Opinion of the Economic and Social Committee on the 'Action Plan for the single market'
Date: 1998-03-25
Institutions: European Economic and Social Committee
Subjects: EU Member State, action programme, national implementing measure, single market

25.5.98

EN

Official Journal of the European Communities

C 157/45

Opinion of the Economic and Social Committee on the ‘Action Plan for the single market’

(98/C 157/12)

On 30 September 1997 the Economic and Social Committee, acting under the second paragraph
of Rule 23 of its Rules of Procedure, decided to draw up an opinion on the ‘Action Plan for
the single market’.

The Section for Industry, Commerce, Crafts and Services, which was responsible for preparing
the Committee’s work on the subject, adopted its opinion on 4 March 1998. The rapporteur
was Mr Pasotti.

At its 353rd plenary session (meeting of 25 March 1998), the Economic and Social Committee
adopted the following opinion by 76 votes to five, with two abstentions.

1. General comments

1.1.
The Committee greets the publication by the
Commission of information on the state of progress of
the single market, based on the first edition of the ‘Single
Market Scoreboard’, (presented to the Luxembourg
Council in December 1997) with great interest, but also
considerable concern.

In its previous opinion on the subject (1), the
1.2.
Committee argued that it was essential for the com-
pletion of the single market for all agreed rules to be
precisely and accurately transposed into Member State
law, for implementing procedures to be defined provid-
ing all those involved with straightforward and effective
means of seeking redress for conduct not conforming to
the rules, and for all citizens concerned to be informed
as fully as possible.

1.3.
The importance of these aspects is confirmed by
the choice of strategic objectives in the Action Plan, and
was emphasized when the plan was adopted by the
Amsterdam European Council.

For the first time, the Single Market Scoreboard
1.4.
(SMS), which the Commission plans to publish twice
a year, contains essential
information in a readily
understandable form for assessing these aspects and
hence identifying what remains to be done in order to
reach the 1999 deadline with the greatest possible degree
of single market completion.

1.5.
A further important aspect of this initiative
to gather and publish information regularly on the
commitment of each Member State is the introduction
of an element of transparency into relations between
European partners. Provided appropriate channels for
the publication of the results are devised, this should
spur countries to vie with one another in making the

benefits of the single market fully available to their own
citizens. It is too early, however, to gauge the effect of
this potential stimulus. The concern the Committee feels
on studying the first report by the Commission on its
Scoreboard arises from the extent to which it reveals, as
indicated below, that Member States are lagging behind
in the actions they are required to take to promote the
completion of the single market.

2. The Single Market Scoreboard (SMS)

The present opinion focuses on the SMS. The Committee
is however monitoring all the measures relating to single
market completion, by means of its Single Market
Observatory and by drawing up specific opinions.

2.1. Transposition of directives

2.1.1.
The first consolidated indicator of the state of
single market progress presented by the SMS is the
number of single market directives implemented by all
Member States. As of 1 November 1997, an average of
more than 25 % of single market measures had not yet
been implemented in the EU as a whole: a similar figure
applies for primary directives alone (i.e. those not
amending
in
implementation rates are also significant, with the bulk
of the figures relating to significant aspects in the
completion of the single market. Transport, with 60 %
of directives not yet transposed, public procurement
with 55 %, and intellectual property rights with 50 %,
are singled out.

earlier directives). The

variations

(1) Opinion on the Communication from the Commission to
the European Parliament and the Council on the Draft
Action Plan for the Single Market — OJ C 287, 22.9.1997,
p. 89.

2.1.2.
In order to tackle this problem, the Action Plan
called upon Member States to report by 1 October 1997
their timetables for steps to implement all directives.
The data contained in the SMS suggest that, provided

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each Member State complies with the programmes it
has announced, the legislative framework of the single
market will be complete by the deadline of 1 January
1999.

2.1.3.
The Committee nevertheless notes that, despite
this forecast, the Scoreboard shows that no Member
State has given notification of a full timetable, with
around 15 % of notifications not forthcoming, and that
the Member States’ declared targets are highly ambitious
when compared with the time so far required for
transposition. In some cases, adding average delays of
two years to the periods laid down in the directives, the
entire process will take some four years. Such a delay
would be damaging to the hopes invested in the
satisfactory completion of the single market. The Com-
mittee looks to the Commission, in its second Scoreboard
report, to state clearly whether it perceives a willingness
on behalf of Member States to meet their obligations on
time.

2.2. Effective application of legislation and problem-

solving

2.2.1. Making the benefits of
the single market
accessible to citizens does not however only mean
making the necessary legal changes to transpose single
market rules into national law. While nearly all Member
States have appointed their own single market coordi-
nation and information centres for businesses and the
general public — where, as the Commission points out,
the challenge is to ensure that such information now
filters down to the latter — and informed the Com-
mission of them, the Scoreboard section on problem-
solving and enforcement reveals that few countries
have yet taken similar steps concerning structures and
procedures for enforcing single market rules.

