Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions : "Working together to maintain momentum" - 2001 Review of the Internal Market Strategy
Date: 2001-04-11
Institutions: European Commission
Subjects: EU action, Economic and Monetary Union, action programme, single market

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 11.04.2001
COM(2001) 198 final

COMMUNICATION FROM THE COMMISSION
TO THE COUNCIL, THE EUROPEAN PARLIAMENT,
THE ECONOMIC AND SOCIAL COMMITTEE
AND THE COMMITTEE OF THE REGIONS

“Working together to maintain momentum”

2001 Review of the Internal Market Strategy

Rapid change is all
around us

The Internal Market
needs to adapt to this
change

Achieving positive
change requires an
effective and lasting
partnership

More competition has
transformed our
economies

A better Internal
Market is within our
grasp

There is a window to
take bold steps. That
window may not be
there for too long

IN T R OD U CT I ON

We live in an era of breathtaking change. The new global marketplace puts
enormous competitive pressure on our economic institutions. Citizens and
businesses have access to information around the clock. It is an age of rising
expectations: increasingly, citizens demand high-quality products and services as
well as extensive choice, but on the basis of an economic approach that respects and
preserves our environment for future generations to enjoy.

Europe needs an Internal Market that works even better for our businesses and
citizens. A market that is flexible and adaptable, free of unnecessary regulations and
red tape, and which continues to be a catalyst for our prosperity. An Internal Market
that empowers our businesses and citizens as much as it serves their needs.

Optimising the functioning of the Internal Market is not a single event. The effort to
maximise its performance is a process, which must be underpinned by a long-term
commitment to change. The job is never “completed”. Nor is the Internal Market
simply a set of laws and regulations adopted at European level. To deliver on the
promise of the Internal Market requires all of us – European institutions, Member
States, business, and civil society - to work together. The European Commission
cannot be – and should not be – the Internal Market’s sole caretaker.

As a result of market integration and increased competition, the Internal Market has
transformed Europe's economy over the past decade, boosting competitiveness and
stimulating growth. The Union is better off as a result of it. Yet still more effort is
needed. And now is the time.

If we succeed, we will begin to see a different Internal Market. The cost of utilities
will go down further. The quality and range of goods and services on offer will go
up. Our companies will become stronger. Our capital markets will become deeper
and more liquid. There will be more funding available for innovation and frontier
technologies. If you run a small business, you should have fewer forms to fill in and
less red tape. Our air will get cleaner. Our citizens will be better skilled, more
mobile and better off. Our economy will be healthier and more resilient. There will
be more jobs of higher quality.

Of course, achieving agreement on some of the proposed reforms requires
considerable and sustained political will. Some of the target actions may create
short-term discomfort. But, with economic conditions deteriorating internationally,
it is crucial for Europe to press ahead with reform in order to get our economy firing
on all its cylinders. Rather than taking the easy road and postponing difficult
decisions to a later date, this is the time to move forward decisively.

If not now, when ?

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The Strategy focuses
attention on strategic
priorities

Lisbon has shaped our
agenda

Stockholm emphasised
continuity and a
sustained effort

The Commission has
paid close attention to
the views of other
Institutions, Member
States, business and
citizens

The Internal Market at the heart of structural and economic reform

To make a reality of our vision of an Internal Market that works more effectively
for companies and our citizens, the Commission brought forward its five-year
Strategy for Europe's Internal Market in November 19991. Endorsed by Heads of
State and Government, its purpose was to identify areas requiring action and to keep
these strategically vital areas under the sharpest political focus. The Strategy centres
on four Strategic Objectives each of equal importance:

Enhancing the efficiency of Community capital, product and services markets
('Markets')
Improving the business environment ('Business')
Improving the quality of life of citizens ('Citizens')
Exploiting the achievements of the Internal Market in a changing world
('External')

These longer-term strategic objectives are combined with operational objectives
and shorter-term target actions which are reviewed and updated every year. In
order to focus political efforts, the first review of the target actions in May 2000
prioritised those target actions which it was felt would have the greatest and most
immediate impact in improving the functioning of the Internal Market. Most of the
priority target actions were drawn from the conclusions of the Lisbon European
Council2 which placed the Internal Market at the heart of a 10-year Strategy
designed to make the EU "the most competitive and dynamic knowledge-based
economy in the world."

The present Communication sets out the second review of the target actions which
have again been prioritised. The choice of priority target actions is largely based on
the conclusions of the Stockholm European Council3 which emphasised the need to
press ahead with the agenda agreed at Lisbon and re-affirmed the importance of the
Internal Market as the driving force behind economic and structural reform in the
Union.

The other priorities in this review have been selected on the basis of the
Commission's own analysis and monitoring (in the Cardiff Report4, the Broad
Economic Policy Guidelines5, the November 2000 Single Market Scoreboard6 and
the feedback from the Dialogue with Citizens and Business). The Commission has
also been guided by the conclusions of the March Internal Market Council and the
important contributions from the European Parliament, individual Member States,
the Economic and Social Committee and the Committee of the Regions. In addition,
the Commission has paid close attention to what was said by citizens, consumers
and SMEs at the Internal Market Forum7, a large-scale event organised by the
Commission, the Parliament and the French Presidency in November 2000, with the
active participation of the Economic and Social Committee.

1

2

3

4

5

6

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COM(1999)624 Final
Conclusions of the Lisbon European Council 24-3-2000
Conclusions of the Stockholm European Council 23/24-3-2001
COM(2000)881 Final
COM(2000)214 Final
SEC(2000) 2088
http://www1.europarl.eu.int/forum/mi/dispatch.cgi

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This Review contains
fewer, more outcome-
oriented actions

Overall, progress in
completing target
actions has been
disappointing

Performance on
priority target actions
has been slightly
better…

…But there is no room
for complacency

As well as prioritising specific target actions, there has also been a conscious
reduction in the overall number of target actions in the current review from 130 to
under 80. The Commission has been more selective in setting new target actions –
including only result-oriented actions that are likely to have a measurable impact on
the functioning of the Internal Market. The result is a more streamlined Strategy
with a much clearer sense of priorities.

The balancesheet of the last twelve months: a combination of breakthroughs and
setbacks

Before introducing our agenda for the next 18 months,
is useful to review
progress so far. Of the 36 target actions scheduled to be achieved by June 2001,
only 20 (56 %) are expected to be completed on time. This is a disappointing
performance in the first year since the Lisbon Strategy was agreed.

it

Performance was only slightly more encouraging as regards those target actions
selected as priorities, with 8 out of 12 being delivered on time. Notable successes
include the adoption in record time of the Directive establishing the regulatory
framework for e-commerce. Once implemented, this will greatly facilitate the take-
up of e-commerce activities in the Union. For their online business, our companies
will to a large extent (i.e. within a co-ordinated field) only need to comply with
regulatory standards in the Member State of origin. Potentially, the savings will be
huge if consumer confidence in e-commerce is established so that it grows beyond
the current low level of approximately 1 % of retail sales.

The European Company Statute has finally been approved thirty years after it was
first proposed. This will offer our companies the opportunity to structure themselves
more efficiently in the Internal Market, although it does not deal with fiscal aspects.
Furthermore, the Directive on Copyright in the Information Society is close to final
adoption. Once implemented (and it is essential that it is), it will ensure a more
competitive environment, enhance investment security for companies and provide
consumers with more choice and opportunities. And as a result of difficult and
intensive negotiations, there has been significant progress on the so-called tax
package. Meanwhile, the Commission has responded to the Lisbon Council request
to develop a comprehensive strategy8 to remove obstacles to the provision of
services within the Union. It must now be fully implemented if the Union is to reap
the benefits of a more dynamic services sector.

These successes confirm the usefulness of the prioritisation process. But they
should not induce a false sense of complacency. We have also witnessed serious
setbacks. The proposal to open up further postal services is still pending in Council,
despite a firm commitment from the European Council to action. Business and
citizens continue to be denied the benefits that will flow from this modest
liberalisation, and the development of e-commerce could be hampered. Progress
towards adoption of the proposals to open up public procurement is too slow,
especially in the Parliament, although it would probably have helped the debate had
the Commission presented its Communications on the link between procurement
and the environment and that on social aspects earlier. Much too slow too is
progress on the Community Patent, despite substantial work over the last 6 months

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COM(2000)888 Final

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Only 3 Member States
have met the
transposition target

The target actions form
a coherent whole.
Partial delivery will not
do

The Review stresses the
need to maintain the
momentum behind the
Lisbon agenda…

and the change introduced in the Nice Treaty in order to allow for the creation of a
centralised jurisdictional system. Regrettably, the European Council was unable to
break the deadlock. These are all major
initiatives which can contribute
significantly to achieving our overall strategic objective but already deadlines have
been missed. In relation to the free movement of people, very little progress has
been made – indeed, in some areas, discussions in the Council have not even
started.

