches. The  Commission  prepared  a Working  Paper 
on the organisation  of the  Internal Electricity  Market which was adopted on 22 March  1995 (85). 
It concluded that there  could  be  no  reciprocity  between the two  approaches  unless  substantial 
modifications were made to the Single Buyer Model. 

180.  The Commission, also at the  request of the Council, prepared a Working  Paper on  small 
and very  small  electricity  systems  in the  Internal  Electricity  Market, which  was  adopted  on  10 
May  1995 (86). It concluded that small  systems do  not  need special treatment  because  of  their 
size. 

The  Energy  Ministers  Council  of  1 June  1995  followed  the  Commission's  Working  Paper 
conclusions  agreeing  that  there  can  be  no  coexistence  between  the  negotiated  TPA  and  the 
Single Buyer approaches unless changes are made in the Single Buyer model. 

Under  the  Spanish  Presidency  the  Council  intensified  its  discussions  and,  whilst  it  was  not 
possible  to  reach  a  common  position  at  the  Energy  Council  on  20 December  1995,  consider 
able  progress was  made. The  negotiations  on the  Directive  have  reached the  final  stage  with 
the key issue to be resolved being the  inclusion of distributors as eligible customers. It is hoped 
that sufficient  progress can  be made  on this  issue to enable a common  position to  be  adopted 
under the Italian Presidency  in 1996. 

B. 

Free  Movement  of  Goods 

181.  The  Commission  has  directly  applied  Treaty  rules  in  parallel  with  the  legislative 
approach. Thus  in the  field  of free  movement  of  goods, the  Court  of Justice  is still  examining 
the  infringement  procedures  against  five  Member  States  for  electricity  and  gas  import  and 
export  monopolies,  on  the  basis  of  Articles  30*.  34*  and  37*  of  the  Treaty  of  the  European 
Union. 

(84)  COM (91 ) 548 final, OJ No C 65,14.3.1992 as amended by COM (93) 643 final, OJ No C 195,18.7.1994. 

(85)  Doc. SEC (95) 464 final. 

(86)  Doc. SEC (95) 685 final. 

THE SINGLE MARKET IN 1995 

56 

SECTION  10 - TRANSPORT, ENERGY AND  TELECOMMUNICATIONS 

C. 

Transposition 

182. 
In  comparison  with  the  previous  year,  the  level  of  transposition  of  Directives  in  the 
energy  sector  into  national  law  has  improved.  The  percentage  of  transposition  has  reached 
89%. 

One  of  the  central  issues  in  1995  has  been  the  transposition  of  the  Hydrocarbons  Directive, 
which so far has been transposed  in six  Member  States. Within the framework  of this  Directive 
some Member States have published rules on exploration areas and authorisation procedures. 

D. 

Standardisation 

183.  The Commission  has adopted a communication  on the  broader  use of standardisation  in 
community  policy.  Concerning  Energy  policy, the  communication  stated that  energy  efficiency 
would become  an essential  requirement  in the so-called "new approach  Directives". This would 
permit the Commission to give  mandates to the new European standardisation  organisations  in 
order  to  establish  standards  limiting  the  energy  consumption  and  improving  the  energy  effi 
ciency  of the electricity  consuming  appliances. The  aim  is to  avoid  national  regulations  affect 
ing free movement  of goods in the intemal  market. 

§ 3  -Telecommunications 

184.  The  publication  at the  beginning  of the  year  of the  "Green  Paper on the  liberalisation  of 
telecommunications  infrastructure  and  cable television  networks" (87) is an  important  contribu 
tion  to  the  setting  up  of  the  regulatory  framework  for  telecommunications  which  is  due  on  1 
January 1998. 

The views expressed  in the ensuing consultation  have  resulted in a speeding  up of the liberali 
sation  of  infrastructure.  The  Commission  has  adopted  a  Directive  allowing  the  use  of  cable 
television  infrastructure  to  deliver  liberalised  telecommunications  services  from  1 January 
1996.  It  has  also  published  for  consultation  a  draft  directive  liberalising  mobile  communica 
tions (88), which would  enable  competitive  provision  of  infrastructure  for  mobile  networks  from 
1996,  and  another  one  providing  for  the  full  liberalisation  of telecommunications services  and 
infrastructure  by  1998,  also  including  liberalisation  of  alternative  infrastructure  for  liberalised 
services from  1996 as one  element  of the  general  amendment  of the  1990 Services  Directive 
to prepare for 1998. 

185.  A  new  proposal  for  the  open  network  provision  (ONP)  voice  telephony  directive  which 
had  been  rejected  by  the  Parliament  last  year  in  the  codecision  procedure, was  presented  in 
1995 by the Commission  (89). This proposal is the first step towards the creation of a framework 
for interconnection, as well as establishing  a consensus around the basic elements of  a  univer 
sal service  in the  Union. Parliament  has  proposed  an amendment  requiring  national  regulators 
to ensure compensation where quality criteria set out in the contracts are not met. 

186.  The  Commission  made  a  proposal  in  July  1995  for  a  Directive  on  Interconnection  in 
Telecommunications  (90) ensuring  universal  service  and  interoperability  through  application  of 

(87)  COM (94) 440 final of 24.10.1994. 

(88)  Draft Directive of 24.06.95, amending 90/388/EEC, published in OJ No C 197,1.8.1995. 

(89)  Common Position No. 17/95, adopted 12.7.1995. 

(90)  COM (95) 379 final, OJ No C 313, 24.11.1995. 

THE SINGLE MARKET  IN 1995 

SECTION 10 - TRANSPORT, ENERGY AND TELECOMMUNICATIONS 

57  1  S3? 

ONP  principles.  The  terms  and  cost  of  interconnection  will  be  the  major  commercial  issue 
brought before national regulators over the next few years. 

187.  The  Commission  has  prepared  a  proposal  for  a  Directive  on  a  common  framework  for 
general  authorisations  and  individual  licences  in the  field  of  telecommunications  services (91). 
This proposal would  lighten the  regulatory  burden on operators, service  providers  and  on  busi 
ness  in  general,  as  general  authorisations  would  become  the  norm,  individual  licences  being 
needed only in exceptional situations. 

188.  With the  new  proposal  by the  Commission  for  a Decision  on an action at  Union  level  in 
the  field  of  satellite  personal  communications  services (92),  a  significant  step  will  be  taken 
towards a truly global information structure. 

189.  The future  regulatory framework should aim at the extension  of competition to the  whole 
telecommunications sector on the basis of efficient  economic conditions and at the delivery  and 
development  of  universal  service  within  the  Union  and  at  the  establishment  of  rules  of  inter 
connection.  A  hearing  on  universal  service  was  held  by  the  Commission  in  October  and  a 
communication  is being prepared with a view to adoption early in 1996. 

§ 4 - Trans-European  Networks (93) 

190.  The interconnection  and interoperability  of trans-European  networks are vital  for  improv 
ing  the  functioning  of  the  Internal  Market  and  sustaining  competitiveness,  jobs  creation,  and 
cohesion in the European Union. 

191.  Progress has been made since the Essen European Council, but there remain substantial 
problems  related  to  the  prioritisation  of  TEN  projects  and  their  financing  that  require  greater 
effort. The Commission's work has shown that  Member  States are undervaluing  the  benefits  of 
TEN  projects  using  current  cost/benefit  methods.  The  benefits  for  all  Member  States  in  fact 
justify  more  priority  for  TEN  projects  in  national  plans.  Further  progress  concerning  environ 
mental projects will depend on the political will of the Member States to involve the  EU in such 
projects. 

192.  On their financing, there  need to  be more efforts to  introduce  private/public  partnerships 
for TEN projects, which are vital  if the TEN  are to  be accelerated. The  Commission  has taken 
measures  including  the  setting-up  of  a  One-Stop  Help  Desk  on  its  application  of  the  EU 
competition and public procurement  rules. It calls on the  Member States also to encourage  the 
change in attitudes that  are needed both  in the  public  and  in the  private  sectors. As far  as the 
Community  budget for the transport TEN is concerned, requests far exceed available  resources 
and financial  shortfalls  are  apparent  for  several  priority  projects.  These  factors  must  be  taken 
into  account  by  the  appropriate  authorities  when  taking  the  necessary  decisions,  requested  at 
Essen, to top up funds currently  available for the TEN. 

(91 )  COM (95) 545 final, not yet published. 

(92)  COM (95) 529 final, not yet published. 

(93)  See Report on this subject to the European Council:CSE (95) 571. 

THE SINGLE MARKET IN 1995 

s^ 

Section 11 - The Internal Market and other Community policies 

§ 1 - Competition policy 

193.  Experience  of applying  competition  policy shows that  in many sectors  national  markets 
still prevail. 

In some sectors this is due to national preferences based on cultural differences or to transport 
costs,  and  cannot  therefore  be  considered  to  reflect  a  lack  of  a  single  market  framework. 
However,  for  a  number  of  sectors  the  reasons  for  the  absence  of  competition  in  national 
markets  are  different:  on the  one  hand  slow  progress  in  opening  up the  national  regulatory 
frameworks  in a  number of sectors  (telecommunications,  energy,  postal services)  and  on the 
other hand the time it takes for firms to adjust to the new possibilities created by the elimination 
of  national  barriers  in  sectors  where  the  internal  market  legislative  programme  has  been 
completed. Some firms may try to slow down the  process by anti-competitive  behaviour.  Most 
will try to take  advantage  in pro-competitive  ways but need time to find suitable  partners and 
trade channels abroad. 

