COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT REPORT Accompanying the document REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL for a Single Market Emergency Instrument REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulations (EU) 2016/424, (EU) 2016/425, (EU) 2016/426, (EU) 2019/1009 and (EU) No 305/2011 as regards emergency procedures for the conformity assessment, adoption of common specifications and market surveillance due to a Single Market emergency and DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Directives 2000/14/EC, 2006/42/EC, 2010/35/EU, 2013/29/EU, 2014/28/EU, 2014/29/EU, 2014/30/EU, 2014/31/EU, 2014/32/EU, 2014/33/EU, 2014/34/EU, 2014/35/EU, 2014/53/EU and 2014/68/EU as regard emergency procedures for the conformity assessment,adoption of common specifications and market surveillance due to a Single Market emergency
Date: 2022-09-20
Institutions: Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, European Commission
Subjects: EC conformity marking, crisis management, free movement of goods, free movement of persons, freedom to provide services, goods and services, market approval, market supervision, security of supply, single market

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 20.9.2022  SWD(2022) 289 final/2 PART 1/2  CORRIGENDUM This document corrects document SWD(2022)289 final of 19.9.2022 Wrong formatting as of page 134 in part 1 The text shall read as follows: COMMISSION STAFF WORKING DOCUMENT  IMPACT ASSESSMENT REPORT  Accompanying the document REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL for a Single Market Emergency Instrument              REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL                amending Regulations (EU) 2016/424, (EU) 2016/425, (EU) 2016/426, (EU) 2019/1009 and (EU) No 305/2011 as regards emergency procedures for the conformity assessment, adoption of common specifications and market surveillance due to a Single Market emergency                and DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL                amending Directives 2000/14/EC, 2006/42/EC, 2010/35/EU, 2013/29/EU, 2014/28/EU, 2014/29/EU, 2014/30/EU, 2014/31/EU, 2014/32/EU, 2014/33/EU, 2014/34/EU, 2014/35/EU, 2014/53/EU and 2014/68/EU as regard emergency procedures for the conformity assessment,adoption of common specifications and market surveillance due to a Single Market emergency {COM(2022) 459 final} - {SEC(2022) 323 final} - {SWD(2022) 288 final} - {SWD(2022) 290 final}  
 
 
Table of contents 

1. 

2. 

INTRODUCTION: POLITICAL AND LEGAL CONTEXT ............................................................... 1 

PROBLEM DEFINITION .................................................................................................................... 6 

3.  WHY SHOULD THE EU ACT? ........................................................................................................ 22 

4.  OBJECTIVES: WHAT IS TO BE ACHIEVED? ............................................................................... 25 

5.  WHAT ARE THE AVAILABLE POLICY OPTIONS? .................................................................... 26 

6.  WHAT ARE THE IMPACTS OF THE POLICY OPTIONS? ........................................................... 47 

6.1.  POLICY OPTION 1 ............................................................................................................................ 47 

6.2.  POLICY OPTION 2 ............................................................................................................................ 56 

6.3.  POLICY OPTION 3 ............................................................................................................................ 59 

7.  HOW DO THE OPTIONS COMPARE? ............................................................................................ 65 

8. 

PREFERRED OPTION ...................................................................................................................... 67 

9.  HOW WILL ACTUAL IMPACTS BE MONITORED AND EVALUATED? .................................. 68 

ANNEX 1: PROCEDURAL INFORMATION ............................................................................................ 70 

1. 

LEAD DG, DECIDE PLANNING/CWP REFERENCES .................................................................. 70 

2.  ORGANISATION AND TIMING ...................................................................................................... 70 

3. 

4. 

CONSULTATION OF THE RSB....................................................................................................... 70 

EVIDENCE, SOURCES AND QUALITY ......................................................................................... 78 

ANNEX 2: STAKEHOLDER CONSULTATION (SYNOPSIS REPORT) ................................................ 79 

ANNEX 3: WHO IS AFFECTED AND HOW? .......................................................................................... 89 

1. 

2. 

SUMMARY OF COSTS AND BENEFITS ....................................................................................... 89 

RELEVANT SUSTAINABLE DEVELOPMENT GOALS ............................................................... 92 

ANNEX 4: ANALYTICAL METHODS ..................................................................................................... 94 

ANNEX 5: DETAILED OVERVIEW OF POLICY APPROACHES PER BUILDING BLOCK .............. 95 

ANNEX 6: ANALYSIS OF POLICY APPROACHES PER BUILDING BLOCK .................................. 110 

ANNEX 7: SME TEST .............................................................................................................................. 129 

ANNEX 8: OVERVIEW OF RESILIENCE MEASURES OF KEY INTERNATIONAL PARTNERS .. 132 

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Term or acronym  Meaning or definition 

GLOSSARY 

CFS 

CIFUS 

CWP 

DPA 

ECDC 

EEN 

Centre for Strategic Futures, Singapore 

Committee on Foreign Investment in the United States, US 

Commission Work Programme 

Defense Production Act, US 

European Centre for Disease Prevention and Control 

Enterprise Europe Network 

EFSCM 

European Food Security Crisis preparedness and response Mechanism 

ERCC 

ESPA 

FABS 

FEPO 

FIRB 

GPA 

HERA 

IIJA 

IMCO 

IPCEI 

IPCR 

IPI 

Emergency Response Coordination Centre 

Economic Security Promotion Act, Japan 

Facilitating American-Built Semiconductors Act, US 

Future Economy Planning Office, Singapore 

Foreign Investment Review Board 

Government Procurement Agreement, US 

Health Emergency Preparedness and Response 

Infrastructure Investment and Jobs Act, US 

European Parliament's Committee on Internal Market and Consumer Protection 

Important Project of Common European Interest, EU 

Integrated Political Crisis Response 

International Procurement Instrument 

JOGMEC 

State owned Japan Oil, Gas and Metals National Corporation, Japan 

NDICI 

NDS 

NLF 

NSIA 

PPE 

Neighbourhood,  Development,  and  International  Cooperation  Instrument  - 
Global Europe, EU 

National Defense Stockpile, US 

New Legislative Framework 

National Security and Investment Act, UK 

Personal Protective Equipment 

ii 

 
 
 
 
 
RIE2025 

Research Innovation Entrepreneurship Programme, Singapore 

RSB 

SCRI 

SMA 

SMET 

SMIT 

SMTD 

TFEU 

TRIS 

UCPM 

Regulatory Scrutiny Board  

Supply Chain Resilience Initiative, Australia 

Southeast Asia Manufacturing Alliance, Singapore 

Single Market Enforcement Task Force 

Single Market Information Tool 

Single Market Transparency Directive 

Treaty on the Functioning of the European Union 

Technical Regulation Information System 

Union Civil Protection Mechanism 

iii 

 
 
 
 
 
1. 

INTRODUCTION: POLITICAL AND LEGAL CONTEXT 

A  look  back  in  history  reveals  that  crises  may  pave  the  way  to  expeditious  innovation,  rapid 
advances  in  technology,  policy,  and/or  procedures  that  in  turn  may  offer  benefits  for  societies, 
countries,  and  humanity1.  However,  crises  by  their  very  nature  disrupt  citizens’  lives  as  well  as 
markets and the overall economy. 

The  Single  Market  is  one  of  the  EU’s  greatest  assets  and  provides  the  backbone  for  the  EU’s 
economic growth and wellbeing. For this reason, the functioning of the Single Market needs to be 
guaranteed  in  times  of  emergency  and  crisis.  While  resilience  of  the  Single  Market  is  the  prime 
responsibility of the European businesses, the free movement of goods, services and persons is the 
foundation of the Single Market and underpins a smooth functioning of supply chains, including the 
availability of services and goods. 

In recent years, the world has been witnessing a sequence of crises from the COVID-19 pandemic 
to Russia’s invasion of Ukraine. These will not be the last crises that the world will have to weather. 
In  addition  to  geopolitical  instability,  climate  change  and  resulting  natural  disasters,  biodiversity 
loss, and global economic instability may lead to other, new emergency situations. Unfortunately, 
there is no crystal ball at hand to predict the exact time and form of the next crisis. 

As recent crises have shown, a fully-operational Single Market and smooth cooperation of Member 
States on Single Market issues can considerably strengthen the EU’s resilience and crisis response. 
Therefore,  the  Single  Market  Emergency  Instrument,  for  which  this  Impact  Assessment  analyses 
different policy options, should provide a blueprint for an EU reaction on Single Market matters in 
a future crisis. It should take into account the lessons learned from past emergencies and extrapolate 
them to possible future emergencies. 

This initiative will neither prevent nor solve any upcoming crises. Its aim is to act as a safety net for 
the functioning of the Single Market. It should provide a governance structure for the occasion that 
the smooth functioning of the Single Market is in jeopardy. In close cooperation with all Member 
States and other existing EU crisis instruments, SMEI should provide a targeted toolbox to ensure 
the functioning of the Single Market in any type of future crisis. It is likely that not all of the tools 
assessed in this Impact Assessment will be needed simultaneously. The idea is rather to brace the 
EU  for  the  future  and  equip  it  with  what  may  prove  to  be  necessary  in  a  given  crisis  situation 
affecting the Single Market. 

The  European  Council  in  its  Conclusions  of  1-2  October  20202  stated  that  the  EU  will  draw  the 
lessons  from  the  COVID-19  pandemic  and  address  remaining  fragmentation,  barriers  and 
weaknesses  of  the  Single  Market  in  facing  emergency  situations.  In  the  Update  of  the  Industrial 
Strategy Communication3, the Commission announced an instrument to ensure the free movement 
of persons, goods and services, as well as greater transparency and coordination in times of crisis. 
The initiative forms part of the Commission Work Programme for 20224. The European Parliament 
welcomed the Commission’s plan to present a Single Market Emergency Instrument and called on 
the  Commission  to  develop  it  as  a  legally  binding  structural  tool  to  ensure  the  free  movement  of 

1 https://www.brookings.edu/research/sometimes-the-world-needs-a-crisis-turning-challenges-into-opportunities/  
2 https://www.consilium.europa.eu/media/45910/021020-euco-final-conclusions.pdf.  
3 COM(2021)350 final.  
4 https://ec.europa.eu/info/publications/2022-commission-work-programme-key-documents_en.  

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persons, goods and services in case of future crises5. The initiative is expected to contribute to the 
achievement of the United Nations Sustainable Development Goals (SDGs), in particular  SDG #1 
No  poverty,  SDG  #8  Decent  work  and  economic  growth,  SDG  #9  Industry,  innovation  and 
infrastructure,  SDG  #10  Reduced  inequalities  and  SDG  #16  Peace,  justice  and  strong  institutions 
(see Annex 3 for more details). 

Legal context 

A number of EU legal instruments lay down provisions which are relevant for the management of 
crises  in  general.  On  the  other  hand,  certain  EU  frameworks  and  recently  adopted  Commission 
proposals lay down more targeted measures which focus on certain aspects of crisis management or 
are  relevant  for  specific  sectors.  The  Single  Market  Emergency  Instrument  will  apply  without 
prejudice to the provisions put forward by these targeted crisis management instruments, which are 
to  be  considered  as  lex  specialis.  A  detailed  overview  of  relevant  existing  and  forthcoming 
instruments is included in Annex 9 (see part 2 of this Impact Assessment file). Financial services in 
particular  are  excluded  from  the  scope  of  the  initiative  due  to  the  existence  of  a  dedicated  crisis-
relevant framework in this area. This also notably concerns the Commission Decision establishing 
the  European  Health  Emergency  Preparedness  and  Response  Authority  (HERA)6  and  the 
Commission Proposal for a Regulation on serious cross-border threats to health7. The Single Market 
Emergency  Instrument is  thus  intended to  apply to  non-medical  goods and services  which do not 
fall within the scope of the above-mentioned Proposals, which will be further elaborated below.  

  Interplay with horizontal crisis response mechanisms 

The integrated political crisis response mechanism (IPCR)8 is among the horizontal crisis response 
mechanisms9.  The  Presidency  of  the  Council  of  the  EU  uses  the  IPCR  to  facilitate  information 
sharing and political coordination among the Member States in responding to complex crises. The 
IPCR was activated for the first time in October 2015 for the refugee and migration crisis. Since its 
activation,  it  has  been  instrumental  in  monitoring  and  supporting  the  response  to  the  crisis, 
reporting  to  Coreper,  the  Council  and  the  European  Council.  The  IPCR  has  also  been  used  to 
exercise  the  Union  response  to  major  crises  caused  by  cyber-attacks,  natural  disasters,  or  hybrid 
threats.  More  recently,  the  IPCR  mechanism  has  also  been  convened  after  the  outbreak  of  the 
COVID-19 pandemic.  

Another EU mechanism for general crisis response is the Union Civil Protection Mechanism and its 
Emergency  Response  Coordination  Centre  (ERCC)10.  The  ERCC  is  the  Commission’s  central 
operational  24/7  hub for first  emergency  response, the  establishment of strategic stockpiles  at  the 
EU level for emergency response (“rescEU”), disaster risk assessments, scenario building, disaster 
resilience  goals,  EU  wide  overview  of  natural  and  man-made  disaster  risks,  other  prevention  and 
preparedness measures, such as training and exercises. 

5 European Parliament resolution of 17 February 2022 on  tackling non-tariff and non-tax barriers in the single market 
(2021/2043(INI). 
6 C(2021)6712 final. 
7 COM(2020)727 final.  
8 https://www.consilium.europa.eu/en/policies/ipcr-response-to-crises/. 
9 It was formally set up by Council Implementing Decision (EU) 2018/1993 of 11 December 2018 on the EU Integrated 
Political Crisis Response, on the basis of previously existing arrangements. 
10 Laid down by the Decision (EU) 1313/2013 governing the functioning of the Union Civil Protection Mechanism. 

2 

 
 
 
 
 
                                                           
  Interplay with measures targeting specific aspects of crisis management 

The  above-mentioned  horizontal  crisis  response  mechanisms  are  supplemented  by  other  more 
targeted measures, focusing on specific aspects of the Single Market such as the free movement of 
goods, common rules on exports or public procurement.  

One  such  framework  is  the  Regulation  (EC)  No.  2679/98  setting  up  a  response  mechanism  to 
address obstacles to the free movement of goods attributable to a Member State leading to serious 
disruptions  and  requiring  immediate  action  (‘The  Strawberry  Regulation’)11.  This  Regulation 
provides for a mechanism of notification as well as a system of information exchange between the 
Member States and the Commission. (See sections 8.1 and 8.2 for more details.) 

The Regulation on common rules for exports12 allows the Commission to subject certain categories 
of  products  to  an  extra-EU  export  surveillance  or  to  an  extra-EU  export  authorisation.  The 
Commission was subjecting certain vaccines and active substances used for the manufacture of such 
vaccines to export surveillance13 on this basis.  

Other  economic  measures  include  negotiated  procedure  and  occasional  joint  procurement  by  the 
Commission on behalf of the Member States14.  

  Interplay with sector-specific crisis measures  

Certain  EU  frameworks  lay  down  more  targeted  measures  which  focus  only  on  certain  specific 
aspects of crisis management or only concern certain specific sectors. 

The Commission communication “Contingency plan for ensuring food supply and food security”15 
draws lessons learnt during the COVID-19 pandemic and previous crises with the objective to step 
up coordination and crisis management including preparedness. To this end, the contingency plan 
puts forward key principles to be followed to ensure food supply and food security in the event of 
future crises. To ensure the implementation of the contingency plan and the key principles therein, 
the  Commission  in  parallel  established  the  European  Food  Security  Crisis  preparedness  and 
response  Mechanism  (EFSCM),  a  group  composed  of  Member  States  and  non-EU  countries 
representatives  as  well  as  of  food  supply  chain  stakeholders  chaired  by  the  Commission  to 
strengthen coordination, exchange data and practices. The EFSCM was convened for the first time 
in March 2022 to discuss the impacts of the energy and input price increases and the consequences 
of Russia’s invasion of Ukraine for food security and supply. The market observatories and the civil 
dialogue groups are other fora that ensure transparency and the flow of information in the agri-food 
sector. 

The  Commission  communication  “Contingency  plan  for  transport”16  has  the  objective  to  ensure 
crisis  preparedness  and  business  continuity  in  the  transport  sector.  The  plan  establishes  a  “crisis 
manual” that includes a toolbox consisting of 10 actions aimed at mitigating any negative impact on 
the transport sector, passengers and the internal market in the event of a crisis. These include among 
others measures rendering EU transport laws fit for crisis situations, ensuring adequate support for 

11 Council Regulation (EC) No 2679/98 of 7 December 1998 on the functioning of the internal market in relation to the 
free movement of goods among the Member States, OJ L 337, 12.12.1998, p. 8. 
12 Regulation (EU) 2015/479 of the European Parliament and of the Council of 11 March 2015. 
13 Commission Implementing Regulation (EU) 2021/2071 of 25 November 2021. 
14  They  can  be  adopted  on  the  basis  of  Directive  2014/24/EU  of  the  European  Parliament  and  of  the  Council  of  26 
February 2014 on public procurement and repealing Directive 2004/18/EC. 
15 COM(2021)689 final. 
16 COM(2022)211 final. 

3 

 
 
 
 
                                                           
the  transport  sector,  ensuring  free  movement  of  goods,  services  and  people,  sharing  of  transport 
information, testing transport contingency in real-life situations etc.17 

Regulation (EU) No 1308/2013 establishing a common organisation of the markets in agricultural 
products18 (CMO Regulation) as well as the sister CMO Regulation for fisheries19 provide the legal 
basis for collecting relevant information from Member States to improve market transparency20. 

Regulation  (EU)  2021/953  establishing  the  EU  Digital  COVID  Certificate21  sets  out  a  common 
framework for the issuance, verification and acceptance of interoperable certificates for COVID-19 
vaccination, test or recovery certificates to facilitate free movement of EU citizens and their family 
members  during  the  COVID-19  pandemic.  Furthermore,  based  on  a  Commission  proposal,  the 
Council  adopted  specific  recommendations  on  the  coordinated  approach  to  the  restriction  of  free 
movement in response to COVID-19 pandemic22. 

Finally,  the  Commission  Decision  of  16  September  2021  established  the  Health  Emergency 
Preparedness and Response Authority23 for coordinated action at Union level to respond to health 
emergencies, including monitoring the needs, swift development, manufacturing, procurement and 
equitable distribution of medical countermeasures. 

  Interplay with ongoing initiatives 

In  parallel,  a  number  of  initiatives,  which  have  been  recently  proposed  and  are  currently  being 
discussed,  concern  aspects  relevant  for  the  crisis  response  and  preparedness.  These  initiatives 
however have a limited scope covering specific types of crisis scenarios and are not intended to set 
up  a  general  horizontal  crisis-management  framework.  To  the  extent  these  initiatives  include  a 
sectoral crisis response and preparedness framework, that framework will take precedence over the 
Single Market Emergency Instrument as lex specialis. 

The  Commission  proposal  for  a  Regulation  on  serious  cross-border  threats  to  health,  repealing 
Decision No 1082/2013/EU (the 'Cross-border Health Threats Decision')24 aims at strengthening the 
EU's  health  security  framework,  and  reinforcing  the  crisis  preparedness  and  response  role  of  key 
EU  agencies  with  respect  to  serious  cross-border  health  threats.  It  would  strengthen  the 

17  Additional  measures  include:  managing  refugee  flows  and  repatriating  stranded  passengers  and  transport  workers, 
ensuring  minimum  connectivity  and  passenger  protection,  strengthening  transport  policy  coordination  through  the 
Network of National Transport Contact Points, strengthening cybersecurity and cooperation with international partners.  
18 Regulation (EU) No 1308/2013 of the European Parliament and of the Council of 17 December 2013 establishing a 
common  organisation  of  the  markets  in  agricultural  products  and  repealing  Council  Regulations  (EEC)  No  922/72, 
(EEC) No 234/79, (EC) No 1037/2001 and (EC) No 1234/2007, OJ L 347, 20.12.2013, p. 671. 
19 Regulation (EU) No 1379/2013 of the European Parliament and of the Council of 11 December 2013 on the common 
organisation of the markets in fishery and aquaculture products, amending Council Regulations (EC) No 1184/2006 and 
(EC) No 1224/2009 and repealing Council Regulation (EC) No 104/2000. OJ L 354, 28.12.2013, p. 1. 
20 Following Russia’s invasion of Ukraine, the obligation for Member States to provide monthly notifications of cereal 
stocks has been included in an amendment to Commission Implementing Regulation (EU) 2017/1185 of 20 April 2017 
laying  down  rules  for  the  application  of  Regulations  (EU)  No  1307/2013  and  (EU)  No  1308/2013  of  the  European 
Parliament and of the Council as regards notifications to the Commission of information and documents and amending 
and repealing several Commission Regulations, OJ L 171, 4.7.2017, p. 113. 
21 Regulation (EU) 2021/953 of the European Parliament and of the  Council of 14 June 2021 on a framework for the 
issuance, verification and acceptance of interoperable COVID-19 vaccination, test and recovery certificates (EU Digital 
COVID Certificate) to facilitate free movement during the COVID-19 pandemic, OJ L 211, 15.6.2021, p. 1. 
22 Council Recommendation (EU) 2020/1475 of 13 October 2020 on a coordinated approach to the restriction of free 
movement in response to the COVID-19 pandemic, OJ L 337, 14.10.2020, p. 3 and its subsequent updates.  
23 C(2021)6712 final.  
24 COM(2020)727 final.  

4 

 
 
 
 
                                                           
preparedness  and  response  planning  and  reinforce  epidemiological  surveillance  and  monitoring, 
improve data reporting, strengthen EU interventions. 

The Commission proposal for a Council Regulation on a framework of measures for ensuring the 
supply  of  crisis-relevant  medical  countermeasures  in  the  event  of  a  public  health  emergency  at 
Union level25 provides for crisis response tools such as joint procurement, mandatory information 
requests for businesses about their production capacities, and repurposing production lines in case 
of public health crises once a public health emergency would be declared. The declaration of an EU 
emergency  situation  would  trigger  increased  coordination  and  allow  for  the  development, 
stockpiling  and  procurement  of  crisis-relevant  products.  The  proposal  covers  medical 
countermeasures and medicinal products for human use but not medical services. 

The Commission proposal for the European Chips Act26 aims to strengthen Europe’s semiconductor 
ecosystem. One important pillar of this strategy is to set up a mechanism for coordinated monitoring 
and response to shortages in the supply of semiconductors, aiming to anticipate and swiftly respond 
to  any  future  supply  chain  disruptions,  through  a  dedicated  emergency  toolbox,  together  with 
Member States and international partners. 

The Commission proposal for a Data Act27 will allow public sector bodies to access data held by the 
private  sector  that  is  necessary  for  exceptional  circumstances,  particularly  to  implement  a  legal 
mandate  if  data  are  not  otherwise  available  or  in  case  of  a  public  emergency  (i.e.  exceptional 
situation negatively affecting the population of the Union, a Member State or part of it, with a risk 
of  serious  and  lasting  repercussions  on  living  conditions  or  economic  stability,  or  the  substantial 
degradation of economic assets in the Union or the relevant Member State(s)). 

The  Commission  proposal  to  amend  the  Schengen  Borders  Code28  aims  to  provide  a  common 
response at the internal borders in situations of threats affecting a majority of Member States. The 
proposal will also put in place procedural safeguards in case of unilateral reintroductions of internal 
border controls and provide for the application of mitigating measures and specific safeguards for 
cross-border  regions  in  cases  where  internal  border  controls  are  reintroduced.  The  proposal 
promotes increased use of effective alternative measures to address the identified threats to internal 
security or public policy instead of internal border controls, for instance increased checks by police 
or other authorities in border regions, subject to certain conditions. The proposal also includes the 
possibility  for  the  Council  to  quickly  adopt  binding  rules  setting  out  temporary  travel  restrictions 
for third country nationals at the external borders in case of a threat to public health. It also clarifies 
which  measures  Member  States  can  take  to  manage  the  EU's  external  borders  effectively  in  a 
situation where migrants are instrumentalised by third countries for political purposes. 

The Commission proposal for a revision of the Financial Regulation, scheduled for adoption by the 
Commission in  the course of 2022, adapts  the applicable procurement rules in  crisis  management 
situations to allow an EU institution or body to procure on behalf of Member States or to act as a 
central purchasing body in order to donate or resell supplies and services to Member States, as well 
as  to  launch  joint  procurement  procedures  despite  the  EU  institutions  not  acquiring  services  and 
supplies for themselves. It also updates the definition of a crisis to include public health emergency 
situations  and  provides  for  triggering  the  crisis  provisions  in  line  with  applicable  internal 
procedures. 

25 COM(2021)577 final.  
26 COM(2022)46 final.  
27 COM (2022)68 final.  
28 COM (2021)891 final.  

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The  proposal  for  a  Directive  on  the  resilience  of  critical  entities  adopted  by  the  Commission  in 
December 202029 has the objective to enhance the resilience of entities providing services that are 
essential  for  the  maintenance  of  vital  societal  functions  or  economic  activities  the  EU.  With  this 
initiative,  the  aim  is  to  create  a  comprehensive  framework  to  support  Member  States  in  ensuring 
that  critical  entities  providing  essential  services  are  able  to  prevent,  protect  against,  respond  to, 
resist, mitigate, absorb, accommodate and recover from disruptive incidents such as natural hazards, 
accidents  or  terrorism.  The  Directive  will  cover  eleven  key  sectors,  including  energy,  transport, 
banking and health. 

2.  PROBLEM DEFINITION 

2.1 What is/are the problems?  

The  purpose  of  the  initiative  is  to  provide  immediate  solutions  to  ensure  that  the  Single  Market 
works as it should during crises. 

Recent  crises  have  demonstrated  how  fragile  the  Single  Market  can  be  in  case  of  unforeseen 
disruptions and at the same time, how much the European economy and all its stakeholders rely on 
a well-functioning Single Market. The impact of a crisis on the Single Market can be two-fold. On 
the one hand, a crisis can lead to the appearance of  obstacles to  free movement within the Single 
Market, thus disrupting its normal functioning. On the other hand, a crisis can amplify the shortages 
of crisis-relevant goods and services if the Single Market is fragmented and is not functioning. This 
is why this Impact Assessment focusses on two separate but interrelated problems: obstacles to free 
movement and shortages of crisis-relevant goods and services.  

While this problem definition draws a great deal upon the lessons learnt from the COVID-19 crisis, 
it is only one example highlighting the possible negative consequences for the Single Market that 
may  arise  in  case  of  crisis  situations.  The  scope  of  this  initiative  is  not  to  provide  solutions  to 
overcome  a  future  crisis  as  a  whole,  but  rather  to  enable  a  swift  and  flexible  response  to  Single 
Market impacts of a crisis. Against this background, the main problems identified and addressed by 
this Impact Assessment are described below. 

2.1.1 Obstacles to free movement of goods, services and persons in times of crisis 

The proper functioning of the Single Market can be disrupted in a crisis situation, either by forces of 
nature or by national regulatory responses such as restrictions on free movement of goods, services 
and persons, which can have legitimate objectives such as protecting public health. Supply chains 
can swiftly become interrupted, companies face difficulties in sourcing, supplying or selling goods 
and  services.  The  access  of  consumers  to  key  products  and  services  then  becomes  disrupted. 
Additionally  to  public  health  and  security  risks,  citizens,  and  in  particular  vulnerable  groups,  are 
also confronted with strong negative economic impacts. 

On  what  concerns  the  free  movement  of  goods,  cross-border  delivery  of  goods  was  typically 
permitted during the COVID-19 crisis. Nonetheless, the increased border checks created delays and 
costs  for  cross-border  transport  of  goods.  Cross-border  intra-EU  trade  in  goods  declined 
substantially during the first wave of the pandemic, contracting by a third in April 2020, but then 
recovered to nearly normal levels over the summer of 202030. 

29 COM(2020)829 final. 
30 Study by IMCO Committee “The impact of COVID-19 on the internal market”. 

6 

 
 
 
 
                                                           
More specifically, during the COVID-19 crisis, the vast majority of Member States (amounting to 
19 Member States) introduced different types of export restrictions and other restrictions distorting 
the  Single  Market  for  goods.  Examples  of  such  measures  included  suspension  of  exports  of 
agricultural  and  food  products  and  export  bans  for  COVID-related  material  including  personal 
protective  equipment.  A  new  intra-EU  export  restriction  on  agricultural  products  of  strategic 
importance  was  introduced  by  Hungary  in  the  context  of  Russia’s  invasion  of  Ukraine.  These 
obstacles to the free movement of goods have also contributed to the problem of supply shortages, 
as discussed in the following sub-section. 

Most  restrictions  of  the  free  movement  of  goods  were  lifted,  often  following  bilateral  contacts 
between the Commission and the Member States in question. However, addressing the patchwork 
of  restrictions  required  a  lot  of  ad  hoc  solutions  including  political  level  intervention  and  was 
lengthy due to a lack of transparency, cooperation and solidarity between Member States. 

For what concerns free movement of services and persons, the key relevant restrictive measures 
adopted  by  some  Member  States  to  protect  public  health  and  on  the  basis  of  the  precautionary 
principle  were:  1)  intra-EU  travel  bans  (including  entry  and  exit  bans  and  bans  on  non-essential 
travel)31, 2) temporary reintroduction of border controls in order to better enforce travel restrictions, 
and  3)  the  requirements  for  certain  cross-border  travellers  to  undergo  quarantine  and/or  testing 
when crossing the borders.  

Following the introduction of entry/exit bans and related travel restrictions and the reintroduction of 
internal border controls, there was a strong negative effect on free movement of goods, services and 
persons.  There  were  significant  truck  build-ups  and  long  waiting  times  on  a  number  of  internal 
borders. For example, after the introduction of new restrictions by Germany on 14 February 2021 
including  testing  requirements  for  truck  drivers,  there  were  traffic  jams  of  up  to  25  km  on  the 
Czech-German border32 and there were queues of up to 40 km long in  Italy ahead of the Brenner 
pass into Austria33. 

Measures  applicable  at  the  internal  borders  have  severely  disrupted  labour  mobility  in  the  Single 
Market. This has particularly affected almost 2 million cross-border workers34. Consequently, there 
has been a shortage of seasonal agriculture sector workers in many Member States, including Italy, 
Spain  and  Germany,  whose  economic  model  depend  on  such  labour.  Engineers  could  not  service 
breakdowns  in  industrial  machines  across  the  border  due  to  quarantine  requirements35.  Many 
countries are heavily reliant on cross-border workforce, e.g. in Luxembourg 45% of the work force 
was commuting from neighbouring countries across the border in 201936.  

Barriers  affecting  transport  workers/transport  service  providers  also  have  a  major  impact  on  the 
flow of goods across the Single Market. Restrictions on free movement of persons coupled with the 
reintroduction of internal  border controls  led to disruptions of movement of trucks across borders 

31 Special Report  13/2022  of the European Court of Auditors of 13 June  2022  “Free  movement in the EU during the 
COVID-19 pandemic”. 
32  According  to  press  reports:  https://www.dpa-international.com/topic/lorries-queue-german-czech-border-entry-bans-
cause-headache-urn%3Anewsml%3Adpa.com%3A20090101%3A210215-99-450723.  
33  According  to  press  reports:  https://www.ansa.it/nuova_europa/en/news/sections/news/2021/02/15/covid-40-km-
queue-of-trucks-between-brixen-and-brenner_dabde036-b65e-428d-a4da-017fad1bf982.html. 
34 European Parliament, Briefing - Single market and the pandemic: Impacts, EU action and recovery Single market and 
the pandemic (europa.eu), June 2020, p. 5. 
35 Information exchange with BusinessEurope, 2020. 
36 Report “State of Health in the EU Luxembourg Country Health Profile” 2019, p. 9. 

7 

 
 
 
 
                                                           
and therefore posed risks of disruption in manufacturing supply chains, in addition to direct costs 
due to perishable fresh food being stuck in traffic.  

Overall,  these  events  have  exposed  the  EU’s  economy  to  an  unprecedented  and  sustained  shock, 
with  the  EU  economy  contracting  by  6.3%  over  the  course  of  202037.  The  impact  is  further 
demonstrated by intra-EU trade falling by 24% during the second and third quarter of 202038. While 
a large part of the contraction in GDP was due to local restrictions, the contraction in the intra-EU 
trade was likely in substantial part caused by the obstacles to free movement. 

In the context of global megatrends such as climate change and pressure on democratic models of 
governance  and  values  as  identified  by  Strategic  Foresight  reports39,  other  potential  crises  could 
also  lead  to  Member  States  introducing  restrictions  on  free  movement.  Such  crises  could  include 
natural  disasters,  technological  disasters,  geopolitical  threats,  migration  crises,  terrorist  attacks, 
financial crises, another pandemic, or a crisis of a completely unpredictable nature. 

In the case of a natural disaster, such as a volcano eruption, a flood or an earthquake, items needed 
in the first response could be of particular necessity and export restrictions could be introduced by 
Member States  for such  items.  In the case of  a technological  disaster, such as a nuclear accident, 
export  restrictions  could  similarly  be  introduced  by  Member  States  for  items  needed  in  the  first 
response or helpful to mitigate the effects of the disaster. Furthermore, it is possible that restrictions 
on free movement of persons could be introduced in order to cordon off the area of disaster. In such 
a  case,  ensuring  the  freedom  of  movement  for  key  personnel  in  managing  the  disaster  at  stake 
would be of particular importance. 

In  the  case  of  terrorist  attack,  for  example  an  attack  on  a  major  port,  the  most  important 
consequence  could  be  the  introduction  of  restrictions  on  free  movement  of  persons.  As  a  second 
order  effect,  an  interruption  in  the  functioning  of  a  major  port  could  lead  to  supply  chain 
bottlenecks, which could amplify any existing shortages. A migration crisis in itself is unlikely to 
lead to restrictions to free movement, as in recent experience the actions taken by Member States in 
this context focused on the reintroduction of border controls. 

Another  pandemic  could  likely  lead  to  similar  effects  on  the  Single  Market  in  the  absence  of  a 
solution,  i.e. reappearance of restrictions for free  movement  of persons  and of export restrictions. 
Effects  of  geopolitical  instability  could  include  trade  sanctions  and  other  disruptions  of  supply 
which  may  result  in  shortages  of  specific  products,  which  could  lead  to  export  restrictions  in  the 
Single Market. 

Financial  crises  are  unlikely  by  themselves  leading  to  restrictions  of  free  movement,  as  financial 
services  are  outside  of  the  scope  of  the  initiative.  There  could  be  other  crises  of  completely 
unpredictable  nature  that  could  lead  to  appearance  of  free  movement  restrictions  and  the  need  to 
coordinate. 

The  two  problems  considered  by  this  Impact  Assessment  are  interrelated,  as  obstacles  to  free 
movement can lead to or exacerbate shortages of crisis-relevant products and vice versa. However, 
as shortages of crisis-relevant products can also have a number of other drivers, we consider the two 
problems separately. 

37 Annual Single Market Report 2021, SWD(2021)351 final, p. 1. 
38 Annual Single Market Report 2021, SWD(2021)351 final – Figure 1, p. 9. 
39 2021 Strategic Foresight report, https://ec.europa.eu/info/sites/default/files/strategic_foresight_report_2021_en.pdf. 

8 

 
 
 
 
                                                           
2.1.2 Shortages of crisis-relevant goods and services 

Shortages of crisis-relevant goods and services in times of crisis 

A shortage could be defined as an imbalance between supply and demand affecting not only prices 
but also quantities40. While structural problems require long-term structural solutions, the focus of 
this initiative is  on the shortages of crisis-relevant  goods  and services in situations of emergency, 
which can be severely amplified during a crisis by a non-functioning Single Market. This could be 
due to Member States competing against each other in securing the availability of such products in 
separate and uncoordinated public procurement procedures. This could also be due to the Member 
States imposing uncoordinated and contradictory  national measures such as export restrictions. Or 
this could be because the relevant Single Market legislation does not allow to place crisis-relevant 
products on the market with the appropriate urgency.  

During  the  COVID-19  crisis,  while  most  companies  and  supply  chains  showed  a  high  degree  of 
resilience and adaptability, sudden supply and demand shocks for crisis-relevant products have led 
to acute shortages of such products. There was an unprecedented surge in demand for certain types 
of personal protective equipment (PPE), especially during the first wave of the pandemic. With the 
exception  of  a  few  specific  legal  frameworks,  the  New  Legal  Framework  does  not  foresee  any 
emergency  procedures  for  placing  products  on  the  market.  Tremendous  ad  hoc  efforts  by  the 
Commission, the Member States and industry eventually led to a significant increase in production 
capacity for PPE in the EU.  

Shortages of crisis-relevant products can also lead to degraded quality of products. According to the 
market  surveillance  authorities  for  PPE,  due  to  a  surge  of  deployment  of  masks  on  the market  to 
meet the high demand during the first wave of the pandemic, between 60 and 80% of face masks 
checked  by  them  failed  their  test41.  The  data  recorded  in  the  Safety  Gate/RAPEX  Rapid  Alert 
System  for  dangerous  non-food  products  confirms  this:  in  2020,  171  measures  were  reported 
against  face  masks  that  did  not  fulfil  the  minimum  health  and  safety  requirements.  For  the  year 
2021  this  amounted  to  147  cases  (in  2020,  7%  of  the  alerts  on  Safety  Gate  concerned  protective 
masks,  in  2021  this  was  6%).  Yet,  low  quality  products,  especially  for  PPE,  defeat  their  purpose 
because they put people at risk rather than protecting them. 

Additionally, in the context of a crisis response, intra-EU export restrictions can have the effect of 
limiting  supplies  and  disrupting  supply  chains  of  goods  that  are  critical  for  the  crisis  response, 
thereby having a detrimental effect not only on the functioning of the Single Market but also on the 
well-being of citizens and the effectiveness of the overall EU crisis response.  

During the COVID-19 crisis,  there was a risk of Member States competing against each other by 
launching  separate  public  procurement  procedures  for  the  same  crisis-relevant  products.  The 
Commission  together  with  the  Member  States  launched  joint  public  procurement  for  various 
medical goods relying on the Emergency Support Instrument. At the moment of drafting this Impact 
Assessment, outside of the field of civil protection, there is no structured framework for making use 
of joint public procurement allowing the Commission or other EU institutions to procure goods on 
behalf of the Member States on its own, or to procure flexibly at the time of crisis. 

40 Detecting and Analysing Supply Chain Disruptions, DocsRoom - European Commission (europa.eu). 
41 EUPCN, ADCO PPE, presentation 9 June 2021. 

9 

 
 
 
 
                                                           
In the context of global megatrends such as climate change or geopolitical instability, a number of 
different  types  of  crisis  can  lead  to  the  situations  where  shortages  of  crisis-relevant  products  are 
amplified by the non-functioning Single Market.  

In  the  case  of  a  natural  disaster,  for  example  an  earthquake,  joint  procurement  and  accelerated 
placing  of  products  on  the  market  could  be  needed  for  ensuring  the  availability  of  products  and 
services needed in the first response, in addition to ensuring free movement. Similarly, in the case 
of a nuclear accident or another technological disaster, there could be shortages of items needed to 
respond to the disaster, in which case joint procurement and/or accelerated placing of products on 
the  market  could  be  needed,  as  well  as  potentially  more  far-reaching  solutions  on  ensuring  the 
availability of supply of such products. 

In  the  case  of  a  terrorist  attack  on  a  key  transportation  route  the  result  could  be  a  significant 
transportation bottleneck, leading to a critical shortage of products.  

While  specific  medical  countermeasures  would  be  covered  by  the  relevant  instruments,  another 
pandemic  could  lead  to  an  unpredictable  shortage  of  products  needed  to  combat  that  specific 
pandemic, which could require solutions to tackle such a shortage. Effects of geopolitical instability 
could include disastrous disruptions of supply of crisis-relevant products and services, which may 
require very far-reaching solutions to ensure the availability of supply. There could be other crises 
of completely unpredictable nature resulting in deep shortages of crisis-relevant products. 

Structural supply chain constraints that could lead to or aggravate shortages during a given crisis  

The EU gains resilience from world markets being open and integrated in global value chains. The 
ongoing  monitoring  of  Critical  Raw  Materials  and  two  rounds  of  In-depth  Reviews  of  Strategic 
Dependencies42 have substantially contributed to a deeper understanding of the EU’s supply chains 
vulnerabilities that could entail shortages of goods or services in a crisis situation. Such structural 
issues require more long-term solutions reinforcing the EU open strategic autonomy, for example in 
fields such as raw materials, semiconductors and energy. Yet, disruptions can affect specific crisis-
relevant products and inputs that are particularly critical for the good functioning of society and the 
EU economy during an emergency. While an emergency by itself can lead to a shortage of crisis-
relevant  goods  and  services,  in  an  emergency  any  existing  structural  problem  is  likely  to  be 
amplified  –  as  it  happened  during  the  COVID-19  crisis  for  semiconductors,  and  with  Russia’s 
invasion of Ukraine for energy and a number of raw materials. Russia’s invasion of Ukraine and the 
related sanctions and countersanctions have put pressure on global supply chains, including in the 
agri-food  sector  and  inputs  such  as  fertilisers,  animal  feed  and  energy,  with  farmers  being 
confronted  with  higher  prices  for  basic  inputs.  This  has  also  led  to  restrictions  affecting  the 
functioning of the Single Market. 

