Communication from the Commission to the European Parliament and the Council - Draft action plan for the single market
Date: 1997-05-06
Institutions: European Commission
Subjects: EU programme, action programme, single market

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels,  0 6 . 0 5 . 1 9 97 
COM(97) 184 final 

COMMUNICATION FROM THE COMMISSION 

10  THE EUROPEAN  P A J U J A M F NT  A Np  THE COUNCIL 

DRAFT ACTION PLAN 

FOR THE SINGLE MARKET 

This draft  summarises  the Commission's  current  thinking concerning  an Action Plan for  the Single  Market. 
The final Action  Plan will be  presented  by the Commission  to the European  Council  in Amsterdam 

TABLE OF CONTENTS 

Why  an  Action  Plan  now?. 

The  Draft  Action  Plan: four  Strategic Targets. 

Strategic target  1:  Making  the rules more effective. 

Action 1: 
Action 2: 
Action 3: 
Action 4: 
Action 5: 
Action 6: 

Put agreed Single Market legislation into  force 
Establish a framework  for enforcement and  problem-solving 
Strengthen checks on products 
Better access for business to the right  information  _. 
National  and  Community rules must be simplified 
Tackle weaknesses in the existing legal framework 

.... 

._ 

Strategic target  2:  Dealing  with key market distortions. 

Action  7 :  Remove tax distortions 
Action  2 :  Create a common  system for value-added tax 
Action  3 :  Restructure the Community  framework for the taxation  of energy products 
Action  4:  A rigorous  approach  to competition  policy 

Strategic target  3:  Removing sectoral obstacles to market  integration 

Action  1:  Break down  the barriers in service markets..... 
Action  2:  Give businesses the structures they need for efficient cross-frontier operations 
Action  3:  Face the challenge of innovation  and new technology 

.... 

.... 

._ 

_ 

Strategic target  4:  Delivering  a Single Market  for the benefit of all citizens. 

.... 

Action  1 :  Elimina te border controls 
Action  2:  The right  of residence 
Action  3:  Protecting 
social  rights 
Action  4:  Promoting  labour  mobility  within  the Union 
Action  5:  Consumer rights and health protection 
Action  6  Dialogue  with  the Citizen 

._ 

.... 

_„_ 

The  international  dimension  of the Single  Market-

Conclusion 

Annex: List of Actions  (to  be taken  before  1 January  1999) 

8 

_ .9 

9 
9 
9 
9 

.10 

10 
7 7 
7 7 

.11 

.  11 
7 7 
77 
12 
12 
12 

.13 

14 

.14 

H~"> 

WHY  AN ACTION PLAN NOW? 

the  creation  of 

1.  The  European  Single  Market  is  the 
world's  largest  domestic  market.  It  has 
contributed  significantly 
to  growth, 
competitiveness  and  employment.  It 
has  been  responsible  for  an  increase  in 
EU income  of  between  1.1% and  1.5% 
between 
and  for 
300.000  and  900.000  jobs  but 
its 
potential  is still to  be  realised.  Barriers 
still  stand  in  the  way.  Europe  needs  a 
better  Single  Market  for  more  growth, 
more 
innovation  and  more  jobs,  a 
that  works  for  everyone  -
market 
citizens,  consumers,  small  companies 
-  a  dynamic, 
and 
larger  business 
socially 
knowledge-based  market, 
the 
to 
sensitive 
responsible 
concerns  of  everyone  affected  by  it.  A 
consolidated  and  properly  functioning 
Single  Market  will  help  to  ensure  a 
transition  to  the  single  currency  in  the 
most  favourable  conditions  and  will 
contribute  to  a successful  enlargement. 
The  Commission's  1996  Report  on  the 
Impact  and  Effectiveness  of  the  Single 
Market  contains  recommendations  on 
what  still  needs  to  be  done.  The 
received  a  very  wide 
Report  has 
degree  of support  from  Member  States. 
The  political  will  is  evident. 
This 
needs  to  be  translated  into  targeted 
action. 

and 

- 

seeking 

2.  The  Single  Market  is  not  simply  an 
economic  structure.  At its heart  are  370 
million 
better 
people 
employment  opportunities, 
improved 
living  and  working  conditions,  and  a 
wider  choice  of  quality  products  and 
services 
for 
including 
everyone  to services  of general  interest 
-  at  lower  prices.  The  Single  Market  is 
working  in  their  interests.  Much  has 
already  been  achieved. 
Individuals 
already  enjoy  the 
right  to  move  and 
the  Union.  The 
throughout 
work 
Single  Market  sets  basic  standards  of 
health  and  safety,  equal  opportunities 

access 

through 

and  labour  law.  However,  more  needs 
to  be  done  to  enforce  these  rights 
effectively.  In  addition,  social  policy 
the  process  of 
must  help  smooth 
interplay 
change,  promoting  a  new 
between  flexibility  and  security,  for 
example 
appropriate 
information  and  consultation.  The 
strategy, 
employment 
European 
the  Dublin  European 
agreed 
Council, 
the 
underpinned 
Commission's  Confidence  Pact  for 
Employment,  will  help  to  give  people 
and 
the  opportunity 
improve 
the 
Commission  will  work  with  Member 
social 
to  help  modernise 
States 
protection  systems  and  make 
them 
more  employment-friendly. 

