Communication from the Commission to the European Parliament and the Council - The strategy for Europe's Internal Market
Date: 1999-11-24
Institutions: European Commission
Subjects: EU action, Economic and Monetary Union, action programme, single market

COMMISSION OF THE EUROPEAN COMMUNITIES

CORRIGENDUM : point 7.2 de la fiche financière.
Concerne uniquement :Fr., De., et En.

Brussels, 29.11.1999
COM(1999)624 final/2

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN
PARLIAMENT AND THE COUNCIL

The Strategy for Europe’s Internal Market

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN
PARLIAMENT AND THE COUNCIL

The Strategy for Europe’s Internal Market

INTRODUCTION

On 5 October 1999, the Commission adopted a consultative Communication1 in which it set
out
its thinking on a strategy for the Internal Market over the next five years. The
Communication launched a short but highly-focussed debate in the Council, Parliament and
the Economic and Social Committee and among interested parties.

The response was positive. There is clearly broadly-based support for combining longer-term
strategic objectives with short-term, annually reviewed, target actions. An exchange of views
on the consultative communication took place at the Internal Market Council of 28 October
1999. Ministers gave a broad welcome to the proposed approach. In its resolution of 4
November2 Parliament welcomed the proposed structure and underlined the need for a unified
approach in achieving a coherent and consistent framework for legislation and non-legislative
measures, while ensuring the proper involvement of the Parliament. The Single Market
Observatory, a study group operating under the auspices of the Industry section of the
Economic and Social Committee, considered the Communication at their meetings of 8
October and 8 November. The Commission organised a hearing on 29 October which was
well-attended by representatives of
trade unions, other non-governmental
organisations and of the candidate countries3.

industry,

This Communication provides the Commission’s strategy for the Internal Market over the
next five years. It sets out four strategic objectives; the operational objectives that flow from
target actions the Commission
the (annually reviewed)
them and, for the first
recommends to deliver
the Commission’s
priorities, guided and informed by the views expressed by interested parties and in particular
by the European Parliament and by Member States - including the current and incoming
Presidents of the Council of Ministers.

time,
these objectives. The target actions reflect

The Commission invites the European Parliament, the Council, the Economic and Social
the proposed overall approach and in
Committee and all
particular the four strategic objectives. The Parliament and the Council are further invited to
support the implementation of the target actions and to ensure rapid adoption of the key
legislative measures.

interested parties to support

1

2

3

COM(1999) 464 final.
B5-0204/1999
A full report of the hearing can be found on the Commission’s website at
http://europa.eu.int/comm/dg15/en/update/strategy. Other comments were received by e-mail and
letter.

2

THE STRATEGY

This strategy for the Internal Market provides a coherent framework for policy development
for the years 2000-2004. It sets out a longer-term strategic vision which should direct the
identification of more immediate priorities for action. The overarching aim is constantly to
improve the performance of the Internal Market in the years ahead for the benefit of citizens
and business alike. The Commission recognises that the credibility of the Internal Market will
depend on its delivering and being seen to deliver these benefits. The strategy has been
conceived to reflect the characteristics of a more mature Internal Market :

•

•

•

•

•

•

•

•

4

their

the need to enhance the competitiveness of the European economy as well as to improve
the quality of life of European citizens. Where the interests of business and the consumer
diverge, they must be equitably reconciled. Community policies on the environment,
economic and social cohesion, health and safety and consumer rights need not only to be
co-ordinated with Internal Market policies but integrated into them, as required by the
Treaty.
the need to involve all stakeholders in the continuing development of the Internal Market,
be they citizens or business and whatever
location and circumstances. The
continuing development of the Internal Market should be at the heart of bringing the EU
closer to its citizens through its impact on their daily lives, as employees, employers,
consumers, pensioners, students, borrowers, savers, investors and taxpayers.
the need to remove all unjustified barriers to the free movement of goods, services,
persons and capital. The new legal framework, created by integrating national markets
must function optimally, in order to maximise the benefits to consumers, citizens and
business. A proper balance will be sought between legislative and non-legislative activity
and between harmonisation and mutual
the
Commission will support self-regulation and ensure that it achieves results in an open and
transparent way.
the need to promote comprehensive structural reform and modernisation through the
microeconomic strand of the process of multilateral economic surveillance, as established
by the Cardiff European Council.
the need to monitor and review the effects of existing Internal Market measures by using
and developing instruments such as the Scoreboard and the Cardiff report4. The Dialogue
with Citizens and Business should make full use of the opportunities created by
information technology to enhance inclusive and interactive policy-shaping.
the need to provide an adequate framework to unleash the great potential for the
development of the Internal Market for information and communication technologies,
including e-commerce.
the need to prepare for the next enlargement of the Union. The accession of ten or more
countries represents a major challenge to both current and future Member States. The
operation of the existing rules needs to be improved and the candidate countries
associated as soon as possible in their practical application.
the need to look beyond the borders of the Union. The internet and e-commerce offer even
the smallest of companies the opportunity to trade globally. The Union’s experience in
creating its Internal Market provides extensive experience on which discussions with its
main trading partners can be based.

recognition. Wherever appropriate,

The Single Market Scoreboard has proved to be a valuable monitor of legal and administrative progress.
The Cardiff report provides an annual assessment of the functioning of product and capital markets.

3

Finally, reference should be made to the separate but related Union objective of creating the
area of Freedom, Security and Justice. The Treaty of Amsterdam offers new possibilities to
ensure that the freedoms derived from the Internal Market can be enjoyed in conditions of
security and justice accessible to all. The European Council in Tampere highlighted the
importance of the link between this objective and the concerns of citizens in their daily lives.
It is clear that progress towards creating the area of Freedom, Security and Justice (for
example, in relation to legal aid) will be an important element in the wider background
against which this strategy is developed.

STRATEGIC OBJECTIVES

Four strategic objectives have been identified. They are:

– to improve the quality of life of citizens
– to enhance the efficiency of Community product and capital markets
– to improve the business environment
– to exploit the achievements of the Internal Market in a changing world

These strategic objectives provide a frame of reference for policy development. They are not
mutually exclusive but overlap and are complementary. Progress in achieving them must be
assessed. The Commission will identify quantitative and qualitative indicators. Sectoral policy
frameworks (some, such as public procurement and the Financial Services Action Plan5, are
already in place) are part of this wider policy picture.

