Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions - Report on the implementation of the Internal Market Strategy (2003-2006)
Date: 2004-01-21
Institutions: European Commission
Subjects: application of EU law, economic integration, national implementing measure, report, single market

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 21.1.2004
COM(2004) 22 final

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

Report on the implementation of the Internal Market Strategy (2003-2006)

EN

  EN

TABLE OF CONTENTS

PART A: INTRODUCTION...................................................................................................... 3

PART B: THE STATE OF THE INTERNAL MARKET – WARNING LIGHTS ARE
BEGINNING TO FLASH RED................................................................................................. 5

PART C: ENLARGEMENT WILL GIVE MARKET INTEGRATION A FRESH BOOST,
IF HANDLED WELL................................................................................................................ 8

PART D: THE INTERNAL MARKET STRATEGY - PROGRESS SO FAR....................... 10

1

2.

3.

4.

5.

6.

7.

8.

9.

Facilitating the free movement of goods.................................................................... 10

Integrating services markets....................................................................................... 10

Ensuring high quality network industries .................................................................. 11

Reducing the impact of tax obstacles......................................................................... 12

Expanding procurement opportunities ....................................................................... 12

Improving conditions for business ............................................................................. 12

Meeting the demographic challenge .......................................................................... 13

Simplifying the regulatory environment. ................................................................... 13

Enforcing the rules ..................................................................................................... 14

10.

Providing more and better information ...................................................................... 15

ANNEX 1: IMPLEMENTATION REPORT SCOREBOARD............................................... 16

ANNEX 2: ACTIONS DUE FOR COMPLETION BY END 2003 ........................................ 21

2

 
PART A:

INTRODUCTION

The  Internal  Market  Strategy  (2003-2006)1  sets  out  what  needs  to  be  done  to
maximise the contribution which an enlarged Internal Market can make to increasing
the EU's competitiveness,  growth and prosperity2.  The  Spring  European  Council  in
March  2003  recognised  the  importance  of  the  Strategy  as  one  of  the  Union's
economic  policy  co-ordination  instruments.  The  European  Council  meeting  in
October  this  year  highlighted  the  need  for  urgent  progress  in  services,  financial
services,  transposition  and  enforcement,  all  of  which  are  key  areas  within  the
Strategy.  The  September  Competitiveness  Council  endorsed  the  Strategy  and
committed itself to  taking urgent action to  deliver the necessary  actions.  It  stressed
its importance as part of an integrated approach to competitiveness.

The  Strategy  is  part  of  the  "Guidelines  Package",  alongside  the  Broad  Economic
Policy Guidelines (BEPG) and the Employment Guidelines (EG)3. In common with
these two instruments, it has been given a three-year perspective in order to ensure a
more comprehensive, efficient and coherent approach to economic reform in the EU.

This is the first report on the implementation of the Strategy. Similar implementation
reports have been prepared for the BEPG and the EG. All three reports are presented
as part of the Commission's Report to the 2004 Spring European Council.

Only  8  months  have  passed  since  the  Strategy  was  adopted.  The  results  so  far  are
mixed.  Over  half  of  the  actions  which  were  due  by  the  end  of  2003  have  been
delivered on time. However, many of those which have been delayed are important
legislative files which are crucial to the EU's future competitiveness.

Urgent action is required over the next 12 months on two fronts:

(cid:1)  First,  fresh  efforts  are  needed  on  the  key  legislative  files  which  have  run  into
delays,  such  as  the  Community  Patent,  the  Directive  on  enforcement  of
intellectual  property  rights  and  the  Directive  on  recognition  of  professional
qualifications as well as on more recent proposals, such as the FSAP's investment
services  and  transparency  Directives.  Legislation  which  is  not  complete  by  the
final  session  of  the  present  European  Parliament  (in  April,  2004)  risks  being
subject  to  further  delays.  This  would  in  turn  have  a  domino  effect  on  all
subsequent steps towards improving the operation of the Internal Market;

1

2

3

COM(2003) 238 final of 7.5.2003
Recognising  the  Strategy’s  importance  for  the  EU’s  competitiveness,  the  Commission  called  for  the
work programme set out in the Strategy to be implemented rigorously in its Communication “Some Key
Issues  in  Europe’s  Competitiveness  –  Towards  an  Integrated  Approach”,  COM(2003)  704  final,  of
21.11.2003.
See  Commission  Communication  on  streamlining  the  annual  economic  and  employment  policy  co-
ordination cycles, COM(2002) 487 final of 3.9.2002

3

 
                                                
(cid:1)  Second, the concept of "better governance" as set out in the Strategy needs to be
developed and implemented. This  means  that Member States, as  joint owners of
the  Internal  Market,  need  to  work  together  in  partnership  and  perform  the
necessary  tasks  which  are  incumbent  upon  them.  Member  States  have  made  a
good  start  in  helping  each  other  solve  cross-border  problems4.  This  willingness
now  needs  to  be  extended  to  other  tasks  such  as  faster  and  better  transposition,
preventing  problems  through  stronger  day-to-day  co-operation  between  national
administrations  and the provision of more  and better  information to  citizens  and
businesses.

Success in doing this will:

(cid:1)  Breathe new life into the Lisbon Strategy by demonstrating consistency between
political  declarations  about  the  need  to  boost  competitiveness,  on  the  one  hand,
and decisions on economic reform measures, on the other;

(cid:1)  Strengthen  the  foundations  of  an  enlarged  Internal  Market,  boosting  intra-EU
trade  and  injecting  greater  competition  into  Member  States'  economies,  thereby
forcing  companies  to  become  more  efficient  and  productive.  This  is  important
because in a relatively high-wage economy such as the EU, enhanced productivity
is the key to boosting competitiveness and securing our long-term prosperity;

(cid:1)  Help increase the supply of investment capital and create the kind of barrier-free
environment  which  is  conducive  to  an  increase  in  private-sector  investments,
including  in  Trans-European  Networks  and  R&D,  as  envisaged  in  the  "Growth
Initiative"5 and the research investment action plan6;

(cid:1)  Put  the  Union  in  a  stronger  position  to  deal  with  any  additional  competitive
pressures  arising  from  exchange  rate  developments  between  the  euro  and  other
major currencies.

4

5

6

Through the SOLVIT network http://europa.eu.int/solvit
An  initiative  for  growth  in  the  European  Union  –  Interim  Report  to  the  European  Council,
COM(2003) 579 of 1.10.2003
"Investing in research: an action plan for Europe", COM(2003) 226 final

4

 
                                                
PART B:

THE STATE OF THE INTERNAL MARKET – WARNING LIGHTS
ARE BEGINNING TO FLASH RED

Since  the  abolition  of  our  internal  frontiers  ten  years  ago,  the  Internal  Market  has
boosted EU economic growth by at least 1,8%, adding nearly 900 billion euro to our
collective prosperity as well as helping to create 2,5 million extra jobs7.