Not only have key legislative proposals been delayed, but progress in implementing
existing Internal Market rules has been disappointing. Only three Member States –
Denmark, Sweden and Finland - met the target established in the Internal Market
Strategy of reducing their transposition deficits to 1.5% by December 2000 - with
Spain coming close. The transposition deficits of Greece, France and Portugal are
still more than three times as great as those of the best performers. There is no
justification for failure to transpose. There should not be a transposition deficit to
begin with. Nearly 13% of all Internal Market legislation has not been transposed in
one or more Member States. This means that we only have a partial Internal Market
operating well below its full capacity. To end delays, our approach has to change.

The Commission is keen to improve the flow of information between the Member
States and the Commission concerning the transposition of Internal Market
Directives. The current paper-based system is outdated, and can lead to
misunderstandings and inaccuracies. It is time to harness the potential of new
technologies to improve the efficiency of the system.

The task of improving the rate of progress is shared between the Commission, the
Council and the European Parliament. The priority target actions identified in the
2001 Review are mutually reinforcing but also interdependent. They form a
coherent whole. What is required is the simultaneous implementation of large
numbers of changes in the way the Internal Market works. Piecemeal delivery will
not do. Sectoral considerations must not be allowed to break the links between
different policy strands that are essential if we are to achieve our overall objective
of becoming the most dynamic economy in the world.

The approach for the next 18 months: some new actions, but a strong emphasis on
the "nuts and bolts" and on preparations for enlargement

Our agenda for the next 18 months reflects the need to press ahead with the
ambitious programme of structural and economic reform agreed at Lisbon and
consolidated at Stockholm. Many of the priority target actions set out in the current
review centre on themes already seen last year: the need to open up to competition
“bedrock” sectors such as transport and utilities; the need to create an integrated
market for capital and financial services; the need to unleash the potential of the
services economy and ensure genuine liberalisation of big sectors of the economy,
such as public procurement; all of these are key determinants of competitiveness
across the whole economy. The review also focuses on the need to improve the
quality of the regulatory framework and promote innovation.

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…It also takes up a few
new elements
introduced in
Stockholm…

…Whilst emphasising
the need for strong
foundations

Building up consumer
confidence

Candidate Countries
must be ready to apply
rules effectively from
day one

Interacting with a
changing world

At the same time, the Stockholm European Council introduced a small number of
new elements which are also reflected in the choice of target actions. These new
elements include actions to exploit the potential of "frontier technologies", such as
life sciences and genomics, and a "New European Labour Market Initiative"
designed to increase labour market flexibility in the Union. This will respond to the
needs of increasingly integrated European businesses who need to be able to recruit
from the European labour pool, as well as workers who want to move across
borders to pursue their careers without unnecessary red tape. It was also decided to
add a sustainability strand to the Lisbon Strategy based on the results of the
forthcoming Göteborg European Council.

But while new actions are required to reform our economies, there is a constant
need to ensure that the basics of the Internal Market continue to work well. This
was the clear message from the Internal Market Forum and the European
Parliament. In the drive to introduce new proposals, it is easy to overlook the "nuts
and bolts" issues of the Internal Market: the operation of the mutual recognition
principle; progress on European standardisation; the need to strengthen market
surveillance; and full
transposition and enforcement of existing Community
legislation. We cannot take these for granted. The Review identifies a number of
actions to address weaknesses in the foundations.

The Internal Market Forum also highlighted the continuing concerns of both
citizens and small businesses about
the need for better access to public
administrations to get their problems solved, information in plain language and
simplification in legislative and administrative procedures. The Forum also brought
out very clearly the need to build up consumer confidence in the functioning of the
Internal Market, through access to affordable and effective out-of-court redress and
other measures. The priority target actions set out below reflect the Commission's
continuing commitment to tackling these fundamental issues.

In an increasingly global economy, we ignore the external dimension of our Internal
Market policy at our peril. There are very concrete steps that can be taken gradually
to make the Candidate Countries part of the management of the Internal Market, so
that by the time of accession they are ready to play their full part. If countries join
before they are ‘ready’, the existing ‘acquis’ would be endangered and the Internal
Market would be at least partially eroded. This would serve nobody’s interest, least
of all that of the candidate countries themselves. Hence the need to step up effective
institution- and confidence-building to ensure that Internal Market rules can and
will be applied effectively from day one.

The Internal Market needs to keep pace with international developments. In several
areas, internationally agreed rules need to be incorporated into our legal framework,
for example, in accounting standards which will enable our companies to compete
effectively for global capital. This “outside-in” imperative to keep the Internal
Market up-to-date is reflected in several target actions. Conversely, it is desirable to
‘export’, whenever appropriate, our Internal Market rules ("inside-out"), particularly
in cases where there are obstacles which prevent our companies from penetrating
new markets. There is, of course, a lot of ongoing work, both at bilateral and
multilateral level. For the purposes of the Review, however, the Commission has
only included actions that have a direct
link with the Internal Market; whose
achievement is broadly within the Union’s control; and, as with the rest of the
Review, where concrete and measurable results can be expected within a specified
time-frame.

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Economic and structural reform, the “nuts and bolts” issues and strengthening the
enlargement and external dimension : these are the themes underlying the priority
target actions outlined below. They have been grouped according to the Strategic
Objectives defined in the original Strategy Communication. A number of the
priorities could justifiably have been classified under more than one of the Strategic
Objectives. Those relating to the “New European Labour Market Initiative”, for
example, could be classified under either “Citizens” or “Business”. In cases such as
this, a choice has been made according to what appeared, on balance, to be the most
to be of a truly
appropriate classification. Some priorities, however, were felt
horizontal nature, cutting across the four Strategic Objectives. These have been
grouped together under the heading "horizontal priorities."

Annex 1 contains a list of completed target actions. A consolidated list of existing,
rescheduled and new target actions can be found in Annex 2. The priority target
actions are in bold.

PR I OR I T Y T A R GE T AC TI ON S

Horizontal priorities

Full, accurate and timely transposition of all Internal Market legislation is a legal
obligation on all Member States and a prerequisite for the proper functioning of the
Internal Market. Transposition deficits must therefore be eliminated. The European
Parliament, the Commission and the Economic and Social Committee all attach
particular importance to the achievement of this objective. The Commission will
continue to monitor Member States' progress towards meeting the interim target of
reducing transposition deficits to 1.5% (even though this target should already have
been met by December 2000). A full review of progress with reference to this
interim target will be prepared in time for the 2002 Spring European Council. The
Commission also takes the view that Member States should halve their transposition
deficits (as recorded in the November 2000 Single Market Scoreboard) by
December 2001. For those Member States still some way off achieving the interim
target of 1.5%, this additional target will provide a useful intermediate objective to
aim for.

The Internal Market offers exciting opportunities - to citizens wanting to live, work,
travel or study in another Member State and to businesses wanting to market their
products throughout the Union. But, as is frequently pointed out by both the
European Parliament and the Economic and Social Committee, individuals and
small businesses often do not know their rights, or how to exercise them. Public
authorities at all levels in the EU need to work constantly to raise awareness of
Internal Market rights. After awareness at a general level, citizens and businesses
need to know where to go for detailed information and help with particular
problems. There are already a number of possibilities open to them, including the
Commission's Dialogue with Citizens and Business9 and the contact points and
co-ordination centres10 established within each national administration, as well as
the Euroguichets (consumer information centres).