OPERATIONAL OBJECTIVES

A series of operational objectives has also been defined. Each covers a particular policy
dimension that contributes to the achievement of one or more strategic objectives. The
operational objectives will provide the benchmark against which progress can be judged.

TARGET ACTIONS

Within the strategic and operational objectives, short-term priorities are identified as target
actions. These have been precisely described in order to provide a measurable outcome. They
encompass initiatives and actions both at Community and national level. In order to ensure
continuity from one year to another, target actions have been established with an 18-month
horizon. Some will not be achieved by the first review in the May 2000 Internal Market
Council, but identifying such targets will enable crucial preparatory work to begin by the
successive Presidencies of the Council and by the Commission itself, thereby optimising the
possibility of achieving them in the course of the next year. However neither the selection of
the target actions nor the accompanying deadlines prejudges the political priority to be
attached to any individual action.

5

See COM(1999) 232, “Financial Services : implementing the framework for financial markets : Action
Plan”, 11.05.1999.

4

THE ANNUAL CYCLE

The present annual Internal Market cycle incorporates the twice-yearly Scoreboard and the
report on the functioning of product and capital markets (the Cardiff report). In addition, the
Commission will present an annual review and update of target actions for discussion by the
European Parliament and at the second Internal Market Council of each year. This review will
examine progress and consider how well the present rolling programme meets longer-term
goals. The Commission will come forward with a comprehensive set of indicators which will
enable us to gauge the effectiveness of our policies and to assess how far they have
contributed to the attainment of the broader objectives.

TARGET ACTION : INDICATORS
• Commission working document setting out its proposals on Internal

Market indicators

• Commission to publish the results of a study on price data within the

EU based on a wide range of consumer products

The annual adjustments to Internal Market target actions will be consistent with the priorities
for structural reform identified in the Broad Economic Policy Guidelines, which play a central
role in the co-ordination of economic policies between the Member States. The various
including the results of the Internal Market
elements of the Internal Market Strategy,
Council’s discussion of the Cardiff report and the views expressed by the European
Parliament, will provide an input to both the Commission’s proposals for the review of target
actions and the Commission’s recommendations for the Broad Economic Policy Guidelines.
The onus will be on the Commission, initially, and later on Member States to maintain a
coherent approach.

Figure 1: the annual cycle for the Internal Market Strategy

5

STRATEGIC OBJECTIVE 1 : CITIZENS

The Community must respond to growing public expectations about the quality of life and
sustainable development. Citizens benefit from truly open and efficient markets provided that
they can exercise an informed choice and that effective mechanisms exist for enhancing their
health, their safety or their economic interests. As employees, citizens must be confident that
increased competition is accompanied by adequate levels of social protection.

European citizenship confers a general right to move and reside freely within the Union,
whatever the economic status of the individual. It confers civil and political rights such as the
right to vote in local and European Parliament elections in the country of residence.

Citizens expect the Union to work towards the achievement of its fundamental objectives, as
set out in Article 2 of the Treaty, including the promotion of economic and social progress, a
high level of employment and balanced and sustainable development. Thus, the first strategic
objective should be to improve the quality of life of citizens. Within this objective,
three
operational objectives have been selected.

Operational objectives

(cid:1)

Citizens 1

Ensure that
balanced development

the Internal Market contributes to sustainable and

Environmental protection requirements must be integrated into all Community policies.
Account must also be taken of the need to strengthen economic and social cohesion by
reducing disparities in regional development. Internal Market policy must take into account
this goal and contribute to its achievement6. Sustainable development can only come about by
taking account of environmental protection, the competitiveness of businesses, employment
concerns and the special needs of the least favoured regions or areas, including the outermost
regions.

The Commission has already set out its approach to making Internal Market and environment
policies mutually supportive and reinforcing7. A Community strategy to integrate
environment policy and Internal Market policy is under development.

Although the available evidence suggests that the Internal Market has generally had a
beneficial effect8 on cohesion, monitoring should continue, to ensure that appropriate flanking
measures can be instigated if necessary in order to strengthen the economic structure of the
regions and to enable them to benefit fully from the Internal Market.

The Internal Market has already significantly contributed to the process of job creation. But
supply-side initiatives must include efforts to develop the skills, flexibility and mobility of
Europe’s workforce. This approach has been developed in the Employment Guidelines,
particularly in the employability and adaptability pillars.

6

7

8

Articles 158 and 159 of the Treaty.
See COM(1999) 263 final, “Single Market and Environment”, 08.06.1999.
cf. inter alia, First Cohesion Report, (November 1996): Single Market Review (sub-series IV, in
particular, volume 2).

6

To achieve this operational objective 1 (Citizens 1), the following Target Actions are needed :

TARGET ACTIONS : CITIZENS 1
ENSURE THAT THE INTERNAL MARKET CONTRIBUTES TO SUSTAINABLE AND BALANCED DEVELOPMENT
LEGISLATIVE

• Commission proposal

for a European Parliament and Council

Directive amending the insolvency Directive (80/987)

• Adoption by European Parliament and Council of a Directive on the
promotion of electricity from renewable energy sources in the
internal electricity market

• Adoption by European Parliament and Council of a Directive on

information and consultation of workers in the EC

NON-LEGISLATIVE

• Commission interpretative Communication that will clarify how
environmental considerations may be taken into account in public
procurement

• Second cohesion report to provide an updated examination of the

effects of the Internal Market on cohesion

• Commission Recommendation on how to integrate environmental

considerations into financial reporting

• Publication of a handbook on the application of Articles 28-30 of the

•

Treaty to national environmental measures
Integration of environmental considerations into the activities of
European standardisation bodies

June
2000

Dec.
2000

June
2000

Dec.
2000

June
2001

Citizens 2

(cid:1)

Enhance citizens’ health and safety and promote their economic
interests

Consumer concerns are a key element of the Internal Market’s commitment to the citizen and
will be a key benchmark by which it will be judged. A high level of protection and proper
enforcement of the rules are essential9, particularly those that deal with safety of goods and
services. Cross-border commercial transactions and effective redress mechanisms must be
developed, especially as electronic commerce continues its exponential growth.