their  skills.  Similarly, 

to  upgrade 

by 

at 

3.  The  Single  Market  stands  or  falls  on 
confidence;  confidence  that  all  the  key 
rules  are  in  place;  that  they  are  fully 
and  fairly  applied;  that  problems  will 
be  addressed  quickly;  that  the  ground-
rules  for  fair  competition  are  fully 
respected;  confidence  for  consumers 
in  the  reliability  of  goods  and  services 
and  of 
for 
smaller  companies,  the  employment 
generators,  that  the  market  can  work 
for  them;  confidence  that  each  and 
every  government 
to 
it  work.  Doing  business, 
making 
the 
in 
living  or  working 
moving, 
Union's 
internal 
"area  without 
frontiers"  should  become  as  easy  as 
within  any  Member  State. 

information:  confidence 

is  committed 

4.  The  Action  Plan  announced 

the  performance  of 

in  the 
conclusions  of  the  Dublin  European 
the  clear  objective  of 
Council  has 
improving 
the 
Single  Market  in  the  years  ahead.  The 
third  stage  of  EMU represents  a  critical 
juncture,  at  which  the  Single  Market 
must  provide  underlying  economic 
support  for  monetary  union  and  the 

I."! 

Euro  will  provide  added  value  and 
efficiency  to  the  Single  Market.  The 
actions  proposed  are  ambitious.  It will 
take  considerable  political  will to  carry 
them  through.  Time  is short.  But  if  we 
succeed,  confidence  will  improve  and 
Europe  will  have  a  Single  Market 
capable  of  generating  more  growth 
and  more jobs,  while  safeguarding  the 
European  social  model.  The 
final 
version  of  the  Action  Plan  will  be  put 
to  the  European  Council  in  Amsterdam 
when  the  Council  will  be  invited: 

to  make  a  firm  commitment  to  the  full 
execution  of  this  Action  Plan  before  1 
January  1999  and  the  start  of  the  third 
stage  of EMU; 

• 

to  provide  for  the  necessary  priority 
treatment  of  any  legislative  proposals 
in 
(a  "fast-track" 
approach) ; 

the  Action  Plan 

•  to  review  progress  at  each  meeting  of 
the  European  Council  in  the  run-up  to 
December  1998. 

The  Commission  will  regularly  publish 
and  draw  to  the  attention  of  each  Internal 
Market  Council  and  European  Council  a 
"Single  Market  Scoreboard"  containing 
detailed 
indicators  of  the  state  of  the 
Single  Market  and  of  Member  States'  level 
the  Action 
of  commitment  to  fulfilling 
Plan. 

THE  DRAFT ACTION PLAN: FOUR STRATEGIC TARGETS 

Plan 

follows 

The  Action 
the 
Commission's  report  on  the  Impact  and 
Effectiveness  of  the  Single  Market.  It sets 
priorities  to  allow  a  clear  and  strategic 
vision  of  what  is  now  needed.  At  this 
stage,  four  Strategic  Targets  have  been 
identified.  They  are  of  equal  importance 
and  must  be  pursued  in  parallel: 

1  Making  the  rules  more  effective: 
The  Single  Market  must  be  based  on 
Proper  enforcement  of 
confidence. 
is  the  only  way  to 
common  rules 
achieve 
this  goal.  Simplification  of 
rules  at  Community  and  national  level 
is  also  essential  to  reduce  the  burden 
on  business  and  create  more jobs. 

course,  new  ones  - are  removed.  This 
may  require  legislative  action  to  fill 
gaps  in  the  Single  Market  framework, 
but  also  calls  for  a  significant  change 
in  national  administrations'  attitudes 
towards  the  Single  Market. 

freedom 

generates 
personal 

4.  Delivering  a  Single  Market  for  the 
benefit  of  all  citizens:  The  Single 
employment, 
Market 
increases 
and 
benefits  consumers,  while  ensuring 
high  levels  of  both  health  and  safety 
and  environmental  protection.  But 
further  steps  are  needed.  And  to  enjoy 
their  Single  Market  rights  to  the  full, 
citizens  must  be  aware  of  these  rights 
and  be  able  to  obtain  redress. 

2.  Dealing 

key 

with 

market 
general 
There 
distortions: 
agreement  that  tax  barriers  and  anti 
competitive 
constitute 
distortions  that  need  to  be  tackled. 

behaviour 

is 

3.  Removing  sectoral  obstacles 

to 
integration:  The  Single 
market 
Market  will  only  deliver 
full 
potential  if remaining  barriers  - and,  of 

its 

each 

target, 

strategic 

identified  a 

the 
Within 
Commission  has 
limited 
number  of  specific  actions  to be  achieved 
by  I January  1999  (a  list  is  given  in  the 
Annex).  This  is  a  selective  approach,  but 
in  other  areas 
clearly 
to 
consolidate 
the  Single  Market  will  be 
pursued. 

action 

Action  1:  Put  agreed  Single  Market 
legislation into force 

Only 65% of Single Market rules are  fully 
operational  in  all  15 Member  States. The 
Single  Market  clearly  cannot  function 
optimally  in  these  conditions.  Member 
States  will  be  called  on  to  submit  their 
detailed  timetable  and  to  demonstrate 
political  commitment  to  eliminate,  by  1 
January  1999  at  the  latest,  any  delay  in 
transposition.  The 
Single  Market 
Scoreboard  will be  used  to  keep  track of 
progress. Meanwhile the Commission will 
continue 
pursue 
infringement  procedures  against  Member 
States  which  fail  in  these  obligations 
using,  where  necessary,  the  possibilities 
of sanctions against  Member States. 

vigorously 

to 

Action 2: Establish a framework for 
enforcement and problem-solving 

to 

The 

consumers. 