Member States should
halve their deficits on
the way to completely
eliminating them

Make it easier to find
out about rights …

9

10

For citizens : http://www.europa.eu.int/citizens
For business: http://www.europa.eu.int/business
http://europa.eu.int/comm/internal_market/en/cp/cit/intro.htm

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… and provide timely
help in case of
problems

Interactive policy-
making : asking and
listening

The Commission believes that these different structures should be better integrated,
so that they complement each other. This is not about setting up new structures. It is
about using existing structures better and making people more aware of their
existence. The ultimate aim should be to develop a "cascading" structure, capable of
tackling quickly and effectively the full range of problems encountered in the
Internal Market. The Dialogue should act as a first port of call for those seeking
information or assistance. The Commission will soon launch an improved Citizens’
website and a new “Citizens Signpost Service”. The challenge now is to raise
awareness of the Dialogue’s existence so that more people will use it. Often the
query can be resolved at that level. If the problem cannot be resolved, complainants
should be directed to their national contact point or co-ordination centre for action.
If a citizen, for example, has a problem with the recognition of a diploma, then this
should be sorted out – within strict deadlines – by the two co-ordination centres
most directly involved, making full use of modern communication technologies.
The same, of course, goes for business problems, for example, in the field of mutual
recognition. The network should draw fully on the important work carried out by
Euro Information Centres (EICs). Where problems cannot be resolved through other
means, as a last resort, the Commission will continue to take decisive action, if
necessary, through infringement proceedings.

Better policy-making begins by listening to those on the receiving end. The
Commission's Interactive Policy-Making initiative aims to do just this. It will use
the Internet to collect and analyse reactions in the marketplace for use in the EU’s
policy-making process. The system will be used by the Commission both to
evaluate existing EU policies and for open consultations on new initiatives. It
involves the development of two internet-based mechanisms. The first of these is a
feedback mechanism which will use existing networks and contact points as
intermediaries to gather
reactions from the marketplace, covering economic
operators, consumers and citizens. The second internet-based mechanism will be a
consultation mechanism which will allow very rapid and structured collection via
the Internet of stakeholders’ reactions to new initiatives. The new mechanism will
fill a gap in existing consultation tools. Feedback will be more structured than is
presently the case (e.g. in reactions to general consultation documents such as
Green Papers) and will, at the same time, be able to accommodate more complex
issues than is possible using existing online questionnaires or opinion surveys. The
Commission is open to co-operation with a wide range of
representative
organisations in the context of this new consultation mechanism.

PRIORITY TARGET ACTIONS: HORIZONTAL

The Member States should

halve transposition deficits by December 2001 and not be above 1.5% by
Spring 2002

The Commission will

set up an effective online, inter-active problem-solving network by June 2002

increase the awareness of the Citizens and Business Dialogue (as measured by
Eurobarometer surveys) by December 2001

– conduct a first Interactive Policy-Making consultation by December 2001

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Telecoms prices have
fallen for both business
and residential users

Further reforms are
needed in postal
services, energy and
transport…

…and in financial
services

Enhancing the efficiency of Community capital, product and services markets

Telecommunications liberalisation has yielded significant benefits for both
consumers and business in terms of lower prices (between 1998 and 2000, telecoms
prices fell by 4-13 % for residential users and 12-21 % for business users) and
improved quality of service. Prices have fallen less for local calls than for long-
distance calls, which is due, in many cases, to a re-balancing of tariffs. However, it
also indicates that work towards strengthening competition in local access networks
needs to continue. Europe’s telecoms sector can hold its own against its global
competitors. We are ahead of the US in mobile communications. Adoption of the
electronic communications package will put the EU industry in a position to lead
the world.

The major challenge, however, is to press ahead with structural reforms in postal
services and the energy and transport sectors. The Stockholm European Council
urged the adoption of the postal services Directive by the end of the year in order to
achieve a balanced opening of this sector.. It also agreed to the objective of opening
gas and electricity markets but without agreeing on a timetable for this. Action is
also required to eliminate problems, notably the delays in air transport, which are
costly to business and a great inconvenience to our citizens. In the railway sector,
while inviting the Member States to implement without delay the recently agreed
infrastructure package, the Commission will propose later in the year to open
further the market to national freight services and international passenger services.
At the same time it will propose to reinforce the organisational aspects of safety as
well as a European agency to deal with safety and interoperability aspects.

Europe has a single currency but not a single, integrated financial market. Our
fragmented market structures are not providing business with the multiple sources
of capital it needs to compete in the modern global economy. Consumers still do not
have a wide enough choice of high-quality financial products. The Financial
Services Action Plan (FSAP)11
full
implementation by 2005 is a pivotal element of the Lisbon agenda. Significant
progress has been made. But the Stockholm European Council called for the pace of
work to be accelerated, with key proposals to be in place by the end of 2003. This
at Stockholm of
task will be greatly facilitated by the
recommendations put forward by the Lamfalussy Group12 for a new regulatory
approach in the securities field to agree common standards in framework
legislation, implement them in practice, update them quickly and flexibly and
enforce them effectively. Two new committees are being created to assist with this.

sets out a blueprint

endorsement

for action.

Its

Not enough money is
channelled into
innovative start-ups

In comparison to the US, EU firms have to operate in a business environment that is
less conducive to research, innovation and ICT. An environment where venture
capital is still too scarce. In 2000, a total of $36.8 billion cash was raised to finance
biotech companies all over the world – approximately $30 billion of this was raised
in the US and only $5.5 billion in Europe13. There are 2,300 biotechnology
companies in the world, of which over 1,100 are in Europe. So, European

11

12

13

COM(1999)232 Final
The Committee of Wise Men on the Regulation of European Securities Markets
http://www.europa.eu.int/comm/internal_market/en/finances/general/lamfalussyen.pdf
Bio Century (the Bernstein Report on biobusiness), Volume 9, N° 10, 26, February 2001

9

Patent protection is
slow and costly

The new R&D
Framework
Programme will help
promote "frontier
technologies"

companies are grossly under-financed. They need to raise a lot more cash in future
years to compete with their US counterparts, and only vibrant, liquid, supportive
European stock exchanges can provide this. Real improvements can be achieved
through the full implementation of the Risk Capital Action Plan14 by 2003.

in particular of "frontier

Action is required at EU level in order for the Community to be able to reap the full
benefit
technologies", such as biotechnology. The
procedures for obtaining appropriate patent protection in the whole Community are
far too slow and costly. The cost of the current European patent has been shown to
be three to five times higher than that of Japanese and US patents. Work on the
proposed Community Patent Regulation should therefore be accelerated as a matter
of priority. As the establishment of the Community Patent also requires a revision
of the European Patent Convention, this revision should be carried out as a matter
of priority. Member States should also implement on time existing Community
legislation particularly to further frontier technologies, such as the Directive on the
legal protection of biotechnological
inventions. Although the deadline for
transposing this key Directive has passed (30 July 2000), only four Member States –
Finland, Denmark, Ireland and the United Kingdom – have done so.

The new 6th Research and Development Framework Programme for the EU recently
proposed by the Commission will also play a key part
in promoting the
development of frontier technologies. The proposed budget for the new programme
is 17.5 bn euro over a four-year period (2003-2006) – representing a 17 % increase
over the budget of the current research framework programme. This will go some
way towards reducing the R&D spending gap between the EU and the US. The
programme is part of a wider political initiative aimed at creating a European
Research Area, as endorsed by the Lisbon European Council. It is also one of the
key priorities identified at Stockholm.

PRIORITY TARGET ACTIONS: MARKETS

The Council and the European Parliament should adopt

an Electronic Communications Package by December 2001
rules to further liberalise Postal Services by December 2001
proposals on opening up electricity and gas markets by December 2001
revised rules on airport slot allocations by December 2002
a Directive on Prudential Supervision of Supplementary Pension Funds by
June 2002
Directive on Prospectuses by June 2002
a Directive on distance marketing of financial services by December 2001
6th Community Research Framework Programme by June 2002

The Council should reach agreement

on the Community Patent by December 2001

14

COM(1999)493 Final

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The Commission will

propose package of measures to open up domestic rail freight and international
passenger markets by December 2001
adopt Decisions establishing the European Securities Committee and the
European Securities Regulators Committee
adopt a strategy for life sciences and biotechnology by December 2001
revise the framework for state aid for research and development by June
2002

The Member States should

ensure that
they are in conformity with Community law as regards the
implementation of the Directive on the legal protection of biotechnological
inventions as soon as possible (except for those Member States which have
already fully transposed the Directive)

Improving the business environment

The Union needs better rules and more efficient rule-making. Nobody is, of course,
arguing against regulation as such. Or indeed in favour of a lowering of standards.
Our system of laws and rules is the foundation of our economic success. It defines
and protects our rights and provides for the orderly conduct of social and business
affairs. But some aspects of rule-making do not work well. We have slipped into
bad habits. Some of our laws, at national and European level, have become too
complicated and contain excessive detail. Compliance costs have often not been
taken into account.