Further liberalisation of services of general interest, the introduction of the euro and the
development of e-commerce all have the potential to unlock further economic benefits for the
citizen. To realise this potential, these developments need to be shaped to take account of
these concerns. The Internal Market should be monitored closely from a citizens’ perspective
to ensure that the benefits envisaged by EU laws are delivered in practice.

9

Article 153 (2) of the EC Treaty now requires consumer protection to be taken into account in defining
other Community policies.

7

To achieve this operational objective (Citizens 2), the following Target Actions are needed :

TARGET ACTIONS : CITIZENS 2
ENHANCE CITIZENS’ HEALTH AND SAFETY AND PROMOTE THEIR ECONOMIC INTERESTS
LEGISLATIVE

•
Implementation of Financial services Action Plan (see also Markets 2)
• Adoption by European Parliament and Council of a proposal for

amendment to the general product safety Directive (92/59)

• Adoption by European Parliament and Council of Directive on the

manufacture, presentation and sale of tobacco products.

• Commission proposal for amendment to door-to-door sales Directive

(85/577)

• Commission proposal for amendment

to misleading advertising

Directive (84/450)
• Commission proposal

to amend the consumer credit Directive

(87/102 as amended by 90/88)

NON-LEGISLATIVE

• Commission Communication on commercial communications and

sales promotions (see also ‘Business 4’)
• Commission White Paper on food safety
• Commission Communication on the safety of services
• Commission Communication on over-indebtedness
• Commission Recommendation on horizontal consumer aspects of

services of general interest

• Commission Communication on passenger protection in air transport
• Commission Communication on legal aid in civil matters
• Commission Communication on priorities in EU road safety
• Commission Green Paper on access to justice and redress for

Consumers

• Commission Recommendation on “green claims”(environmental

promotion)

• Commission Communication on the reinforcement of administrative

co-operation in health and consumer protection.
Implementation of a Community safety system in air transport

•

June
2000

June
2000

Dec.
2000

June
2001

Citizens 3

(cid:1)

Reinforce and promote the full use of the rights of citizens

Few citizens exercise their rights of free movement : labour mobility within the Internal
Market – necessary to an adaptable economy – thus remains limited. More efficient and user-
friendly application of Internal Market rights – such as the recognition of qualifications – is
needed. Easy access to information on job opportunities in the different Member States is a
key requirement for increased mobility. The EURES service network, which brings together
national employment services, must strengthen its activities in this respect. The Union and
national administrations, working together, should develop a common administrative culture
which offers a high level of service and allows problems to be quickly resolved.

Citizens need appropriate information, support and advice. The Dialogue with Citizens and
Business, as well as the EU network of European Consumer Centres (the “Euroguichets”) and

8

other information networks like EURES, can be used to help citizens to take advantage of
their rights.

To achieve this operational objective (Citizens 3), the following Target Actions are needed :

TARGET ACTIONS : CITIZENS 3
REINFORCE AND PROMOTE THE FULL USE OF THE RIGHTS OF CITIZENS
LEGISLATIVE

• Adoption by European Parliament and Council of a proposal to extend
Regulation 1408/71 on the co-ordination of social security schemes
to non-EU nationals

• Adoption by European Parliament and Council of a proposal

to
replace Regulation 1408/71 on the co-ordination of social security
schemes by a new simplified and modernised Regulation.

• Commission proposal for a Regulation on a common format for the

EU passport

• Commission proposal to amend the Directive on the second General
System for the recognition of professional qualifications (92/51)
• Commission proposal for a Regulation recasting Directives on rights

of residence (90/364, 90/365, 93/96, 68/360)

• Commission proposal for a Regulation on a common format for

residence cards

• Dialogue with Citizens and Business:

NON-LEGISLATIVE

- Promotion campaign to be launched in early 2000
- Publication of Guide on exercising rights in the Single Market
- Commission Communication on Feedback from Dialogue
- Launch of new “citizens” web-site on rights and opportunities in

the Internal Market

• Publication of Dialogue guide on data protection
• Commission Communication on the future of recognition of

professional qualifications

• Provide a complete self-service package for

job seekers and
employers on the EURES internet site supported by the personalised
service from the Euroadvisers

June
2000

Dec.
2000

June
2001

June
2000

Dec.
2000

• Provide a complete and up-to-date database for the citizen on living
and working conditions and on labour markets in the Member States

STRATEGIC OBJECTIVE 2 : MARKETS

In order to enhance the competitiveness of its economy, the Union needs efficient goods,
services and capital markets. The development of the economic reform process agreed by the
Cardiff European Council will help to achieve this. The Member States and the Community
institutions must respond to that process by actively implementing the necessary changes.
Comprehensive structural reform and modernisation of markets is an integral part of the
process of economic co-ordination in the Union, as expressed through the Broad Economic
Policy Guidelines.

9

A properly co-ordinated and coherent enterprise policy across the Community is increasingly
important, special attention being paid to the needs of small and medium sized enterprises, to
ensure that their full potential for innovation, growth and job-creation is realised.

For these reasons the second strategic objective should be to enhance the efficiency of
Community product and capital markets. Within this objective five operational objectives
have been identified.

Operational objectives

(cid:1)

Markets 1

Encourage economic reform in the interests of market efficiency

The process of economic reform instituted by the Cardiff European Council which is now one
of the three pillars of the European Employment Pact, pinpoints areas where action is needed
at Community or national
level and incorporates a micro-economic dimension into the
preparation of the Broad Economic Policy Guidelines. The question is not only whether
Member State regulation is legally compatible with the Internal Market, but whether it is both
conducive to securing the maximum benefit
in terms of
competitiveness and employment and attains its public policy goals in the most efficient way.

from integrated markets

The process of joint evaluation whereby national reports are examined in the framework of
the Internal Market Council must be further developed into a peer-review exercise to allow
this new instrument to deliver its full potential.