Some of these vulnerabilities have de facto shown their ability to affect the Single Market. Overall, 
in the course of 2021 and 2022, there has been mounting evidence across countries and industrial 
ecosystems  about  supply  chains  distress,  and  in  particular  about  specific  supply  shortages.  For 
instance, the share of firms reporting shortages in equipment in the third quarter of 2021 was 57.8% 
in the motor industry and 52.2% for electrical equipment43. Respondents to the public consultation 

42 SWD(2021)352 and SWD(2022)41. In particular, they have  shed light on the strategic  dependencies,  especially on 
China, affecting the energy intensive industries (critical raw materials in general, rare earth and magnesium, chemicals), 
health  (active  pharmaceutical  ingredients),  renewable  energy  (e.g.  permanent  magnets,  photovoltaic  panels  and 
technologies) and digital (e.g. semiconductors, cloud services, cybersecurity technologies) industries. 
43 Annual Single Market Report 2022, SWD(2022)40 final.  

10 

 
 
 
 
                                                           
pointed to difficulties when wishing to purchase goods, such as the product not being available for 
purchase, the product being available with a very high price increase or with a very high delay in 
delivery  time.  This  has  moreover  led  to  upward  pressure  on  prices,  mainly  observed  in  industry 
sectors, but also in certain services sectors. Many of these shortages have structural origins, yet the 
impacts  of  such  shortages  during  an  emergency  might  have  severe  disruptive  effects  on  the 
availability  of  crisis-relevant  products  and  might  require  quick  corrective  actions  to  support  the 
functioning of the Single Market. 

2.2 What are the problem drivers? 

The links between problems, problem drivers and consequences are illustrated in the problem tree 
graph above. The drivers and consequences related to problem 1 are marked in pink, those related to 
problem  2 are marked in  light  yellow and those related to  both  are in light  blue. As  explained in 
Section 2.1, the two problems are interrelated as obstacles to free movement in times of crisis can in 
themselves lead to or exacerbate shortages of crisis-relevant goods and services and vice versa.  

1.  Dedicated  fora  do  not  exist  or  the  existing  fora  are  unable  to  deal  with  Single  Market 

vigilance and crisis response (communication, coordination, decisions)  

There  are  various  mechanisms  and  groups  at  the  EU  level  dealing  with  crisis  vigilance  and 
response; from the Integrated Political Crisis Response (IPCR) mechanism for crisis coordination in 
the  Council,  the  Union  Civil  Protection  Mechanism  (UCPM)  and  its  Emergency  Response 
Coordination  Centre  (ERCC)  for  first  emergency  response  coordination  with  Member  States  and 
other Participating States in the UCPM to sector specific expert bodies such as the European Food 
Security  Crisis  preparedness  and  response  Mechanism  (EFSCM)  or  other  sectoral  expert  groups, 
such  as  for  example  the  national  transport  contact  points  network,  which  discuss  crisis-related 
matters when warranted. However, the existing fora either have not been designed for information 
sharing,  coordination  and  cooperation  on  the  Single  Market  impacts  of  crises  or  do  not  allow 

11 

 
 
 
 
 
 
discussing  cross-cutting  or  interconnected  Single  Market  impacts  of  the  crises  in  several  areas 
together.  Under  the  currently  applicable  EU  legal  frameworks,  the  Member  States  are  obliged  to 
exchange crisis-relevant information between themselves only in the area of civil protection.  

The  COVID-19  pandemic,  in  particular  during  its  early  stages,  showed  that  Member  States  are 
prone  to  act  on  their  own,  although  confronted  with  the  same  threat.  There  is  no  explicit  legal 
obligation  for  Member  States  to  consult  or  inform  each  other  about  their  crisis  measures  in 
general44. 

IPCR focused at the start of its activation under the Croatian Presidency on the health aspects, and 
only later started to take into account the effects of COVID-19 on other policy areas, such as border 
management  and  transport.  Whereas  the  IPCR  is  providing  for  communication  and  coordination 
between  the  Member  States  at  the  times  of  crisis,  assisted  by  the  Commission,  it  has  not  been 
designed to address and resolve the impacts of the crises on the Single Market, such as availability 
of crisis-relevant  goods and services. This follows in part from Article 222 TFEU, the legal basis 
for the Council  Implementing Decision on  IPCR, which focuses on humanitarian, civil  protection 
and  defence  matters.  Also,  although  allowed  to  intervene  in  the  event  of  natural  and  man-made 
disasters,  such  interventions  are  limited  to  the  Member  States  whose  political  authorities  have 
requested the involvement of the IPCR. The requirement of request by the political authorities of all 
concerned Member States before being able to discuss the crisis concerned in the IPCR is not likely 
to  allow the  IPCR in  its  current  form to  get  involved in  a timely manner, where  a Single Market 
emergency would occur. Due to its high level of political representation, it is also not able to go into 
much technical detail in its discussions and does not allow for live coordination at a technical level. 

Therefore, while IPCR proved to be a useful tool that contributed to the EU’s crisis response during 
COVID-19,  the  existing  EU  emergency  instruments/mechanisms  overall  do  not  have  the  Single 
Market  in  their  focus  and  do  not  represent  a  pre-agreed  and  formalised  institutional  answer  to  a 
health crisis or another crisis involving cross-cutting restrictions of free movement and/or shortages 
of crisis-relevant goods and services. 

Finally,  there  would  also  be  instances  of  bilateral  or  regional  cooperation  between  the  Member 
States  aiming  at  coordination  and  cooperation  between  the  participating  Member  States,  but  they 
would not cover the whole Single Market. 

2.  Lack  of  preventive  measures  at  EU  and  national  level  such  as  forecasting,  emergency 

trainings, mitigations measures for crisis situations such as stockpiling  

Several  Member  States  operate  a  specific  monitoring  system  used  through  their  own  crisis 
management tools/contingency plans to gather information from economic operators and assess the 
situation  to  reduce  negative  impacts  of  a  crisis  on  businesses.  Crisis  management  systems  at 
Member State level are setting up monitoring systems targeting vital service providers and strategic 
supply  chains  for  crisis-relevant  products.  Member  States  have  designated  critical  sectors  and 
industrial  ecosystems  (such  as  energy,  health,  transport,  agri-food,  cybersecurity)  that  require  a 
more acute monitoring. Such sectors must be involved in the collection of targeted information and 

44  The  Single  Market  Transparency  Directive  sets  up  a  TRIS  system,  which  requires  Member  States  to  notify  draft 
restrictions  of  free  movement  of  goods  and  information  society  services.  Such  notification  is  followed  by  a  three 
months standstill period during which other Member States and the Commission may provide written comments on the 
notified  measures.  In  case  of  any  comments  that  standstill  period  is  prolonged  by  another  three  months.  In  case  of 
important reasons, Member States may ask under the urgency procedure the Commission to allow them within 10 days 
to waive the 3+3 months standstill period and peer review and adopt the measures. 

12 

 
 
 
 
                                                           
develop  strategic  plans  in  order  to  avoid  supply  chain  disruptions.  Data  are  collected  through 
business  associations  to  identify,  to  the  extent  possible,  interruptions  in  the  free  movement  of 
goods, services and people and shortages of crisis-relevant goods and services affecting the Single 
Market  thanks  to  a  better  knowledge  of  the  market.  For  example,  the  current  market  information 
systems  in  Spain  have  made  it  possible  to  detect  market  crisis  situations  caused  by  high  market 
availabilities  (stocks  and/or  productions)  together  with  significant  price  reductions.  Business 
associations  gather  information  from  companies  on  a  sectoral  basis,  for  sharing  information  with 
and  having  a  dialogue  with  public  authorities. SMEs  and  micro-enterprises  also  participate  in  the 
monitoring system as well as economic observatories. Spain  develops  a system of declarations of 
stock  levels  for  certain  agricultural  goods.  However,  only  several  Member  States  confirmed  the 
existence of such monitoring, which is scattered across the EU and lacks coherence. Furthermore, 
the  findings  stemming  from  monitoring  at  national  level  may  not  reach  the  Commission  and/or 
other Member States and may not be collectively discussed with a view to inform possible action.  

At the EU level, there is a lack of formal preventive tools such as forecasting or strategic reserves in 
view of addressing possible supply chain shortages in the Single Market during crises. Before the 
COVID-19  pandemic,  there  was  no  structured  monitoring  tool  that  could  provide  reliable,  up-to-
date  quantitative  information  on  the  situation  of  supply  chains  (in  particular  the  balance  between 
demand and supply) for  critical  equipment  during the pandemic. The Clearing  House for medical 
equipment  was  therefore  created  as  an  ad  hoc  solution.  The  Commission  has  thereafter  sought  to 
address the lack of reliable and standardised data, intelligence gathering and monitoring of medical 
countermeasures specifically in the framework of proposed instruments linked to HERA.  

In  certain  areas  including  agricultural  products,  EU  legislation45  provides  the  legal  basis  for 
collecting relevant information from Member States to ensure market transparency. This monitoring 
supports  forecasting  and  serves  to  inform  possible  mitigation  measures.  Measures  to  improve  the 
EU’s ability to  anticipate or prevent  shortages  are or may be discussed in formal and/or informal 
fora  such  as  sectoral  expert  groups  or  ad  hoc  work  streams.  For  instance,  the  Chief  Economist 
Network  working  group  recently  set  up  by  the  Commission’s  Directorate-General  for  Internal 
Market,  Industry,  Entrepreneurship  and  SMEs  with  the  Member  States  has  been  discussing 
analytical  methods  useful  for  detecting  and  analysing  supply  chain  disruptions,  as  well  as  a 
Shortages  Alert  System  based  on  official  statistics  concerning  the  price  evolution  for  goods  and 
stakeholders’  expectations  about  factors  affecting  the  supply  and  demand  of  products.  However, 
while  these  discussions  are  extremely  valuable  to  build  a  common  understanding  of the  relevant 
market developments and to fine-tune the methodology for assessing these developments, they can 
hardly  go  beyond  an  informal  exchange  of  information  and  cannot  trigger  a  coordination  of  the 
possible  policy  responses.  In  addition,  the  Commission  has  been  regularly  monitoring  relevant 
developments in the area of critical raw materials specifically46, which could provide inspiration for 
monitoring also beyond the raw materials area. 

There  is  no  appropriate  Early  Warning  System  whereby  the  Member  States  could  notify 
information  to  the  Commission  on  shortages  of  goods  or  services  that  result  from  Single  Market 
impacts of an emergency situation or about any developments that would lead to those. The Early 
Warning System of the Strawberry Regulation47 allows for notification of free movement obstacles 

45 See e.g. Regulation (EU) No 1308/2013 establishing a common organisation of the markets in agricultural products 
(Common Market Organisation or CMO regulation). 
46 https://ec.europa.eu/growth/sectors/raw-materials/areas-specific-interest/critical-raw-materials_en. 
47 Council Regulation (EC) No 2679/98 of 7 December 1998 on the functioning of the internal market in relation to the 
free movement of goods among the Member States, OJ L 337, 12.12.1998, p. 8. 

13 

 
 
 
 
                                                           
between two Member States to the Commission but is rarely used. Member States may in principle 
raise  any  free  movement  obstacles  for  discussion  in  the  Single  Market  Enforcement  Task  Force. 
However,  its’  scope  is  not  focused  on  enforcement  matters  for  crisis  management.  The  Early 
Warning and Response System operated by DG ECHO is designated for early warning concerning 
natural disasters that might need to be followed up by humanitarian assistance and civil protection 
measures. The mechanism for early warnings proposed in Article 15 of the Chips Act for Europe 
proposal  concerns  semiconductors,  their  parts  and  the  raw  materials  that  are  needed  for  their 
production. The Early Warning System contained in the proposal for the Cross-border health threats 
Regulation  proposal  concerns  threats  to  public  health,  not  shortages  of  goods  and  services  at  the 
time of public health emergencies. 

As far as stockpiling or strategic reserves are concerned, apart from emergency oil/gas reserves and 
reserves  in  the  field  of  civil  protection48,  there  are  currently  no  EU-level  measures  or  initiatives. 
While strategic reserves are a way to address short-term supply chain disruptions or imbalances, the 
interest in strategic reserves has increased due to the unstable geopolitical situation brought forward 
by  Russia’s  invasion  of  Ukraine  as  well  as  other  factors  including  Europe’s  dependency  on  third 
countries  for  certain  goods.  For  example,  in  the  area  of  security  of  supply  for  energy,  Russia's 
invasion of Ukraine has aggravated the situation and driven energy prices to unprecedented levels. 
This situation prompted the Commission to present a legislative proposal requiring underground gas 
storage  across  the  EU  to  be  filled  in  at  least  80%  of  their  storage  capacity  by  1  November  2022 
(rising to 90% in subsequent years)49. 

By  way  of  example,  international  like-minded  partners  including  USA,  Japan  and  Switzerland 
already  dispose  of  strategic  reserves  arrangements  and  can  rely  on  legal  instruments  allowing  for 
the adoption of additional measures in this respect (e.g. the US Defense Production Act or Japan’s 
JOGMEC, see Annex 8 for an overview). 

When it comes to preventive measures by the industry, many companies have adapted their supply 
chain  “thinking” and introduced mitigating measures following Russia’s  invasion of Ukraine. For 
instance,  according  to  a  survey  of  its  members  carried  out  by  VDMA,  the  German  umbrella 
association  representing  the  mechanical  engineering  industry,  more  than  80%  of  respondents 
have  changed  or  considered  changing  their  procurement  principles  or  opted  for  increased 
stockholding further to Russia’s invasion50. 

According to a survey of Member States carried out by the Commission in May 2022, the picture is 
mixed when it comes to preventive measures in place at national level. The survey looked at crisis 
preparedness  measures  already  in  place  in  the  Member  States  and  in  particular,  the  presence  (or 
absence)  of  national  monitoring  systems  and  strategic  storage  or  stockpiling  systems  of  goods  of 
key importance. As regards monitoring, several Member States have implemented risk assessment 
mechanisms  in  designated  critical  sectors  and  strengthened  the  exchange  of  information  between 
stakeholders in such sectors and national competent authorities. Regarding strategic reserves, most 
Member  States  do  not  have  stockpiling  systems  in  place.  However,  certain  Member  States  have 

48 The rescEU strategic reserves at the EU level for capacities in the area of emergency response (response teams with 
equipment  and/or  critical  items/goods  for  first  response  operations).  Such  capacities  are  currently  available  or  under 
development  in  line  with  Article  12  of  Decision  1313/2013  in  the  areas  of  forest  fire  fighting,  emergency  health, 
chemical, biological, radiological and nuclear incidents, transport and logistics, shelter and energy supply. For example, 
in direct response to the COVID-19 pandemic, specific stockpiles of medical countermeasures have been set up under 
rescEU in a number of Member States. 
49 COM(2022) 135 final. 
50 Results of the 14th VDMA Flash Survey Mechanical Engineering, from 5 to 6 April 2022.  

14 

 
 
 
 
                                                           
established  systems,  such  as  Finland  and  specifically  it’s  National  Emergency  Supply  Agency. 
Recent  initiatives  or  fora  in  this  area  include  Estonia’s  Stockpiling  Agency,  operating  since  July 
2021,  the  creation  by  the  Spanish  National  Security  Council  of  the  Strategic  Reserve  based  on 
Industrial  Production  Capacities  in  October  2020,  and  the  Polish  Government  Programme  of 
Strategic Reserves created in December 2020. Other Member States have set up strategic stocks for 
specific  products  (e.g.  gas,  basic  food  and  drinking  water,  protective  equipment  or  medicinal 
products). Russia’s invasion of Ukraine, meanwhile, has prompted more Member States to initiate 
plans including dedicated task forces to manage supply chain disruptions through similar measures.  

3.  Divergent and not well targeted Single Market restrictions by Member States during crisis 

situations 

Neither  primary  EU  law,  nor  any  of  the  secondary  EU  law  instruments  with  the  exception  of  the 
legislation  concerning  financial  services,  lay  down  crisis-specific  provisions  for  the  purpose  of 
ensuing  coordination  of  the  measures  that  the  Member  States  may  adopt  in  response  to  the 
disruptions to the functioning of the Single Market. 

Over  the  course  of  recent  crises,  Member  States  have  been  introducing  restrictions  affecting  the 
functioning of the Single Market that were  not well targeted to the issues. The approach taken by 
Member States in terms of restrictions was also often heterogeneous and uncoordinated. 

Specifically  during  the  COVID-19  pandemic,  restrictions  on  free  movement  and  internal  border 
controls  have  been  reintroduced  repeatedly  to  protect  public  health  and  on  the  basis  of  the 
precautionary  principle,  while  at  the  same  time  having  a  negative  impact  on  the  economy.  On 
several  occasions,  Member  States  acted  on  their  own  without  consulting  or  even,  in  some  cases, 
informing other Member States, even when confronted with the same threat51.  

In  the  public  consultation,  23  of  24  respondents,  the  majority  being  business  associations,  stated 
that  they  were  negatively  affected  by  the  restrictions  on  free  movement  of  persons,  cross-border 
service provision or export of goods, with many affected to a great extent. Stakeholders repeatedly 
explained  the  difficulties  resulting  from  uncoordinated  and  not  well  targeted  restrictions.  The 
biggest  issue  put  forward  as  problematic  by  the  stakeholders  in  the  area  of  transport  was  the 
uncoordinated  response  as  well  as  frequent  changing  of  rules52.  A  number  of  Chambers  of 
Commerce reported53 difficulties faced by cross-border businesses due to the differences in duration 
of  quarantines,  frequency  of  tests  and  definitions  of  key  categories  of  persons  benefiting  from 
facilitating measures between Member States. They called for a unified and coordinated approach. 

Recommendations  adopted  at  EU  level  may  be  used  to  incite  the  emergence  of  a  coordinated 
approach  among  the  Member  States  regarding  restrictive  measures  adopted  in  response  to  crisis 
situations. However, the effectiveness of such recommendations is limited due to the fact that they 
are non-binding legal instruments and there are no legal means to enforce them.  

4.  Lack of information from public authorities on Member States’ restrictions 

Stakeholders  and  Member  States  can  receive  some  information  on  draft  crisis  measures  of  other 
Member  States  via  the  TRIS  system  that  is  operated  under  the  Single  Market  Transparency 

51 Impact assessment on amending Schengen Borders Code, SWD(2021)462, pp.28-29. 
52 Summary report for the public consultation on the Contingency plan for transport, p.6. 
53 Letter from Eurochambres, 16 February 2021. 

15 

 
 
 
 
                                                           
Directive54.  The  Directive  provides  also  for  an  urgency  procedure  according  to  which  in  urgent 
situations,  due  to  serious  and  unforeseeable  circumstances,  an  EU  country  may  adopt  a  technical 
regulation without respecting the standstill period. 

Member  States55  are  obliged  under  the  Schengen  Borders  Code56  to  notify  the  reintroduction  of 
internal  border  controls.  Whilst  the  Commission  cannot  veto  any  such  decision  of  the  Member 
States, it may issue an opinion on the necessity and proportionality of such checks. The adoption of 
such  an  opinion  is  without  prejudice  to  the  powers  of  the  Commission  to  launch  infringement 
procedures.  The  European  Court  of  Auditors  stated  that  the  Commission  did  not  sufficiently 
monitor  Member  States  who  did  not  comply  with  the  existing  notification  obligations57,  did  not 
issue  opinions  on  disproportionality  of  the  national  measures  on  the  reintroduction  of  internal 
border controls and did not start infringement proceedings even if the information received from the 
Member  States  on  the  reintroduction  of  such  border  controls  was  not  sufficient  to  demonstrate 
proportionality of the taken measures for the fight against COVID-1958. 

Regarding restrictions to the free movement of persons, Member States are not obliged to notify to 
the Commission measures affecting the free movement of persons under Directive 2004/38/EC (the 
Free  Movement  Directive).  According  to  the  functioning  of  the  Directive,  restrictions  to  free 
movement for reasons of public policy, public security or public health apply based on an individual 
assessment and are subject to judicial control. 

Administrative  assistance  including  points  of  contact  that  provide  information  and  assistance  to 
citizens  and  businesses  is  provided  by  national  authorities  based  on  differing  national  legislation 
implementing the Services Directive59  and on the Single Digital Gateway  Regulation60. However, 
the  provision  of  crisis-specific  administrative  assistance  with  fulfilment  of  additional  formalities 
and procedures is not guaranteed by one single contact point in each of the Member States. There 
are  also  linguistic  barriers  for  the  economic  operators  for  accessing  information  from  each  of  the 
host  Member  States  where  they  carry  out  their  economic  activities  and  this  brings  an  additional 
administrative burden. 

In the experience of the COVID-19 crisis, the repeated lifting and reintroduction of free movement 
restrictions and of internal border controls led to a situation where, despite the Commission’s efforts 
to  coordinate  Member  States  measures,  the  rules  were  not  known  in  a  timely  manner,  were 
sometimes difficult to access or unclear (see also problem driver 3). 

54  Directive  (EU)  2015/1535  of  the  European  Parliament  and  of  the  Council  of  9  September  2015  laying  down  a 
procedure  for  the  provision  of  information  in  the  field  of  technical  regulations  and  of  rules  on  Information  Society 
services, OJ L 241, 17.9.2015, p. 1. 
55 This obligation applies to the EU Member States which have lifted controls at internal borders, EEA countries and 
Switzerland. 
56 Regulation (EU) 2016/399 of the European Parliament and of the Council of 9 March 2016 on a Union Code on the 
rules governing the movement of persons across borders, OJ L 77, 23.3.2016, p. 1.  
57 The European Court of Auditors was able to identify based on its own research  several cases where Member States 
did not notify reintroductions of internal border controls in 2020 and 2021, see p.21 of the Special Report. 
58 See the Special Report of the European Court of Auditors, p. 25. 
59  Directive  2006/123/EC  of  the  European  Parliament  and  of  the  Council  of  12 December 2006  on  services  in  the 
internal market, OJ L 376, 27.12.2006, p. 36. 
60 Regulation (EU) 2018/1724 of the European Parliament and of the Council of 2 October 2018 establishing a single 
digital  gateway  to  provide  access  to  information,  to  procedures  and  to  assistance  and  problem-solving  services  and 
amending Regulation (EU) No 1024/2012, OJ L 295, 21.11.2018, p. 1.  

16 

 
 
 
 
                                                           
The lack of reliable, timely and widely accessible information about national restrictions during the 
COVID-19  pandemic  has  been  repeatedly  highlighted  by  business  representatives  as  a  key 
challenge affecting economic activities61. A number of Chambers of Commerce reported difficulties 
to  find  information  on  the  different  measures  affecting  free  movement  put  in  place  in  different 
Member  States62,  lack  of  clarity  of  rules  and  lack  of  legal  certainty,  administrative  and  practical 
burden to comply with the rules and the need to ensure mutual recognition of tests63.  

The  cross-border  regions  also  experienced  many  difficulties  related  to  constant  changes.  In  2020, 
the Euregio Meuse-Rhine region alone received 416,000 questions from citizens and businesses64. 
According  to  Eurostar  ‘The  clarity  and  reciprocity  of  border  restrictions,  and  their  joint 
implementation, is essential [...] [B]order restriction rules have been changing and updating on a 
virtually daily basis. The result has been confusion  for  passengers,  staff  and within  governments. 
Frequently  governments’  own  information  (e.g.  embassy  websites)  has  failed  to  keep  up  and  had 
been partial, inaccurate or missing entirely. The overwhelming majority of passengers are trying to 
be responsible but if the rules are not clear and simple, they struggle to comply. Eurostar staff and 
border forces are put in the difficult position to have to interpret rules and regularly fail to provide 
answers with confidence.’65 

The stakeholders in the area of transport, especially businesses, experienced problems with cross-
border operations due to lack of clear and up-to-date information on the national measures as well 
as due to regular testing requirements imposed on transport workers without easy access to testing 
facilities, or specific language requirements for tests, as well as unavailability of auxiliary services 
due to closures or lack of personnel66. This challenge was mitigated by the implementation of the 
Green  Lanes  system,  which  recommended  exempting  transport  workers  from  all  restrictions  and 
facilitating the movement of goods and the border crossing thereof. The ensuing legal uncertainty 
has  been  particularly  problematic  for  SMEs,  who  may  not  have  the  resources  to  source  relevant 
information  quickly.  SMEs  have  reported  difficulties  keeping  track  of  fragmented  and  constantly 
changing  rules  and  restrictions,  such  as  those  impacting  service  provision,  for  which  relevant 
information has been hard to find for non-national service providers67.  

5.  Procedures  for  placing  harmonized  products  on  the  market  are  not  sufficiently  fast  for 

deploying critical goods on the market for crisis response 

EU product safety rules, especially those aligned to the so-called New Legislative Framework68, are 
aimed  at  ensuring  the  safety  of  products  that  are  placed  on  the  Single  Market  by  laying  down  a 
harmonised  set  of  requirements,  conformity  assessment  procedures  and  market  surveillance 

61 Feedback from BusinessEurope and SMEUnited during public hearing by the European Parliament’s Committee on 
the Internal Market and Consumer Protection on "Impact of restrictions imposed during the COVID-19 crisis on the 
free movement of professionals and way forward". 
62 Consultation meeting with the Association of German Chambers of Commerce and Industry (DIHK) Board Europe, 9 
December 2021. 
63 Letter from Eurochambres, 16 February 2021. 
64 See letter from Marion Dammann, President of the High Rhine Commission, Head of Lörrach District Authority (D), 
and  Stephan  Attiger,  Vice-President  of  the  High  Rhine  Commission,  Administrator  of  the  Canton  of  Aargau  (CH) 
ARES(2020)4394367, as reported in https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52021SC0462. 
65 Written contribution submitted to the Commission. 
66 Summary report for the public consultation on the Contingency plan for transport, p.6. 
67 Feedback from BusinessEurope and SMEUnited during public hearing by the European Parliament’s Committee on 
the  Internal  Market  and  Consumer  Protection  on  "Impact  of  restrictions  imposed  during  the  COVID-19  crisis  on  the 
free movement of professionals and way forward". 
68 New legislative framework (europa.eu). 

17 

 
 
 
 
                                                           
procedures for each respective product category. The vast majority of industrial products in the EU 
are subject to harmonised rules provided by the New Legislative Framework (NLF). The NLF sets 
out  the  essential  requirements  products  have  to  follow,  formulated  in  a  general  manner  to  ensure 
that  legislation  remains  technology  neutral  and  fosters  innovation.  It  is  up  to  manufacturers  to 
ensure  that  their  products  comply  with  the  essential  requirements.  Harmonised  standards  are 
intended  to  facilitate  this  process  and  provide  a  presumption  of  conformity  with  the  essential 
requirements. The NLF also foresees horizontal rules on market surveillance. 

Currently about 40 pieces of sectoral product legislation follow this regulatory model. The aim of 
these  rules  is  to  ensure  the  free  movement  of  goods  on  the  Single  Market  while  ensuring  a  high 
level  of  protection.  In  particular,  many  products  that  proved  to  be  essential  during  the  Covid-19 
pandemic,  such  as  Personal  Protective  Equipment  (PPE),  are  regulated  according  to  these  rules. 
Other  potentially  critical  products  such  as  machinery,  radio  equipment  or  pressure  equipment  are 
equally governed by frameworks aligned to this regulatory model.  

With  the  exception  of  a  few  specific  legal  frameworks  such  as  the  new  Regulation  on  Medical 
devices69, the NLF does not foresee any emergency procedures for placing products on the market. 
This  is  why  during  the  pandemic,  the  Commission  adopted  the  Recommendation  on  PPE  and 
Medical  Devices70  in  order  to  provide  with  the  possibility  for  the  national  authorities  to  rely  on 
specific  derogatory  procedures  for  the  conformity  assessment  of  crisis-relevant  products  and 
therefore ensuring the swifter placing of such products on the market. 

The  evaluation  study  of  the  NLF  has  found  that  the  basic  principles  of  the  NLF  have  proven  to 
function well during the COVID-19 pandemic. Yet, especially business stakeholders involved with 
PPE  and  medical  devices  noted  that  “it  took  too  long  for  new  market  entrants  to  familiarise 
themselves  with  the  legislation  and  go  through  the  procedures  necessary  to  place  products 
important in the fight against COVID-19, such as PPE and medical devices, on the Union market”.  

One national  authority highlighted the need to  “to establish procedures for any crisis, urgency or 
other  special  situations”  within  the  conformity  assessment  system71.  While  the  issues  could  be 
eventually resolved, much time was lost trying to find ad hoc solutions. 

In addition, for some legal frameworks (e.g. Machinery, Radio Equipment Directive) the use of a 
harmonised standard may imply that a manufacturer can do a self-declaration of conformity without 
having to have recourse to third party conformity assessment body. In some cases, the overall time 
to  conduct  the  full  procedure  involving  a  third  party  conformity  assessment  body  may  be  several 
weeks or months. In cases where the relevant harmonised standards are not available, manufacturers 
would  not  be  able  to  use  this  possibility  and  would  have  to  undergo  the  lengthier  third  party 
assessment by a notified body. This can delay market access for critical products in times of crisis. 
Furthermore,  as  the  experience  has  shown  during  the  COVID-19  pandemic,  restrictive  measures 
taken  at  national  level  such  as  lockdowns  could  have  an  impact  on  the  availability  of  such  third 
party  assessment  bodies.  In  those  cases  where  the  testing  facilities  had  to  remain  closed  due  to 
pandemic-related restrictions, the immediate result was that significant backlogs in the conformity 
assessment  of  products  were  accumulating.  These  backlogs  concerned  also  the  crisis-relevant 
products, which added additional strain on the already strained supply chains.  

69  Regulation  (EU)  2017/745  of  the  European  Parliament  and  of  the  Council  of  5  April  2017  on  medical  devices, 
amending  Directive  2001/83/EC,  Regulation  (EC)  No  178/2002  and  Regulation  (EC)  No  1223/2009  and  repealing 
Council Directives 90/385/EEC and 93/42/EEC, OJ L 117, 5.5.2017, p. 1. 
70 Commission Recommendation (EU) 2020/403 of 13 March 2020 on conformity assessment and market surveillance 
procedures within the context of the COVID-19 threat. 
71 NLF evaluation study, p. 103. 

18 

 
 
 
 
                                                           
6.  Insufficient  legal  certainty  in  relation  to  existing  emergency  provisions  in  public 
procurement  and  lack  of  rules  on  coordinated  and  joint  procurement  for  single  market 
emergencies specifically 

The EU legal framework for public procurement by individual Member States contains a number of 
provisions that foresee flexibilities for emergencies when there is an urgent need to procure goods 
or  services  quickly.  In  case  of  urgency,  public  buyers  have  several  possibilities,  such  as 
substantially reducing deadlines to accelerate open or restricted procedures, or if necessary opting 
for  negotiated  procedures  without  publication.  In  case  of  extreme  urgency,  direct  awards  to 
preselected economic operators might  be allowed.  Public buyers may  have to  look  for alternative 
and possibly innovative solutions. However, while the overall legal framework therefore appears fit 
for purpose, Member States may be hesitant to use the flexibilities provided for, out of concerns for 
possible non-compliance with the applicable rules and potential court cases challenging the use of 
emergency procurement rules. 

To  complement  public  procurement  by  national  level  buyers,  during  the  COVID-19  crisis,  the 
Commission  together  with  the  Member  States  launched  joint  public  procurement  for  various 
medical  goods  relying  on  the  Emergency  Support  Instrument.  This  proved  an  effective  way  to 
procure necessary products, needed for preserving life, health and human dignity during natural or 
man-made disasters.  In  addition,  the possibility  to  procure  goods  for the needs of civil  protection 
exists  under  the  rescEU  mechanism.  However,  there  is  currently  no  structured  framework  for 
making  use  of  joint  public  procurement  outside  of  the  field  of  civil  protection  or  medical 
countermeasures, allowing the Commission or other EU institutions to procure goods on behalf of 
the  Member  States  on  its  own,  or  to  procure  flexibly  at  the  time  of  crisis  substantially  reducing 
deadlines  to  accelerate  open  or  restricted  procedures,  or  if  necessary  opting  for  negotiated 
procedures  without  publication  where  necessary.  Member  States  may  procure  any  crisis-relevant 
goods or services  individually, without any obligation to  coordinate such procurement procedures 
between themselves and with the Commission. Several Member States observed in their replies to 
the Member States questionnaire administrative obstacles to public procurement that constrained a 
rapid and flexible process of crisis measures. Latvia noted in its reply that this had a limiting effect 
on  compiling  national  strategic  reserves.  The  upcoming  revision  of  the  Financial  Regulation  is 
intended  to  introduce  crisis  procurement  provisions  to  the  Financial  Regulation.  The  proposal  is 
expected to become applicable in four  years’ time and its emergency procurement provisions will 
apply only in  case of declaration of crisis  under  the Financial Regulation.  The crisis  definition of 
the draft revision of the Financial Regulation as it stands is not adapted to Single Market emergency 
situations, therefore the proposed emergency procurement provisions cannot provide a solution for 
the purposes of the Single Market emergencies even after their entry into force.  

7.  Supply  chain  disruptions  that  amplify  shortages  of  crisis-relevant  products  during 

emergency and the lack of the ability to anticipate them  

Supply  chain  disruptions  can  stem  from  a  wide  variety  of  causes.  Some  of  these  causes  are 
structural  and  therefore  require  more  long-term  solutions  reinforcing  the  EU  open  strategic 
autonomy, for example in fields such as raw materials, semiconductors and energy. However supply 
chain disruptions can lead to or amplify shortages of crisis-relevant products. 

The  COVID-19  pandemic  disrupted  global  supply  chains  in  unprecedented  ways,  inter  alia  by 
fundamentally changing consumption patterns during the lockdown thereby impacting demand, or 
by forcing shutdowns of factories in manufacturing hubs globally.  

19 

 
 
 
 
Further  to  a  sharp  increase  in  global  demand  in  the  second  half  of  2020,  supply  side  bottlenecks 
became  evident,  most  notably:  (i)  logistic  disruptions  in  the  transport  sector  (mainly  container 
shipping)  that  struggled  to  cater  for  the  surge  in  merchandise  trade  in  post-lockdown  reopening, 
thus  exacerbating  pre-existing  challenges  in  this  regard  (ii)  microprocessors,  a  highly  cyclical 
industry  faced  with  a  surge  in  demand,  and  (iii)  a  host  of  commodities,  such  as  metals,  wood, 
energy  and  others,  where  a  combination  of  supply  disruptions  and  spiralling  demand  pushed  up 
prices  to  all-time  highs.  Backlogs  continued  to  drag  on  or  even  exacerbate  throughout  2021  and 
beyond,  leading  to  shortages  especially  in  the  manufacturing  sector,  with  negative  effects  (on 
production capacity and consequently, outputs) across various industrial ecosystems72. The supply 
disruptions  disproportionately  impacted  insular  regions  that  are  heavily  dependent  on  imports 
(including basic goods) and limited connectivity modes (air and maritime). 

Supply  chains  have  become  increasingly  complex  as  they  span  across  a  variety  of  suppliers  and 
geographical  areas,  in  an  attempt  to  maximise  the  comparative  advantage  at  each  stage  of  the 
production process. These business models or practices, which are highly efficient in normal times, 
may be vulnerable in times of unexpected events, since any unexpected pressure can paralyse entire 
supply chains. They have exacerbated shortages further during the COVID-19 pandemic73.  

Russia’s invasion of Ukraine and resulting sanctions and trade restrictions have put further strain on 
supply chains. This is having an impact on the supply of food products (including animal food) in 
the Single Market that has led to price increases and to sudden changes in product composition (e.g. 
to  replace  sunflower  oil),  which  also  triggered  the  need  for  emergency  amendment  to  legal 
provisions  on  labelling  in  the  Single  Market.  Even  before  the  invasion,  commodity  markets 
displayed  significant  price  increases,  affecting  agricultural  markets  due  to  higher  fertiliser  and 
energy costs. In addition to driving up prices and leading to possible shortages in the medium and 
longer term, this situation also affects how Member States operate within the EU Single Market: in 
March  2022,  Hungary  notified  to  the  Commission  measures  concerning  the  intra-EU  export  of 
agricultural  products  of strategic importance  for  feed and  food security of supply. The Hungarian 
measures include a notification obligation concerning exports, giving the State the right to pre-empt 
exports or purchase such products.  

Furthermore, there is a high reliance on Russia and (to a lesser extent) Belarus and Ukraine for a 
range of other products including raw materials, such as wood, rare earths and noble gases, as well 
as  fertilisers  and  related  inputs  and  rubber.  Imports  have  been  severely  affected,  not  the  least  in 
view of import bans in relation to Russia. While alternative sources generally exist, those may not 
be available, or are available at higher prices.  

China’s  recent  zero-Covid  policy  that  imposed  a  lockdown  on  millions  of  workers  across  the 
country  brings  about  additional  disruptions,  notably  as  regards  logistics.  These  measures  are 
expected  to  translate  into  further  challenges  (delays  in  deliveries,  higher  prices  and  risk  of 
shortages) for global supply chains and with major spill over effects on the availability of goods in 
the Single Market. 

In response to these challenges, industry has been forced to look for alternative sources of  supply. 
For instance, according to VDMA’s survey in April 2022, following Russia’s invasion of Ukraine, 

72 European Economic Forecast 2021, European economy institutional paper 160, DG ECFIN (November 2021).  
73  Magableh  G.  M.  (2021).  “Supply  Chains  and  the  COVID‐19 Pandemic:  A  Comprehensive  Framework.”  European 
Management Review, p.10. 

20 

 
 
 
 
                                                           
82% of respondents have implemented or considered a broader supplier network and 42% have 
implemented or considered alternative routes or logistics 74. 

There  is  a  lack  of  EU-level  measures  to  identify,  anticipate  and  monitor  such  supply  chain 
disruptions  that  can  have  an  impact  on  the  availability  of  crisis-relevant  products  during  an 
emergency.  There  are  also  no  effective  measures  to  tackle  such  shortages  during  an  emergency. 
This can lead to or amplify further the shortages of crisis-relevant products during an emergency, 
thus hampering the EU-level crisis response. 

8.  Lack of information from economic operators 

Data  is  essential  for  driving  better  delivery  of  policy  and  for  improving  the  quality  of  policy 
outcomes. Increasingly, the data used in evidence-based policymaking is held by companies, often 
very large ones but also smaller ones active in specific supply chains. Public sector bodies typically 
acquire  such  data  from  the  private  sector  by  setting  reporting  obligations,  launching  public 
procurement,  or  encouraging  voluntary  data-sharing  collaborations.  In  some  cases,  national 
authorities may not  possess  relevant  firm-level  information,  or their national  rules on information 
collection  may  prevent  them  from  sharing  it  with  the  Commission  or  with  other  Member  States 
(either  at  all  or  in  a  sufficiently  timely/disaggregated  fashion).  Another  factor  limiting  the 
availability  of  information  is  the  challenge  faced  by  economic  operators  themselves  to  obtain 
relevant  data  within  their  supply  chains  e.g.  in  case  problems  arise  that  would  require  accessing 
information from suppliers further down in the supply chain, in view of developing solutions within 
the industry. This is typically observed in increasingly complex and globalised supply chains, with 
business  models  relying  on multiple suppliers along the chain  from  production to  delivery to  end 
consumers.  

All  in  all,  existing  mechanisms  for  obtaining  and  sharing  information  from  economic  operators 
show limitations, such as being incomplete or too slow. This concerns in the first place emergency 
situations  and  the  products  deemed  essential  for  such  situations.  The  COVID-19  pandemic  has 
confirmed  the  difficulties  in  the  timely  acquisition  of  data  necessary  for  crisis  management  by 
governments at national, regional, and local levels75 as well as by European institutions. These were 
not  able  to  obtain  the  necessary  information  from  economic  operators  for  taking  optimal  crisis 
response  measures  to  respond  to  shortages  of  crisis-relevant  goods.  In  particular,  economic 
operators  refused to  provide information  on their production capacities,  number of manufacturing 
facilities  and  their  stocks  of  crisis-relevant  goods,  consumables,  intermediate  products  and  raw 
materials,  which are necessary  for the production of such goods, referring to  business  secrets  and 
contractual terms that prohibit them to reveal such information. The example of vaccines production 
during  the  COVID-19  pandemic  is  a  case  in  point:  the  Commission  compiled  data  on  production 
capacity  (by  adding  up  notified  exports  to  third  countries  and  EU  deliveries)  based  on  a  proxy 
assuming that companies were producing vaccines at full capacity during the crisis, which did not 
reflect the actual potential.  

None of the recently proposed initiatives, such as the proposals for the Council Regulation on the 
emergency framework regarding medical countermeasures, the Data Act and the Chips Act, which 
contain provisions on mandatory information requests, provide for targeted information requests for 
emergencies  where  the  functioning  of  the  Single  Market  is  severely  disrupted  (outside  of 

74 Results of the 14th VDMA Flash Survey Mechanical Engineering, from 5 to 6 April 2022.  
75 De Nigris, S. et al. (2020). Artificial Intelligence and digital transformation: early lessons from the COVID-19 crisis; 
several EU and international case studies available in a Data & Policy special collection dedicated to  Telco Big Data 
Analytics  for  COVID-19,  see  here;  Science  Academies  of  the  Group  of  Seven  (G7)  (2021).  Statement  on  Data  for 
international health emergencies: governance, operations and skills.  

21 

 
 
 
 
                                                           
specifically  on  medical  countermeasures  and  semiconductors).  Furthermore,  when  such 
mechanisms  exist  at  national  level,  they  are  not  coordinated  with  the  other  Member  States  nor 
mirrored at EU level. 

However, it is difficult for the EU and Member State level authorities to take fully targeted action, 
such  as  procurement  action,  at  the  time  of  crisis  to  remedy  shortages  of  crisis-relevant  goods  or 
their  components,  without  having  accurate  information  at  their  disposal.  For  example  such 
information could point to specific additional sources of disruptions of the supply of crisis-relevant 
goods  (e.g.  availability  of  testing  services,  of  packaging  etc.)  or  to  the  potential  risk  of  spillover 
effects  to  other  sectors/goods/services  (e.g.  if  the  raw  materials  used  for  the  manufacturing  of 
product A are also used in product B, an increase in the demand and the production of product A 
has the potential to put the production of product B under strain). Similar challenges are observed 
when  it  comes  to  obtaining  necessary  information  for  the  purpose  of  ensuring  correct  application 
and enforcement of Single Market rules, including in times of crisis. 