Single  Market 

Problems need to be sorted out quickly in 
today's 
avoid 
undermining  of  confidence  of  business 
informal 
and 
arrangements  for  cooperation  between 
Member States and between  them and the 
Commission  have  proved  only  partly 
successful  and  now need  to be upgraded. 
The Commission will therefore  press each 
Member State to designate a coordination 
centre  within 
administration 
its 
that  any 
for  ensuring 
responsible 
problems  raised  by  other  Member  States 
or  the  Commission  are  solved  by  the 
authorities directly concerned within strict 
deadlines.  This  will  be  a  key  component 
in  a  simple  but  effective  framework  for 
enforcement  cooperation,  which  will also 
provide;  for  more  transparency  about 
enforcement  structures  and  peer  review 
or  mutual  audit  of  national  enforcement. 
Telematic  links  between  enforcement 
authorities  will  be  further  developed 
under  the  second  IDA  programme.  The 
Commission  intends  to  submit  serious 
cases  of  non-application  to  the  Internal 

STRATEGIC TARGET  1: 

MAKING THE RULES MORE  EFFECTIVE 

ensure 

Market  Council 
strong 
to 
commitment and involvement  in problem 
solving  at  political  level  and.  in  parallel, 
will 
treatment  of 
infringement  procedures.  Strengthening 
of the Commission's enforcement  powers 
under  the  Treaty  would  be  desirable  to 
further  reduce  delays in problem solving. 

accelerate 

its 

Action 3: Strengthen checks on products 

At present the checks that are carried  out 
on  compliance  with  product  rules  are 
uneven  and  could  compromise  consumer 
protection  and  fair  competition.  The 
legislative 
Commission  will  make 
proposals to strengthen common rules for 
market  surveillance  by,  for  example, 
providing  for joint  inspection  schemes or 
more  detailed  inspection  procedures  in 
areas  that  will  include  industrial  and 
consumer 
foodstuffs, 
products, 
pharmaceutical  products  and  medical 
devices.  Scientific  expertise,  which  is 
important  for  the  application  of  the 
legislation 
to  market 
surveillance, must be mobilized  and  used 
more  widely  for  legislative  purposes  at 
Community level. 

linked 

and 

Action  4:  Better access for business to the 
right 

information 

Access  to  information 
is  essential  to 
ensure  that  businesses  are  aware  of 
opportunities in the Single Market, how to 
exploit them  and  how to solve problems. 
Information  must  be  made  accessible 
rapidly  and  in  user-friendly  ways.  The 
Commission  will  set  up  an  Internet  shop 
for  information  on  all  Single  Market 
to 
regulations  affecting  business, 
complement  and  be coordinated  with the 
Euro  Info  Centres,  which  have  been 
assigned  a "first-stop" objective  under the 
multi-annual  programme  for  SMEs (1997-
2000).  This  service  will  be  part  of  the 
Europa Website and will also be linked to 
the  Member  States'  Websites.  Businesses 

will  be  able  to  provide  feedback  on  their 
experience  on  the  ground. 

Action 5: National  and Community rules 
must be simplified and improved 

is 

Over-regulation 
the  enemy  of  job 
creation  -  the  Union's  top  priority.  Over-
complex  rules,  most  of  them  national, 
impose  unnecessary  costs  on  operators. 
The  Commission  will  set  up  a  permanent 
rolling  programme  of  simplification  and 
improvement  of  Single  Market  legislation, 
combining  SLIM  and  other  simplification 
exercises.  It  will  include  VAT,  banking, 
fertilizers, 
insurance 
consumer  services, 
telecommunications, 
customs 
rules  and  procedures  and 
possibly  other  sectors,  including  company 
law  .The Commission  will undertake  pilot 
projects 
consultation 
improve 
procedures  with  business  regarding  the 
implementing  certain  new 
costs  of 
legislative 
including 
proposals, 
consultation  of  a  European  Business  Test 
Panel. 

securities, 

and 

to 

to 

Member  States  will  be  called  upon  to 
commit 
parallel 
a 
themselves 
including 
programme  of  simplification, 
the 
comprehensive 
use 
of  more 
regulatory 
impact  analysis  procedures 
and  to  simplify  national  regulatory  and 
administrative  procedures  for  business 
start-ups. 

Businesses  and  citizens'  organisations  will 
be  invited  to  alert  the  Commission  to 
national  rules  which  they  consider  to  be 
abnormally 
The 
Commission  will  publicize  and  take  up 
the  most  significant  cases  with 
the 
Member  State  concerned. 

burdensome. 

