Opinion of the Economic and Social Committee on the 'Action Plan for the Single Market - Scoreboard No 3'
Date: 1999-02-24
Institutions: European Economic and Social Committee
Subjects: ESC opinion, European Economic and Social Committee, report, single market

C 116/6

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Official Journal of the European Communities

28.4.1999

Opinion of the Economic and Social Committee on the ‘Action Plan for the Single Market —
Scoreboard No 3’

(1999/ C 116/02)

On 9 December 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 —
Scoreboard No 3’.

This decision was confirmed by the new Bureau on 15 October 1998.

The Section for the Single Market, Production and Consumption, which was responsible for preparing
the Committee’s work on the subject, adopted its opinion on 11 February 1999. The rapporteur was
Mr Little.

At its 361st plenary session (meeting of 24 February 1999) the Economic and Social Committee adopted
the following opinion by 70 votes to two with two abstentions.

1.

Introduction

The third issue of the Commission’s Single Market
1.1.
Scoreboard was published in November 1998 and constitutes
the third progress report on The Action Plan for the Single
Market published in June 1997 and due to be implemented by
31 December 1998.

1.2.
The report provides updated information in the same
format as the second issue with some additional statistics, a
changed emphasis in the reporting of feedback and a presen-
tation of the results of a business survey undertaken in
September, 1998.

1.3.
In addition to the opinions given regularly on specific
aspects of the single market, the Committee has provided
opinions on the Commission’s ‘Draft Action Plan for the
Single Market’ and on the first two Scoreboards.

As in the previous opinion(1), it is the intention to
1.4.
focus in this opinion on what seem to be the most important
issues within the Commission’s report and not to reproduce
or comment on every item. However, the opportunity is being
taken also to express views as to how the momentum
generated by the Action Plan should be maintained.

2. General Comments

2.1. Scoreboard No 3

2.1.1.
The Committee commends the form of presentation
maintained in the third issue. It welcomes the categories of
information again provided and the continuing analysis of
progress made in different areas and by individual Member
States.
In identifying achievements and shortcomings, the
report achieves a reasonable balance even though it reaches a
more favourable overall conclusion as to the outcome from
that of the Committee.

(1) OJ C 407, 28.12.1998, pp. 60-66.

2.1.2.
The Scoreboard’s straightforward and factual presen-
tation has been particularly well-targeted in posing a challenge
to the political will to complete the transposition of legislation
into national law. The analysis of non-transposed directives
for each Member State by the length of delay and by sector is
particularly instructive. The Committee considers it to be
essential that a political commitment to complete the process
be guaranteed.

The Committee feels that the least persuasive section
2.1.3.
of the report is Part D in which statistics relating to Foreign
Direct Investment and State Aids are provided under the
heading of Single Market Economic Integration. Whilst it
might be implied by the title that there has been movement
towards economic integration, the text of the report does not
directly link the information given under the two sub-headings
with any such movement nor does it provide other pointers
which would indicate that economic integration is taking
place. The Committee would have preferred to see indicators
which show more specifically the economic benefits and social
developments attributable to the single market.
looks
forward to receiving a separate report on economic integration
which, it is advised, will be published by the Commission in
1999.

It

2.2. Action Plan

2.2.1.
The Committee recognizes that the Action Plan has
served a very worthwhile purpose in that it has both driven
and facilitated progress towards completion of the legislative
framework and that a stronger single market is emerging in
which citizens and business will be better able to take
advantage of the opportunities available.

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2.2.2.
However, the Committee does not subscribe to the
view expressed by the Commission that the Action Plan ‘can
already be counted as a success’. Consider that, as of 15 Octo-
ber, 1998:

— one third of the commitments of the Commission, Council
and European Parliament under the June, 1997 Action
Plan have not been met;

— almost 15 % of Directives (203) have not yet been applied

in all Member States(1);

— over half of the Directives dealing with telecommuni-
cations, public procurement and transport have not been
transposed in all Member States;

— Member States with a poor record on implementing
Directives also tend to be the poorest in applying the rules;

— trade barriers are considered to be broadly similar to those

a year ago.

Notwithstanding what has been achieved, the Action Plan
failed to realize its objectives. No independent business would
survive if it failed consistently to meet one-third of its targets!

The Commission acknowledges that much remains
2.2.3.
to be done and states its intention to issue further editions of
the Scoreboard. The Committee agrees that the Action Plan
deadline should not be extended and does not advocate the
setting of another target date. However, concentrated attention
on the implementation and enforcement of single market rules
must be maintained by one means or another.