194.  The following recent  competition  policy developments and decisions especially  relevant 
to the achievement of the internal market are worth individual mention: 

•  Restrictive  agreements (Articles  85/86*)  -  The  Commission  adopted  a  new  block 
exemption  for  certain  categories  of  motor  vehicle  distribution  and  servicing  agree 
ments. The aim of the regulation is to intensify competition at the distribution stage by 
giving  dealers  greater  commercial  independence  vis-à-vis  manufacturers,  by giving 
independent spare  part manufacturers and distributors easier access and  by improv 
ing the position of consumers in accordance with the principles underlying the intemal 
market. The new regulation took effect on 1 October 1995, although for existing con 
tracts the old regulation will apply until 1 October 1996. 

The  Commission  has  received  numerous  complaints  from  individual  citizens  in the 
EU,  mostly  from  Austria,  Germany  and  France,  who  have  been  prevented  from 
purchasing  a  car  in  Italy  and  Spain  where  prices were  relatively  low. Any  policy to 
prevent or obstruct consumers from buying at the location they consider most advan 
tageous runs the risk of being incompatible with the block exemption and may lead to 
loss of the benefit of the exemption. 

The  Commission  adopted  guidelines  for  the  application  of  the  competition  rules to 
cross-border credit transfer systems. The guidelines assist  banks when  implementing 
the  directive  on cross-border  credit transfers (94). The  aim  is to  allow  more  efficient 
ways of handling cross-border credit transfers without unduly restricting competition. 

•  Monopolies (Article 90*) - The liberalisation of traditionally monopolised markets, such 
as  utilities,  is an  essential  step  in the  establishment  of  an  internal  market (95).  The 
Commission  has  pursued  its  efforts  to  open  up these  markets  to  competition  and 
intra-Community  trade  while  ensuring  that  the  measures  proposed  or  adopted  are 
compatible with the maintenance of universal service. 

(94)  See para.  118 

(95)  See also Section 10. 

THE SINGLE MARKET IN 1995 

6Q 

SECTION  11  - THE  INTERNAL  MARKET  AND  OTHER  COMMUNITY  POLICIES 

Progress  can  be  observed  in  the  telecommunications  sector  with  the  adoption  of 
directives  and  draft  directives  aiming  at  the  liberalisation  of  the  use  of  cable  tv 
networks for the  provision  of telecommunication  services, the  liberalisation  of  mobile 
communications  and  the  full  liberalisation  of  telecommunication  infrastructures  and 
services  (including  voice  telephony)  by  1 January  1998.  These  initiatives  are  funda 
mental steps towards the information society. 

The  Commission  also  proposed  a  draft  directive  to  the  Council  and  the  Parliament 
and adopted a draft  Commission  notice, both aiming  at a progressive  liberalisation  of 
the postal sector (96). 

The  situation  in  the  energy  sector  is  less  satisfactory.  No  agreement  has  been 
reached so far in the Council on the draft directives presented by the Commission  for 
the  internal  market  for  electricity  and  gas (97), despite  the  fact  that  the  Commission 
has already  modified  its  original  proposals  in  order  to  meet  the  concerns  expressed 
by some Member States. 

Mergers - As described  above  the  internal  market  stimulates  firms to  look  for  cross-
border  cooperation  and  mergers.  In  this  light  the  Commission  started  reviewing  a 
possible  lowering  of the  notification  thresholds  under the  merger  regulation, which  is 
now the subject of a Green paper (98). 

In  a  number  of  cases  the  Commission  decided  that  in  view  of  preferences  for  the 
own-country  product,  differences  in  technical  standards  and  (safety)  regulations  etc. 
the  markets  investigated  are  still  national  in  character.  Examples  are the  markets  in 
Germany  for  buses  (Mercedes-Benz/Kâssbohrer case)  (Decision 95/354/CE*)  and  for 
rail transport equipment  (ABB/Daimler-Benz case) (99). 

State  aid  -  The  obligation  imposed  upon  Member  States  by the  Treaty  to  notify  aid 
projects and the prohibition on granting the aid before approval  by the Commission  is 
intended to prevent  aid incompatible with the internal market from  being granted. The 
Commission  recalled  in a communication  to  Member  States  on  10 May  1995 (100) its 
intention  to  make  use  of  all  its  powers  under the  Treaty  to  oblige  Member  States  to 
comply  with  these  obligations.  National  courts  have  an  important  role  to  play  in 
protecting  the  rights  of  competitors  of  recipients  of  aid  granted  unlawfully.  The 
Commission  adopted  a  notice  on  31 October  1995 (101)  explaining  how  national 
courts  apply  the  rule  that  Member  States  are  not  allowed  to  give  state  aid  before  it 
has been  notified  and  approved. The  notice  also offers  assistance to  national judges 
who  deal  with  such  cases.  The judge  may,  in  appropriate  cases,  order  the  Member 
State to pay damages to a party who has suffered as a result of the illegal aid. 

§  2 - Social  dimension  of the  internal  market 

195.  Social  policy  remains  integral  to the  completion  of the  internal  market.  The  progressive 
economic  integration  of  the  Union,  and  the  completion  of  the  internal  market,  raise  a  wide 
range of social issues, in particular  regarding their impact on citizens' living and working condi 
tions.  Progress  has  been  made  on  these  issues,  and  in  April  the  Commission  adopted  a 
medium  term  Social  Action  Programme,  which  sets  out  its  detailed  work  programme  in  the 
social  field  for  the  period  1995-1997(102).  However,  but  the  Commission  regrets  that  during 
1995  a  number  of  proposals  remained  blocked  in  the  Council,  and  that  the  level  of 

(96)  COM  (95) 227 final, OJ  No C  322,  2.12.1995. 

(97)  COM  (91) 548 final, OJ  No C 65,14.3.1992 as amended  by COM  (93) 643  final, OJ  No C  195,18.7.1994. 

(98)  COM(96)  19,  31.01.1996 

(99)  Not yet published. 

(100)  OJ  No C  156,  20.6.1995. 

(101)  C  (95) 2436 final. 

(102)  COM  (95)  134,12.04.1995 

THE  SINGLE  MARKET  IN  1995 

SECTION  11 - THE INTERNAL MARKET AND OTHER COMMUNITY POLICIES 

61 

communication  by  Member  States  of  national  measures  implementing  EU  health  and  safety 
legislation (75% by October  1995) is lagging behind that of other legislation. 

196.  Equality-  The  Fourth  Equal  Opportunities  Action  Programme  (103)  sets  out the  general 
framework  for  action  in  this  key  area  for  the  period  1996-2000.  In  February  1995,  the 
Commission  launched  consultations  with  the  social  partners  under  the  Agreement  on  Social 
Policy to  consider the  possibility  of  negotiating  an  agreement  on  reconciliation  of  professional 
and family  life. The  aim would  be to  promote  equal opportunities  and to introduce  new  flexible 
models  better  suited  to  the  changing  needs  of  European  society.  On  6  November  1995  the 
social partners announced a pre-agreement which is favourable to such an approach. 

The Commission  has also launched consultations with the social partners on possible action on 
the  burden  of  proof  in  possible  discrimination  cases.  Following  this  consultation  under  the 
Agreement on Social Policy, the Commission will take steps to carry the process forward  in line 
with Article 3 of the Agreement. 

Concerning  equal  treatment  in  occupational  social  security  schemes,  on  16 May  1995  the 
Commission  presented  a  proposal (104) 
for  a  Council  Directive  modifying  Directive 
86/378/EEC*. This would  bring  it  into  conformity  with Article  119* of the  Treaty  as  interpreted 
by the judgement  of the  Court  of  Justice  in the  Barber  case  of  17 May  1990 (105) and  in  sub 
sequent cases. This would avoid confusion in the application of Community  law. 

The Commission  has also launched a number of technical studies to test the neutrality  of taxa 
tion systems on the  individual  autonomy  of women. Further technical  studies will  follow  on the 
costs  and  consequences  for  different  social  security  regimes  and  benefits  of  treating  each 
member  of  a couple  as an  individual,  rather than the  couple  as a single  unit.  Studies will  also 
consider the implications of this for part-time and full-time work. 

197.  Labour  law  -  The  Commission  has  launched  consultations  under  the  Agreement  on 
Social Policy relating to flexibility  of working time and security  in employment  in order to  obtain 
the social  partners' views on the desirability  of  measures in favour of equal treatment  between 
full-time,  part-time  and temporary  workers. The  Commission  also  presented the  Fourth  Health 
and  Safety  Action  Programme  (106),  covering  the  period  1996-2000,  setting  out  a  range  of 
measures to safeguard the working  environment. 

§ 3 - Consumer policy 

A. 

Consumer  behaviour  - cross-border  purchasing 

198.  The  willingness  of  consumers  to  shop  across  frontiers  in  another  Member  State  was 
examined in a Eurobarometer survey  in the Spring of  1995. The number of consumers  making 
purchases across frontiers in another EU Member State is now 24%. 