Action 6: Tackle weaknesses in the 
existing legal framework 

There  are  a  number  of  areas  where  the 
existing  Single  Market  framework  needs 

to be  improved.  The  Commission  intends, 
as  a  priority,  to  propose  action  in  the 
following  areas: 

•  public  procurement:  action  will  be 
the 
following 

proposed 
on 
consultation  undertaken 
publication  of  the  Green  Paper; 

the  basis  of 

•  application 

of 

the 

mutual 
recognition  principle:  Member 
States  and  the  Commission  will  need 
to  cooperate  closely  on  cases  of  non-
recognition  made  under  Council 
Decision  3052/95  and  ensure 
that 
adequate  political  attention  is  given, 
including  at  Council 
the 
effective  application  of the  principle  of 
mutual  recognition; 

level, 

to 

•  European  standardization:  a  new 
to 

given 

impulsion 
be 
standardization  policy; 

will 

•  conformity  marking  of  products:  a 
re-evaluation  of  CE  marking  will  be 
undertaken  in view  of  the  proliferation 
of  national  marks; 

•  construction  products: 

modifications  will  be  proposed  to  the 
construction  products  Directive 
to 
ensure  its  effective  operation; 

•  transit  rules:  computerisation  of 
transit  procedures  is  needed  in  order 
to  reduce  fraud  and  the  administrative 
burden  on  business; 

•  the 

and 

Single  Market 

the 
environment:  the  Commission  will 
produce  guidelines  on  how  Single 
Market  policy  can  further  contribute  to 
sustainable  development  and  how  any 
potential  conflicts  between  Single 
Market  and  environment  policies  can 
be  remedied. 

Action 11 Remove tax distortions 

Tax  barriers  and  distortions  to  the  Single 
Market  have  not  yet  been  tackled  with 
tax 
sufficient  determination.  Harmful 
increases  Member  States' 
competition 
difficulties 
tax 
in  restructuring 
systems  and  delays  progress  towards  a 
more  coherent  tax  system  within  the 
Union.  A  co-ordinated  approach 
is 
essential.  Member  States,  by  acting 
together,  can  tackle this issue. 

their 

Member  States  will  therefore  be  asked  to 
agree  to  a  tax  package  designed  to 
achieved  a  balance 
their 
interests comprising: 

between 

•  the  elimination  of  distortions  in  the 
in 
capital 
taxation  of 
particular, 
through  adoption  of  a 
modified  proposal  for  a  Directive  on 
the  taxation  of savings; 

income, 

•  the  elimination  of  tax  obstacles  to 
cross-border  economic  activity,  in 
particular  by  eliminating  withholding 
taxes on  interest  and  royalty payments 
between  companies; 

•  a  code  of  conduct  designed  to  tackle 
harmful  tax  competition  that  causes 
difficulties  for  every Member State. 

the  scope  and 

In  this  context,  the  Commission  will also 
clarify 
the 
coherence 
application  of 
the 
Community  competition  rules,  including 
rules on  state aids. 

improve 

of 

Progress  on  this  package  should  help 
Member  States to  make  their  tax  systems 
employment-friendly, 
become  more 
reducing  the  burden  on 
labour  and 
thereby  promoting  job  creation.  Further 
work  is also  needed  on  removing double 
taxation  of frontier  workers. 

DEALING WITH KEY MARKET DISTORTIONS 

STRATEGIC TARGET  2: 

Action 2: Create a common system for 
value-added tax: 

for 

the 

The  current  VAT  system  imposes  an 
excessive  burden  on  business  and 
discourages  cross-frontier 
trade.  The 
Council  and  Parliament  are  invited  to 
adopt 
the 
proposals 
modernization  and  a  more  coherent  and 
uniform  application  of  the  tax  together 
advance 
with 
administrative 
among 
Member  States  and  to  engage  as  quickly 
as  possible  in  the  process  of  change  to 
the  radically  simpler  origin-based  VAT 
system proposed  by the Commission. 

to 
cooperation 

proposals 

the 

Action 3: Restructure the Community 
framework for the taxation of energy 
products 

At present, only mineral oils are subject to 
a  Community  system 
for  minimum 
taxation.  For  other  products,  Member 
States  are  free  to  tax  at  the  rate  of  their 
choice or to apply no tax at all. This leads 
the  different 
to  distortions  between 
the 
sources  of  energy  and  between 
Member  States.  For  this  reason 
the 
Council  is  called  upon  to  adopt  the 
the 
Commission's 
Community  minimum  rate  system  be 
widened  to  all energy  products and  that 
there should  be  a gradual  approximation 
of national  rates of taxation  for all energy 
products. 

proposal 

that 

Action 4: A  rigorous approach to 
competition policy 

The  rigorous  application  of  competition 
policy  is  essential  to  ensure  that  anti 
competitive  practices  on  the  part  of 
companies  or  national  authorities  do  not 
choke off the competitive dynamics of the 
single market. 

The  volume  of  state  aids  granted  in  the 
EU  remains  at  worryingly  high  levels, 
representing annually  95 billion  ECU and 
-.-._  9 

_ 

between  0.4  and  2.6%  of  GDP  in  the 
different  Member  States  during  the  1992-
1994  period.  In  addition,  85%  of  aid  to 
industry  is  accounted  for  by  4  important 
economies  of  the  Union.  As well  as  being 
a  source  of  distortion  of  competition,  the 
level  of  aid  weighs  on  public 
high 
the 
budgets  and 
efficient  functioning  of  the  Single  Market. 
Inasmuch  as  aids  tend  to  concentrate  on 
large  enterprises  they  also  damage  the 
competitive  position  of SMEs. 