2.3 How likely is the problem to persist? 

Recent experience has shown that in a tightly interconnected global economy certain disruptions in 
some parts of the world can quickly spread and produce spill over-effects, including in the Single 
Market.  Furthermore,  such  crisis  could  be  of  different  nature,  thus  requiring  a  more  nuanced 
response, tailored to the specificities of each scenario. Currently there is no horizontal  framework 
allowing  to  cater  for  the  possible  disruptions  to  the  proper  functioning  of  the  Single  Market  that 
might arise during a crisis, no matter its nature. Even if a number of ongoing initiatives aim to lay 
down  such  crisis-relevant  provisions  and  mechanisms  in  certain  specific  sectors,  those  initiatives 
would not be able to capture crisis scenarios, which fall beyond their scope or would not be able to 
fully  capture  in  a  comprehensive  manner  disruptions,  which  even  partly  fall  outside  their  scope. 
This in turn will likely hamper EU’s ability to anticipate and to address fragmentation in the Single 
Market and to remedy the disruptions in the supply chains of critical goods and services. 

Notwithstanding the ongoing initiatives laying down certain  sectorial  crisis relevant  provisions, if 
and  when  a  new  crisis  strikes,  the  EU  will  still  lack  dedicated  fora  where  all  the  cross-sectorial 
issues  affecting  the  Single  Market  can  be  discussed  and  coordinated  in  a  coherent  and  holistic 
manner.  If  such  a  mechanism  continues  to  lack,  Member  States  are  likely  to  introduce 
heterogeneous restrictions again. In the absence of transparency of such measures, problems related 
to lack of timely and clear information are likely to reoccur. Inability to anticipate supply shortages 
as well as a lack of information from economic operators and a lack of vigilance measures would 
kneecap the EU’s response. The EU crisis response itself could be hindered by a lack of streamlined 
rules on the availability of critical products as well as by an insufficient legal certainty and a lack of 
provisions on joint or coordinated procurement. 

3.  WHY SHOULD THE EU ACT? 

3.1 Legal basis 

Within  the  context  of  a  crisis,  the  Single  Market  can  be  impacted  both  by  the  appearance  of  the 
specific  disruptions  and  shortages  inherent  to  the  said  crisis,  as  well  as  by  the  possible  intra-EU 
restrictions to the free movement of goods, services and persons, which may emerge in an attempt 
to address the said crisis. The general objective of the initiative is to lay down the mechanisms and 
procedures, which would allow to prepare for and to address potential crises and disruptions to the 
proper  functioning  of  the  Single  Market.  Such  measures  are  also  aimed  to  minimise the  intra-EU 
obstacles  to  the  free  movement  in  times  of  crisis.  More  specifically,  in  the  case  of  a  crisis,  the 

22 

 
 
 
 
measures have to be taken to  address any identified shortages and to safeguard  the availability of 
crisis-critical goods and services across the entire EU.  

A  number  of  measures,  considered  within  the  context  of  this  initiative  (e.g.  derogation  to  certain 
notification  procedures  or  for  procedures  on  the  conformity  assessment  of  certain  products) 
derogate or complement existing EU harmonisation legislation, based on the general internal market 
legal  basis  (Article  114  of  the  Treaty  on  the  Functioning  of  the  European  Union  (TFEU)).  In 
addition, other measures which are considered, such as the ramping up of production capacities, the 
speeding  up  of  permitting,  priority  rated  orders  as  well  as  the  accumulation  and  distribution  of 
strategic  reserves  also  aim  to  ensure  a  coherent  response  to  future  crises  and  to  avoid  the 
fragmentation of the Single Market. In cases where there are substantial risks to the functioning of 
the  Single  Market  or  in  cases  of  severe  shortages  or  an  exceptionally  high  demand  of  goods  of 
strategic  importance,  measures  at  EU  level  aimed  to  ensure  the  availability  of  crisis-relevant 
products, such as strategic reserves or priority rated orders, may prove to be indispensable for the 
restauration of the normal functioning of the Single Market. 

Pursuant  to  Article  4(2)  of  the  Treaty  on  European  Union  (TFEU),  the  Member  States  retain  the 
competence  to  take  all  measures  within  the  context  of  “their  essential  State  functions,  including 
ensuring the territorial integrity of the State, maintaining law and order and safeguarding national 
security… [And]… national security remains the sole responsibility of each Member State.” It is an 
article of last resort that can be used by Member States in a crisis. 

In  principle,  uncoordinated  individual  crisis  response  measures  have  the  potential  to  further 
exacerbate the crisis if they were to add additional obstacles to the smooth functioning of the Single 
Market and may in those circumstances put additional strain on the supply chains of crisis-relevant 
goods  and  services.  However,  it  is  likely  that  there  could  be  only  limited  overlap  between  the 
measures which can be adopted under the Single Market Emergency Instrument  and the measures 
adopted  by  the  Members  States  pursuant  to  Article  4(2)  TFEU  due  to  the  fact  that  the  two 
mechanisms have a different material scope with Article 4(2) TFEU focused on the preservation of 
the  territorial  integrity,  the  maintenance  of  law  and  order  and  safeguarding  the  national  security, 
while  the  Single  Market  Emergency  Instrument  primarily  concerns  restrictions  to  free  movement 
with impact on the Single Market. Nevertheless, potential conflicts between safeguarding national 
security  and  supporting  the  proper  functioning  of  the  Single  Market  cannot  be  excluded  in  the 
future. 

In order to establish a clear delineation between Article 4(2) TFEU and other instruments, in recent 
legislative  procedures,  e.g.  Revised  Directive  on  Security  of  Network  and  Information  Systems 
(NIS2),  in  the  context  of  inter-institutional  negotiations  a  specific  caveat  has  been  included  to 
ensure that the specific instrument concerned is without prejudice to the Member States’ rights and 
responsibilities stemming from this Article76. Therefore, an analogous provision will be included in 
SMEI which will act as a general framework without prejudice to specific rights and responsibilities 
of Member States in the context of Article 4(2), which will take precedence. 

76 Specifically, the compromise proposal for the Directive on measures for a high common level of cybersecurity across 
the  Union  (NIS2  Directive)  includes  in  Article  2(3)  a  provision:  “This  Directive  is  without  prejudice  to  the  Member 
States’  responsibilities  to  safeguard  national  security  or  their  power  to  safeguard  other  essential  State  functions, 
including 
see 
https://data.consilium.europa.eu/doc/document/ST-10193-2022-INIT/x/pdf.  An  analogous  provision  is  likely  to  be 
included in the context of the Directive on the resilience of critical entities, proposed by the Commission in December 
2020, COM(2020)829 final, for which a political agreement was achieved in June 2022. 

and  maintaining 

and  order.”, 

integrity  of 

the  State 

territorial 

ensuring 

law 

the 

23 

 
 
 
 
                                                           
Furthermore, while Member States could potentially take measures pursuant Article 4(2) that could 
have an impact on the Single Market, an effective Single Market Emergency  Instrument with full 
Member  States’  participation  would  ensure  a  coordinated  crisis  response  and  mutual  trust  and 
would  therefore  diminish  the  effects  of  a  crisis,  which  could  decrease  the  need  for  the  potential 
introduction of last resort measures under this Article. 

3.2 Subsidiarity: Necessity of EU action 

The  economic  activities  across  the  Single  Market  are  deeply  integrated.  Interaction  between 
companies,  service  providers,  clients,  consumers  and  workers  located  in  different  Member  States 
that rely on their free movement rights, is increasingly common. The experience of the past crisis 
has shown that often the distribution of production capacities across the EU is uneven (e.g. with the 
production  lines  of  certain  products  primarily  located  in  a  few  Member  States  such  as  PPE).  In 
parallel,  in  the  case  of  a  crisis,  the  demand  for  crisis-relevant  goods  or  services  across  the  EU 
territory may also be uneven. The objective of ensuring the smooth and undisrupted functioning of 
the Single Market cannot be achieved by means of unilateral national measures. Moreover, even if 
measures adopted by the Member States individually may be able to address to a certain extent the 
deficiencies  resulting  from  a  crisis  at  the  national  level,  they  are  in  fact  more  likely  to  further 
exacerbate  the  said  crisis  across  the  EU  by  adding  further  obstacles  to  the  free  movement  and/or 
additional strain on products already impacted by shortages. 

3.3 Subsidiarity: Added value of EU action 

The introduction of rules which govern the functioning of the Single Market is a competence shared 
between the EU and the Member States. A significant number of EU frameworks governing various 
aspects  are  already  in  place  and  they  contribute  to  the  smooth  operation  of  the  Single  Market  by 
laying down coherent sets of rules which apply across all the territories of the Member States. 

However,  the  existing  EU  frameworks  generally  lay  down  rules  concerning  the  day-to-day 
functioning  of  the  Single  Market,  outside  of  any  specific  crisis  scenarios.  This  being  said,  some 
proposals  which  have  been  recently  adopted  by  the  Commission  contain  certain  crisis-relevant 
provisions.  However,  there  is  currently  no  horizontal  set  of  rules  and  mechanisms  which  address 
aspects  such  as  the  contingency  planning,  the  crisis  monitoring  and  the  crisis  response  measures, 
which  would  apply  in  a  coherent  manner  across  economic  sectors  and  across  the  entire  Single 
Market. 

The  emergency  instrument  would  only  be  deployed  with  the  objective  of  ensuring  a  coordinated 
approach to respond to crises that have important cross-border effects and threaten the functioning 
of the Single Market, and where no EU instrument already exists or where the existing instruments 
do  not  lay  down  crisis-relevant  provisions.  Putting  in  place  contingency  and  vigilance  measures 
across the Single Market can facilitate the coordination  of the response measures  in the case of  a 
crisis. Furthermore, such measures can be complemented by effective and efficient coordination and 
cooperation amongst  the Commission  and Member States  during the crisis  in  order to  ensure that 
the most appropriate measures to address the crisis are taken.  

The options below foresee a toolbox of targeted EU-level measures that would be proportionately 
used in  response to  a specific  crisis.  Prior risk assessment, based on a  well-defined set  of criteria 
and involving closely the Member States, will be systematically conducted before specific measures 
are  deployed  at  EU  level.  The  various  tools  may  be  activated  and  deployed  by  themselves  or  in 
different combinations depending on the specific emergency circumstances.  

24 

 
 
 
 
The  Single  Market  Emergency  Instrument  is  not  intended  to  lay  down  a  detailed  set  of  EU  level 
provisions which should be exclusively relied upon in the case of crisis. Instead, the instrument is 
intended  to  lay  down  and  ensure  the  coherent  application  of  possible  combinations  between 
provisions taken  at  EU level  together with  rules  on the coordination of  the measures taken  at  the 
level  of  the  Member  States.  In  this  respect,  the  emergency  measures  which  may  be  taken  at  EU 
level  on  the  basis  of  the  Single  Market  Emergency  Instrument  would  be  coordinated  with  and 
complement the emergency response measures adopted by the Member States. In order to allow for 
such  coordination  and  complementarity,  the  Single  Market  Emergency  Instrument  would  set  out 
specific  measures  which  the  Member  States  should  refrain  from  imposing  once  a  Single  Market 
emergency has been activated at EU level.  

In this context, the EU added value of this instrument would be to lay down the mechanisms for a 
swift  and  structured  way  of  communication  between  the  Commission  and  Member  States, 
coordination and information exchange when the Single Market is put under strain, and to be able to 
take necessary measures in a transparent way – speeding up existing mechanisms as well as adding 
new targeted tools for emergency situations. It  would also ensure transparency across the internal 
market, ensuring that businesses and citizens that rely on their free movement rights have at their 
disposal appropriate information about the applicable measures across all the Member States. This 
will increase legal certainty allowing them to take informed decisions. 

A  further  advantage  of  action  in  this  domain  would  be  to  equip  the  EU  with  the  resilience  tools 
needed  to  sustain  the  competitiveness  of  the  EU  industry  in  a  geopolitical  context  in  which  our 
international competitors can already rely on legal instruments allowing for a structured monitoring 
of  supply  chain  disruptions  and  for  the adoption  of  possible  response  measures  such  as  strategic 
reserves (e.g. the US Defense Production Act or Japan’s JOGMEC, see Annex 8 for an overview).  

4.  OBJECTIVES: WHAT IS TO BE ACHIEVED? 

4.1 General objective 

The general objective of SMEI is to enhance the Single Market’s vigilance for, response to and its 
smooth functioning in times of crisis. To this end, SMEI  will equip the EU with a well-calibrated 
crisis  toolbox  that  permits  a  rapid  and  effective  response  to  any  future  crisis  that  threatens  to 
hamper  the  functioning  of  the  Single  Market,  complementing  other  existing  EU  mechanisms, 
including  through  better  coordination,  transparency  and  speed.  The  objective  is  to  strengthen  the 
functioning  of  the  Single  Market  and  provide  quick  and  practical  solutions  to  issues  of  free 
movement of goods, services and persons and of supply in times of crisis.  

4.2 Specific objectives 

This initiative pursues two specific objectives (SOs). 

SO1: Minimise obstacles to free movement of goods, services and persons in times of crisis 

The specific objective 1 is to minimise obstacles to free movement of goods, services and persons 
in  times  of  crisis  by  providing  a  toolbox  of  solutions  to  ensure  a  well-coordinated  EU-level 
vigilance and response to crises affecting the Single Market. To this end, it is expected to provide a 
toolbox of solutions consisting of vigilance, coordination and transparency measures assuring more 
aligned and targeted Member State responses and providing needed transparency when it comes to 
obstacles to free movement. 

SO2: Address shortages and safeguard availability of crisis-relevant goods and services 

25 

 
 
 
 
This specific objective aims at facilitating quick and practical solutions to issues of supply in times 
of  crisis.  To  this  end,  it  is  expected  to  provide  adequate  vigilance,  coordination  and  transparency 
mechanisms  for  a  targeted  policy  response  and  for  all  Single  Market  players  by  enabling 
information  exchange  and  close  cooperation  with  industry/stakeholders  for  identifying  crisis-
relevant  supply chain  bottlenecks and capacity needs and taking  further  action when necessary to 
ensure the availability of crisis-relevant goods and services in an emergency.  

5.  WHAT ARE THE AVAILABLE POLICY OPTIONS? 

5.1 What is the baseline from which options are assessed? 

The  potential  impacts  of  the  policy  options  are  measured  against  the  current  dynamic  baseline 
scenario that consists of no  additional EU actions, meaning no change to the currently existing or 
proposed  regulatory  framework  and  existing  mechanisms  and  tools  for  crisis  management.  The 
baseline scenario is not the current state but the state that would dynamically develop without any 
additional EU action.  

Currently,  there  is  no  single  forum,  with  a  horizontal  mandate  and  a  clearly  defined  role,  which 
would  gather  and  discuss  the  cross-sectorial  concerns,  disruptions  and  crisis-response  measures. 
Several  Member  States  operate  public  information  systems  on  the  market  situation  (production, 
stocks, exports, prices, etc.) that enables the effects of possible crises in the markets to be analysed 
and  quantified,  and  have  organised  meetings  with  sectoral  representative  organisations.  However 
existing  examples  bilateral  or  regional  cooperation  between  the  Member  States  do  not  cover  the 
whole Single Market neither geographically, nor in terms of the sectors covered. 

In terms of communication of crisis-response measures,  at  EU level  the  Commission put  in  place 
the  interactive  tool  Re-open  EU  which  aims  to  provide  the  information  that  citizens  need  to  plan 
their  travel.  Member  States’  competent  authorities  inform  citizens  and  businesses  generally  about 
their  crisis  measures  via  official  websites  of  institutions,  media  (press  conferences)  and  social 
networks. Dedicated web pages were created to provide detailed information about specific sectors 
to inform about measures by ecosystems and upcoming meetings within the EU institutions. Some 
Member  States  have  also  set  up  information  hotlines  to  provide  business  with  administrative 
assistance in  view of implemented measures such as loans guaranteed by the state.  In the case of 
technical regulations, stakeholders and Member States would be able to receive some information 
on draft crisis  measures  of (other) Member States via the TRIS system that  is  operated under the 
Single Market Transparency Directive. The Member States are obliged to notify the reintroduction 
of  internal  border  controls  under  the  Schengen  Borders  Code,  but  the  follow-up  is  limited.  As 
regards free movement of persons, there is no notification obligation for measures such as entry and 
exit bans.  

There  is  currently  no  obligation  for  the  Member  States  to  establish  single  contact  points  for  the 
provision  of  crisis-specific  administrative  assistance  with  fulfilment  of  additional  formalities  and 
procedures.  Furthermore,  there  are  no  specific  provisions  addressing  the  language  regime  for 
contacts  with  the  national  contact  points,  which  may  be  already  set  up  or  which  alleviate  the 
administrative burden for requestors. 

There  is  currently  no  obligation  for  the  Member  States  to  exchange  crisis-relevant  information 
outside  the  areas  of  civil  protection  and  medical  countermeasures.  The  Member  States  could 
exchange  some  crisis-relevant  information  on  ad  hoc  basis  via  the  IPCR  and  the  Single  Market 
Enforcement Task Force. Some regions would hold at the crisis time regular meetings between the 
crisis management authorities to share challenges and best practices and there would also be some 

26 

 
 
 
 
instances  of  bilateral  exchange  of  information  between  the  Member  States.  Their  obligations  of 
exchanging  information  with  the  Commission,  would  be  limited  to  the  fragmented  notification 
obligations under the Single Market Transparency Directive, Services Directive and the Schengen 
Borders Code.  

With respect to specific monitoring systems for crisis management purposes, several Member States 
operate  specific  monitoring  systems  used  through  their  own  crisis  management  tools/contingency 
plans  to  gather  information  from  economic  operators  and  assess  the  situation  to  reduce  negative 
impacts  of a crisis  on businesses. However, such monitoring is  not  systematically done across all 
the Member States and there are no provisions at EU level rendering such monitoring  mandatory. 
Furthermore,  the  Member  States,  which  perform  such  monitoring  are  not  required  to  inform  the 
Commission and the other Member States.  

There is no horizontal Early Warning System whereby the Member States could notify information 
to  the  Commission  on  identified  shortages  of  goods  or  services  that  result  from  Single  Market 
impacts of an emergency situation or about any developments that would lead to those.  

Preparatory actions exist in specific areas such as civil protection or specific sectors, depending on 
national  practices  and/or  EU  level  initiatives.  However,  there  are  no  tailored  preparatory  tools  in 
view of the broader Single Market impacts of possible future crises. 

There are no EU-level mechanisms organising the collaboration with private sector stakeholders for 
the  purposes  of  information  gathering  in  view  of  the  anticipation  of  future  crises.  When  such 
mechanisms exist at national level they are not coordinated nor mirrored at EU level. 

With the exception of the legislation concerning financial services, neither primary, nor secondary 
EU  law  contain  crisis-specific  provisions  specifically  targeting  emergencies  affective  the  proper 
functioning of the Single Market. The standard rules for placing products on the market embedded 
in  the  EU  harmonised  product  framework  do  not  provide  for  crisis-response  procedures.  More 
specifically,  the  sectorial  harmonised  product  legislations  in  general  do  not  provide  for  the 
possibilities  to  use  fast-track  conformity  assessment  procedures  for  crisis-relevant  products. 
Additionally, the sectorial legal frameworks for harmonised products generally do not provide the 
possibility  for  the  Commission  to  adopt  technical  specifications  in  cases  where  no  harmonised 
standards are available, which has the potential to accelerate the placing on the market of products 
by  providing  the  manufacturers  with  the  possibility  to  rely  on  simplified  and  swifter  conformity 
assessment procedures.  

For public procurement  the baseline scenario consists  of the inability of  the Commission,  outside 
the  areas  of  civil  protection  and  medical  counter-measures,  to  procure  on  behalf  of  the  Member 
States  during  the  crisis  or  otherwise.  The  Joint  procurement  provision  of  the  Public  Procurement 
Directive requires the Member States to negotiate between themselves what the procedure of such 
joint procurement by the Member States would be and to put in place a joint undertaking or a joint 
purchasing body for each instance of joint procurement.  

There  are  no  specific  arrangements  for  distribution  of  crisis-relevant  goods  at  the  time  of  dire 
shortages,  ramping  up  the  production  lines  of  crisis-relevant  products,  speeding  up  permitting 
procedures and accepting and prioritising orders of crisis-relevant products by economic operators, 
apart  from  the  potential  rescEU  strategic  reserves  in  the  area  of  civil  protection/emergency 
response. The Commission currently does not have a possibility to oblige the economic operators or 
their representatives to reply to targeted crisis-related information requests. It may, however, rely on 
the EEN/cluster survey on the impact of supply chain disruptions and the information received by 

27 

 
 
 
 
the Industrial Forum or from other sources. It appears from the study carried out by DG CNECT for 
the impact assessment of the Data Act that the legal possibilities of the Member States authorities to 
issue such information  requests during the crisis and  to  share the received information  with  other 
Member States and the Commission differ largely and the overall legal framework is fragmented. 

5.2 Setup of the instrument  

The  policy  options  described  below  provide  a  flexible  toolbox  of  measures  which  allows  the 
selection of the most appropriate measures depending on the type and nature of the crisis. 

The toolbox is built around eight building blocks which are described in detail in Section 5.3. The 
building  blocks  were  identified  on  the  basis  of  the  mapping  of  problem  drivers  as  well  as  the 
analysis of the  gaps  in  terms  of coverage of the  relevant  sector-specific crisis  legislation with  the 
objective to address all the problem drivers and all the identified gaps (see Table 1 in section 5.3). 
All building blocks are necessary in order to ensure the coverage of all problem drivers. 

The  options  establish:  1)  a  governance  body  and  a  framework  for  2)  contingency  planning,  3) 
Single Market vigilance and 4) Single Market emergency measures that would function along a 
gradual approach, which can be illustrated by a “traffic lights approach” presented below. 

The definition77 of a Single Market emergency at the moment of drafting this Impact Assessment is 
foreseen as follows: ‘Single Market emergency’ means a wide-ranging impact on the Single Market 
in at least two Member States of a natural or man-made crisis78 taking place inside or outside the 
Single Market, that severely disrupts or threatens to severely disrupt the functioning of the Single 
Market  or puts  its supply chains  that are  indispensable for  the normal functioning  of  society and 
have a limited substitution and diversification potential at risk.’ This definition caters for any future 
emergency while putting a clear focus on its effects on the Single Market and it is wide enough to 
cover “any” product and service since future crises are unknown today. In practice the instrument 
will not deal with “every” product and service, but only with those relevant for the crisis. 

Other relevant definitions for the purpose of the instrument may be:  

▪ 

▪ 

▪ 

‘goods and services of strategic importance’ means goods and services are necessary for 
maintaining economic activities in the Single Market in strategically important areas of the 
economy and are considered as reference during the vigilance mode; 

‘strategically important areas of the economy’ means those areas with critical importance 
to the EU and its Member States’ strategic interests such as security, safety, public order, 
health  and  the  green  and  digital  transformation,  including  critical  infrastructure,  critical 
technologies and inputs which are essential for safeguarding such interests, the disruption, 
failure, loss or destruction of which would have a significant impact in a Member State or 
the Union; 

‘crisis-relevant  goods  and  services’  means  goods  and  services  that  are  indispensable  to 
safeguard  or  restore  the  functioning  of  the  Single  Market  during  a  Single  Market 
emergency or for responding to such emergency; 

77 The definitions and the activation criteria provided in this section are without prejudice to the  final legal text of the 
proposal. 
78 ‘A natural or man-made crisis’ means an unexpected event with large scale and exceptional impact that gives rise to 
severe wide-ranging negative consequences in the Member States. 

28 

 
 
 
 
 
  
 
                                                           
1)  Governance body  

A central governance body observes the state of the Single Market along a traffic light approach to 
ensure adequate  coordination  and  advises the  Commission  on  the  appropriate  measures  for 
preventing  or  addressing  the  impact  of  a  crisis  on  the  Single  Market.  It  is  composed  of  the 
Commission  and  one  representative  from  each  Member  State  and  is  chaired  by  the  Commission. 
The governance body has as observers representatives of other crisis-relevant instruments. Industry 
is consulted on a need basis with the possibility to set up ad hoc industry subgroups depending on 
the  products/services/supply  chains  identified.  It  will propose  the  activation  and  the  scope of  the 
Single Market vigilance and emergency modes and analyse the relevant information gathered by the 
Member States or the Commission by voluntary or mandatory means, including from the economic 
operators, depending on the chosen policy option (building block 1)79.  

2)  Contingency planning  

In  normal  times  (“green  light”),  where  no  sudden  event  is  likely  to  have  or  is  already 
having  severe  disruptive  effects  on  the  Single  Market,  market  forces  ensure  the 
functioning  of  the  businesses  and  of  the  Single  Market.  The  economic  operators,  the 
Member  States  or  the  Commission  may,  depending  on  the  policy  option  retained,  assess 
the  risks  to  supply  chains  of  goods  and  services  of  strategic  importance  (e.g.  goods  and 
services  that  are  necessary  for  maintaining  economic  activities  in  the  Single  Market  in 

79 During the  vigilance  mode, the  governance body could assist the Commission in the following tasks: providing an 
advisory  opinion  on  the  activation  and  scope  of  the  vigilance  mode;  gathering  foresight,  data  analysis  and  market 
intelligence, as well as fostering continuous exchanges of information between the Commission and Member States to 
build  a  common  analysis;  performing  risk  assessment  at  EU  level  to  anticipate  and  prevent  disruptions;  analysing 
aggregated data received by other crisis-relevant bodies at EU level, such as the European Semiconductors Board, the 
HERA Board and any crisis-relevant emanation of the Council; issuing a repository of national and EU crisis measures. 
In  case  of  a  Single  Market  emergency,  the  governance  body  could  assist  the  Commission  in  the  following  tasks: 
analysing crisis-relevant information gathered by Member States or the Commission; providing an advisory opinion on 
the activation and scope of the emergency framework, as well as on the possibility to prolong it, once it is activated; 
advising on the implementation of the emergency measures chosen for emergency response at EU level; performing a 
peer scrutiny of national crisis measures; facilitating exchanges and sharing of information, including with other crisis-
relevant structures at EU level. 

29 

 
 
 
 
 
 
                                                           
strategically important  areas of the economy) if  such risk assessment  has not  been undertaken by 
industry (building block 2). 

Depending on the policy option chosen, the Commission could make the relevant elements of the 
risk assessment available to the representative organisations of economic operators in order to assist 
them in carrying out their own risk assessments and take measures to ensure their resilience against 
the identified risks. Furthermore, the Commission, assisted by the governance body, could develop 
in  the  risk  assessment  a  list  of  early  warning  indicators  to  identify  factors  that  may  disrupt, 
compromise or negatively affect the supply of goods and services of strategic importance and make 
publicly available such list. An early warning system may be set up by which the Member States’ 
contact points will alert the Commission and the other Member States about incidents that have the 
potential  to  significantly  disrupt  the  functioning  of  the  Single  Market  and  its  supply  chains  of 
services  and  goods.  In  determining  the  significance  or  the  seriousness  of  the  disruption,  pre-
determined  parameters  may  be  taken  into  account  such  as  the  number  of  economic  operators’ 
affected, geographical area or duration of the disruption. 

If the Member States become aware of a risk of severe disruptions of the Single Market, they shall alert the 
Commission. Upon this alert, or where the Commission learns of a risk of severe shortages including from 
international partners, it will convene an extraordinary meeting of the SMEI governance body and enter in 
dialogue  with  stakeholders,  in  particular  the  industry,  to  identify  and  prepare  effective  crisis  response 
measures concerning the identified disruptions. 

The SMEI governance body will discuss the severity of the disruption and whether it may be appropriate, 
necessary and proportionate to activate the vigilance mode based on a pre-defined set of criteria such as: 

a)  an incident that has the potential to significantly disrupt a particular supply chain of goods or services 

of strategic importance has occurred 

Or 

b) 

it appears from the information gathered by the Commission and the  governance body that there are 
first signs of severe shortages such as atypically high increases of prices in a particular supply chain of 
goods or services of strategic importance, resulting from an incident with a crisis potential. 

These criteria  will  apply  with respect to goods or services of strategic importance,  vital  to the green and 
digital transition, which are dependent on non-diversifiable and non-substitutable inputs and not covered by 
any of sector-specific EU legal frameworks laying down crisis-response measures. 

If  the  Commission,  assisted  by  the  SMEI  governance  body,  has  established  that  the  criteria  above  are 
fulfilled, it will activate the Single Market vigilance mode (“yellow light”) by means of implementing acts 
for  maximum  six  months  with  possibility  to  prolong  or  deactivate.  The  Commission  implementing  act, 
which will be subject to the examination comitology procedure in accordance with Article 5 or Regulation 
(EU)  182/2011  would  be  the  most  appropriate  activation  mean,  in  line  with  the  similar  mechanism  (i.e. 
monitoring  of  crisis-relevant  medical  countermeasures)  in  the  Commission  Proposal  for  an  Emergency 
framework for medical countermeasures. 

3) Single Market vigilance  

This  component would consist  of a framework for impacts  of incidents  that  have not  yet 
escalated  into  a  full-blown  Single  Market  emergency  and  includes  a  set  of  vigilance 
measures  such  as  information  gathering  and  industry  stockpiling  and/or  Member  States 
strategic reserves. 

30 

 
 
 
 
 
 
Information  gathering  concerns  identified  supply  chains  of  goods  and  services  of  strategic 
importance  and  the  measures  could  vary  from  guidance  for  businesses,  to  recommendations  to 
Member States, to obligations to Member States to monitor shortages affecting the functioning of 
the Single Market as regards the companies that operate in their territory in those supply chains and 
the possibility for the Commission to coordinate such monitoring. 

The  measures  related  to  industry  stockpiling/  Member  States  strategic  reserves,  depending  on  the 
policy option retained, could be 1) guidance for industry stockpiling without public procurement, 2) 
recommendations  to  the  Member  States  for  building  up  strategic  reserves  with  focus  on  Member 
States facilitating the role of the industry in ensuring resilience with providing guidance on the use 
of  public  procurement  or  3)  obligations  to  Member  States  to  build  up,  maintain  or  reduce  their 
strategic reserves in order to meet the targets for strategic reserves (for selected goods of strategic 
importance)  pre-identified  by  the  Commission  by  means  of  implementing  acts.  On  the  latter, 
strategic  reserves  are  activated  upon  the  condition  that:  i)  there  is  evidence  that  industry’s 
stockpiling is insufficient or inexistent, ii) alternative supply sources do not work or are insufficient 
and iii) assessment of risks  and impacts  by the  Commission  and the governance body indicates  a 
need  for  building  up  strategic  reserves.  When  the  vigilance  mode  has  been  activated  by  an 
implementing act, the Commission will identify among the goods of strategic importance identified 
by that act the goods for which building a reserve may be necessary and inform the Member States. 
It can request Member States by means of an implementing act to provide the information on their 
levels of strategic reserves. The Commission, assisted by the governance body, will coordinate and 
streamline  efforts  of  Member  States  to  build  up  and  maintain  strategic  reserves  by  promoting 
coordinated  public  procurement  (in  particular  allowing  smaller  Member  States  to  pool  their 
resources) and the exchange of information and cooperation between Member States, including by 
facilitating  public-private  cooperation  and  with  the  objective  to  avoid  overlap  or  duplication  of 
reserves. Where the building of strategic reserves can be rendered more  effective by streamlining 
among Member States, the Commission, based on the opinion of the governance body, may draw 
up  and  regularly  update  by  means  of  implementing  acts  the  list  of  individual  targets  for  those 
strategic reserves that the Member States should maintain, taking into account factors such as the 
probability  and  impact  of  shortages  and  risks  identified  during  the  risk  assessment,  the  level  of 
existing  stocks  and  strategic  reserves  across  the  Union  and  the  costs  of  building  and  maintaining 
such strategic reserves. The Member States will regularly inform the Commission about the current 
state  of  their  strategic  reserves  and  of  any  excess  stocks.  The  Commission  will  facilitate  the 
cooperation  between  those  Member  States  which  have  already  reached  their  targets  and  others. 
Where strategic reserves of a Member State continuously fall short of the targets, the Commission 
may  adopt  a  decision  requiring  the  said  Member  State  to  build  up  its  strategic  reserve  by  a  set 
deadline. Such a decision would only be taken if either the Commission considers it  indispensable 
or  14  Member  States  ask  the  Commission  to  issue  such  a  binding  target  decision  (see  building 
block 3). 

31 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Where  the  Commission  becomes  aware  of  severe  disruptions  leading  to  severe  shortages  affecting  the 
functioning of the Single Market in the presence of concrete and reliable evidence, it shall assess whether 
the criteria for activating the emergency mode are met:  

- 

- 

a crisis, which has already triggered the application of at least one of the relevant EU crisis-response 
mechanisms, has produced a severe impact on the Single Market 
Or 
there  are  indications  that  a  severe  disruption  in  supply  chains  affects  the  functioning  of  the  Single 
Market,  which  disruption  will  be  assessed  by  the  Commission  in  consultation  with  the  governance 
body based on the following indicators: 
- 

an estimation of the number of economic operators and/or users relying on the disrupted supply 
chain for the provision of the goods or services concerned;  
the  dependency  of  other  sectors  from  the  disrupted  supply  chain  on  the  goods  or  services 
concerned;  
the impacts in terms of degree and duration, on economic and societal activities, the environment 
and public safety;  
the market share of the affected economic operator(s);  
the geographic area that could be affected, including any cross-border impacts;  
the importance of the affected economic operator in  maintaining a  sufficient level of supply of 
the  goods  or  of  the  services,  taking  into  account  the  availability  of  alternative  means  for  the 
provision of those goods or services; 
the absence of substitute goods or inputs and or services. 

- 

- 

- 
- 

Examples of other relevant EU crisis response mechanisms could include IPCR, UCPM or EFSCM etc. 

If the criteria above are met and in consultation with the governance body, the Commission will propose 
the  activation  of  the  Single  Market  emergency  by  means  of  Council  implementing  act,  which  is  to  be 
adopted via the qualified majority voting procedure (15 out of 27 Member States representing at least 65% 
of  the  total  EU  population)  and  would  be  justified  by  the  magnitude  of  the  crisis  /  importance  of  the 
decision (2 days following the Commission proposal to activate). The emergency stage will be activated 
for six months with the possibility to be renewed for another six months or terminated before. 

4) Single Market emergency 

The  activation  of  the  Single  Market  emergency  will  immediately  unlock  a  number  of 
possible  emergency  measures  (see  building  blocks  4-8)  which  include  measures  to 
facilitate  free  movement,  improve  transparency,  speed  up  the  placing  of  crisis-relevant 
products  on  the  market  during  emergency,  public  procurement  or  exceptional  measures 
impacting crisis-relevant supply chains, specifically: 

-  distribution of crisis-relevant goods at the time of dire shortages; 
- 
ramping up the production lines of crisis-relevant products; 
- 
speeding up permitting procedures; 
- 
accepting  and  prioritising  orders  of  crisis-relevant  products  by  economic  operators 
(‘priority rated orders’); 

-  obtaining information from economic operators. 

On  this  last  category  of  measures,  there  is  a  variety  of  policy  approaches  from  guidance, 
recommendations and obligations to economic operators and to Member States. The latter  would 
require  an  additional  activation  by  means  of  a  Commission  implementing  act  adopted  in 
examination  procedure  (maximum  14  days  or  accelerated),  and  on  duly  justified  grounds  of 
urgency in urgency procedure (5 days, immediately applicable). The activation of such measures 

32 

 
 
 
 
 
would be underpinned by the assessment of impacts carried out by the Commission and the SMEI 
governance body, and:  

-  will be activated only after unsatisfactory results of consultation and response by industry;  
-  will be activated upon the advice of the SMEI governance body after careful examination of 

monitoring data and consultation with all relevant expertise;  
-  will relate to clearly identified crisis-relevant goods and services.  

The information provided by economic operators will be safeguarded through the obligation for the 
Commission for ensuring the confidentiality and trade secrets protection. 

For the coordinated distribution of strategic reserves, the Commission, taking into consideration the 
opinion provided by the governance body, may recommend to the Member States, where possible, 
to  distribute  the strategic reserves  in  a targeted  way  in areas  where they  are most needed, having 
regard  to  the  need  not  to  aggravate  the  Single  Market  disruption  further  and  the  principles  of 
necessity,  proportionality  and  solidarity  and  establishing  the  most  efficient  use  of  reserves  with  a 
view to ending the  Single Market emergency. 

As regards priority rated orders of crisis-relevant products by economic operators, the Commission 
may invite economic operators in crisis-relevant supply chains to accept and prioritise certain orders 
of inputs for the production of crisis-relevant  goods or orders for the production of crisis-relevant 
goods  as  final  products.  In  situations  where  the  economic  operators  refuse  to  accept  to  prioritise 
such  orders  and  yet  the  Commission  or  14  Member  States  considers  such  prioritisation 
indispensable, the Commission may take recourse to obliging the economic operators to accept such 
priority  rated  orders  by  means  of  a  Commission  decision.  Such  decision  shall  be  taken  in 
accordance with applicable Union legal obligations, having regard to the circumstances of the case, 
including  the  principles  of  necessity  and  proportionality.  The  decision  shall  in  particular  have 
regard  for  the  legitimate  interests  of  the  economic  operator  concerned  and  the  cost  and  effort 
required for any change in production sequence. In its decision, the Commission shall state the legal 
basis of the priority rated order, fix the time-limit within which the order is to be performed in the 
absence  of  contestation  by  the  economic  operator  addressed,  and,  where  applicable,  specify  the 
product  and quantity,  and state the penalties for  non-compliance with  the obligation. The priority 
rated  order  shall  be  placed  at  fair  and  reasonable  price.  Where  an  economic  operator  accepts  and 
prioritises a priority rated order, it shall not be liable for any breach of contractual obligations that is 
required to comply with the priority rated orders. 

