Opinion of the Economic and Social Committee on the "Communication from the Commission to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions — 2000 Review of the Internal Market Strategy"
Date: 2000-10-19
Institutions: European Economic and Social Committee
Subjects: European standard, business policy, consumer protection, development policy, single market, tax harmonisation

16.1.2001

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Official Journal of the European Communities

C 14/13

Opinion of the Economic and Social Committee on the ‘Communication from the Commission
to the European Parliament, the Council, the Economic and Social Committee and the Committee
of the Regions — 2000 Review of the Internal Market Strategy’

(2001/C 14/02)

On 3 May 2000, the Commission decided to consult the Economic and Social Committee, under
Article 262 of the Treaty establishing the European Community, on the above-mentioned communication.

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 27 September 2000. The rapporteur was
Mrs Sa´nchez Miguel.

At its 376th plenary session of 19 October 2000 the Economic and Social Committee adopted the
following opinion by with 87 votes in favour and one abstention.

1.

Introduction

1.1.
The Commission has submitted a review of the Internal
Market Strategy on the basis of the Conclusions of the Lisbon
European Council, which stressed that, in order to capitalise
on Europe’s economic situation, the regulatory framework
aimed at stimulating innovation, investment and economic
efficiency, as adopted by the Helsinki European Council,
should be maintained. This is the first in a series of annual
reviews of the Internal Market Strategy adopted in 1999.

1.2.
The Commission’s communication makes no substan-
tial changes to the previous strategic objectives adopted at the
end of 1999, the four principal priorities for action remaining
the following:

— improving the quality of life of citizens;

— enhancing the efficiency of Community capital and

product markets;

— improving the business environment;

— exploiting the achievements of the internal market in a

changing world.

1.3.
This Communication lays down temporary priorities
for existing actions to ensure timely adoption and to monitor
the implementation of on-going internal market actions to
promote the four objectives listed, with a view to ranking
them in order of priority, laying down implementing measures.

food safety action, which incorporates the views of the sectors
consulted, or to actions in favour of European citizens, using
as a point of reference the realisation of citizens’ rights.

1.5.
This update incorporates previous experience gathered
from actions undertaken, as well as the result of consultations
of associations of employers, trade unions, consumers and
environmentalists; but above all account has been taken of the
opinions of the European Parliament and the ESC, with some
of the proposals they contained having been incorporated into
the legislative instruments.

2. General comments

2.1.
The brief period which has elapsed since the sub-
mission of the previous Commission Communication on the
strategy for Europe’s internal market (1) prompts us to confirm
the general line taken in the Committee’s opinion on that
insofar as it approved the principles of
communication,
biannual actions and of annual monitoring but not
the
publication of two scoreboards each year, which demonstrably
is not producing the desired results, given the short space of
time involved and the more extensive legislative procedure
arising from the system of parliamentary co-decision, as this
increases the time needed for legislative adoption of the
proposed actions.

The results presented by the Commission in May 2000
2.2.
are hardly encouraging; of
the 53 actions identified last
November only 26 had been completed by the end of June
2000, partly as a result of lack of progress in the Council and
the long-drawn-out procedure in the Parliament. This is one
reason why the system of classification by priority used in the
current communication seems appropriate; such a system was
proposed by the ESC in its previous opinion as a way of
focusing attention on the achievement of priority objectives.

At

the same time a distinction is made between
1.4.
legislative and non-legislative actions, highlighting those
intended as a follow-up either to the white papers, e.g. the

(1) Strategy for Europe’s Internal Market and Recommendations for
the Review of Target Actions — OJ C 140, 18.5.2000, p. 36.

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The proposed revision appears to have dropped a
for the proper

2.3.
number of actions which are important
operation of the European internal market, such as:

ESC feels that its SMO should be included in view of its
capacity for analysis and detecting problems arising in the
single market.

— public-sector support, which has a major impact on

market competitiveness; and

— free movement of persons, to which should be added the
problems deriving from large-scale immigration from
Eastern Europe and North Africa.

2.4.
Notwithstanding the results, in its current communi-
cation the Commission presents new actions, in addition to
the existing ones,
including actions to amend EU law on
pharmaceutical and chemical products, boosting consumer
confidence by providing health-protection and environmental
guarantees.

2.5.
The conclusion reached by the Commission in its
communication is in many respects positive, but everyday
practice in the internal market belies other results, as too many
administrative hindrances to the proper operation of European
firms, particularly SMEs, continue to exist. Despite the Com-
munity actions carried out, cross-border transactions continue
to be a source of uncertainty for consumers. Workers, who are
part of the market, have no uniform system of participation in
corporate management, with the persistence of different
national systems.