199.  The  range  of  goods  and  services  which  consumers  purchased  across  borders  may  be 
illustrated as follows: 

•  12.3% of EU Adults purchased clothing, footwear, etc.; 

• 

11%  of EU Adults purchased travel related services; 

•  5.5% of EU Adults purchased financial services; 

•  3.8% of EU Adults purchased durable goods (TVs, cars, washing machines, etc.); 

(103)  COM (95) 381, 19.07.1995 

(104)  COM (95) 186 final of 16/5/95. 

(105)  Case C-262/88; judgement delivered on 17 May 1990. 

(106)  COM(95) 282,12.07.1995 

THE SINGLE MARKET IN 1995 

62 

SECTION 11 - THE INTERNAL MARKET AND OTHER COMMUNITY  POLICIES 

•  0.6% of EU Adults purchased property (fixed); 

•  7.1%  of EU Adults purchased something else (food, drink, etc.). 

200.  The  table  below  shows  the  percentage  of  consumer  in  each  Member  State  who  had 
engaged in cross-border shopping in the year to April 1995: 

L 

NL 

D 

B 

S 

DK 

A 

UK 

FIN 

IRL 

F 

I 

P 

E 

EL 

EU 

69.4% 

44.4% 

37.5% 

35.6% 

33.7% 

31.6% 

29.6% 

27.2% 

22.7% 

18.8% 

17.5% 

11.4% 

10.1% 

8.8% 

8.9% 

24.0% 

This  reflects  awareness  of  single  market  opportunities  and  confidence  in  the  arrangements 
made  by  the  EU  to  protect  consumers  and  indicates  that  consumer  demand  is  potentially 
mobile. 

B. 

Consumer  policy  priorities  1996-1998 

201. 
In  October,  the  Commission  adopted  a  Communication  on  the  priorities  for  Consumer 
Policy  1996-1998(107).  The  aim  of  this  communication  is  to  indicate  the  orientation  of  con 
sumer policy for the next three years. 

202.  Ten priorities for action have been identified: 

Intensify efforts to improve the education and information of consumers; 

Complete,  revise  and  update  the  framework  required  to  ensure  that  the  interests  of 
consumers are fully taken into account in the internal market; 

Consumers and financial services; 
Protect the interests of consumers in the supply of essential public utility services; 
Take  steps  to  allow  consumers  to  benefit  from  the  advantages  of  the  information 
society; 

Take steps to increase the confidence of consumers in foodstuffs; 

Encourage the adoption of sustainable consumption  behaviour; 

Strengthen and increase the representation of consumers; 
Assist  the  countries  of  Central  and  Eastern  Europe  to  draw  up  policies  in  favour  of 
consumers; 

Reflections on the question of consumer policy in the developing countries. 

§ 4 - Environmental  policy 

203.  Environmental policy is an essential component of the creation of the internal market. An 
integrated  approach, to  enable  a  more  sustainable  path  of social  and  economic  development, 
is not only vital for the environment  itself but also for the long-term success of the Internal  Mar 
ket. Its success is dependent  on the sustainability  of the  policies  pursued  in the fields of indus 
try, energy, transport, agriculture  and tourism, which must take into account the capacity  of the 
environment to sustain them. Moreover,  effective environmental protection, which goes beyond 
national  borders,  can  only  be  achieved  in the  framework  of  a  functioning  intemal  market  and 
common environmental rules. 

(107)  COM(95) 519 final of 31.10.1995. 

THE SINGLE MARKET IN 1995 

SECTION 11 - THE INTERNAL MARKET AND OTHER COMMUNITY POLICIES 

63 

A. 

Integration of environment and single market policy 

204.  In the  context  of  the  follow-up  to  the  Strategic  Programme  and the  White  Paper  on 
Growth, Competitiveness and Employment, the Commission has prepared draft general guide 
lines on regulatory  policy (108). These guidelines aim to  ensure wide consultation  and appro 
priate  evaluation  of  costs  and  benefits  including  environmental  ones  and  will  help  ensure 
consistency  between  different  policy  objectives,  including  single  market  and  environmental 
policy. 

205.  Examples  of  efforts  to  take  account  of  the  environmental  dimension  in single  market 
policy may be found in the field of insurance. In order to encourage the integration of the envi 
ronment into insurance policy, in 1994 the Commission proposed to the Insurance Committee 
that, due to the evolution of the market, a separate class of risk should be introduced into the 
annex of the First Directive on non-life assurance, for the approval of companies proposing the 
insurance  of risks of  damage  to  the  environment.  Although  it  was  positively  received, the 
implementation of this measure depends on a fundamental reform of the classification of types 
of  risk. 

B.  Approximation  of  laws  and  other  Community  legislation  in  the  environ 

mental field 

206.  A substantial number of product-related harmonisation  measures have been introduced 
to  achieve  an  environmental  objective.  They  have  been  based  on  Article  100a*  or  Article 
130s*. The positive impact on the complexion of the Internal Market is clear, as there  is less 
need for  Member  States to  adopt  unilaterally  environmental  standards which  could  became 
barriers to trade. 

207.  Pesticides are regulated by directive 91/414/EEC*. whose annexes were modified during 
1995. The proposal for a Council directive on biocides (109) has as objective to assure a single 
market for  biocides  (Biocidal  products  comprise  a wide  range  of  products  necessary  for the 
control of organisms that  are  harmful to  human or animal  health). Council  Regulation (EEC) 
793/93* of 23 March 1993 covers the evaluation and control of the risk of existing substances. 
As  regards  Directive  67/548/EEC*  on  classification,  packaging  and  labelling  of  dangerous 
substances, works aimed to maintain classification updated continued during 1995. 

208.  Directive  94/62/EEC* on  packaging  and  packaging  waste  aims to  harmonise  national 
measures concerning the management of packaging and packaging waste in order, on the one 
hand, to prevent any impact thereof on the environment of all Member States, thus providing a 
high level of environment  protection and, on the other hand, to ensure the functioning  of the 
internal market and to avoid obstacles to trade, distortion and restriction of competition within 
the Community. It should be brought into force by Member States before June 1996. 

209.  A  political  agreement  on the  proposal to  regulate the trade  in wildlife  was reached  in 
June 1995. If this proposal is adopted, it could enter into force on 1  January 1997. 

210.  The  Ecolabel,  awarded  to  products  with  reduced  impact  on  the  environment,  was 
expanded in 1995 to include laundry detergents. This allows the consumer to identify environ 
mentally friendly products throughout Europe, irrespective of the country of origin. 

211.  In order to insure that the Internal Market is accomplished in the framework of a sustain 
able transport policy, Community legislation sets limits values for polluting emissions such as 
hydrocarbons (HC), carbon monoxide (CO), nitrogen oxides (NOx), benzene (Bz) and evapora 
tive VOC emissions from transport and storage of petrol. The last directive on car emissions is 

(108)  Doc. SEC (95) 2255. 

(109)  COM (93) 351 final, OJ No C 239, 3.9.1993 as amended by COM (95) 387 final, OJ No C 261,6.10.1995. 

THE SINGLE MARKET IN 1995 

64 

SECTION 11 - THE INTERNAL MARKET AND OTHER  COMMUNITY  POLICIES 

Directive  94/12/EC* which  sets differentiated  emissions  standards for  petrol  and diesel  cars to 
come into force for all new vehicles  in  1997. The Commission  has made a proposal for a direc 
tive  on  the  assessment  and  management  of  air  quality (no).  Regarding  C 02  emissions,  the 
Community  committed  itself  under the  UN Framework  Convention  on climate  change to stabi 
lizing  its  C 02  emissions  by  the  year  2000  at  the  level  of  its  emissions  in  1990.  There  is  a 
particular cause of  concern  as C 02  emissions from traffic  are growing substantially  in line with 
traffic growth which jeopardizes the Community's C 02  stabilization target. 

212.  Council  Regulation  (EEC)  No.  259/93  on  the  supervision  and  control  of  shipments  of 
waste within, into  and  out  of the  European  Community  became  of  application  in  1994.  During 
1995,  however,  the  functioning  of  the  system  laid  down  by this  Regulation  which  provides  for 
extensive  authorization  and  monitoring  procedures  for  shipments  of  waste  has  improved  and 
has become  more  operational. This was  mainly  due to the  fact  that  since  1 February  1995  all 
planned  shipments  of  waste  have  to  be  notified  by  means  of  a  standard  consignment  note, 
which  consists  of a notification  form  and  a  movement/tracking form.  Implementation  problems 
were discussed by a group of correspondents  of the Commission and the Member States which 
meets twice a year. 

213.  The Commission  plans to publish a Communication  in  1996, suggesting  a framework  for 
the use of environmental levies and charges in Member States. The objective of the Communi 
cation is to clarify  how such levies and charges can be used efficiently  by Member States, while 
also respecting legislation on the internal market and other relevant  EU legislation. 

214.  Austria, Finland and Sweden have a transitional period of four years from their accession 
to the  Union during  which  they  can  apply  their  more  stringent  national  provisions  on  environ 
mental standards. The agreement  reached strives to reconcile the requirements of free circula 
tion of goods with the legitimate  insistence of the new Member States on avoiding a lowering of 
their environmental standards. 