However, despite its many successes, the Internal Market is still not functioning as it
should. There are too many obstacles which continue to hold it back. There are also
important areas, such as services, which have been barely touched by Internal Market
policy.

There is particular cause for concern at the moment. After  years of steady progress
throughout  the  1990s,  some  of  the  key  indicators,  which  track  the  level  of  market
integration, are beginning to point in the wrong direction.

First, the value of manufacturing trade inside the EU has begun to falter (figure 1). It
barely grew in 2001 and then actually shrank in 2002.

Figure 1: Manufacturing trade in the EU is stalling...

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25,0%

20,0%

15,0%

10,0%

5,0%

0,0%

-5,0%

1995

1996

1997

1998

1999

2000

2001

2002

Source: Come xt (Eurostat) and Commission se rvices

Second, prices  across the EU are no  longer  converging  (figure  2).  Not  all  products
are easily tradable but a large percentage of them are. Were trade between Member

7

"The Internal Market – ten years without frontiers", SEC(2002) 1417 of 7.1.2003

5

 
 
 
                                                
States  increasing  then  the  prices  of  those  products  should  converge  because  more
trade  makes  price  differences  harder  to  sustain.  It  is  a  cause  for  concern  then  that
price convergence in the EU has stalled.

Figure 2: ...and prices have stopped converging

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170

150

130

110

90

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1990

1993

1995

1996

1997

1998

1999

2000

2001

Source: Eurostat

The  picture  is  particularly  worrying  when  viewed  in  comparison  to  the  other  big
single market in the world  – the United  States. Price  variation  in  the  USA  in  1998
was considerably less  than in  the  EU  (figure  3).  As  EU  price  convergence  stopped
before 1998, this gap cannot have narrowed.

Figure 3: ...even though prices vary much more in the EU than 
in the US

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100%

80%

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20%

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Overall

Groceries

Transport

Source : Commission Service s (Economic and Financial Affairs 
Directorate  Ge ne ral)

Third, the EU is investing more in the rest of the world than the rest of the world is
investing in the EU (figure 4). The difference has narrowed in the last two years, but
not because of an increase in foreign investors' interest in the EU economy. Rather,

6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
there has been an abrupt cut back in investment from the EU to the rest of the world.
The  reasons  for  the  deteriorating  investment  picture  in  the  EU  are  complex  but
disappointment about the general regulatory environment and the imperfect state of
Internal  Market  integration  may  be  one  of  the  factors  influencing  the  decisions  of
potential investors.

Figure 4: These days, foreign investors prefer opportunities outside the 
Internal Market…

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250
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150
100
50
0
-50
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entering the EU

leaving the EU

balance

1992-96

1997-2002

Source: Eurostat and Commission se rvices

Some  of  the  downturn  in  these  indicators  may  be  due  to  cyclical  factors.  It  is,
therefore, too early to draw conclusions. However, it would also be unwise to ignore
these  warning  signs  altogether.  The  best  way  to  prevent  further  deterioration  is  to
tackle remaining barriers in the functioning of the EU’s product and capital markets,
reduce  the  cost  of  trading  across  borders  and  get  the  process  of  market  integration
moving again.

The effort needed may not be huge. The cost of trading does not need to fall much to
increase intra-EU trade significantly. The substantial intensification of intra-EU trade
over the last twenty years has been driven by an estimated fall in trade costs of only 2
to 5%8. All Community institutions and Member States must now work together to
achieve similar results again.

As  well  as  facilitating  the  cross-border  supply  of  goods  and  services,  it  is  also
important  to  focus  on  the  demand  side  (i.e.  the  consumer  dimension).  Where
consumers  feel  uncertain  about  the  safety  and  quality  of  imported  products,  or  are
unsure about their rights of redress, they will not buy as much from suppliers in other
Member States. The best way to solve this problem is through strong competition in
the marketplace, combined with measures at EU level to boost consumer confidence
and proper enforcement of the rules.

8

Cavelaars,  P.  (2001)  International  trade  costs,  home  bias  and  Europe's  single  markets,  Netherlands
Central Bank, MEB Series 2001-8

7

 
 
 
 
 
                                                
PART C:

ENLARGEMENT WILL GIVE MARKET INTEGRATION
A FRESH BOOST, IF HANDLED WELL

Enlargement has the potential to provide the Internal Market with a significant new
stimulus  on  top  of  the  benefits  which  removal  of  existing  obstacles  would  deliver.
However,  this  is  predicated  on  the  assumption  that  (current  and  future)  Member
States work closely together and avoid action that could lead to fragmentation of the
Internal Market. In this context, it is important that the Acceding Countries heed the
conclusions  drawn  by  the  Commission  in  its  Monitoring  Report  on  their  state  of
readiness9,  and  take  immediate  and  decisive  action  to  address  the  remaining
weaknesses.

Trade  between  EU-15  and  the  Acceding  Countries  already  increased  more  than
eight-fold  between  1995  and  2000  –  in  no  small  measure  due  to  the  impact  of  the
Europe  Agreements. And,  despite these increases, their exports  to  the EU-15  could
still almost double,  even  at  current  levels  of  development.  Indeed,  accession  to  the
EU will lead to a further reduction in trade barriers for such countries.

Were  today's  Acceding  Countries  already  Member  States,  a  seminal  economic
model10 of trade suggests that their exports to the EU-15 in 2000 were about 63% as
large  as  they  should  have  been.  Some  Acceding  Countries,  especially  Cyprus  and
Slovenia, have a latent export potential which is even higher (figure 5). The biggest
impact  is  likely  to  come  from  Poland,  as  the  largest  Acceding  Country,  whose
exports to the EU-15 in 2000 were 54% of what would normally be expected for a
Member State of its size and geographical location.

Figure 5: Acceding country exports to the EU should grow...

50

45

40

35

30

25

20

15

10

5

0

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actual

potential

Malta

Estonia

Latvia

Lithuania

Poland

Czech Rep.

Slovakia

Hungary

Slovenia

Cyprus

Source : C ommission Se rvice s

9

10

COM(2003) 675 final of 5.11.2003
Eastern Europe’s International Trade, with Z. K. Wang, Manchester University Press, London, 1992

8

 
 
                                                
The  fact  that  EU-15  imports  from  the  Acceding  Countries  have  been  growing  fast
right up to the present (unlike EU-15 exports, which have slowed) suggests that the
Acceding  Countries  do  indeed  still  have  further  potential  to  expand  exports  to  the
EU-15  (see  figure  6)  –  provided  everybody  plays  by  the  rules  and  pressure  to
fragment the Internal Market is avoided.