3.

Specific comments on actions

The ESC considers it appropriate that the actions to
3.1.
ensure the attainment of the four strategic objectives on which
the successful operation of the European internal market
depends have been graded in importance, with the priority
actions, those to which a deadline for application has been
assigned, providing the framework for the work of
the
institutions.

3.2. The quality of life of European citizens

3.2.1. With regard to the priority actions for each of the
four strategic objectives, the progress made at the Lisbon
summit on improving the quality of life of citizens should be
stressed, with the establishment of
four points aimed at
restoring citizens’ confidence in the European internal market.

3.2.3.
The ESC feels that one measure that will boost the
efficient operation of the market is the development of out-of-
court settlement systems, which will simplify the relationship
between consumers and firms, whilst leaving open the option
for judicial settlement (1).

The White Paper on Food Safety (2) could be one of
3.2.4.
the most suitable instruments for restoring the confidence of
European consumers, who in recent years have witnessed a
series of scandals which have pointed up grave shortcomings
in the operation of food-safety monitoring procedures in the
internal market. The ESC considers that the proposed actions
should be carried out within the deadlines laid down and that
the European Food Agency has a vital role to play in their
implementation.

3.2.5.
On the subject of transport safety, serious accidents
involving the transport of crude oil have led to a number of
legislative measures being proposed to establish liability for
hydrocarbon pollution and to regulate transport in ecologically
fragile areas. Priority should at all events be given to adopting
the environmental liability measure currently being discussed
in the context of a white paper (3), the goal being an objective
liability measure applicable to any form of environmental
damage, and not just that resulting from transport by sea.

3.2.6.
The use of modern technologies, particularly the
Internet, is seen as a suitable way of promoting the dialogue
between citizens and firms. Whilst recognising that this is a
good way of bringing about this dialogue, it should be borne
in mind that, if this approach is to be effective, a good system
of training will also be needed, with use of the technologies
being taught in schools; financial assistance with acquisition
costs will also be needed to ensure access to the technologies,
not only for all firms, but also for less affluent citizens, and
especially those living in rural areas.

3.2.2.
The internal market forum proposed by the Council
and the European Parliament will make it possible to identify
the problems encountered by citizens and small firms in
exercising their rights vis-à-vis national administrations. The

(1) Proposal

for a Council Regulation (EC) on jurisdiction and
the recognition and enforcement of judgements in civil and
commercial matters, OJ C 117, 26.4.2000, p. 6.
(2) White Paper on Food Safety — OJ C 204, 18.7.2000.
(3) ESC Opinion, CES 803/2000

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3.3.

Improving the business environment

3.3.3.2.
The only existing standards at present are those
relating to competition and, especially, those contained in the
Mergers Regulation.

3.3.1.
The introduction of the euro will be a decisive factor
in improving the business environment. The ESC supports the
actions designed to eliminate tax-related distortions; in this
context the Committee reiterates the proposals put forward in
its previous opinion (1), to the effect that before enlargement
progress needs to have been made on the development of a
VAT system based on the state of origin principle which is
capable of controlling tax fraud in the internal market. The
Committee strongly recommends in this context that, with a
view to combating unemployment more effectively, the tax-
ation of the output of labour as a factor of production also be
studied. The ESC hopes that the tax package adopted by the
European Council at the Feira (Portugal) summit will take
account of the Committee’s proposals aimed at promoting the
smooth operation of the internal market.

3.3.2. With regard to the simplification of the internal
market rules, attention is drawn to the content of an own-
initiative opinion on this subject (2), and the proposals it
contains, especially:

— consultation of the ESC on the SLIM project priority

actions;

— prior impact analysis for every draft regulation, to be

carried out by independent bodies;

— recognition of the code of conduct drawn up by the ESC

as a contribution to simplification.

3.3.3. Within the context of this objective, it should be
pointed out that the European Company Statute, which after
long years of debate and many amendments both to the Statute
itself and to the related Directive on worker participation has
still not been approved, needs to be implemented rapidly.

3.3.3.1.
The lack of company-law standards regulating
mergers, particularly cross-border mergers, is creating distor-
tions among European firms, with a resulting impact on the
governments of the Member States and at great cost to the
parties concerned, particularly the shareholders and workers
of European firms.

(1) Strategy for Europe’s Internal Market and Recommendations for
the Review of Target Actions — OJ C 140, 18.5.2000, p. 36.
(2) ESC Opinion CES 1174/2000 — Simplifying rules in the single

market.

