Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions - A single market for 21st century Europe {COM(2007) 725 final} {SEC(2007) 1517} {SEC(2007) 1518} {SEC(2007) 1519} {SEC(2007) 1520} {SEC(2007) 1521}
Date: 2007-11-20
Institutions: European Commission
Subjects: competitiveness, consumer protection, deepening of the European Union, economic and social cohesion, globalisation, single market, small and medium-sized enterprises

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 20.11.2007 
COM(2007) 724 final 

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

A single market for 21st century Europe 

{COM(2007) 725 final} 
{SEC(2007) 1517} 
{SEC(2007) 1518} 
{SEC(2007) 1519} 
{SEC(2007) 1520} 
{SEC(2007) 1521} 

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TABLE OF CONTENTS 

1. 

2. 

2.1. 

2.2. 

2.3. 

3. 

3.1. 

3.2. 

3.3. 

3.3. 

3.4. 

4. 

Introduction .................................................................................................................. 3 

Harnessing opportunities for citizens........................................................................... 4 

Empowering consumers and SMEs ............................................................................. 4 

Making globalisation deliver for Europe ..................................................................... 6 

New frontiers: knowledge and innovation ................................................................... 8 

Delivering results ....................................................................................................... 11 

The social, environmental and cohesion dimensions................................................. 10 

A more evidence-based and impact-driven single market ......................................... 11 

More targeted and better enforced ............................................................................. 12 

More decentralised and network-based...................................................................... 13 

More accessible and better communicated ................................................................ 13 

Conclusion.................................................................................................................. 14

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1. 

INTRODUCTION 

The  single  market  is  a  pillar  of  the  European  Union.  It  has  turned  the  free  movement  of 
people,  goods,  services  and  capital  into  a  tangible  reality,  delivering  real  benefits  for 
Europeans1. It has created jobs and stimulated growth. It has enabled Europeans to live, work, 
study and retire in a different country. One and a half million Erasmus students, for example, 
have taken advantage of EU-wide mobility. The single market has brought consumers a wider 
choice of  goods and services at lower prices, stimulating higher quality and better  safety. It 
has created a common set of rules for business, as well as access to a market of 500 million 
consumers.  The  single  market  has  been  essential  for  the  smooth  functioning  of  Europe's 
economic and monetary policies and served as a strong base for the launch of the Euro. The 
enlarged  single  market  has  made  Europe  more  open,  more  diverse  and  more  competitive  - 
creating new opportunities, respecting social rights, and promoting high standards for health, 
safety and the environment. 

Despite these achievements, the single market still has untapped potential and needs to adapt 
to  new  realities.  In  February  2007,  the  Commission  set  out  its  vision  for  the  21st  century 
single market: a strong, innovative and competitive market, which maximises the potential of 
services, directly benefits consumers and entrepreneurs and positions Europe to better respond 
to and shape globalisation2. 

This  Review  translates  this  vision  into  action.  The  single  market  will  build  on  its  existing 
strong foundations while repositioning itself to respond to new challenges - globalisation, the 
rapid pace of innovation and change, evolving social and environmental realities. Also, now 
that the EU has become bigger and more diverse the single market needs to: 

•  deliver more results for citizens, consumers and SMEs: the single market must be more 
responsive  to  the  expectations  and  concerns  of  citizens.  It  must  continue  to  bring  the 
consumer  benefits  in  terms  of  lower  prices,  quality,  diversity,  affordability  and  safety  of 
goods  and  services.  It  has  to  foster  the  right  conditions  for  small  and  medium-sized 
businesses. 

•  take better advantage of globalisation: the single market is a powerful lever to bring the 
benefits of globalisation to Europeans. It must maximise its potential as a springboard for 
businesses entering global markets, an attractive location for investors and a global leader 
in setting benchmarks for rules and standards. 

•  open new frontiers of knowledge and innovation: the single market needs to better foster 
knowledge- and technology-intensive goods and services as the engines of future growth. 

•  encompass  a  strong  social  and  environmental  dimension:  single  market  policy  must 
take full account of the social and environmental implications of market opening, and must 
be accompanied by measures that enable all citizens and businesses to take advantage of 
new opportunities. 

1 
2 

A staff working paper published alongside this report recalls the achievements of the single market. 
COM(2007) 60, 21.2.2007. 

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All of this calls for new working methods and the use of a diverse set of instruments. Efforts 
have  focused  on  removing  cross  border  barriers,  mainly  through  legal  measures.  Efforts 
should  now  be  made  to  develop  a  more  varied  set  of  tools  and  a  more  impact-driven 
approach: making markets deliver more effectively in areas which will bring the best return 
for consumers, growth and job creation. In line with Europe's "Better Regulation" goals, more 
attention  will  be  paid  to  implementation  and  enforcement;  further  strengthening  impact 
assessments and consultation of stakeholders; simplifying existing legislation where possible, 
cutting unnecessary red tape; and subjecting policies and laws to systematic evaluation. This 
effort requires a commitment well beyond "Brussels": in a larger, more diverse EU, success 
demands  partnership  with  the  Member  States  and  involvement  of  a  wider  range  of 
stakeholders. 