risks  endangering 

Commission  action  alone  is not  sufficient. 
A dialogue  with  the  Member  States  to  fix 
precise  objectives  and  a  timetable  for  the 
reduction  of  overall  aid  budgets  appears 
therefore  as  a  necessary  complement  to 
the  Commission's  action.  To  redress  the 
negative 
the 
present  situation,  the  Commission  will 
propose  new  guidelines  on  regional  aids 
aiming  at  reducing  regional  disparities  by 
concentrating  aid  in  the  poorest  regions 
and 
levels  to 
better  take  account  of the  socio-economic 
It  will 
situation 

impact  on  cohesion  of 

the  maximum 

lowering 

region. 

each 

of 

of 

on 

regional 
large 

resources  on  assessment  of 
concentrate 
the 
those  aid  cases  which 
represent 
the 
greatest  threat  to  competition  and 
the  Single  Market, 
functioning 
is 
aid 
particularly  where 
concentrated 
investment 
projects. The  Commission  will also  further 
and 
rules  on 
tighten 
restructuring  aid,  while  taking  account  of 
the  role  of  appropriate  levels  of  aid  in 
cushioning 
of 
it  will 
restructuring. 
examine  whether  state  aid  rules  can  be 
to  limit  the  risk  of  state  aid 
modified 
providing 
for 
délocalisation. 

social 
Furthermore, 

incentives 

rescue 

effects 

unfair 

the 

the 

and 

restraints 

to  focus  attention  on 

Anti-trust  rules  will  be  simplified  and 
modernised  by  the  revision  of  policies  on 
vertical 
horizontal 
cooperation  agreements.  Action  will  be 
taken 
the  most 
serious  infringements  and  to  decentralise 
the application  of the  competition  rules  to 
the  Member  States  as  far  as  possible 
without  endangering 
level  playing 
field  within  the  Single  Market. 

the 

STRATEGIC TARGET  3: 

REMOVING  SECTORAL  OBSTACLES TO MARKET  INTEGRATION 

Action 1: Break down the barriers in 
service markets 

to 

Service  markets  account  for  70% of  Union 
GDP  but  they  are  less  integrated  than 
other  markets.  In  financial  sen/ices,  the 
lack  of a real Single Market  for  investment 
funds  is  a  major  handicap  for  Europe's 
potential 
into 
channel 
investments.  Far-reaching 
productive 
steps  are  required.  The  Commission  will 
propose 
directive  on 
framework 
Undertakings  for  Collective  Investment  in 
Transferable  Securities  (UCITS)  to  tackle 
the  remaining  obstacles.  Member  States 
are  called  upon  to  adopt  the  directive  by 
the  January  1999  deadline. 

savings 

a 

impose 

Some  Member  States 
strict 
quantitative  rules  on  the  investments  of 
pension  funds.  These  result  in  lower 
returns  which  raise  indirect  labour  costs 
(and  thus  reduce job  creation)  and  reduce 

10 

the  potential  of  a  European  capital 
market.  EMU  will  make 
currency 
matching  restrictions  irrelevant.  Member 
States  are  called  upon  to  move  towards 
the  elimination  of  these  restrictions  in 
anticipation  of  the  introduction  of  the 
to 
Euro.  Further  work  is  also  needed 
improve 
to 
the  availability  of  capital 
SMEs. 

the  need 

full  account  of 

The  balanced  opening  of  public  utilities, 
taking 
to 
promote  access  for  everyone  to  services 
of  general  interest,  will  contribute  to  a 
better  overall  allocation  of  resources.  The 
liberalization  of  gas  supplies  has  to  be 
agreed.  The  Community  Institutions  and 
the  Member  States  must  ensure  that  the 
national  measures  required  to  implement 
agreed 
in 
telecommunications  and  electricity  are 
that  networks  are 
taken 
time  and 
, 
effectively  open  to  competition. 

opening 

market 

in 

railway 

services, 

In  transport,  priority  will  be  given  to 
opening  up  access  to  the  provision  of 
crossborder 
and 
railfreight  freeways.  In  the  air  transport 
the 
field,  new  rules  for  charges  and 
allocation  of  slots  at  Community  airports 
institutional 
and 
the  creation  of  new 
traffic 
structures  for  air  safety  and  air 
management  are  essential  for  effective 
market  integration. 

Action  2: Improve  the  business 
environment 

for  cross-frontier 

operations 

Companies  incur  unnecessary  costs  and 
delays  by  having  to  comply  with  different 
national  registration  rules  when  operating 
in  more  than  one  Member  State.  The 
Commission  calls  upon  the  Council  to 
adopt,  by  1  January  1999, its proposals  on 
the  Tenth  Company  Law  Directive  on 
mergers  and  on  the  European  Company 
the 
the 
Statute, 
recommendations  of the group  chaired  by 
Viscount  Davignon. 

light 

of 

in 

Increasingly  long  payment  periods  have 
serious  consequences  for  all  European 
firms,  in particular  SMEs whose  cash-flow, 
profitability  and  competitiveness  and 
opportunities  to  trade  across  frontiers  are 
undermined. 
SMEs' 
competitive  position  as suppliers  to  larger 

particular, 

In 

firms  is  often  distorted  by  deliberately 
long  payment  delays  by  the  latter.  The 
public  sector  should  also  set  a  better 
example.  The  Commission  will  publish  a 
little 
report  shortly  which  shows 
action  has  been  taken  by  Member  States 
to  reduce 
the 
this  problem,  and 
payments situation is getting worse. In the 
absence  of  sufficient  action  by  Member 
States  before  the  end  of  the  year,  the 
Commission  will  propose  a  draft  directive 
to  reduce  late  payments  in  Europe. 