§ 5 - Small and medium-sized  enterprises 

215.  The  Commission's  Integrated  Programme  in  Favour  of  SMEs  and the  Craft  Sector (111) 
implements  the  measures  necessary  to  achieve  the  objectives  set  out  in  the  Commission's 
White  Paper  on  Growth,  Competitiveness  and  Employment  (112). This  highlighted  the  need to 
create  as  favourable  as  possible  a  business  environment,  particularly  for  SMEs,  recognizing 
the  crucial  contribution  they  would  make  towards  economic  growth  and  employment  creation. 
The  Integrated  Programme  reinforces  the  coordination  of  national/regional  and  Community 
policies  which  could  have  a  positive  impact  on  SMEs.  Concerted  actions  with  both  Member 
States and the Business Community  have already started. 

216.  A Forum was  organised  in June  1995  in  Paris,  under the  auspices  of the  Committee  on 
the  Simplification  of  the  Business  Environment,  to  examine  legislative  and  administrative 
constraints  confronting  entrepreneurs  in setting  up a business and getting through the  first  few 
years  of  existence.  This  will  be  followed-up  by  workshops  to  consider  the  issues  more 
thoroughly,  and  ultimately  to  decide  on the  best  practice which  might  be taken  up  by  Member 
States. 

217.  A second  concerted  action  involving  Member  States' authorities  and  European  Business 
Organisations  was  held  in  Madrid  on  16  and  17 November  1995  which  exchanged  views  and 
ideas  based  on  best  practice  in  respect  of  support  measures  for  business  start-ups  and  for 
enterprises in the first few years of their development. Again, the intention will be to  benchmark 
best practice and consider how this can be put into effect  by other Member States. 

(110)  COM (94) 109 final, OJ No C 216, 6.8.1994 as amended by COM (95) 312, OJ No C 238,13.9.1995. 

(111)  COM (94) 207 final of 3.6.1994. 

(112)  Commission White Paper on Growth Competitiveness and Employment, December 1993. 

THE SINGLE MARKET IN 1995 

SECTION 11 - THE INTERNAL MARKET AND OTHER COMMUNITY  POLICIES 

65 

218.  The Community supports SMEs wanting to grow and take advantage  of the  opportunities 
provided  by  the  single  market  through  a  variety  of  instruments  under  the  umbrella  of  the 
1993/1996 Multi-Annual  Programme for SMEs, including the  business  information  network  (the 
Euro-Info-Centres)  and  the  transnational  co-operation  networks  and  programmes,  (BC-Net, 
BCC, Europartenariat  and Interprise). 

219. 
In 1995, the Euro-Info-Centre  network has been extended to the new Member States and 
Correspondence  Centres  have  been  opened  in some  Central  and  Eastern  European  countries 
and in the Mediterranean region. 

"Europartenariats", designed to  encourage  contact  and  co-operation  between  businesses  from 
less  developed  regions  or  regions  in  industrial  decline  and  enterprises  from  other  Member 
States  or  non-Community  countries,  were  held  in  Dortmund  and  Lisbon.  Over  40  smaller 
"Interprise" events will have taken place in 1995 by the end of the year. 

As  requested  by  the  European  Council  at  its  Cannes  meeting  in  June,  the  Commission 
prepared a report on SMEs (113) as a dynamic  source of employment, growth and competitive 
ness in the  EU for submission  to the  European  Council  at  its  December  meeting  in  Madrid. It 
covers  proposals  on  such  areas  as  the  tax  and  administrative  environment  of  SMEs,  labour 
legislation, better access to financing, new technologies and training. The Community  contribu 
tion to  the  creation  and  development  of  SMEs  will  be  reinforced  through  a  new  Multi-Annual 
Programme  for  SMEs  and the  craft  sector  (1997/2000)  which the  Commission  will  propose  in 
1996, by reviewing priorities in existing policies, and by proposing complementary  measures, in 
particular  to  help  SMEs  to  exploit  the  potential  of  the  Internal  Market  and  to  enhance  their 
competitiveness in international markets. 

§ 6 - Education and Training 

220.  Action by the Commission in the area of education and professional training this year has 
concentrated on developing the conclusions of the Essen European Council, according to which 
qualifications  and  access  to  life-long  training  are  essential  to  the  mastery  of  technological 
development and individual employment  potential. 

221.  The  White  Paper  on  Education  and  Training (114)  identifies  the  initiatives  to  be  imple 
mented up to the end of the century: 

•  opening  up  new  methods  for  the  recognition  of  competences,  whether  obtained 

through training certified by a diploma or in the course of professional life; 

•  bringing school closer to  business,  particularly  by developing  apprenticeship  at  Euro 

pean level; 

• 

fighting against exclusion, by offering  young  people who have failed  in the context  of 
the traditional teaching system a second chance at school; 

•  promoting  the  mastery  of  three  European  languages,  to  be  encouraged  by  a  quality 

label for "European classes"; 

•  ensuring equal treatment for physical investment and investment  in training. 

The preparation of the European year of lifelong education and training, currently  in  preparation 
for 1996, also constitutes an important  initiative in this area. 

222.  Finally,  the  work  has  continued  on  the  implementation  of  the  three  recently  adopted 
programmes,  SOCRATES,  LEONARDO  and YOUTH  FOR  EUROPE  III. SOCRATES  empha 
sises  the  deepening  of  the  European  dimension  at  all  levels  of  education,  for  example  by 
promoting  the  teaching  of  languages  and  the  mobility  of  teachers  and  students.  Under 

(113)  CSE(95)2087. 

(114)  COM (95) 590 final, not yet published. 

THE SINGLE MARKET IN 1995 

66 

SECTION 11 - THE INTERNAL MARKET AND OTHER  COMMUNITY  POLICIES 

LEONARDO, the  objectives  pursued  include greater  convergence  of the  objectives of profes 
sional  training  in the  Member  States  towards  the  framework  outlined  for  the  Union  and  the 
improvement  of training structures. YOUTH  FOR  EUROPE  III  continued to support  participa 
tion,  initiative  and  solidarity  among  young  people,  by  involving  them,  particularly  the  less-
favoured, in the process of European construction. 

§ 7 - Research 

223.  1995 was marked  by the  rapid  implementation  of the specific  programmes  of  research 
and technological  development  (RTD)  of the  fourth  framework  programme  adopted  in  1994. 
The  calls for proposals for Community  research  projects were  a considerable  success among 
economic  operators, with  a  general  increase  in the  number  of  proposals,  an  improvement  in 
their  quality  and  greater  participation  of  industry.  The  new  emphasis  of  the  Specific 
Programmes on user and market needs, on SMEs participation and on exploitation and transfer 
of results has improved significantly the  impact and relevance of these programmes for indus 
try, citizens and public users. 

224.  The  setting  up of  operational  "Task  Forces", as announced to the  Council  in  March, is 
designed  to  improve  the  effectiveness  of  RTD  actions  by  concentrating  efforts  on  common 
projects of industrial  and  public  interest.  The  Task  Forces cover  areas of general  interest  for 
the Union, such as "vaccines and viral diseases". Those on "the car of the future", "intermodal 
transport", "maritime systems of the  future",  "the  new generation  of aircraft",  "the train  of the 
future and railway systems" will help to respond to the  mobility requirements of European  citi 
zens. That  on "multimedia  educational  software" will  facilitate  communication  and  access by 
citizens to the new information technologies. 

THE SINGLE MARKET IN 1995 

61 

Annexes 

1 -  Abbreviations and acronyms 

2 -  Community provisions cited 

- EC Treaty 

- Official Journal - references 

3 -  Judgements of the Court of Justice cited 

4 -  Recent reports, studies and surveys on the single market 

THE SINGLE MARKET IN 1995 

« 

Annex 1 - Abbreviations and acronyms 

B 

BCC 
Bc-Net 

Business Cooperation Centre 
Business Cooperation Network 

CAA 
CAD 

Civil Aviation Authority 
Capital Adequacy Directive 

ECU 
EEA 
EEC 
EFTA 
EIC 
Eurostat 

European Currency Unit 
European Economic Area 
European Economic Community 
European Free Trade Association 
European Information Centre 
Statistical Office of the European Communities 

GATS 
GATT 

General Agreement on Trade in Services 
General Agreement on Tariffs and Trade 

I 

IDA 

Interchange of Data between Administrations 

M 

Matthaeus Tax  Programme for the exchange of indirect taxation officials 

N 

NATO 

North Atlantic Treaty Organization 

OECD 
OHIM 
OJEC 
ONP 

SHIFT 

SIMAP 
SMEs 

TED 
TEN 

Organisation for Economic Co-operation and Development 
Office of Harmonisation in the Internal Market 
Official Journal of the European Communities 
Open network provision 

System to assist the Health controls of Imports of items at Frontier inspection 
posts from Third countries 
Information system on public procurement 
Small and medium-sized enterprises 

Tenders Electronic Daily 
Trans-European Networks 

THE SINGLE MARKET IN 1995 

ANNEX 1 

C*\ 

TPA 

Third Party Access 

U 

UNICE 

Union des Confédérations de l'Industrie et des Employeurs d'Europe (Union 
of Industrial and Employers' Confederations of Europe) 

VAT 
VOD 

value added tax 
Video-on-demand 

W 

WEU 
WEAG 

Western European Union 
Western European Armaments Agency 

THE SINGLE MARKET IN 1995 

To 

Annex 2 - Community  provisions cited 

A.  EC Treaty (1 > 

PRINCIPLES 

Article 2 

The Community  shall  shave as  its task,  by establishing  a common  market  and an economic  and  mone 
tary  union  and  by  implementing  the  common  policies  or  activities  referred  to  in  Articles  3  and  3a,  to 
promote  throughout  the  Community  a  harmonious  and  balanced  development  of  economic  activities, 
sustainable  and  non-inflationary  growth  respecting  the  environment,  a  high  degree  of  convergence  of 
economic  performance,  a  high  level  of  employment  and  of  social  protection, the  raising  of the  standard 
of living and quality of life, and economic  and social cohesion and solidarity among Member States. 