The single market is at the heart of a range of EU policies. The creation of the euro at the turn 
of  the  century  and  its  adoption  by  an  increasing  number  of  Member  States  reinforces  the 
interaction  between  the  single  market  and  the  Economic  Monetary  Union.  The  euro  has 
proved  an  anchor  of  stability  and  a  driving  force  for  the  single  market  process  that  has 
benefited  the  EU  economy  as  a  whole,  not  only  the  euro  area.  As  a  powerful  stimulant  of 
growth and jobs, the single market is key for delivering the priorities of the Lisbon Strategy. 
This  Review  should  be  followed  up  in  the  next  phase  of  the  Strategy,  for  which  the 
Commission will present proposals in December 2007. The single market also goes hand in 
hand with social and environment policies to contribute to sustainable development goals. 

The  Review  sets  out  a  new  approach  to  the  single  market.  It  does  not  include  a  classic 
legislative  action  programme.  Its  aim  is  rather  to  foster  flexibility  and  adaptability  while 
maintaining the legal and regulatory certainty necessary to preserve a well-functioning single 
market.  The  way  that  it  will  do  so  is  summarised  below  with  illustrative  actions.  It  is 
described in further detail in the documents on market monitoring, single market instruments 
and  trade  instruments  which  accompany  the  Review.  An  accompanying  document  on  retail 
financial services illustrates in more detail how the approach will be applied in this important 
sector. The Review is complemented by a vision on how to promote opportunities, access and 
solidarity in the Europe of the 21st century, which is presented alongside the Review together 
with a companion document on services of general interest. These documents, together with a 
summary  of  the  achievements  of  the  single  market,  form  the  "Review  package".  They 
represent  an  important  part  of  the  Commission's  response  to  the  challenges  of  globalisation 
"The European interest - succeeding in an era of globalisation"3 which was presented at the 
informal European Council in October 2007. 

2. 

HARNESSING OPPORTUNITIES FOR CITIZENS  

2.1. 

Empowering consumers and SMEs 

The  single  market  needs  to  deliver  better  results  and  tangible  benefits  for  consumers  and 
SMEs, responding to their expectations and concerns. Consumers need to feel confident and 
empowered to make full use of their rights. Market opening and consumer policy go hand in 
hand. Today, consumers can shop in other EU countries or on the internet without having to 
worry  about  paying  customs  duty  or  additional  VAT.  They  enjoy  the  guarantee  of  high 
standards  for  food  and  consumer  goods.  Product  and  food  labelling,  as  well  as  price 

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COM(2007) 581, 3.10.2007. 

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transparency  requirements,  make  it  easier  to  compare  when  buying.  Goods  which  do  not 
conform to the contract of sale can be sent back and must be replaced or repaired. Legislation 
is in place to prohibit unfair commercial practices and misleading advertising. The European 
Consumer  Centres  Network  (ECC-net)  advises  and  supports  consumers  on  cross-border 
disputes.  Recently,  the  Commission  proposed  to  establish  an  Energy  Consumers'  Charter 
setting  out  basic  consumer  rights  for  electricity  and  gas  supply.  Consumer  welfare  is  also 
protected  by  the  rigorous  enforcement  of  EU  competition  rules:  cartels  in  sectors  from 
escalators to beer have been broken up; anti-competitive mergers between airlines have been 
prohibited; companies like Microsoft, Telefonica, Deutsche Telekom and Wanadoo have been 
obliged to stop abusing their dominant position; State aid control ensuring that public funds 
are well used. All of this has contributed to better functioning and more innovative markets 
that deliver better goods and services at better prices. 

More needs to be done. The single market must continue to focus on areas that touch the daily 
lives  of  consumers,  such  as  energy,  telecommunications,  retail  financial  services  and 
wholesale  and  retail  trade.  The  lack  of  effective  competition  and  the  fragmentation  of 
markets, in part due to different national consumer contract laws, should be dealt with so as to 
ensure  that  consumers  effectively  reap  the  benefits  of  market  opening  and  find  it  easier  to 
understand  how  the  single  market  can  work  for  them.  By  educating  and  empowering 
consumers,  for  instance  in  the  area  of  retail  financial  services,  action  at  EU  level  can  be  a 
stimulus for productivity and efficiency. Although the regulatory framework for e-commerce 
is in place, more can also be done to ensure that citizens can exploit the opportunities offered 
by the internet. 

The single market has to maintain high standards, notably in areas such as product and food 
safety. Efforts are being made to improve the management of the goods market - for example, 
through  strengthened  market  surveillance  and  better  coordination  between  accreditation, 
certification and surveillance bodies. This should also lead to an improved understanding of 
the CE marking on products so as to better protect consumers from unsafe products. Not only 
goods, but also services, should be safe and of good quality. There is a need to reflect further 
on how safety and quality can be best ensured and communicated in the services sector. 