We have no precise measurements of how much excessive regulation costs or how
much time it takes away from productive work. But there is no disagreement that
the costs can be enormous; some estimates put it at between 4 and 6% of GDP15. At
the same time, it is becoming more and more difficult for regulators to keep pace
with rapid market and technological developments. It often takes more than 5 years
from the time a need for regulation is identified for a Directive to come into effect.
We risk imposing yesterday’s rules on tomorrow’s economy. Governments need to
give themselves the tools to write rules at a much faster speed. The recent report
from the Lamfalussy Group puts particular emphasis on improving the way
decisions are reached in the field of securities markets, but it has wider validity.

The European Parliament and the Economic and Social Committee have continually
emphasised the importance of putting in place the right regulatory framework. The
Stockholm Council endorsed a series of new ideas on regulatory reform put
forward in a Communication prepared by the Commission16. Based on these ideas,
and those put forward in the Mandelkern Report17, the Commission will produce a
full and co-ordinated strategy before the end of 2001 which will embrace the need
for regulatory simplification and improvement at both Community and national

The Union needs to
make better rules that
are easier to
understand…

…And make them
faster

15

16

17

Doorn Report A50351/2000
COM(2001)130 Final
This is an initial report prepared by the high-level consultative group of experts set up by Ministers of
Public Administration

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Delivering the goods,
at last, in the field of
services

Providing services
across the EU should
be as easy as it is
nationally

Streamlining
procurement and
giving a boost to
electronic tendering

Standards and the
principle of mutual
recognition are corner-
stones of the Internal
Market

levels. More widely, the issue of regulation will form an important part of the
Commission's forthcoming White Paper on Governance.

The last decades have seen a profound change in the composition of the EU
economy. In almost all EU Member States, the commercial service sector is now at
least double the size of the manufacturing sector in terms of GDP and employment.
The information society has transformed the services market in many ways – for
example, the cost of transmitting and acquiring information has been cut and the
need for proximity removed in many cases. But the services sector is still rife with
barriers. In many fields, there is not yet an Internal Market.

from the Lisbon European Council,

In response to a specific request
the
Commission presented, in December 2000, a major new strategy for dismantling
these barriers by 2002. In its paper,
the Commission suggests taking a new
approach to services, one which complements the classic sectoral approach that has
been followed until now, for example, in financial services. Many barriers are
common to different services sectors, for example, in establishment or licensing.
With a view to removing as many barriers as possible, a horizontal instrument may
be needed. The aim of the Strategy is to ensure that providers of services can
operate as easily throughout the EU as they can in any single Member State.

€

Public procurement represents over 10% of EU GDP. If modest savings of only
5 % could be realised, this would amount to nearly
50 bn of savings each year. At
a time when governments are making major efforts to reduce budget deficits and
lower taxes, this would make a significant contribution. EU legislation has already
yielded good progress in terms of enhancing market transparency; numbers of
public tender invitations have risen steadily since the 1980s. But there is yet to be
impact on the level of cross-border public purchasing. Our
any significant
procurement
rules must be reconfigured, particularly to promote electronic
tendering, which is the way of the future. Lisbon set 2003 as the target date for e-
tendering in the EU. Public procurement ought to be a major driver in Europe's
embrace of the New Economy.

After more than ten years experience with the application of the “New Approach”
Directives, the time has come to evaluate some of the key elements in the existing
body of law. This includes, for example, looking at the impact of conformity
assessment procedures, the designation of notified bodies and CE marking, where
difficulties continue to be reported. The objective of this evaluation will be to make
the existing procedures more efficient without, however, changing the essence of
the “New Approach”, which has generally served us well. The Commission will
make concrete recommendations by the end of the year.

improvement

in the development and adoption of
There has been significant
European standards, for example, in crucial areas such as that of construction
products. The Commission has launched a multi-annual programme with the aim of
developing a total of 600 standards in this sector, together with 1,500 testing
methods. Over 50 standards have already been agreed and the short-term aim is to
take this number to 120 (i.e. 20 % of the total) by December 2001.

The mutual recognition principle is fundamental to the optimal working of the
Internal Market. The Commission will produce a Report by the end of this year
looking at the steps already taken to improve the functioning of this principle and

12

State aid levels are still
too high

Tax obstacles continue
to hamper economic
growth

drawing conclusions as to what still remains to be done. It is also important to
review the effectiveness of the early warning mechanism provided by Regulation
2679/98 in order to deal with obstacles which lead to serious disruption of the free
movement of goods.

A competitive market economy requires an effective and coherent competition
policy at Community and national level. A reform of the Community competition
rules is currently underway. For this reform to work in the interest of the Internal
Market, there is a need to promote a common competition culture throughout the
Community and to avoid competition being distorted by companies having to
comply with different competition law standards. There is still too much sectoral
and ad hoc state aid which has a particular tendency to distort competition. Member
States should focus on reducing further the volume of these aids. In addition, the
system must be made more transparent. There is also a need to put in place a clear
policy framework which will allow public financial support to be given to new
ventures in frontier technologies without creating distortions in competition.

EU businesses are still confronted with a single economic zone in which
15 different company tax systems apply. This prevents them from fully exploiting
the benefits of the Internal Market and biases their choices towards national rather
than European economic activity. The Commission’s forthcoming Communication
on Company Taxation will propose solutions to the tax obstacles that hamper cross-
border economic activity within the Internal Market. Further progress on the
implementation of the tax package is vital to remove barriers to trade and address
harmful tax competition. On indirect taxation, a major effort to modernise and
simplify VAT rules is now needed, especially in the area of invoicing.

PRIORITY TARGET ACTIONS: BUSINESS

The Council and the European Parliament should

reach agreement on new public procurement rules by December 2001

The Council should

agree modernisation of the VAT regime (on electronic invoicing) by December
2001
adopt a new Regulation implementing the antitrust rules in Articles 81 and 82
of the EC Treaty by June 2002

The Commission will

present a co-ordinated strategy to simplify the regulatory environment by
December 2001

13

-
-
-
-
in co-operation with standardisation bodies increase the number of agreed
standards in the construction products sector to, at least, 120 by December
2001
publish an inventory of barriers to cross-border trade in services by December
2001, and propose a horizontal instrument to remove barriers common to
several services sectors by June 2002
take position on the vehicles block exemption for by December 2001

The Member States should

reduce the overall level of state aid to below current levels by December 2001,
taking into account the need to redirect aid towards horizontal objectives of
common interest, including cohesion objectives
roll-back all harmful tax measures, as identified by the Code of Conduct
Group, by December 2002

Improving the Quality of Life of Citizens

The Union’s economic and social future depends on the quality and mobility of its
workforce. Our citizens’ futures, too, depend on whether they have marketable,
flexible skills with which to adapt to the changing demands of new technologies
and the global competition. Mobility in the Internal Market is being seriously
impeded by a number of factors. For example, different national tax and benefit
systems,
the
recognition of professional qualifications, together with difficulties in transferring
supplementary pension and health insurance rights across borders, act as strong
brakes on mobility.

insufficiently transparent, coherent and flexible conditions for

Removing these barriers would help to increase labour market flexibility and
facilitate the transfer of skills across borders. This would have a particularly
beneficial effect on R&D and in high-tech sectors where acute skill-related
problems exist. According to estimates, the skills shortage in Western Europe will
reach 1.7 million IT professionals by 2003. These issues are addressed in the
Commission Communication to the Stockholm European Council on New
European Labour Markets18. The Commission will present an Action Plan for the
Madrid European Council to achieve a labour market that keeps pace with the
integration of the Internal Market and the dynamism of Europe’s new economy,
drawing on the recommendations of a High Level Skills and Mobility Task Force.
The Commission will also bring forward, this year, proposals with a view to the
simplification and improved operation of the regime for professional recognition.