2.2.2.
The Committee attaches great importance to
this aspect, considering it to be a gauge of the efforts —
as yet inadequate — made by the Member States to
overcome the difficulties encountered by individuals and
businesses in exploiting single market opportunities.

2.2.3.
Similarly, the Committee agrees with the Com-
mission on the importance of Member States following
up on notification actions by coordinating their own
information points in a functional network, allowing
problems to be resolved in the first instance bilaterally.

Regarding cases requiring Commission inter-
2.2.4.
vention under the terms of Treaty Article 169, the fact
that the average Member State response time to letters
of notice addressed to them is twice the 60 days provided
under the infringement procedure gives cause for con-
cern. Close adherence to the Treaty on this point is
essential.

2.2.5.
In the eyes of the general public and businesses,
the credibility of the Member States’ commitment to
completing the single market also depends upon their
chances of obtaining rapid and effective solutions to the
obstacles they encounter in using it. As highlighted in
the Committee’s opinion on the Communication from
the Commission on the impact and effectiveness of the
single market, the smaller the scale of the single market
actors, the greater the obstacles.

2.2.6.
From this point of view, the Committee is struck
by the business survey’s finding that approximately half
the SMEs in a situation justifying the introduction of a
formal complaint had not done so because they were
unaware of the procedures or found them too costly and
complex. The figure rises to over 80 % for those
feeling that the efforts required outweighed the expected
benefits.

2.2.7.
This confirms the value of a drive for trans-
parency in the completion of the single market, in part
by stepping up actions to inform citizens in line with the
provisions of the ‘Citizens First’ initiative — which
alone, however, cannot resolve the problem of slowness
in the process of Member State administrative change.

2.2.8.
The Committee therefore takes note of the
proposal for a Council regulation (1) allowing the Com-
mission to intervene with regard to Member States in
which clear infringements of the right of freedom of
movement of goods have occurred, to ensure they take
the necessary measures. Such action must protect the
right of workers and trade unions.

2.3.

Implementing the Action Plan

2.3.1. S t r a t e g i c o b j e c t i v e 1 : M a k i n g t h e

r u l e s m o r e e f f e c t i v e

The Committee is particularly concerned that
2.3.1.1.
major actions designated as necessary to the satisfactory
completion of the single market, such as public procure-
ment and in the area of European standards, are at a
stand-still. The Committee looks to the Commission for
a fuller report on the state of progress with such matters
in its second Scoreboard report.

2.3.2. S t r a t e g i c

o b j e c t i v e 2 :

D e a l i n g

w i t h k e y m a r k e t d i s t o r t i o n s

2.3.2.1.
Issues of fiscal policy represent an aspect
which is complex and sensitive, but of paramount

(1) Proposal for a Council Regulation (EC) creating a mecha-
nism whereby the Commission can intervene in order to
remove certain obstacles to trade.

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importance in relation to market distortions. The
relevant actions under the Action Plan concentrate on
such distortions, together with the rules governing
competition.

proposal for a Directive, fails to take proper account of
the serious issue of payment periods, as proposed by the
Committee’s earlier Opinion of 30 June 1993 (2).

2.3.2.2. Once harmful fiscal competition begins to
affect the natural competitive playing field between
countries, Member States’ room for manoeuvre in
restructuring their own fiscal systems is reduced. This
has major implications for the coordination of fiscal
systems within the European Union.

2.3.2.3.
The Committee looks with great interest
upon the measures contained in the conclusions of
the Ecofin Council meeting on 1 December 1997 (1),
concerning the code of conduct for Member States on
harmful tax competition, finding a minimum Com-
munity solution to taxation of capital
income and
withholding taxes on interest.

The importance of the Action Plan’s moves
2.3.2.4.
on indirect taxation is confirmed by the business survey’s
finding that companies, regardless of size, single out the
complexity of VAT rules as one of the greatest remaining
obstacles to the free movement of goods and services.

2.3.4. S t r a t e g i c o b j e c t i v e 4 : D e l i v e r i n g
t h e b e n e f i t

f o r

a s i n g l e m a r k e t
o f a l l c i t i z e n s

2.3.4.1.
Considerable delays continue to exist in
establishing mobility for individuals in terms of the
complete removal of border controls, the right to settle
and the right to work in any Union country.

2.3.4.2.
Following the Amsterdam Treaty, which is
still to be ratified, the relevant measures contained in
the Action Plan should be reviewed.

