Opinion of the Committee of the Regions on the future of the Single Market and Stocktaking of European Society
Date: 2007-03-23
Institutions: European Committee of the Regions
Subjects: European Union, balance sheet, competitiveness, economic and social cohesion, single market, social situation

C 156/14

EN

Official Journal of the European Union

7.7.2007

Opinion of the Committee of the Regions on the future of the Single Market and Stocktaking of
European Society

(2007/C 156/03)

THE COMMITTEE OF THE REGIONS

— believes that the Single Market is in need of fresh impetus in order to meet its challenges over the
coming years. The Single Market now consists of 27 Member States, making it far more diverse than
when it was first conceived. Furthermore, the Single Market now operates within a global environ-
ment. It must therefore adjust from being an internal EU project to becoming an effective instrument
for improving the EU's capacity to compete effectively with the rest of the world, to achieve territorial,
economic and social cohesion and to meet the targets set out in the Lisbon Agenda. Local and
regional authorities have a key role in achieving this.

— invites the European Commission and the Member States, in close cooperation with local and regional
authorities, to undertake studies to determine the obstacles that regions, cities and localities currently
face in the application of the Single Market and the potential solutions to creating a Single Market fit
for the 21st Century.

— recommends to the European Commission that it should focus activity on the further implementation
of the Single Market in the services, labour and financial sectors. The free movement of goods has
been relatively successful whereas the Single Market has been less effective in the services, labour and
financial sectors.

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I. Policy recommendations

THE COMMITTEE OF THE REGIONS,

Introduction

1.
Concurs with the European Commission and the European
Council that the European economy faces important new chal-
lenges and opportunities in the 21st Century. The Committee of
the Regions therefore welcomes the European Commission's
commitment to undertake a comprehensive review of both the
Single Market
and European society during 2007. The
Committee of the Regions also welcomes the request from the
European Commission to contribute to these reviews in the
form of this ‘Outlook Opinion’;

2.
Believes that the Single Market is in need of fresh impetus
in order to meet its challenges over the coming years. The
Single Market now consists of 27 Member States, making it far
more diverse than when it was first conceived. Furthermore, the
Single Market now operates within a global environment.
Informed by this Opinion, the Single Market must therefore
adjust from being an internal EU project to becoming an effec-
tive instrument for improving the EU's capacity to compete
effectively with the rest of
the world, to achieve territorial,
economic and social cohesion and to meet the targets set out in
the Lisbon Agenda. Local and regional authorities have a key
role in achieving this;

A Single Market for the 21st Century

3.
Recognises that the free movement of goods, persons,
services and capital is a fundamental principle of the European
Union and provides the basis for the Single Market. It should
also be remembered that the project of European integration
was, and is, not only about the Single Market but driven by the
aim to preserve peace through building solidarity and cohesion
between the people of Europe;

Stresses

the importance of

4.
stakeholders
upstream of the decision-making process, by developing the
public consultation procedures, and of giving particular atten-
tion, by way of impact assessments, to the territorial, social and
environmental effects of EU legislation;

involving all

Recommends that

the European Commission and the
5.
Member States better harness the creative and innovative poten-
tial of local and regional authorities in Europe through addres-
sing the implementation deficit. This relates in particular to the
need to enhance openness and address protectionist policies in
some Member States that hinder Small to Medium sized Enter-
prises (SMEs) from investing in new markets across the EU and
in the world;

Invites the European Commission and the Member States,
6.
in close cooperation with local and regional authorities,
to
undertake studies to determine the obstacles that regions, cities
and localities currently face in the application of the Single

Market and the potential solutions to creating a Single Market
fit for the 21st Century;

7.
Notes that the role of local and regional authorities is not
confined to adapting to economic change and supporting
companies in the Single Market. As organisers and providers of
public services they are also players in the Single Market;

8.
Recognises that social stocktaking is closely related to the
effective functioning of the Single Market. The stocktaking of
European society should acknowledge that traditionally defined
social problems
(for example, poverty and disability) may
increase as a result of an ageing population and persistent
unemployment. At the same time, new social problems may
emerge as a result of changing family structures and globalisa-
tion. The social stocktaking should lead to a common approach
towards analysis, exchange of best practice at the European level
and between the Member States;

Globalisation and the External Challenge

9.
Recommends that the European Commission should more
systematically benchmark, measure and consider the economic
performance and policy development of national and regional
in particular the
economies against our overseas competitors,
USA, China and India, alongside other Members States and
regions of the EU;