Increased labour
mobility will benefit
both employers and
employees

The Commission will
present an action plan
to remove barriers

The Internal Market's
contribution to a
cleaner environment

The EU can and must consolidate and further develop the positive interaction
between the operation of the Internal Market and environmental protection and
sustainable development. This has been a central aim of the Internal Market
Strategy from the outset. With the European Council in Göteborg in June 2001, this
objective will undoubtedly receive added impetus. It is important that the actions set

18

COM(2001)116

14

-
-
-
-
-
The Internal Market at
the service of
consumers

We need quicker and
more effective cross-
border dispute
resolution mechanisms

out in the 1999 Communication on the Single Market and the Environment19 be
carried out. There are, however, already delays, for some of which the Commission
is itself is to blame. It is essential that the revised deadlines for action are now met.
This Review identifies some concrete, innovative actions which, once implemented,
can be expected to impact positively on the quality of the environment and climate
change. For example, proposing a framework for greenhouse gas emissions-trading,
tackling the environmental liability issue and promoting renewable sources of
energy. The Commission will also play its part
in implementing the Council
strategy on integrating environmental protection and sustainable development into
Internal Market policy which will be presented to the Göteborg European Council.

E-commerce and the euro make cross-border shopping in Europe far easier. But
when consumers feel uncertain about the safety or quality of imported products or
unsure of their rights of redress, they will not buy from suppliers in other Member
States. Concrete measures are required to strengthen consumer confidence in the
proper functioning of the Internal Market. The continuing wide divergence in
consumer protection laws in Member States fragments the Internal Market. This
results in barriers to business and reduces consumer confidence in cross-border
transactions. The Commission will produce a working document for discussion
which will form the basis for further consideration of the adoption of a general
regulatory framework for consumer protection and for co-operation between
administrations. This document could envisage different options, including greater
use, at European level, of self-regulation and co-regulation, based on the ideas set
out in the Commission's Communication on simplification and improvement of the
regulatory environment presented at the Stockholm European Council.

The right legal framework and access to justice are essential. The recent adoption of
the Brussels Regulation will strengthen consumer confidence. But fast, effective
and cheap redress mechanisms can solve many problems without having to go to
court which is expensive and time-consuming. The Commission is therefore placing
high priority on the development of cross-border alternative dispute mechanisms.
The Commission has adopted 2 Recommendations to provide a firm basis for the
setting up and the development of out-of-court settlement bodies. In the field of
financial services, a Memorandum of Understanding has been signed between
national bodies dealing with out-of-court complaints allowing the creation of a co-
operation network (FIN-NET). The aim is now to extend this kind of mechanism to
other areas, particularly through the Commission's European Extra-Judicial
Network (EEJ-Net)
the Commission’s ‘e-confidence’
initiative is designed to reinforce the role of e-commerce codes of conduct in
boosting consumer confidence. Rapid progress is needed to bring the initiative to a
successful conclusion.

In addition,

initiative.

Restore confidence in
food safety

Beyond measures to strengthen consumer confidence in general, there are areas
where specific policy interventions are required. Foremost among these is food
safety. The recurrence of the consumer confidence crisis, brought about primarily
by the spread of BSE, clearly shows that the mere announcement of measures,
however impressive, is not going to restore consumer confidence in the food supply
or in the food regulatory system, unless it is followed up by concrete action. A safe
food chain from farm to fork, correctly regulated and effectively controlled, is thus

19

COM(1999)263 Final

15

Pursue rationalisation
efforts in the
pharmaceuticals sector

Give the non-profit
sector the tools to
organise themselves
efficiently at EU level

the road to building this confidence. The establishment of a new and coherent
regulatory framework in the field of food safety, as laid down in the White Paper on
Food Safety20, and the start of the new European Food Authority, which should be
operational by 2002, are fundamental activities to enhance citizens’ health and
safety and their confidence.

There are continuing calls for further liberalisation of the pharmaceuticals sector.
However, there is as yet no consensus between the pharmaceuticals industry and the
different health systems of the Member States as to how best to respond to the
challenges of liberalisation. Discussions are continuing between the interested
parties with a view to reaching a consensus. In the meantime, the Commission will
continue the rationalisation process with the forthcoming review of legislation
concerning the different procedures for the marketing authorisation of medicinal
products.

With the imminent adoption of the European Company Statute (ECS), the way is
now open for the formation of European companies. The same possibilities should
also be available to the non-profit sector in the EU. The adoption of the ECS should
allow the
concerning European
associations, European co-operatives and European mutual societies. This is a
good example of an area where Community policy can have a direct bearing on the
concerns and aspirations of our citizens.

associated proposals

rapid adoption of

PRIORITY TARGET ACTIONS: CITIZENS

The Council and the European Parliament should adopt

a Regulation to establish the European Food Authority by December 2001
a Regulation modernising and simplifying the co-ordination of social security
schemes by December 2001
proposals on European Associations, European Co-operatives and
European Mutual Societies by December 2001

a Regulation on the framework for the creation of the Single European Sky and
a Regulation establishing the European Aviation Safety Authority by
December 2001, as well as a Regulation on the organisation of airspace in the
Single European Sky by December 2002

The Commission will

put forward to the 2002 Spring European Council an Action Plan to open up
new European Labour Markets
present proposals for an effective regime for the recognition of professional
qualifications
including ways of ensuring more widespread automatic
recognition by December 2001
present a proposal on the portability of supplementary pensions by December

20

COM(1999)719 Final

16

-
-
-
-
-
-
-
2001

propose a Framework Directive establishing strict liability by December 2001

17

-
propose a Framework Directive on Greenhouse Gas Emissions Trading by
June 2002
propose a Regulation on food and feed safety controls as part of Food Safety
Action Plan by December 2001
define a policy on the integration of environmental considerations into the
life cycle of products by December 2001
present proposals on human and veterinary medicinal products by December
2001

The Member States in partnership with the Commission should

ensure that EEJ-Net starts operations and is able to handle complaints by
December 2001

Exploiting the achievements of the Internal Market in a changing world

The Nice European Council has set a new milestone in the enlargement process.
With the conclusion of the Inter-Governmental Conference, and the endorsement of
the enlargement strategy proposed by the Commission, the Union has demonstrated
its commitment to moving the accession process forward. To the extent this strategy
is effectively pursued, and the Candidate Countries continue their preparations for
membership, negotiations could be concluded in 2002 with those candidates that
fulfil
the European Council has
expressed the hope that the first acceding countries will be able to participate in the
elections for the European Parliament in June 2004.

the accession criteria. In addition, at Nice,

Considerable resources have been devoted to helping Candidate countries transpose
Internal Market legislation and to monitoring their performance. The challenge now
is to ensure that they are able to apply the rules in practice. Attention must focus on
improving the functioning of
their supervisory, enforcement and judicial
structures. Existing and new instruments must be mobilised to this end.

The Internal Market model is unique in the world. Many trading partners have
expressed interest in it. The EU has an obvious interest in promoting Internal
Market-type arrangements, particularly with neighbouring countries, as a way of
helping them stabilise their economies and facilitating business transactions. The
MEDA programme with Mediterranean countries is a good example of such an
approach. The Internal Market also needs to reflect changing international rules, for
in accounting or capital standards for globally operating banks and
example,
investment firms. If we fail to do so, we will jeopardise the competitive position of
our own industry.

There is renewed
momentum behind the
enlargement process

Attention must focus
on candidate countries’
ability to enforce the
Internal Market rules

Exporting the Internal
Market model and
keeping it up-to-date

18

-
-
-
-
-
PRIORITY TARGET ACTIONS: EXTERNAL

The Council and the European Parliament should adopt

a Regulation on the application of international accounting standards by
December 2001
a new Capital Framework for Banks and Investment Firms by December 2001
Prudential Rules for Financial Conglomerates by June 2002

The Council should adopt

a directive on adapting the VAT treatment of electronic commerce supplies by
December 2001

The Commission will

Conclude negotiations on the Protocol to Europe Agreement on Conformity
Assessment and Acceptance of Industrial Products (PECA) with those
Candidate Countries which meet the conditions
Ensure that all key sectors of the Internal Market are covered by at least one
twinning arrangement in each candidate country by December 2002
Complete the peer review process among banking, insurance and securities
supervisors from the Member States and a number of Candidate countries

M E A SUR I N G P R OGR E SS A N D B E NEF I T S

To help maintain the momentum behind the Internal Market Strategy, it is important
that progress is monitored as closely as possible. Although the annual Reviews
count the number of target actions achieved, a broader measure of progress is also
needed. Based on consultations with the Member States,
the Commission is
currently examining different options for the development of a comprehensive set
of indicators which will measure progress towards meeting the Operational
Objectives set out in the Strategy. A working paper will be produced by June 2001
and the first results will be published in the November 2001 Single Market
Scoreboard. The indicators will measure outcomes, not inputs. Measurement will
include an environmental and consumer dimension and should allow the degree of
integration of Internal Market and other policies to be measured. The development
of these indicators will take full account of existing Internal Market monitoring
instruments, such as the Cardiff Report and the Single Market Scoreboard, and of
the structural indicators developed in the framework of the Commission's Synthesis
Report presented to the Stockholm European Council. In addition, the Commission
is undertaking studies on the benefits (potential or realised) in certain sectors where
the performance of the Internal Market needs to be enhanced.