To achieve this operational objective (Markets 1), the following Target Actions are needed :

TARGET ACTIONS : MARKETS 1
ENCOURAGE ECONOMIC REFORM IN THE INTERESTS OF MARKET EFFICIENCY

• Annual adoption of Commission Communication on Economic
Reform – Report on the functioning of product and capital markets in
the EU (Cardiff Report)
Implementation annually by the Member States of the country-
specific recommendations on product and capital market reform
contained in the Broad Economic Policy Guidelines

•

Markets 2

(cid:1)

Ensuring financial services deliver their full potential

Financial services represent a key sector which will significantly contribute towards making
the Internal Market a reality for consumers and industry. The benefits to financial services of
the introduction of the euro need to be reinforced in order to give consumers access to a
greater choice of competitive retail financial services products in which they can trust, to give
industry (especially SMEs) easier access to a single deep and liquid market for investment
capital and to ensure the continued stability of financial markets. Implementation of the May
1999 Financial Services Action Plan, which specifically centres on these issues, is therefore
an important element in the Internal Market Strategy.

The result should be to boost employment, by facilitating investment in innovation, especially
by smaller companies, and to ensure a greater choice of quality services to meet consumer
demands, particularly with the growth of electronic commerce. To facilitate progress on
agreeing and implementing the necessary measures, the Commission will be working in close
co-operation with Member State officials, market practitioners and users.

10

To achieve this operational objective (Markets 2), the following Target Action is needed :

TARGET ACTIONS : MARKETS 2
ENSURING FINANCIAL SERVICES DELIVER THEIR FULL POTENTIAL

•

Implementation of the Financial Services Action Plan

Many actions in the Financial Services Action Plan can contribute to the
achievement of other operational objectives, such as those relating to
consumer
trading system,
company law and the fight against criminal activities in the Internal
Market.

the digital age,

the multilateral

interests,

Markets 3

(cid:1)

Maximise the benefits to the Internal Market of the digital age

Over the coming years, technology and information will transform Europe’s economy, its
workplaces and its society, affecting business as much as citizens. The development of a
favourable environment for electronic commerce, based on Internal Market principles, is
essential. It will be an integral part of the “e-Europe” initiative being prepared for the Helsinki
Summit10. It offers business access to new cross border markets at relatively low-cost,
particularly for those trading in intangibles (financial services, insurance) or low bulk/high
value consumer products (CDs, branded goods). E-commerce also allows consumers to seek
the best value across the Internal Market and world-wide. Further Community action is
necessary to ensure that the benefits of electronic commerce are not offset by divergences
between national rules and to ensure that consumers feel confident in shopping on-line. The
Community’s objective must be to create an appropriate regulatory environment; to restrict
regulation to the minimum necessary to offer legal certainty to service providers; to provide
consumers with a high level of protection and simple, low-cost redress mechanisms and to
prevent the use of the Internet as a vehicle for criminal activity.

To achieve this operational objective (Markets 3), the following Target Actions are needed :

TARGET ACTIONS : MARKETS 3
MAXIMISE THE BENEFITS TO THE INTERNAL MARKET OF THE DIGITAL AGE
LEGISLATIVE

• Adoption by European Parliament and Council of electronic commerce

Directive

• Adoption by European Parliament and Council of Directive on copyright

and related rights in the information society

• Commission proposal for a Directive on the patentability of software
• Commission proposal
to ensure that

the existing VAT system is

compatible with e-commerce

June
2000

Dec.
2000

10

The “e-Europe” initiative (“Information Society for all”) to be presented at the Helsinki European
Council will pave the way for the Commission’s contribution to the March 2000 Lisbon Summit on
“Employment, Economic Reform and Social Cohesion – Towards a Europe of Innovation and
Knowledge”.

11

NON-LEGISLATIVE

• Commission Communication on rules on access to cable for

broadcasting and information society services

• Action to support initiatives for on-line out of court redress
• Establish a dialogue with industry and consumers as part of the
development of the integrated framework for electronic commerce

June
2000

June
2001

Markets 4

(cid:1)

Encourage
industrial and intellectual property rights

creativity and innovation by adequately protecting

The markets for industrial and intellectual property are constantly evolving, stimulated by
technical developments, new marketing strategies and consumer/user behaviour. Adequate
protection of industrial and intellectual property rights is essential to ensure a climate that is
conducive to innovation, creativity and investment. Internal Market rules in this field should
foster a pro-competitive environment and at the same time achieve a careful balance of all the
interests involved. The proposal for a Community patent will support the innovative capacity
of Community enterprises.

To achieve this operational objective (Markets 4), the following Target Actions are needed :

TARGET ACTIONS : MARKETS 4
ENCOURAGE CREATIVITY AND INNOVATION BY ADEQUATELY PROTECTING INDUSTRIAL AND INTELLECTUAL
PROPERTY RIGHTS
LEGISLATIVE

• Commission proposal for a Regulation on the Community patent
• Adoption by European Parliament and Council of Directive on utility

models

• Adoption by European Parliament and Council of Directive on

artists’ resale rights

• Adoption by Council of proposal for a Regulation on Community

designs

• Commission Communication as

follow-up to Green Paper on

NON-LEGISLATIVE

counterfeiting and piracy

June
2000

June
2001

June
2000

Markets 5

(cid:1)

Securing effective market-opening legislation in the utilities and
transport sectors, whilst preserving universal services

is already
Liberalisation in telecommunications, electricity and air and road transport
producing benefits in terms of reduced prices and higher quality. Liberalisation of rail freight
is a current priority. The recent completion of the liberalisation of maritime cabotage is
expected to have similar results. The Commission is also addressing the problem of delays in
air transport resulting from inadequate air traffic management systems and will come forward
with initiatives to establish common rules for managing air traffic at European level.

Uniform application of Community law by national regulatory authorities must be assured
whilst procedures for strengthened co-operation between national regulatory authorities need
to be urgently developed. Competition law will be the primary tool for managing these
markets, although the objectives of universal service, consumer rights and interoperability

12

may continue to require specific regulation. Liberalisation of telecommunications should
ensure that all citizens have affordable access to a universal service and, in particular, access
to Information Society services.