Article 7a 

The Community  shall adopt  measures with the aim of progressively  establishing the internal  market  over 
a  period  expiring  on  31 December  1992,  in  accordance  with  the  provisions  of  this  Article  and  of  Arti 
cles 7b, 7c, 28, 57(2),  59,  70(1),  84, 99,  100a  and  100b and without  prejudice to the other  provisions  of 
this Treaty. 

The  internal  market  shall  comprise  an  area  without  internal  frontiers  in  which  the  free  movement  of 
goods, persons, services and capital is ensured in accordance with the provisions of this Treaty. 

COMMUNITY  POLICIES - FREE MOVEMENT OF GOODS -
ELIMINATION OF QUANTITATIVE  RESTRICTIONS  BETWEEN MEMBER STATES 

Article 30 

Quantitative  restrictions  on  imports  and all  measures  having equivalent  effect  shall, without  prejudice  to 
the following provisions, be prohibited  between Member States. 

Article 34 

Quantitative  restrictions  on exports, and all  measures  having equivalent  effect,  shall  be  prohibited 

1. 
between Member States. 

2. 
Member States shall, by the end of the first  stage at the latest,  abolish  all quantitative  restrictions 
on exports and any measures  having equivalent effect which are in existence when this Treaty  enters  into 
force. 

Article 36 

The provisions  of Articles 30  to  34  shall  not  preclude  prohibitions  or  restrictions  on  imports,  exports  or 
goods  in transit justified  on  grounds  of  public  morality,  public  policy  or  public  security;  the  protection  of 
health  and  life  of  humans,  animals  or  plants;  the  protection  of  national  treasures  possessing  artistic, 
historic  or  archaeological  value;  or  the  protection  of  industrial  and  commercial  property.  Such  prohibi 
tions  or  restrictions  shall  not,  however,  constitute  a  means  of  arbitrary  discrimination  or  a  disguised 
restriction on trade between Member States. 

(1 )  As amended by the Treaty on European Union. 

THE SINGLE MARKET IN 1995 

ANNEX 2 

M 

Article 37 

1. 
Member  States  shall  progressively  adjust  any  State  monopolies  of a commercial  character  so  as 
to  ensure that  when  the  transitional  period  has  ended  no  discrimination  regarding  the  conditions  under 
which goods are procured and marketed exists  between nationals of Member States. 

The  provisions  of  this  Article  shall  apply  to  any  body  through which  a  Member  State,  in  law  or  in  fact, 
either  directly  or  indirectly  supervises,  determines  or  appreciably  influences  imports  or  exports  between 
Member States. These provisions  shall likewise apply to  monopolies delegated by the State to others. 

2. 
Member  States  shall  refrain  from  introducing  any new measure which  is  contrary to the  principles 
laid down in paragraph  1 or which  restricts the scope of the Articles dealing with the abolition of  customs 
duties and quantitative  restrictions  between Member States. 

The timetable  for  the  measures  referred to  in  paragraph  1 shall  be harmonized with the  abolition 

3. 
of quantitative  restrictions  on the same products  provided for in Articles 30 to 34. 

If  a  product  is  subject  to  a  State  monopoly  of  a  commercial  character  in  only  one  or  some  Member 
States, the  Commission  may  authorize  the  other  Member  States  to  apply  protective  measures  until  the 
adjustment  provided  for  in  paragraph  1 has  been  effected;  the  Commission  shall  determine  the  condi 
tions and details of such  measures. 

4. 
If a State  monopoly  of  a commercial  character  has  rules which  are designed to  make  it  easier  to 
dispose of agricultural  products  or obtain  for them the  best  return, steps should  be taken  in applying  the 
rules contained  in this Article to  ensure  equivalent  safeguards  for the employment  and standard  of  living 
of the  producers  concerned,  account  being  taken  of  the  adjustments  that  will  be  possible  and  the  spe 
cialization that will  be needed with the passage of time. 

The  obligations  on  Member  States  shall  be  binding  only  in  so  far  as  they  are  compatible  with 

5. 
existing international  agreements. 

6. 
With  effect from the first  stage the Commission  shall  make recommendations  as to the  manner  in 
which  and  the  timetable  according  to  which  the  adjustment  provided  for  in this  Article  shall  be  carried 
out. 

COMMUNITY  POLICIES  - COMMON  RULES ON COMPETITION, TAXATION AND 
APPROXIMATION  OF LAWS - RULES ON COMPETITION  - RULES APPLYING TO  UNDERTAKINGS 

Article 85 

The  following  shall  be  prohibited  as  incompatible  with  the  common  market:  all  agreements 
1. 
between  undertakings,  decisions  by  associations  of  undertakings  and  concerted  practices  which  may 
affect trade between Member States and which  have as their  object or effect the prevention, restriction  or 
distortion of competition within the common  market,  and in particular those which: 

(a) 

(b) 

(c) 

(d) 

(e) 

2. 

3. 

directly or indirectly  fix purchase or selling  prices or any other trading conditions; 

limit or control production, markets, technical development, or investment; 

share markets  or sources of supply; 

apply  dissimilar  conditions  to  equivalent  transactions  with  other  trading  parties,  thereby  placing 
them at a competitive  disadvantage; 

make  the  conclusion  of  contracts  subject  to  acceptance  by  the  other  parties  of  supplementary 
obligations which,  by their  nature or  according to  commercial  usage, have no connection with  the 
subject of such contracts. 

Any agreements  or decisions  prohibited pursuant to this Article shall be automatically  void. 

The provisions  of paragraph  1 may, however,  be declared inapplicable in the case of: 

- any agreement  or category  of agreements  between undertakings; 

- any decision or category  of decisions  by associations  of undertakings; 

- any concerted  practice or category  of concerted practices; 

which  contributes  to  improving  the  production  or  distribution  of  goods  or to  promoting  technical  or  eco 
nomic  progress, while allowing consumers  a fair share of the resulting  benefit, and which does not: 

THE SINGLE MARKET IN 1995 

ANNEX 2 

\2-

(a) 

(b) 

impose on the  undertakings  concerned  restrictions which  are  not  indispensable  to  the  attainment 
of these objectives; 

afford  such  undertakings  the  possibility  of eliminating  competition  in  respect  of  a substantial  part 
of the products  in question. 

Article 86 

Any  abuse  by one or  more  undertakings  of  a  dominant  position within  the  common  market  or  in  a  sub 
stantial part of  it  shall  be prohibited  as  incompatible with the common  market  in so far  as  it  may  affect 
trade between Member States. 

Such abuse may, in particular,  consist in: 

(a) 

(b) 

(c) 

directly or indirectly  imposing  unfair  purchase or selling prices or other unfair trading conditions; 

limiting production, markets or technical development to the prejudice of consumers; 

applying dissimilar conditions to equivalent transactions with other trading  parties, thereby  placing 
them at a competitive disadvantage; 

(d)  making  the  conclusion  of  contracts  subject  to  acceptance  by the  other  parties  of  supplementary 
obligations which, by their  nature or according to  commercial  usage,  have no connection with  the 
subject of such contracts. 

Article 90 

1. 
In  the  case  of  public  undertakings  and  undertakings  to  which  Member  States  grant  special  or 
exclusive  rights,  Member  States  shall  neither  enact  nor  maintain  in  force  any  measure  contrary  to  the 
rules contained in this Treaty, in particular to those rules provided for in Article 6 and Articles 85 to 94. 

2. 
Undertakings  entrusted with the  operation  of  services  of  general  economic  interest  or  having  the 
character of a revenue-producing monopoly  shall  be subject to the rules  contained  in this Treaty,  in  par 
ticular to the  rules  on  competition,  in  so  far  as  the  application  of  such  rules  does  not. obstruct  the  per 
formance, in law or  in fact,  of the  particular  tasks  assigned to them. The development  of trade  must  not 
be affected to such an extent as would be contrary to the interests of the Community. 

The  Commission  shall  ensure  the  application  of  the  provisions  of  this  Article  and  shall,  where 

3. 
necessary, address appropriate directives or decisions to Member States. 

COMMUNITY  POLICIES - COMMON RULES ON COMPETITION, TAXATION 
AND APPROXIMATION  OF LAWS - APPROXIMATION  OF LAWS 

Article 100a 

1. 
By way  of  derogation  from  Article  100 and  save where  otherwise  provided  in this  Treaty,  the  fol 
lowing  provisions  shall  apply  for  the  achievement  of  the  objectives  set  out  in  Article 7a.  The  Council 
shall,  acting  in  accordance with  the  procedure  referred  to  in  Article 189b  and  after  consulting  the  Eco 
nomic  and  Social  Committee,  adopt  the  measures  for the  approximation  of the  provisions  laid  down  by 
law,  regulation  or  administrative  action  in  Member  States  which  have  as  their  object  the  establishment 
and functioning of the internal  market. 

Paragraph  1 shall not apply to fiscal  provisions, to those relating to the free movement  of persons 

2. 
nor to those relating to the rights and interests of employed persons. 