C ON C L U SI ON

19

Monitoring progress
and benefits

-
-
-
-
-
-
-
A gap risks opening up
between rhetoric and
reality

Too often, commitments made at European Councils are not translated into concrete
action at lower levels of decision-making. A gap opens up between rhetoric and
reality. By retaining a sharp political focus on the Stockholm Internal Market
priorities, it is hoped that this Review can help to prevent this from happening.

The Commission is
seeking firm
endorsement of the
priority target actions

It is hoped that the Review will give rise to substantive discussions in both the
Council and the European Parliament resulting in clear, action-oriented conclusions.
The Commission seeks firm endorsement of the Review, in particular of the priority
target actions, and a commitment that deadlines will be met by all.

20

TARGET ACTIONS COMPLETED BY JUNE 20011

BY THE COMMISSION

1. ENHANCING THE EFFICIENCY OF COMMUNITY PRODUCT AND CAPITAL MARKETS
(cid:1)

AN N E X 1

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

2.
(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

1

Adoption of the annual Report on Economic Reform (Cardiff Report)

Implementation of the Financial Services Action Plan, including the Risk Capital Action
Plan (The Financial Services Action Plan is to be implemented in full by 2005. Detailed timings
appear in the Action Plan itself).

Proposal to ensure that the existing VAT system is compatible with e-commerce

Action to support initiatives for on-line out of court redress

Communication as follow-up to Green Paper on counterfeiting and piracy

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

Proposal confirming rules on cross-border tarification in the electricity sector

Proposal for Regulation on checks of professional road drivers

Proposals for future liberalisation of the Energy market

Communication on progress in liberalising Energy markets including the completion of
mechanisms for cross-border transmission tarification

Sixth Report on the implementation of the Telecoms Regulatory Package

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

Communication on the application of the principle of free movement of services for the use of
antenna dishes

IMPROVING THE BUSINESS ENVIRONMENT

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

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

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

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

Proposals for modernisation of VAT legislation in the Internal Market

Report to Council on the system of excise duties in the Internal Market on tobacco

Report on company taxation in the EU

Strategy for Removing Barriers to Trade in Services

Communication on commercial communications and sales promotion

Monitoring report on the application of the product liability Directive (85/374)

Some of these target actions have not been completed at the date of the publication but are expected to
do so by the end of June 2001. Target actions in bold are priority target actions.

21

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

3.
(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

Agreement on 50 harmonised standards relating to construction products

Proposal to amend the Machinery Directive (98/37)
Proposals to modify the 1st Company Law Directives (post-SLIM) (68/151 )

Implementation Report on BEST Action Plan

Conference / Seminar on SMEs and Public Procurement

Develop Business Dialogue on-line with Member States National Contact Points

Making on-line statistical data from the Business Feedback mechanism available to Member
States

IMPROVING THE QUALITY OF LIFE OF CITIZENS

Proposal for a European Parliament and Council Directive amending the Insolvency Directive
80/987

Proposal for a Directive on liability and compensation for damages relating to oil pollution at sea

Second cohesion report to provide an updated examination of the effects of the Internal Market on
cohesion

Recommendation on how to integrate environmental considerations into financial reporting

Communication on Environmental Considerations in Public Procurement

Proposal to amend driving licence Directive 91/439

Communication on commercial communications and sales promotions

White Paper outlining a new strategy on chemicals

Communication on maritime safety

Proposal to establish the European Aviation Authority

Proposal for setting-up a European Food Authority

Proposal for a general food law Directive

Proposal for amending Directive 79/112/EEC on the labelling, presentation and advertising of
foodstuffs

Proposal for a Directive updating and revising rules on the right of residence

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

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

Report on the application of Directive 91/477 on the control of the acquisition and possession of
weapons

Publication of guide on data protection rights

Commission and European Parliament Internal Market Forum on Enforcing Internal
Market Rights and Means of Redress

Develop Partnership with Member States Internal Market Contact Points for Citizens

22

4. EXPLOITING THE ACHIEVEMENT OF THE INTERNAL MARKET IN A CHANGING WORLD
(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

Additional protocol to Convention 108 of the Council of Europe in line with Directive 95/46

Decisions, based on Article 25, paragraph 6 of Directive 95/46, assessing the adequacy of the level
of data protection in some third countries

Complete negotiations with the Council of Europe on a Recommendation on the protection of
personal data collected and processed for insurance purposes

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

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

candidate

Joint meeting of Heads of Co-ordination Centres and representatives of candidate countries

More targeted use of pre-accession strategies,
arrangements on Internal Market issues

such as

intensification of

twinning

Examine the possibility of initiating a peer review process among banking, insurance and
securities supervisors from the EU and candidate countries.

BY THE COUNCIL AND EP

1. ENHANCING THE EFFICIENCY OF COMMUNITY PRODUCT AND CAPITAL MARKETS
(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:1)

2.
(cid:1)

(cid:1)

Adoption of Directive on copyright and related rights in the information society

Adoption of Directive on artists’ resale rights

Adoption of proposal for a Regulation on Community designs

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

Adoption of a Directive on the interoperability of conventional rail

Adoption of a Directive on working time in road transport

IMPROVING THE BUSINESS ENVIRONMENT

Adoption of amendments to Regulation 3911/92 on the export of cultural goods, and adoption of
amendments to Directive 93/7 on the return of cultural objects unlawfully removed from the
territory of a Member State

Adoption of the proposed Regulation and Directive on the Statute for a European company

3. IMPROVING THE QUALITY OF LIFE OF CITIZENS
(cid:1)

Adoption of an amendment to Council Regulation establishing a Community eco-label award
scheme (880/92)

Adoption of an amendment to Council Regulation establishing a Community eco-label and audit
scheme (EMAS) (1836/93)

Adoption of a Directive on information and consultation of workers in the EC

Adoption of the Directive on the transformation, presentation and sale of tobacco products

(cid:1)

(cid:1)

(cid:1)

23

(cid:1)

(cid:1)

Adoption of Directives modifying Directives 95/21 (port state control), and 94/57 (ship
inspections and surveys), and a Regulation on the accelerated phasing-in of double hull or
equivalent requirements for single hull oil tankers (safety of the sea-borne oil trade)

Adoption by the Council and the European Parliament of a proposal to amend the general product
safety Directive (92/59)

BY THE MEMBER STATES

1. ENHANCING THE EFFICIENCY OF COMMUNITY PRODUCT AND CAPITAL MARKETS
(cid:1)

Implementation annually by the Member States of the country-specific recommendations on
product and capital market reform contained in the Broad Economic Policy Guidelines

Timely transposition and full implementation of Directive 96/92 concerning common rules
for the Internal Market in electricity

(cid:1)

(cid:1)

Timely transposition and full implementation of Directive 97/67 on postal services liberalisation

24

AN N E X 2

CONSOLIDATED LIST OF TARGET ACTIONS UP TO DECEMBER 2002

Priority Target Actions

New Target Actions

P
v
(cid:1)

Rescheduled Target Actions

25

P

P

P

P

(cid:2)

(cid:2)

(cid:2)

(cid:2)

(cid:2)

(cid:2)

MARK ETS 1
ENSURE FINANCIAL SERVICES DELIVER THEIR FULL POTENTIAL

DECEMBER 2001

Council and EP to adopt Distance Marketing of Financial Services Directive
to promote online financial services.
Council and EP to adopt the framework legislation to set up a European
Securities Committee with a view to speeding up modifications to the legal
framework so that it keeps up to date with market developments.

JUNE 2002

Council and EP to adopt Directive on Prudential Supervision of
Supplementary Pension Funds to remove artificial investment restrictions
while maintaining prudential soundness.
Council and EP to adopt two upgraded Directives on Prospectuses to allow
companies to raise capital on a pan-European basis using a single prospectus.