To achieve this operational objective (Markets 5), the following Target Actions are needed :

TARGET ACTIONS : MARKETS 5
SECURING EFFECTIVE MARKET-OPENING LEGISLATION IN THE UTILITIES AND TRANSPORT SECTORS, WHILST
PRESERVING UNIVERSAL SERVICE
LEGISLATIVE

• Follow-up to review of existing telecommunications legislation :
Commission proposals for framework Directive and four specific
Directives

June
2000

• Adoption by European Parliament
establishing rules on airport charges

and Council of Directive

• Adoption by European Parliament and Council of Directives
modifying Directives 91/440 and 95/18 and replacing Directive 95/19
(rail revitalisation package)

• Commission proposal

for a European Parliament and Council
Regulation amending Council Regulation 1191/69 (public services in
inland transport)

• Adoption by European Parliament and Council of Regulation updating

TENs guidelines

• Timely transposition and full implementation of Directive 97/67 on

NON-LEGISLATIVE

postal services liberalisation
• Timely transposition and full

implementation of Directive 96/92

concerning common rules for the Internal Market in electricity11
• Timely transposition of Directive 98/30 concerning common rules for

the Internal Market in natural gas

• Commission Interpretative Communication on concessions
• Commission Sixth Report on the implementation of the Telecoms

•

Regulatory Package
Implementation of the Communication on the creation of a single
European sky

Dec.
2000

June
2001

June
2000

Dec.
2000

June
2001

STRATEGIC OBJECTIVE 3 : BUSINESS

Action aimed at deepening market integration by removing sectoral barriers in goods and
services markets and by improving the functioning of the acquis will have its full effect only
if the overall environment in which business is carried on is favourable. This too requires a
shared commitment on the part of Member States and the Community institutions to eliminate
anti-competitive practices, tax obstacles to cross-border activity and unfair tax competition,
while respecting sectoral policies. Both at national and Community level, continuing and
reinforced efforts are also required to achieve a less burdensome regulatory framework and a
high quality of regulation. Small and medium-sized companies in particular will benefit from

11

Deadline for implementation in Greece is 19th February 2001

13

compliance

reduced
encourages
an administrative
entrepreneurship. The third strategic objective is therefore to improve the business
environment.

environment which

costs

and

Operational objectives

(cid:1)

Business 1

A shared determination to ensure that market
undermined by anti-competitive practices

integration is not

Neither anti-competitive behaviour by businesses nor aid granted by Members States will be
allowed to obstruct further integration or improved efficiency in the Internal Market.
Vigorous application of Community and national rules is needed to ensure that producers and
distributors cannot re-segment the market or maintain prices at an artificially high level
through restrictive agreements or abuse of a dominant position. The Commission’s White
Paper “Modernisation of the rules implementing Articles 85 and 86 of the EC Treaty”12 raises
the prospect of further changes to the regulatory architecture. It is essential that national
competition bodies and the Commission work together to secure free and fair competition at
all levels of the market.

Although overall levels of state aid are declining, they remain a major threat to market
should be
integration and efficiency. The individual assessment of notified aids
complemented by a consideration of the cumulative impact on the Internal Market of state
aids which constitute distortions of competition. Member States should redirect remaining
state aid away from ad-hoc and sectoral aid and towards aid designed to pursue horizontal
policy objectives of Community interest.

To achieve this operational objective (Business 1), the following Target Actions are needed :

TARGET ACTIONS : BUSINESS 1
A SHARED DETERMINATION TO ENSURE THAT MARKET INTEGRATION IS NOT UNDERMINED BY ANTI-COMPETITIVE
PRACTICES
LEGISLATIVE

• Commission proposal for a Regulation on the modernisation of the
rules on competition for the application of Articles 81 & 82 of the
EC Treaty

• Adoption by the Commission of block exemption Regulations for
state aid to SMEs, for training aid and on the “de minimis rule”

• Commission proposal

for a European Parliament and Council
Regulation amending Council Regulation 1107/70 (state aids in
inland transport)

NON-LEGISLATIVE

• Adoption by the Commission of Guidelines to the block exemption

Regulation for vertical restraints

• Review of the Commission’s policy on horizontal co-operation

agreements

• Follow-up to the Commission notice on the application of state aid

principles to measures relating to direct business taxation

Dec.
2000

June
2000

Dec.
2000

12

1999/C132/01. Articles 85 and 86 have been renumbered as Articles 81 and 82.

14

15

Business 2

(cid:1)

Eliminate tax barriers to the Internal Market and unfair
competition

tax

Since the informal ECOFIN Council in Verona in April 1996, the focus has been on the need
for co-ordinated action at European level in order to :

- stop the erosion of certain classes of tax revenues;
- remove fiscal barriers to the smooth functioning of the Internal Market;
- make tax systems more employment-friendly.

This prompted the Commission to put forward the “tax package” which was endorsed by the
Council in December 1997. In this framework of greater co-ordination, a balanced and more
comprehensive approach is needed to provide the taxpayer with an Internal Market-friendly
tax system. Particular attention will be paid to the elimination of discriminatory provisions. At
present, taxpayers – individuals and companies – may suffer from double taxation, delays in
obtaining tax refunds and other fiscal barriers to the full exploitation of the “four freedoms”.

Existing taxation rules need to be applied efficiently. Business surveys consistently point to
the complexities of VAT procedures as a major disincentive to cross-border trade. The
Commission has already made proposals to simplify these issues in the short term (abolition
of tax representatives and replacement of VAT reimbursement by a real right of deduction).
VAT rules and procedures will require modernisation to take account of the evolution of
business and especially of e-commerce.

To achieve this operational objective (Business 2), the following Target Actions are needed :

TARGET ACTIONS : BUSINESS 2
ELIMINATE TAX BARRIERS TO THE INTERNAL MARKET AND UNFAIR TAX COMPETITION
LEGISLATIVE

• Adoption by Council of Directive on taxation of savings
• Adoption by Council of Directive on interests and royalties
• Adoption by Council of Directive on energy taxation
• Commission proposal for consolidation of the 6th VAT Directive

(77/388)

• Commission proposals for modernisation of VAT legislation in the

Internal Market

• Commission proposals for measures to modernise the system of

excise duties and make it more Internal Market friendly.

• Commission proposals for measures against tax provisions restricting

full access of taxpayers to the Internal Market
NON-LEGISLATIVE

• Unfair tax competition code of conduct : agreement on roll-back or

amendments of harmful tax measures under the code
• Commission report on company taxation in the EU
• Commission report to Council on the system of excise duties in the

Internal Market on mineral oils, tobacco and other goods

June
2000

Dec.
2000

June
2000

Dec.
2000

16

Business 3

(cid:1)

Improve the effectiveness of the legal framework

The fundamental precondition for a fully integrated market that commands the confidence of
its stakeholders is a shared body of rules uniformly applied by Member States. The failure to
transpose agreed directives therefore remains a focus for urgent attention. All Member States
should now be able to reach the levels set by the leading countries.