Figure 6: ... which helps explain why EU trade with the Acceding Countries 
is growing in importance

18,0%

16,0%

14,0%

12,0%

10,0%

8,0%

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imports

exports

1995

1998

2002

Source: Eurostat and Commission services

EU-15  export  expansion  to  the  Acceding  Countries  has  stabilised  after  a  period  of
rapid  growth  during  the  second  half  of  the  nineties.  However,  as  the  Acceding
Countries grow richer and as infrastructure connections improve, the current Member
States will increasingly find them attractive outlets for their products and services.

A large part of the Acceding Countries’ trade expansion with the current EU is the
direct result of foreign direct investments.

In 1995, they received a combined inflow of just over €10 billion.  In 2000, a mere
five  years later, this had more  than doubled to just over  €25  billion.  These  inflows
have  been  critical  in  paying  for  the  Acceding  Countries'  chronic  trade  deficits;
approximately  75%  of  their  trade  deficits  were  covered  by  FDI  inflows  in  the  late
1990s.

It  is  also  vital  that  the  inflows  continue.  Without  them,  the  Acceding  Countries
cannot catch up with current Member States; their domestic savings are inadequate to
fund the required investments.

FDI generally flows to countries with stable, credible macro-economic environments,
a  predictable  legal  framework  and  a  business-friendly  culture.  This  is  true  for  the
Acceding Countries too. But, in their case, FDI is also driven by another factor – low
production  costs  combined  with  the  ability  to  export  to  the  EU.  Increased  capital
flows in future will therefore depend on full integration into the Internal Market and
implementation of the rules on which it is based.

9

 
 
 
 
 
 
 
 
PART D:

THE INTERNAL MARKET STRATEGY - PROGRESS SO FAR

Although  there  have  been  some  notable  successes,  progress  in  implementing  the
Strategy  has  generally  been  disappointing.  Of  the  45  actions  due  before  the  end  of
2003,  only  27  have  been  delivered  on  time.  Moreover,  many  of  those  which  have
been  delayed  are  important  legislative  files.  More  details  on  the  individual  actions
can be found in Annex 2. Below is a short  summary  of progress in  each  of  the  ten
priority areas set out in the Strategy.

1.

Facilitating the free movement of goods

The implementation of 2003 actions under this heading is on track. However, many
of the key actions announced in the Strategy to facilitate trading in goods will come
to fruition only over the next twelve months. Chief among them is the proposal for a
new Regulation to improve the operation of mutual recognition by introducing new
disciplines (such as mandatory notification  in cases where  market  access  is  denied,
declaration of reasons for denials and appeal procedures for companies).

This  proposal  will  be  based  on  the  extensive  co-operation  between  national
administrations  which  the  Commission  hopes  will  develop  as  part  of  the  ongoing
efforts towards "better governance" in the Internal Market.

Another  key  action  is  also  underway  in  the  harmonised  product  area  to  strengthen
further  the  operational  efficiency  of  the  so-called  “new  approach”  directives.  The
Council  has  responded  positively  to  the  Commission's  Communication11  on  this
subject. It has invited the Commission to develop a clearer framework for conformity
assessment,  accreditation  and  market  surveillance  and  to  take  steps  to  clarify  and
promote  the  use  of  CE-marking.  The  Commission  intends  to  present  a  legislative
proposal by the end of 2004.

2.

Integrating services markets

There  is  no  genuine  Internal  Market  for  services  yet;  53.6%  of  the  European
economy is still not integrated. The resulting fragmentation and lack of competition
harms the productivity of EU service providers, which  grew at  0.6%  between  1996
and 2000, compared with productivity gains in the US of 1.5% over the same period.
In addition, cross-border consumption of services is hampered by a lack of consumer
confidence.

The  Strategy  committed  the  Commission  to  come  forward  with  a  proposal  for  a
Directive  on  Services  in  the  Internal  Market  by  the  end  of  2003.  The  Commission
has now presented this proposal and calls on the Council and Parliament to deal with
it as a matter of priority.

11

COM(2003) 704 final of 21.11.2003

10

 
                                                
Progress  is  also  required  on  the  Sales  Promotion  Regulation  –  due  for  adoption  in
2003 but now delayed – as well as on the Directive on Unfair Commercial Practices
and  on  the  Professional  Qualifications  Directive.  These  are  essential  if  the  Internal
Market for services is to become a reality.

Financial markets in the EU could and should be more integrated. If they were, the
gains  could  be  sizeable.  Studies12  suggest  that  one  expected  source  of  benefit  –
narrower equity and corporate bond spreads – would allow:

(cid:1)  a potential increase in EU GDP of 1.1% over the next decade;

(cid:1)  an increase in employment of 0.5%;

(cid:1)  an average reduction in the cost of capital by 0.5%.

36 of the original 42 measures in the Financial Services Action Plan have now been
adopted13,  including  the  Prospectuses  Directive.  These  measures  provide  for  a
coherent and market-responsive regulatory framework. Effective implementation and
enforcement is now the key to reaping the benefits.

3.

Ensuring high quality network industries

The Internal Market Strategy stressed that market opening in the network industries
(energy, transport, telecommunications and post) has brought significant benefits for
both businesses and consumers14.

The Commission is therefore determined to pursue the process of market opening in
full respect of universal and public service obligations – i.e. the provision of services
of  a  specified  quality  to  all  consumers  and  users  throughout  the  territory  of  a
Member State at an affordable price15.

There has been good progress over the past six months. A final push is now needed
on measures to open freight services in the railway sector.

In  addition,  the  Commission  is  presently  conducting  an  analysis  of  the  legal  and
administrative  arrangements  relating  to  the  provision  of  water  services,  including
wastewater  treatment,  and  the  application  of  EU  competition  and  Internal  Market
rules to these sectors. The aim is to assess whether there are gains to be made from
further modernisation of the sector. The Commission expects to complete its analysis
in the near future.

The Strategy also highlighted the growing importance of public-private partnerships
(PPPs).  These  are  essential  if  we  are  to  find  innovative  funding  solutions  for  the
Trans-European Networks and the research and innovation projects which are central
to the "Growth Initiative." The Commission's Green Paper on PPPs and Procurement
Law is expected in spring next year.

12

13

14

15

"Quantification  of  the  macro-economic  impact  of  the  integration  of  EU  financial  markets",  London
Economics study for DG Internal Market
"The FSAP enters the home straight", ninth FSAP implementation report, 25.11.2003
See footnote 6
COM(2003) 270 final of 21.5.2003

11

 
                                                
4.

Reducing the impact of tax obstacles

Tax obstacles significantly hinder the functioning of the Internal Market and generate
unnecessary compliance costs for business which are often passed on to consumers.