that 

that 

Action  3: Face the challenge  of 
technology 
and  new 

innovation 

transparency  mechanism 

Electronic  commerce  offers  enormous 
opportunities  for  cross-border  trading  in 
Europe. A clear  regulatory  framework  will 
give  consumers  the  confidence  to  use  it 
and  businesses  the  incentive  to  make  the 
necessary  investments.  The  Commission 
seeks  early  agreement  on  its  proposal  for 
a 
as 
recent  Electronic 
indicated 
Commerce 
it  will  make 
proposals  on  distance-selling  of  financial 
services,  copyright,  digital  signatures  and 
conditional  access  services. 
The  Commission's  new  proposal  on  the 
protection  of  biotechnological  inventions 
should  be  adopted 
in  the  same  time 
frame. 

its 
Initiative, 

and, 

in 

DELIVERING A  SINGLE  MARKET  FOR THE BENEFIT OF ALL  CITIZENS 

STRATEGIC TARGET  4: 

Action  1: Eliminate  border  controls 

Action  2: The right  of  residence 

The  continued  existence  of  controls  on 
individuals  at  internal  frontiers  represents 
the  Single  Market's  most  important  failing 
for  many  citizens.  In  the  light  of  the 
IGC, 
outcome  of  discussions 
Member  States  are  called  upon  to  agree 
and 
flanking  measures 
necessary  to  provide  a  secure  framework 
for  the  free  movement  of  people  so  as  to 
allow  urgent  adoption  by  the  Council  of 
the 
on 
Commission's 
eliminating  frontier  controls. 

proposals 

apply 

the 

the 

in 

People 

the  Free 
The  High  Level  Panel  on 
Movement 
the 
and 
of 
Commission's  report  on  Citizenship  of  the 
Union  have  highlighted  a  number  of 
shortcomings  in  the  way  citizens  can 
exercise  their  right  to  move  and  reside 
freely  within  the  territory  of  the  Member 
States. 

In  order  to  remedy  this  situation  and  to 
give full  value  to  citizenship  of  the  Union, 
the  Commission  will  propose,  inter  alia, 

ll 

arrangements  for  short-term  residents  and 
adaptation  of  the  right  to  reside  and  to 
remain  in  the  host  Member  State. 
Member  States  are  called  upon  to  act 
swiftly  on  these  proposals  in order  to give 
its  full  meaning  to  the  notion  of  Union 
citizenship. 

Action 3: Protecting social rights 

Social  policies  have  a  crucial  role  to  play 
in  the  development  of  the  Single  Market 
by  defining  a  new 
interplay  between 
flexibility  and  security.  This  will  help 
create  the  conditions  for  change,  and 
promote  new  ways  of  working  while 
guaranteeing  adequate  social  rights.  The 
social  dialogue  has  a  vital  role  to  play  in 
this  respect.  Negotiations  are  currently 
taking  place  between  the  social  partners 
on  part-time  work,  and  the  recent  Green 
new 
Paper 
organisation  of  work  has 
launched  a 
broad  debate  on  how  to  respond  to  these 
new  challenges.  This  will  be  followed  by 
specific  initiatives  in  the  framework  of  a 
new  Social  Action  Programme  in  early 
1998. 

partnership 

for 

on 

a 

restructuring 

from 
resulting 
Industrial 
market  integration 
is  beneficial  to  the 
Union's  economy  but  can  have  serious 
social  consequences  for  the  communities 
involved.  The  Commission  will  monitor 
closely  the  application  of  the  Community 
rules  on  the  consultation  of  workers.  It 
calls  on  the  Member  States  to  review 
national  provisions  for  the  enforcement  of 
these  rules  and  the  penalties which  apply. 
It  will  also  soon  launch  consultation  of 
the  Social  Partners  at  European  level  on 
possible  Community  framework  rules  on 
information  and  consultation  at  national 
the  Commission  will 
level.  Finally 
continue  to  define  a  more  balanced  and 
coherent  approach  in  the  application  of 
all Community  policies affecting  industrial 
restructuring.  This  will  include  efforts  to 
encourage  companies  and  the  Member 
States  to  anticipate  the  consequences  of 
restructuring 
the 
and 
employability  of  workers  by  adapting 
training  and  social  protection  systems. 

ensure 

12 

Action 4: Promoting  labour  mobility 
within the Union 

of  measures  designed 

Although  the  Treaty  has  long  guaranteed 
European  citizens  the  right  to  live  and 
work 
labour 
in  any  Member  State, 
mobility in the Single Market  remains  low. 
This  is partly  due  to  remaining  barriers  to 
the  free  movement  of  workers,  which 
must  be  eliminated.  Building  on 
the 
report  of  the  High  Level  Panel  referred  to 
above,  the  Commission  will  propose  a 
package 
to 
overcome  these  barriers. In  parallel,  it will 
present  a  proposal  on  supplementary 
pensions, 
the 
simplification  and  modernisation  of  the 
system 
security 
arrangements  for  people  moving  about 
the  Union.  The  Council  is  also  called  on 
to  adopt  the  Commission's  proposals  on 
extending  the  scope  of  family  reunion 
and  consolidating 
to  equal 
treatment  as  regards  social  benefits. 

coordinating 

and  work 

the  right 

towards 

social 

To raise  awareness  of job  opportunities  in 
other  Member  States  and  increase  labour 
mobility  the  Commission  will  improve  the 
EURES  database  on  pan-EU  employment 
opportunities.  Member  States  will  be 
invited  to  make  this  information  more 
widely  available  by  integrating  it  into  the 
mainstream  of  their  public  employment 
services. 