2.3.4.3.
The Commission is asked to draw up a
communication on citizens’ mobility and obstacles to it.

2.3.4.4.
The Action Plan’s proposal for a directive on
the completion of legislation on pension systems should
be included among the priorities.

2.3.2.5.
A consensus on the part of the single market’s
users is certainly a critical factor in its success, but the
Committee must also emphasize that there are major
opportunities to channel the Member States’ commit-
ment into positive action in the field of tax harmoni-
zation.

2.3.4.5. On these as on the other questions discussed
in the present opinion, the Committee hopes — as it did
in its specific opinion on this subject — that the various
EU institutions will make full use of the contribution
which associations and foundations can make to
implementing Community policies.

Concerning State Aids, where the SMS notes
2.3.2.6.
that progress is almost complete, the Committee would
take this opportunity to make the general point that,
from the socio-economic actors’ point of view, it is not
entirely convincing to base the table on the degree of
implementation of the Action Plan as the judgment
is based only on implementation of administrative
procedures with no mention of subsequent stages.

2.3.3. S t r a t e g i c

o b j e c t i v e 3 : R e m o v i n g
s e c t o r a l o b s t a c l e s t o m a r k e t i n t e -
g r a t i o n

2.3.3.1.
A number of significant obstacles remain,
some of which have long been in need of specific action.
One such is the preparation of the European company
statute. In particular, as regards the proper definition of
rules to govern competition, much remains to be done
on important topics such as telecommunications and
airports.

2.3.5. T h e

i n t e r n a t i o n a l d i m e n s i o n o f

t h e s i n g l e m a r k e t

The single market cannot, of course, be
2.3.5.1.
looked at in the abstract, away from the broader
economic and political context of the European Union’s
development. The completion of the single market has
a key role to play in the EU’s enlargement procedure,
and in its relations with the European Economic Area
and, more generally, with other world market players.

2.3.5.2.
The Committee therefore proposes that these
issues — which are, moreover, specifically included in
the Action Plan — be specifically addressed in further
editions of the SMS.

3. Broadening the scope of the SMS

The Commission’s 1995 Communication on
2.3.3.2.
late payments which, by the December 1997 deadline
set out in the SMS, had not yet led to the adoption of a

3.1. While expressing its interest in the information
provided by the SMS, and its positive view of the
Commission’s decision to accompany the publication of

(1) OJ C 2, 6.1.1998, p. 1.

(2) OJ C 249, 13.9.1993, p. 21.

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the Scoreboard with a survey and sector report — which,
to some degree, extends the scope of analysis to the
expectations and needs of single market users — the
Committee would point out that an assessment of such
a complex and demanding programme as this one cannot
be restricted to purely quantitative aspects.

Although quantitative data are indeed necessary,
3.2.
they cannot be considered enough to judge the efficacy
of the planned actions. As the data on the options for
securing application of the rules make abundantly clear,
a more detailed analysis of single market users, whether
companies, workers or consumers,
is the only way
of obtaining an accurate picture of the degree of
commitment of those involved, in their different capaci-
ties, in completing the single market: the Council, the
Commission and the Member States.

3.3.
Since the inception of its Single Market Observa-
tory, the Committee has given priority to what might
be defined as a ‘bottom-up’ approach to assessment,
designed to complement the Commission’s ‘top-down’
approach. Two public hearings with the socio-economic
actors were held, in 1994 and 1997. Indeed, in view
of its mission, the Committee constitutes an ideal
vantage-point for identifying the needs of single market
users and monitoring the real impact of action under-
taken at political level. Combining these two perspectives
also helps to foster the atmosphere of general trust
which is a prerequisite for completion of the integration

Brussels, 25 March 1998.

process. Indeed, the Committee’s Opinion on Preventing
new barriers from arising in the Single Market specifi-
the Commission’s Scoreboard on
cally states that
implementation of Directives should include a test for
‘real lifting of barriers’

3.4.
The Committee intends to pursue this line
consistently in the future, with its own independent,
direct monitoring in order to assess such qualitative
aspects as the consistency of Member State, Council and
Commission actions in the areas covered, progress in
terms of simplification of rules and transparency, and
the impact on opportunities for economic growth and
employment.

Amongst the improvements which could usefully be
made to the Commission’s assessment reports, the
Committee urges that:
— the scoreboard indicators be backed up by the
following information: data showing comparative
changes, at EU and national level, to technical rules,
standards and patents; and data showing the trend
in the percentage of public contracts open to compe-
tition which have actually been awarded to non-
nationals;

— in tandem with the scoreboard, data be presented
on economic and social developments in the single
market; this data should cover inter alia, trends as
regards: economic growth, employment, mobility
of individuals, intra-EU and extra-EU trade and
international investment.

The President

of the Economic and Social Committee

Tom JENKINS