10.
Shares the Commission's view of the need to take more
account of the international environment in order to maintain a
competitive and attractive Community Market. A more inte-
grated Single Market would help meet the challenge of globalisa-
tion, exploit its opportunities, thereby reducing negative percep-
tions. In this context the Committee of the Regions emphasises
that local and regional authorities across the EU are also part of
an increasingly globalised economy, in which the world trade in
goods is doubling in size every decade. In the face of competi-
tion from knowledge intensive economies, European business
will need to become significantly more innovative, more skilled
and creative to compete;

11.
Recommends that the Single Market is fully understood
as a dynamic instrument for European social and economic
growth. The Single Market must be supported to evolve and
appropriately respond to the changing patterns and challenges
the global economy in order to effectively increase EU
of
economic growth by creating the necessary political and
economic conditions;

12.
Believes that a common approach to drawing up a set of
minimum social standards based on a shared vision should be
drawn up at EU level. Specific principles governing equal treat-
ment with regard to working conditions should be established
where the employment is located and should be based on an
agreement between the social partners. Given the development
of the global market, many of the challenges facing the Single
Market are external in nature;

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Official Journal of the European Union

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Learning, Skills and Employability in the Knowledge Economy

Stocktaking of European Society

13.
Recommends to the European Commission that support
for skills development should, through equality of opportunity
and investing in lifelong learning,
focus upon ensuring that
education and training policies deliver the skills needed by
people to find suitable employment and respond to business
needs;

14.
Emphasises that skills development is a central challenge
facing European regions and together with innovation, enter-
prise, competition and investment, is one of the key drivers of
the Regions highlights the
productivity. The Committee of
importance of improving the capacity for investment in skills
development of Member States and local and regional authori-
ties so as to ensure lifelong learning in practice and the promo-
tion of active labour market policies through a sustainable
approach in accordance with the Lisbon Agenda;

15.
Recommends that the European Commission, in consul-
tation with the Member States and local and regional authori-
ties, provides a strategic framework and targets resources to
support the development of focused regional and locally based
skills strategies;

Recommends to the European Commission and to the
16.
Member States that the future Single Market focus on skills and
employment should be developed, where appropriate, on the
basis of delivery at the local and regional
level. With greater
regional autonomy and accountability, skills programmes, such
Fund
those delivered through the
as
programme, should ensure alignment
to regional and local
labour markets in order to address the specific challenges faced
by regions;

European Social

that

Proposes

17.
the European Commission and the
Member States should build upon the EU's strengths as a knowl-
edge economy and to support the transferability of skills and
employability of
its citizens rather than trying to compete
against those economies with a competitive advantage in low-
skills and low-value added employment. Skills development and
lifelong learning are essential elements of any programme to
make the Single Market more effective;

18.
Recalls in this context that global competition and the
orientation towards knowledge -and service- economies creates
new challenges for skills development and education. Low-
skilled and low-paid jobs should not create a new group of
‘working poor’. It is therefore necessary to focus social provision
in particular on assisting those concerned through education
and training, fair pay and working conditions for all, and provi-
sions for increased social mobility;

Endorses the view of

the European Council on the
19.
importance of the EU's (1) social dimension. The Committee of
the Regions, therefore, also welcomes the Council's request that
the European Commission and Parliament should pay due atten-
tion to the social impact of European legislation;

20.
Underlines that the Single Market should be understood
as an important component of wider EU society. Therefore, the
its Single Market policies should be better
social aspects of
addressed and the EU should build upon the different regional
identities and approaches to socio-economic development in
trying to implement common European principles rather than
imposing uniform or solely ‘economic’ driven policy;

21.
Recommends that the European Commission continues
to guarantee social and consumer rights, while freeing up the
market in services (for example through the future Services
Directive);

22.
Considers it necessary, as illustrated by the debate on the
Services Directive, to take account of the specific nature of
public service missions, with regard to the application of the
internal market rules;

Recommends that the European Commission specifically
23.
considers the impact of current and future demographic changes
on the future success and direction of the Single Market. There
should be particular attention to the uneven impact of current
and future migratory population flows. Equality of opportunity
is an essential principle of modern Europe; discrimination is not
an option;

Recommends that

24.
the European Commission should
adopt a more coherent and structured approach to better
address the social dimension of the Single Market. The welfare
and interests of European citizens and business must be guiding
principles of EU policy and are key to securing the opportu-
nities of the Single Market. Therefore, the competitiveness of the
regions should be understood in terms of both citizens' and
companies' potential;