DECEMBER 2002

Council and EP to adopt Directive on Cross-border use of Collateral to ensure legal
certainty and financial stability.
Council and EP to adopt Directive on Market Manipulation to enhance investors’
confidence in securities markets.

E
V
I
T
A
L
S
I
G
E
L

E
V
I
T
A
L
S
I
G
E
L

E
V
I
T
A
L
S
I
G
E
L

MARK ETS 2
ENCOURAGE CREATIVITY AND INNOVATION AND MAXIMISE THE BENEFITS OF FRONTIER TECHNOLOGIES

P

P

P

P

P

(cid:2)

(cid:2)

(cid:2)

(cid:2)

DECEMBER 2001

(cid:1)

All Member States to rapidly implement the Directive on the legal protection
of biotechnological inventions which will help to obtain legal certainty for
companies and promote innovation.

• Council to adopt Regulation on a Community patent to encourage investment
(cid:2)

in research and innovation and reduce costs, particularly for SMEs
Council and EP to adopt
Programme.
Commission Communication setting out a strategy for life sciences and
biotechnology up to 2010 including on ethical issues.
Rapid and rigorous implementation of the Electronic Commerce Directive to
ensure that European citizens and companies benefit fully from the development of
cross-border electronic commerce in the Internal Market

the 6th Community Research Framework

JUNE 2002

Council and EP to adopt Directive to be proposed on the patentability of software
related inventions which, by making the legal situation more transparent, will
promote creativity

Commission to renew and improve rules on State Aid for Research and
Development
innovation can be promoted without distorting
competition

so that

26

E
V
I
T
A
L
S
I
G
E
L

-
N
O
N

E
V
I
T
A
L
S
I
G
E
L

E
V
I
T
A
L
S
I
G
E
L

-
N
O
N

E
V
I
T
A
L
S
I
G
E
L

P

P

P

P

P

E
V
I
T
A
L
S
I
G
E
L

E
V
I
T
A
L
S
I
G
E
L

MARK ETS 3
MARKET OPENING LEGISLATION IN THE UTILITIES AND TRANSPORT SECTORS

DECEMBER 2001

(cid:1)

(cid:2)

Council and EP to adopt amendment to Postal Services Directive (97/67) to
increase liberalisation, and to improve efficiency of sorting and distribution
techniques consistent with maintaining a universal service.
Commission proposals for liberalisation of the market for national freight and
international passenger services in order to complete rail liberalisation.

four

specific Directives

• Council and EP to adopt five proposals for a new regulatory framework for
electronic communications networks and services. A Framework Directive
and
covering Authorisations, Access &
Interconnection, Universal Service & Users’ Rights and Data Protection, as a
means of encouraging increased competition in all segments of the market
while at the same time ensuring that the basic rights of consumers continue to
be protected.
Council and EP to agree proposals to open up electricity and gas markets to
greater competition leading to lower prices and greater choice.

(cid:2)

(cid:2)

(cid:2)

DECEMBER 2002

Council and EP to adopt proposals to open up airport landing/take-off
facilities (“slots”) to provide greater competition, lower prices and greater
choice for consumers.
Council and EP to adopt proposals to provide greater competition on port services
(e.g. Pilotage, towing and mooring).

27

B US I NES S 1
REMOVAL OF ANTI-COMPETITIVE PRACTICES WHICH THREATEN MARKET INTEGRATION

(cid:2)

(cid:1)

(cid:2)

(cid:2)

(cid:2)

(cid:1)

(cid:2)

P

P

P

P

DECEMBER 2001

Overall levels of state aid to be reduced to below current levels
Commission proposal to revise the Notice on agreements of minor importance
which do not have sufficient impact on competition and/or trade between Member
States (the ‘de minimis’ Notice) to improve the operation of the EU's competition
policy.
Commission to present its intentions regarding the regime for motor vehicle
distribution and servicing applicable as from 1st October 2002 in order to
ensure that the Internal Market can operate efficiently to the full benefit of
consumers
Commission to open the State Aid Register and provide regular information in the
form of a Scoreboard.

JUNE 2002

Council to adopt new Regulation implementing the antitrust rules in Articles
81 and 82 of the EC Treaty which will decentralise the application of EU
competition law.

B US I NES S 2
ELIMINATE TAX BARRIERS AND UNFAIR TAX COMPETITION

DECEMBER 2001

Council to adopt Directive on energy taxation which will result in a more efficient
use of energy.
Council to adopt Directive on simplification and modernisation of VAT
invoicing conditions (including electronic invoicing), with a view to enhancing
the competitiveness of European industry.

In the framework of the Tax Package :

DECEMBER 2002

(cid:2)

(cid:2)

Council to adopt Directive to ensure effective taxation of savings income in the
form of interest payments within the Community
Council to adopt Directive on a common system of taxation applicable to interest
and royalty payments between associated companies in different Member States.

In the framework of the Tax Package :

(cid:2)

P

Roll back of all harmful tax measures contained in the November 1999 Report
of the Code of Conduct Group

E
V
I
T
A
L
S
I
G
E
L
-
N
O
N

E
V
I
T
A
L
S
I
G
E
L

E
V
I
T
A
L
S
I
G
E
L

E
V
I
T
A
L
S
I
G
E
L

-
N
O
N

E
V
I
T
A
L
S
I
G
E
L

28

B US I NES S 3
IMPROVE THE REGULATORY AND ADMINISTRATIVE ENVIRONMENT FOR BUSINESS, PARTICULARLY SMES

(cid:1)

(cid:1)

(cid:1)

(cid:1)

(cid:2)

(cid:2)

(cid:2)

(cid:2)

(cid:2)

(cid:2)

P

P

P

P

P

DECEMBER 2001

Council and EP to adopt public procurement legislative package to simplify
and introduce more user friendly procedures for contracting authorities and
suppliers, especially SMEs, and to promote electronic means of procurement.
Commission proposal to amend Electromagnetic Compatibility Directive (89/336)
to simplify procedures and make it easier for SMEs to market their products across
borders.
Commission to present a co-ordinated strategy and Action Plan to simplify the
regulatory environment. Improving the regulatory environment in Europe -
both at Community and national
level - is an essential requirement for
achieving our goal of becoming the most dynamic and competitive economy in
the world.
Commission to complete the 5th SLIM project to simplify legislation covering
nuclear waste, pesticide residues and cosmetics.
Commission to publish inventory of existing barriers across all services
sectors as part of the Services Strategy (First phase).
Commission to work with standardisation bodies to increase the number of
standards agreed in the construction products sector to at least 120.
Commission to recommend improvements in the operation of
recognition principle for goods and services.
Commission proposals on the better implementation of conformity assessment
(CE) marking on products covered by New Approach Directives.

the mutual

JUNE 2002

Council and EP to adopt amendment to Machines Directive (98/37) designed to
simplify the rules and procedures for business.

DECEMBER 2002

Commission to propose a horizontal instrument to remove barriers that are
common to a number of services sectors as part of the Services Strategy
(Second phase).

E
V
I
T
A
L
S
I
G
E
L

E
V
I
T
A
L
S
I
G
E
L
-
N
O
N

E
V
I
T
A
L
S
I
G
E
L

E
V
I
T
A
L
S
I
G
E
L

29

E
V
I
T
A
L
S
I
G
E
L

E
V
I
T
A
L
S
I
G
E
L
-
N
O
N

E
V
I
T
A
L
S
I
G
E
L

E
V
I
T
A
L
S
I
G
E
L
-
N
O
N

C I TI ZENS 1
ENSURE THAT THE INTERNAL MARKET CONTRIBUTES TO SUSTAINABLE AND BALANCED DEVELOPMENT

DECEMBER 2001
• Council and EP to adopt Directive on the promotion of electricity from renewable
(cid:2)

energy sources as a contribution to sustainable development
Commission to propose Framework Directive establishing strict liability
provisions to protect the environment.
Commission proposal for a Directive on the impact on the environment of the use
of electrical and electronic equipment (EEE)

P

P

P

(cid:2)

(cid:2)

(cid:2)

(cid:2)

Commission Communication on an Integrated Product Policy setting out how
the Commission intends to take forward the integration of environmental
considerations into the life cycle of products.