The  Commission  has  stuck  to  all  its  deadlines  in  this  area.  For  example,  it  has
presented  proposals  amending  the  Parent/Subsidiary  Directive  and  the  Merger
Directive.  However,  for  progress  to  be  achieved,  Member  States  will  have  to  set
aside positions of principle and work more pragmatically towards results which are
good for competitiveness in the Internal Market. The Commission continues to hold
the view that qualified majority voting will have to replace unanimity in the Council
for  tax  matters  which  are  essential  for  the  functioning  of  the  Internal  Market.
Without this, making progress in a Union of 25 or more Member States will become
virtually impossible.

5.

Expanding procurement opportunities

A  recent  study16  shows  that  the  difference  between  applying  or  not  applying  EU
public  procurement  rules  can  be  as  high  as  34%  of  total  costs.  Saving  just  10%  of
current public procurement expenditure would allow all Member States to conform
to the Stability and Growth Pact.

Yet  many  public  administrations  continue  to  award  contracts  without  effective
competition. Member States must urgently tackle this problem.  To help them to  do
this,  the  Commission  will  present  a  proposal  in  2004  to  strengthen  the  Remedies
Directive.

The major target for 2003 was adoption of the procurement legislative package. This
is now on track. The new package will enable Member States to press forward with
e-procurement  in  the  public  and  utilities  sectors.  The  savings  to  be  made  from  this
are enormous.  In  Italy, for example, the  government  estimates that  €3.7 billion  has
already  been  saved  in  2003  out  of  a  total  of  €23  billion  of  purchases.  Revised
estimates in Ireland put potential savings over the next 5 years at €1 billion – double
the initial estimates.

The  Strategy  commits  the  Commission  to  producing  an  Action  Plan  to  boost
electronic procurement. Work on this has already started and will accelerate once the
right legal conditions (provided by the legal package) are put in place.

6.

Improving conditions for business

This chapter focuses particularly on the protection of intellectual property rights and
company law – two issues which are directly relevant to promoting entrepreneurship
and innovation in the EU and have a strong Internal Market dimension.

In  the  field  of  intellectual  property,  the  focus  is  on  three  important  legislative
proposals  –  the  Community  Patent,  the  Directive  on  the  patentability  of  computer-
implemented inventions and the Directive on the enforcement of intellectual property

16

COWI. "Monitoring Public Procurement in the European Union using Public Authorities Panel Data".
Lot 2. Final report July 2003

12

 
                                                
rights - which aim in different ways to ensure that the system remains relevant to the
needs of industry and consumers.

Progress on these proposals has been slow. Without an up to date legal framework in
this  field,  research  investment,  innovation  and  creativity,  which  underpin  a  strong
knowledge-based EU economy, will suffer.

The Commission has now launched its Action Plan on "Modernising Company Law
and  Enhancing  Corporate  Governance  in  the  EU"17.  This  is  an  important  initiative
which  will  help  companies  to  operate  efficiently  in  the  Internal  Market  and  boost
confidence in capital markets following recent corporate scandals.

In  addition,  the  Commission  has  presented  a  proposal  for  a  10th  Company  Law
Directive  on  cross-border  mergers.  The  Council  has  reached  agreement  on  a  Take-
Over  Bids  Directive,  although  this  agreement  provides  for  less  harmonisation  than
the original Commission proposal.

7.

Meeting the demographic challenge

The  actions  foreseen  in  the  Strategy  relate  to  two  areas  where  the  impact  of
demographic  changes  will  be  felt  most  keenly:  pensions  and  health  services.  Only
one  action  was  due  for  delivery  in  2003:  an  analysis  by  the  Commission  of  the
Member States' compliance with ECJ case law relating to cross-border provision of
and access to health services.

This  analysis  has  been  completed.  It  concluded  that  the  Internal  Market  in  health
services is not functioning satisfactorily and that European citizens are encountering
unjustified  or  disproportionate  obstacles  when  they  seek  reimbursement  of  medical
costs incurred in another Member State. The Commission is determined to tackle this
problem. In doing so, it will take account of the 19 recommendations set out by the
High Level Reflection Group on patient mobility and healthcare developments18.

8.

Simplifying the regulatory environment.

Progress is being made towards meeting the goals set out in the Commission’s Better
Regulation  Action  Plan19,  although  there  is  still  some  way  to  go  before  significant
results will begin to be felt on the ground.

In  particular,  the  Commission  is  subjecting  an  increasing  share  of  its  work
programme  to  extended  impact  assessment  and  is  systematically  consulting
stakeholders  at  an  early  stage.  In  addition,  the  three  major  EU  institutions  have
recently  signed20  an  agreement  aimed  at  improving  the  quality  of  Community
legislation and its transposition into national law.

A  better  regulatory  environment  also  depends  on  similar  efforts  at  national  level
where the majority of rule-making still takes place. Progress has been made, but by

17

18

19

20

COM(2003) 284 final
The  Commission  plans  to  issue  a  Communication  in  March  2004  setting  out  its  response  to  these
recommendations.
COM(2002)  278  final  of  5.6.2002.  See  also  the  2003  Annual  Report  on  Better  Law  Making,
COM(2003) 770
On 16 December 2003

13

 
                                                
no  means  all  Member  States,  for  example,  are  carrying  out  impact  assessments  on
their proposals as the Commission is now doing21.

For  2003,  the  Strategy  promised  two  actions  –  a  mechanism  for  reporting  on
particularly  complex  rules  and  a  Council  working  group  on  "better  regulation".
Neither  has  been  delivered  on  time,  although  work  on  the  mechanism  is  well
underway.

The Strategy also stressed the need to introduce greater logic into the use of (legal)
instruments  and  policy  actions,  particularly  in  EU-25.  The  choice  between  mutual
recognition  or  harmonisation,  self-regulation  or  co-regulation,  directives  or
regulations  should  result  from  a  careful  assessment  of  how  best  to  achieve  the
objectives rather than be a matter of political expediency.  The Commission will set
out its ideas in this area during 2004, including on an Internal Market “compatibility
test” to be applied to all legislation adopted at national level.

9.

Enforcing the rules

The  Internal  Market  can  only  work  if  its  rules  are  correctly  implemented  by  the
Member  States  and  effectively  applied  in  practice.  This  is  not  yet  the  case  (see
Annex 1 for more details).

This is a serious problem. The Internal Market is built on trust. Trust that everybody
will  be  playing  by  the  rules.  With  the  EU  increasing  in  size  and  diversity  after
enlargement, this trust needs to be reinforced, not undermined.

The Strategy suggests a number  of  actions  for  improving  the  situation.  Of  the  four
actions due in 2003, two have been delivered on time – the initiation of "preventive"
dialogue  between  the  Commission  and  Member  States  and  the  proposal  for  a
Regulation  on  co-operation  between  national  authorities  responsible  for  the
enforcement of consumer protection legislation.