The new legal order also requires a shared understanding of the meaning of the rules and the
development of agreed strategies for enforcement including enhanced administrative co-
operation. National officials must work together to deliver a uniformly high level of
enforcement and the efficient
resolution of problems encountered by businesses and
individuals. The primary responsibility for enforcement lies with the Member States. They
should seek to develop an Internal Market mindedness within their administrations. The
Commission will initiate and facilitate joint exercises and the exchange of good practice, and
will continue to monitor progress. It will also continue to pursue infringement proceedings
diligently whilst Member States should ensure that all letters of formal notice and reasoned
opinions are dealt with promptly and appropriately.

Access to information and advice plays a critical role in helping businesses to make the most
of the Internal Market and to resolve any problems. In addition to using the existing European
Information Centres, the Commission will give a high priority to the further development of
the Dialogue with Citizens and Business and the Euroguichet network.

To achieve this operational objective (Business 3), the following Target Actions are needed :

TARGET ACTIONS : BUSINESS 3
IMPROVE THE EFFECTIVENESS OF THE LEGAL FRAMEWORK
NON-LEGISLATIVE

• Launch of pilot project offering Community support
initiatives in the field of administrative co-operation

to national

• All Member States to reduce their transposition deficit to less than

1,5 %

• Commission Communication on a comprehensive EU strategy on

administrative co-operation to promote enforcement

June
2000

Dec.
2000

June
2001

Business 4

(cid:1)

Eliminate the remaining obstacles to cross-border trade

The Internal Market has proved an effective means of integrating goods markets, despite
some remaining problems. The Community’s objective must now be to eradicate any
remaining obstacles to cross-border trade, particularly in the service sector and to prevent the
emergence of new barriers. In particular, the application of the mutual recognition principle
needs to be improved, even though harmonisation must not be ruled out.

17

To achieve this operational objective (Business 4), the following Target Actions are needed :

TARGET ACTIONS : BUSINESS 4
ELIMINATE THE REMAINING OBSTACLES TO CROSS-BORDER TRADE
LEGISLATIVE

• Commission proposal for a public procurement legislative package

• Adoption by European Parliament and Council of Directives on EC

services provision card

• Commission Communication on commercial communications and

NON-LEGISLATIVE

sales promotion

• Commission Communication on patent agents
•

Implementation of specific measures contained in the Council
Resolution on standardisation13

• Monitoring report on the application of

the product

liability

Directive (85/374)

• Commission Report evaluating the implementation of

policy on

products conformity marking

• Agreement on 50 harmonised standards relating to construction

products

•

Implementation by Member States and the Commission of specific
measures contained in the Commission Communication and the
Council Resolution on mutual recognition

• Assessment of the results of the forthcoming study on remaining

barriers to trade in business services

June
2000
Dec.
2000

June
2000

Dec.
2000

June
2001

Business 5

(cid:1)

Reduce the regulatory burden on business, particularly SMEs, and
help business take advantage of Internal Market opportunities

Over-complex or ill-conceived legislation imposes additional costs and burdens on business,
inter alia reducing competitiveness. It can also act as a disincentive to business expansion,
thus undermining job-creation, particularly in small and medium-sized companies. The
Commission has already made considerable efforts14 to improve the quality of legislation
including the implementation of the SLIM initiative and the Business Test Panel pilot project.
However, the results, in terms of impact on existing or planned legislation, continue to fall
short of expectations. We need to develop a coherent policy which encompasses work at both
national and Community level. This might include, for example, the concurrent application of
the SLIM approach to Community directives and the corresponding national implementing
measures through co-ordinated parallel exercises in the Member States. The Dialogue with
Citizens and Business can be used to help companies to take advantage of Internal Market
opportunities. It will also be developed so as to allow a constant flow of information back to
all parties involved in the operation of the Internal Market. This data can contribute to
improving and simplifying the legal and administrative framework. Finally, business,

13

14

This target action may be valid up to June 2001
See the annual “Better Lawmaking” report, the most recent of which is COM (1998) 715 final,
01.12.1998.

18

including smaller companies, needs a clear and up-to-date framework of company law for its
operations in the Internal Market.

To achieve this operational objective (Business 5), the following Target Actions are needed :

TARGET ACTIONS : BUSINESS 5
REDUCE THE REGULATORY BURDEN ON BUSINESS, PARTICULARLY SMES, AND HELP BUSINESS TAKE ADVANTAGE OF
INTERNAL MAKRET OPPORTUNITIES
LEGISLATIVE

• Adoption by European Parliament and Council of a Directive

combating late payments in commercial transactions

• Commission proposals to modify the 1st and 2nd Company Law

Directives (post-SLIM) (68/151 & 77/91)

• Adoption by the Council of the proposed Regulation and Directive on
the Statute for a European company and associated proposals
(European associations, European co-operatives, European
mutual societies)

• Evaluation of projects to promote better regulation :

NON-LEGISLATIVE

- SLIM
- Business Test Panel
•
Implementation of BEST Action Plan
• Dialogue with Citizens and Business:

Commission to launch a business feedback mechanism
for SMEs

• Commission Communication on access

to public

procurement markets

• First report on the quantitative results of the business feedback

mechanism

June
2000

Dec.
2000

June
2001

June
2000

Dec.
2000

STRATEGIC OBJECTIVE 4 : EXTERNAL ASPECTS

The Internal Market cannot be considered in isolation from the world economic order. At
micro-economic level, the increased competitiveness brought about by the Internal Market is
vital to European businesses competing in global markets. At a political level, the Internal
Market offers a model in building global or regional consensus on trade liberalisation. It is
also an essential prerequisite for a successful enlargement. Thus the final strategic objective is
to exploit the achievements of the Internal Market in a changing world. There are two
operational objectives.