3. Specific Comments

3.1.

Infringements (Part B 2 of Scoreboard No 3)

3.1.1.
Interesting sectoral information is given regarding
the numbers of cases dealt with under the formal infringement
procedure which can lead to references to the Court of Justice.
The continuing high number of infringement proceedings
gives cause for concern, even if many cases are halted
after constructive dialogue between the Commission and the
Member State in question. The Committee feels that it would
have been useful for the Commission to explain reasons
for the continuing breaches of Community law. Further
developments should be carefully monitored and analysed by
the Commission.

(1) Subsequently reported by the Commission to be 13,2 % (181) at

2.12.1998.

3.2. Enforcement and problem solving (Part C 1)

3.2.1.
Reports on the operation of Coordination Centres
and Contacts are given for only five Member States and, on
the evidence available, minimal use is being made of these
facilities so far.

3.2.2.
The Committee is disappointed that Contact Points
do not yet appear to have been utilized at all by citizens facing
cross-border labour market difficulties (other than holiday
jobs).

3.2.3.
Clearly, there remains much to be done by both the
Commission and Member States to promote and expand the
use of the framework now in place if it is to be an effective
conduit for individual citizens and businesses.

3.2.4.
Better use of the Internet could also facilitate better
understanding and the new ‘Internet Shop’ recently introduced
by the Commission may help in this regard.

3.2.5.
Other communication channels not linked solely to
the single market, e.g. EURES, are available to all citizens and
their continuing use should be encouraged also.

3.3. Regulatory simplification (Part C 3)

3.3.1.
The Commission refrains from passing any judge-
ment whatsoever on the measures for simplifying legal pro-
visions. It does not repeat the critical comments which it made
in the previous report on the inadequate results of the SLIM
initiatives.
Instead it provides, and sets out clearly, more
detailed information than in the past on the transposition to
date of the recommendations made by the Phase I and Phase II
SLIM teams. Figures 19 and 20 show that it now considers the
progress made as satisfactory.

The Committee is pleased to note the continuing
3.3.2.
focus by both the European Council and the Commission on
the desire for regulatory simplification at all
levels and
the wide-ranging tasks being undertaken through the SLIM
initiative. The process is accepted as being one which should
bring major benefits in the longer term although it is essential
to ensure that the legitimate interests of all parties concerned
are not prejudiced by it. The Committee feels that
the
effectiveness of the action taken has generally still to be seen
by users and views the delay in tackling construction products
legislation as a matter of concern.

3.3.3.
The Committee also welcomes the fact that the
Commission, in keeping with the recommendations of the
SLIM team, has now presented proposals for simplifying VAT.
It once again calls on the Commission and the Member States

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to ensure that when European legislation is drawn up in future,
more attention is paid from the outset to the objective of
keeping the legislation as simple as possible.

3.3.4.
It is noted that the VAT proposal has been the subject
of the first pilot-stage consultation with the new Business Test
Panel. The Commission provides brief information about this
initiative although, strictly speaking, it does not concern the
simplification of legislation but rather the assessment of the
implications of a proposed law in terms of costs. It will report
in detail in summer 1999 on the first two pilot projects and
the Committee eagerly awaits this appraisal. It assumes that
this new channel of communication will be used only as an
additional check in the case of certain draft laws where it
would appear necessary to assess the prospective cost of the
proposal, to SMEs in particular. Furthermore, such consul-
tation of firms would only make sense if conducted in the
preparatory phase of new legislation in order that, if necessary,
an alternative way of solving the problem could be found
and provided that such consultation takes place through
representative interest groups.

3.4. Action Plan Implementation (Annex)

It is felt by the Committee, taking due account of the
3.4.1.
fact that progress is measured against the Action Plan targets
and not against full completion, that the Commission has been
over-optimistic to a degree in its assessment of achievements
under the Plan, e.g. with regard to mutual recognition and to
the European company statute.

regard to those topics covered in the Business Survey published
in the Scoreboard, the conclusions which emerged relate
closely to the Survey’s results. It is clear that prime concerns
of economic players remain the need for the elimination of
barriers to trade by even enforcement of legislation and rules
and the elimination of protectionism. The suspicion voiced in
the
‘Member States may be
implementing single market legislation selectively in such a
way that serves national interests’ has not been dispelled.

second Scoreboard that

4.3.
The Hearing also concluded that a successful and
efficient single market is essential to ensure competitiveness,
employment and cohesion within the EU on the launch of the
euro and with the real prospect of further major enlargement.