Two  others  –  more  ambitious  transposition  targets  and  a  website  setting  out  the
various redress procedures  available to  citizens and businesses  –  are  now  late.  It  is
not realistic to set more ambitious transposition targets as long as only a few Member
States  are  meeting  the  present  targets.  Work  on  pulling  the  different  redress
mechanisms together in a seamless service is well advanced.

More  generally,  political  pressure,  for  example  through  the  Internal  Market
Scoreboard,  will  to  some  extent  help  improve  the  situation  or  prevent  it  from
deteriorating. But real success in an  Internal Market  composed of  28 countries will
require a different attitude and different working relationships. Member States must
take full ownership of their Internal Market and work in partnership with each other
and with the Commission to make it work in practice.

This  means,  for  example,  avoiding  transposition  delays,  learning  from  each  other
how best to implement EU directives and assisting in the resolution of cross-border
problems (through SOLVIT). The Commission is now working with Member States
to translate this vision into reality.

21

Report to the Ministers responsible for Public Administration in the EU Member States on the progress
of the implementation of the Mandelkern Report's Action Plan on Better Regulation. Athens, May, 2003

14

 
                                                
10.

Providing more and better information

Providing  information  to  citizens  and  business  as  to  how  they  can  exercise  their
rights  is  another  element  of  "better  governance"  in  the  Internal  Market.  It  is  very
much an area where effective results will depend on Member States taking on  a lot
more responsibility in partnership with the Commission.

The Strategy calls on Member States to draw up national plans to raise awareness of
Internal Market opportunities among their own citizens and businesses and commits
the  Commission  to  organising  regular  high-level  discussions  of  these  plans.  It  also
calls  on  Member  States  to  take  more  responsibility  for  the  national-level
information  provided 
the  Commission's  Dialogue  with  Citizens
(http://europa.eu.int/citizensrights),  a  new  version  of  which  will  be  online  early  in
2004. There has been progress in both these areas, although there is still some way to
go.

through 

15

 
ANNEX 1

IMPLEMENTATION REPORT SCOREBOARD

1. 

Problems  persist  with  implementation  by  Member  States  of  Internal  Market
rules into national law

With few exceptions, Member States are failing to implement a large number of key
Internal  Market  directives  into  national  law  by  the  deadline  they  have  themselves
agreed.  As  Figure  1  shows,  their  performance  has  marginally  improved  but  is  still
disappointing.  The  current  'transposition  deficit'  is  now  2.3%,  far  from  the  1.5%
target  set  by  successive  European  Councils.  Concretely,  this  means  that  the
Commission  is  still  awaiting  527  notifications  of  national  implementing  measures.
As many as 131 Internal Market directives have not been implemented into national
law  in  all  the  Member  States.  This  represents  around  8.5%  of  all  Internal  Market
directives22, and is a principal cause of fragmentation of the Internal Market.

Figure 1: Member States need to work harder
to reduce the transposition deficit

6,3

4,5

3,9

3,5

3,6

3,5

3,0

2,5

2,0

1,8

2,1

2,4

2,3

e
g
a

t

n
e
c
r
e
P

7

6

5

4

3

2

1

0

Nov. 97

May 98

Nov. 98

May 99

Nov. 99

May 00

Nov. 00

May 01

Nov. 01

May 02

Nov. 02

May 03

Nov. 03

Of those countries that met the 1.5% target set by the European Council:

(cid:1)  Denmark  and  Spain  are  to  be  especially  commended  for  having  the  best
performance  records  (figure  2),  and  for  having  shown  the  commitment  and
organisation to improve on their already good records;

(cid:1)  Ireland has made giant strides in more than halving its transposition deficit since
May 2003, and should be congratulated on the commitment it has shown to doing
so;

22

As at 31 October 2003, 1,535 directives and 429 regulations concerned the Internal Market, as defined
by the EC Treaty.

16

 
                                                
(cid:1)  Finland and the UK are also to be congratulated, but should follow the example of

Denmark and Spain in further improving their performance.

e
g
a
t
n
e
c
r
e
P

4

3

2

1

0

Figure 2: Many Member States 
have gone into reverse gear 

e
g
a
t
n
e
c
r
e
P

2

1

0

EFTA

1,1

1,0

0,5

LIE

ISL NOR

1.5% 
Target

3,5 3,5 3,5 3,4 3,1 3,0 2,6 2,5 2,2 1,6 1,4

1,4

1,4 0,9

0,3

BE
54

FR
54

DE
53

LU
52

EL
48

IT
46

NL
40

AT
38

PT
33

SE
25

UK
22

IE
21

FI
21

ES
14

DK
5

Number of Directives

Transposition deficit, by Member State, as at 30 November 2003

Of the Member States that did not meet the 1.5% target:

(cid:1)  While Sweden just missed the target, its performance is its worst since 1999;

(cid:1)  Portugal,  Austria  and  to  a  lesser  extent  Italy  have  made  efforts  to  reduce  their
deficits (figure 3), although in Italy's case its deficit is still double the 1.5% target;

(cid:1)  The  deficits  of  Belgium  and  the  Netherlands  have  got  considerably  worse
recently, in Belgium's case almost doubling since May 2003, which is a matter for
concern;

(cid:1)  France,  Germany,  Luxembourg  and  Greece  continue  to  be  among  the  worst
performers and, with the exception of Greece, their deficits have got worse. This
is  regrettable  given  the  commitment  and  organisation  shown  by  other  Member
States to improve their performance  and  to  meet  the  target.  It  is  also  regrettable
that  these  countries  (together  with  Belgium  and  Italy)  again  appear  to  consider
that it is acceptable to have a transposition deficit that is (more than) double the
1.5% target set by the European Council.

17

 
Figure 3: Ireland and Portugal make
 big strides to reduce their deficits,
 while Belgium's deficit explodes

27

9

9

7

5

4

3

EFTA

s
e
v
i
t
c
e
r
i

D

5

-5

-15

-11

-3

0

ISL

NOR

LIE

-1

-3

-4

-4

-13

-14

-24

BE NL SE DE

FI

FR LU UK EL DK ES

IT

AT PT

-33
IE

s
e
v
i
t
c
e
r
i

D

25

15

5

-5

-15

-25

-35

Change in number of outstanding directives, by Member State, since May 2003. For example, Belgium
has increased its backlog by 27 directives, while Ireland has reduced its backlog by 33 directives.

Ensuring that delays in implementing Internal Market directives into national law do
not go on indefinitely is also important. This is why the Barcelona European Council
of  March  2002  added  a  'zero  tolerance'  target  for  directives  whose  implementation
into national law is two or more years overdue. As Figure 4 shows, only Denmark,
Finland  and  Portugal  met  this  target,  as  they  had  in  the  May  2003  Scoreboard.
France, Ireland, Austria, Italy and Greece all improved their performance, while the
United Kingdom and Luxembourg had a worse performance than in May 2003. It is
disappointing that a target set for all Member States has only been met by 3 of them.