5.3 Building blocks 

On  the  basis  of  the  mapping  of  problem  drivers  as  well  as  the  analysis  of  the  gaps  in  terms  of 
coverage of the relevant sector-specific crisis legislation, we identified the measures that could form 
part of the toolbox with the objective to address all the problem drivers and all the identified gaps. 
We then defined eight building blocks on the basis of these measures, grouping the measures into 
blocks that would apply in different modes (at all times, in vigilance mode and in emergency mode) 
and further by topic/problem driver:  

1.  governance, coordination and cooperation 
2.  crisis contingency planning 
3.  Single  Market  vigilance  (including  elements  of  public  procurement  and  constitution  of 

strategic reserves) 

4.  key principles and supportive measures for facilitating free movement during emergency 
5.  transparency and administrative assistance during emergency 
6.  speeding up the placing of crisis-relevant products on the market during emergency 

33 

 
 
 
 
 
 
 
 
7.  public procurement during emergency 
8.  measures impacting crisis-relevant supply  chains  during emergency  (including distribution 
of  strategic  reserves,  ramping  up  and  repurposing  of  production,  priority-rated  orders, 
speeding up permitting, information requests) 

Building blocks 1 and 2 would apply at all times (“green light”). Building block 3 would apply in 
the  Single  Market  vigilance  mode  (“yellow  light”).  Finally,  building  blocks  4-8  would  all  only 
apply  in  the  Single  Market  emergency  mode  (“red  light”).  The  correspondence  between  problem 
drivers, problems, gaps and building blocks is presented in the table below: 

34 

 
 
 
 
 
Problem drivers 
1.  Dedicated  fora  do  not  exist  or 
the  existing  fora  are  unable  to 
deal with single  market vigilance 
response 
crisis 
and 
(communication, 
coordination, 
decisions) 
2. Lack of preventive measures at 
EU  and  national  level  such  as 
forecasting,  emergency  trainings, 
mitigations  measures  for  crisis 
situations such as stockpiling  

3.  Divergent  and  not  well 
targeted 
Market 
Single 
restrictions  by  Member  States 
during crisis situations 
4.  Lack  of 
public 
restrictions 

information  from 
on  MS 

authorities 

for 

Procedures 

placing 
5. 
harmonized  products  on 
the 
market  are  not  sufficiently  fast 
for  deploying  critical  goods  on 
the market for crisis response 
6.  Insufficient  legal  certainty  in 
relation  to  existing  emergency 
provisions  in  public  procurement 
and  lack  of  rules  on  coordinated 
and  joint  procurement  for  single 

Table 1. Correspondence between problem drivers, gaps and building blocks 

Gaps 
1.  Lack  of  a  clearly  identified  forum  with  a  broad  horizontal  mandate  for  discussion  among  sectorial 
experts inevitably delays the response time in case of crisis 
2.  Lack  of  an  existing  fora  at  EU  level  covering  all  aspects  relating  to  the  functioning  of  the  Single 
Market 
3.  Lack  of  requirements  for  the  Member  States  to  exchange  any  crisis-relevant  information  between 
themselves, with the exception of civil protection 
1. Scattered or non-existent monitoring at Member States level 
2.  Lack  of  tailored  preparatory  tools  in  view  of  the  broader  Single  Market  impacts  of  possible  future 
crises 
3. The findings stemming from monitoring at national level may not reach the Commission and/or other 
Member States and may not be collectively discussed  
4.  Lack  of  formal  preventive  tools  at  the  EU  level  such  as  forecasting  or  strategic  reserves  in  view  of 
anticipating or tackling possible supply chain shortages in the Single Market during crises 
1.  Lack  of  existing  EU-level  mechanisms  (neither  at  the  level  of  primary  law,  nor  at  the  level  of 
secondary law) for crisis management due to disruptions of the functioning of the Single Market 
2. Limited effectiveness of EU-level recommendations,  which  may be  issued in a crisis context due to 
their non-binding nature 
1.  Lack  of  clear  and  coherent  rules  regarding  the  administrative  assistance  including  points  of  contact 
that provide information and assistance to citizens and businesses at national level, resulting in linguistic 
barriers and additional administrative burden for economic operators 
2. Length of the delays provided for in the TRIS system operated under the Single Market Transparency 
Directive (SMTD), which may not be sufficiently adapted to crisis scenarios 
3.  Follow-up  to  reintroduction  of  internal  border  controls  under  the  Schengen  Borders  Code,  which 
cannot  be  vetoed  by  the  Commission,  is  limited.  There  is  no  notification  obligation  for  measures 
restricting free movement of persons such as entry and exit bans 
1. Lack of legally binding fast-track conformity assessment procedures allowing for a swifter placing of 
harmonised crisis-relevant products on the market during emergency 
2. Lack of mechanisms allowing to swiftly lay down detailed technical specifications for crisis-relevant 
products  

1. Member States may procure any crisis-relevant goods or services individually, without any obligation 
to coordinate such procurement action between themselves 
2.  Outside  of  rescEU  mechanism  in  the  area  of  civil  protection,  the  Commission  currently  has  no 
mechanism at its disposal to procure on behalf of the Member States  
3. The Joint procurement provision of the  Public Procurement Directive requires the Member States to 

35 

Solutions = building blocks 
1.  governance,  coordination  and 
cooperation 

2. crisis contingency planning 
3. Single Market vigilance 

4.  key  principles  and  supportive 
measures 
free 
movement during emergency 

facilitating 

for 

5. transparency and administrative 
assistance during emergency 

6.  speeding  up  the  placing  of 
crisis-relevant  products  on 
the 
market during emergency 

3. Single Market vigilance 
7.  public  procurement  during 
emergency 

 
 
 
 
 
 
 
 
market emergencies specifically 

7.  Supply  chain  disruptions  that 
crisis-
shortages  of 
amplify 
relevant 
during 
products 
emergency  and  the  lack  of  the 
ability to anticipate them 

8.  Lack  of 
economic operators 

information  from 

negotiate between themselves what the procedure of such joint procurement by the Member States would 
be  and  to  put  in  place  a  joint  undertaking  or  a  joint  purchasing  body  for  each  instance  of  joint 
procurement 
1. Lack of appropriate Early  Warning System  whereby the Member States could notify  information  to 
the  Commission  on  shortages  of  goods  or  services  that  result  from  Single  Market  impacts  of  an 
emergency situation or about any developments that would lead to those 
2.  Lack  of  formal  preventive  tools  at  the  EU  level  such  as  forecasting  or  strategic  reserves  in  view  of 
anticipating or tackling possible supply chain shortages in the Single Market during crises 
3.  Lack  of  specific  EU-level  arrangements  for  distribution  of  crisis-relevant  goods  at  the  time  of 
established  shortages,  ramping  up  the  production  lines  of  crisis-relevant  products,  speeding  up 
permitting  procedures  and  accepting  and  prioritising  orders  of  crisis-relevant  products  by  economic 
operators 
1.  Lack  of  mechanisms  for  collaboration  between  the  private  sector  and  public  authorities  in  each  the 
Member States and lack of a coordinated mechanism for such a collaboration at the EU level 

2. crisis contingency planning 
3. Single Market vigilance 
8.  measures 
impacting  crisis-
relevant  supply  chains  during 
emergency 

8.  measures 
impacting  crisis-
relevant  supply  chains  during 
emergency 

In  the  following  Table  2  we  set  out  a  description  of  the  contents  of  each  building  block,  including  the  alternative  policy  approaches  that  could  be 
chosen  for  each  building  block.  Beside  the  baseline  scenario  or  ‘doing  nothing’,  we  assess  for  each  building  block  an  approach  focused  on  non-
legislative measures  additional to  the baseline scenario,  a hybrid  approach combining  legislative  and non-legislative measures and a third approach 
proposing a legislative framework with a broader range of crisis management measures. The approaches should not be seen as self-standing options, 
but policy alternatives considered in preparation of policy options. 

Table  2  below  presents  an  overview  of  approaches  per  building  block.  A  very  detailed  overview  of  approaches  per  building  block  is  presented  for 
further reference in Annex 5. These approaches for each building block are analysed in detail in Annex 6 in order to define realistic policy options, 
which represent combinations of different approaches selected for each building block. These newly defined Policy Options reflect different levels of 
political ambition and different levels of support of stakeholders. These Policy Options are then analysed in detail in section 6. 

36 

 
 
 
 
 
 
 
  
 
TABLE 2. OVERVIEW OF POLICY APPROACHES PER BUILDING BLOCK 

Building blocks 

Policy approach 1: Soft law 

Policy approach 2: Targeted legal solutions 
combined with soft law 

Policy approach 3: Comprehensive legal 
framework combined with some soft law 

Mode when 
the building 
block applies. 

1. Governance, coordination, 
cooperation 

Informal network of experts 
set  up  by  DG  GROW  as  the 
technical-level. 

Advisory  Group  set  up  by  the  SMEI 
regulation  to  serve  as  the  technical-level 
forum. 

High  Level  Board  with  high-level  MS 
representatives,  chaired  by  COM  supported 
by dedicated technical sub-groups. 

Applies at all 
times 

Recommendation  to  MS  to 
exchange 
crisis-relevant 
information. 

Obligation  of  the  MS  to  share  between 
themselves and with the Commission within 
the  expert  group  and  the  Council  crisis-
relevant  information,  in  anticipation  of 
the crises and during crisis.  

where 
guidance 
New 
necessary  for  the  functioning 
of the Single Market in times 
of crises on: 

  voluntary assessment of 
risks to supply chains of 
goods and services on 
regular basis 

Recommendation to the MSs:  

 

 

to assess risks to supply chains of goods 
and services of strategic importance on 
a regular basis 
to train and organise drills in crisis 
vigilance and crisis communication to 
relevant national experts  

  crisis-relevant 

training 
and  drills  for  national 
experts  
Compendium 
crisis 
response  measures,  prepared 
the 
and  maintained  by 

of 

Compendium of crisis response measures, 
prepared and maintained by the MS and the 
Commission in the Advisory Group. 

37 

2. Crisis contingency 
planning 

-  Regular assessment 

of risks 

-  Emergency trainings 
and drills of relevant 
national experts 
-  Crisis protocols  
-  Compendium of crisis 
response measures 

Obligation  of  the  MS  to  share  any  crisis-
relevant information in the HLB with other 
MS  and 
the  Commission.  HLB  shares 
information  with  IPCR  and  other  crisis-
relevant EU-level bodies. 

operators 

Obligation  of  the  Commission  to  share 
information that it has obtained from the 
economic 
via  mandatory 
information  requests  with  the  High  Level 
Board. 
Recommendation to the MS to assess risks 
of  supply  chains  of  goods  and  services  of 
strategic importance on a regular basis. 

Obligation of the Commission to: 
carry  out  regularly  a  risk  assessment  at 
Union  level  for  supply  chains  of  strategic 
goods and services, 

 operate in cooperation with the MS an 

early warning system  

Applies at all 
times 

crisis 

 devise in cooperation with the Member 
States 
the 
framework  for  crisis  communication  to 
be  applied  during  vigilance  and 
emergency modes 

protocols 

and 

 
 
 
 
 
 
 
 
 
 
3. Single Market vigilance 

informal 
experts. 

network 

of 

on 

voluntary 
Guidance 
information 
stepped-up 
gathering 
concerning 
identified  strategic  supply 
chains. 

New  guidance  to  economic 
operators 
on  mitigating 
measures,  including  strategic 
storage  or  stockpiling  of 
goods of strategic  

Public 

Guidance  on  the  use  of  the 
negotiated  procedure  under 
the 
Procurement 
Directive  for  compiling  any 
relevant  MS  level  strategic 
reserves. 

 provide training on crisis coordination 

and cooperation and information 
exchange for national experts.  

 conduct stress tests, simulations and in-
action and after-action reviews of the 
national crisis protocols and 
communication plans with Member 
States  

Obligation to MS to train their relevant 
crisis management staff regularly. 

on 
to 
Recommendation 
information 
concerning 
gathering 
identified  strategic  supply  chains  and 
obstacles to free movement. 

the  MS 

Industry  stakeholders  in  the  relevant  supply 
chain(s)  to  be  invited  by  MS  to  provide 
targeted  information  factors  impacting  the 
availability of such goods and services. 

Compendium of crisis response measures, 
prepared and maintained by the Commission 
for the High Level Board. 
Subject  to  the  activation  of  the  Single 
Market  vigilance  mode  by  means  of 
Commission implementing act:  

Vigilance 
mode 

The  obligation  of  the  MS  to  monitor 
identified  supply  chains  of  goods  and 
services  of  strategic  importance  with  the 
Commission 
such 
monitoring. 

coordinating 

The  Commission  would  actively  promote 
matchmaking  among  companies  in  the 
identified supply chains. 

The  Commission  would  actively  promote 
matchmaking  among  companies  in  the 
identified supply chains. 

Recommendations to the MS on mitigating 
measures,  and  stockpiling  of  goods  of 
strategic importance. 

Guidance  on  the  use  of  the  negotiated 
procedure  under  the  Public  Procurement 
Directive  for  compiling  any  relevant  MS 
level strategic reserves. 

38 

The  Commission  would 
monitoring  of 
obstacles. 

relevant 

step  up 

the 
free  movement 

Obligation  of  the  Commission  to  draw  up 
and  regularly  update  the  list  with  targets 
for strategic reserves to be constituted by 
Member  States  for  the  selected  supply 
chains  of  goods  and  services  of  strategic 

 
 
 
 
 
 
importance. 

Commission 

issue 
The 
Recommendations  requesting  MS  to  build 
up,  maintain  or 
their  strategic 
reserves in order to meet the targets. 

reduce 

will 

The  Commission  will  coordinate  and 
streamline  efforts  of  MS  to  build  up  and 
maintain strategic reserves.  

Subject  to  additional  trigger  by  means  of 
Commission  implementing  acts  (during  the 
activation  of  the  Single  Market  vigilance) 
upon  the  condition  that  i)  there  is  evidence 
that  industry’s  stockpiling  is  insufficient  or 
inexistent,  ii)  alternative  supply  sources  do 
not  work  or  are  insufficient  and  iii)  impact 
and 
assessment 
for 
governance  body 
building up strategic reserves. 

the  Commission 
indicates  a  need 

by 

Where  the  strategic  reserves  of  MS  fall 
the 
significantly  short  of 
Commission  can  oblige  the  MS  to  build 
up strategic reserves for selected goods of 
strategic importance that would correspond 
to such targets. 

targets, 

the 

4. Key principles and 
supportive measures for 
facilitating free movement 

New 
or 
guidance 
Recommendations  on  free 
movement  of  crisis-relevant 
workers,  service  providers, 

Reinforcing key principles of free 
movement of crisis-relevant workers, service 
providers, goods in binding rules 
(identifying restrictions of free movement 
incompatible with the Single Market in a 

39 

for  building  up 

MS  would  rely  on  the  provisions  of  the 
Procurement  Directive  for  carrying  out 
any  necessary  individual  or  coordinated 
their 
procurement 
strategic reserves. 
Providing for a comprehensive set of rules 
supporting  free  movement  of  goods  and 
persons (including workers, posted workers, 
service  providers),  especially  crisis-relevant 
goods  and  persons  in  times  of  crisis  in 

Emergency 
mode 

 
 
 
 
during emergency 

persons and goods. 

particular crisis situation, black lists of such 
measures and providing supportive 
measures) 

binding rules.  

5. Transparency and 
administrative assistance 
during emergency 

States 

share 
Member 
national 
crisis  measures 
voluntarily  with  COM80  and 
other MS. 

Recommendation  to  Member  States  on 
free  movement  of  persons  (including 
workers and service providers) and goods. 
Binding  simplified  fast-track  notification 
mechanism 
free  movement 
any 
restrictions81  +  flash  peer  review  of  draft 
notified measures in the EG82. 

of 

-  Notification of 
national crisis 
measures 
Information and 
assistance in relation 
to national crisis 
measures 

- 

6. Speeding up the placing of 
crisis-relevant goods on the 
market 

to 

Recommendation 
the 
Member  States 
to  provide 
to 
administrative  assistance 
businesses,  workers,  services 
providers, 
and 
citizens  for  fulfilment  of  any 
crisis-related  formalities  and 
procedures. 
Guidance on  

consumers 

 

increasing availability of 
products and 
  prioritizing market 

surveillance and controls 

Binding full-fledged fast-track notification 
mechanism83  

Emergency 
mode 

+  flash  peer  review  of  draft  notified 
measures 

+  possibility 
the  notified 
to  declare 
national crisis  measures incompatible with 
EU  law  by  COM  Decision84  and  to  request 
the  Member  State  in  question  to  refrain 
from  adopting  the  draft  measures  or  to 
abolish the adopted measures. 

Targeted  amendments  of  existing  Single 
Market harmonisation legislation  

Targeted  amendments  of  existing  Single 
Market  harmonisation 
for 
products 

legislation 

Emergency 
mode 

 

national 

enabling 

market 
surveillance  authorities  to  authorise  the 
placing  on 
the  market  of  critical 
products while conformity assessment is 
ongoing.  

 

possibility  for  the  Commission  to 

 derogating  from  existing  conformity 
assessment procedures during a specific 
timeframe 
 possibility 
standards 

to  use  normal  European 
harmonised/non-

for 

80 COM may in principle start normal infringement proceedings if any notified crisis measure is incompatible with EU law. 
81 Not applicable to the reintroduction of internal border controls under the Schengen Borders Code as there is a separate notification obligation. 
82 Besides the flash peer review comments, COM may in principle start normal infringement proceedings if any notified crisis measure is incompatible with EU law. 
83 Not applicable to the reintroduction of internal border controls under the Schengen Borders Code as there is a separate notification obligation. 
84 The possibility for the Commission is an option and not an obligation. It is always without prejudice to other tools such infringement procedures, administrative and political letters 
etc.  

40 

 
 
 
 
 
 
 
 
 
                                                           
adopt 
technical 
harmonised/non-harmonised 
where no harmonised standard exists.  

specifications 

for 
products 

 

obligations 

to  prioritise 
market  surveillance  for  crisis-relevant 
products. 

to  MS 

harmonised  products  in  the  absence  of 
European standards. 

 obligation 

prioritise  market 
surveillance for crisis-relevant products. 

to 

Public 
7. 
during emergency 

procurement 

New  guidance  on  public 
procurement: 

 

the use of emergency 
provisions of public 
procurement  

  voluntary coordination 

of public procurement 
action by individual 
Member States during the 
crisis 

8. Measures impacting 
crisis-relevant supply chains 

Guidance  on  distribution  of 
previously 
possibly 

on 

provision 

for  some  or  all  MS, 

coordinated 
New 
procurement/common  purchasing  by  the 
Commission 
if 
requested  by  the  MS85,  with  MS  budget 
whereby  the  Commission  draws  up  the 
proposal 
agreement 
organising in detail the  joint procurement to 
be  signed  by  the  participating  Member 
States.  Such  procurement  would  exclude 
any joint/coordinated procurement by the 
same  MS  that  does  not 
involve  the 
Commission at the same time. 

framework 

for 

New  provision  obliging  the  Member  States 
to  coordinate  with  and  consult  other  MS 
and  the  Commission  prior  to  engaging  in 
individual  procurement  action  of  crisis-
relevant products during the crisis. 

New guidance:  

 

 

the use of emergency provisions of 
public procurement  
the use of occasional joint 
procurement by the Member States 
under the Procurement Directives 
The use  of below measures is subject  to the 
these  measures 
individual  activation  of 

Emergency 
mode 

of 

the 
amendments 
Targeted 
Procurement Directives allowing Member 
States  to  derogate  from  existing  public 
procurement  procedures/suspend 
the 
application of the Procurement Directives 
for 
crisis-relevant 
products  during  a  specific  timeframe 
during the crisis. 

procurement 

of 

on 

provision 

coordinated 
New 
procurement/common  purchasing  by  the 
Commission  for  some  or  all  MS,  which 
would  exclude  any  procurement  by  any 
MS  jointly  or  individually  at  the  same 
time86.  It  could  allow  the  Commission  to 
derogate  from  several  steps  of  normal 
procurement  procedures  under 
the 
Financial Regulation.  

The  use  of  below  measures  is  subject  to 
individual activation of the measures during 

Emergency 

85 If the emergency procurement provisions of the proposal for the Regulation revising the Financial Regulation will not be adopted by the time SMEI is adopted. 
86 If the emergency procurement provisions of the proposal for the Regulation revising the Financial Regulation will not be adopted by the time SMEI is adopted. 

41 

 
 
 
 
 
                                                           
during emergency 

stockpiled products relevant 
for a certain type of crisis. 

during  the  activation  of  the  Single  Market 
emergency mode87:  

the  activation  of 
emergency mode:  

the  Single  Market 

mode 

-  Distribution of crisis-
relevant goods at the 
time of dire shortages 

-  Ramping up the 

- 

production lines of 
crisis-relevant 
products 
Speeding up 
permitting 
procedures 
-  Accepting and 

prioritising orders of 
crisis-relevant 
products by economic 
operators 
-  Obtaining 

information from 
economic operators  

Guidance  on  ways  how  the 
MS  could  encourage 
the 
economic  operators  to  ramp 
up their production capacity 
of  crisis-  relevant  products 
during the crisis. 

Guidance  on  speeding  up 
permitting  procedures 
to 
ramp  up 
the  production 
capacity for products relevant 
for the specific type of crisis. 

Guidance  on  the  ways  how 
the  MS  could  encourage  the 
economic  operators  to  accept 
and  prioritise  orders  of 
crisis-relevant products.  

Recommendation 
the 
economic operators to share 
crisis-relevant info.  

to 

Measures  would  be  envisaged  only  where 
the  industry  is  unable  or  unwilling  to 
without 
provide 
to 
reasonable 
guidance by the Commission. 

justification, 

solutions 

effective 

further 

Measures  would  be  envisaged  only  where 
the  industry  is  unable  or  unwilling  to 
without 
provide 
to 
reasonable 
guidance by the Commission. 

justification, 

solutions 

effective 

further 

on 
Recommendation 
previously 
of 
distribution 
stockpiled products relevant for a certain 
type of crisis. 

to 
possibly 

the  MS 

the  MS 

Empowering 
the 
economic  operators  to  ramp  up  their 
production  capacity  of  crisis-relevant 
products during the crisis. 

to  oblige 

Recommendation  to  the  MS  on  speeding 
up  permitting  procedures  during  the 
crisis. 

Recommendation to the Member States to 
encourage  the  economic  operators  to 
accept  and  prioritise  orders  of  crisis-
relevant products.  

for 

harmonised 

for 
Providing 
mandatory 
of 
information 
targeted  crisis-relevant  information  by 
the  MS  to  economic  operators  in  crisis-

rules 
requests 

Obligation  of  the  Member  States  to 
distribute  possibly  previously  stockpiled 
products  relevant  for  a  certain  type  of 
crisis when the reserves have been financed 
by the EU. 

Empowering  the  Commission  to  oblige 
the  economic  operators  to  ramp  up  their 
production  capacity  of  crisis-relevant 
goods  (e.g.  repurposing  their  production 
lines or creating new production lines)88. 

Obliging  the  MS  to  speed  up  permitting 
procedures  during  the  crisis  by  means  of 
the 
legislation 
production capacity for products relevant for 
the specific type of crisis. 

ramp  up 

in  order 

to 

Obligation  of  the  economic  operators  to 
accept  and  prioritise  orders  of  EU 
authorities of crisis-relevant products. 

Commission 

empowered 

to 

issue 

87 Additional activation by means of Commission implementing act (at the advice of the governance body) at the time or after activation for the emergency mode. 
88 In case this measure is retained, such an empowerment for the Commission would imply a need for a special financial instrument (based on the model of Emergency Support 
Instrument which was activated during the COVID-19 crisis to help the EU address the pandemic, in particular to secure the COVID-19 vaccines) to reimburse the economic 
operators for their costs in such a scenario.  

42 

 
 
 
 
 
 
                                                           
relevant 
their 
supply  chains  as 
production  capacities,  current  supply 
chain  disruptions  +  data  necessary  for 
assessment  of  the  nature  and  magnitude 
of the supply chain disruptions.  

to 

mandatory  requests  of  crisis-relevant 
information  to  economic  operators 
in 
crisis-relevant supply chains, based on the 
lists  of  contacts  or  relevant  ad  hoc 
information  provided  by  the  Member 
States,  as  to  their  production  capacities, 
current  supply  chain  disruptions  +  data 
necessary  for  assessment  of  the  nature 
and magnitude of the supply.  

The Single Market Emergency Instrument initiative would take the form of a Proposal for a Regulation of the European Parliament and of the Council. 
Considering that in the case of provisions laid down in a Regulation, there is no need for the Member States to transpose them into their respective 
national legislation, this specific legal instrument would allow to ensure that the provisions are applied in a consistent manner.  

The proposed Regulation would bring targeted amendments to a series of sectorial harmonised product legal frameworks in order to introduce in each 
specific framework derogatory procedures which would be applied once the Single Market emergency mode has been activated.  

With respect to other frameworks such as the Single Market Transparency Directive or the Services Directive, the proposed Regulation will introduce 
complementary procedures, which are to be applied in the emergency mode and will clarify the relationship between the relevant legal frameworks but 
without amending the respective legal frameworks.  

Digital by default rule will apply for all measures as relevant. Specifically, secure, interoperable solutions will be used for the exchange of information 
between  Member  States  and  the  Commission  foreseen  under  building  block  1.  Equally,  communication  protocols  and  the  framework  for  crisis 
communication, as well as the early warning system foreseen under building block 2 would be based on interoperable digital solutions, building on 
already existing technical solutions. These solutions, in particular the exchange of information tool, would also form basis for an interoperable digital 
solution to be used for coordinated monitoring foreseen in the vigilance mode in building block 3. Fast-track notification mechanism foreseen under 
building  block  5  would  be  interoperable  with  existing  notification  IT  tool(s)  as  it  would  be  an  extension  of  such  tool(s).  Finally,  for  information 
requests  from  companies  an  electronic  tool  would  be  used  which  would  ensure  once-only  principle  and  reuse  of  data  and  would  be  user-centric  to 
minimise the administrative burden for companies. 

43 

 
 
 
 
 
 
 
5.4 Policy options  

The approaches for each building block are analysed in detail in Annex 6 in order to define realistic 
policy  options,  which  represent  combinations  of  different  approaches  selected  for  each  building 
block.  The  options  reflect  different  levels  of  political  ambition  and  different  levels  of  support  of 
stakeholders.  For  some  of  the  building  blocks,  the  choice  of  the  preferred  policy  approach  is 
straightforward taking into account the feedback from stakeholders, proportionality and subsidiarity 
of measures. For others, in particular for far-reaching measures, the views of stakeholders including 
Member  States  and  businesses  differ,  hence  the  different  approaches  for  these  blocks  have  been 
included  in  the  different  policy  options.  The  overview  of  the  composition  of  the  policy  options 
resulting from the analysis in Annex 6 is presented in the table below. These policy options will be 
analysed in detail in section 6. 

Policy Option 1 consists of common elements between all three Options for blocks 1, 4, 5, 6, 7 and 
of soft-law measures relying on recommendations for blocks 2, 3 and 8, representing the lower level 
of  ambition  and  aiming  to  ensure  full  transparency.  Policy  Option  2  introduces  more  ambitious 
elements in blocks 2 and 8 relying on actions by Member States, aiming for increased cooperation. 
Policy Option 3 introduces binding measures for Member States under blocks 3 and 8 in order to go 
beyond cooperation and ensure a maximum of solidarity. 

Table 3. Overview of the composition of the policy options 

Mode 

Building blocks 

All times 

All times 

1. governance, 
coordination and 
cooperation 
2. crisis contingency 
planning 

Vigilance 

3. Single Market 
vigilance 

Policy Option 1 
TRANSPARENCY 

Policy Option 2 
COOPERATION 

Policy Option 3 
SOLIDARITY 

Approach 2 
Formal Advisory Group as the technical-level forum and obligation of the MS to 
share information within the group in anticipation and during the crisis 

Approach 3 

- Recommendation to MS for risk assessment & 
compendium of crisis response measures and 
- Obligation to the Commission for Union level risk 
assessment 
- Obligation to MS to train their relevant crisis 
management staff regularly 

Approach 2 
Recommendation to 
the Member States 
for risk assessment, 
training and drills & 
compendium of 
crisis response 
measures 
Approach 2 
- Recommendation to the Member States on 
information  gathering  concerning  identified 
strategic supply chains 

Approach 3 
-  Obligation  to  Member  States  to 
gather 
information  concerning 
identified  strategic  supply  chains 
and  share  that  information  with 
the Commission 
- Obligation of the Commission to 
draw  up  and  regularly  update,  by 
means of implementing acts, a list 
with  targets  for  strategic  reserves 
to  be  constituted  by  Member 
States  for  the  selected  supply 
chains  of  goods  and  services  of 
strategic importance, by means of 
recommendation 

Subject to additional trigger: 
- Obligations to Member States to 
build  up  strategic  reserves  for 
strategic 
selected 
importance  if  the  Member  States 

goods 

of 

-  Recommendations  to  the  Member  States 
for  building  up  strategic  reserves  of  goods 
of strategic importance 

44 

 
 
 
 
 
 
 
 
 
 
Emergency  4. key principles and 
supportive measures 
for facilitating free 
movement during 
emergency 

Emergency  5. transparency and 

administrative 
assistance during 
emergency 

Emergency  6. speeding up the 

placing of crisis-
relevant products on 
the market during 
emergency 

Emergency  7. public 

procurement during 
emergency 
Emergency  8. measures 

impacting crisis-
relevant supply 
chains during 
emergency mode 

Approach 2 
Reinforcing  key  principles  of  free  movement  of  goods,  services  and  persons  in 
binding rules where appropriate for effective crisis management 

strategic reserves fall significantly 
short of the targets 

Approach 3 
Binding  full-fledged  fast-track  notification  mechanism,  flash  peer  review  and 
possibility  to  declare  the  notified  measures  incompatible  with  EU  law;  contact 
points and electronic platform 

Approach 2 
Targeted amendments of existing Single Market harmonisation legislation: faster 
placing  of  crisis-relevant  products  on  the  market;  Commission  can  adopt 
technical  specifications;  MS  prioritise  market  surveillance  for  crisis-relevant 
products  

New  provision  on  coordinated  procurement/common  purchasing  by 
Commission for some or all Member States 

the 

Approach 2 

Approach 3 

Subject to additional activation: 

Obligations to MS to distribute 
products previously stockpiled; 
speeding up permitting 
procedures,  
Obligations to businesses to 
accept and prioritise orders; ramp 
up production capacity and 
provide crisis-relevant 
information 

Approach 1 

Guidance on 
ramping up 
production capacity; 
speeding up 
permitting 
procedures; 
accepting and 
prioritising orders of 
crisis relevant goods 
Recommendations 
to businesses to 
share crisis-relevant 
information 

Approach 2 
Recommendations to 
MS for the 
distribution of 
possibly previously 
stockpiled products; 
speeding up 
permitting 
procedures; 
encouraging 
economic operators 
to accept and 
prioritise orders 

Subject to additional 
activation: 
Empowering MS to 
oblige economic 
operators to ramp up 
production capacity 
and to address 
binding information 
requests to economic 
operators 

5.5 Options discarded at an early stage 

Discarded policy approaches  

Annex  6  provides  a  list  of  discarded  policy  approaches  for  different  building  blocks.  They  were 
discarded  due  to  their  lack  of  effectiveness  in  meeting  the  policy  objectives  and/or  the  lack  of 
support  of  stakeholders.  The  policy  options  retained  for  the  assessment  are  composed  of  the 
retained  policy  approaches  and  are  framed  to  recognize  the  constraints  of  stakeholders  while 
meeting the expectations of Member States and the European Parliament. 

45 

 
 
 
 
 
 
 
 
 
 
 
 
Discarded options on legal instrument 

It  is  foreseen  that  the  proposal  will  use  the  Commission  implementing  act  to  activate  vigilance 
mode and individual measures, and the Council implementing act to activate emergency mode. 

With  respect  to  the  Single  Market  vigilance  mode,  two  mechanisms  were  considered  for  its 
activation:  activation  by  means  of  Council  implementing  act  or  by  means  of  a  Commission 
implementing  act.  Similarly,  with  respect  to  the  Single  Market  emergency  mode,  both  the 
possibility  to  activate  it  by  means  of  a  Council  implementing  act  or  by  means  of  a  Commission 
implementing act were considered.  

Procedurally,  there  is  also  a  difference  between  two  types  of  implementing  acts.  Specifically, 
Commission implementing acts are subject to procedures for control by the Member States of the 
Commission’s  exercise  of  implementing  powers  (‘Comitology  procedures’)  as  laid  down  by 
Regulation  (EU)  No  182/201189.  While  different  comitology  procedures  have  been  set  up,  each 
providing  for  specific  procedural  requirements,  the  common  thread  for  all  of  them  is  that  they 
provide  for  the  requirement  to  consult  a  dedicated  committee  set  up  by  the  basic  act,  which  is 
composed by representatives of the Member States. The objective of the Single Market Emergency 
Instrument is to provide a framework which enables the swift adoption of response measures in case 
of  an  emergency  affecting  the  functioning  of  the  Single  Market.  In  that  respect,  any  procedural 
delays should be as short as possible in order to  provide for the necessary flexibility and reaction 
time necessary in times of crisis.  

For  what  concerns  the  emergency  mode,  given  the  broad-ranging  effects  that  it  produces  for  the 
Member  States,  the  political  significance  of  the  transition  to  the  Single  Market  emergency  mode 
and the range of the measures that may be taken by the Commission during that mode, it should be 
exceptionally activated by means of Council implementing acts that are adopted at the proposal of 
the Commission. Therefore, in the case of the activation of the Single Market emergency mode, due 
to its broad-ranging effects and political significance, the use of Council implementing acts would 
be more appropriate. Similarly, the Commission proposal for a Council Regulation on a framework 
of  measures  for  ensuring  the  supply  of  crisis-relevant  medical  countermeasures  in  the  event  of  a 
public health emergency at Union level90 provides that the public health emergency framework is to 
be  activated  by  means  of  Council  implementing  decisions.  In  that  respect,  it  would  appear 
appropriate  to  ensure  a  similar  approach  with  respect  to  the  activation  of  the  two  complementary 
emergency  frameworks  (namely  the  Single  Market  Emergency  Instrument  and  the  emergency 
framework regarding medical countermeasures). 

Conversely,  due  to  its  essentially  preventive  nature,  the  Single  Market  vigilance  mode  may  be 
activated by means of a Commission implementing act. Similarly, the activation of the Mechanism 
for  monitoring  crisis-relevant  medical  countermeasures  under  the  Proposal  for  framework  of 
measures for ensuring the supply of crisis-relevant medical countermeasures is also done by means 
of a Commission implementing act.  

89 Regulation (EU) No 182/2011 of the European Parliament and of the Council of 16 February 2011 laying down the 
rules  and  general  principles  concerning  mechanisms  for  control  by  Member  States  of  the  Commission’s  exercise  of 
implementing powers, OJ L 55, 28.2.2011, p. 13.  
90 COM(2021)577 final.  

46 

 
 
 
 
                                                           
6.  WHAT ARE THE IMPACTS OF THE POLICY OPTIONS? 

The following assessment  provides a qualitative analysis of the impacts  generated by each policy 
option, based on the evidence gathered from multiple sources. Whenever possible, it also provides a 
quantitative  analysis  of  benefits  and  costs  relating  to  the  main  economic  and  social  impacts.  The 
cost/benefit analysis, however, is not fully comprehensive due to data gaps and limitations as so far 
no  other  crisis-coordination  and  management  tool  of  horizontal  nature  exists  at  EU  level.  The 
quantification of costs and benefits is based on a number of assumptions coming from other existing 
impact assessment studies and reports and expert knowledge of the Commission officials. The aim 
of  this  assessment  is  to  provide  ranges  of  the  magnitude  of  potential  impacts  generated  by  each 
policy  option,  rather  than  exact  monetisation91.  Given  that  for  certain  measures  the  necessary 
evidence will become available only in a crisis situation (unknown today), the assessment provides 
a  qualitative  assessment  of  the  type  of  impacts  to  be  expected  for  different  stakeholders  groups. 
This  is  also  the  reason  why  the  instrument  foresees  the  need  for  the  assessment  before  activating 
certain measures in the decision mechanisms (as explained in section 5.2, setup of the instrument). 

1.  POLICY OPTION 1  

Economic Impacts 

Impact on companies 
The  toolbox  of  measures  under  Policy  Option  1  is  expected  to  bring  economic  benefits  for 
companies, in particular during an emergency, due to better EU-level crisis response leading to less 
obstacles  to  free  movement  and  better  availability  of  crisis-relevant  products.  These  measures  do 
not  impose  any  compliance  costs  on  companies  as  all  of  the  measures  that  could  have  cost 
implications for companies (e.g. information requests or stockpiling) are voluntary. This voluntary 
nature means that businesses will only decide to go ahead with these measures when they perceive 
that the benefits of doing so will outweigh the costs. 

In terms of measures with immediate effect (block 1 and block 2), during an emergency, thanks 
to better coordination of national measures and cooperation between the Member States within the 
governance  body  and  with  other  crisis  relevant  mechanisms,  it  is  expected  that  there  will  be  an 
overall better crisis response benefiting companies. In their responses to the call for evidence and 
the public consultation, business stakeholders stressed that the initiative should ensure cooperation, 
coordination and exchange of information and should focus on crisis response. Some of the industry 
associations  pointed  out  in  their  position  papers  that  SMEI  should  primarily  ensure  cooperation, 
coordination  and  exchange  of  information  (Business  Europe).  Also,  the  European  Trade  Union 
Confederation (ETUC) asked for a Single Market Emergency Instrument that will address the lack 
of coordination and cooperation between the Member States.  Business stakeholders supported the 
instrument’s  role  to  ensure  exchange  of  information.  During  the  stakeholder  workshop,  69%  of 
respondents  (mainly  public  authorities  and  business  associations)  were  in  favour  of  mandatory 
exchange of gathered information by Member States in a dedicated forum. 

The  measures  contained  in  the  crisis  contingency  planning  building  block  2  will  bring  economic 
benefits  to  companies  in  the  longer  term,  if  the  emergency  mode  is  activated,  thanks  to  better 
foresight and anticipation to manage a Single Market emergency when it strikes. There are no direct 
compliance  and  administrative  costs  for  companies.  In  the  public  consultation,  regular  risk 
assessment by the industry was supported by 22 out of 24 respondents and by the Member States 

91 More details on data gaps and limitations are presented in Annex 4. 

47 

 
 
 
 
                                                           
was supported by 22 out of 24 respondents. Emergency training and drills were supported by 22 out 
of  24  respondents.  Business  stakeholders  expressed  support  for  risk  assessment  by  public 
authorities (BusinessEurope) and emergency simulation exercises (SMEUnited). 

During  the  vigilance  mode,  under  Policy  Option  1  the  measures  foreseen  in  the  Single  Market 
vigilance  (block  3)  are  voluntary  (providing  information  on  supply  chains  and  participating  in 
match-making).  In  terms  of  benefits,  promotion  of  match-making  among  companies  in  the 
identified  supply  chains  is  expected  to  result  in  certain  benefit  for  companies.  In  the  longer 
perspective, if a crisis materialises, measures taken by Member States on information gathering on 
supply  chains  and  on  constituting  strategic  reserves  in  the  vigilance  mode  could  result  in  better 
availability  of  crisis-relevant  goods,  which  could  benefit  companies  in  terms  of  better  EU-wide 
crisis response; however these benefits would be limited due to being dependent on the uptake of 
recommendations by Member States. Any costs for companies will be incurred based on their own 
assessment of costs and benefits.  In the public consultation, 14 out of 24 respondents supported a 
targeted monitoring mechanism (above referred to as targeted information gathering) of identified 
supply  chains  to  anticipate  shortages.  Some  business  stakeholders  were  in  favour  of  voluntary  or 
mandatory mechanisms to anticipate future shortages (for example SMEUnited,  Europen, VDMA, 
ETUC),  whereas  others  considered  that  this  was  not  in  line  with  the  principles  of  proportionality 
and necessity (BusinessEurope, ERT, and Dansk Industri). 

On the question of a strategic storage or stockpiling system for goods of strategic importance in the 
public consultation, 19 respondents out of 21 were generally supportive of such a measure, whether 
done on the industry, Member States or EU level. There were a number of divergent suggestions on 
how to determine such goods of strategic importance, both in terms of methodology and in terms of 
specific goods. 

During the emergency mode, certain blocks (4-7) and measures could be activated depending on 
the type of crisis. The impacts will therefore strongly depend on the types of measures activated and 
sectors concerned. Therefore, the analysis below focuses on the type of expected impacts.  

During  an  emergency,  facilitation  of  free  movement  by  means  of  key  principles  and  related 
measures and better information (transparency) will have a very positive impact on companies due 
to  the  improved  legal  certainty  and  improved  free  movement  of  goods,  services  and  persons, 
resulting  in  higher  turnover,  less  delays  in  production,  less  difficulties  in  outsourcing  staff,  lower 
prices for inputs and less temporary stoppages (blocks 4 and 5).  

In  general,  companies  support  key  principles  and  supportive  measures  for  facilitating  free 
movement  during  emergency  (block  4)  and  transparency  and  administrative  assistance  during 
emergency (block 5). 21 out of 21 respondents to the public consultation supported providing key 
principles concerning crisis measures restricting the free movement of certain categories of goods 
as well as persons, workers and professionals. 19 out of 21 respondents supported setting out key 
principles  to  identify  a  blacklist  of  national  measures  restricting  the  free  movement  of  goods, 
services and persons incompatible with the particular crisis situation. Business stakeholders widely 
supported  measures  to  ensure  free  movement,  singling  out  the  needs  of  cross-border  workers, 
critical occupations and supporting solutions such as key principles and blacklists. Specifically, in 
their position papers the European Organization for Packaging and the Environment (EUROPEN) 
was  in  favour  of  key  principles  to  identify  incompatible  national  restrictions,  the  German 
Mechanical Engineering Industry Association (VDMA) stated that a blacklist of measures could be 
useful.  Stakeholders  have  largely  supported  actions  regarding  information  sharing  and/or 
notifications  of  national  crisis  measures  as  a  solution  to  crisis  situations.  20  out  of  22  public 
consultation  respondents  (mostly  business  associations)  were  in  favour  of  specific  mandatory 

48 

 
 
 
 
 
notification mechanisms followed by flash peer review. 21 out of 22 respondents expressed support 
both  for EU-level  and national  level  contact  points,  as well as for publishing the summary of the 
national  crisis  measures  on a dedicated EU website.  In the stakeholder workshop, the majority of 
participants  supported  obligatory  notifications  and  disseminating  information  via  electronic 
platform and a single point of contact in the EU, with less support for voluntary options. Business 
stakeholders stressed the need to address difficulties to access information and the need for Member 
States  to  share information  about  national  measures, supported notification mechanism and called 
for  a  dedicated  information  interface  and  hotline.  Eurocommerce  stated  that  overall,  access  to 
timely (real-time), comprehensive and clearly structured information has been a huge problem.  

Economic  benefits  for  companies  are  also  foreseen  for  the  measures  related  to  speeding  up  the 
placing  of  crisis-relevant  products  on  the  market  during  emergency  (block  6).  Through  these 
measures,  the  companies  would  benefit  due  to  being  able  to  anticipate  revenues  from 
commercialising  their  crisis-relevant  products  earlier  than  in  normal  circumstances  by  deploying 
them on the market before finalising the conformity assessment and due to being able to meet the 
increased demand, thus increasing their overall turnover. The risk of non-compliant products would 
be  mitigated  by  the  increased  market  surveillance.  Streamlining  EU  product  rules  (such  as 
mandatory  conformity  assessment  and  standards)  and  prioritising  products’  controls  for  a  limited 
time, to enable a swift deployment of products of potential relevance to a crisis on the market was 
considered  as  an  efficient  solution  by  14  out  of  17  respondents  in  the  public  consultation. 
Businesses associations BusinessEurope, SMEUnited, VDMA and Dansk Industri support the idea 
to facilitate procedures for placing crisis relevant products on the market.  

For  the  public  procurement  (block  7),  the  possibility  for  the  Commission  to  lead  joint  public 
procurement on behalf of Member States will affect the market and there may be some companies 
that  will  be  beneficiaries  of  such  procurement  and  therefore  would  have  a  higher  turnover,  while 
other  companies  may  have  less  business  opportunities.  This  may  in  particular  favour  larger 
companies  who  may  be  better  placed  to  participate  in  larger  tenders.  The  overall  impact  on  the 
companies is expected to be beneficial, due to the fact that overall there would be a better EU-wide 
crisis  response  due  to  better  availability  of  crisis-relevant  products  and  less  fragmentation  in  the 
market.  Business  stakeholders were in  favour of guidance on public procurement (Eurochambres) 
and did not see the need to modify the rules (BusinessEurope, Dansk Industri). In the stakeholder 
workshop, joint procurement by the Commission on behalf of the Member States was supported by 
53% and guidance on emergency procurement in Member States by 49% of participants. 