The  single  market  must  also  continue  to  improve  framework  conditions  for  businesses.  In 
contrast to large operators who have been very successful in accessing the opportunities of the 
single  market,  small  and  medium-sized  businesses  often  find  the  single  market  fragmented 
and  difficult  to  penetrate.  For  example,  Europe's  language  diversity  and  varied  cultural  and 
consumer preferences, an invaluable asset and source of innovation, add to the complexity of 
the  single  market  for  SMEs.  Differing  approaches  to  taxation  and  the  difficulty  of  finding 
unanimous  support  for  a  common  approach  to  rules  on  taxation  can  also  act  as  a  brake  on 
SMEs  penetration  of  the  single  market.  Whilst  it  has  become  quicker  and  easier  in  recent 
years to set up a business in all parts of Europe, more has to be done to improve access for 
SMEs,  to  facilitate  their  growth  and  unlock  their  business  potential.  The  Commission  will 
consult all stakeholders so as to develop further initiatives that better tailor the single market 
to the needs of today's SMEs. 

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Box 1. A market for consumers and SMEs 

Consumer  rights  and  redress:  A  global  approach  to  consumers'  rights  across  the  EU  will  create  a 
simple and easily enforceable regulatory framework and will help remove the barriers to cross-border 
shopping now faced by consumers and businesses. Empowering consumers, including more vulnerable 
consumers with special needs or disabilities, setting rights and accessibility standards, and protecting 
them against risks and threats that they cannot tackle as individuals is a central goal of the consumer 
policy strategy. Building on its review of the EU consumer acquis, the Commission will present further 
initiatives  in  2008  on  consumer  contractual  rights  and  collective  redress,  also  facilitating  damages 
claims for breaches of consumers' rights and competition law. 

Access to quality retail financial services: Choosing a current bank account, a mode of payments, an 
investment  or  insurance  product,  a  personal  mortgage,  a  saving,  pension  or  loan  scheme,  a  motor 
vehicle  insurance  -  all  involve  important  personal  decisions,  with  significant  impacts  on  household 
budgets. Evidence suggests that this sector can deliver greater benefits in terms of price, choice and 
confidence in the products and services on offer. A staff working paper published alongside this report 
describes  the  initiatives  envisaged  by  the  Commission  to  stimulate  competition  and  improve  the 
capacity  of  consumers  to  make  decisions  for  themselves.  These  include  measures  to  foster  financial 
literacy, to allow consumers to move freely between providers and switch bank accounts easily, to do 
away with anticompetitive product tying and to stimulate the mortgage credit market. 

Food  Safety:  the  EU  is  committed  to  ensuring  maximum  food  safety  across  its  territory.  The 
Commission will present an initiative on food and nutrition labelling and will review the legislation on 
novel food. 

Pharmaceuticals:  Further  strengthening  and  rationalising  of  market  surveillance  mechanisms  for 
medicinal products will contribute to improving the safety of patients in Europe. Improved access to 
information  on  pharmaceutical  products  and  services  will  enable  patients  to  make  more  informed 
choices about their health. The Commission is preparing a package of measures to deliver on these 
objectives,  which  will  also  help  keep  Europe  as  a  prime  location  for  health-related  innovation  and 
development.  

A Small Business Act for Europe: The Commission will examine a range of initiatives to back SMEs, 
in the form of a Small Business Act for Europe in 2008. This could provide guidelines and provisions 
tailored  for  SMEs  according  to  the  "think  small  first"  principle.  It  could  draw  together  the  SME 
elements  present  in  various  policies  and  laws,  with  the  aim  of  reducing  further  unnecessary 
administrative burdens, increasing SMEs' participation in EU programmes, further improving SMEs' 
access  to  public  procurement  and  reducing  obstacles  to  cross-border  trade,  thus  fostering  further 
innovation and growth. The Commission will also examine how taxation policies and practices affect 
SME  growth  and  will  propose  a  European  Private  Company  statute  to  facilitate  cross-border 
activities of SMEs. 

Improving the tax environment: Efforts will continue to reduce compliance costs resulting from the 
tax  fragmentation  of  the  internal  market,  in  particular  for  SMEs,  as  well  as  to  allow  companies  to 
choose an EU-wide tax base. Policy initiatives to reduce double taxation should also facilitate cross-
border activity both for firms and individual citizens. 

2.2.  Making globalisation deliver for Europe 

Globalisation is a formidable source of dynamism and change. The single market is Europe's 
best asset in reaping the benefits of globalisation. It enables Europeans to benefit from global 
market  opening  through  reduced  prices  and  increased  choice.  It  prompts  firms  to  improve 
efficiency  and  innovate  and  helps  them  to  strengthen  their  competitiveness  so  as  to  enter 
global markets. It makes Europe more attractive for investors and companies across the world. 

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It enables Europe to take the lead in setting benchmarks and bringing about convergence of 
rules  worldwide,  facilitating  European  exports  and  ensuring  that  imports  meet  necessary 
standards, thereby also protecting European citizens. 