Figure 4: Only Denmark, Finland and Portugal met the 0% target

s
e
v

i
t
c
e
r
i

D

10

5

0

8

7

5

4

3

2

2

2

1

1

1

1

0

LU FR

IE

BE DE

ES
dotted lines = decrease of overdue directives since May 2003
red = increase of overdue directive since May 2003

UK

NL

EL

AT

IT

SE DK

0

FI

0

PT

Number of overdue directives with a deadline for implementation into national law before 31 October
2001 which have not been implemented by 30 November 2003

18

 
Figure  5  shows  that,  in  general,  Member  States  that  have  the  best  performance  in
implementing directives on time have also organised themselves in such a way as to
react more quickly once the deadline has passed to ensure that they do not remain in
breach of their obligations for long periods of time. Regrettably, Member States such
as Luxembourg and France that are often late in implementing directives compound
this by taking the longest to remedy the situation.

Figure 5: Member States with larger transposition deficits generally 
compound this by taking longer to remedy delays

s
h
t
n
o
M

15

10

5

0

15

14

13

12

11

10

10

10

9

9

8

8

7

6

6

LU FR IE

ES BE AT DE UK

IT

NL EL SE

FI DK PT

Average delay in months of directives which have passed the implementation deadline

2. 

Problems with application of Internal Market rules: Infringements

When the Commission considers that Internal Market rules are not applied correctly,
it  takes  infringement  proceedings  against  the  Member  State  in  question.  Every
infringement is one too many; they are costly and can take a long time to be resolved.
In the Internal Market Strategy, the Commission urged Member States to reduce the
number of infringement cases by at least 50% by 2006. This is a bold objective, but
achievable.

Regrettably,  as  Figure  6  shows,  Member  States  have  made  little  progress,  as  the
number of cases has only gone down by less than 3% - from 103323 cases to 1006.
While as many as ten Member States appear to have heeded the Commission’s call
by reducing the number of infringements against them, France, the Netherlands and
Luxembourg have seen the number of infringement cases against them increase.

France  and  Italy  together  account  for  some  28%  of  infringement  cases,  more  than
Denmark,  Finland,  Sweden,  Luxembourg,  Portugal,  Ireland  and  the  Netherlands
combined. Action by France and Italy to reduce the number of infringements would
have  a  proportionately  bigger  impact  on  reaching  the  50%  target,  and  they  are
therefore called on to redouble their efforts.

23

This figure,  which is  smaller  than  earlier  published  statistics,  excludes  so-called  ‘joined’  cases  which
concern infringement proceedings based on multiple complaints.

19

 
                                                
Figure 6: Little progress made 
in reducing the number of infringements
 for misapplication of Internal Market rules

s
e
s
a
c

n
e
p
O

40

30

20

10

0

EFTA

30

NOR

10

ISL

4

LIE

s
e
s
a
c

n
e
p
O

160

140

120

100

80

60

40

20

0

146

135

102

90

81

75

58

57

54

54

44

38

26

25

21

IT

FR

ES

DE

BE

EL

UK

AT

NL

IE

PT

LU

SE

FI

DK

red = increase in the number of open cases since May 2003
dotted lines = decrease in the number of open cases since May 2003

Open  infringement  cases,  by  Member  State,  as  at  31  October  2003,  compared  to  corresponding
figures as at 30 April 2003 when the Internal Market Strategy was adopted

20

 
 
 
ANNEX 2

ACTIONS DUE FOR COMPLETION BY END 2003

1.

Facilitating the free movement of goods

Action

State of play

Costs/benefits

This  aims  to  reduce  uncertainty  among
national
operators 
economic 
administrations  about 
rights  and
obligations under the existing system.

their 

and 

This  aims  to  reinforce  further  the  levels  of
confidence,  transparency  and  cooperation
among  Member  States  in  order  to  facilitate
the  mutual  recognition  and  acceptance  of
certificates and the free movement of goods.
The  Council  has  invited  the  Commission  to
develop  a clearer  framework  for  conformity
assessment, 
and  market
accreditation 
surveillance  in  the  European  Union  and  to
take steps to clarify and protect CE marking.

New  performance-based 
are
expected  to  help  speed  up  the  standard-
setting process.

contracts 

to 

integrate  environmental
This  aims 
performance  requirements 
into  products'
life-cycles  at  EU  level,  so  reducing  the
pressure  to  adopt  national  measures  which
could fragment the Internal Market.

This aims at ensuring that greater account is
taken  of  environmental  considerations  at  all
stages in the standardisation process.

DONE.

ONGOING.

Commission
Communication
on 
correct
the 
implementation  of
the 
mutual
recognition

Legislative
proposal 
on
the
enhancing 
implementation  of
the New Approach
Directives

DONE.

DONE.

(ALMOST) DONE.

with

Contracts 
European
standardisation
organisations

Commission
Communication
on 
product 
(IPP)

integrated
policy

Commission
Communication
on  the  integration
of  environmental
aspects 
the
into 
standardisation
process

21

 
DONE.

ONGOING.

for 

a
Proposal 
Directive 
on
unfair  business  to
consumer
commercial
practices

Commission 
to
its
implement 
Action  Plan  on
European Contract
Law

If  adopted,  this  will  establish  a  single,
common,  general  prohibition  of  unfair
commercial practices. It will give consumers
the  same  protection  against  unfair  business
practices  and  rogue  traders  wherever  they
shop in the EU.

The  consultation  on  the  Action  Plan  has
generated  about  130  responses  so  far  from
Member  States  and  stakeholders.  The
Commission  will  soon  publish  a 
first
summary  of  these  responses  and  outline  the
next  steps  to  be  taken.  Both  the  European
Parliament 
adopted
Resolutions  supporting  the  Action  Plan  in
September 2003.

the  Council 

and 

DONE.

If  adopted,  this  proposal  will  extend  the
(highly successful) EU Whole Vehicle Type-
Approval  system  for  cars  to  other  types  of
vehicles.

DONE. 
The
agreements will soon
be  ratified  by 
the
Acceding Countries.

This  will  smooth  the  integration  of  new
Member  States  into  existing  procedures  and
structures  aimed  at  preserving  the  integrity
of the Internal Market legal framework.