3.4. Enhancing the efficiency of Community capital and product

markets

3.4.1.
The measures being used to achieve this objective are
the most effective. The liberalisation of the service sectors is
proceeding apace, although some Member States still retain
holdings in these sectors.

3.4.2.
Notwithstanding the positive assessment of the liber-
alisation of services, this must not result in the creation of
oligopolies, which are prejudicial to free competition and to
services which are of fundamental importance to all European
citizens, where quality and competitive pricing must be
maintained.

3.4.3.
The financial market is crucial to the full effectiveness
of the internal market, and the adaptation of the directives
amending the rules on the accounting standards of commercial
companies, and particularly financial companies, will, by
harmonising these standards, open up access to international
securities markets. The implementation of the risk capital
action plan will also make for greater flexibility in the securities
markets and promote progress towards a uniform system
allowing the establishment of a pan-European securities market
able to accommodate new high-technology securities, which
are strategically important for economic development and
employment in the EU.

3.4.4.
From the point of view of promoting innovation,
high priority must be assigned to the protection of industrial
and intellectual property rights. The ESC is pleased that the
Commission recently submitted a proposal for a Regulation
on the Community Patent. In so doing it is responding to the
ESC’s long-standing call for an instrument to protect patents
in Europe.

3.4.5.
The need should also be stressed for the adoption
of standards governing the transport and energy markets,
particularly directives laying down common rules for the
internal markets in electricity and natural gas. Reference should
also be made here to the amendment of the Directive on the
liberalisation of postal services, which is necessary for the
efficient operation of the universal service.

4. Conclusions

4.1.
The ESC welcomes the annual submission of a review
of the Internal Market Strategy, particularly with regard to the
establishment of priorities for actions undertaken. Account
should, however, be taken of the legislative procedures required
if the deadlines for implementation of measures to facilitate
the operation of the internal market are to be met.

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4.2.
In the light of the strategic objectives referred to, which
affect people’s quality of life, it is necessary to develop the
actions provided for in the White Paper on Food Safety and to
establish the Food Agency in order to restore European
consumers’ confidence in the European market.

Tax harmonisation, and the package of measures
4.3.
adopted to that effect by the European Council
in Feira
(Portugal), is one of the priority areas for action which the ESC
would like to stress as a way of ending tax fraud.

4.4.
Also with a view to improving the business environ-
ment, it is necessary to simplify internal market rules to ensure
that the standards can be met by all companies, especially
SMEs.

4.5.
The Committee considers the adoption of the European
Company Statute to be one of the most important precon-
ditions for the smooth operation of the internal market, as a
suitable vehicle not only for mergers but also for the systems
for the participation of workers in the development of their
companies.

Brussels, 19 October 2000.

The President

of the Economic and Social Committee

Göke FRERICHS

Opinion of the Economic and Social Committee on ‘Competition rules relating to horizontal
cooperation agreements — Communication pursuant to Article 5 of Council Regulation (EEC)
No 2821/71 of 20 December 1971 on the application of Article 81(3) of the Treaty to categories
of agreements, decisions and concerted practices modified by Regulation (EEC) No 2743/72’ (1)

(2001/C 14/03)

On 25 May 2000, the Economic and Social Committee, acting under Rule 23(2) of its Rules of Procedure,
decided to draw up an additional opinion on the above-mentioned communication.

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 27 September 2000. The rapporteur was
Mr Regaldo.

At its 376th plenary session (meeting of 19 October 2000) the Economic and Social Committee adopted
the following opinion with 93 votes in favour and one abstention.

1.

Introduction

1.1.
The two draft Commission regulations on the appli-
cation of Article 81(3) of the EC Treaty to research and
development agreements and specialisation agreements, and
the accompanying draft guidelines on the applicability of
Article 81 to horizontal cooperation, are the result of lengthy
consideration of the need to reform and modernise compe-
tition policy regarding horizontal cooperation agreements.

The draft regulations and guidelines are designed to
1.2.
replace the current regulations on specialisation (Commission
Regulation (EC) No 417/85) and research and development
(Commission Regulation (EC) No 418/85), and the two notices
on cooperation between enterprises (2).

1.3.
The two draft regulations and the notices on the
guidelines for horizontal cooperation agreements are to enter
into force on 1 January 2001 and to apply for ten years,
expiring on 31 December 2010.

(1) OJ C 118, 27.4.2000.

(2) OJ C 75, 29.7.1968 and OJ C 43, 16.2.1993.