The  Commission,  in  its  proposals  envisaged  in  paragraph  1 concerning  health,  safety,  environ 

3. 
mental protection and consumer  protection, will take as a base a high level of protection. 

THE SINGLE MARKET IN 1995 

ANNEX 2 

T-3 

If, after the  adoption  of  a  harmonization  measure  by the  Council  acting  by  a qualified  majority,  a 
4. 
Member  State deems  it  necessary to  apply  national  provisions  on grounds  of  major  needs  referred  to  in 
Article 36,  or  relating  to  protection  of  the  environment  or  the  working  environment,  it  shall  notify  the 
Commission of these provisions. 

The Commission  shall  confirm  the  provisions  involved  after  having verified that they  are not  a means  of 
arbitrary discrimination  or a disguised  restriction  on trade between Member States. 

By  way  of  derogation  from  the  procedure  laid  down  in  Articles  169  and  170,  the  Commission  or  any 
Member State may  bring the  matter  directly  before the Court  of Justice if  it considers that  another  Mem 
ber State is making  improper  use of the powers provided for in this Article. 

5. 
The  harmonization  measures  referred  to  above  shall,  in  appropriate  cases,  include  a  safeguard 
clause authorizing the Member States to take, for one or more of the non-economic  reasons referred to  in 
Article 36, provisional  measures  subject to a Community  control procedure. 

COMMUNITY  POLICIES - SOCIAL POLICY  EDUCATION VOCATIONAL 
TRAINING AND YOUTH - SOCIAL  PROVISIONS 

Article 119 

Each  Member  State shall  during the first  stage  ensure  and  subsequently  maintain  the  application  of  the 
principle that men and women should  receive equal pay for equal work. 

For the purpose of this Article, 'pay' means the ordinary  basic or minimum wage or salary  and  any  other 
consideration, whether  in cash  or  in  kind,  which  the worker  receives,  directly  or  indirectly,  in  respect  of 
his employment from his  employer. 

Equal pay without discrimination  based on sex means: 

(a) 

that  pay  for  the  same  work  at  piece  rates  shall  be  calculated  on  the  basis  of  the  same  unit  of 
measurement; 

(b) 

that pay for work at time rates shall be the same for the same job. 

COMMUNITY  POLICIES -  ENVIRONMENT 

Article  130r(2) 

Community  policy  on  the  environment  shall  aim  at  a  high  level  of  protection  taking  into  account  the 
diversity  of  situations  in the  various  regions  of  the  Community.  It  shall  be  based  on the  precautionary 
principle and on the principles that  preventive action should  be taken, that environmental  damage  should 
as  a  priority  be  rectified  at  source  and  that  the  polluter  should  pay.  Environmental  protection  require 
ments  must  be  integrated  into  the  definition  and  implementation  of  other  Community  policies.  In  this 
context,  harmonization  measures  answering  these  requirements  shall  include,  where  appropriate,  a 
safeguard clause allowing Member States to take  provisional  measures, for non-economic  environmental 
reasons, subject to a Community  inspection  procedure 

Article 130s 

1. 
The Council, acting  in accordance with the procedure referred to  in Article  189c and after  consult 
ing the  Economic  and  Social  Committee,  shall  decide what  action  is  to  be taken  by the  Community  in 
order to achieve the objectives  referred to  in Article 130r. 

2. 
By way of derogation from the decision-making  procedure provided for in paragraph  1 and without 
prejudice to Article  100a, the Council, acting  unanimously  on a proposal from the Commission  and  after 
consulting the European Parliament  and the Economic and Social Committee, shall adopt: 

provisions  primarily of a fiscal nature; 

measures  concerning  town  and  country  planning,  land  use with  the  exception  of waste  manage 
ment and measures of a general nature, and management of water resources; 

measures  significantly  affecting  a  Member  State's  choice  between  different  energy  sources  and 
the general structure of its energy  supply. 

THE SINGLE MARKET IN 1995 

ANNEX 2 

-H 

The Council  may,  under  the  conditions  laid  down  in  the  preceding  subparagraph,  define  those  matters 
referred to in this paragraph on which decisions  are to be taken by a qualified  majority. 

3. 
In other  areas,  general  action  programmes  setting  out  priority  objectives  to  be  attained  shall  be 
adopted by the Council, acting in accordance with the procedure referred to in Article  189b and after  con 
sulting the Economic and Social Committee. 

The Council, acting under the terms of paragraph  1 or paragraph 2 according to the case, shall adopt the 
measures necessary for the implementation of these programmes. 

Without  prejudice to  certain  measures  of  a  Community  nature,  the  Member  States  shall  finance 

4. 
and implement the environment  policy. 

5. 
Without  prejudice  to  the  principle  that  the  polluter  should  pay,  if  a  measure  based  on the  provi 
sions  of  paragraph  1  involves  costs  deemed  disproportionate  for  the  public  authorities  of  a  Member 
State, the Council shall, in the act adopting that measure, lay down appropriate provisions in the form of: 

temporary derogations  and/or 

financial  support  from the Cohesion  Fund to  be set up no later than 31 December  1993  pursuant 
to Article 130d. 

INSTITUTIONS OF THE COMMUNITY  - PROVISIONS GOVERNING THE INSTITUTIONS -
THE INSTITUTIONS - THE COURT OF JUSTICE 

Article 169 

If the  Commission  considers  that  a  Member  State  has  failed to  fulfil  an  obligation  under  this  Treaty,  it 
shall deliver a reasoned opinion on the matter  after  giving the State concerned the opportunity to  submit 
its observations. 

If the State concerned does not  comply  with the opinion within the period  laid down  by the Commission, 
the latter may bring the matter before the Court of Justice. 

B.  Official Journal - references (2 > 

396E 

Council Directive 67/548/EEC  of 27 June  1967  on the approximation of laws, regulations  and adminis 
trative  provisions  relating  to  the  classification,  packaging  and  labelling  of  dangerous  substances  (OJ  L 
196, 16/08/67) 

1968 

Council  Regulation  (EEC)  No  827/68  of  28  June  1968  on  the  common  organisation  of  the  market  in 
certain products listed in Annex II to the Treaty (OJ L  151,  30/06/68) 

1970] 

Council  Directive  70/156/EEC  of  6  February  1970  on  the  approximation  of  the  laws  of  the  Member 
States relating to the type-approval of motor vehicles and their trailers (OJ L 42, 23/02/70) 

1976; 

Council Directive 76/769/EEC of 27 July  1976 on the approximation of the laws, regulations  and admin 
istrative provisions of the Member States  relating to  restrictions on the marketing and use of certain dan 
gerous substances and preparations  (OJ L 262, 27/09/76) 

(2 )  To provide clarity, the references are cited in numerical order; regulations follow upon other types of measures. 

THE SINGLE MARKET IN 1995 

ANNEX 2 

[1977 | 

T< 

Council Directive 77/93/EEC  of 21 December  1976 on protective  measures  against the introduction  into 
the Member States of harmful organisms  of plants or plant products (OJ L 26, 31/01/77) 

1983 

Council  Directive  of 83/189/EEC 28  March  1983 laying  down  a procedure for the  provision  of  informa 
tion in the field of technical standards  and regulations  (OJ L 109, 26/04/83) 

mm 
Council Directive 86/378/EEC of 24 July  1986 on the implementation  of the principle of equal treatment 
for men and women in occupational social security  schemes (OJ L 225,  12/08/86) 

Council  Regulation  (EEC)  No  3842/86  of  1  December  1986  laying  down  measures  to  prohibit  the 
release for free circulation of counterfeit  goods (OJ L 357, 18/12/86) 

Council  Regulation  (EEC)  No 4055/86  of  22  December  1986  applying the  principle  of freedom  to  pro 
vide services to  maritime transport  between  Member States and between Member States and third coun 
tries (OJ L 378, 31/12/86) 

1988 

Council  Directive  88/295/EEC  of  22  March  1988  amending  Directive  77/62/EEC  relating to  the coordi 
nation of procedures on the award of public  supply contracts  and repealing  certain  provisions  of  Directive 
80/767/EEC (OJ L 127, 20/05/88) 

Second  Council  Directive  88/357/EEC  of  22  June  1988  on  the  coordination  of  laws,  regulations  and 
administrative  provisions  relating  to  direct  insurance  other  than  life  assurance  and  laying  down  provi 
sions  to  facilitate  the  effective  exercise  of  freedom  to  provide  services  and  amending  Directive 
73/239/EEC (OJ L 172,  04/07/88) 

1989 

Council  Directive  89/48/EEC  of  21  December  1988  on  a  general  system  for  the  recognition  of  higher-
education diplomas awarded on completion  of professional  education and training  of at least three years' 
duration (OJL  19, 24/01/89) 

First  Council  Directive  89/104/EEC  of  21  December  1988  to  approximate  the  laws  of  the  Member 
States relating to trade marks (OJ L 40,  11/02/89) 

Council Directive 89/440/EEC  of  18 July  1989 amending  Directive 71/305/EEC concerning  coordination 
of procedures for the award of public works contracts  (OJ L 210, 21/07/89) 

Council  Directive 89/552/EEC of 3 October  1989 on the coordination  of certain  provisions  laid down  by 
law, regulation or  administrative  action  in  Member  States  concerning the  pursuit  of television  broadcast 
ing activities (OJ L 298, 17/10/89) 