Action 5: Consumer rights and  health 
protection 

Consumers  may  hesitate  before  buying 
goods  and  services,  including  financial 
services,  across  frontiers  because  they  are 
unsure  of  their  rights.  Agreement  on  the 
proposal  on  consumer  guarantees  would 
for 
the 
be  one  of 
improving  consumer  confidence. 

important 

step 

Consumer  health  protection  will  be 
reinforced  through  more  effective  use  of 
scientific  advice,  control  and  risk  analysis. 
This will  be  used  to  ensure  that  consumer 
health  is  taken  into  account  during  the 
drafting  of  new  legislation,  that  current 
legislation  is  properly  applied  and  that 

Community  interests  are  defended  in  the 
international  context.  In  addition, 
the 
Commission 
is  considering  whether 
primary  agricultural  products  should  be 
on 
covered 
producers'  liability  for  defective  products. 

by  Directive 

85/374 

Action 6:  Dialogue  with the Citizen 

the 

about 

Most  European  citizens  are  keen  to  find 
rights 
out  more 
and 
the  Single 
opportunities  offered  by 
Market;  more  than  half  a  million  people 
have  already  made  use  of  Citizens  First  to 
find  out  what  they  need  to  do  in  practice 

that 

considers 

in  another 
to  reside,  study  or  work 
Member  State.  Building  on  experience, 
the  Commission 
a 
permanent  mechanism  is  necessary  for 
dialogue  with  citizens  on  their  rights  and 
how  tc  exercise  them.  A Signpost  Service 
will  also  be  made  available  to  advise 
citizens  who  run  into  problems  and  need 
help.  Feedback  from  this  mechanism  will 
eliminate 
help 
identify 
the 
administrative  obstacles  and  keep 
how 
Commission 
Community 
in 
practice. 

about 
respected 

informed 
are 

rules 

and 

to 

THE INTERNATIONAL DIMENSION OF THE SINGLE MARKET 

Its 

size 

investment 

environment. 

The  Single  Market  cannot  be  considered 
in  isolation  from  its  wider  economic  and 
political 
and 
potential  growth  already  constitute  an 
asset  in  terms  of  attracting  international 
trade  and 
to  Europe.  The 
Single  Market  is  providing  the  conditions 
international 
for 
competitiveness  and  its  success  serves  as 
a  model  for  other  regions. These  strengths 
will  be  reinforced  by  a  single  currency. 
The  Union  should  capitalise  more  on 
these  advantages. 

improving  European 

(ii) The global context of the  Singh 
Market 

The  Single  Market  is  the  reflection  of 
Europe's  open  economy,  with  its  rules 
and  standards  frequently  a  reference  for 
many  countries.  This  is  an  asset  which 
should  allow  the  Union  to  play  a  stronger 
role 
it 
speaks  clearly  with  one  voice.  Action  will 
focus  particularly  on  the  following  areas: 

fora  provided 

international 

in 

•  approximation  of  systems  and  rules  in 

the  Euro-Mediterranean  area; 

(i) Preparing for  enlargement 

•  attacking  technical  barriers  to  trade  in 

into 

their 

integration 

As  agreed  by 
the  European  Council 
following  the  Commission's  1995  White 
Paper,  the  associated  countries  preparing 
for  accession  must  be  assisted  to  prepare 
for 
the  Single 
Market.  The  extension  of  the  activities  of 
Information 
the  Technical  Assistance 
Exchange  Office 
(TAIEX)  beyond  1997 
will  contribute  to  that  objective.  Where 
fully 
the  Community  acquis  has  been 
the  Conformity  Assessment 
integrated, 
Agreements  offer 
the  possibility  of 
opening  markets. 

third  country  markets; 

•  assisting  SMES  to  compete  in  world 

markets; 
•  favouring 

the  use  of 

international 
standards  in  national  and  international 
technical  regulations; 
•  negotiation  of  mutual 

recognition 

agreements; 

•  fighting  intellectual  property  fraud; 
• 
liberalising  financial  services  (GATS); 
•  a  common  negotiating  position  for  air 

transport; 

•  coordination  of  Member  States 

international 
communications; 

fora 

for 

•  strengthening  and  expanding  WTO 
and 

competition 

for 

disciplines 
investments. 

13 

in 
tele 

An  important  step  will  be  to  ensure  full 
Community  participation  in  international 
particularly 
organisations, 
those 
the  development  of 
responsible 
technical  regulations  and  standards  and 
full  exploitation  of  other 
frameworks, 
such  as 
the  Trans-Atlantic  Business 
Dialogue. 

for 

CONCLUSION 

further 

requires 
the 

the  Union's  external 
The  policing  of 
to 
frontiers 
strengthen 
customs 
authorities  to  work  together  as  effectively 
as  possible,  particularly 
fight 
against  fraud. 

ability 

action 

the 

of 

in 

The  draft  Action  Plan  is the  key  to  unlock 
the  full  potential  of  the  Single  Market.  It 
should  improve  the  competitiveness  and 
job-creating  capability  of  business  in  the 
run-up  to  the  introduction  of  the  single 
currency.  It  represents  a  balanced  and 
full 
coherent  approach  which 
account  of  the  concerns  of 
individual 
citizens  regarding  their  personal  rights, 
the  environment,  the  protection  of  health 
and  safety,  and  the  social  dimension. 