In developing its regulatory regime, the EU has worked with the Member States to reconcile 
their different approaches and to find the right mix to allow trade to flourish while respecting 
labour  law,  health,  safety  and  environmental  standards.  This  has  led  the  EU  to  develop  a 
modern  and  innovative  regulatory  and  supervisory  framework,  with  the  EU  being  looked 
upon  as  the  global  standard-setter  in  many  areas  such  as  product  safety,  food  safety, 
environmental protection, public procurement, financial regulation and accounting. The GSM 
standard is now used by almost two and half billion mobile phone customers worldwide. In 
CO2 emissions trading, aviation safety or chemicals, the EU has established new rules, which 
are gradually being adopted across the world. EU competition policy also has a global reach, 
with the Commission challenging cartels, anti-competitive mergers and abuses of a dominant 
position  affecting  European  consumers  and  businesses,  regardless  of  the  nationality  of  the 
companies  concerned.  The  international  context  is  changing  rapidly.  Many  challenges 
increasingly  require  coordinated  global  action  -  be  it  to  tackle  climate  change  or  to  fight 
against  piracy  and  counterfeiting.  A  new  international  approach  focusing  on  regulatory 
cooperation,  convergence  of  standards  and  equivalence  of  rules  is  emerging.  This  approach 
should be further developed in the mutual interests of the EU and its partners. This will foster 
a "convergence to the top" rather than a "race to the bottom". 

How  can  this  be  done?  The  way  forward  must  build  upon  three  pillars  identified  in  the 
"Global Europe" agenda4. 

Box 2. Global Europe: the way forward 

Expanding  the  competitive  space  for  European  firms  beyond  the  physical  boundaries  of  the  single 
market,  opening  up  other  markets  through  multilateral  and  bilateral  trade  liberalisation,  as  well  as 
active enforcement of market access rights. The Commission remains committed to the success of the 
Doha  development  agenda.  Building  on  the  platform  created  by  the  World  Trade  Organisation,  the 
Commission  has  launched  negotiations  for  "deep"  Free  Trade  Agreements  aiming  at  better  market 
access for EU companies and a large degree of regulatory convergence. Specific initiatives will also 
be launched to foster intellectual property rights enforcement and full respect of international rules on 
subsidies.  Moreover,  state  aid  control,  as  one  of  the  instruments  of  competition  policy,  ensures  an 
integrated competitive internal market. This needs to be complemented with active use of trade policy 
tools in order to respond to unfair foreign subsidies and other unfair trading practices, as well as to 
ensure a level playing field internationally, including by actively opening markets abroad. 

Expanding the regulatory space of the single market, by promoting cooperation on Europe's norms 
and  values  abroad  enabling  European  regulations  to  benefit  from  best  practice  everywhere,  and 
ensuring that European norms are a reference for global standards. The Commission is engaged in a 
series  of  multilateral  and  bilateral  dialogues  to  improve  regulatory  convergence  with  its  main 
partners and with its immediate neighbours. Multilaterally, it is important to push forward the issue of 
regulatory  coherence  on  the  WTO  agenda.  Bilateral  fora,  such  as  the  EU-US  Financial  Markets 
Regulatory  Dialogue  or  the  recently  established  Transatlantic  Economic  Council,  provide  good 
opportunities  for  effective  cooperation.  These  efforts  should  be  more  focused,  complement  trade 
negotiations and relate more effectively to training, assistance and research cooperation efforts. The 
Commission  should  also  support  European  supervisors  and  regulators  in  deepening  their 
international cooperation. The EU must continue to play a leading role in international rule making 

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and  standard  setting  bodies,  and  for  this  it  needs  to  speak  with  one  voice.  For  instance,  the 
Commission  will  seek  greater  convergence  of  competition  rules  in  international  venues,  such  as  the 
OECD.  Finally,  the  EU  must  also  be  able  to  learn:  examining  global  standards  when  devising 
Europe's own policy solutions and taking inspiration from best practices of foreign regulators should 
serve to improve EU regulations and facilitate their acceptance abroad. 

Ensuring  that  the  benefits  of  openness  reach  European  citizens,  through  better  standards,  lower 
prices and greater  choice, to be achieved by close  monitoring of markets and appropriate action to 
improve  their  functioning  or  to  create  a  more  competitive  environment,  at  EU  level  or  within  the 
Member States. The EU has a specific responsibility to follow up on trade agreements and ensure that 
they produce their intended effects. The case of textiles is a good illustration of the conditions which 
need to be met for market opening to deliver. In January 2005, following a transitional phase of about 
a decade, a 40-year old system of quotas for textiles and clothing (the "multifibre arrangements") was 
dismantled  under  WTO  rules.  A  recent  study  has  shown  that  the  impacts  for  consumers,  while  on 
average  positive,  have  varied  widely  across  the  EU  depending  on  the  structure  of  the  competing 
domestic industry and the extent of competition in the retail sector. In Ireland and the UK, clothing 
prices have fallen by about 50% in real terms, while they have remained largely unchanged in Italy 
and  Spain.  This  type  of  analysis  will  be  done  in  other  sectors,  with  accompanying  measures  being 
promoted so that the gains of international trade are passed on to consumers. 

A  document  on  the  external  dimension  of  the  single  market  accompanying  this  report 
provides  greater  detail  on  how  single  market  tools  should  be  adjusted  to  respond  to  the 
changing global context. 

2.3. 

New frontiers: knowledge and innovation 

The  single  market  originally  conceived  for  an  economy  reliant  on  primary  products  and 
manufactured  goods  has  to  adapt  to  foster  openness  and  integration  in  a  knowledge-based, 
service-oriented economy. 