For the measures impacting crisis-relevant supply chains during emergency (block 8), under Policy 
Option  1, all the measures are of voluntary nature and limited to recommendations and guidance. 
Companies  may  acquire  indirect  economic  benefits  which  will  depend  on  the  uptake  of  the 
guidance by the Member States and companies. Such indirect benefits are harvested by improving 
the  functioning  of  the  Single  Market  during  emergencies  and  resolving  the  crisis  faster  thanks  to 
adequate availability and  allocation of crisis-relevant goods to tackle the crisis at stake. However, 
there  is  likely  to  be  only  a  very  limited  take-up  of  such  measures  and  the  benefits  for  the  Single 
Market and for companies are expected to be very limited under this Policy Option. 

Respondents  to  the  public  consultation  considered  that  ramping  up  production  capacity,  e.g.  by 
repurposing or extending existing production lines on a voluntary basis was efficient (13 out of 17 
respondents).  Business  stakeholders  considered  that  recommendations  would  be  sufficient 
(Eurochambres), stressing that businesses are best placed to manage their own supply chains (ERT, 
VDMA).  Business  association  (SMEUnited)  supported  the  possibility  to  oblige  companies  to 
prioritise  orders  in  times  of  crisis  and  ramp  up  production  without  specifying  the  means  (on 
voluntary or mandatory basis). The latter was also supported by Eurochambres upon the condition 

49 

 
 
 
 
that is implemented by means of recommendation. In the stakeholder workshop, recommendations 
gathered  more  support  than  obligatory  solutions,  with  recommendation  to  businesses  to  ramp  up 
production  capacity  of  crisis-relevant  products  was  supported  by  73%  and  recommendation  to 
businesses to prioritise orders of crisis-relevant products by 63% gathering particular support.  

Business stakeholders called for the information to be disclosed on voluntary basis and insisted that 
industry  should  not  be  burdened  by  excessive  requirements,  with  BusinessEurope,  ERT,  Europen 
and  others  objecting  to  disclosure  of  business  confidential  information,  and  even  stronger  in  the 
context  of  monitoring.  In  the  stakeholder  workshop,  in  terms  of  obtaining  information  from 
businesses, participants were in favour to encourage voluntary sharing (75%). 

As the measures under Policy Option 1 for block 8 are voluntary, limited to recommendations and 
guidance,  they  would  not  imply  any  cost  for  companies  as  the  decisions  on  their  implementation 
would be left to companies. 

Impact on SMEs 
Under Policy Option 1, SMEs are likely to be specifically affected by the measures under building 
blocks 3-8. SMEs will benefit from  promotion of match-making (block 3). SMEs are particularly 
affected  by  the  obstacles  to  the  free  movement  and  the  lack  of  transparency  of  measures  as  their 
activities could be easily disrupted by restrictions especially in cross-border regions. Therefore the 
positive impacts  of  easing  free movement (block 4) are  expected to  be especially  pronounced  for 
SMEs. They will particularly benefit from better transparency (block 5). SMEs will benefit from the 
possibility  to  place  products  faster  on  the  market  (block  6).  Finally,  SMEs  may  be  somewhat 
affected  by  the  joint  procurement,  however  the  precise  effect  is  impossible  to  predict  as  it  will 
depend on the nature of the crisis. Nevertheless it is possible that due to the larger overall size of 
tenders, SMEs may have less opportunities to win such a tender (block 7). Under Policy Option 1, it 
is not expected that SMEs would be impacted by voluntary measures such as information requests 
or stockpiling or prioritising orders (block 8) as  companies will be able to  decide on their own if 
they are willing to participate in these measures. Overall, no costs for SMEs are therefore expected 
under Policy Option 1. 

In  its  position  paper,  SMEUnited  expressed  support  for  measures  such  EU  and  national  single 
points  of  information,  facilitation  of  free  movement  of  workers  and  acceleration  of  conformity 
assessment procedures during crises. 

Impact on competitiveness 
Under Policy Option 1, there would be better transparency and legal certainty as well as lower costs 
for EU companies due to easing of free movement and measures to ensure transparency (blocks 4 
and 5). This would have a positive impact on international competitiveness of EU companies. Since 
blocks 2, 3 and 8 are voluntary, they would allow the companies to opt in or opt out in line with 
their preferences, thus there would not be an impact on competitiveness from these blocks. 

Impact on competition 
Under  Policy  Option  1,  competition  is  likely  to  be  directly  affected  by  measures  under  building 
blocks 4, 5, 6 and 7. Easing free movement of goods, services and persons by definition increases 
trade  in  the  Single  Market  due  to  increasing  the  number  of  companies  competing,  and  thereby 
improves  competition  (block  4).  Better  information  leading  to  improved  legal  certainty  and 
predictability similarly positively affects competition (block 5). The possibility to place products on 
the  market  faster  may  increase  the  amount  of  products  on  the  market,  therefore  the  impact  on 
competition  is  expected  to  be  positive.  The  risk  that  some  crisis-relevant  goods  might  be  non-
compliant would be mitigated due to the increased market surveillance of such goods, although this 

50 

 
 
 
 
might mean less resources for checks of other goods (block 6). The possibility to launch joint public 
procurement  may  have  different  effects  on  the  competition,  as  some  companies  may  be 
beneficiaries  whereas  others  may  have  less  possibility  to  win  a  tender.  The  precise  effect  is 
impossible to predict as it will depend on the nature of the crisis (block 7). Finally, the measures on 
supply chains will only be voluntary under this option, therefore it is unlikely that they would have 
a  significant  effect  on  competition  (block  8).  Overall,  the  effect  on  competition  is  expected  to  be 
positive. 

Impact on international trade 
Crisis measures with high international trade and competition impacts have been kept outside of the 
scope  of  SMEI  since  they  belong  to  the  realm  of  EU  exclusive  competence  (emergency  state  aid 
framework, export authorisation schemes). 

Under  Policy  Option  1,  international  trade  may  be  affected  in  particular  by  blocks  4,  5,  6  and  7. 
Easing  free  movement  will  in  general  improve  the  functioning  of  the  Single  Market,  which  may 
lead to better trade opportunities, thus increasing international trade as more products and services 
can  be  produced  and  consumed  in  the  Single  Market  and  therefore  sold  to  or  bought  from 
international  partners  (block  4).  Better  legal  clarity  and  predictability  is  also  likely  to  encourage 
trade, including international trade (block 5). Speeding up the placing of crisis-relevant products on 
the market is likely to stimulate trade, including for exporters to the Single Market, thus boosting 
international trade (block 6). The possibility to launch joint public procurement may have different 
effects  on  international  trade,  as  some  companies  may  be  beneficiaries  whereas  others  may  have 
less possibility to win a tender. The precise effect is impossible to predict as it will depend on the 
nature of the crisis (block 7). Finally, the measures on supply chains will only be voluntary under 
this option, therefore it is  unlikely that they  would  have a significant  effect  on international  trade 
(block 8). Overall, the effect on international trade is expected to be positive. 

Impact on Member States (public authorities) 
In terms of measures with immediate effect  (block 1 and block 2), this  option will entail some 
direct costs for the Member States related to participation in the SMEI Advisory Group, which are 
estimated at ½ FTE annually (block 1). Travel expenses would be reimbursed by the Commission 
similar  to  existing  expert  groups.  The  costs  of  the  exchange  of  information  fall  largely  on  the 
Member  States.  Their  magnitude  depends  on  the  extent  to  which  they  have  information  available 
already in a suitable format. In that case, additional costs for the transmission are likely to be low. 
Otherwise additional efforts are needed, but these depend on the nature of the information required 
in a concrete crisis and cannot be estimated in the abstract. 

Since under Policy Option 1, the measures in block 2 are based on guidance, the costs will depend 
on the MS willingness to follow it in terms of voluntary risk assessment and organising training and 
drills. Further elaboration on these costs is included under Policy Option 2 where such measures are 
binding. 

The public consultation results indicated that the majority of the national authorities responsible for 
the Single Market believes that a new dedicated forum for coordination and information exchange is 
necessary  to  ensure  effective  coordination  and  information  exchange  on  obstacles  to  free 
movement.  Most  Member  States  have  voiced  their  support  for  mechanisms  to  ensure  greater 
transparency and coordination during a crisis (for example BG, DK, DE, EE, IE, FI, LV, MT, NL, 
PL,  SE,  SI,  letter  of  nine  Member  States  of  3  June  2022).  In  their  replies  to  the  Member  States 
questionnaire,  Member  States  recognised  the  need  to  ensure  an  effective  partnership  between 
Member  States  (national  public  and  private  entities)  and  the  Commission  (notably  through  the 
participation  in  several  Committees,  Steering  Groups,  Expert  Groups,  Taskforces,  European 

51 

 
 
 
 
Clusters,  and  in  SME  Envoys  Network)  when  it  comes  to  information  sharing.  In  light  of  future 
crises,  most  Member  States  having  responded  to  the  Member  States  questionnaire  agree  that 
preparedness  measures  such as risk assessments  concerning the  availability of non-medical  goods 
and  critical  raw  materials  are  indispensable;  strategic  storage  or  stockpiling  of  such  goods  and 
critical  raw  materials  should  be  undertaken.  They  acknowledge  that  in  most  cases,  national 
authorities are best prepared to take the above-mentioned measures. 

For  the  vigilance  mode,  the  measures  for  Member  States  are  voluntary.  There  could  be  costs  of 
gathering  information  on  identified  supply  chains  and  obstacles  to  free  movement,  costs  of 
participation in promotion of match-making, costs for voluntarily constituting strategic reserves for 
crisis-relevant  goods but these costs will depend on the uptake of the recommendations by public 
authorities. The costs depend on voluntary actions ultimately taken by the Member States when the 
Single  Market  vigilance  mode  is  activated.  Such  costs  are  expected  to  be  similar  to  business  as 
usual  as  most  of  the  Member  States  that  have  replied  to  the  targeted  questionnaire  indicated  that 
they have national level activities to monitor the market with early warning systems in place. 

In  the  stakeholder  workshop,  guidance  to  Member  States  on  voluntary  targeted  monitoring  of 
identified  strategic  supply  chains  for  shortages  was  supported  by  61%.  However,  some  Member 
States, such as DK, emphasise that gathering information would potentially require a great deal of 
work  and  coordination.  This  would  imply  in  their  view  significant  burdens  for  public  authorities 
and businesses subjected to reporting requirements, and also entail risks around forced disclosure of 
sensitive  business  information.  Member  States  have  pointed  out  in  their  replies  to  the  Member 
States questionnaire that the private sector could be further involved in management of stockpiles. 

For the emergency mode,  the costs will be subject to the activation of the emergency mode and 
will depend on which building blocks will be relevant to the specific crisis. 

For  key  principles  and  supportive  measures  for  facilitating  free  movement,  there  would  be 
compliance  costs  for  Member  States.  The  aim  of  these  key  principles  is  to  ensure  that  the  new 
restrictions  introduced  with  Member  States  are  compatible  with  the  functioning  of  the  Single 
Market,  therefore  Member  States  will  need  to  make  sure  that  their  new  measures  are  compliant. 
However these will form part of the normal activity of Member States in terms of developing new 
rules (block 4). 

Member  States  have  widely  supported  measures  to  ensure  free  movement  of  persons,  goods  and 
services  (for  example BE, BG,  DK,  IE, EE,  FI,  LU,  NL, PL, PT, RO, SE, letter of nine Member 
States of 3 June 2022). 

For  transparency  and  administrative  assistance  during  emergency  (block  5),  the  costs  for  a 
notification  mechanism  are  slightly  higher  than  current  costs  for  the  Single  Market  Transparency 
Directive and the costs of the notification mechanism under the Service Directive, due to the wider 
obligation on the Member States to notify any free movement restrictions. Based on the data in the 
impact assessment on the Services Directive notification proposal, the average time spent to comply 
with  the  notification  procedure  is  12  hours  per  notification.  This  leads  to  administrative  costs  of 
€385.20 per notification, assuming the EU average of hourly earnings for civil servants holding a 
university degree of €32.10. There would be also costs for setting up national contact points, which 
could be estimated at approximately 1.5 FTE per Member State. 

Some Member States have warned about the difficulties of introducing a new notification obligation 
and/or the need to build on the existing mechanisms (for example joint letter of 11 March 2022 and 
individually DK,  IE,  FI,  SE), while stressing the importance of ensuring  transparency for citizens 

52 

 
 
 
 
and businesses with regards to measures taken across Member States (joint letter of 11 March 2022) 
and calling for an online platform providing standardised information on measures (BE, LV, PL). In 
its  replies  to  the  Member  States  questionnaire,  LV  recommends  setting  up  a  dedicated  platform 
where all the necessary information would be available in times of crisis: a webpage for up-to-date 
information, like the existing Re-open EU platform that provides information on travel and health 
measures. 

For speeding up the placing of crisis-relevant products on the market during emergency (block 6), 
no additional costs are expected – familiarising with the new technical specification developed by 
the Commission and prioritising market surveillance would fall under business as usual. 

Regarding the costs for the Member States for the public procurement during emergency (block 7), 
the  costs  under  this  policy  option  are  similar  to  the  costs  for  setting  up  Commission-led 
procurement of COVID-19 vaccines, which are considered business as usual. 

When  it  comes  to  ensuring  availability  of  crisis-relevant  goods,  Member  States  have  expressed 
support for measures such as coordination of public procurement, fast-track conformity assessment 
and improved market surveillance (joint letter of 11 March 2022, also AT, FR, DE). 

For  measures  impacting  crisis-relevant  supply  chains  during  emergency  (block  8),  in  case  of 
following  the  Commission  recommendations,  there  could  be  costs  for  distribution  of  voluntarily 
constituted strategic reserves; costs for encouraging economic operators to ramp up their production 
capacities, encouraging them to accept and prioritise orders of crisis-relevant goods and of speeding 
up  permitting  procedures.  As  these  costs  are  voluntary,  they  are  expected  to  be  of  limited 
magnitude. 

A  number  of  Member  States  have  voiced  concern  about  including  in  the  scope  of  the  initiative 
measures  to  address  difficulties  in  supply  chains,  also  drawing  attention  to  the  need  to  follow 
strictly  the  principles  of  necessity  and  proportionality  of  measures  and  to  avoid  the  related 
administrative burden. On the other hand, Member States such as PL, RO, EL, AT, LU have spoken 
in favour of addressing crisis preparedness and supply chains disruptions.  

Most  Member  States  agree  in  their  replies  to  the  Member  States  questionnaire  that  in  light  of  a 
future  crisis,  tools  that  allow  to  increase  the  availability  of  non-medical  goods  and  critical  raw 
materials (speeding up permitting procedure, targeted mandatory information requests to businesses 
on their stocks and production capacities, priority rated orders) should be taken. They acknowledge 
that in most cases, national authorities are best prepared to take such measures. 

They also point out in their replies to the Member States questionnaire that the private sector could 
be further involved in management of stockpiles and the continuity of supply chains. Supply chain-
wise, the private sector should have the capacity to switch production from their day-to-day items to 
key items in times of crisis. Meanwhile, the public sector would continue the coordination efforts, 
knowing they can rely on the private sector. The public sector may need to finance the additional 
capacities of the private sector. 

Impact on the Commission (budgetary implications) 
Under  Policy  Option  1,  for  a  number  of  building  blocks,  guidance  or  recommendations  will  be 
developed  by  the  Commission.  We  assume  that  this  forms  part  of  normal  functioning  of  the 
Commission and therefore no additional costs are attributed to these activities. 

53 

 
 
 
 
Under  Policy  Option  1,  the  immediate  budgetary  implications  for  the  Commission  would  be 
limited to administrative costs for the functioning of the Advisory Group, including reimbursement 
of travel expenses for experts (recurrent). This is estimated at 30.000 EUR annually, which is based 
on  a  standard  budget  for  a  meeting  with  27  MS  experts  of  15.000  EUR.  The  organisation  of  the 
meetings would require ½ AD FTE that could be added through reallocation of staff. There would 
be  also  one-time  costs  for  creating  a  compendium  of  crisis  responses,  which  would  be  done  by 
existing Commission resources.  

In  vigilance  mode,  there  could  be  costs  for  promotion  of  match-making  between  companies. 
Matchmaking  between  companies  in  identified  strategic  supply  chains  would  be  primarily 
coordinated  by  the  Commission,  requiring  up  to  2  AD  FTE  totalling  an  estimated  314.000 
EUR/year.  Possible  involvement  of  Member  States  in  matchmaking  activities  may  entail  more 
limited resources for the Commission due to cost savings, involving up to 1 FTE at approximately 
157.000 EUR/year. Additionally there would be a need of 1 AD FTE for organising and running the 
Advisory Group meetings that could be added through reallocation of staff.  

In emergency mode, the use of different blocks would depend on the nature of the emergency. 

For the organisation of the meetings of the Advisory Group (block 1) in the emergency mode which 
have higher  recurrence,  1.5 AD FTE are needed that could  be added through reallocation of staff 
during the time the emergency mode is activated.  

For key principles and supportive measures for  facilitating free movement  (block 4), no costs are 
expected for the Commission in addition to its normal activities of monitoring and enforcement. 

For transparency and administrative assistance during emergency (block 5), there would be costs of 
analysing  notifications  and  of  follow-up.  Based  on  the  impact  assessment  report  on  the  Services 
Directive notification proposal, on average, the assessment of a notification by a Commission staff 
member  will  take  2-3  hours.  In  case  comments  or  questions  addressed  to  the  Member  State 
concerned are to be prepared, it is estimated that this will lead to an additional 5 hours of work per 
notification.  This  option  will  impact  the  Commission  in  that  it  will  lead  to  additional  work 
stemming  from  the  comments  received  from  stakeholders  who  will  be  granted  access  to  the 
notifications to be considered. Another element could be the possible increase of notifications from 
those Member States currently not completely fulfilling the obligation under the Services Directive. 
For restrictions affecting the free movement of persons, we calculate additional resources of 2 AD 
officials. Further to this increase in workload, there is likely to be an impact on the translation costs. 
Additionally,  there  could  be  costs  linked  to  setting  up  an  electronic  platform  for  disseminating 
crisis-related information, which are similar to the costs for the Re-open EU platform, estimated at 
600.000 EUR per annum. 

For speeding up the placing of crisis-relevant products on the market (block 6), there could be costs 
for  the  Commission  for  developing  and  adopting  technical  specifications,  when  and  if  applicable 
depending on the nature of the crisis, which are considered to be a normal activity. 

For public procurement during emergency (block 7), the costs are similar to the costs for setting up 
Commission-led procurement of COVID-19 vaccines, which are considered business as usual. 

For measures impacting crisis-relevant supply chains during emergency (block 8), under this Policy 
Option,  the  Commission  will  develop  a  number  of  recommendations  and  guidance,  however  the 
costs of developing such documents are considered business as usual. 

54 

 
 
 
 
 
Social Impacts 

There are strong links between the functioning of the Single Market and the achievement of the EU 
green and digital twin transition objectives in particular, and of society more generally.  

Specifically, measures easing free movement of goods, services and products will have a significant 
impact on workers because they will lead to securing employment due to higher cross-border trade 
and less disruptions in economic activity. As a consequence, there will be less bankruptcies and less 
redundancies,  which  will  lead  to  the  reduction  in  poverty.  Easing  free  movement  of  persons  will 
have a significant social impact on cross-border workers and their communities, by providing better 
opportunities  to  maintain  their  social  connections.  Outermost  regions  can  be  disproportionately 
affected by obstacles to free movement, worsening the economic and social situation of vulnerable 
communities,  therefore  less  obstacles  to  free  movement  will  result  in  better  social  outcomes  for 
outermost regions (particularly relevant for blocks 4 and 5). 

Measures  to  ensure  better  availability  of  crisis-relevant  products  and  services  will  result  in  direct 
social benefits as they will improve crisis-specific response of the EU, thereby contributing to better 
quality of life of citizens. However due to the voluntary nature of the measures in blocks 2, 3 and 8, 
the  ability  to  ensure  the  availability  of  such  crisis-relevant  products  in  a  situation  of  last  resort 
would be severely limited, in particular when it comes to guidance on constituting and distributing 
strategic  reserves,  as  well  as  guidance  on  speeding  up  permitting  procedures,  ramping  up 
production,  priority-rated  orders,  and  requesting  information  from  economic  operators.  Therefore 
the toolbox would only ensure a certain degree of social benefit. 

Environmental impacts 

The initiative overall is likely to lead to increased economic activity (compared to the baseline) due 
to the better functioning Single Market, which may lead to impacts on the environment associated 
with  increased  economic  activity.  The  only  measure  in  the  toolbox  that  may  have  specific 
environmental  impacts  is  speeding  up  permitting  procedures,  as  issuing  permits  in  an  expedited 
manner  with  simplified  requirements  may  potentially  lead  to  less  scrutiny  of  environmental 
impacts. Under Policy Option 1, only guidance to Member States is foreseen in this area, therefore 
the  expected  environmental  impact  is  very  limited  (block  8).  Overall,  the  Option  is  therefore 
consistent with ‘do no significant harm’ principle. 

55 

 
 
 
 
1.  POLICY OPTION 2 

The differences of Policy Option 2 compared to Policy Option 1 are in blocks 2 and 8. In block 2, 
crisis  contingency  planning,  there  will  be  an  obligation  for  the  Commission  to  conduct  a  regular 
Union-level  risk assessment for supply  chains  of strategic goods  and services;  to  operate together 
with Member States an Early Warning System for alerts and incidents; to develop crisis protocols; 
to  organise training and  drills for national  experts.  In block 8 (measures  impacting crisis  relevant 
supply  chains  that  could  be  activated  during  the  emergency  mode),  in  addition  to  voluntary 
measures,  there  would  be  a  legal  empowerment  for  Member  States  to  1)  address  binding 
information  requests  to  economic  operators  in  crisis-relevant  supply  chains  as  to  their  production 
capacities, current supply chain disruptions and related data; to 2) oblige the economic operators to 
ramp up their production capacities of crisis-relevant products, with the possibility to offer targeted 
and necessary financial support in compliance with state aid  rules. The assessment below focuses 
on these new elements in comparison with Policy Option 1. 

Economic Impacts 

Impact on companies 
The toolbox of measures under Policy Option 2 is expected to bring further economic benefits for 
companies, in particular during an emergency, due to significantly better EU-level  crisis response 
leading to less obstacles to free movement and better availability of crisis-relevant products.  

In terms of measures with immediate effect, due to the fact that there would be a Union-wide risk 
assessment conducted by the Commission and related crisis contingency measures, there would be 
better foresight and anticipation to manage a Single Market emergency when it strikes. There are no 
compliance and administrative costs for companies. 

In the public consultation, regular risk assessment by the Commission was supported by 23 out of 
24.  Business  stakeholders  expressed  support  for  risk  assessment  by  public  authorities 
(BusinessEurope). 

During the vigilance mode, there would be no changes compared to Policy Option 1. 

During the emergency mode, the possibility to implement measures in block 8 would be subject to 
the  activation  of  the  emergency  mode.  Furthermore,  there  would  be  additional  activation  by  a 
Commission implementing act for individual measures of obligatory nature. 

For  the  legal  empowerment  for  Member  States  to  address  binding  information  requests  to 
companies, this could lead to costs for companies. However as such information requests would be 
limited  to  cases  of  utmost  necessity  and  only  if  the  companies  have  refused  to  provide  such 
information voluntarily at an earlier stage, it is expected that such requests would be relatively rare 
and of limited scope. In terms of costs related to mandatory information requests to companies, the 
costs are similar to those indicated by the impact assessment on the Single Market Information Tool 
(SMIT)  proposal  (option  4)92.  For  a  company  affected  by  a  mandatory  info  request  the  impact 
assessment estimated the one-off administrative costs to be approximately 0.29 million EUR. Since 
the  measure  will  be  used  in  the  emergence  mode  and  only  if  Member  States  decide  to  use  their 

92  Impact  assessment  of  the  SMIT  proposal,  SWD(2017)217.  The  European  Commission  withdrew  this  legislative 
proposal on 29 September 2020. 

56 

 
 
 
 
 
                                                           
empowerments, it is not possible to quantify precisely the costs which also strongly depend on the 
type of future crisis. 

Respondents to the public consultation were supportive of targeted information requests to industry 
in order to manage crisis, on issues such as information regarding current primary disruptions (17 
out of 20 respondents said yes and 2 said maybe), production capacities (9 said yes, 9 maybe) and 
existing stocks of goods (9 said yes, 10 said maybe) However, as already mentioned under Policy 
Option  1,  business  stakeholders  called  for  the  information  to  be  disclosed  on  voluntary  basis  and 
insisted that industry should not be burdened by excessive requirements.  

For what concerns the empowerment for Member States to oblige economic operators to ramp up 
production  capacity  of  crisis-relevant  products  during  the  crisis,  this  would  come  with  the 
possibility to offer targeted and necessary financial support, the decision on which will be up to the 
Member  States  concerned.  This  means  that  in  practice,  the  net  effect  for  companies  may  be 
beneficial, since the necessary production overhaul would be supported financially by the Member 
States as appropriate and it would allow the companies to increase their turnover due to more crisis-
relevant products being produced meeting the spike in demand. The number of companies falling 
under the obligation to ramp up production is expected to be very limited and will strongly depend 
on the type of crisis – these are the companies operating in the value chains of a limited number of 
goods or products relevant for a certain type of crisis activated by strict criteria.  

Respondents  to  the public consultation  indicated  a limited support for  ramping up or  repurposing 
production  on  mandatary  basis  with  government  support  (5  out  17  respondents).  Business 
stakeholders did not support mandatory ramping up of production (BusinessEurope, ERT). 

Impact on SMEs 
Under this Policy Option, SMEs could be additionally affected by some of obligatory measures in 
block 8. In particular certain SMEs in key sectors for the crisis response could be affected by the 
mandatory  information  requests  and  by  the  obligation  to  ramp  up  their  production  capacity.  For 
SMEs it could be easier to constitute data on production capacity and supply disruption in the case 
of  an  SME  due  to  its  size  but  at  the  same  time  SMEs  have  less  resources  and  more  limited 
capabilities to deal with such information requests. The obligation to ramp up production capacity 
with  appropriate  financial  support  from  Member  States  could  be  net  beneficial  for  SMEs  in 
question.  In  their  position  paper,  SMEUnited  supported  the  possibility  of  financial  support  to 
encourage the development of production capacities for goods needed in the event of a crisis. 

Impact on competitiveness 
Under  Policy  Option  2,  obligatory  measures  in  block  8  could  have  an  effect  on  competitiveness. 
Specifically,  mandatory  information  requests  could  create  additional  costs  for  the  concerned 
companies, thus hurting their profitability. The obligation to ramp up production of crisis-relevant 
products  could  on  the  other  hand  increase  the  competitiveness  of  the  concerned  companies,  as  it 
would allow them to meet a spike in demand more rapidly and with appropriate financial support 
from Member States. Overall, since these measures are expected to only concern a limited number 
of  companies  in  very  specific  emergency  situations,  the  additional  effect  on  international 
competitiveness is expected to be small compared to Policy Option 1. 

Impact on competition 
Under  Policy  Option  2,  obligatory  measures  in  block  8  could  have  an  effect  on  competition. 
Mandatory information requests by Member States could lead to costs, thus somewhat hurting the 
competitive position of the companies concerned. On the other hand, there would be safeguards for 
confidentiality and intellectual property protection, therefore the competition would not be affected 

57 

 
 
 
 
by  a  risk  of  disclosure  of  sensitive  information.  The  obligation  to  ramp  up  production  of  crisis-
relevant  products  could  distort  the  competitive  position  of  companies  depending  on  the  level  of 
state  financial  support,  as  it  could  lead  to  them  addressing  a  larger  share  of  demand  and  higher 
profitability,  but  also  to  forego  other  profitable  markets.  Nevertheless,  without  this  measure,  the 
demand would not have been met at all in time and therefore this measure rectifies an inefficiency 
in the market. In any case, if these measures are short-lived and accelerate the return to the normal 
functioning of markets, their negative impact on competition should be limited. Overall, since these 
measures are expected to concern only  a limited number of companies in very specific situations, 
the additional effect on competition is expected to be small compared to Policy Option 1. 

Impact on international trade 
Under Policy Option 2, reinforced contingency planning measures could lead to overall better crisis 
reaction  in  the  Single  Market,  thus  improving  its  performance  and  facilitating  trade  including 
international  trade  (block  2).  Obligatory  measures  in  block  8  could  have  an  indirect  effect  on 
international  trade,  if  there  are  costs  for  certain  companies  concerned  which  could  make  them 
somewhat less competitive and if some companies are obliged to ramp up production, as this would 
improve their competitive position and could allow EU companies to meet high demand for crisis-
relevant products for which otherwise may be no other supplier than international suppliers at high 
cost. However improved production capacity could also lead to increase of exports in the medium 
term,  as  it  has  for  example  happened  with  vaccine  production.  Therefore  the  overall  impact  on 
international trade will depend on the specific circumstances of the crisis. 

Impact on Member States (public authorities) 
In terms of measures with immediate effect, for regular Union-level risk assessment and related 
contingency  measures, the benefits  are harvested during times of crisis,  by  having lower negative 
effects  of  the  particular  type  of  crisis  thanks  to  these  preparatory  measures.  In  particular,  due  to 
regular  trainings  and  drills  as  well  as  the  existence  of  crisis  protocols,  Member  States’ 
administrations would be significantly better prepared to face any future crisis. 

In  terms  of  costs  with  immediate  effect,  the  risk  assessment  would  be  conducted  by  the 
Commission  and would not  imply  additional costs  for the Member States. The functioning of the 
Early Warning System would be part of the functioning of the Advisory Group and would also not 
imply  additional  costs  compared  to  the  normal  coordination  activities  within  the  Member  States. 
The development of crisis protocols would be led by the Commission and would also be part of the 
functioning  of  the  Advisory  Group.  Participation  in  the  trainings  and  drills  organised  by  the 
Commission  would  imply  costs  for  Member  States  in  terms  of  time  of  experts  that  would  be 
participating in these trainings and drills. Member States would also have to organise trainings for 
their own experts which would result in additional costs, depending on the extent of such trainings 
(block 2). 

In the emergency mode, obligatory measures in block 8 (activated only during emergency) could 
lead  to  certain  administrative  costs  to  the  extent  that  the  coordination  of  such  measures  would 
require increased efforts. In the impact assessment on the Single Market Information Tool (SMIT) 
proposal (option 4), it was estimated that the overall one-off costs for Member States could be up to 
0.72  million  EUR  to  operate  such  information  requests.  However  the  measures  considered  under 
SMEI  would  be  very  limited  in  duration  and  in  the  number  of  companies  concerned  and  would 
strongly depend on the type of emergency. Member States might have also additional costs related 
to  financial  support  of  companies  ramping  up  production.  This  will  be  decided  by  individual 
Member States depending on the emergency and the type and complexity of production, following a 
case by case assessment.  

58 

 
 
 
 
Impact on the Commission (budgetary implications) 
In  terms  of  measures  with  immediate  effect,  costs  related  to  regular  risk  assessment  could  be 
regarded  as  business  as  usual  as  similar  assessments  are  done  by  the  relevant  services  of  the 
Commission. The functioning of the Early Warning System would be part of the functioning of the 
Advisory  Group  and  would  also  not  imply  additional  costs  compared  to  the  normal  coordination 
activities of the Commission. The development of crisis protocols would be led by the Commission 
and would also be part of the functioning of the Advisory Group, however this would also enter into 
normal activities of the Commission. Organisation of trainings and drills by the Commission would 
imply costs for the organisation of meetings and reimbursement of travel expenses, if such meetings 
were  taking  place  physically,  as  well  as  potentially  costs  for  subcontractors  who  would  organise 
such trainings and drills. The precise costs would depend on the duration and regularity of training 
and drills (block 2). 

In case of emergency, measures in block 8 would require the Commission to develop a number of 
recommendations to Member States as well as harmonised rules for mandatory information requests 
to be done by Member States. The development of such recommendations and legal provisions can 
be considered as part of normal activities of the Commission. 

Social Impacts 

Compared  to  Policy  Option  1,  particularly  the  binding  measures  in  block  8  would  provide 
additional social benefits. The capability for Member States to request information from economic 
operators and to oblige the economic operators to ramp up production for crisis-relevant products 
could plug a serious gap in meeting the demand for such products in a dire situation of a crisis and 
thus  result in a significantly better overall EU crisis response, leading to  a direct  social impact  in 
terms of improving living conditions and quality of life. 

Environmental impacts 

Policy Option 2 is expected to have similar environmental impacts as Policy Option 1. 

1.  POLICY OPTION 3 

The differences of Policy Option 3 compared to Policy Option 2 are in blocks 3 and 8.  

In block 3, Single Market  vigilance, Member States are obliged to  gather information  concerning 
identified strategic supply chains and share that information with the Commission.  

In Single Market vigilance mode, the Commission can draw up and regularly update by means of 
implementing acts a list with targets for strategic reserves to be constituted by Member States for 
the  selected  supply  chains  of  goods  and  services  of  strategic  importance.  The  Commission  will 
issue  recommendations  requesting  Member  States  to  build  up,  maintain  or  reduce  their  strategic 
reserves  in  order  to  meet  the  targets  and  coordinate  such  efforts.  Subject  to  an  additional  trigger 
(when  there  is  evidence  that  industry’s  stockpiling  is  insufficient  or  inexistent,  alternative  supply 
sources  do  not  work  or  are  insufficient  and  an  impact  assessment  by  the  Commission  and  the 
governance  body  indicates  a  need  to  build  up  strategic  reserves),  the  Commission  can  oblige 
Member  States  to  build  up  strategic  reserves  for  selected  goods  of  strategic  importance  if  the 
Member States’ strategic reserves fall significantly short of the targets.  

In block 8, during emergency mode, the following measures would all be subject to an individual 
activation  by  means  of  implementing  acts.  The  Commission  could  oblige  the  Member  States  to 

59 

 
 
 
 
distribute the products previously stockpiled by Member States following the issuance of targets in 
order  to  address  dire  shortages  of  such  products.  The  Commission  could  directly  oblige  the 
economic  operators  to  ramp  up  their  production  capacity  of  crisis-relevant  goods  by  means  of 
repurposing their production lines or creating new production lines. The Commission could oblige 
the  Member  States  to  speed  up  permitting  procedures  during  the  crisis.  The  Commission  could 
oblige  economic  operators  to  accept  and  prioritise  orders  of  crisis-relevant  products.  Finally,  the 
Commission  could  issue  binding  requests  of  information  to  economic  operators  as  to  their 
production  capacities,  current  supply  chain  disruptions  and  related  data.  This  is  different  from 
Policy Option 2 where the only binding measures were requests for information and obligation to 
ramp up production capacity and these were done by Member States. 

The assessment below focuses on these new elements in comparison with Policy Option 2. 

Economic Impacts 

Impact on companies 
The toolbox of measures under Policy Option 3 is expected to bring even larger further  economic 
benefits  for  companies,  in  particular  during  an  emergency,  due  to  the  availability  of  strong 
measures  that  would  allow  to  further  improve  EU-level  crisis  response  leading  to  significantly 
better availability of crisis-relevant products and less obstacles to free movement. 

In terms of measures with immediate effect, there are no differences compared to Policy Option 
2. 

During  the  vigilance  mode,  companies  could  be  indirectly  concerned  by  the  Member  States 
information gathering on identified supply chains of goods and services of strategic importance. It 
is  likely  that  Member  States  may  contact  companies  in  order  to  obtain  certain  information  about 
supply  chains  that  only  companies  might  have.  However  such  exchanges  would  be  of  voluntary 
nature  and  would  pertain  to  the  normal  activity  of  companies,  therefore  it  can  be  considered  that 
there are no costs for companies in addition to business as usual. 

For what concerns the constitution of strategic reserves, while it would be the obligation of Member 
States, it could nevertheless affect companies. The reserves would concern goods from the selected 
supply chains of strategic importance and in those supply chains, the constitution of reserves may 
contribute  to  the  increase  of  the  overall  demand  for  such  goods  and  may  consequently  affect  the 
price  of  such  goods.  This  would  impact  companies  that  produce  such  goods,  increasing  their 
turnover and profitability, and companies that need such goods for their operations, increasing their 
costs.  In  the  public  consultation,  8  out  of  20  respondents  considered  that  a  strategic  storage  or 
stockpiling  system  coordinated  at  EU  level  would  be  an  efficient  solution  to  crises.  Some 
stakeholders were in favour of strategic stockpiling (SMEUnited, VDMA) whereas others were not 
or called for it to be done at the national level (Eurocommerce, Eurochambres, Dansk Industri). 

During the emergency mode, the possibility to implement measures in block 8 would be subject to 
the  activation  of  the  emergency  mode.  Furthermore,  there  would  be  additional  activation  by  a 
Commission implementing act for individual measures of obligatory nature. 

For  the  obligation  for  Member  States  to  distribute  the  previously  stockpiled  goods  in  the  case  of 
dire  shortages,  companies  that  need  such  goods  for  their  operations  and  would  receive  them,  as 
applicable,  would  be  extremely  positively  affected  as  this  would  allow  them  to  continue  their 
operations. This would have a beneficial effect throughout the supply chain, as also their suppliers 
and customers would be able to continue operations. The distribution of the previously stockpiled 

60 

 
 
 
 
 
 
 
goods  would  be  done  following  the  discussions  in  the  Advisory  Group  involving  industry  as 
needed. In the public consultation, targeted and coordinated distribution of products relevant for a 
certain type of crisis was considered efficient by 6 out of 17 respondents. 

For the obligation for the economic operators to ramp up their production capacity of crisis-relevant 
goods by means of repurposing their production lines or creating new production lines, which under 
Policy Option  3 would  be done by the Commission,  this would be done on the basis of financial 
support  by  the  Commission  (which  in  such  a  case  would  be  provided  under  a  separate  financial 
instrument).  Consequently,  the  impacts  of  this  measure  on  companies  would  be  similar  to  the 
impact  of  a  similar  measure  done  by  Member  States,  as  discussed  under  Policy  Option  2.  In  the 
public consultation, obligation on undertakings to accept and prioritise orders of goods and services 
relevant to a crisis in order to enhance their availability during a crisis was considered efficient by 3 
out of 16 respondents. 

The  Commission  could  oblige  the  Member  States  to  speed  up  permitting  procedures  during  the 
crisis. This could have very positive impacts on the companies that are in the process of obtaining 
such permits as it would allow them to start their economic activity much faster, leading to higher 
turnover and profitability.  

The Commission could oblige economic operators to accept and prioritise orders of crisis-relevant 
products. Subject to all the relevant activations, the Commission will then take a decision to place 
such priority rated order which will take into account the principles of necessity and proportionality, 
the legitimate interests of the economic operator concerned and the cost and effort required for any 
change in production sequence. The priority rated order will be placed at fair and reasonable price. 
Such priority rated orders will have a strong impact on the companies concerned, as they will need 
to  set  aside  their  normal  production  orders  and  fulfil  the  orders  placed  by  the  Commission. 
Considering such orders would be placed at fair and reasonable price, it is expected that such orders 
may increase the turnover of these companies and may thereby contribute to higher profits, however 
the specific effect will depend on the circumstances of a particular company. Placing of such orders 
will negatively affect the normal customers of such companies as their orders would be delayed or 
even  cancelled,  depending  on  the  situation.  However  by  legislation  they  would  be  freed  from 
liability  for  the  resulting  delay  or  non-fulfilment  of  their  contractual  obligation  vis-à-vis  third 
parties. Such orders could also affect the competitors of these companies, as the spillover demand 
may lead to higher turnover and profits for them. As explained under Policy Option 2, respondents 
to the public consultation and business stakeholders were not in favour of mandatory ramping up or 
repurposing of production. 

Binding  requests  of  information  by  the  Commission  to  economic  operators  as  to  their  production 
capacities,  current  supply  chain  disruptions  and  related  data  could  lead  to  costs  for  companies. 
However costs would be similar to the costs of binding requests if they were done by the Member 
States, as under Policy Option 2. 

Impact on SMEs 
For  measures  different  under  this  Policy  Option,  SMEs  would  experience  similar  impacts  as  all 
companies. However the effects (positive and negative) could be even more important for SMEs. In 
particular, priority-rated orders could impact the whole production capacity of SMEs, whereas for 
larger  companies  they  may  represent  only  a  fraction  of  their  production  as  they  may  have 
diversified production portfolio. Speeding up permitting could be decisive for economic success of 
an SME in a crisis situation. Distribution of strategic reserves could also be of a very high benefit to 
the SMEs that would be concerned and their customers and suppliers. Like under Policy Option 2, 
for mandatory information requests, it could be easier to collect the data on production capacity for 

61 

 
 
 
 
an  SME  due  to  its  smaller  size,  however  SMEs  may  have  less  resources  and  more  limited 
capabilities  to  deal  with  such  requests.  The  obligation  to  ramp  up  production  capacity  with 
appropriate financial support from Member States could be net beneficial for SMEs in question. 

In  its  position  paper,  SMEUnited  expressed  support  for  measures  such  as  preventative  measures 
such as a monitoring system to anticipate future shortages and a possibility to oblige companies to 
prioritise orders in times of crisis, as well as strategic reserves to improve the availability of crisis-
relevant goods. 

Impact on competitiveness 
Under Policy Option  3,  the measures different under this Option  as compared to Policy  Option  2 
could have an effect on competitiveness. The obligations to  ramp up production of crisis-relevant 
products  and  to  accept  priority-rated  orders  could  increase  the  competitiveness  of  the  concerned 
companies, as it would allow them to potentially increase their turnover and profitability. While the 
strategic  reserves  would  be  constituted  and  distributed  by  the  Member  States,  this  measure  could 
impact competitiveness by providing the much-needed inputs to companies that need them during 
an  emergency,  which  would  allow  them  to  continue  their  operations  and  may  ultimately  prevent 
their  bankruptcy,  with  a  similar  cascading  effect  along  the  supply  chain.  Speeding  up  permitting 
could  also  be  beneficial  for  competitiveness,  allowing  the  concerned  companies  to  start  their 
activities  faster.  Mandatory  information  requests  could  create  additional  costs  for  the  concerned 
companies,  thus  hurting  their  profitability.  Overall,  while  these  measures  are  expected  to  only 
concern  a  limited  number  of  companies  in  very  specific  emergency  situations,  this  could 
nevertheless result in a significant positive effect on competitiveness compared to Policy Option 2 
due  to  the  likely  effectiveness  of  such  measures  in  ensuring  the  availability  of  crisis-relevant 
products. 