Second  Council  Directive  89/646/EEC  of  15  December  1989  on the  coordination  of  laws,  regulations 
and  administrative  provisions  relating  to  the  taking  up  and  pursuit  of the  business  of  credit  institutions 
and amending Directive 77/780/EEC (OJ L 386, 30/12/89) 

Council  Directive  89/647/EEC  of  18  December  1989  on  a  solvency  ratio  for  credit  institutions  (OJ  L 
386, 30/12/89) 

Council  Directive  89/665/EEC  of  21  December  1989  on  the  coordination  of  the  laws,  regulations  and 
administrative  provisions  relating  to  the  application  of  review  procedures  to  the  award  of  public  supply 
and public works contracts (OJ L 395,  30/12/89) 

1990 

Third  Council  Directive  90/232/EEC  of  14  May  1990  on the  approximation  of the  laws  of  the  Member 
States  relating  to  insurance  against  civil  liability  in  respect  of  the  use  of  motor  vehicles  (OJ  L  129, 
19/05/90) 

Council  Directive  90/387/EEC  of  28  June  1990  on  the  establishment  of  the  internal  market  for  tele 
communications  services through the implementation  of open network provision (OJ L 192, 24/07/90) 

THE SINGLE MARKET IN 1995 

ANNEX  2 

l<o 

Council  Directive  90/618/EEC  of  8  November  1990  amending,  particularly  as  regards  motor  vehicle 
liability  insurance,  Directive  73/239/EEC  and  Directive  88/357/EEC  which  concern  the  coordination  of 
laws, regulations  and  administrative  provisions  relating to  direct  insurance  other than  life assurance  (OJ 
L 330, 29/11/90) 

Council  Directive 90/619/EEC of 8 November  1990 on the coordination  of laws, regulations  and admin 
istrative provisions  relating to direct  life assurance,  laying  down  provisions  to facilitate the  effective  exer 
cise of freedom to provide services and amending  Directive 79/267/EEC (OJ L 330, 29/11/90) 

Council  Directive 90/642/EEC of 27  November  1990 on the fixing  of  maximum  levels for  pesticide  resi 
dues in and on certain  products  of plant origin, including fruit and vegetables (OJ L 350,  14/12/90) 

1991 

Council  Directive 91/263/EEC of 29 April  1991  on the approximation  of the  laws of the  Member  States 
concerning telecommunications  terminal  equipment,  including the  mutual  recognition  of their  conformity 
(OJL  128, 23/05/91) 

Council  Directive  91/414/EEC  of  15  July  1991  concerning  the  placing  of  plant  protection  products  on 
the market ( OJ L 230,  19/08/91) 

Council  Directive 91/440/EEC  of 29 July  1991  on the  development  of the Community'  s railways  (OJ  L 
237,24/08/91) 

1992; 

Council  Directive  92/44/EEC  of  5  June  1992  on  the  application  of  open  network  provision  to  leased 
lines (OJ L 165,  19/06/92) 

Council  Directive  92/49/EEC  of  18 June  1992  on the  coordination  of  laws,  regulations  and  administra 
tive provisions  relating to direct  insurance other than  life assurance and amending  Directives  73/239/EEC 
and 88/357/EEC (third non-life insurance Directive) (OJ L 228, 11/08/92) 

Council Directive 92/50/EEC of  18 June  1992 relating to the coordination of procedures for the award  of 
public service contracts (OJ L 209, 24/07/92) 

Council  Directive  92/51/EEC  of  18 June  1992  on  a  second  general  system  for  the  recognition  of  pro 
fessional education and training to supplement  Directive 89/48/EEC (OJ L 209, 24/07/92) 

Council  Directive 92/96/EEC of  10 November  1992 on the coordination  of laws, regulations  and admin 
istrative  provisions  relating  to  direct 
life  assurance  and  amending  Directives  79/267/EEC  and 
90/619/EEC (third life assurance Directive) (OJ L 360, 09/12/92) 

Council Regulation (EEC) No 2081/92 of  14 July  1992 on the protection of geographical  indications  and 
designations of origin for agricultural  products  and foodstuffs  (OJ L 208, 24/07/92) 

Council Regulation (EEC) No 3577/92 of 7 December  1992 applying the principle of freedom to  provide 
services to maritime transport within Member  States (maritime cabotage) (OJ L 364,  12/12/92) 

1993 

Council  Directive  93/6/EEC  of  15 March  1993 on the  capital  adequacy  of  investments  firms  and  credit 
institutions (OJ L 141,  11/06/93) 

Council  Directive  93/22/EEC  of  10  May  1993  on  investment  services  in the  securities  field  (OJ  L 141, 
11/06/93) 

Council  Directive  93/36/EEC  of  14  June  1993  coordinating  procedures  for  the  award  of  public  supply 
contracts (OJ L 199, 09/08/93) 

Council  Directive  93/37/EEC  of  14 June  1993  concerning  the  coordination  of  procedures  for  the  award 
of public works contracts (OJ L 199, 09/08/93) 

Council  Directive  93/38/EEC  of  14  June  1993  coordinating  the  procurement  procedures  of  entities 
operating  in the water, energy, transport  and telecommunications  sectors (OJ L 199, 09/08/93) 

Council  Directive  93/68/EEC  of  22  July  1993  amending  Directives  87/404/EEC  (simple  pressure  ves 
sels),  88/378/EEC  (safety  of  toys),  89/106/EEC  (construction  products),  89/336/EEC  (electromagnetic 
compatibility),  89/392/EEC (machinery),  89/686/EEC  (personal  protective equipment),  90/384/EEC  (non-
automatic  weighing  instruments),  90/385/EEC  (active  implantable  medicinal  devices),  90/396/EEC 
(appliances  burning  gaseous  fuels),  91/263/EEC  (telecommunications  terminal  equipment),  92/42/EEC 
(new  hot-water  boilers  fired with  liquid  or  gaseous  fuels)  and  73/23/EEC  (electrical  equipment  designed 
for use within certain voltage limits) (OJ L 220,  31/08/93) 

THE  SINGLE  MARKET  IN  1995 

ANNEX 2 

YT 

Council  Directive 93/99/EEC  of 29  October  1993 on the subject  of additional  measures  concerning  the 
official control of foodstuffs (OJ L 290, 24/11/93 

Council  Regulation  (EEC)  No  793/93  of  23  March  1993  on  the  evaluation  and  control  of  the  risks  of 
existing substances (OJ L 84, 05/04/93) 

1994 

Council  Directive 94/45/EC  of 22  September  1994  on the establishment  of  a  European  Works  Council 
or  a  procedure  in  Community-scale  undertakings  and  Community-scale  groups  of  undertakings  for  the 
purposes of informing and consulting employees (OJ L 254, 30/09/94) 

European  Parliament  and  Council  Directive  94/60/EC  of  20  December  1994  amending  for  the  14th 
time Directive 76/769/EEC on the approximation  of the laws, regulations and administrative  provisions  of 
the Member States relating to restrictions  on the marketing and use of certain dangerous substances  and 
preparations (OJ L 365, 31/12/94) 

European  Parliament  and  Council  Directive  94/62/EC of 20  December  1994  on  packaging  and  pack 
aging waste (OJ L 365, 31/12/94) 

Commission  Recommendation  94/79/CE  of  21  December  1993  on  the  taxation  of  certain  items  of 
income received by non-residents  in a Member  State other than that in which they are resident (OJ L 39, 
10/02/94) 

Council  Regulation  (EC)  No  2100/94  of  27  July  1994  on  Community  plant  variety  rights  (OJ  L  227, 
01/09/94) 

Council  Regulation  (EC)  No  3381/94  of  19  December  1994  setting  up  a  Community  regime  for  the 
control of exports of dual-use goods (OJ L 367, 31/12/94) 

mm 
European Parliament and Council Directive 95/2/EC  of 20 February  1995 on food additives  other than 
colours and sweeteners (OJ L 61,  18/03/95) 

Council  Directive  95/18/EC  of  19  June  1995  on  the  licensing  of  railway  undertakings  (OJ  L  143, 
27/06/95) 

Council Directive 95/19/EC of  19 June  1995 on the  allocation  of  railway  infrastructure  capacity  and the 
charging of infrastructure fees (OJ L 143, 27/06/95) 

Council  Directive  95/22/EC  of  22  June  1995  amending  Directive  91/67/EEC  concerning  the  animal 
health conditions  governing  the  placing  on the  market  of  aquaculture  animals  and  products  (OJ  L 243, 
11/10/95) 

Council Directive 95/23/EC of 22 June  1995 amending  Directive 64/433/EEC  on conditions  for the pro 
duction and marketing of fresh meat (OJ L 243,  11/10/95) 

Council Directive 95/25/EC of 22 June 1995 amending  Directive 64/432/EEC on health problems  affect 
ing intra-Community trade in bovine animals and swine (OJ L 243,11/10/95) 

Council Directive 95/29/EC of 29 June  1995 amending  Directive 91/628/EEC concerning the  protection 
of animals during transport (OJ L 148, 30/06/95) 

Commission  Directive 95/31/EC of 5 July  1995  laying down specific  criteria of purity concerning  sweet 
eners for use in foodstuffs  (Text with EEA relevance) (OJ L 178, 28/07/95) 