Today, services are the dominant economic force in Europe. The services sector accounts for 
70% of GDP, 68% of employment and 96% of the new jobs created in the EU. However, it 
accounts  for  only  20%  of  intra-EU  trade.  This  reflects  the  fact  that  services  often  have  an 
intrinsically local character with the client wanting to be close to the service provider. But it 
also points to the need to tap further potential, reduce barriers and increase competition in the 
services  sector.  That  only  6%  of  Europeans  are  using  cross-border  electronic  transactions 
illustrates the potential that remains untapped. 

Many steps are being taken. Provision of services across the EU should get a boost with the 
implementation of the Services Directive, which has to be transposed into national law by end 
2009.  Similarly,  initiatives  on  network  industries  -  energy,  telecommunications,  postal 
services, transport - are showing results on the ground once they are fully implemented. For 
instance, thanks to the unified European framework in telecommunications, citizens and firms 
have benefited from lower prices, more choice and innovative services. The re-orientation of 
state aid towards horizontal objectives such as innovation and knowledge should also help tap 
single market potential. 

Yet  more  can  be  done.  For  instance,  citizens,  businesses  and  public  authorities  should  be 
enabled  to  exploit  new  opportunities  across  Europe  using  Information  and  Communication 
Technology  (ICT).  ICT  is  essential  for  the  good  functioning  of  the  "e-Internal  Market", 
creating  interoperable  services  such  as  e-invoicing,  e-procurement  and  e-customs.  With  the 
rapid development of these technologies, there is the risk that Member States opt for different 
or  incompatible  solutions,  and  that  new  "e-barriers"  would  emerge  for  the  end  users.  The 

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Member States and the Commission, working together, need to redouble their efforts to avoid 
market fragmentation and promote commonly agreed ICT solutions.  

Further efforts are needed to promote free movement of knowledge and innovation as a "fifth 
freedom"  in  the  single  market. The single market can be a platform to stimulate innovation in 
Europe.  It  encourages  the  spread  of  new  technologies  across  the  EU.  It  lends  itself  to 
networks  -  virtual  and  real  -  and  fosters  the  development  of  a  sophisticated  logistics  sector 
allowing for integrated management of the flows of goods, energy, information, services and 
people. It facilitates exchange of knowledge through the mobility of workers, researchers and 
students. A number of initiatives to stimulate the single market for knowledge and innovation 
are outlined below. 

Box 3. Pushing the frontiers: innovative people, products and services 

Mobility  of  researchers:  The  7th  Framework  Research  Framework  Programme  provides  direct 
support to network and integrate research throughout the EU. As part of the realisation of a European 
Research Area, work is under way to introduce the equivalent of a "researcher passport" that would 
remove barriers to researcher mobility and facilitate exchange of researchers.  

A  modernised  framework  for  e-communications:  The  Commission's  new  reform  proposals  for  EU 
telecom rules aim at the completion of the single market in telecom services, which is essential for the 
wider digital economy and society. These proposals will increase consistency and predictability and 
make it easier to roll out new cross-border services. They will also unleash the economic potential of 
Europe's leadership in wireless technologies by making radio spectrum policies more efficient, flexible 
and market driven. In 2008 the proposals will be followed by an initiative to update universal service 
in support of the transition to an Information Society for All. 

Intellectual Property Rights: The groundwork has been laid for decisions to be taken on a common 
EU framework for patent protection, delivering a simple, cost-effective and high-quality patent system 
for Europe. The Commission will present a strategy for Industrial Property Rights in 2008, including 
activities aiming at improving the awareness and enforcement of IPR by SMEs and the management of 
IPR  by  publicly-funded  research  institutions.  Moreover,  a  Customs  Action  Plan  to  combat 
counterfeiting and piracy will be proposed. 

Standardisation: The Commission will present a standardisation strategy in 2008 to enable the results 
of R&D to find their way onto markets, in particular through SMEs, and to facilitate the uptake of new 
energy-saving  and  environmental  technologies.  Particular  emphasis  will  be  put  on  engaging  with 
SMEs and the research community.  

E-invoicing: The Commission will propose a European e-Invoicing Framework, which will facilitate 
the transmission of invoices in electronic format across the EU. 

E-authentication  and  e-signatures:  Building  on  on-going  work  in  the  field  of  e-government,  the 
Commission  will  present  in  2008  a  specific  Action  Plan  to  further  promote  the  implementation  of 
mutually recognised and interoperable electronic signatures and e-authentication (electronic identity) 
between the Member States, thereby facilitating the provision of cross-border public services. 

E-customs: In the year of the 40th anniversary of the CustomsUnion in 2008, the Commission and the 
Member  States  will  start  implementing  the  E-customs  Decision,  which  aims  at  making  customs  and 
companies' IT-systems inter-operable throughout the EU. 

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2.4. 

The social, environmental and cohesion dimensions 

Market opening and economic integration have social and environmental impacts, which must 
be factored in - both in Europe and abroad. This requires a better assessment of the impact of 
decisions and a better collective capacity to anticipate, foster and manage changes implied by 
greater  opening  and  technological  developments.  This  also  implies  getting  market  prices  to 
reflect their real costs on society and the environment, as well as making citizens more aware 
of  the  social  and  environmental  impacts  of  their  consumer  choices.  These  priorities  are 
essential for the long term viability of the single market and are at the core of the Sustainable 
Development Strategy, so that the benefits of a more open world are shared more evenly and 
passed on to future generations. 