JUNE 2002

Commission proposal
for a Framework Directive on Greenhouse Gas
Emissions Trading as a cost effective policy instrument in the fight against the
serious consequences of climate change both in Europe and the developing
world.

Commission proposals for the use of economic instruments for environmental
policy which will consider the potential for environmental taxes and charges in the
Internal Market.

30

C I TI ZENS 2
ENHANCE CITIZEN’S HEALTH AND SAFETY AND PROMOTE THEIR ECONOMIC INTERESTS

(cid:2)

(cid:1)

(cid:2)

(cid:2)

(cid:1)

(cid:1)

(cid:2)

(cid:2)

(cid:2)

(cid:1)

(cid:2)

DECEMBER 2001

Council and EP to adopt Regulation establishing the European Food
Authority and setting out the general principles and basic requirements of
Food Law.
Commission proposal for a Regulation on food and feed safety controls as part
of the Food Safety Action Plan.
Commission to present proposals on human and veterinary medicinal
products
Commission to propose amendment to Directive (89/109) on materials that are
used in packaging and could contaminate foodstuffs to protect human health and
eliminate technical barriers to trade.
Commission proposal to amend the Misleading Advertising Directive (84/450) to
include health, nutritional and ethical claims.
Commission proposal to amend the Consumer Credit Directive (87/102) to bring
the legislation into line with market practice and facilitate cross-border
transactions.
Council and EP to adopt Regulation setting the framework for the creation of
the Single European Sky to reform air traffic management towards reducing
delays and improving safety.
Commission proposals for a general regulatory framework for consumer protection
and a general framework for administrative co-operation in consumer protection.

Council and EP to adopt Regulation establishing the European Aviation
Safety Authority which will deal with aircraft certification and regulations
covering air carriers operations.

Member States, in partnership with the Commission, to make the European
Extra-Judicial Network (EEJ-Net) for out of court settlements ready to start
operations and begin to handle cases for consumers.

DECEMBER 2002

Council and EP to adopt proposals on the organisation of airspace in the
Single European Sky including air navigation services, and the introduction of
standards
for air navigation systems and equipment encouraging the
development of new technology.

P

P

P

P

P

P

P

E
V
I
T
A
L
S
I
G
E
L

E
V
I
T
A
L
S
I
G
E
L
-
N
O
N

E
V
I
T
A
L
S
I
G
E
L

31

P

P

P

P

P

(cid:1)

(cid:1)

(cid:1)

(cid:2)

(cid:2)

(cid:1)

(cid:2)

(cid:2)

C I TI ZENS 3
REINFORCE AND PROMOTE CITIZENS’ RIGHTS

DECEMBER 2001

Council and EP to adopt Regulation modernising and simplifying the co-
ordination of social security schemes to help the free movement of people and
employees.
Council and EP to adopt proposals in line with the European Company
Statute on Associations, Co-operatives and Mutual Societies, to give non-
profit organisations the opportunity to organise themselves efficiently across
borders.
Council and EP to adopt modification to Regulation (1408/71) extending social
security schemes to third country nationals to help the free movement of people
and employees.
Commission proposals for action on supplementary pensions to encourage
and facilitate the movement of workers.
Commission proposals to produce a more uniform, transparent and flexible
regime for the recognition of professional qualifications.

JUNE 2002

Commission proposal to amend Directive 91/477 on controls for the acquisition
and possession of weapons by citizens.

Commission to put forward an action plan to open up new European Labour
Markets by 2005 thereby increasing labour mobility and helping to close the
skills gap (for presentation to 2002 Spring European Council).

DECEMBER 2002

Council and EP to adopt Directive simplifying and modifying existing legislation
on the right of free movement and residence so that citizens can move around the
European Union more easily.

E
V

E
V
I
T
A
L
S
I
G
E
L

I
T
A
L
S
I
G
E
L
E
V
I
T
A
L
S
I
G
E
L
-
N
O
N

E
V
I
T
A
L
S
I
G
E
L

32

P

P

P

P

E X TERNAL 1
ENHANCING THE INTERNAL MARKET’S INTERACTION WITH A GLOBAL TRADING SYSTEM

(cid:2)

(cid:2)

(cid:2)

(cid:2)

(cid:2)

(cid:2)

(cid:2)

(cid:2)

DECEMBER 2001

Council and EP to adopt Regulation on the application of the international
accounting standards, which will reduce costs and enable our companies to
compete on equal terms for global capital.
Commission to adopt Directive Governing the Capital Framework for Banks
and Investment Firms, as agreed in the G-10, which will ensure financial
stability as well a level playing field for EU institutions.
Council to adopt Directive on adapting the VAT treatment of electronic
commerce supplies, which will establish a level playing field for EU and non-
EU suppliers of electronic services.
Council and EP to adopt Regulation on the implementation of the internet top level
domain [. eu] which will give a concrete expression to Europe’s role in the Internet
economy. This will be followed by a Commission Decision on the designation of
the [.eu] top level domain registry.
Commission to adopt Decision on the basis of Article 25.6 of Directive 95/46 on
the adequacy of the Canadian law governing the protection of personal data in
order to facilitate transatlantic data flows.

JUNE 2002

Council and EP to adopt Directive on Prudential Rules for Financial
Conglomerates based on work in the G-10 with a view to ensuring financial
stability and keeping the EU’s supervisory approach compatible with global
rules

DECEMBER 2002

Commission to negotiate arrangements with certain third countries so that a
Directive on the taxation of income from savings can be finally adopted.
Commission to adopt a timetable for Internal Market-type harmonisation measures
to be implemented in the framework of the Mediterranean Partnership (MEDA)
Programme for priority sectors, such as rules of origin, customs, standards and
IPRs.

E
V
I
T
A
L
S
I
G
E
L

E
V
I
T
A
L
S
I
G
E
L

E
V
I
T
A
L
S
I
G
E
L
-
N
O
N

33

E X TERNAL 2
ENSURE THAT THE INTERNAL MARKET CONTRIBUTES TO A SUCCESSFUL ENLARGEMENT OF THE COMMUNITY

P

P

P

P

P

P

P

1

(cid:2)

(cid:2)

(cid:2)

(cid:2)

(cid:2)

DECEMBER 2001

Commission to conclude negotiations on the Protocol to Europe Agreement on
Conformity Assessment and Acceptance of Industrial Products (PECA) with a
number of Candidate Countries (at least with Latvia and Lithuania) who meet
the conditions.
Invite Candidate Countries to attend meetings of Internal Market Committees
(except to those who engage in decision-making)1
Complete peer review process among banking,
insurance and securities
supervisors from the EU and a number of Candidate Countries (at least with
Hungary, Slovenia, Czech Republic, Poland).
Commission to publish practical guide for Candidate Countries and Member States
on the application of the “mutual recognition principle”.
Commission to evaluate and report on the use made of the administrative co-
operation database involving Candidate Countries. This is an important tool for the
management of the Internal Market as it facilitate better contacts between officials
on practical questions.

JUNE 2002
• Commission to conclude negotiations on the Protocol to Europe Agreement on
Conformity Assessment and Acceptance of Industrial Products (PECA) with a
number of Candidate Countries (at least with Slovakia, Slovenia) who meet
the conditions.
Complete peer review process among banking,
insurance and securities
supervisors from the EU and a number of Candidate Countries (at least with
Malta, Lithuania, Latvia, Slovakia).

(cid:2)

(cid:2)

(cid:2)

(cid:2)

DECEMBER 2002

Conclude negotiations on the Protocol to Europe Agreement on Conformity
Assessment and Acceptance of Industrial Products (PECA) with a number of
Candidate Countries (at least with Estonia) who meet the conditions.
Complete peer review process among banking,
insurance and securities
supervisors from the EU and a number of Candidate Countries (at least
Bulgaria, Romania).
Ensure that all key sectors of the Internal Market are covered by at least one
twinning arrangement in all Candidate Countries.

E
V
I
T
A
L
S
I
G
E
L

E
V
I
T
A
L
S
I
G
E
L
-
N
O
N

E
V
I
T
A
L
S
I
G
E
L

-
N
O
N

I
T
A
L
S
I
G
E
L

-
N
O
N

E
V
I
T
A
L
S
I
G
E
L

E
V

E
V
I
T
A
L
S
I
G
E
L

In line with the Commission’s Communication to the Council on the participation of Candidate
Countries in Community programmes, agencies and committees.

34