takes 

The  prize  is immense. If we  are  successful 
confidence  could  be  generated  across 
Europe.  The  European  Union  will be  able 
to  draw  strength  before  the  end  of  the 

century  from  the  convergence  of  several 
major  developments  :  a  first-rate  single 
market,  the  single  currency,  new  pan-
European  market 
as 
previously  closed  sectors  open  up  and 
enlargement  of  the  Union  - all  leading  to 
more  employment  opportunities. 

opportunities 

institutions  and 

All  Community 
the 
Member  States  are  called  on  to  play  their 
full  part  in  ensuring  a  strong  positive 
response  to  this  call  for  action  to  ensure 
that  all  the  elements  of  the  Plan  finalized 
at  the  Amsterdam  European  Council  are 
implemented  before  the  1 January  1999 
deadline. 

ANNEX: LIST OF ACTIONS (TO BE TAKEN BEFORE 1  JANUARY  1999) 

1.  Making  the rules more effective 

•  All  delays  in  transposition  of  the 
to  be 

legislation 

Single  Market 
eliminated 

•  Establishment  of  a  framework  for 
enforcement  and  problem-solving 
•  Adoption  of  new  rules  on  market 
surveillance  in  selected  sectors 
of 

•  Adoption 

second 

IDA 

programme 

•  Implementation  of 
2000  programme 
up 

•  Speeding 

procedures 

the  Customs 

infringement 

•  Establishment  of  an  Internet  shop 
for  information  on  all Single  Market 
rules  affecting  business 

•  Extension  of  SLIM  and  other 

14 

of 

insurance 

European 
for  certain 

simplification  work  to  new  sectors : 
and 
VAT,  banking, 
securities,consumer 
services, 
telecommunications,  customs  rules 
and  procedures  and  fertilizers 
a 
Consultation 
Business  Test  Panel 
legislative  proposals 
Simplification  of  national  business 
start-up  rules 
Follow-up  to  Commission  initiatives 
concerning  public  procurement, 
European 
mutual 
conformity  marking, 
standards, 
construction  products, 
transit  rules 
and 
links  between  Single 
Market  policy  and  the  environment. 

recognition, 

the 

ANNEX:  LIST OF ACTIONS  (TO  BE TAKEN BEFORE  1  JANUARY  1999)  CONTINUED 

2.  Dealing  with  key market  distortions 

•  Adoption  of  proposals 

the 
modernization  and  more  coherent 
application  of VAT 

for 

•  Restructuring 
framework 
for 
energy  products 

the  Community 
taxation  of 
the 

•  Adoption 

package 
a 
(modified  Directive  on  the  taxation 

tax 

of 

3.  Attacking  sectoral obstacles to  market 

integration 

of 

on 

a  new  general 

Adoption  of 
framework  UCITS Directive 
Reduction 
restrictions 
of 
investment  by pension  funds 
Agreement  on  the  liberalisation  of 
gas  supply 
Implementation 
communications 
liberalization  on  time 
Agreements  on  crossborder  railway 
services  and  railfreight  freeways 
Adoption  of  new  rules  on 
the 
allocation  of  airport  slots  and  on 
charges 
Agreements 
of 
on 
European  Air  Safety  Agency  and 
new  EUROCONTROL  convention 

tele 
electricity 

creation 

and 

4.  Delivering  a Single Market  for  the 

benefit  of all  citizens 

of 

on 

accompanying 
Adoption 
measures  and  of  3  Directives  on 
c o n t r o l s, 
abolition  of  frontier 
to 
right 
restrictions 
movement  and  the  right  to travel 
Adaptation  of  right  to  reside  and 
remain  in another  Member  State 
Adoption 
supplementary  pensions 

of  Directive 

the 

on 

of savings, Directive on  crossborder 
payment  of  interest  and  royalties, 
code  of  conduct  on  harmful  tax 
competition) 
Guidelines  on  regional  state  aid 
schemes  ,  stricter  rules  on  rescue 
and 
and 
simplification  of anti-trust  rules. 

restructuring 

aids 

for  a 

mutualities 
and 

Adoption  of  the  proposals  for  the 
European Company Statute  , related 
for  statutes  on  co 
proposals 
operatives, 
and 
the  Tenth 
associations 
Company  Law Directive 
Adoption  of  proposal 
Directive  on  late  payments 
Adoption  of  electronic  commerce-
related  measures  (proposals  on 
transparency  mechanism,  copyright 
and 
rights  protection, 
distance selling of financial services, 
digital 
conditional 
access services) 
Adoption  of  Directive  on 
protection 
of 
inventions 

the 
biotechnological 

signatures, 

related 

Improvement  and  wider  use  of  the 
EURES employment  database 
Adoption of Directive on the sale of 
consumer  goods  and  associated 
guarantees 
Establishment  of  a  mechanism  for 
dialogue  with  citizens 
Consultation  of  the  social  partners 
on  information  and  consultation  of 
workers. 

15  — 

ISSN 0254-1475 

COM(97)  184  final 

DOCUMENTS 

10  01 

Catalogue  number  :  CB-C0-97-197-EN-C 

ISBN  92-78-19520-0 

Office  for Official  Publications of the European  Communities 

L-2985 Luxembourg