The  development  of  the  single  market  has  gone  hand  in  hand  with  the  European  social 
agenda.  The  set  of  shared  rights  and  values,  which  are  clearly  expressed  in  Article  2  of  the 
Reform Treaty and the Community social policy "acquis", reflect a commitment to European 
action in a number of social policy areas.  

European  economic,  social  and  territorial  cohesion  policy,  backed  by  the  EU  Structural 
Funds, connects and empowers citizens and businesses, helping to unleash the single market's 
full potential. This policy has helped to spread the benefits of the internal market to all regions 
of the Union, making sure the benefits of opening are widely shared and cushioning possible 
adverse effects of adjustment. 

European societies are changing fast. Technological progress and globalisation are affecting 
the way Europeans live and work, with new job, career and service opportunities, a demand 
for new skills and an increasing pace of change. The single market has prompted new trends 
in intra EU mobility. Some workers have difficulty adapting and see these wider processes as 
a threat, particularly when they affect their local communities. These are legitimate concerns, 
which  must  be  addressed.  Workers'  rights  need  to  be  guaranteed  and  a  level  playing  field 
maintained, notably through the correct application of EU labour law. 

Taking  better  account  of  the  environmental  dimension  is  not  only  important  in  itself,  but  it 
can  generate  many  new  opportunities.  The  eco-industry  already  employs  more  than  sectors 
like  car  manufacturing  or  pharmaceuticals.  The  EU's  determination  to  act  and  promote  its 
standards globally will give it a head start in steering new technologies and creating new jobs. 
Europe’s  experience  in  fighting  climate  change,  for  example,  by  fostering  low  carbon 
products  and  services,  serves  as  an  inspiration  across  the  world,  establishing  global 
benchmarks and generating new export markets. 

Box 4. Advancing Social Europe 

Paving  the  way  for  a  renewed  Social  Agenda:  As  part  of  the  Commission's  Citizens'  Agenda,  a 
consultation  is  on-going  on  Europe's  social  reality.  Alongside  this  report,  the  Commission  is 
publishing a vision on how Europeans can access the opportunities generated by an open, modern and 
changing Europe. Reactions to this vision will feed into the preparation of a renewed Social Agenda 
setting out initiatives at EU level, which the Commission will present in mid-2008. 

Services  of  general  interest:  The  Protocol  agreed  alongside  the  Treaty  of  Lisbon  sets  out  the  EU 
principles  applicable  to  services  of  general  interest  and  establishes  a  new,  transparent  and  reliable 
framework at the level of the Treaty. This draws the lessons of a decade of debate about the role of the 
EU and it highlights the convergence of views, notably since the 2004 Commission's White Paper. A 
document  on  services  of  general  interest,  including  social  services  of  general  interest,  is  presented 

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alongside  this  review  to  take  stock  of  this  new  situation.  An  initiative  on  healthcare  services  will 
follow soon. 

Facilitating mobility: Workers' mobility is a right established by the EU Treaty and it is essential to 
the functioning of the single market. The free movement of workers will be further facilitated when the 
transitional  arrangements  foreseen  for  the  new  Member  States  come  to  an  end.  Following  the  2006 
European Year of Workers' Mobility, the Commission will present a Job Mobility Action Plan by the 
end of 2007 including a review of the Community rules on social security coordination. 

EU labour law: Rules in place at EU level recognise fundamental rights for workers, for instance in 
terms of information and consultation, and provide for minimum requirements which guarantee a level 
playing field for workers and companies. By 2008, the Commission will present a proposal to amend 
the Directive on the establishment of a European Works Council. 

Cross-border  integration:  To  help  EU  citizens  living  and  working  in  border  regions,  a  new  legal 
instrument,  called  "European  Grouping  for  Territorial  Cooperation"  (EGTC),  has  been  designed  to 
help deliver new cooperative approaches across borders in areas such as healthcare, risk prevention, 
environment protection, culture, tourism, and local cross border infrastructures.  

3. 

DELIVERING RESULTS 

To deliver results, the single market needs to adapt and apply new approaches. This is all the 
more important now that the EU is bigger and more diverse. Making the single market work is 
a joint responsibility of all levels of government and supervision. The single market is built on 
trust  -  a  trust  that  can  be  fostered  and  strengthened  both  through  close  administrative 
cooperation  and  improved  information.  A  renewed  partnership  is  needed  to  ensure  that  the 
single market delivers to its potential. 

3.1. 

A more evidence-based and impact-driven single market 

The  EU  should  focus  on  areas  where  it  matters  most,  taking  action  where  markets  do  not 
deliver and where it will have the maximum impact. Action requires efforts on the part of all 
stakeholders  to  track  market  developments,  identify  problems,  assess  scope  for  action  and 
gather  feedback  from  the  ground.  The  efforts  to  improve  the  functioning  of  the  gas  and 
electricity markets provide a good example. 