In its Opinion(1) on ‘Preventing new barriers to trade
4.4.
from arising in the Single Market’, the Committee encouraged
both the EFTA countries and the states which have applied for
membership to take similar measures as the EU countries. To
this end, the EFTA Surveillance Unit has now published two
single market scoreboards but the Committee continues to be
concerned with the importance of the enlargement candidates
adopting, as far as possible, single market rules before joining
the EU.

4.5.
A majority of respondents to the questionnaire associ-
ated with the above Hearing were not satisfied with the way
the single market was operating and it was felt that the benefits
derived from it were not sufficiently clear to citizens and
consumers.

4. Considerations for the future

One of

4.1.
the most striking statements in the 3rd
Scoreboard was that the Business Survey showed that two-
thirds of companies had not taken action to overcome barriers
faced when doing business in the single market. This situation
is not surprising but it is very useful that it has been quantified.
However, it cannot be satisfactory that such issues are not
being addressed and that, in consequence, full single market
benefits are not being realized. Use of the Contact Points set
up under the Action Plan might help in this regard but, in
addition, there is an opportunity here for the ESC, through the
Single Market Observatory, to provide a facility for businesses
to expose such problems outwith the formal complaints
procedure and to help to have them overcome. It is a major
objective of the SMO to so do but clearly consideration will
have to be given as to how it can be undertaken more
effectively.

4.6. Whilst the Committee concurs with the Commission’s
view that the introduction of the euro will bring a new
dimension to the single market, it is by no means the final
piece of the jigsaw. Rather, it will serve to expose uncompleted
areas by making differing prices and costs more transparent.
After a period when energies and vision have been focused on
launching the euro and reaching the next phase of EMU, there
should now be scope to redirect resources and efforts at the
single market.

The Scoreboard tabulates and describes many areas of
4.7.
ongoing action required to be taken by Member States,
Council, European Parliament and the Commission. The
Committee would like to see a continuing concerted effort
made to achieve further progress and welcomes, in principle,
the Commission’s intention to produce further reports on
progress.

4.2.
The ESC held a Hearing with a wide range of socio-
economic representatives on 15 September 1998 and, with

(1) OJ C 157, 25.5.1998, p. 36.

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4.7.1.
However, it is understood that consideration is now
being given to the issue of reports on a more frequent but
more limited basis. The Committee is concerned that such a
change would detract from the necessary longer-term perspec-
tive and, indeed, it feels that as far as economic indicators are
concerned, it would be better for these to be provided on a
less frequent, say annual, basis. It would prefer to see the
continuation of consolidated reports and reiterates the wish
expressed in its previous opinions that these reports be further
developed so as to reinforce their impact. The Committee
proposes that they should include performance indicators that
reflect the experience of employees as well as that of business.
Such reports should become a main source of information for
all participants in the single market.

4.7.2.
The Committee acknowledges that the ‘Scoreboard’
title has provided a very succinct and eye-catching banner
under which to report progress under the Action Plan.
Notwithstanding, the Committee doubts whether it is appro-
priate to present future comprehensive reports as ‘Score-
boards’. The title would continue to be associated with an
Action Plan the termination date of which has now passed and

which set another unfulfilled target date for completion of the
Single Market; to continue to use the Scoreboard heading
could suggest complacency by implying infinite extension of
the Action Plan deadline and would be much less appropriate
when the stated intention is to focus more on qualitative data.
The Committee suggests that further comprehensive reports
be produced under a heading such as ‘Progress and Backlog’
which would be, deliberately, less neutral than ‘Scoreboard’
and could be equally media-friendly.

4.8.
The Committee notes with considerable interest that,
in addition to reports such as discussed above, the Commission
intends to publish a number of strategic reports on the single
market(1) in the near future culminating with a presentation to
the June Summit in Cologne of the status of the single market
and the perspective for the following three years. On its own
initiative,
the Committee itself will continue to monitor,
investigate and report on the general progress of the single
market and on both specific and horizontal facets.

(1) The first of these reports ‘Economic Reform: Report on the
Functioning of Community product and capital markets’
(COM(99) 10) was published on 20 January 1999.

Brussels, 24 February 1999.

The President

of the Economic and Social Committee

Beatrice RANGONI MACHIAVELLI