Operational objectives

(cid:1)

External 1

Contribute to the shaping of the multilateral trading system for the next
century

The Internal Market, the single currency, the prospect of enlargement – which will make the
Union the world’s largest integrated market, with over half a billion consumers – and the
growing political assertiveness of the Union world-wide mean that the Union is a major actor
in the development and consolidation of the multilateral trading system and legal order.
Agreement in Seattle on the launch of the next Round later this year should provide an
opportunity for the Union to reaffirm its commitment to an open world trading system, and to
the strengthening of the World Trade Organisation and particularly its dispute settlement

19

system. The Union’s contribution to the negotiations will aim at reaching a high level of
comprehensive trade liberalisation and market access whilst ensuring that Europe’s social,
environmental, cultural and other societal interests and values are properly safeguarded.

integration of
Further progress towards trade liberalisation accompanied by further
developing countries into the multilateral
trading system remains the Union’s overall
objective. Key sectors of the Internal Market are already on the agenda : public procurement,
investment, competition, intellectual and industrial property rights, professional and financial
services. Solutions developed within the Internal Market may offer adequate and possible
bases for an international regulatory framework based on the principles of transparency, non-
discrimination and a level playing field. At the same time, achievement in the multilateral
trade negotiations will further enhance and consolidate the potential of the Internal Market.
This process of mutual enrichment shall further promote the coherence and consistency of the
world trade order to the benefit of overall prosperity.

The growing importance of Internal Market principles in trade agreements with third
countries will clearly be reflected in the outcome of the next multilateral round. Free trade
agreements are being contemplated or negotiated with countries or groups of countries such
as Mexico, Chile, Russia, Mercosur and the Mediterranean countries under the Barcelona
process. Industry’s active involvement in the shaping and monitoring of the Internal Market
acquis is an approach that could be extended to the bilateral and multilateral context, as for
example, in the case of the Transatlantic Business Dialogue.

To achieve this operational objective (External 1), the following Target Actions are needed :

TARGET ACTIONS : EXTERNAL 1
CONTRIBUTE TO THE SHAPING OF THE MULTILATERAL TRADING SYSTEM FOR THE NEXT CENTURY
LEGISLATIVE

• Commission to complete negotiations with the Council of Europe on:

- a draft Recommendation on the protection of personal data

June
2000

collected and processed for insurance purposes

- a draft protocol concerning Community accession to Convention 108

of the Council of Europe on the processing of personal data
- additional protocol to Convention 108 in line with Directive 95/46
• Commission Decisions, based on Article 25, paragraph 6 of Directive
95/46, assessing the adequacy of the level of data protection in some
third countries

• Adoption of a Council Decision on ratification of World Intellectual
Property Organisation (WIPO) copyright Treaty (WCT) and WIPO
Performances and Phonograms Treaty (WPPT) on behalf of the EC

NON-LEGISLATIVE

•

• Continuing work on the setting of minimum standards at
international level, notably in the framework of WIPO, on protection
of audio-visual performances, broadcasters’ rights and non-original
databases
Identify and promote those instruments developed at Internal
Market level which could be applied within the framework of pluri or
multilateral
regulatory
trade agreements, such as a transparent
environment and the procedures and principles for the harmonisation
of standards.

Dec.
2000

June
2000

Dec.
2000

20

21

External 2

(cid:1)

Ensure
enlargement of the Community

that

the

Internal Market

contributes

to a successful

Preparation for membership of the Union has already strengthened the economies of the
Central and Eastern European countries, as their relative resistance to the Asian crisis last
autumn testified. The candidate countries must continue their preparations for an enlarged
Internal Market. It is of vital importance that, in addition to making the necessary legislative
changes, they put in place administrative infrastructures which will guarantee the effective
application of Internal Market rules,
including those related to environment, health and
consumer protection. The Commission will use the instruments available under the reinforced
pre-accession strategy to help them set up and improve the necessary structures.
Attention must be focused on maximising the Internal Market dimension of the pre-accession
strategy. The “Road Maps for alignment”15 must be fully implemented in the framework of
the Accession Partnership,
through all available instruments. These include TAIEX
(Technical Assistance Information Exchange) and twinning arrangements, which should be
extended so as to cover all Internal Market sectors.

To achieve this operational objective (External 2), the following Target Actions are needed :

TARGET ACTIONS : EXTERNAL 2
ENSURE THAT THE INTERNAL MARKET CONTRIBUTES TO A SUCCESSFUL ENLARGEMENT OF THE COMMUNITY
NON-LEGISLATIVE

•

•

Joint meeting of the Internal Market Advisory Committee and
representatives of candidate countries
Joint meeting
representatives of candidate countries

of Co-ordination Centres

of Heads

and

• Work with the candidate countries with a view to the establishment

of a Co-ordination Centre in each

• More targeted use of pre-accession strategies, such as intensification

of twinning arrangements on Internal Market issues

Dec.
2000

June
2001

15

On 9th March 1998, the Commission proposed to each candidate country a Road Map to help them to
prepare for the gradual implementation of the acquis in the Internal Market field.

22

FINANCIAL STATEMENT

1.

TITLE OF OPERATION

Commission Communication “The Strategy for Europe’s Internal Market”

2.

BUDGET HEADINGS INVOLVED

B5-3001-“Implementation and development of the Internal Market”

3.

LEGAL BASIS

Article 211/EC

4.

DESCRIPTION OF THE OPERATION

The strategic objectives identified in the Communication are:

a) To improve the quality of life of citizens:

- ensure that the Internal Market contributes to sustainable and balanced development;

- enhance citizens’ health and safety and promote their economic interests;

-

reinforce and promote the full use of the rights of citizens.

b) To enhance the efficiency of Community product and capital markets:

- encourage economic reform in the interests of market efficiency;

- ensuring financial services deliver their full potential;

- maximise the benefits to the Internal Market of the digital age;

- encourage creativity and innovation by adequately protecting industrial and intellectual

property rights;

-

securing effective market-opening legislation in the utilities and transport sectors, whilst
preserving universal services.

c) To improve the business environment:

- a shared determination to ensure that market integration is not undermined by anti-

competitive practices;

- eliminate tax barriers to the Internal Market and unfair tax competition;

-

improve the effectiveness of the legal framework;

- eliminate the remaining obstacles to cross-border trade;

23

-

reduce the regulatory burden on business, particularly SMEs, and help business take
advantage of Internal Market opportunities.

d) To exploit the achievements of the Internal Market in a changing world:

- contribute to the shaping of the multilateral trading system for the next century;

- ensure that
Community.

the Internal Market contributes to a successful enlargement of the

5.