The  Commission  and  national  authorities  have  wide  experience  with  market  and  sector 
monitoring.  This  needs  to  be  further  developed.  Competition  sector  inquiries,  the 
identification  of  lead  markets  and  the  development  of  joint  technology  initiatives  provide  a 
large  part  of  the  answer.  But  in  a  number  of  areas,  more  evidence  needs  to  be  gathered 
through  effective  feedback  from  the  operation  of  the  single  market  on  the  ground.  Better 
account also needs to be taken of the consumer, SMEs and the global dimension as well as 
social and environmental impacts.  

Box 5. Taking action where it matters 

Market  and  sector  monitoring:  As  part  of  this  review,  the  Commission's  services  have  developed  a 
methodology for a more systematic monitoring of the functioning of key goods and services markets. 
The  first  stage  of  this  methodology  consisted  in  screening  sectors  offering  the  greatest  potential 
benefits in terms of growth, job creation and consumer welfare. In the second stage, selected sectors 
will  be  examined  in  more  detail  in  order  to  determine  why  markets  are  functioning  poorly  (lack  of 
openness/integration, lack of choice and transparency for consumers, low degree of competition, poor 

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regulatory environment and lack of innovation). This will give crucial insights to address the specific 
challenges faced in the sector(s) concerned. A staff working paper is presented alongside this report to 
present first findings. The Commission intends to work closely with national authorities to develop this 
new approach. 

A consumer scoreboard: As an input to the above methodology, a consumer scoreboard will be put in 
place  to  monitor  performances  from  the  perspective  of  the  consumer  and  show  which  markets  are 
failing  in  terms  of  economic  or  social  outcomes,  using  key  indicators  such  as  complaints,  prices, 
satisfaction  of  consumers,  switching  possibilities  and  safety,  as  well  as  additional  sector-specific 
indicators wherever possible. New data sources, e.g. to compare consumer prices, will be developed. 
This scoreboard will be integrated with the Single Market Scoreboard from 2009. 

3.2.  More targeted and better enforced 

In carrying forward the single market, the Commission is committed to using a "smarter" mix 
of  tools  -  instruments  that  are  simple  and  take  subsidiarity,  proportionality  and  different 
national traditions fully into account.  

Citizens and businesses need legal certainty to engage confidently in cross-border activities. 
Regulation therefore remains important in some areas, but it may not always be necessary or 
adequate,  for  instance  where  obstacles  to  the  functioning  of  the  single  market  are  not 
primarily legal, but mainly behavioural  or institutional. In  a diverse EU, there is even more 
incentive  to  keep  legislation  simple.  In  practice,  the  best  results  will  therefore  often  be 
achieved  through  a  mix  of  tools  (e.g.  single  market  and  competition),  which  complements 
legally  binding  instruments  with  approaches  such  as  guidance,  self-regulation,  training  or 
advocacy. Continued efforts are needed to involve and consult stakeholders on single market 
policies. Important proposals will continue to go through rigorous impact assessment, and the 
Commission is committed to rolling back EU intervention where it no longer achieves desired 
goals or has been superseded, be it by market developments or by action at a local, regional, 
national or global level. 

Implementation  and  enforcement  of  single  market  rules  throughout  the  EU  is  fundamental. 
The benefits of the single market will not materialise if EU law is not correctly applied or if 
the  rights  it  creates  is  not  satisfactorily  upheld  and  means  of  redress  ensured.  Efforts  to 
improve  the  application  of  Community  law  will  continue  to  ensure  that  citizens,  consumers 
and  businesses  understand  and  can  make  effective  use  of  the  single  market  regulatory 
framework. 

Box 6. Putting single market tools to best use 

A better mix of instruments: A staff working paper is presented alongside this report which reviews 
the tools available to shape, manage and deliver single market policies, and discusses how best results 
can be achieved at all levels of governance. 

Improving on implementation: As set out in its recent Communication on the application of EU law5, 
the  Commission  will  take  action  to  prevent  problem  in  applying  EU  laws  from  arising  and  moving 
swiftly  to  correct  problems  that  do  emerge  in  close  cooperation  with  Member  States.  Where 
infringements  of  EU  law  occur,  they  will  be  addressed,  and  the  Commission  will  give  priority  to 
infringements  having  the  greatest  impact.  Member  States  are  asked  to  provide  concordance 
information showing how Community legislation is transposed into national law. The Commission will 

5 

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publish  more  general  information  on  the  current  state  of  implementation  of  the  law  and  legal 
proceedings to ensure the correction of breaches of Community law. 

"Hands on" problem-solving: SOLVIT is a network of single market experts available to help citizens 
and businesses facing problems due to incorrect application of EU rules by national authorities. Since 
its  creation  in  July  2002,  the  network  of  national  SOLVIT  centres  and  of  the  Commission  SOLVIT 
team  has  resolved  more  than  1 300  problems,  sometimes  leading  to  substantial  amendments  to 
national legislation. Around 80% of problems encountered are resolved, without having to involve the 
judiciary,  most  of  them  within  the  deadline  of  ten  weeks.  As  more  people  are  made  aware  of  the 
service SOLVIT can offer, more cases are submitted every day. 

3.3.  More decentralised and network-based 

The  single  market  requires  action  by  authorities  and  stakeholders  at  all  levels  of  EU 
governance.  They  must  team  up  to  ensure  that  single  market  rules  are  known,  understood, 
applied and enforced. Fostering ownership and reinforcing mutual trust are key to making the 
single market work effectively: this calls for new working relationships and new approaches.  