Impact on competition 
Under Policy Option  3,  the measures different under this Option  as compared to Policy  Option  2 
could have an effect on completion.  

While  the  strategic  reserves  would  be  constituted  and  distributed  by  the  Member  States,  this 
measure could impact competition due to the fact that there would be an intervention in the market 
both  during  the  vigilance  mode  (constitution)  and  during  the  emergency  mode  (distribution). 
Depending  on  the  product,  the  effect  on  the  market  could  be  substantial.  The  constitution  of 
strategic  reserves  will  happen  under  the  appropriate  public  procurement  rules,  thus  ensuring  fair 
competition.  The  distribution  of  strategic  reserves,  when  applicable,  will  be  done  taking  into 
account  the  situation  of  the  market  and  the  legitimate  interests  of  market  participants,  thus  also 
ensuring fair competition. 

The  obligation  to  ramp  up  production  of  crisis-relevant  products  could  distort  the  competitive 
position of the concerned companies, as depending on the level of state financial support it could 
lead to them addressing a larger share of demand and to higher profitability but also to forego other 
profitable  markets.  However  this  does  not  mean  taking  market  share  at  the  expense  of  other 
companies  as  the  rationale  of  this  measure  is  to  create  production  capacity  to  meet  the  spike  in 
demand which would not otherwise have been met. On the other hand, the obligation to repurpose 
production  lines  could  be  beneficial  for  companies  in  the  short  term,  but  could  be  costly  for 
companies in the longer term if such repurposed production lines would not be useful after the crisis 
and would have to be repurposed again.  

The  obligation  to  accept  priority-rated  orders  may  also  impact  competition  as  the  concerned 
companies would not be able to fulfil their other contracts on time or at all, thus potentially driving 

62 

 
 
 
 
their customers to other companies. Nevertheless it could also result in higher turnover and higher 
profitability. 

Mandatory  information  requests  could  create  additional  costs  for  the  concerned  companies,  thus 
somewhat hurting the competitive situation of the companies concerned. On the other hand, there 
would  be  safeguards  for  confidentiality  and  intellectual  property  protection,  therefore  the 
competition would not be affected by a risk of disclosure of sensitive information. 

Overall,  while  these  measures  are  expected  to  concern  a  limited  number  of  companies  in  very 
specific  emergency  situations,  under  this  Policy  Option  there  could  be  an  important  effect  on 
competition,  depending  on  the  measure  chosen,  in  particular  due  to  the  effect  on  the  competitive 
position of the specific companies concerned by mandatory measures. 

Impact on international trade 
Under Policy Option 3, the new measures as compared to Policy Option 2 would affect international 
trade. 

The constitution (block 3) and distribution (block 8) of strategic reserves by Member States could 
affect  international  trade.  Depending  on  the  volume  of  the  new  reserves,  their  constitution  could 
affect both international trade flows and prices in the world market. However it is expected that the 
measure would have an overall balancing effect, as the reserves would be constituted in anticipation 
of  potential  shortages,  i.e.  when  the  prices  are  relatively  lower,  and  would  be  released  during 
shortages, i.e. when the prices are higher due to the spike in demand. This would have the effect of 
advancing  potential  inflows  of  the  crisis-relevant  products  to  an  earlier  stage,  when  there  are  no 
shortages. 

The obligation to ramp up production of crisis-relevant products and/or repurpose production lines 
could  increase  the  output  of  the  crisis-relevant  products  in  the  EU,  thus  decreasing  the  potential 
strain  on  international  demand  for  such  products.  This  could  have  the  effect  of  rebalancing 
international trade flows. The obligation to accept priority-rated orders may have a similar effect, as 
would speeding up permitting. Improved production capacity could also lead to increase of exports 
in the medium term, again taking the example of the vaccine production. 

Mandatory  information  requests  could  create  additional  costs  for  the  concerned  companies,  thus 
somewhat hurting their competitive situation and their performance internationally. 

The  overall  impact  on  international  trade  under  Policy  Option  3  will  depend  on  the  specific 
circumstances  of  the  crisis,  but  it  is  expected  that  there  would  be  rebalancing  of  the  trade  flows 
depending  on  the  extent  that  EU’s  production  capacity  for  crisis-relevant  products  would  be 
improved. 

Impact on Member States (public authorities) 
In  the  vigilance  mode,  Member  States  would  be  obliged  to  gather  information  concerning 
identified strategic supply chains, to monitor such supply chains for a list of indicators as set out in 
the  Union  risk  assessment  and  share  that  information  with  the  Commission.  Depending  on  the 
specifics of the identified value chains and the information that is already available to the Member 
States,  this could  impose quite significant  administrative costs for them. While it is expected that 
most  of  the  information  would  still  come  from  the  companies  on  the  voluntary  basis,  Member 
States  would  need  to  spend  significant  efforts  to  collect  this  information  and  to  analyse  it.  They 
would also be obliged to compile lists of contacts of the economic operators functioning along the 
identified supply chains. The benefits of this process would be harvested during a crisis, as it would 

63 

 
 
 
 
significantly  improve  the  EU’s  ability  to  react  to  supply  shortages  due  to  the  full  overview  that 
would be available based on the monitoring and would allow to take targeted measures foreseen in 
the rest of the toolbox. 

Furthermore, in the vigilance mode, the Commission can draw up and regularly update by means of 
implementing acts a list with targets for strategic reserves to be constituted by Member States for 
the  selected  supply  chains  of  goods  and  services  of  strategic  importance,  and  can  enforce  the 
compliance with these targets through additional steps. Depending on the specific products selected 
for the application of this measure and the required target volumes included in the lists with targets, 
this  measure  could  have  very  significant  implications  for  Member  States,  both  financially  (as 
Member States would need to procure the products that would form part of the strategic reserves, 
organise storage facilities and provide for possible disposal if such products become unusable in the 
course  of  time)  and  administratively  (as  the  management  of  these  processes  would  require 
significant  human  resources).  Member  States  would  be  obliged  to  inform  the  Commission  about 
their  individual  public  procurement  actions  to  constitute  such  strategic  reserves.  The  checks  and 
balances are built into the system as the Member States would have to agree to both the targets and 
the binding measures to build up the reserves as both would require adoption by implementing acts. 

In block 8, during emergency mode, the Commission could oblige the Member States to distribute 
the products previously stockpiled by Member States following the issuance of targets in order to 
address  dire  shortages  of  such  products.  The  additional  costs  to  Member  States  would  only  be 
linked to the costs of distribution.  

The  Commission  could  oblige  the  Member  States  to  speed  up  permitting  procedures  during  the 
crisis.  This  could  have  important  administrative  implications  for  the  Member  States,  as  it  would 
imply compliance and administrative costs in order to implement such a change in their procedures. 

The Commission’s rights to oblige the economic operators to ramp up their production capacity of 
crisis-relevant goods, to oblige economic operators to accept and prioritise orders of crisis-relevant 
products and to issue binding requests of information to economic operators as to their production 
capacities, current supply chain disruptions and related data is not expected to have significant cost 
implications for Member States’ authorities. 

Member  States  questioned  the  inclusion  of  mandatory  information  requests  and  drew  attention  to 
the need to respect the principles of necessity and proportionality (letter of nine Member States) and 
due consideration of possible administrative burdens on businesses, also stressing that information 
requests should not be mandatory (DE, PL, BG). However due to the fact that Member States are 
involved  in  activating  both  vigilance  and  emergency  mode  (via  Council  and  Commission 
implementing  acts,  respectively)  as  well  as  in  additionally  activating  each  of  the  obligatory 
measures  in  block  8  (via  Commission  implementing  acts),  these  measures  would  comply  with 
principles of subsidiarity and proportionality, as the necessary checks and balances would be built 
into the procedure. 

Impact on the Commission (budgetary implications) 
In the vigilance mode, the new obligation for Member States to gather information and monitor the 
supply chains would also mean that the Commission would be getting this information which would 
feed into its own analysis and monitoring activities. However this does not lead to new obligations 
for  the  Commission.  The  Commission  would  also  step  up  the  monitoring  of  free  movement 
obstacles, however this can be considered part of its normal activities. 

64 

 
 
 
 
Furthermore, in the vigilance mode, the Commission can draw up lists of targets for the constitution 
of strategic reserves. This does not imply additional costs for the Commission as this action can be 
considered part of its normal activities. 

During  emergency  mode,  the  Commission  could  oblige  the  Member  States  to  distribute  the 
products previously stockpiled, it could oblige economic operators to ramp up production, it could 
oblige the Member States to speed up permitting procedures during the crisis, it could issue priority 
rated orders, it could send binding information requests to economic operators. All of these actions 
would require detailed  analysis and monitoring  for the Commission  departments  concerned  and a 
significant amount of administrative resources would be needed to develop the relevant legislation 
and  to  agree  it  with  the  Member  States.  However  these  activities,  while  extraordinary  due  to  a 
crisis, can be considered part of normal functioning of the Commission. 

Social Impacts 

Compared  to  Policy  Option  2,  the  measures  introduced  by  Policy  Option  3  would  provide  very 
significant  additional  social  benefits.  The  mechanism  to  constitute  and  then  distribute  strategic 
reserves, the right for the Commission to oblige economic operators to ramp up production of crisis-
relevant  products,  to  issue  priority-rated  orders,  to  speed  up  permitting,  and  to  issue  mandatory 
information  requests  would  all  serve  as  exceptional  measures  that  could  however  be  decisive  in 
ensuring  the  availability  of  crisis-relevant  products  in  case  of  a  dire  need  in  a  crisis.  This  could 
result in a significantly better overall EU crisis response, leading to an even stronger direct social 
impact in terms of improving living conditions and quality of life and even saving lives of citizens, 
depending on the crisis.  

Environmental impacts 

Policy Option 3 is  expected in general to have similar environmental impacts as Policy Option 2. 
However  the  obligation  for  Member  States  to  speed  up  permitting  procedures  may  lead  to 
expedition  of  some  such  procedures,  which  potentially  could  have  environmental  impacts  due  to 
less scrutiny. 

7. 

 HOW DO THE OPTIONS COMPARE?  

For  what  concerns  the  effectiveness  in  meeting  the  objective  on  minimising  obstacles  to  free 
movement (SO1), the objective is likely to be effectively met by all three Policy Options due to the 
presence of the same building blocks on the free movement  and on transparency in  all three POs 
with similar effects. For addressing shortages and safeguarding availability of crisis-relevant goods 
and  services  (SO2),  PO1  is  least  likely  to  meet  this  objective,  as  the  toolbox  available  to  the 
policymaker  would  be  limited  to  guidance  for  the  measures  applicable  to  supply  chains  and  the 
effects  would  strongly  depend  on  the  voluntary  uptake  by  authorities  and/or  economic  operators. 
PO2 would be somewhat more effective in this regard, as there would be some empowerments for 
Member  States  to  take  strong  measures  in  relation  to  information  requests  or  ramping  up 
production.  The  EU  level  risk  assessment  done  by  the  Commission  would  play  an  important  role 
too. PO3 would be most likely to meet this objective due to the strongest possible toolbox available 
to  ensure  availability  of  crisis-relevant  goods  and  services,  as  in  this  PO  the  Commission  would 
have  the  possibility  to  oblige  Member  States  to  take  measures  on  constitution  and  distribution  of 
strategic reserves, to speed up permitting, and to oblige economic operators to ramp up production, 
to  accept  priority-rated  orders  and  to  respond  to  binding  information  requests,  all  subject  to 
appropriate checks and balances, thus giving the Commission the full spectrum of tools to address 
shortages and safeguard the availability of crisis-relevant goods and services. 

65 

 
 
 
 
For  what  concerns  the  efficiency  in  terms  of  meeting  the  objectives,  PO1  is  the  most  efficient 
options as it foresees the least costs compared with the other two POs, and in particular no costs for 
companies  except  for  voluntary  measures  they  may  undertake,  and  very  limited  costs  to  Member 
States and the Commission, consisting in the immediate term of the costs of the Advisory Group, 
and  in  the  emergency  mode  of  costs  of  a  limited  number  of  tools  that  would  only  be  used  if 
applicable  to  the  crisis.  Yet  PO1  provides  a  substantial  improvement  on  the  baseline  in  terms  of 
addressing  especially  SO1  and  to  an  extent  SO2.  PO2  is  less  efficient  as  it  contains  in  particular 
measures  that  could  be  costly  for  Member  States  (financial  support  for  companies  in  case  of 
ramping up of production) and for companies (mandatory information requests), although such an 
expansion  of  the  toolbox  would  lead  to  a  more  effective  coverage  of  SO2.  Finally,  PO3  is  less 
efficient due to the fact  that it may lead to substantial costs, in particular the costs of constitution 
and  distribution  of  strategic  reserves  by  Member  States,  as  well  as  costs  linked  to  obligatory 
measures  such  as  speeding  up  permitting,  ramping  up  production,  priority-rated  orders  and 
mandatory information requests to companies. However such a full toolbox is likely to provide the 
strongest tools to tackle in particular SO2. 

For what concerns subsidiarity/proportionality of policy options, PO1 is assessed as PO reflecting 
these principles to the fullest due to the fact that there are no obligatory measures for companies and 
the  Member  States  retain  substantive  freedom  to  introduce  crisis  measures  according  to  their 
preferences,  only  needing  to  comply  with  proportionate  provisions  such  as  key  principles  of  free 
movement and transparency and administrative assistance measures. PO2 is assessed to also comply 
with  these  principles,  with  some  measures  such  as  Member  States’  empowerment  to  issue 
information requests and oblige companies to ramp up production considered stronger in terms of 
degree  of  intervention.  PO3  contains  far-reaching  measures  at  the  level  of  the  Commission  in 
blocks  3  and  8.  Stakeholders  and  Member  States  have  expressed  doubts  about  whether  these 
measures  comply  with  the  principles  of  proportionality  and  subsidiarity.  However  due  to  the  fact 
that  Member  States  are  involved  in  activating  both  vigilance  and  emergency  mode  as  well  as  in 
additionally  activating  each  of  the  obligatory  measures  in  these  blocks,  it  is  assessed  that  PO3  is 
still compliant with principles of subsidiarity and proportionality.  

Comparison of options’ effectiveness in meeting objectives, efficiency, subsidiarity/proportionality 

Effectiveness in meeting objectives 

Efficiency 

Subsidiarity/ 
proportionality 

SO1 / Minimise 
obstacles to free 
movement of goods, 
services and persons in 
times of crisis 
+++ 

+++ 

+++ 

Option 1 

Option 2 

Option 3 

SO2 / Address shortages 
and safeguard availability 
of crisis-relevant goods 
and services 

+ 

++ 

+++ 

+++ 

++ 

+ 

+++ 

++ 

+ 

Legend: +- no / neutral impact; + minor positive impact; ++ positive impact; +++ significant positive impact; 
 - minor negative impact; -- negative impact; --- significant negative impact 

For companies, all three POs would result in positive impacts, as they would contribute to uphold 
free movement and availability of crisis-relevant products. For companies, the largest support was 
expressed  for  measures  included  in  PO1,  including  measures  to  minimise  obstacles  to  free 
movement  and  to  ensure  transparency,  as  well  as  for  measures  of  voluntary  nature,  whereas  far-
reaching  measures  were  generally  less  supported  by  business  stakeholders.  Under  PO1,  no 
mandatory costs are foreseen for companies. Companies could face more costs under PO2 as they 

66 

 
 
 
 
 
 
 
 
 
could be obliged by Member States to respond to information request and to ramp up production. 
Member States have been very supportive of measures under PO1, in particular measures to ensure 
free  movement  as  well  as  measures  on  conformity  assessment  and  public  procurement.  Member 
States are also more supportive of measures based on guidance and recommendations which leave 
to  them  the  decisions  on  whether  to  follow  these  recommendations.  Member  States  would  face 
larger costs under PO2 as they would be empowered to issue information requests to companies and 
oblige  them  to  ramp  up  production,  while  providing  financial  support.  For  PO3,  Member  States 
have  expressed  ambiguous  positions,  with  some  support  for  far-reaching  measures  to  address 
shortages  and  with  some  opposition.  Under  PO3,  Member  States  would  face  substantially  higher 
costs, in  particular due to  the measures linked to  strategic reserves.  In terms  of the impact  on the 
civil  society,  it  is  assessed  that  PO3  would  have  the  largest  positive  impact,  as  it  would  allow to 
ensure the best possible availability of crisis-relevant products, leading to the strongest impact on 
citizens, whereas PO2 would have somewhat lesser positive impact and PO1 would have still less 
positive impact. 

Comparison of options - impacts on key stakeholders groups and their support 

Companies 

Member States 

Civil society 

Option 1 

Option 2 

Option 3 

+++ 

++ 

+ 

++ 

+ 

+/- 

+ 

++ 

+++ 

Legend: +- no / neutral impact; + minor positive impact; ++ positive impact; +++ significant positive impact; 
 - minor negative impact; -- negative impact; --- significant negative impact 

8.  PREFERRED OPTION 

This Impact Assessment does not present a preferred option. Instead, the preferred option is left for 
political decision based on the comparison of policy options included in section 7 of this report. On 
the basis of this comparison, all three POs appear to be effective in meeting specific objective 1 to 
minimise  obstacles  to  free  movement  of  goods,  services  and  persons  in  times  of  crisis,  however 
PO3 scores as the most effective in meeting specific objective 2 to address shortages and safeguard 
availability of crisis-relevant goods and services, with PO2 scoring in between. PO1 is also assessed 
as the most efficient and scoring highest on subsidiarity/proportionality, with PO2 scoring less and 
PO3  scoring  lowest,  though  still  with  positive  impact.  Stakeholders  and  Member  States  have 
expressed doubts about whether measures in PO3 comply with the principles of proportionality and 
subsidiarity.  In  terms  of  stakeholder  impacts  and  support,  PO1  would  have  the  strongest  support 
among  companies  and  Member  States,  with  PO2  somewhat  less  positive  support  and  PO3 
supported  only  to  some  extent.  In  terms  of  feasibility,  PO3  is  about  solidarity  and  the  binding 
measures only kick in when it is clear that industry needs support. While some Member States have 
expressed  reservations  on  these  measures,  the  aim  of  the  PO3  is  to  help  Member  States  in  crisis 
management  by  ensuring  harmonised  rules  instead  of  uncoordinated  national  measures  leading  to 
fragmentation. PO3 would have the strongest positive impact on the society as it would provide the 
strongest toolbox, with PO2 and PO1 having lesser positive impact. 

8.1. REFIT (simplification and improved efficiency) 

The  Strawberry  Regulation  will  be  repealed  together  with  the  adoption  of  the  Single  Market 
Emergency  Instrument. This will lead to the simplification of the legal framework due to the fact 

67 

 
 
 
 
 
 
that  this  mechanism  is  rarely  used  and  its  information  exchange  system  is  insufficient  as  it’s  too 
slow and outdated (see more information in section 8.2). 

8.2 Application of the ‘one in, one out’ approach 

The Single Market Emergency Instrument provides a toolbox of measures to address Single Market 
emergency,  consisting  a  set  of  measures  applicable  at  all  times  as  well  as  certain  measures  only 
applicable  in  vigilance  or  emergency  modes,  to  be  separately  activated.  There  are  no 
administrative  costs  for  businesses  and  citizens  that  would  apply  with  immediate  effect  and 
during the normal functioning of the Single Market. 

The measures  foreseen in the emergency and vigilance modes would be used in  very  exceptional 
circumstances. Their initiation would be subject to conditions and a triggering procedure upon the 
advice of the  governance body  (see details  in  section 5). As assessed in  section 6, there  could  be 
some  administrative  costs  for  companies  mostly  related  to  information  requests  (voluntary  under 
Policy  Option  1  and  mandatory  under  Policy  Options  2  and  3).  As  these  measures  could  be 
triggered only in case of future unknown type of crisis, it is impossible to quantify the number of 
companies impacted. Therefore the Impact Assessment specifies the type of potential impacts and 
magnitude  of  potential  administrative  costs  per  information  request  for  companies  based  on 
previous  impact  assessment  concerning  similar  provisions  (see  section  6  for  details).  Companies 
could  also  be  directly  affected  by  measures  such  as  obligatory  ramping  up  of  production  and 
priority-rated orders, however the effect could be net benefit. 

The Regulation (EC) No. 2679/98 setting up an response mechanism to address obstacles to the free 
movement  of  goods  attributable  to  a  Member  State  leading  to  serious  disruptions  and  requiring 
immediate  action  (‘The  Strawberry  Regulation’)  will  be  repealed.  According  to  its  evaluation 
finalised in October 2019 and supported by an external study, this mechanism is rarely used and its 
information exchange system is insufficient as it’s too slow and outdated. There are no costs borne 
by businesses or citizens due to the implementation of this Regulation because of the fact that the 
Regulation  is  about  the  exchange  of  information  and  reporting  among  national  authorities  and 
between them and the Commission. For what concerns the national authorities, the costs are low 
given that there are few cases of obstacles reported per year and the exchange of information takes 
place by email, however it could still lead to some limited  administrative costs savings for public 
administrations93. 

9.  HOW WILL ACTUAL IMPACTS BE MONITORED AND EVALUATED? 

The  Commission  will  carry  out  an  evaluation  of  the  effectiveness,  efficiency,  coherence, 
proportionality  and  subsidiarity  of  this  legislative  initiative  and  present  a  report  on  the  main 
findings to the European Parliament, the Council, the European Economic and Social Committee, 
and the Committee of the Regions five years after the date of application of the legislative acts. The 
Commission may propose in that evaluation report how to improve the Single Market Emergency 
Instrument.  This  review  mechanism  is  similar  to  the  review  mechanisms  included  with  the 
Commission proposal for a Council Regulation on a framework of measures for ensuring the supply 
of  crisis-relevant  medical  countermeasures  in  the  event  of  a  public  health  emergency  at  Union 
level94 as well as with the Commission proposal for a Regulation of the European Parliament and of 

93  As  assessed  in  the  evaluation  supporting  study  and  the  evaluation  Commission  Staff  Working  Document 
SWD(2019)371 final of 8 October 2019. 
94 COM(2021)577 final. 

68 

 
 
 
 
                                                           
the  Council  establishing  a  framework  of  measures  for  strengthening  Europe's  semiconductor 
ecosystem (Chips Act)95.  

Member States  and representative organisations  of economic operators will  be obliged to  provide 
the Commission with the information necessary for the preparation of that report. 

The  Commission  and  Member  States  will  regularly  monitor  the  application  of  the  legal  acts,  in 
particular  the  effectiveness  of  the  measures  facilitating  the  free  movement  of  goods,  persons  and 
services during the crisis on the persons and businesses concerned as well as the functioning of the 
Single  Market,  and  the  impacts  of  the  information  requests  and  monitoring,  building  and 
distribution of the strategic reserves and other measures increasing the availability of products and 
services on the Single Market to economic operators and their representatives. 

95 COM(2022)46 final.  

69 

 
 
 
 
 
                                                           
ANNEX 1: PROCEDURAL INFORMATION 

1.  LEAD DG, DECIDE PLANNING/CWP REFERENCES 

The  Single  Market  Emergency  Instrument  initiative  is  part  of  the  2022  CWP  under  the 
Commission’s priority ‘A Europe fit for the digital age’. 

The lead DG for this initiative is the DG for Internal Market, Industry, Entrepreneurship and SMEs 
(DG GROW). The Directorate in charge is Directorate A  – Strategy and Economic Analysis. The 
initiative is encoded in Decide Planning with the reference PLAN/2021/11161. 

2.  ORGANISATION AND TIMING 

The Secretariat-General set up the Inter-service Steering Group to assist in preparing the initiative 
in  Q2  2021.  There  have  been  three  ISSG  meetings.  The  last  ISSG  consultation  took  place  on  10 
June 2022. 

The Call for Evidence for this initiative was published on 13 April 2022 and was open to feedback 
from all stakeholders for a period of four weeks, until 11 May 2022. 

The timing for adoption of the new act by the Commission is Q3 2022. 

3.  CONSULTATION OF THE RSB 

This Impact Assessment was sent to the RSB on 15 June 2022. A meeting with the RSB took place 
on 6 July 2022. The RSB issued  a negative opinion on 8 July 2022,  following which this  Impact 
Assessment was revised as follows:  

RSB Recommendations 

Revisions introduced 

(B) Summary of findings 

(1) The report does not provide a clear definition 
of  a  Single  Market  ‘emergency’.  It  does  not 
specify the criteria and decision-mechanisms for 
establishing  and  terminating  an  emergency.  It 
does  not  clearly  differentiate  the  basic  SMEI 
measures and structures that will be implemented 
in the absence of a crisis from those that can only 
be  activated  once  a  Single  Market  ‘emergency’ 
is  established.  It  does  not  clearly  identify  the 
decisional  and analytical requirements and steps 
for taking emergency measures. 

The  definition  of  a  Single  Market  emergency  was  added 
in section 5.2 

The proposed definition of the Single Market emergency 
is:  ‘Single  Market  emergency’  means  a  wide-ranging 
impact  of  a  natural  or  man-made  crisis  on  the  Single 
Market  in  at  least  two  Member  States  that  severely 
disrupts or threatens to severely disrupt the functioning of 
the  Single  Market  or  puts  its  supply  chains  that  are 
indispensable  for  the  normal  functioning  of  society  and 
have a limited substitution and diversification potential at 
risk. 

Section 5.2 “setup of the initiative”  specifies the criteria, 
and decision mechanisms for establishing and terminating 
an emergency. 

Section 5.2 further explains the “traffic light” approach of 
the  initiative  with  three  modes:  1.  normal  times  “green 
mode”  2.  Vigilance  mode  “yellow  light”  3.  Emergency 
mode “green light”. Table 2 in section 5.3 specifies which 
building  block  of  the  SMEI  could  be  activated  under 

70 

 
 
 
 
 
 
which mode. 

In  section  5.2  “setup  of  the  initiative”,  decisional  and 
analytical  requirements  and  steps  for  activating  different 
modes  and  additional  triggers  for  some  of  the  building 
blocks or measures have been clarified. 
Assessment  in  section  6  specifies  which  impacts  will 
occur with the immediate effect (normal times) and which 
impacts  could  be  expected  under  the  vigilance  and 
emergency modes.  

The assessment provides estimates of immediate impacts.  

The  assessment  was  elaborated  to  cover  more  type  of 
impacts  i.e.  economic  impacts  for  key  stakeholders 
(businesses,  MS  and  Commission),  impacts  on  SMEs, 
impacts  on  competitiveness,  competition,  international 
trade.  The  assessment  covers  all  three  types  of  impacts 
economic,  social  and  environmental.  The  stakeholder 
feedback  is  transparently  reflected  in  the  assessment  in 
section 6. 

Detailed  assessment  of  alternative  approaches  to  eight 
building blocks was added in Annex 6.  
The  IA  defined  three  alternative  policy  options  which 
reflect  different  levels  of  political  ambition  and  different 
levels of support of stakeholders. These alternative policy 
options  are  also  feasible  policy  choices  open  to  policy 
makers. 
They are based on combination of different approaches to 
some  of  the  building  blocks.  For  some  of  the  building 
blocks,  the  choice  of  the  preferred  policy  approach  is 
straightforward  taking  into  account  the  feedback  from 
stakeholders, 
of 
measures. For others, in particular far-reaching measures, 
the  views  of  stakeholders  including  Member  States  and 
businesses differ, hence the different approaches for these 
blocks have been included in the different policy options 
based on detailed assessment of annex 6. The description 
of alternative policy options is provided in section 5. 
The  comparison  of  options  in  section  7  was  extended  to 
cover proportionality and subsidiarity. 

proportionality 

subsidiarity 

and 

Section  2  clarifies  that  the  objective  of  SMEI  is  not  to 
provide solutions to overcome a  future  crisis as a  whole, 
but rather to enable a swift and flexible response to Single 
Market  impacts  of  a  crisis.  The  purpose  is  to  provide 
immediate  solutions  to  ensure  that  the  Single  Market 
works as it should during crises. While the root causes of 
shortages of crisis-relevant products and services may be 
unrelated to the Single Market, shortages of such products 
and services can be severely amplified during a crisis by a 
non-functional  Single  Market,  in  particular  due  to:  1) 
Member  States  competing  against  each  other  in  securing 
the  availability  of  such  products 
in  separate  and 
uncoordinated  public  procurement  procedures;  2) 
Member States imposing uncoordinated and contradictory 
national  measures such as export restrictions; 3) the lack 
of  crisis  provisions  in  the  relevant  Single  Market 

(2)  The  report  does  not  provide  a  thorough 
assessment of the impacts  of the policy options. 
It  does  not  clearly  differentiate  the  impacts  that 
will  result  from  the  creation  of  the  SMEI  (and 
the directly applicable measures) from those that 
could  materialise  only  if  specific  emergency 
measures are activated. 

(3) The report is unclear about the policy choices 
and discretion open to policymakers on the basis 
of  the  analysis.  It  does  not  present  alternative 
combinations  of  relevant  policy  options.  The 
comparison  of  options  is  not  linked  to  the 
analysis  of  impacts  and  does  not  sufficiently 
reflect  the  respect  of  the  proportionality  and 
subsidiarity principles. 

(C) What to improve 

(1) 
The  report  should  clarify  upfront  that  it 
deals only with problems that may appear during 
any  kind  of  crisis  clearly 
the 
functioning of the Single Market.  

linked 

to 

71 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The  problem  definition  should  make  a  clear 
distinction  between  structural  issues,  such  as 
dependence  on  critical  raw  materials  or  other 
non-diversifiable  inputs,  which  are  likely  to 
require  specific  policy  instruments,  and  clearly 
single market crisis-related challenges.  

It  should  clarify  and  substantiate  with  evidence 
to  what  extent  global  and  external  shortages  of 
crisis-relevant  goods  alone  critically  affect  the 
functioning  of  the  Single  Market  and  allow 
Article  114 
justify  related 
measures,  such  as  strategic  stockpiling  and 
supply chain interventions (e.g. repurposing).  

to  be  used 

to 

It  should  also  explain  how  precisely  the  SMEI 
will  articulate  with  Member  States’  right  to 
invoke  Article  4(2)  TEU  in  crises  that  they 
consider threaten their national security 
(2) 
The  report  should  clarify  upfront  the 
definitions  of  Single  Market  ‘vigilance’  and 
Single  Market  ‘emergency’  and  the  overall 
gradual 
intervention  approach  envisaged.  It 
should explain in detail the criteria, triggers, and 
process to activate and deactivate the ‘vigilance’ 
and ‘emergency’ modes and to move from one to 
another,  who  will 
such  decisions 
(Commission,  Council  or  both),  on  the  basis  of 
what  kind  of  analysis  and  alerts,  and  based  on 
what  type  of  decision-making  instrument  and 
voting procedure.  

take 

Moreover, the report should explain how Single 

72 

legislation  that  would  allow  to  place  products  on  the 
market with the appropriate urgency. 

reinforcing 

Section  2  further  explains  that  while  the  root  causes  of 
shortages of crisis-relevant products and services may be 
unrelated to the Single Market, shortages of such products 
and services can be severely amplified during a crisis by a 
non-functional Single Market. The aim of the instrument 
is not to resolve structural issues that require  more long-
term  solutions 
the  EU  open  strategic 
autonomy in fields such as raw materials, semiconductors 
and  energy.  Yet  the  impacts  of  such  shortages  during  an 
emergency  might  have  severe  disruptive  effects  on  the 
availability  of  crisis-relevant  products  and  might  require 
quick corrective actions to support the functioning of the 
Single  Market.  There  is  a  lack  of  EU-level  measures  to 
identify,  anticipate  and  monitor  such  supply  chain 
disruptions that can have an impact on the availability of 
crisis-relevant  products  during  an  emergency.  There  are 
also no effective measures to tackle such shortages during 
an  emergency.  This  can  lead  to  or  amplify  further  the 
shortages  of 
an 
emergency, thus hampering the EU-level crisis response. 

crisis-relevant  products  during 

Section  5  also  lays  out  the  triggering  conditions  of  each 
mode,  demonstrating  that  a  severe  crisis  is  always  a 
precondition for using the stronger measures in the SMEI 
toolbox, with a number of checks and balances built in to 
ensure that they are not used outside of such crises. 

Section 3.1 includes the clarification on the use of Article 
114. The enhancing of production capacities, the speeding 
up  of  permitting,  priority  rated  orders  as  well  as  the 
accumulation  and  distribution  of  strategic  reserves  also 
aim to ensure a coherent response to future  crises and to 
avoid  the  fragmentation  of  the  Single  Market  and  hence 
justifies the use of Article 114 as the legal basis. 

Section 3.1 includes an explanation that MS will continue 
to  invoke  Article  4(2)  and  how  the  SMEI  will  articulate 
with this.  

A new section “The setup of the initiative” was added in 
the  IA  (section  5.2).  This  section  explains  the  overall 
approach  to  the  instrument  and  specifies  criteria  for 
activing  “vigilance”  and  “emergency”  modes.  It  also 
clarifies the process for activing the different modes. The 
SMEI  governance  body  will  propose  the  activation  and 
the  scope  of  the  Single  Market  vigilance  and  emergency 
modes  and  analyse  the  relevant  information  gathered  by 
the 
voluntary  or  mandatory  means 
economic  operators  by 
the 
Commission depending on the chosen policy option. The 
triggering  of  the  Single  Market  emergency  will  be  done 
by  means  of  Council  implementing  act  and  would  be 
justified by the magnitude of the crisis / importance of the 
decision  (2  days  following  the  Commission  proposal  to 
activate).  The  emergency  stage  will  be  activated  for  six 
months with the possibility to be renewed for another six 

including  from 
the  Member  States  or 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Market  ‘emergency’  status  would  interact  with 
the  emergency  status  decided  at  the  Member 
State level. 

(3)  The  report  should  set  out,  analyse  and 
compare a set of policy options that are feasible 
and politically relevant.  It should explore policy 
options  consisting  of  all  or  a  selection  of 
building  blocks,  representing  different  levels  of 
ambition,  different  areas  of  action,  different 
triggers  and  decision 
timings,  or  different 
process  mechanisms  for  the  instruments.  The 
policy  options  should  be  framed  to  meet  the 
expectations  and  recognise  the  constraints  of 
stakeholders, Member States and Parliament. 

(4) The report should better justify the selection 
of the nine building blocks. It should: 

   explain  how  they  were  identified,  whether 
and  how 
there  were  other 
stakeholders’ views were considered, 

alternatives 

months or terminated before. 

that 

the  IA  clarifies 

Section 3.3 and in particular paragraph 5 thereof includes 
an  explanation  on  the  interaction  between  the  Single 
Market emergency status and the emergency status at the 
level of the Member States. 
As explained under point in the summary of findings, the 
IA  defined  three  alternative  policy  options  in  section  5 
which  reflect  different  levels  of  political  ambition  and 
different  levels  of  support  of  stakeholder  to  meet  the 
expectations  and  constraints  of  stakeholders,  Member 
States  and  Parliament.  The  policy  options  are  formed  of 
all  building  blocks  in  combinations  of  different  policy 
approaches  e.g.  varying  from  guidance  to  mandatory 
the 
obligations.  Furthermore, 
instrument  is  a  toolbox  so  the  inclusion  of  all  building 
blocks which are necessary to address all problem drivers 
does  not  mean  that  all  of  the  building  blocks  will  be 
activated  in  every  crisis  situation.  The  choice  of  the 
triggers  is  explained  e.g.  are  based  on  already  adopted 
Commission  proposals  and  legislation,  as  well  as  the 
timing  they  apply  (green,  yellow,  red  modes)  together 
with  the  specific  measures  envisaged  for  each  mode. 
Decision  process  of  the  mechanism  is  also  explained, 
indicating  the  role  of  the  Commission,  the  Advisory 
Group or the Member States. 
The  building  blocks  are  reflecting  problem  drivers.  The 
structure  of  section  2.2  and  numbering  of  drivers  was 
changed to show this link more clearly. The problem tree 
in  section  2  and  Table  1  showing  links  between 
problems/drivers/ gaps/ building blocks in section 5 were 
adjusted  accordingly.  The  stakeholder’s  views  were 
considered  in  defining  three  policy  approaches  for  each 
building  block.  Finally, 
stakeholders  views 
underpinned  the  assessment  of  policy  approaches  in 
Annex  6  in  order  to  define  which  approaches  should  be 
retained.  

the 

   explain  the  link  between  the  building  blocks 
and  the  remaining  gaps  in  the  Single  Market 
legislation,  

  clearly  distinguish  between  those  building 
blocks  that  will  be  in  place  permanently  and 
those  that  could  be  activated  only  during  an 
established crisis,  

  present  evidence  (including  experience  from 

73 

Table  1  in  section  5  was  extended  to  show  the  links 
between  gaps  in  the  Single  Market  legislation,  drivers, 
problems  and  building  blocks.  The  gaps  analysis  was 
integrated  in  the  description  of  relevant  problem  drivers 
in section 2. The legal context section (1.2) was redrafted 
to explain better the context and not legal gaps. 

The  tables  in  section  5  on  the  links  between  gaps  in  the 
Single Market legislation, drivers, problems and building 
blocks  (Table  1)  and 
table  explaining  policy 
the 
approaches  for  different  building  blocks  (Table  2)  were 
extended to include modes when different building blocks 
are  activated  (all  times,  vigilance  mode  and  emergency 
mode). 

The  description  of  the  relevant  driver  on  supply  chain 
disruptions  (see  section  2.2)  includes  further  evidence. 
The  measures  concerning  strategic  reserves  and  supply 
chains  are  included  in  the  building  blocks  3  and  8.  For 
these  blocks,  different  policy  approaches  were  retained 
and included in the alternative policy options (see Annex 

 
 
 
 
 
 
 
 
 
 
 
 
that 

justifies  as  such 

the 
previous  crises) 
the  proposed  far-reaching  and 
inclusion  of 
intrusive  interventions  in  the  area  of  strategic 
reserves  and  supply  chains  and  specify  clearly 
the 
justify 
regulatory interventions in these areas as well as 
assess the feasibility of such interventions,  

information  needs 

required 

to 

  address  the  concerns  shown  by  stakeholders, 
including from a subsidiarity and proportionality 
regards  measures  such  as 
perspective  as 
stockpiling,  monitoring  and  enhancing 
the 
resilience  of  strategic  supply  chains,  disclosure 
of  information  or  accelerating  Member  States 
normal permitting procedures. 
(5)  The  analysis  of 
strengthened. It should:  

should  be 

impacts 

specify 

unambiguously 

 
evidence 
supporting  the  impact  analysis  and  assess  how 
robust the resulting conclusions are, 

the 

   acknowledge  that  for  certain  measures  the 
necessary evidence will become available only in 
a  crisis  situation  and  will  therefore  need  to  be 
adequately  reflected  in  the  decision  to  activate 
such measures,  

  assess  the  broader  economic,  international 
trade,  competition  and  business  impacts  and 
present clearly the results of an SME test,  

6).  In  particular  for  block  8,  three  policy  alternatives 
ranging  from  guidance  (approach  1)  to  obligations  to 
businesses  to  accept  and  prioritise  orders;  ramp  up 
production 
crisis-relevant 
information  (approach  3)  are  retained  and  assessed  in 
alternative policy options. 

capacity 

provide 

and 

As  mentioned  above,  three  alternative  policy  options 
include  different  approach  to  building  blocks  related  to 
stockpiling  and  supply  chains.  The  assessment  of  these 
options  (section  6)  is  underpinned  with  stakeholder’s 
views.  Furthermore  the  comparison  of  alternative  policy 
options  in  section  7  includes  a  comparison  against 
subsidiarity/  proportionality  criterion  and  also  include  a 
comparison  table  with  key  impacts  and  supports  of 
concerns  of 
different 
stakeholders are transparently in rating of different policy 
options in these comparison tables. 

stakeholder’s  views.  The 

The  introduction  to  section  6  clarifies  the  limitations  of 
evidence supporting the impact analysis. For impacts with 
immediate  effect,  the  impacts  analysis  aim  to  provide 
quantification of costs. 

Given  that  for  certain  measures  the  necessary  evidence 
will become available only in a crisis situation (unknown 
today),  the  assessment  provides  a  qualitative  assessment 
of  the  type  of  impacts  to  be  expected  for  different 
stakeholders  groups.  It  acknowledges  that  evidence  will 
become only in the (pre) crisis situation, the need for the 
assessment of impacts before activing certain measures is 
reflected  in  the  decision  mechanisms  (as  explained  in 
section 5, set-up of the instrument). 