Proposal  to  recast
framework
the 
on
Directive 
motor 
vehicles
and their trailers

Negotiation by the
Commission  of  a
series  of  bilateral
agreements  with
Acceding
to
Countries 
the
facilitate 
of
notification 
their 
draft
technical measures
within  the  scope
of 
Directive
98/34/EC

Extension,
implementation
and  conclusion  of
PECAs  (Protocols
the  Europe
to 
Agreements 
on
Conformity
Assessment 
Acceptance 
Industrial
Products) 
Acceding
Countries

and
of

with

PECAs  are  a  particular  form  of  agreement
based  on 
the  adoption  of  Community
legislation  on  industrial  products  and  the
creation  of  the  appropriate  administrative
infrastructure  in  Accession  Countries.  They
are  useful  instruments  for  integrating  these
countries into the Internal Market.

DONE.  New  PECAs
have  entered 
into
force  with  Slovenia,
the  Slovak  Republic
and  Estonia.  New
sectoral  annexes  to
the  PECAs  with  the
Republic,
Czech 
Hungary, 
Latvia,
Lithuania,  Slovenia
and 
Slovak
Republic  have  also
been developed.

the 

22

 
2.

Integrating services markets

Action

State of Play

Costs/benefits

for 

Proposal 
Directive 
Services 
Internal Market

in 

DONE.

a
on
the

Adoption  of 
Regulation 
Sales Promotion

the
on

NOT  DONE.  Delays
have  been  incurred
in Council. The Irish
Presidency 
foresees
a  possible  political
agreement in May.

of
the
of

Adoption 
Directive  on 
recognition 
professional
qualifications

NOT 
DONE.
Substantial delay due
to 
than
slower 
expected  progress  of
work in Parliament.

DONE.

Commission
Communication
on 
the
competitiveness of
business services

the

DONE.

Adoption  of 
Prospectuses
Directive

Communication
on  clearing  and
settlement

DONE.
NOT 
Discussions 
with
financial  institutions
are still ongoing.

3.

Ensuring high quality network industries

If adopted, this will remove legal barriers in
the  Internal  Market  thus  helping  to  free  up
the  immense  economic  and  job  creation
potential of the services industries.

If  adopted,  this  will  make  it  easier  for
businesses  to  use  sales  promotions  to  draw
attention to their products in new markets. It
is  an  essential  accompaniment 
the
Services Directive.

to 

conditions 
for 

If  adopted,  this  will  create  clearer  and
recognition,
simpler 
particularly 
service
free
provision.  This  will 
movement, create more competitive markets
and ensure better services for users.

for 
cross-frontier 

facilitate 

to  complement 

This  sets  out  non-legislative  measures
designed 
the  Services
Directive. These include the development of
to
European 
improve  statistical  coverage  of  services
sectors.

and  measures 

standards 

This  will  make  it  easier  for  companies  to
raise  money  on  an  EU-wide  basis  while  at
the same time providing adequate protection
for investors.

clearing 

Improved 
settlement
arrangements are essential to an efficient and
integrated securities market.

and 

Action

State of play

Costs/benefits

Single  European
Sky  for  air  traffic
management

NEARLY  DONE.
Conciliation
procedure  completed
on 
9  December
2003.

This  should  help  to  reduce  air  transport
delays and costs as well as increasing safety.

23

 
Second package of
measures 
to
revitalise
European railways

NOT  YET  DONE.
Conciliation  due  to
start 
January
2004.

in 

This  should  result  in  more  competitive  rail
freight services, promoting a shift from road-
to-rail by offering business better conditions
and a higher-quality service.

DONE.

Council  mandate
to the Commission
to  negotiate  an
skies
open 
agreement  with
the US

of

Adoption 
legislation
the
completing 
Internal  Market
for 
and
gas 
electricity

Member
DONE. 
must
States 
the
transpose 
legislation  by  1  July
2004.

4.

Reducing the impact of tax obstacles

The  current  system,  based  on  bilateral
agreements  between 
individual  Member
States and the US, places a significant brake
on  restructuring  in  the  EU  air  transport
industry  and  hinders  the  functioning  of  the
Internal  Market.  Negotiations  with  the  US
are now underway.

Gas  and  electricity  markets  will  be
completely  opened  up  for  non-household
customers  by  2004  and  for  household
customers by 2007.

Action

State of play

Costs/benefits

DONE.

DONE.

DONE.

Proposals
amending 
the
Parent/Subsidiary
Directive  and  the
Merger Directive

Communication
examining
different  options
for 
providing
companies  with  a
consolidated 
tax
base  for  their  EU-
wide activities

Communication
setting  out  further
steps to modernise
and  simplify 
the
VAT system

These  Directives  eliminate  double  taxation
and  allow  companies  organising 
their
operations  on  a  cross-border  basis  to  defer
payment  of  certain  taxes.  If  the  proposed
amendments are adopted, these benefits will
be made available to more companies.

A  consolidated  base  could  be  achieved
without harmonising corporate tax  rates  and
would  go  a  long  way  towards  solving  the
problems faced by companies.

This  envisages  the  introduction  of  a  single
place  of  compliance  for  all  businesses
trading  in  Member  States  where  they  have
no 
lower
compliance  costs  and  make  it  easier  to  do
business across borders.

establishment.  This  will 

24

 
DONE.

Communication
on  the  effect  of
case  law  of  the
ECJ  on  dividend
taxation systems

This  aims  at  eliminating  discrimination  in
some  Member  States  who  impose  a  higher
tax  on  cross-border  dividends 
than  on
domestic  dividends.  Such  rules  are  a  strong
disincentive  to  the  cross-border  holding  of
shares  and  slow  down  the  creation  of  pan-
European equity markets.

5.

Expanding procurement opportunities

Action

State of play

Costs/benefits

the

Adoption  of 
"legislative
package"

NEARLY  DONE.
Political  agreement
reached 
in
(Final
conciliation. 
adoption 
in
January 2004).

due 

This  will  pave  the  way  for  greater  use  of
electronic procurement, and will put in place
a  legal  framework  which  is  sufficiently
flexible for the complex contracts which can
arise  in  the  context  of  the  Trans-European
Networks.

POSTPONED.

This will be integrated into the Green Paper
on defence procurement (due in 2004).

Interpretative
Communication
the
on 
of
implications 
recent  ECJ  rulings
regarding
exceptions  under
for
the  Treaty 
essential  security
interests 
in
Member States

6.

Improving conditions for business

Action

State of play

Costs/benefits

Regulation  on  the
Community Patent

NOT  YET  DONE.
Adoption 
expected
by the end of 2003.

in 

innovators 

The  proposed  system  will  establish  a  single
EU-wide patent, bringing important benefits
terms  of  obtaining,
for 
enforcing  and  managing  their  rights.  It  will
provide  protection  in  25  Member  States  for
around the same price (or slightly less) as is
just  8
currently  paid  for  protection  in 
countries.

the
of

Directive  on 
enforcement 
intellectual
property rights

NOT 
DONE.
Parliament  likely  to
vote  its  first  reading
in January 2004.

