WRITTEN QUESTION E-2381/03 by Christopher Huhne (ELDR) to the Commission. Single market.
Date: 2003-07-18
Institutions: European Parliament, Provisional data
Subjects: EU situation, economic analysis, economic convergence, economic indicator, market, single market

27.3.2004

EN

Official Journal of the European Union

C 78 E/109

(2004/C 78 E/0109)

WRITTEN QUESTION E-2381/03

by Christopher Huhne (ELDR) to the Commission

(18 July 2003)

Subject: Single market

Will the Commission define what it means by a successful single market? How will it know when we have
arrived at the single market?

(2004/C 78 E/0110)

WRITTEN QUESTION E-2382/03

by Christopher Huhne (ELDR) to the Commission

(18 July 2003)

Subject: Single market

Will the Commission in future benchmark the success of the EU single market against the US single
market, notably in the volatility and discrepancy of prices for differing goods and services?

Joint answer
to Written Questions E-2381/03 and E-2382/03
given by Mr Bolkestein on behalf of the Commission

(7 August 2003)

To judge the success of the Internal Market, the Commission uses a variety of standard market integration
indicators, both legal and economic; these cover price convergence, internal trade and internal cross-border
investment as well as the legal transposition and application of Community law in the Member States.

Europe’s results for each of these indicators can then be compared with the results that a successful
Internal Market would be expected to achieve. The latter can be defined in a variety of ways: theoretically
(see, for example, boxes 4 and 5 of the statistical annex to Directorate General Internal Market’s Report on
Product and Capital Markets 2001) or against the results achieved by an actual single market (often, but
not always, the United States (US)).

In the case of price convergence, the Commission is already using the US as a benchmark in its monitoring
of the single market. Whenever possible and suitable from a technical point of view, it will continue to do
so. However, although the US is a relevant benchmark for the Union since the two areas are of
approximately the same size, population etc, the Commission believes that it is sometimes more relevant
to use a European benchmark, e.g. one of the larger Member States (Germany, France or the United
Kingdom). The advantage of this is that the outlet structure, product availability and consumption patterns
in these Member States is similar to that of the Union as a whole (more similar than what is found in the
US).

So far, the picture as regards price convergence is a mixed one. For example, price dispersion in groceries
has been significantly reduced in recent years (the coefficient of variation fell from more than 20 % in the
early 1990s to around 10 % today). But it is still almost double than in the US (5,6 %). And it remains
higher than the maximum price dispersion for these goods within individual Member States.

As well as measuring the degree of market integration achieved, it is also important to assess the benefits
which have flowed from this integration for Community business and consumers. This is the purpose of
the Commission’s recent report to mark the 10th anniversary of the 1992 Internal Market. In particular, it
estimates that the Internal Market has delivered nearly EUR 900 billion in extra wealth and 2,5 million
extra jobs. It also demonstrates that consumers have benefited from the extra competition in the Internal
Market through lower prices, better goods and services and increased choice.