The  assessment  of  options  in  section  6  assess  the  most 
relevant  economic  impacts:  impacts  for  key  stakeholders 
(in  particular 
impacts  on 
impact  on  businesses), 
international  trade,  competition  and  SMEs.  The  analysis 
in the SME Test (Annex 7) was extended.  

 explore and elaborate on the type of social and 
environmental  impacts  that  the  initiative  could 
have,  

The  IA  provides  a  qualitative  assessment  of  relevant 
environmental  and  social  impacts  of  policy  options  in 
section 6. 

the 
  show  a  comprehensive  overview  of 
administrative  and  adjustment  costs 
(and 
savings)  for  businesses,  citizens  and  national 
authorities to  allow a  realistic assessment of the 
magnitude  of  the  expected  administrative  costs 
for  businesses  and  citizens  for  the  purpose  of 
‘One-In, One-Out’,  

Annex  3  was  improved  to  summarise  a  comprehensive 
overview  if  costs  and  benefits  for  different  stakeholders. 
The  immediate  costs  were  quantified.  The  assessment 
shows  that  there  are  no  immediate  administrative  or 
adjustment  costs  for  businesses  and  citizens  for  the 
purpose of “One-In, One-Out’. The assessment in section 
6,  section  8.2  and  annex  3  further  specifies  that  there 
could administrative costs in the vigilance and emergency 
mode  for  companies  mostly  related  to  information 
requests (voluntary under  policy option 1 and mandatory 
under policy options 2 and 3) As these measures could be 

74 

 
 
 
 
 
 
 
 
 
including 

  clearly  present  the  budgetary  impacts  of  the 
considering  whether 
initiative, 
economic  operators  would  be  entitled 
to 
compensation  in  cases  of  revenue  losses  due  to 
repurposing or EU prioritisation,  

triggered only in case of future unknown type of crisis, it 
is  impossible  to  quantify  the  number  of  companies 
impacted.  Therefore  the  IA  specifies  type  of  potential 
impacts  and  magnitude  of  potential  administrative  costs 
per information request for companies 

The  assessment  of  impacts  in  section  6  includes  the 
budgetary implications  for the  Commission  for  measures 
with  the  immediate  effect.  The  same  applies  to  costs  for 
Member States with the immediate effect. The description 
of  policy  measures  under  building  block  8  in  section  5 
specifies  that  in  case  of  ramping  up/repurposing  of 
production  or  priority-rated  orders,  companies  would  be 
entitled 
former  or 
support 
compensation  at  fair  price  for  the  latter.  Given  that  the 
activation of these measures would depend on the type of 
crisis  and  would  be  subject  to  additional  triggering 
mechanisms including the assessment of potential impacts 
(see  section  5.2),  the  budgetary  implications  of  such 
measures need to be assessed on case by case basis. 

financial 

the 

for 

to 

 specify which impacts will materialise once the 
instrument  is  adopted,  and  which  only  in  a 
concrete crisis situation, 

The  assessment  of  options  in  section  6  specifies  clearly 
immediate impacts and impacts which will materialise ion 
the vigilance and emergency mode. 

  improve the effectiveness analysis throughout 
(e.g.  building  up  strategic  reserves  of  critical 
goods  only  once  an  emergency  is  established 
might  come  too  late  and  may  plead  rather  for 
structural measures). 
(6)  The  comparison  of  options  should  clearly 
flow from the analysis of the policy options. The 
report  should  justify  the  scores  given  to  each 
policy  option.  On  that  basis  the  report  should 
identify  the  most  relevant  or  best  performing 
combination of policy options and compare them 
in 
terms  of  effectiveness,  efficiency  and 
coherence to allow policy makers a complete and 
fully  informed  choice.  This  comparison  should 
include a more developed assessment in terms of 
proportionality  and  respect  of  the  subsidiarity 
principle. 

It  was  clearly  specified  that  the  constitution  of  strategic 
reserves  would happen in the vigilance  mode, i.e. before 
the potential arrival of the emergency. 

Section  7  comparing  have  been  changed  and  it  fully 
reflects the impact analysis done in section 6. 

The  justification  of  scores  flows  on  one  hand  from  the 
assessment  in  section  6  and  is  also  provided  in  the  text 
accompanying the comparison tables. 

As explained above, three alternative policy options were 
identified  based  on  the  assessment  of  policy  approaches 
for building blocks in Annex 6. These policy options are 
alternative  combinations  which  are  then  assessed  in 
details 
terms  of 
effectiveness, efficiency, proportionality/ subsidiarity and 
impacts/  support  of  key  stakeholders  to  allow  policy 
makers for evidence based policy decisions. 

in  section  6  and  compared 

in 

The revised Impact Assessment was sent to the RSB on 29 July 2022. On 17 August 2022, the RSB 
issued a positive opinion with comments, following which the Impact Assessment was updated as 
follows: 

RSB Recommendations 

Revisions introduced 

(B) Summary of findings 

(1)  The  report  does  not  sufficiently  identify, 
explore or distinguish between different types of 

Indications  on  effects  of  potential  future  crises  added  to 
Section  2,  separately  for  problem  1  (Obstacles  to  free 

75 

 
 
 
 
 
 
 
 
 
 
 
 
crises  that  may  impact  the  functioning  of  the 
Single Market. 

(2) The report does not clearly set out the scope 
or  recent  uses  of  the  Article  4(2)  TEU  national 
risks 
result 
security  exemption  and  as  a 
underestimating 
in  a  crisis 
its  significance 
situation.  It  does  not  explain  the  hierarchy  of 
the  EU-level 
emergency  measures  among 
instruments  and 
that  Member  States 
themselves may introduce in a crisis situation on 
the  basis  of  Article  4(2)  TEU.  The  rationale, 
content  and  functioning  of  some  options  and 
measures are not sufficiently clear. 

those 

(3) The report does not sufficiently justify some 
of the obligatory measures proposed in the SMEI 
emergency  mode  from  the  subsidiarity  and 
proportionality principles point of view. 

(C) What to improve 

(1)  As  the  initiative  is  intended  to  provide  an 
enabling  framework  for  supporting  a  proper 
functioning  of  the  Single  Market  in  a  crisis 
situation,  the  report  should  explore,  analyse  and 
discuss different crisis scenarios that may lead to 
disruptions  in  the  free  circulation  of  goods, 
services and persons in the EU. The current text 
of  the  report  centres  almost  exclusively  on  the 
COVID-19  pandemic  and  the  war  in  Ukraine 
while  not  sufficiently  reflecting  other  recent 
crises  with  Single  Market  effects  such  as 
financial, 
or 
migration.  In  the  absence  of  a  broader  analysis 
feeding  into  the  problem  definition,  the  report 
risks proposing solutions  to  the last crisis  rather 
resilience, 
than 
preparedness  and  rapid  response  to  the  next. 
Overall,  the  report  should  distinguish  more 
clearly  between  structural  problems  (requiring 
long  term  structural  solutions)  and  emergency 
and crisis triggered situations that could require a 

the  Union’s 

disasters, 

terrorism 

building 

natural 

76 

movement)  and  for  problem  2  (Shortages  of  crisis-
relevant  products  and  services).  Specifically,  the  effects 
of potential crises such as natural disasters, technological 
disasters,  geopolitical  threats,  migration  crises,  terrorist 
attacks,  financial  crises,  another  pandemic,  or  of  a  crisis 
of a completely unpredictable nature, have been analysed 
with  regards  to  possible  impact  in  terms  of  obstacles  to 
free movement and shortages of crisis-relevant products. 
Section  3  modified  to  account  for  the  interplay  with 
potential measures under Article 4(2) TFEU. Specifically, 
it has been explained that there is a possibility of overlap 
between  measures  taken  to  maintain  law  and  order  and 
safeguard  national  security  taken  in  the  context  of  this 
Article  and  measures  impacting  the  Single  Market  in  a 
crisis.  It  has  been  explained  that  a  specific  provision 
would be included to clarify that SMEI would be without 
prejudice  to  measures  taken  by  Member  States  in  the 
context of Article 4(2) TFEU which would therefore take 
precedence.  It  has  also  been  explained  that  the  presence 
of  an  effective  coordination  mechanism  such  as  SMEI 
would likely increase mutual trust and lessen the need for 
measures  of  last  resort  in  the  context  of  Article  4(2) 
TFEU. 
Detailed explanation of the content and the functioning of 
a  set  of  measures  envisaged  under  Policy  Option  3 
(‘Solidarity’)  has  been  provided  in  the  Section  5.2.  In 
particular,  detailed  information  on  the  procedure  and 
steps  to  be  used  for  the  constitution  of  strategic  reserves 
have  been  described  under  vigilance  mode.  Detailed 
information  on  coordinated  distribution  of  strategic 
reserves and on priority rated orders has been added under 
emergency  mode.  Justification  on  subsidiarity  and 
proportionality provided in Section 6.3. 

Indications  on  effects  of  potential  future  crises  added  to 
Section  2,  separately  for  problem  1  (Obstacles  to  free 
movement)  and  for  problem  2  (Shortages  of  crisis-
relevant  products  and  services).  Specifically,  the  effects 
of potential crises such as natural disasters, technological 
disasters,  geopolitical  threats,  migration  crises,  terrorist 
attacks,  financial  crises,  another  pandemic,  or  of  a  crisis 
of a completely unpredictable nature, have been analysed 
with  regards  to  possible  impact  in  terms  of  obstacles  to 
free movement and shortages of crisis-relevant products. 

A  clearer  distinction  added  in  the  text  of  Section  2  to 
highlight that the instrument will focus on emergency and 
crisis triggered situations that could require a coordinated 
action at the EU level. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
coordinated  action  at  the  EU  level.  It  should 
more clearly present as a problem driver the fact 
that 
emergency 
instruments/mechanisms  do  not  have  Single 
Market  in  their  focus  rather  than  ‘the  lack  of’ 
appropriate bodies or instruments. 

existing 

EU 

the 

It 

of 

not 

and 

should 

underplay 

interaction 

instead  seek 

(2)  Given 
the  plethora  of  crisis-related 
instruments  at  the  EU  level  and  the  possibility 
for  Member  States  to  invoke  Article  4(2)  TEU 
that provides for the Member States the right  to 
take  measures  to  maintain  law  and  order  and 
safeguard  national  security,  the  report  should 
better  explain  and  analyse  with  examples  the 
hierarchy 
these 
measures/instruments that would apply in a crisis 
the 
situation. 
significance of Article 4(2) TEU given the latter 
has  been  invoked  by  Member  States  in  recent 
to 
crises  at  some  point,  but 
demonstrate  how  an  effective  SMEI  with  full 
Member  State  participation  could  potentially 
avoid the use of this Article of last resort. While 
the SMEI is meant to be built on early warnings, 
cooperation  and  coordination  among  Member 
States,  potential  conflicts  between  safeguarding 
national  security  and  supporting  a  proper 
functioning  of  the  Single  Market  cannot  be 
excluded in the future. The report should discuss 
more  thoroughly,  including  from  a  subsidiarity 
and proportionality perspective, how overlapping 
or conflicting measures at EU and Member State 
level  will  be  avoided  and  potential  conflicts 
resolved. 
(3) The report should better present the rationale, 
content  and  functioning  of  some  options  and 
measures.  It  should  bring  out  more  clearly  the 
practical  functioning  (including  their  financing) 
of  the  solidarity  measures  envisaged  under 
policy option 3 (‘Solidarity’), given that the main 
trust  of 
to  be  about 
concentrating  decision  making  at  EU  level.  It 
should  better  justify  why  for  building  block  5 
(transparency  and  administrative  assistance 
during emergency) no alternative option than the 
(i.e., 
most  comprehensive 
possibility  to  declare  the  notified  national  crisis 
measure  incompatible)  was  considered,  leaving 
no choice for the decision maker. It should better 
explain how the targets for strategic reserves will 

this  option  seems 

legal  framework 

77 

Problem  driver  1  modified  to  account  for  the  lack  of 
Single Market focus in the existing mechanisms. 

Section  3  modified  to  account  for  the  interplay  with 
potential measures under Article 4(2) TFEU. Specifically, 
it has been explained that there is a possibility of overlap 
between  measures  taken  to  maintain  law  and  order  and 
safeguard  national  security  taken  in  the  context  of  this 
Article  and  measures  impacting  the  Single  Market  in  a 
crisis.  It  has  been  explained  that  a  specific  provision 
would be included to clarify that SMEI would be without 
prejudice  to  measures  taken  by  Member  States  in  the 
context of Article 4(2) TFEU which would therefore take 
precedence.  It  has  also  been  explained  that  the  presence 
of  an  effective  coordination  mechanism  such  as  SMEI 
would likely increase mutual trust and lessen the need for 
measures  of  last  resort  in  the  context  of  Article  4(2) 
TFEU. 

Detailed explanation of the content and the functioning of 
a  set  of  measures  envisaged  under  Policy  Option  3 
(‘Solidarity’)  has  been  provided  in  the  Section  5.2.  In 
particular,  detailed  information  on  the  procedure  and 
steps  to  be  used  for  the  constitution  of  strategic  reserves 
have  been  described  under  vigilance  mode.  Detailed 
information  on  coordinated  distribution  of  strategic 
reserves and on priority rated orders has been added under 
emergency  mode.  Justification  on  subsidiarity  and 
proportionality provided in Section 6.3. 

An  explanation  of  the  selection  of  policy  approach  3  for 
building block 5 added in Annex 6.  

Detailed  information  on  the  functioning  of  strategic 
reserves  added  in  Section  5.2,  for  both  vigilance  and 

 
 
 
 
 
 
 
 
 
 
 
 
be  set  and  whether  (in  particular  smaller) 
Member  States  could  cooperate  in  due  time  in 
achieving their respective targets, for instance by 
pooling certain measures to achieve synergies. It 
should  also  clarify  how  overlap  or  inefficient 
duplication  of  strategic  reserves  built  up  on  the 
basis  of  different  (national  and  EU 
level) 
objectives  will  be  avoided,  exploring  targeted 
coordination  mechanisms  to  this  purpose.  It 
should clarify the nature of the separate financial 
instrument that would be necessary for the most 
ambitious  measures  under  building  block  8 
(crisis relevant supply chains). 
(4) The report should explain how the digital by 
default principle will be applied in the measures 
envisaged under the SMEI instrument.  
(5)  Stakeholder  views  should  be  systematically 
presented  in  a  more  granular  way,  focusing  on 
the  types  of  stakeholders  (e.g.  Member  States, 
type  of 
than  only  on 
SMEs) 
consultation. 

rather 

the 

emergency modes. 

Reference added in Annex 5 indicating the possible need 
for  a  separate  financial  statement  for  the  Commission’s 
powers  to  oblige  companies  to  repurpose  or  ramp  up 
production  under  Policy  Option  3,  likely  modelled  after 
Emergency  Support  Instrument  used  during  the  COVID-
19 pandemic. 

A  detailed  explanation  of  the  application  of  digital  by 
default principle has been added in Section 5.3. 

Specification  by  main  stakeholder  type  added  for  the 
respondents  to  the  public  consultation  in  the  text  of  the 
report. 

4.  EVIDENCE, SOURCES AND QUALITY 

Evidence and data that were used in this Impact Assessment included: 

  “The  impact  of  COVID-19  on  the  Internal  Market”,  study  at  the  request  of  the  EP  IMCO 

Committee; 

  Evaluation  of  the  “Strawberry  Regulation”  (EC)  No  2679/98  and  its  supporting  external 

study; 

  Evaluation of the New Legislative Framework; 
  Relevant information and/or evidence collected in the context of preparation of existing or 
proposed  EU  crisis  response  initiatives  and  mechanisms,  including  through  consultation 
activities or impact assessment studies (e.g. the Data Act, Single Market Information Tool 
(SMIT),  HERA,  Schengen  Borders  Code,  Contingency  plan  for  ensuring  food  supply  and 
food security, the integrated political crisis response mechanism (IPCR), Contingency plan 
for  transport,  EU  Digital  COVID  Certificate  Regulation,  Council  Recommendation  (EU) 
2020/1475 on a coordinated approach to the restriction of free movement in response to the 
COVID-19 pandemic and its adaptations); 

  Academic  studies  and  literature  on  the  effect  of  previous  crises  on  the  functioning  of  the 
Single Market, as well as existing position papers and other documents drawn up by relevant 
stakeholders; 

  Newspaper articles and press materials. 

The references are cited in the main text of the report as appropriate. 

The Impact Assessment further relies on the information received from consultation activities as 
detailed in the synopsis report contained in Annex 2 of this Impact Assessment. 

78 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ANNEX 2: STAKEHOLDER CONSULTATION (SYNOPSIS REPORT) 

In  the  context  of  the  Impact  Assessment  on  the  Single  Market  Emergency  Instrument,  various 
consultation  activities  were  conducted  between  October  2021  and  May  2022.  The  purpose  of  the 
consultation was to collect evidence and views from a broad range of stakeholders, giving them an 
opportunity  to  provide  relevant  data  and  information  on  the  problems  and  potential  solutions 
concerning  crisis-related  disruptions  of  the  Single  Market.  While  attempting  to  reach  the  widest 
possible  range  of  stakeholders,  the  results  of  the  consultation  activities  are  not  designed  to  be 
representative. This Annex presents the results of the consultation activities carried out. 

The consultation activities included: 

  a call for evidence published on the “Have  your say” portal and open from 13 April to 11 

May 2022, 

  a  public  consultation  conducted  via  a  questionnaire  published  on  the  same  portal  for  the 

same dates,  

  a stakeholder workshop on 6 May 2022,  
  a Member State survey in May 2022 and  
  Targeted  consultations  conducted  by  means  of  meetings  with  Member  States  and  specific 

stakeholders.  

Concerning  the  call  for  evidence,  the  public  consultation  and  the  stakeholder  workshop,  all  three 
were open to the public. 

1.  Overview of the participants 

For all stakeholder activities, the main stakeholder groups addressed were: 

  National authorities responsible for the Single Market;  
  Governmental  organisations  involved  in  cross-border  interaction  (such  as  regional 
authorities  of  cross-border  regions,  public  employment  authorities  involved  in  cross-
border job placement, etc.) 

  Non-Governmental Organisations representing the civil society;  
  EU and national consumer associations;  
  Associations representing industry, businesses, professionals and crafts;  
  Businesses,  including  online  platforms  and  Small  and  Medium-sized  Enterprises 

(SMEs);  

  Social partners; 
  Academic experts on free movement in the Single Market and on international supply 

chains;  
Individual EU citizens, including mobile citizens and cross-border workers. 

 

For  the  call  for  evidence,  55  answers  were  received  coming  mainly  from  EU  citizens  (28 
respondents),  business  associations  (14)  and  company/business  organisations  (5).  Respondents  to 
the call for evidence were mainly located in Belgium (16), Slovakia (11) and Germany (10). 

For the public consultation, 25 answers were received coming mainly from business associations 
(14 respondents), public authorities (4), EU citizens (3) and companies/business organisations (3). 
Respondents were mainly located in Belgium (10) and Germany (4). 

79 

 
 
 
 
 
 
 
For  the  stakeholder  workshop,  there  were  168  registered  participants.  These  participants  came 
from  public  authorities  (106  participants),  business  associations  (49)  and  academic/research 
institutions  (5).  The  participants  were  located  in  Belgium  (40),  Portugal  (15)  and  in  27  other 
countries, including Iceland, Norway and Switzerland. 

For the Member States survey, the survey was sent to all Member States. As of 1 June 2022, 13 
Member States (BE, CZ, DK, EE, ES, IT, LV, LT, NL, AT, PL, PT, SI) submitted responses to the 
survey and two other Member States (IE, SE) sent additional materials in this context. 

The  consultation  activities  were  completed  by  targeted  consultations  of  different  types  of 
stakeholders  and  interviews.  In  particular,  the  objectives  and  scope  of  the  initiative  have  been 
discussed  with  the  Member  State  authorities  in  several  of  the  Council  Working  Parties  and  High 
Level Group meetings in the course of 2021 and 2022, as well as in a number of bilateral meetings. 
Meetings with a number of consumer and industry associations have taken place in 2021 and 2022. 

Stakeholder type 

Public 
consultatio
n  and  Call 
for 
Evidence 

Targeted 
consultation 

Final workshop 

 

 

 

 

 

 

 

 

 

 

National authorities 

Civil Society 

Consumer 
associations 

Industry associations 

Economic operators 

Social partners 

Academic experts 

Individual citizens 

 

 

 

 

 

 

 

 

2.  Summary of results 

2.1 Call for evidence 

Business associations provided detailed feedback and evidence on the initiative. They mainly agree 
with the need to ensure free movement as well as greater transparency and coordination in times of 
crisis.  Most  experiences  described  by  stakeholders  came  from  the  COVID-19  crisis  due  to  its 
serious  impacts  on  citizens,  cross-border  workers  and  on  the  global  economy  through  lockdown 
measures  including  border  controls  and  entry/exit  bans  which  also  contributed  to  supply  chains 
disruptions. In this context, stakeholders also raised issues regarding standardisation and the lack of 
procedures to ensure that products and services remain conform and safe, even in a crisis situation. 
Feedback from business associations mainly came from the healthcare and pharmaceuticals sectors 

80 

 
 
 
 
 
 
 
 
 
 
 
 
 
as  medicines  were  subject  to  heavy  export  bans  and  stockpiling  requirements  in  some  Member 
States. 

Stakeholders called for the scope of the initiative to be focused and for a legally sound definition of 
a  crisis  as  well  as  limited  timing  of  exceptional  measures  and  for  simplification  of  procedures 
undertaken during a crisis. Stakeholders also agreed on the need for any SMEI-related measures to 
be streamlined and consistent with other crisis management tools existing at the EU level such as 
the Chips Act and Health Emergency Preparedness and Response Authority (HERA).  

On the specific measures to be included in the initiative, some business organisations underlined the 
fact  that  predicting  the  effects  of  a  crisis  on  supply  chains  and  value  chains  is  very  complex. 
Therefore,  businesses  should  not  face  obligations  or  heavy  burdens.  Business  associations  also 
called  for  a  strengthened  dialogue  with  businesses  and  industries  to  include  them  in  decision-
making. On stockpiling, several respondents pointed out that uncoordinated and unilateral measures 
from some Member States proved to be a major obstacle during the first months of the pandemic. 
For example, several Member States encouraged industries to stop exporting and instead stockpile 
while other Member States  forced wholesalers and/or manufacturers to  stockpile medicines. Such 
measures  had  similar  effects  to  export  restrictions  and  caused  disruption  in  the  functioning  of 
supply chains  even if stockpiling was not  used  as much  as the  export restrictions. Some business 
associations  call  therefore  for  strategic  stockpiling  that  focuses  on  very  specific  goods.  Business 
associations stressed the lack of harmonisation of data-gathering at the EU level and called for the 
use of the principle of proportionality when imposing market monitoring obligations on companies. 
While  the  idea  of  facilitating  the  procedures  for  placing  the  products  concerned  on  the  market  is 
mostly  approved,  stakeholders  stress  the  need  to  be  careful  not  to  develop  parallel  regulatory 
frameworks with lower standards or to distort the level playing field. 

Among the EU citizens that responded to the call for evidence, 19 respondents did not agree with 
the initiative. They pointed out a risk of loss of sovereignty of Member States in the management of 
a  crisis  and  interference  with  national  affairs.  They  also  highlighted  the  structural  economic 
differences between Member States which can make solidarity initiatives more difficult.  

2.2 Public consultation 

The  public  consultation  questionnaire  included  questions  on  the  problems  experienced  during  the 
recent crises as well as on the possible optional modules to be included in the future instrument. 

For the problems experience, on the effect of restrictions on free movement of persons, cross-border 
service provision or export of goods, 23 of 24 respondents stated that they were negatively affected, 
with 12 to a great extent. 13 respondents pointed to the effect in private activity as a consumer or 
service  recipient,  6  in  professional  activity  as  a  worker,  13  in  professional  activity  as  a  service 
provider, 12 in  professional  activity  as an entrepreneur, 14  as a company  employing cross-border 
workers, 17 as a company relying on cross-border service providers, 6 as a citizen wishing to travel. 

On the difficulties experienced when wishing to purchase goods, 13 respondents out of 17 pointed 
at the product not being available for purchase (3 often), 14 out of 17 at the product available with a 
very high price increase of over 30%  (6 often),  15 out  of 17  at  the product  available with  a high 
price increase of over 10% (9 often), 13 out of 17 at the product available with a very high delay in 
delivery (4 often), and 15 out of 17 at the product available with a high delay in delivery (5 often). 

Due  to  difficulties  in  purchasing  goods  or  services,  from  the  point  of  view  of  businesses,  the 
following  consequences  occurred:  lower  production  volumes  for  13  out  of  16  respondents  (10 

81 

 
 
 
 
 
often), delays in production for 14 out of 16 (11 often), lost business opportunities for 11 out of 16 
(10 often), lost investment opportunities for 9 out of 15 (8 often), liquidity problems for 4 out of 15 
(3 often), staff redundancies for 10 out of 16 (7 often). 

For  measures  to  anticipate  disruptions  and  prepare  for  crises  before  they  arise,  the  following 
responses were received in terms of adequacy of measures: 

 

 

 

 

targeted  monitoring  mechanism  of  identified  supply  chains  through  data  gathered  from 
economic  operators  to  anticipate  shortages  affecting  the  smooth  functioning  of  the  Single 
Market – 14 out of 24 respondents supported it, 9 to a great extent 
regular  risk  assessment  by  industry  –  22  out  of  24  respondents  supported  it,  13  to  a  great 
extent 
regular risk assessment by Member States – 22 out of 24 respondents supported it, 13 to a 
great extent 
regular risk assessment by the Commission – 23 out of 24 respondents supported it, 12 to a 
great extent 

  emergency training drills for national and EU experts – 22 out of 24 respondents supported 

it, 8 to a great extent 

  promoting  the  reinforcement  of  the  resilience  of  the  EU  economy  through  voluntary 

industry-driven initiatives – 22 out of 24 respondents supported it, 5 to a great extent 

  promoting  the  reinforcement  of  the  resilience  of  the  EU  economy  through  or  mandatory 
industry-driven initiatives – 13 out of 24 respondents supported it, 1 to a great extent; 11 did 
not support at all. 

For what concerns the targeted information needed from industry in order to anticipate and prepare 
for the crisis adequately, the following choices were supported: 

 

 

 

information regarding their production capacities (5 respondents said yes, 7 said maybe out 
of 14 respondents) 
information  regarding  their  current  primary  disruptions  (11  respondents  said  yes,  1  said 
maybe out of 14 respondents) 
information regarding existing stocks of goods of potential relevance to that particular crisis 
(7 respondents said yes, 5 said maybe out of 15 respondents) 
 
information regarding their prices (2 said yes, 2 said maybe out of 15 respondents) 
 
information regarding their supply chains (5 said yes, 6 said maybe out of 15 respondents) 
  any existing data necessary to assess the nature of a potential future the crisis or to identify 
and  assess  potential  mitigation  or  emergency  measures  at  national  or  Union  level  (5  said 
yes, 7 said maybe out of 14 respondents). 

For  what  concerns  the  targeted  information  needed  from  industry  in  order  to  manage  a  crisis 
adequately, the following choices were supported: 

 

 

 

 
 

information regarding their production capacities (9 respondents said yes, 9 said maybe out 
of 20 respondents) 
information  regarding  their  current  primary  disruptions  (17  respondents  said  yes,  2  said 
maybe out of 20 respondents) 
information regarding existing stocks of goods of potential relevance to that particular crisis 
(9 respondents said yes, 10 said maybe out of 20 respondents) 
information regarding their prices (4 said yes, 5 said maybe out of 21 respondents) 
information regarding their supply chains (7 said yes, 6 said maybe out of 20 respondents) 

82 

 
 
 
 
  any existing data necessary to assess the nature of a potential future the crisis or to identify 
and  assess  potential  mitigation  or  emergency  measures  at  national  or  Union  level  (7  said 
yes, 7 said maybe out of 20 respondents). 

On the question of a strategic storage or stockpiling system for  goods of strategic importance, 19 
respondents out of 21 were supportive of such a measure (4 to a great extent). There were a number 
of divergent suggestions on how to determine such goods of strategic importance, both in terms of 
methodology and in terms of specific goods. On the question whether the respondent’s organisation 
has such a stockpiling system in place, only 2 out of 20 respondents replied positively. 8 out of 20 
respondents considered that a strategic storage or stockpiling system coordinated at EU level would 
be an efficient solution to crises. 

In terms of addressing obstacles to free movement in times of crisis, 21 out of 21 respondents (17 to 
a  great  extent)  supported  providing  key  principles  concerning  crisis  measures  restricting  the  free 
movement of certain categories of goods as well as persons, workers and professionals. 18 out of 22 
respondents (11 to a great extent) supported conditions/mechanisms for drawing up key principles 
to determine products and/or services that are indispensable in the context of a given crisis and for 
facilitating their free movement. 19 out of 21 respondents (12 to a great  extent) supported setting 
out  key  principles  to  identify  a  blacklist  of  national  measures  restricting  the  free  movement  of 
goods, services and persons incompatible with the particular crisis situation. 

On  the  actions  regarding  information  sharing  and/or  notifications  of  national  crisis  measures  as  a 
solution to the crisis situations, the following responses were received: 

  Specific mandatory notification mechanisms for any national crisis measures restricting the 
intra-EU  exportation  of  goods  and  restricting  services  provisions  followed  by  flash  peer 
review by the Member States and the Commission, during which adoption is suspended – 20 
out of 22 respondents supportive, 15 to a great extent 

  Voluntary information sharing on national crisis measures by Member States – 14 out of 21 

respondents supportive, 2 to a great extent 

  Require  Member  States  to  notify  the  national  crisis  measures  and  specific  exemptions  or 
special  treatment  that  exist  for  recognised  groups  such  as  transport  workers  and  service 
providers,  health  care  workers,  cross-border  commuters  etc.  affecting  the  Single  Market  – 
21 out of 22 respondents supportive, 16 to a great extent 

  Publish  the  summary  of  the  national  crisis  measures  on  a  dedicated  EU  website  where 
citizens and businesses could acquire information about the national crisis measures – 21 out 
of 22 respondents supportive, 16 to a great extent 

  Set  up information  contact  points at  EU level  where citizens and businesses could  acquire 
further  information  about  the  EU  and  national  crisis  measures  –  21  out  of  22  respondents 
supportive, 9 to a great extent 

  Require Member States to set up information contact points at national level where citizens 
and businesses could acquire further information about the national crisis measures affecting 
the Single Market – 21 out of 22 respondents supportive, 14 to a great extent. 

As  regards  the  timely  availability  of  critical  products  relevant  to  a  crisis,  the  following  responses 
were received in terms of the efficiency of each measure: 

  Streamlining  EU  product  rules  (such  as  mandatory  conformity  assessment  and  standards) 
and  prioritising  products’  controls  for  a  limited  time,  to  enable  a  swift  deployment  of 
products  of  potential  relevance  to  a  crisis  on  the  market  –  14  out  of  17  respondents 
considered efficient, 10 highly efficient 

83 

 
 
 
 
  Ramping up production capacity, e.g. by repurposing or extending existing production lines 

on a voluntary basis – 13 out of 17 respondents considered efficient, 3 highly efficient 

  Ramping up production capacity, e.g. by repurposing or extending existing production lines 
on  mandatory  basis  with  governmental  support  including  the  possibility  of  speeding  up 
permitting procedures at national level, as a measure of last resort when the supply of crisis-
related  goods  does  not  meet  the  need  to  adequately  manage  a  crisis  –  5  out  of  17 
respondents considered efficient, 2 highly efficient 

  Targeted and coordinated distribution of products relevant for a certain type of crisis when 
there  are  dire  shortages  of  crisis-relevant  resources  in  times  of  crisis  –  6  out  of  17 
respondents considered efficient, 3 highly efficient 

  Obligation on undertakings to accept and prioritise orders of goods and services relevant to a 
crisis  in  order  to  enhance  their  availability  during  a  crisis  –  3  out  of  16  respondents 
considered efficient, 2 highly efficient. 

2.3 Stakeholder workshop 

The objective of the online stakeholder workshop which took place on 6 May 2022 was to  collect 
feedback from participants in an interactive way and to encourage active participation in the other 
consultation  activities.  The  discussion  was  structured  along  two  pillars:  possible  crisis  response 
measures and options and possible preparedness measures and options. The workshop included an 
audience  interaction  using  Slido  where  the  participants  could  express  their  support  for  different 
variants of measures. 

Stakeholders  broadly  supported  an  instrument  that  ensures  free  movement  of  goods,  services  and 
workers  (for  example  Eurocommerce)  and  were  in  favour  of  a  clear  and  focused  scope  of  SMEI 
focused on the Single Market freedoms (for example BusinessEurope).  

The  clear  definition  of  emergency  and  the  mechanism  for  activation  and  de-activation  were  very 
important  (BusinessEurope,  German  Confederation  of  Crafts  and  Small  Businesses,  the  Danish 
Business Authority). 

On  specific  measures  in  the  crisis  response  pillar,  Eurocommerce  expressed  support  for  specific 
measures  such  as  proportionality  guidance  or  even  a  blacklist  of  measures  and  a  fast-track 
notification procedure. The Danish Business Authority called for prevention of intra-EU restrictions 
but  invited  SMEI  to  make  use  of  existing  instruments  for  notifications  and  standards. 
BusinessEurope  noted  that  noted  that  during  the  COVID-19  crisis,  the  various  attempts  to  define 
essential  services  and  products  led  to  confusion  with  some  products  that  were  treated  differently 
depending on the shops where they were sold. 

Strong  doubts  were  raised  on  crisis  preparedness  pillar,  in  particular  over  the  potential  obligation 
for  economic  operators  to  prioritise  some  production  lines  or  disclose  sensitive  information 
(BusinessEurope).  Stakeholders  warned  to  take  care  not  to  aggregate  supply  chain  disruptions  by 
imposing additional obligation on the industry, for example through stockpiling (Eurocommerce). 
The  German  Confederation  of  Crafts  and  Small  Businesses  said  there  should  be  a  possibility  or 
obligation for a stockpiling Member State to supply a Member State that is experiencing a shortage 
or cannot deliver the products concerned. The Confederation of Swedish Enterprise mentioned that 
during the pandemic that  some Member States stopped the stockpiles that  companies had already 
made in their country and hindered the efforts made by companies and noted that if Member States 
that have made extensive efforts in terms of stockpiling cannot be expected to share their stockpiles 
with those who have made no such efforts. 

84 

 
 
 
 
 
In  terms  of  audience  interaction,  54  responses  were  received  on  the  crisis  response  pillar  and  40 
responses  were  received  on  the  crisis  preparedness  pillar.  Participants  were  broadly  in  favour  of 
measures  on  ensuring  free  movement  of  crisis-relevant  goods,  persons  and  services  (each  option 
gathering  from  48  to  56%  support),  of  obligatory  notifications  of  national  crisis  measures  (76% 
supported), of disseminating information about MS and EU crisis measures via electronic platform 
for notified information (72%) and via a single point of contact in the EU (58%), with less support 
for  voluntary  options.  In  terms  of  obtaining  information  from  businesses,  participants  were  in 
favour  to  encourage  voluntary  sharing  (75%).  69%  were  in  favour  of  mandatory  exchange  of 
gathered  information  by  Member  States  in  a  dedicated  forum.  On  ensuring  the  availability  of 
products  relevant  for  a  certain  type  of  crisis,  guidance  on  increasing  availability  of  products  and 
prioritising  market  surveillance  and  technical  specifications  for  crisis-relevant  products  was 
supported  by  57%  and  prioritisation  of  market  surveillance  of  crisis-relevant  products  by  49%  of 
participants. Joint procurement by the Commission on behalf of the Member States 
supported  by  53%  and  guidance  on  emergency  procurement  in  Member  States  by  49%  of 
participants.  Among  the  measures  of  last  resort,  recommendations  gathered  more  support  than 
obligatory solutions, with recommendation to businesses to ramp up production capacity of crisis-
relevant products was supported by 73% and recommendation to businesses to prioritise orders of 
crisis-relevant products by 63% gathering particular support. 

 was 

On  the  crisis  preparedness  pillar,  risk  assessment  and  preparedness  measures  were  broadly 
supported  (with  recommendation  to  MS  being  supported  by  55%,  guidance  by  50%  and  an 
obligation  to  MS/EU  by  38%).  59%  supported  a  recommendation  to  train  and  organise  drills  for 
national  experts  in  preparedness  and  crisis  communication.  Guidance  to  Member  States  on 
voluntary targeted monitoring of identified strategic supply chains for shortages was supported by 
61%. For stockpiling, recommendations to Member States on mitigating measures, stockpiling and 
strategic storage and distribution  were  supported  by  67%  and  guidance  to  businesses  on 
stockpiling and its use was supported by 61%. 

2.4 Member States survey 

14 Member States (BE, CZ, DK, EE, ES, IT, LV, LT, NL, AT, PL, PT, FI, SI) replied to the survey 
on  national  tools  and  measures  for  addressing  emergencies  that  may  have  an  impact  on  the 
functioning  of  the  Single  Market  during  a  crisis.  Two  Member  States  (IE  and  SI)  sent  additional 
material in this context. They were asked to provide answers to 10 questions divided into three main 
blocks:  questions  about  national  crisis  response  measures  (1  to  4),  questions  about  national  crisis 
preparedness measures (5 to 9), and questions about national measures in light of future crises (10). 

Member States based their answers mainly on the COVID-19 crisis as well as Russia’s invasion of 
Ukraine.  During  both  crises,  Member  States  took  measures  firstly  to  mitigate  the  resulting 
economic impact. Most measures were aimed at propping up financial solvency to ensure sufficient 
liquidity for production and facilitate economic recovery through grants, bridge-financing loans and 
tax  reductions.  Measures  have  also  been  introduced  to  provide  the  necessary  supply  of  critical 
goods by helping companies to  find new suppliers and facilitating public procurement  for  critical 
goods.  To  ensure  the  continued  functioning  of  the  Single  Market  by  addressing  obstacles  to  the 
movement  of  goods  and  services,  Green  Lanes  for  road  transport  vehicles  were  introduced 
following  the  Commission’s  guidelines.  Despite  complaints  about  the  lack  of  transparency  and 
coordination between the Member States on the measures taken, cooperation initiatives among the 
Member  States  on  an  ad  hoc  basis  to  share  information  on  measures  that  could  affect  the  Single 
Market  were  also  highlighted  (i.e.  “Cross-Border  Task  Force  Corona”  between  NL,  DE  and  BE 
ensured  that  the  border  between  the  Netherlands  and  Germany  remained  open  during  the 
pandemic). Most measures were introduced horizontally but  some measures also  targeted specific 

85 

 
 
 
 
industrial  ecosystems  depending  on  the  type  of  crisis.  The  COVID-19  crisis  enhanced  measures 
targeting transport and health sectors while Russia’s invasion of Ukraine led to measures in the field 
of energy and agri-food. Regarding legislative gaps in EU law in relation to the measures that the 
Member States wanted to take to resolve the crisis, a number of Member States referred to the need 
for  more  rapid  or  flexible  public  procurement  framework  as  well  as  state  aid  rules.  Individual 
Member  States  also  mentioned  issues  such  as  air  services  regulation  (though  quickly  resolved), 
GDPR  and  Connecting  Europe  Facility.  It  was  also  considered  that  it  would  be  necessary  to 
improve the mechanisms for reporting national crisis measures adopted by a Member State to the 
Commission  and  in  particular  to  the  other  Member  States,  and  to  establish  a  mechanism  for 
assessing the effects of such measures on the Single Market. 

The survey looked at the crisis preparedness measures already in place in the Member States and in 
particular, the presence of a national monitoring system and strategic storage or stockpiling system 
of  goods  of  key  importance.  Regarding  monitoring,  some  Member  States  implemented  risk 
assessment mechanisms  in  designated  critical  sectors (BE, CZ, DK, EE,  ES,  IT,  LV,  LT,  FI, PL) 
and strengthened the exchange of information between stakeholders in vital sectors and competent 
authorities  at  the  national  level.  Regarding  stockpiling,  most  Member  States  have  not  yet 
implemented  such  a  system.  Some  Member  States  have,  however,  strategic  storage/stockpiling 
systems for raw materials, such as Estonia with the Stockpiling Agency operating since July 2021, 
Spain  with  the  creation  by  the  National  Security  Council  of  the  Strategic  Reserve  based  on 
Industrial Production Capacities on October 2020, and Poland with the Government Programme of 
Strategic Reserves created in December 2020. In Finland, the preparedness action of the authorities 
is  based  on  the  relevant  legislation  and  the  National  Emergency  Supply  Agency  (NESA) 
coordinates and supports the action for preparedness and resilience of supply chains at the business 
sector.  Finland  employs  a  stockpiling  system  with  three  different  types  of  stocks:  national 
emergency  stocks,  compulsory  stocks  and  security  stocks.  Areas  of  stockpiling  include,  for 
example,  imported  fuels,  crude  oil  and  oil  products,  chemicals,  grains  and  seeds,  medicines, 
hospital supplies as well as critical products and materials. Provision on emergency stockpiling are 
provided  on  several  pieces  of  legislation.  Other  Member  States  have  set  up  strategic  stocks  for 
specific  products  (such  as  gas,  oil,  basic  food,  drinking  water,  metals,  protective  equipment, 
medical equipment, and medicines). Russia’s invasion of Ukraine, meanwhile, has prompted more 
Member States to initiate plans and task forces to manage supply chain disruptions through similar 
measures. 

In  light  of  future  crises,  Member  States  acknowledge  the  need  to  strengthen  preparation  and 
appropriate  response  to  such  events.  Specifically,  most  Member  States  acknowledge  the  need  to 
carry  out  risk  assessment  concerning  the  availability  of  non-medical  goods  and  critical  raw 
materials; strategic storage or stockpiling of such goods; and design tools that allow increasing the 
availability  of  such  goods,  including  speeding  up  permitting  procedures,  targeted  mandatory 
information requests to businesses on their stocks and production capacities and priority rate orders. 
The replies to the survey indicate that such measures should be mainly coordinated at the national 
level  by  including  relevant  and  key  stakeholders  and  experts  in  the  process.  At  the  EU  level, 
Member States mainly call for an improvement of information-sharing platforms and well-designed 
coordination mechanisms. 