Council  Directive 95/38/EC of  17 July  1995  amending  Annexes  I and  II to  Directive 90/642/EEC on the 
fixing of maximum  levels for  pesticide  residues  in  and  on  certain  products  of  plant  origin,  including  fruit 
and vegetables, and providing for the establishment  of a list of maximum levels (OJ L 197, 22/08/95) 

Commission  Directive 95/40/EC  of  19 July  1995  amending  Directive 92/76/EEC  recognizing  protected 
zones exposed to particular plant health  risks  in the Community (OJ L 182, 02/08/95) 

Commission  Directive 95/44/EC  of 26 July  1995 establishing  the conditions  under which certain  harm 
ful  organisms,  plants,  plant  products  and  other  objects  listed  in  Annexes  I  to  V  to  Council  Directive 
77/93/EEC  may be introduced into or moved within the Community or certain protected zones thereof,  for 
trial or scientific purposes and for work on varietal selections (OJ L 184, 03/08/95) 

Commission  Directive 95/45/EC of 26 July  1995  laying down specific  purity  criteria  concerning  colours 
for use in foodstuffs  (OJ L 226, 22/09/95) 

European  Parliament  and  Council  Directive  95/46/EC  of  24  October  1995  on  the  protection  of  indi 
viduals with regard to the processing of personal data and on the free movement of such data (OJ L 281, 
23/11/95) 

THE SINGLE MARKET IN 1995 

ANNEX 2 

yg 

Council  Directive 95/61/EC  of  29  November  1995  amending  Annex  II to  Directive  90/642/EEC  relating 
to the fixing of maximum  levels for pesticide  residues  in and on certain  products  of plant origin,  including 
fruit and vegetables (OJ L 292, 07/12/95) 

Commission  Decision  95/354/EC  of  14  February  1995  relating  to  a  proceeding  pursuant  to  Council 
Regulation (EEC) No 4064/89 (Case No IV/M.477 - Mercedes-Benz/Kâssbohrer)  (Only the German text is 
authentic) (OJ L 211,  06/09/95) 

Council  Decision  95/409/EC  of  22  June  1995  laying  down the  rules  for  the  microbiological  testing  by 
sampling of fresh beef and veal and pigmeat intended for Finland and Sweden (OJ L 243,  11/10/95) 

Council  Decision  95/410/EC  of  22  June  1995  laying  down  the  rules  for  the  microbiological  testing  by 
sampling  in the  establishment  of  origin  of  poultry  for  slaughter  intended  for  Finland  and  Sweden  (OJ  L 
243, 11/10/95) 

Council  Decision  95/411/EC  of  22  June  1995  laying  down  the  rules  for the  microbiological  testing  for 
salmonella  by sampling of fresh poultrymeat intended for Finland and Sweden (OJ L 243, 11/10/95) 

Council  Decision  95/468/EC  of  6  November  1995  on  a  Community  contribution  for  telematic  inter 
change of data between administrations  in the Community (IDA) (OJ L 269, 11/11/95) 

Decision 95/3052/EC of the European Parliament and of the Council of  13 December  1995 establish 
ing  a  procedure  for  the  exchange  of  information  on  national  measures  derogating  from  the  principle  of 
the free movement of goods within the Community  (OJ L 321,  30/12/95) 

Council Regulation (EC) No 1683/95 of 29 May  1995 laying down a uniform format for visas  (OJ L 164, 
14/07/95) 

Council  Regulation  (EC)  No  2317/95  of  25  September  1995  determining  the  third  countries  whose 
nationals must be in possession  of visas when crossing the external  borders of the Member States (OJ L 
234, 03/10/95) 

THE SINGLE MARKET IN 1995 

Annex 3 - Judgements of the Court of Justice cited 

Judgement of the Court of 29 June  1995 
Joined Cases C-109/94, C-207/94 and C-22S/94 
Reports of cases 1995 pages 0000 

Commission of the European Communities v Hellenic Republic 
Failure of a Member State to fulfil its obligations 
Directives 618/EEC, 88/357/EEC and 90/619/EEC - Non-transposition - Insurances. 

Judgement of the Court of 9 February 1995 
Case 412/93 
Reports of cases 1995 pages 1-0179 

Société d'importation Edouard Leclerc-Siplec v TF1 Publicité sa and M6 Publicité sa 
Reference for a preliminary ruling: Tribunal de Commerce de Paris - France 
Televised advertising - Free movement of goods and services. 

Judgement of the Court of 23 February  1995 
Joined Cases C-54/94 and C-74/94 
Reports of cases 1995 pages 1-0391 

§  30 

§  81 

§  81 

Criminal proceedings against Ulderico Cacchiarelli and Gino Stanghellini 
Reference for a preliminary ruling: Pretura circondariale di Macerata - Italy 
Council directives 76/895/EEC and 90/642/EEC - Maximum permissible levels of pesticide resi 
dues on or in potatoes. 

Judgement of the Court of 28 March 1995 
Case C-324/93 
Reports of cases 1995 pages I-0563 

§  81 

The Queen v Secretary of State for Home Department, ex parte Evans Medical Ltd and McFarian 
Smith Ltd 
Reference for a preliminary ruling: High Court of Justice, Queen's Bench Division - United King 
dom 
Free movement of goods - Importation of a narcotic drug (diamorphine). 

Judgement of the Court of 6 July 1995 
Case C-470/93 
Reports of cases 1995 pages 0000 

§  81 

Verein gegen Unwesen in Handel und Gewerbe Kôln e.V. v Mars GmbH 
Reference for a preliminary ruling: Landgericht Kôln - Germany 
Free  movement  of  goods  -  Measures  having  an  effect  equivalent  to  quantitative  restrictions  -
Presentation of a product likely to restrict freedom to fix retail prices and mislead the consumer. 

Judgement of the Court of 14 February  1995 
Case C-279/93 
Reports of cases 1995 pages I-0225 

§ 135 

Finanzamt Kôln-Altstadt v Roland Schumacker 
Reference for a preliminary ruling: Bundesfmanzhof - Germany 
Article 48 of the EC Treaty -  Principle of equal treatment - Taxation of the income of non-resi 
dents. 

Judgement of the Court of 11 August 1995..... 
Case C-80/94 
Reports of cases 1995 pages 0000 

§ 135 

G.H.E.J. Wielockx v Inspecteur der directe belastingen 
Reference for a preliminary ruling: Gerechtshof s-Hertogenbosch - Netherlands 
Article 52 of the EC Treaty - Requirement of equal treatment - Tax on non-residents' income. 

THE SINGLE MARKET IN 1995 

ANNEX 3 

Judgement of the Court of 24 January  1995 
Case C-359/93 
Reports of cases 1995 pages 1-0157 

Commission of the European Communities v Kingdom of the Netherlands 
Tender notices for public supply contracts 
Review procedure - Notification - Technical specifications. 

Judgement of the Court of 4 May 1995 
Case C-79/94 
Reports of cases 1995 pages 1-1071 

gO 

§ 162 

§ 162 

Commission of the European Communities v Hellenic Republic 
Failure of a Member State to fulfil its obligations 
Directive 77/62/EEC - Framework agreement for the exclusive supply of dressing material for use 
in Greek hospitals and by the Greek army. 

Judgement of the Court of 17 May 1990 
Case 262/88 
Reports of cases 1990 pages 1-1889 

§ 196 

Douglas Harvey Barber v Guardian Royal Exchange Assurance Group 
Reference for a preliminary ruling: Court of Appeal - United Kingdom 
Social policy - Equal payment for men and women - Compulsory redundancy - Early payment of 
retirement pension. 

THE SINGLE MARKET  IN 1995 

Annex 4 - Recent reports, studies and surveys on the 
single market 

frl 

(The following list does not purport to be exhaustive.  It is a selection of publications dealing with 
the practical operation of the  single market in general which have been brought to the attention 
of the  Commission  during  1994. It does not include  the many academic  works  which  are pub 
lished regularly in this field). 

Reports of the Competitiveness Advisory  Group  (Ciampi Group), June and December  1995. 

Report  of  The  Group  of Independent  Experts  on Legislative and Administrative  Simplification. (The 
"Molitor" Report).  Office for Official  Publications  of the  European  Communities,  21.06.95;  COM (95) 
288/2 final. 

Opinion on the Single Market in 1994. The Economic  and  Social  Committee  of the  European  Com 
munities. 23.11.95; CES (95) 1310. 

The European  Observatory  for SMEs.  Comments  of the Commission  on the third  Annual  Report. 
Office of Publications of the European Communities; COM (95) 526 final. 

Releasing Europe's  Potential  though  Targeted  Regulatory  Reform.  Union  of  Industrial  and Employ 
ers' Confederations of Europe. October  1995. 

A Europe that  Works. The Confederation of British  Industry, June 1995. 

Barriers to Trade in Chemicals in the Single Market. The UK Department  of Trade and  Industry,  July 
1995. 

Single Market  Implementation  Monitoring  Report.  The UK Simpler  Trade  Procedures  Board,  June 
1995. 

Ireland, The European  Union and Economic Integration: A Business Perspective. IBEC, May  1995. 

Generic Study on Standards,  Testing and Certification Barriers in Non-Harmonised Areas  of the  Sin 
gle Market. The UK Department of Trade and  Industry,  1995. 

THE SINGLE MARKET IN 1995 

ISSN 0254-1475 

COM(96) 51  final 

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