Recommends that the EU should safeguard the more
25.
vulnerable members of European society. The globalisation of
world markets provides additional opportunities to reinvigorate
the economies of the EU. However, while supporting further
economic growth that should lead to job and wealth creation,
there may be sections of the European community that are
unable to benefit from this growth. As a result of demographic
changes and an ageing population, traditional welfare policies
should adapt
to these new challenges. Consequently, while
exploiting the opportunities for growth, EU policies must ensure
equality of opportunity, and assist social welfare structures to
meet the challenges of an evolving European Single Market. This
will require welfare structures, and in particular education and
training, to better target those in most need while ensuring
appropriate resources and incentives and to develop innovative
approaches to providing effective welfare;

(1) European Council conclusions of 15-16 June 2006.

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Better Communication

26.
Recommends that the European Commission and the
Member States consult and work alongside local and regional
authorities to stimulate a debate and engage its citizens in the
goals of prosperity, solidarity and security, and the jobs and
economic growth agenda. Reference should be made to the
important role that social partners and social dialogue can play
at all levels to evaluate market functioning, promote sustainable
policies on economic migration, combat abusive working condi-
tions, and eliminate discrimination in both the workplace and
the wider labour market;

Emphasises that the benefits of the Single Market have
27.
not been effectively communicated with partners, citizens and
businesses alike. Reconnecting Europe with its citizens is a
prerequisite for making the Single Market a success. The
Committee of
the Regions therefore suggests that local and
regional authorities, being the closest level of government to the
citizen, should take a lead role in this process. It is recom-
mended that the European Commission should, in partnership
with the Committee of the Regions, develop a communication
and policy driven process to engage and meet the expectations
of its citizens and business community and involve them in the
European goals of prosperity, solidarity and security, and the
growth and jobs agenda. These are indispensable elements for
future confidence and support in the EU;

that

Recommends

the European Commission,

the
28.
Member States and local and regional authorities should,
in
order to allay the concerns of citizens and businesses, especially
SMEs, better communicate how to manage economic and social
adjustment that results from globalisation and increased compe-
tition;

Effective Decision Making

Recommends

to the European Commission that

29.
it
the
should focus activity on the further implementation of
Single Market in the services, labour and financial sectors. The
free movement of goods has been relatively successful whereas
the Single Market has been less effective in the services, labour
and financial sectors;

Appeals to the Member States to support

30.
local and
regional authorities in the further introduction of co-ordinated,
simplified and integrated business support structures at
the
level. There is considerable
most appropriate geographical
potential for these structures to provide information for public
procurement opportunities and assistance in explaining the
process of awarding public service contracts. Local and regional

Rome, 23 March 2007

authorities also have a significant role in supporting SMEs as
significant customers of
the goods and services that SMEs
provide;

Recommends to the European Commission, in consulta-
31.
tion with business,
to promote European competitiveness
through the introduction of an effective European patent system
that supports patent holders in both enforcing their intellectual
property rights and reducing costs while providing better incen-
tives for innovation;

32.
Recommends to the European Commission and the
Member States to undertake genuine consultation and dialogue
with local and regional authorities and the business sector to
identify areas where the regulatory burden upon businesses, in
particular SMEs, may be reduced;

33.
Agrees that the simplification and effective application of
the
existing EU law, are indispensable to the integration of
Single Market, but also recalls that better regulation does not
necessarily mean less regulation. Harmonisation may be neces-
sary to respect the Community acquis, so that the EU has a
clear and coherent regulatory framework;

34.
Recommends to the European Commission and the
Member States to apply more comprehensive ex-ante SME
impact analysis to the EU legislative process and to strengthen
the role of SMEs when drawing up new legislation;

35.
Calls for the principle of mutual recognition (Court of
Justice ‘Cassis de Dijon’ judgement (case 120/78 20th February
1979)) to be consolidated. Therefore urges the Commission to
take the necessary steps to ensure that Member States should
continue to be able to have different manufacturing standards
without these being a pretext for refusing to allow a product to
be marketed;

they
Recommends to the European Commission that
36.
recognise the proactive and important role of local and regional
authorities in influencing the further appropriate development
of the Single Market and social reality of Europe. Municipal and
regional autonomy should therefore be strengthened. The
Committee of the Regions is an important partner in demon-
strating the benefits of the Single Market through our close
links to the citizens of Europe while at the same time ideally
placed to advocate change where it is appropriate to do so.

II. Recommendations for amendments

—

The President

of the Committee of the Regions

Michel DELEBARRE