This will create a  level playing  field for the
enforcement of intellectual property rights in
different EU countries. It is an essential part
of the fight against piracy and counterfeiting
which  causes  immense  damage  to  the  EU
economy.

25

 
the
of

Directive  on 
patentability 
computer-
implemented
inventions

Take-over 
Directive

bids

DONE.
NOT 
Member  States  did
not  reach  a  common
position  in  time  to
second
a 
allow 
reading 
in
during
Parliament 
the 
current
legislature.

DONE. 
The
agreement reached in
Council falls short of
what  is  required  to
create  a  genuinely
level playing field.

of

(NEARLY)  DONE.
All  endorsed,  except
IAS 32 and 39.

Legal
endorsement 
existing
International
Accounting
Standards

Communication
on statutory audit

DONE.

NOT  (YET)  DONE.
Expected  in  the  first
quarter 2004.

DONE.

to
Proposal 
modernise  the  8th
company 
law
Directive

Proposal for a 10th
Law
Company 
Directive 
on
cross-border
mergers

This will clarify and make more  transparent
the boundaries of  patent  law  in  this  field.  It
will 
innovation  and  benefit
software developers and suppliers as well as
the users of patentable technology.

stimulate 

A  Directive  ensuring  a  high  degree  of
harmonisation  at  EU  level  would  have
facilitated pan-European restructuring.

their  consolidated  accounts 

All EU-listed companies are now required to
prepare 
in
accordance  with  IAS  from  2005.  IAS  are
established  by  the  International  Accounting
Standards Board but have to be endorsed for
use within the EU.

This sets out priorities for 2003 and beyond
aimed  at  improving  and  harmonising  the
quality  of  statutory  audit  in  the  EU.  It  will
ensure  that  investors  can  rely  fully  on  the
accuracy  of  audited  accounts,  prevent
conflicts of interest for auditors and enhance
the  EU's  protection  against  Enron-type
scandals.

If adopted, this will strengthen access to and
regulation of the audit profession.

If  adopted,  this  proposal  will  make  cross-
border  mergers  simpler  for  all  companies
with  share  capital.  However,  it  will  be
especially  useful  for  small  and  medium-
sized  businesses  who  want  to  operate  in
more  than  one  Member  State,  but  not
throughout Europe, and thus are not likely to
seek 
the  European
Company Statute.

incorporation  under 

26

 
7.

Meeting the demographic challenge

Action

State of play

Costs/benefits

DONE.

of
Analysis 
Member 
States'
compliance  with
ECJ 
law
case 
relating  to  cross-
border  provision
of  and  access  to
health services

The  analysis  shows that the  Internal  Market
in  health  services 
functioning
satisfactorily.  It  provides  a  useful  basis  for
discussions with Member States.

is  not 

8.

Simplifying the regulatory environment

Action

State of play

Costs/benefits

Ex-ante 
assessment

impact

Simplification  of
existing EU rules

for
on

Mechanism 
reporting 
particularly
complex rules

ON  TRACK.  Some
50%  of  Commission
initiatives  will  be
subject  to  extended
impact assessment in
2004,  compared 
to
17% during last year.

23 

ON  TRACK.  18  of
planned
the 
simplification
exercises  completed
on 
Less
time. 
progress in removing
obsolete legislation.

NOT  YET  DONE.
This  mechanism  will
be  launched  during
the  first  quarter  of
2004.

NOT YET DONE.

(Competitiveness)
Council  working
group  on  "better
regulation"

If  carried  out  properly,  impact  assessment
introduces  greater transparency,  provides  an
objective  basis  for  decision-making  and
improves the quality of any new rules.

result 

This  will 
less  and  simpler
in 
regulation. The Commission is committed to
reducing  the  Community  acquis  (of  around
96.000 pages) by 25% by 2005.

to 

Respondents  will  be  able 
identify
particular (Community or national) measures
through  a  permanent  online  facility  and
point out why in their current form they are
an  obstacle  to  the  Internal  Market  and  to
competitiveness.  These  problems  will  then
be  drawn  to  the  attention  of  the  responsible
authorities for their consideration/action.

The Commission believes that it is important
that  better  regulation  be  given  a  permanent
“home’  within  the  Council  structures  to
ensure  that  any  best  practices,  such  as
conducting  impact  assessment  on  Council
amendments  to  Commission  proposals,  are
promulgated  to  all  Council  formations.  It
regrets that the Council has not yet been able
to agree on such forum.

27

 
9.

Enforcing the rules

Action

State of play

Costs/benefits

NOT DONE.

Transposition  deficits  have  been  increasing
since  May  2002,  and  the  EU  average  now
stands at 2.3% (see Annex 1).

ONGOING. 
This
covers  a  wide  range
of  Internal  Market
Directives.

NOT  (YET)  DONE.
The  Commission  is
with
working 
Member  States 
to
integrate 
national
redress  systems  into
this facility.

DONE.

ensure 

This  will 
better
transposition by allowing potential problems
to be detected at an early stage.

faster 

and 

to  see 

This  will  allow  citizens,  consumers  and
businesses 
the  whole  range  of
possibilities  available  to  them  and  the  time
and  costs  involved  in  each  option.  It  will
enable them  to  choose  the  means  of  redress
most suited to their needs.

this  will 

If  adopted, 
link  up  national
enforcement  authorities  and  enable  them  to
take  co-ordinated  action  against 
rogue
traders  who  abuse  the  freedom  of  the
to  deceive
Internal  Market 
consumers.

in  order 

Meet  transposition
targets  set  by  the
Spring  European
Council

"Preventive" 
–
dialogue  between
the  Commission
Member
and 
upon
States 
adoption 
of
Directives.

Internet 
setting  out 
various 
procedures
available 
citizens,
consumers 
businesses.

facility
the
redress

to

and

for 

Proposal 
a
Regulation  on  co-
operation  between
national
authorities
responsible for the
enforcement 
of
consumer
protection laws.

10.

Providing more and better information

Action

State of play

Costs/benefits

Better information will lead to more people
taking advantage of the manifold Internal
Market opportunities. It could lower the
threshold for companies who want to sell to
and/or import from other Member States.

Member States to
draw up national
information plans

ONGOING. The
Commission has
invited Member
States to report on
their Internal Market
information
activities, identifying
best practices as well
as any gaps in
information needs.

28

 
Member States to
take responsibility
for national-level
information made
available through
the Dialogue with
Citizens

NOT YET DONE.
Member States agree
with the principle,
but practical
arrangements will
need to be
established to make
this work in practice.

The Dialogue provides citizens with
targeted, practical information. It is based on
a series of EU level guides dealing with
different areas (e.g. living, working and
studying in another Member State) and
national fact sheets providing detailed
instructions on how to exercise Internal
Market rights in individual Member States.
In order to ensure that information is correct,
Member States should take ownership of the
fact sheets and keep them up to date.

29