Experience  in  some  Member  States  has  shown  that  much  can  be  gained  through  the 
establishment  of  "single  market  centres"  coordinating  national  efforts  to  make  the  single 
market work. At EU level, the example of the European Competition Network shows how a 
network  formed  by  the  Member  States'  competition  authorities  and  the  Commission  can 
ensure the effective and consistent application of EU rules. As is done for instance in the field 
of customs and through the Consumer Enforcement Network, the EU can also play a role in 
supporting  exchange  of  information  and  staff  between  national  administrations.  In  many 
areas,  there  is  scope  to  further  foster  cooperation,  networking  and  exchange  of  practices 
between Member States' administrative, judicial and regulatory authorities, as well as between 
EU regulators. 

Box 7. Working in partnership  

In recent years, many initiatives have been taken at local, regional, national and EU level to improve 
transposition,  implementation  and  enforcement  of  EU  laws,  to  spread  information  and  to  enhance 
cross-border cooperation between administrations. The EU can draw on these experiences to identify 
what  works  well  and  what  does  not,  and  where  more  effort  is  needed  to  make  the  single  market  a 
reality. The Commission will work with the Member States in the Internal Market Advisory Committee 
to identify best practices, agree guidelines and provide mutual support. The national coordinators in 
charge  of  the  Lisbon  Strategy  should  also  be  invited  to  play  a  key  role  in  strengthening  strategic 
coordination and exchange of experiences. 

3.4.  More accessible and better communicated 

Much more can be done to improve communication and to publicise the opportunities offered 
by the single market. Citizens, companies, and local and regional authorities must have access 
to  information  and  understand  the  rules  in  order  to  seize  single  market  opportunities. 
Transparency of rules and easy access to information is  also  particularly  important  for  non-
EU partners. 

Member  States  are  encouraged  to  strengthen  their  communication  activities  on  the  single 
market  and  better  publicise  sources  of  information.  The  Commission  will  support  these 
efforts. As part of this review, communication activities have been stepped up: a pilot project 
of "single market ambassadors" has been launched and a single internet access point for the 
various  EU  single  market  assistance  services  is  being  developed.  This  will  complement  the 

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wider  work  under  way  between  the  Commission  and  the  Member  States  on  information-
provision and problem-solving for citizens and business. 

Box 8. Facilitating access to information 

Need  help?  EU  assistance  services:  On  the  move  in  Europe  and  wondering  about  your  rights? 
Looking  for  a  job?  Problem  with  car  registration?  Difficulty  setting  up  a  business  activity?  Europe 
has answers and can help you. A single gateway integrating existing EU on-line services will be set up 
for citizens and businesses to find answers about the single market, in the form of a "one-stop shop" 
access  to  the  current  information,  assistance  and  problem-solving  systems  managed  by  the  EU 
(including  Europe  Direct,  Your  Europe,  SOLVIT,  Citizens'  Signpost  Service,  EURES  and  the  new 
integrated business support network). 

Want to see how the single market is performing? The Single Market Scoreboard: The Commission 
will  monitor  the  single  market's  performance  and  report  regularly  on  priorities  to  the  Spring 
European  Council.  This  will  include  the  information  already  gathered  on  transposition  of  EU 
directives,  infringements  and  the  use  of  problem-solving  mechanisms,  such  as  SOLVIT.  It  will  also 
include  economic  indicators  e.g.  on  market  monitoring,  and  further  benchmarking  of  performances 
across the EU. A first edition of this wider Single Market Scoreboard will be published in 2008. 

4. 

CONCLUSION 

The  single  market,  one  of  Europe’s  most  concrete  successes,  can  help  Europe  meet  the 
challenges  of  the  21st  century.  An  open,  integrated  and  competitive  single  market  will 
stimulate economic growth and healthy trading relations, opening opportunities and creating 
jobs. It will advance the interests and values of Europeans in an era of globalisation. It will go 
hand  in  hand  with  effective  universal  access  to  key  services,  high  social  and  environmental 
standards, and high levels of investment in research and education. As a joint endeavour of all 
stakeholders  and  all  levels  of  government,  the  single  market  will  show  how  Europe  can 
deliver results for its citizens. 

In order to take forward the ideas set out in the Review, the Commission invites the European 
Parliament, the Council, the European Economic and Social Committee and the Committee of 
the Regions to: 

•  Give  their  broad  support  to  the  repositioning  of  the  single  market  as  described  in  this 
Communication;  in  particular,  the  2008  Spring  Council  should  ensure  that  single  market 
priorities  figure  more  prominently  in  the  Lisbon  Strategy,  including  in  its  external 
dimension,  and  that  the  findings  of  this  report  feed  into  the  upcoming  review  of  the 
Economic and Monetary Union on the occasion of its 10th anniversary in May 2008; 

•  Highlight  the  importance  of  the  social  benefits  in  terms  of  opportunities,  access  and 
solidarity which can flow from the single market by endorsing the approach set out in the 
vision paper which accompanies this Communication; 

•  Support  the  approach  to  services  of  general  interest,  including  social  services  of  general 

interest, set out in the Communication accompanying this report. 

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