5.1

5.2

5.3

CLASSIFICATION OF EXPENDITURE

DNO

CD

None

6.

TYPE OF EXPENDITURE

Operational expenditure:

-

-

-

7.

7.1

subventions to support projects which have a Community interest organised by outside
organisations;

finance for information actions and communication programmes;

finance for general studies, analysis, simulations or preparatory studies, about the
practical operation or evaluation of the functioning of the Internal Market and the
realisation of other policy objectives.

FINANCIAL IMPACT (ON PART B)

Method of calculating the total cost of operation

The figures given reflect those contained in the 2000 PDB. Given that a number of the target
actions may change on an annual basis no further figures are indicated as these would
necessarily only be very rough indicative estimates but no significant increase is foreseen
over the five year period.

Financial
year
Total

€

In

uros
2000 PDB

11.850.000

24

7.2

Itemised breakdown of costs

As mentioned in 7.1 above a number of the target actions may change on an annual basis. The
figures given in the table below thus reflect only those contained in the 2000 PDB with a view
to identifying the type of elements contained in the Strategy. No further figures are indicated
as these would necessarily only be very rough indicative estimates. As also mentioned above
no significant increase is foreseen over the five year period

Itemised breakdown

I. Dialogue with Business

Codification legal
base (= point 4)
Action A

MioEuros (to the third decimal point)
Var. in
%

1999

2000

And Citizens

- Maintenance

- Development

- Feedback

- Evaluation

II. Public Procurement
Development of a favourable
environment for business

- Training
- Awareness raising

Monitoring
effectiveness

of

ongoing

- monitoring
- independent authorities
- qualification systems

knowledge on
Developing
opportunities in third country
markets

III. Completion of the

Internal Market

IV. Managing the

Community acquis
V. Robert Schuman Action
p.m. Karolus Programme

0,500

0,500

1,000

0,600

1,000

1,000

2,000

1,500

Sub-total

2,600

5,500

Action A

0
0

0
0
0
0

0
2,100

0,065
0,040

0,220
0,090
0,045
0,160

0.620
3,080

1,300

1,300

1,350
0,650
9,000

1,35016
0
11,850

Sub-total

Action A

Action A

Action B
-

100

100

100

150

115

46

0

0
0
31

16

This action is being transferred to DG Justice.

25

7.3

Schedule for committment credits / payment credits

€

in

uros

2000
11.850.000

8.200.000

Commitment
credits
Payment credits

8.

FRAUD PREVENTION MEASURES

The Commission services will, before making payment of subventions, verify the receipt of
properly completed studies or services, etc. taking account of the contractual obligations and
the principles of sound financial and economic management. Anti-fraud measures (controls,
delivery of reports, etc.) are included in all agreements and contracts concluded between the
Commission and the contractors.

9.

9.1

ELEMENTS OF COST-EFFECTIVENESS ANALYSIS

Specific and quantifiable objectives; target population

Target population:

- other institutions;

- national, regional and local administrations;

- citizens;

- economic operators

- social partners;

- NGOs and other interested organisations.

9.2

Grounds for the operation

The Strategy has been formulated with a view to ensuring that synergies between the Internal
Market and other common policies of the Union are maximised thus delivering tangible
benefits to citizens, high levels of business performance as well as job creation. It also
provides the framework for ensuring that Internal Market activities are in line with the
priorities defined in the Commission’s recommendation for the broad economic policy
guidelines.

9.3

Monitoring and evaluation of the operation

To monitor progress, the Internal Market DG has developed a range of instruments including
the Scoreboard, an annual business survey, feedback from the Dialogue with Citizens and
Business, and the process of economic reform triggered by the Cardiff European Council.

26

10.

ADMINISTRATIVE EXPENDITURE (PART A OF SECTION III OF THE GENERAL
BUDGET)

Actual mobilisation of the necessary resources will depend on the Commission’s annual
decision on the allocation of resources, taking into account the number of staff and additional
amounts authorised by the Budgetary authority. The supplementary needs indicated do not, in
any case, prejudge the decision that the Commission will need to take concerning the request
of new posts in the framework of the APB and for the resources allocation.

10.1

Impact on the number of posts

All existing staff in the Internal Market DG will be involved in the implementation of the
Strategy for Europe’s Internal Market. Accordingly figures are only provided for the
additional resources considered necessary.

Type of post

Staff to be assigned to the
administration of the
operation

Permanent
posts

Temporary
posts

or

Officials
temporary
staff
Other resources
Total

A
B
C

Of which

Duration

Use of existing
resources
within the DG
or department
concerned

of

Use
additional
resources

6
1
2
10 END
1917

The administrative resources required will actually be mobilised following the annual
Commission Decision on the allocation of resources, taking into account, in particular,
manpower and additional amounts granted by the budgetary authority.

The additional resources necessary identified above will need to be found either in the course
of a future decision on the allocation of resources or by means of the redeployment of existing
resources, in the absence of which it will be necessary to identify which of the target actions
cannot be achieved.

17

The majority of these resources relate to Financial Services the need for which has been subject to
continual discussions between DG Markt and DG Budget since the preparation of the PDB 2000.

27

10.2

Overall financial impact of additional human resources

Type of post

Staff to be assigned to the administration of the
operation (additional requirements)

Permanent posts

Temporary posts

Amount

or

Officials
temporary
staff
Other
Total

A
B
C
END

€

108.000 = 972.000

6 )
1 ) 9 posts x
2 )
10 x
19

€

36.996 = 369.960

972.000

369.960
1.341.960

10.3

Increase in other administrative expenditure arising from the operation

Budget heading
(No and title)

Amount

Method of calculation

7030

A
meetings

General

135.000

Various Working Groups

A 7010 Missions
Total

76.800
211.800

€

12 meetings annually x 15 members = 180 x 750
=135.000
€
64 missions x 1.200

= 76.800

€

€

=

The expenditure set out in the above table under heading A-7 will be covered by credits within
the DG's global envelope.

28