2.5 Targeted consultations 

SMEI was discussed with Member States in a number of High Level Group meetings and Working 
Parties of the Council. In particular discussions took place on the following dates: 

  HLG 4 February 2021 

86 

 
 
 
 
 
  COMPCRO 14 June 2021 
  HLG 9 September 2021 
  COMPCRO 20 September 2021 
  COMPCRO 1 December 2021 
  HLG 3 February 2022 
  COMPCRO 23 May 2022 

We received specific position papers from the following Member States: 

  Joint  considerations  by  Denmark,  Estonia,  Finland,  Ireland,  Netherlands,  Slovenia  and 

Sweden (11 March 2022) 

  Netherlands (non-official paper of 19 April 2022) 
  Sweden (10 May 2022) 
  Estonia (11 May 2022) 
  Denmark (11 May 2022) 
 
Ireland (11 May 2022) 
  Finland (27 May 2022) 
  Letter  by  Belgium,  Denmark,  Finland,  Ireland,  Malta,  Netherlands,  Portugal,  Slovenia, 

Sweden (3 June 2022) 
  Luxembourg (14 June 2022) 

Additionally,  we  received  11  position  papers  from  stakeholders  as  attachments  to  the  public 
consultation questionnaire and 18 position papers as attachments to the call for evidence (with some 
overlaps),  as  well  as  one  additional  position  paper  by  email.  In  addition  to  the  stakeholder 
workshop, there were also a number of meetings with individual stakeholders to present and discuss 
the proposal. 

SMEI proposal was also discussed with the representatives of the European Parliament, in particular 
in  an  exchange  of  views  with  the  IMCO  Committee  on  17  May  2022,  and  with  EFTA/EEA 
representatives. 

For what concerns the positions of the Member States, overall the majority of Member States have 
expressed support for an instrument that would ensure better coordination of measures, uphold the 
freedoms  of  the  Single  Market  and  leverage  the  Single  Market  to  address  crises.  However,  there 
differences  of  views  with  regards  to  individual  building  blocks  of  the  initiative  and  options  to  be 
chosen. 

Most Member States have voiced their support for mechanisms to ensure greater transparency and 
coordination during a crisis (for example BG, DK, DE, EE, IE, FI, LV, MT, NL, PL, SE, SI, letter 
of nine Member States  of 3 June 2022). They have called for a clear definition  of a crisis  and of 
activation mechanism of the instrument (for example joint letter of 11 March 2022 and individually 
BE, CZ, IE, DE, EE, MT, LT, and NL, AT, PT, RO, and SI). 

Further,  Member  States  have  widely  supported  measures  to  ensure  free  movement  of  persons, 
goods and services (for example BE, BG, DK, IE, EE, FI, LU, NL, PL, PT, RO, SE, letter of nine 
Member  States  of  3  June  2022).  Some  Member  States  have  warned  about  the  difficulties  of 
introducing a new notification obligation and/or the need to build on the existing mechanisms (for 
example  joint  letter  of  11  March  2022  and  individually  DK,  IE,  FI,  SE),  while  stressing  the 
importance  of  ensuring  transparency  for  citizens  and  businesses  with  regards  to  measures  taken 

87 

 
 
 
 
 
across Member States (joint letter of 11 March 2022) and calling for an online platform providing 
standardised information on measures (BE, LV, PL). 

When  it  comes  to  ensuring  availability  of  crisis-relevant  goods,  Member  States  have  expressed 
support for measures such as coordination of public procurement, fast-track conformity assessment 
and improved market surveillance (joint letter of 11 March 2022, also AT, FR, DE). 

A number of Member States have voiced concern about including in the scope of the initiative of 
measures to ensure crisis preparedness and to address difficulties in supply chains. For example, a 
letter  of  3  June  2022  from  nine  Member  States  questioned  the  inclusion  of  measures  such  as 
stockpiling,  monitoring  and  enhancing  the  resilience  of  strategic  supply  chains,  mandatory 
information requests to economic operators and priority orders. Similar concerns were expressed in 
individual letters from DK, IE, NL, FI, and SE, also drawing attention to the need to follow strictly 
the principles of necessity and proportionality of measures and to avoid the related administrative 
burden. A number of other MS, including DE, BG, LT, have also raised questions in this direction. 
DE,  PL,  BG  have  also  stressed  that  information  requests  should  not  be  mandatory.  On  the  other 
hand, MS such as PL, RO, EL, AT, LU have spoken in favour of addressing crisis preparedness and 
supply chains disruptions. 

A number of stakeholders representing the business community have expressed support for a clear 
definition of a crisis, greater coordination and transparency, measures to ensure free movement of 
workers,  fast-track  notifications  of  national  measures,  fast  track  procedures  for  development  and 
publishing of harmonised standards, EU and national single points of information, emergency drills 
for experts. Additional suggestions included from business stakeholders included measures such as 
a common dedicated online information interface modelled on Re-open EU, harmonised electronic 
laissez-passer systems for specific groups of workers, and speedier framework for emergency state 
aid. Business stakeholders have warned against specific measures such supply chain mechanisms, 
ex  ante  market  monitoring,  obligatory  orders  to  ramp  up  production,  mandatory  information 
requests  to  businesses  under  preparedness  stage,  modification  of  public  procurement  rules, 
stockpiling,  and  called  for  all  measures  to  be  analysed  against  the  criteria  of  necessity  and 
proportionality. 

In  its  contribution,  ETUC  (European  Trade  Union  Confederation)  stressed  the  need  to  address 
challenges  faced  by  cross-border  workers,  in  particular  frontier,  posted,  seasonal  and  transport 
workers  as  well  as  lack  of  coordination  and  cooperation  between  MS  and  difficulties  to  access 
information.  Furthermore,  it  stated  that  SMEI  should  support  EU  strategic  autonomy  agenda  and 
sustainable supply chains which required initiatives such as identification of strategic supply chains 
and monitoring to anticipate shortages. 

88 

 
 
 
 
 
 
 
ANNEX 3: WHO IS AFFECTED AND HOW? 

Businesses will be positively affected, in particularly during an emergency, due to better EU-level 
crisis response leading to less obstacles to free movement and better availability of crisis-relevant 
products. Measures in the toolbox that would have a direct positive effect on businesses include key 
principles  to  ensure  free  movement  and  supporting  measures,  transparency  and  administrative 
assistance during emergency, public procurement during emergency and measures to place products 
faster on the market during emergency, and speeding up permitting during emergency. Businesses 
however could also face costs and their operations could be impacted, notably due to measures to 
support  supply  chains  during  emergency,  in  particular  information  requests  to  companies, 
obligations to ramp up production and to accept priority-rated orders. 

Citizens would benefit from the overall better EU-level crisis response thanks to the presence of the 
coordination  mechanisms  as  well  as  the  toolbox  to  ensure  less  obstacles  to  free  movement  and 
better  availability  of  crisis-relevant  products.  They  would  further  directly  benefit  from  key 
principles to ensure free movement, in particular as it concerns free movement of persons, in their 
capacity as workers and consumers. They could also directly benefit from distribution of previously 
stockpiled crisis-relevant products of strategic importance. There are no direct costs to citizens. 

Member  States  would  benefit  from  overall  better  EU-level  crisis  response  and  directly  benefit 
from  the  existence  of  a  dedicated  governance  body  ensuring  coordination  during  a  crisis  with 
impact  on  the  Single  Market.  There  would  be  administrative  and  compliance  costs  for  Member 
States  for  a  range  of  measures  foreseen  under  the  toolbox,  including  for  contingency  planning, 
gathering information on supply chains, participation in match-making and constitution of strategic 
reserves under vigilance mode, as well as in emergency mode for compliance with key principles 
for  free  movement,  measures  on  transparency  and  administrative  assistance,  compliance  with 
measures  on  placing  crisis-relevant  products  on  the  market,  participation  in  public  procurement 
during emergency and measures impacting crisis-relevant supply chains during emergency. 

For the Commission, we consider that the activity of developing new guidance, recommendations 
and coordinating obligatory measures forms part of the normal activities. The Commission would 
nevertheless incur additional specific costs, in particular for the organisation of the SMEI Advisory 
Group  meetings,  organising  trainings  and  drills  for  national  experts,  conducting  Union-level  risk 
assessment,  organising  match-making  between  companies,  analysis  of  notifications  under 
transparency and administrative assistance. 

This  Impact  Assessment  does  not  indicate  the  preferred  option.  The  choice  is  left  for  political 
decision based on the assessment of impacts of the three identified policy options presented in this 
Impact Assessment. However, an indication of costs and benefits of the different measures could be 
presented below:  

1.  SUMMARY OF COSTS AND BENEFITS 

I. Overview of Benefits (total for all provisions) 

Description 

Amount 

Direct benefits 

Comments 

Access  to  the  Single  Market 
during 
for 
citizens and businesses 

times  of  crisis 

Total  amount  not  quantifiable  but  benefits 
generated  by  open  borders  and  the  free  flow 
of  goods,  services  and  persons  in  times  of 
crisis. 

Benefits 
applicable for all policy options. 

for  citizens  and  businesses 

Support 

for 

the 

identified  Total  amount  not  quantifiable  but  benefits  Benefit 

for 

citizens 

and  businesses 

89 

 
 
 
 
generated  better  crisis  response,  thanks  to 
better  availability  of  crisis-relevant  products 
and services. 

applicable  for  all  policy  options  but  with  a 
different  order  of  magnitude  depending  on 
the effectiveness of the toolbox. 

the 
supply  chains  ensuring 
the  Single 
functioning  of 
Market  and  better  overall  EU-
level  crisis  response  thanks  to 
the 
crisis-
relevant products needed in the 
crisis response 

availability  of 

Repeal  of 
Regulation  

the  Strawberry 

Simplification of the crisis framework. 

As  the  Strawberry  Regulation  deals  with 
emergency  type  of  situations,  there  would 
be  no  costs  savings  for  businesses  and 
citizens with immediate effect. 

Indirect benefits 

Social  benefits  in  terms  of 
living  conditions 
improving 
and  quality  of  life  of  citizens 
and saving lives, depending on 
the crisis. 

Total  amount  not  quantifiable,  but  benefits 
generated especially due to better availability 
of crisis-relevant products needed in the crisis 
response  and 
less  obstacles  to  the  free 
movement of persons. 

Benefits  for  citizens  applicable  for  all 
policy options, but with a different order of 
magnitude  depending on the  availability of 
effective tools in the toolbox. 

Administrative cost savings related to the ‘one in, one out’ approach* 

N/A 

(1) Estimates are gross values relative to the baseline for the preferred option as a whole (i.e. the impact of individual 
actions/obligations of the preferred option are aggregated together); (2) Please indicate which stakeholder group is the 
main recipient of the benefit in the comment section;(3) For reductions in regulatory costs, please describe details as to 
how the saving arises (e.g. reductions in adjustment costs, administrative costs, regulatory charges, enforcement costs, 
etc.;);  (4)  Cost  savings  related  to  the  ’one  in,  one  out’  approach  are  detailed  in  Tool  #58  and  #59  of  the  ‘better 
regulation’ toolbox. * if relevant.  

II. Overview of costs 

Citizens/ 
Consumers 

One-
off 

Recurre
nt 

Businesses 

Administrations (Member States) 

One-off 

Recurrent 

One-off 

Recurrent 

Direct adjustment 
costs 

- 

- 

Direct 
administrative 
costs 

- 

- 

Actions 
applicable at 
all times 

Direct regulatory 
fees and charges 

Direct enforcement 
costs 

Indirect costs 

Direct adjustment 
costs 

- 

- 

- 

- 

- 

- 

- 

- 

Actions 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

90 

- 

Costs  of  participation 
in  Advisory  Group 
estimated  at  ½  FTE 
per MS (all POs); costs 
of 
in 
participation 
and  drills 
trainings 
organised 
the 
Commission  (PO2  and 
3);  costs  of  organising 
regular 
for 
national  experts  (PO2 
and 3)  

trainings 

by 

- 

- 

- 

Costs of gathering 
information on 
identified supply 

 
 
 
 
 
 
 
 
 
applicable in 
vigilance 
mode (see 
triggering 
mechanisms 
in section 5)96 

Direct 
administrative 
costs 

Direct regulatory 
fees and charges 

Direct enforcement 
costs 

Indirect costs 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Direct adjustment 
costs 

- 

- 

- 

Actions 
applicable in 
emergency 
mode (see 
triggering 
mechanisms 
in section 5)97 

Direct 
administrative 
costs 

Direct regulatory 
fees and charges 

Direct enforcement 
costs 

Indirect costs 

- 

- 

- 

- 

Costs of 
complying with 
mandatory 
information 
requests (PO2 
and 3) 

- 

- 

Opportunity 
costs linked to 
ramping up 
production 

- 

- 

- 

- 

chains and monitoring 
them for a list of 
indicators (PO3); costs 
of participation in 
match-making; costs 
of constituting 
strategic reserves 
(PO3) 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

Costs for encouraging 
economic operators to 
ramp up production 
(under PO2); costs of 
distribution of 
constituted strategic 
reserves (under PO3); 
costs for encouraging 
economic operators to 
ramp up production 
(under PO2); costs of 
distribution of 
constituted strategic 
reserves (under PO3) 

Costs for compliance 
with notification 
mechanism (all POs) 

Costs of 
compliance with 
key principles of 
free movement (all 
POs) 

Costs for issuing 
mandatory 
information 
requests (under 
PO2) 

- 

- 

- 

- 

- 

- 

96  The  recurrent  costs  in  the  context  of  vigilance  are  understood  as  ongoing  costs  incurred  during  the  duration  of  a 
vigilance  mode  whereas  one-off  costs  relate  to  single  actions  during  a  given  activation  of  a  vigilance  mode.  The 
assessment of costs will be done based on available evidence before triggering this mode certain as explained in section 
5. 
97 The  recurrent costs in the context of emergency are  understood as ongoing costs incurred during the duration of a 
given  emergency  here  as  one-off  costs  relate  to  single  actions  during  a  given  activation  of  a  emergency  mode.  The 
assessment of costs will be done based on available evidence before triggering certain measures as explained in section 
5. 

91 

 
 
 
 
 
                                                           
(PO2 and 3); 
opportunity 
costs linked to 
accepting 
priority-rated 
orders (PO3) 

Costs related to the ‘one in, one out’ approach 

Direct adjustment 
costs  

Given that there are no immediate costs for businesses and citizens envisaged under this 
initiative  and  that  the  costs  identified  are  incurred  to  businesses  in  exceptional 
circumstances (emergency and vigilance) the costs cannot be estimated for the ‘one in, 
one  out’ approach. The assessment of impacts and related costs  will be done based on 
available evidence before triggering certain measures as explained in section 5. 

Total 

Indirect adjustment 
costs 

N/A 

Administrative 
costs (for 
offsetting) 

N/A 

(1)  Estimates  (gross  values)  to  be  provided  with  respect  to  the  baseline;  (2)  costs  are  provided  for  each  identifiable 
action/obligation of the preferred option otherwise for all retained options when no preferred option is specified; (3) If 
relevant  and  available,  please  present  information  on  costs  according  to  the  standard  typology  of  costs  (adjustment 
costs,  administrative  costs,  regulatory  charges,  enforcement  costs,  indirect  costs;).  (4)  Administrative  costs  for 
offsetting as explained in Tool #58 and #59 of the ‘better regulation’ toolbox. The total adjustment costs should equal 
the sum of the adjustment costs presented in the upper part of the table (whenever they are quantifiable and/or can be 
monetised). Measures taken with a view to compensate adjustment costs to the greatest extent possible are presented in 
the section of the impact assessment report presenting the preferred option. 

2.  RELEVANT SUSTAINABLE DEVELOPMENT GOALS 

III. Overview of relevant Sustainable Development Goals 
Relevant SDG 

Expected progress towards the Goal 

Comments 

SDG 1: No poverty 

The  Single  Market  Emergency  Instrument  will 
help 
sustain 
to  prevent  bankruptcies, 
to 
to  prevent 
employment  opportunities  and 
redundancies,  thereby  indirectly  contributing  to 
reduction of poverty in the European Union.  

SDG  8:  Decent  work  and 
economic growth 

The  Single  Market  Emergency  Instrument  will 
contribute to the sustainable development goal of 
decent work and economic growth by ensuring a 
well-functioning Single Market in times of crisis 
economic 
and 
business 
repercussions 
opportunities and crisis-related redundancies.  

therefore  mitigate 

severe 
of 

through 

loss 

SDG 9: Industry, innovation 
and infrastructure 

SDG 
inequalities 

10: 

Reduced 

The  Single  Market  Emergency  Instrument  will 
help  prevent  obstacles  to  free  movement  of 
goods,  services  and  persons,  thereby  ensuring 
that  all  groups  can  continue  to  benefit  from 
access to infrastructure, including from roads and 
cross-border infrastructure installations. 

The  Single  Market  Emergency  Instrument  will 
help to remove the obstacles to free movement of 
goods,  services  and  persons  and  provide  more 
access  to  all  groups  to  crisis-relevant  goods, 
especially  addressing  difficulties  experienced  by 
vulnerable  groups  particularly  at  risk  in  a  crisis, 

92 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SDG  16:  Peace,  justice  and 
strong institutions 

such  as  those  in  outermost  regions  and  in  cross-
border communities. 

The  Single  Market  Emergency  Instrument  will 
put  in  place  a  governance  system  for  managing 
Single Market impacts of large-scale exceptional 
crises  and  stimulates  at  the  same  time  the 
strengthening  of  national-level  governance  and 
institutions  that  are  resilient  enough  and  can 
withstand shock and crisis. 

93 

 
 
 
 
 
 
 
 
ANNEX 4: ANALYTICAL METHODS 

The  analysis  contained  in  this  Impact  Assessment  builds  on  data  collected  from  desk  research 
(academic studies, economic reports, media items, existing impact assessment reports such as Data 
Act or SMIT proposals, etc.), input from stakeholder outreach activities and Commission officials’ 
expert  knowledge.  Information  has  been  analysed  against  the  main  problems  identified  for  the 
purpose of this initiative, the problem drivers as well as stakeholder positions. 

Whenever  possible,  the  Impact  Assessment  provides  a  quantitative  analysis  of  benefits  and  costs 
relating to  the main economic and social impacts.  The cost/benefit analysis, however, is  not  fully 
comprehensive due to significant data gaps.  

The evidence base of the report is strongly limited due to the relatively low number of responses to 
the  call  for  evidence  and  the  public  consultation,  and  the  lack  of  a  supporting  study.  We  tried  to 
remedy  this  situation  by  conducting  a  stakeholder  workshop  attended  by  a  large  number  of 
stakeholders  and  by  conducting  a  series  of  targeted  consultations,  especially  with  Member  States 
and stakeholders. The views of stakeholders are transparently reflected in the Impact Assessment. 

There  is  a  general  lack  of  granular  information  at  company,  Member  States  and  EU  level  on  the 
actions and activities undertaken to mitigate possible future shortages of supply chains. 

It should be noted that the aim of this assessment is to provide ranges of the magnitude of potential 
impacts  generated  by  each  policy  option,  rather  than  exact  monetisation.  Given  that  for  certain 
measures the necessary evidence will become available only in a crisis situation (unknown today), 
the assessment provides a qualitative assessment of the type of impacts to be expected for different 
stakeholders  groups.  Since  for  some  of  the  measures,  evidence  will  become  available  only  in  the 
(pre)-crisis  situation,  the need for the  additional  analysis and assessment  before activating certain 
measures  is  reflected  in  the  decision  mechanisms  (as  explained  in  section  5,  set-up  of  the 
instrument). 

94 

 
 
 
 
 
 
 
ANNEX 5: DETAILED OVERVIEW OF POLICY approaches per building block 

DETAILED OVERVIEW OF POLICY APPROACHES PER BUILDING BLOCK 

Building blocks 

Policy approach 1: Soft law 

Policy approach 2: Targeted legal 
solutions combined with soft law 

Policy approach 3: Comprehensive legal 
framework combined with some soft law 

Mode when the 
building block applies. 

1. Governance, coordination, 
and cooperation 

network 

Informal 
of 
experts  set  up  by  DG 
GROW  will  serve  as  the 
technical-level forum for: 

  discussion and 

voluntary exchange of 
crisis-related 
information and  
  voluntary coordination 
of national crisis 
management measures.  
It will cooperate closely 
with IPCR and other 
relevant crisis related 
EG 

 

The informal network of 
experts will assist the 
Commission in: 

  Providing information 
that is useful for 
proposing the activation 
and scope of 
emergency and the 
activation of Single 
Market vigilance mode 
for measures outside 

Advisory  Group  set  up  by  the 
SMEI  regulation  will  serve  as  the 
technical-level forum for: 

High  Level  Board  with  high-level  MS 
by  COM 
representatives, 
supported  by  dedicated  technical  sub-
groups. 

chaired 

Applies at all times 

  discussion and mandatory 
exchange of crisis-related 
information and  

 

  mandatory coordination of 
national crisis management 
measures 
‘vigilance’ and crisis response 
cooperation 
It will cooperate closely with 
IPCR and other relevant crisis 
related EG 

 

The Advisory Group will advise and 
assist the Commission in: 

  Proposing the activation and 
scope of emergency and the 
activation of Single Market 
vigilance mode for measures 
outside the Single Market 
emergency 

  Analyse crisis-relevant 
information gathered by 
Member States by means of 
surveys or mandatory 

95 

It will serve as a high-level forum for: 

  discussion and mandatory exchange 
of crisis-related information and  

  obligatory coordination of national 

crisis management measures and  
  Single Market vigilance and crisis 

 

response cooperation. 
It will cooperate closely with IPCR 
and other relevant crisis related EG 
and crisis response and preparedness 
bodies 

The HLB will assist the Commission in: 

  Proposing the activation and scope of 
emergency and the activation of 
Single Market vigilance mode for 
measures outside the Single Market 
Analyse information gathered by 
COM from economic operators by 
means of mandatory information 
requests that can serve as a basis for 
recommending crisis response 

 
 
 
 
 
 
 
 
 
 
the Single Market 
  Free exchange on 
crisis-relevant 
information received by 
COM and the MS from 
economic operators on 
a voluntary basis that 
can serve as a basis for 
recommending crisis 
response measures for 
the MS and 
Commission 

Any  high-level  political 
coordination  of  the  crisis 
response  will  occur  in  the 
relevant 
IPCR  and 
Council working party. 

the 

that 

Recommendation  to  the 
to 
Member 
States 
crisis-relevant 
exchange 
including 
information, 
information 
the 
economic  operators  have 
shared  with  them  on  a 
voluntary  basis,  with  other 
Member  States  and  the  EU 
institutions  during  crises 
and  in  anticipation  of  the 
crises. 

information requests from 
economic operators that can 
serve as a basis for 
recommending crisis response 
and vigilance measures. Any 
high-level political coordination 
of crisis response will occur in 
the IPCR and the relevant 
Council working party  

measures for the MS and the 
Commission 

  Supporting the Commission in 

relevant international 
partnerships/fora/organisations 
(allowing for coordination of the 
position of the Member States in 
international organisations where the 
Commission is not a member) 

Obligation  of  the  Member  States  to 
share any crisis-relevant information in 
the  HLB  with  other  Member  States  and 
the  Commission.  HLB shares information 
with  IPCR  and  other  crisis-relevant  EU-
level bodies. 

Obligation  of  the  Commission  to  share 
information  that  it  has  obtained  from 
the  economic  operators  via  mandatory 
information  requests  with  the  High  Level 
Board. 

Obligation  of  the  Member  States 
to  share  between  themselves  and 
with  the  Commission  within  the 
expert  group  and  the  Council  in 
the 
anticipation  of 
following important information:  

the  crises 

 

 

 

information on national level 
mitigation measures, 
including strategic storage 
and stockpiling of goods of 
strategic importance; 
 information on identified 
shortages affecting the smooth 
functioning of the Single 
Market as a result of national 
level targeted monitoring of 
identified strategic supply 
chains;  
Information on the results of 
periodic/regular assessment of 
risks by expert bodies and 
groups on national level 
Information on any relevant 
industry-led initiatives aiming 
at enhancing the resilience of 
strategic supply chains 

96 

 
 
 
 
 
 
 
 
 
Obligation  of  the  Member  States  to 
share  between  themselves  and  with 
the  Commission  and  the  Council 
within 
the  expert  group  during 
crises the following information: 

 

 

 

 

 

 

 

information obtained from the 
economic operators via 
mandatory information 
requests  
information on national 
procurement needs in 
preparation of joint procurement 
by the Commission 
Information on any acceptance 
and prioritisation of orders of 
crisis-relevant products that 
are indispensable during the 
crisis by economic operators 
Information on ramping up of 
the production capacity of 
crisis-relevant goods by any 
economic operator that is 
active in their territory 
Information on speeding up 
permitting procedures during 
the crisis in order to increase 
the production capacity of 
crisis-relevant products 
Information on distribution of 
(possibly previously 
stockpiled) products relevant 
for the specific crisis when 
there are dire shortages of crisis-
relevant resources on the Single 
Market in times of crisis 
Information necessary for 
adequate coordination of 
national crisis response 

97 

 
 
 
 
2. Crisis contingency 
planning 

-  Regular assessment 

of risks 

-  Emergency trainings 
and drills of relevant 
national experts 
-  Crisis protocols  
-  Compendium of crisis 
response measures 

measures and crisis 
communication 

and 

Recommendation  to  the  Member 
to  exchange  any  other 
States 
crisis-relevant 
vigilance 
information  with  other  Member 
States and the EU institutions during 
crises  and  in  anticipation  of  the 
crises. 
Recommendation  to  the  Member 
States:  

 

 

to assess risks to supply chains 
of goods and services of 
strategic importance on a 
regular basis including in 
national expert bodies or groups 
and in consultation with the 
industry, if/where assessment 
not already undertaken by the 
industry 
to train and organise drills in 
crisis vigilance and crisis 
communication to relevant 
national experts  

Compendium  of  crisis  response 
measures,  prepared  and  maintained 
by  the  Member  States  and  the 
the  Advisory 
Commission 
Group, 
including 
guidance/recommendations that have 
been used in the past. 

in 

98 

guidance  where 
New 
necessary 
the 
for 
functioning  of  the  Single 
Market in times of crises on: 

  voluntary assessment of 
risks to supply chains 
of goods and services 
of strategic importance 
on a regular basis by 
the economic operators, 
if/where such 
assessment not already 
undertaken by the 
industry  
 crisis-relevant  training 
and  drills  for  national 
experts  

 

of 
crisis 
Compendium 
response 
measures, 
prepared and maintained  by 
the  informal  network  of 
experts, 
including 
guidance/recommendations 
that  have  been  used  in  the 
past. 

Recommendation 
States:  

to 

the  Member 

Applies at all times 

 

to assess risks of supply chains of 
goods and services of strategic 
importance on a regular basis and in 
consultation with the industry, 
if/where assessment not already 
undertaken by the industry 

Obligation of the Commission to: 

  carry out regularly a risk assessment 

at Union level for supply chains of 
strategic goods and services, in 
consultation with the industry and in 
cooperation with all relevant 
Commission expert groups and on the 
basis of all available information 
provided by Member States and the 
industry 

  operate in cooperation with the 

Member States an early warning 
system for alerts of incidents that 
have the potential to significantly 
affect or significantly affect the 
functioning of the Single Market and 

 
 
 
 
 
 
 
 
 
 
 
its supply chains  

  devise in cooperation with the 

Member States a framework for 
crisis protocols and crisis 
communication that assigns the roles 
and responsibilities of the relevant 
Member States authorities and EU 
bodies for the vigilance and Single 
Market emergency modes  

  provide adequate training on crisis 
coordination and cooperation and 
information exchange for national 
experts.  

  conduct stress tests, simulations and 
in-action and after-action reviews of 
the national crisis protocols and 
communication plans with Member 
States Obligation to Member States 

 

to train their relevant crisis 
management staff regularly on the 
communication, coordination and 
collaboration tools as well as 
vigilance and crisis response 
measures 

of 

crisis 

Compendium 
response 
measures,  prepared  and  maintained  by 
the  Commission  for  the  High  Level 
including 
Board, 
guidance/recommendations that have been 
used in the past. 
Subject  to  the  activation  of  the  Single 
Market  vigilance  mode  by  means  of 
Commission implementing act:  

Vigilance mode 

3. Single Market vigilance 

on 

Guidance 
voluntary 
stepped-up 
information 
concerning 
gathering 
identified  strategic  supply 

Recommendation  to  the  Member 
States  on  information  gathering 
strategic 
concerning 
supply  chains  and  obstacles  to  free 

identified 

99 

 
 
 
 
 
 
 
 
 
  
 
chains  for  the  companies 
that  are  part  of  such  value 
to  identify/monitor 
chains 
shortages 
the 
affecting 
functioning  of  the  Single 
Market, to facilitate the role 
of  the  industry  in  building 
up resilience.  

storage 

New guidance to economic 
operators  on  mitigating 
including 
measures, 
strategic 
or 
stockpiling  of  goods  of 
strategic 
importance  and 
their  use  where  necessary 
for  the  functioning  of  the 
Single  Market  in  times  of 
crises,  to  facilitate  the  role 
of  the  industry  in  ensuring 
resilience.  

Guidance  on  the  use  of  the 
negotiated  procedure  under 
the  Public  Procurement 
Directive  for  compiling  any 
relevant  Member  States 
level strategic reserves. 

in 

to 

in 

identify 

movement, 
/monitor 
shortages  affecting  the  functioning 
of  the  Single  Market  as  regards  the 
companies 
their 
that  operate 
territory 
those  supply  chains. 
Industry  stakeholders in the relevant 
supply  chain(s)  to  be  invited  by 
Member  States  to  provide  targeted 
information  factors  impacting  the 
availability  of  such  goods  and 
services  (e.g.  production  capacity, 
limitations, 
stocks, 
possibilities  for  diversification  and 
substitution,  demand 
conditions, 
bottlenecks). 

supplier’s 

(together  with 
The  Commission 
appropriate) 
as 
Member  States 
would 
promote 
actively 
matchmaking among companies in 
the identified supply chains. 

for 

Recommendations  to  the  Member 
the 
States  where  necessary 
functioning  of  the  Single  Market  in 
crises  on  mitigating 
times  of 
measures, 
including  building  up 
strategic  storage  and  stockpiling  of 
goods of strategic importance to be 
distributed across the Single Market 
at  the  time  of  crisis  to  alleviate  the 
relevant 
shortages. 
Recommendations  would  focus  on 
Member  States  facilitating  the  role 
of the industry in ensuring resilience, 
and  on  possible  further  measures 
where  the  industry  is  unable  or 
effective 
unwilling 

provide 

to 

100 

The  obligation  of  the  MS  to  monitor 
identified  supply  chains  of  goods  and 
services  of  strategic  importance  with 
the  Commission  coordinating 
such 
monitoring.  Industry  stakeholders  in  the 
relevant  supply  chain(s)  to  be  invited  by 
targeted 
Member  States 
information 
the 
factors 
availability of such goods and services.  

to  provide 

impacting 

that 

strategic 

importance 

important  areas  of 

The  information  gathering  would  concern 
those supply chains of goods and services 
of 
the 
Commission  has  identified  in  the  Union 
level  risk  assessment  as  having  higher 
risks  for  the  onset  of  Single  Market 
emergencies.  The  supply  chains  of  goods 
and services of strategic importance could 
be  defined  based  on  elements  of  strategic 
importance  identified  in  Regulation  of 
screening  of  Foreign  Direct  Investments 
and 
the  Commission  Staff  Working 
Document  on  strategic  dependencies. 
Strategically 
the 
economy  could  be  understood  as  areas 
with critical importance to the EU and its 
Member States’ strategic interests such as 
security,  safety,  public  order,  health  and 
transformation, 
the  green  and  digital 
including  critical  infrastructure,  critical 
technologies 
are 
essential  for  safeguarding  such  interests, 
the  disruption,  failure,  loss  or  destruction 
of  which  would  have a significant impact 
in  a  Member  State  or 
the  Union). 
Consequently,  the  goods  and  services  of 
strategic  importance  could  be  defined  as 
those  that  are  necessary  for  maintaining 
economic  activities  in  the  Single  Market 

inputs  which 

and 

 
 
 
 
solutions. 

the 
the  use  of 
Guidance  on 
negotiated  procedure  under 
the 
Public  Procurement  Directive  for 
compiling  any 
relevant  Member 
States level strategic reserves. 

in  strategically  important  areas  of  the 
economy. 

The  Member  States  would  be  obliged  to 
compile  lists  of  contacts  of  the  economic 
operators  functioning  along  the  identified 
supply  chains  of  strategic  goods  and 
services.  Whereas 
competent 
authorities  of  Member  States  Such  would 
rely  on  such  lists  in  monitoring  supply 
chain  concerned,  it  would  also  be  relied 
on  by  the  Commission  for  the  mandatory 
information requests. 

the 

The  Commission  would  actively  promote 
matchmaking  among  companies  in  the 
identified supply chains. 

The  Commission  would  step  up 
the 
monitoring  of  relevant  free  movement 
obstacles. 

Subject  to  evidence  that  1)  industry’s 
stockpiling is insufficient or inexistent, 2) 
alternative  supply  sources  do  not  exist  or 
are  insufficient  and  on  the  basis  of  3) 
impact  assessment  by  the  Commission  in 
cooperation  with  the  Advisory  Group 
indicating  the  need  for  strategic  reserves, 
the  Commission  may  activate,  by  means 
of  implementing  act,  strategic  reserve 
measure:  

Obligation  of  the  Commission  to  draw 
up  and  regularly  update,  by  means  of 
implementing acts, a list with targets for 
strategic  reserves  to  be  constituted  by 
Member  States  for  the  selected  supply 
chains of goods and services of strategic 

101 

 
 
 
 
importance, taking into account: 

a. 

b. 

c. 

the probability and impact of 
shocks and risks identified in 
the  Union 
risk 
assessment; 

level 

the level of existing reserves 
in the EU; 

the  costs  for  building  and 
maintaining reserves. 

will 

Commission 

The 
issue 
Recommendations  requesting  Member 
States to build up, maintain or reduce their 
strategic  reserves  in  order  to  meet  the 
targets. 

The  Commission  will  coordinate  and 
streamline  efforts  of  Member  States  to 
build  up  and  maintain 
strategic 
reserves  by  promoting  the  exchange  of 
information  and  cooperation  between 
Member  States,  facilitating  public-private 
cooperation. 

Subject  to  additional  trigger  by  means  of 
Commission  implementing  acts  (during 
the  activation  of 
the  Single  Market 
vigilance) upon the condition that i) there 
is  evidence  that  industry’s  stockpiling  is 
insufficient  or  inexistent,  ii)  alternative 
supply  sources  do  not  work  or  are 
insufficient  and  iii)  impact  assessment  by 
the  Commission  and  governance  body 
indicates  a  need  for  building  up  strategic 

102 

 
 
 
 
 
4. Key principles and 
supportive measures for 
facilitating free movement 
during emergency 

for 

or 
guidance 
New 
Recommendations  where 
necessary 
the 
functioning  of  the  Single 
Market in times of crises on 
free  movement  of  crisis-
relevant  workers,  service 
providers, 
and 
goods. 

persons 

reserves. 

Where  the  strategic  reserves  of  Member 
States  fall  significantly  short  of 
the 
targets,  the  Commission  can  oblige  the 
Member  States  to  build  up  strategic 
reserves  for  selected  goods  of  strategic 
importance  that  would  correspond  to 
such targets. 

The  Commission  will  coordinate  and 
streamline efforts of MS to build up and 
maintain strategic reserves. 

MS would rely on the provisions of the 
Procurement Directive for carrying out 
any necessary individual or coordinated 
procurement  for  building  up  their 
strategic reserves. 
Subject  to  the  activation  of  the  Single 
Market emergency mode:  

Providing  for  a  comprehensive  set  of 
rules supporting free movement of goods 
and  persons  (including  workers,  posted 
workers,  service  providers),  especially 
crisis-relevant goods and persons in times 
in  binding  rules  where 
of  crisis 
crisis 
effective 
appropriate 
management. 

for 

Emergency mode 

Subject  to  the  activation  of  the 
Single Market emergency mode:  

Reinforcing key principles of free 
movement of crisis-relevant 
workers, service providers, goods in 
binding rules where appropriate for 
effective crisis management: 

 

 

to identify restrictions of free 
movement of goods, services 
and persons that are 
incompatible with the Single 
Market in the particular crisis 
situation and to create black lists 
of such measures 
to provide for some supportive 
measures for reinforcing free 
movement during the crisis (e.g. 
defining essential travel, 

103 

 
 
 
 
 
 
essential worker, etc.) 

to  Member 
Recommendation 
States  where  necessary 
the 
for 
functioning  of  the  Single  Market  in 
times of crises on free movement of 
persons  (including  workers  and 
service providers) and goods. 

Subject  to  the  activation  of  the 
Single Market emergency mode:  

Subject  to  the  activation  of  the  Single 
Market emergency mode:  

Emergency mode 

5. Transparency and 
administrative assistance 
during emergency 

- 

-  Notification of 
national crisis 
measures 
Information and 
assistance in relation 
to national crisis 
measures 

States 

Member 
share 
national  crisis  measures 
voluntarily with COM98 and 
other  MS.  The 
shared 
information  serves  as  a 
basis  of  discussion  of 
appropriate  policy  response 
to crisis in the expert group, 
but  also  published  in  the 
electronic 
for 
businesses and citizens. 

platform 

info, 

crisis 

Provide  national  and  EU 
level 
in 
particular  on  the  introduced 
national restrictions that has 
been obtained voluntarily by 
means  of  an  electronic 
platform in English.  

on 

restrictions 

Binding 
fast-track 
simplified 
notification mechanism of any free 
movement 
(any 
restrictions  of  freedom  to  provide 
services, 
free 
including 
movement  of  persons,  workers, 
posted  workers  and  their  exit  or 
entry  bans,  free  movement  of 
agricultural  goods)99  with 
the 
purpose of providing transparency 
to businesses, citizens and other MS 
and  ensuring  free  movement  of 
goods,  services  and  persons  +  flash 
peer  review  of  draft  notified 
measures in the EG100: 

Binding 
full-fledged 
notification mechanism101 

fast-track 

+  flash  peer  review  of  draft  notified 
measures 

+  possibility  to  declare  the  notified 
national  crisis  measures  incompatible 
with EU law  by  COM Decision102 and to 
request  the  Member  State  in  question  to 
refrain from adopting the draft measures 
or to abolish the adopted measures: 

  Provide by means of an electronic 
platform crisis info at national and 
EU level, obtained via mandatory 
fast-track notifications, available in 
all EU languages 

Recommendation 

to 

the 

  Provide crisis info obtained at 
national and EU level via the 

98 COM may in principle start normal infringement proceedings if any notified crisis measure is incompatible with EU law. 
99 Not applicable to the reintroduction of internal border controls under the Schengen Borders Code as there is a separate notification obligation. 
100 Besides the flash peer review comments, COM may in principle start normal infringement proceedings if any notified crisis measure is incompatible with EU law. 
101 Not applicable to the reintroduction of internal border controls under the Schengen Borders Code as there is a separate notification obligation. 
102 The  possibility for the  Commission is an option and not an obligation. It is  always  without prejudice  to other tools  such infringement procedures, administrative  and political 
letters etc. 

104 

 
 
 
 
 
 
                                                           
Member  States  to  provide 
administrative  assistance  to 
workers, 
businesses, 
services 
providers, 
consumers  and  citizens  for 
fulfilment  of  any  crisis-
and 
related 
procedures. 

formalities 

Guidance on:  

 

increasing availability 
of products and  
  prioritizing market 
surveillance and 
controls 

mandatory simplified 
notifications and other publicly 
available sources by means of 
an electronic platform in 
English 
Member States will set up 
national single contact points for 
crisis-relevant information and 
administrative assistance to 
citizens, consumers and 
businesses 

The  use  of  the  elements  below  is 
subject  to  the  activation  of  the 
Single  Market  emergency  mode: 
Targeted  amendments  of  existing 
harmonisation 
Single  Market 
legislation  

Display national crisis measures and 
their summaries on Your Europe 
websites in all EU languages 
  Establish national and EU contact 

points for businesses and citizens to 
obtain information about applicable 
national and EU level crisis measures 
and to get administrative assistance 
for fulfilling any related 
administrative requirements 

The  use  of  the  new  elements  below  is 
subject  to  the  activation  of  the  Single 
Market emergency mode  

Emergency mode 

Targeted amendments of existing Single 
Market  harmonisation  legislation  for 
products 

6. Speeding up the placing of 
crisis-relevant goods on the 
market during emergency 

  enabling  national  market 
to 
surveillance  authorities 
authorise  the  placing  on  the 
market  of  critical  products 
while  conformity  assessment 
is ongoing.  
  Possibility 

the 
Commission 
adopt 
technical  specifications  for 
harmonised/non-harmonised 
no 
products 
harmonised standard exists.  
  Obligations to MS to prioritise 
market  surveillance  for  crisis-
relevant products 

for 
to 

where 

  derogating 

existing 
conformity assessment procedures 
during a specific timeframe 

from 

to 

use 
standards 

  Possibility 
European 
harmonised/non-harmonised 
products 
in 
harmonised standards. 

the  absence  of 

normal 
for 

  Obligation 

surveillance 
products 

to  prioritise  market 
crisis-relevant 

for 

The  use  of  those  new  elements 
would  be  subject  to  the  activation 
of  the  Single  Market  emergency 
mode. 

The use of those new elements would be 
subject  to  the  activation  of  the  Single 
Market emergency mode. 

105 

 
 
 
 
 
 
 
 
7. 
Public 
during emergency 

procurement 

guidance  where 
New 
necessary 
the 
for 
functioning  of  the  Single 
Market in times of crises on:  

The  use  of  below  measures  is 
subject  to  the  activation  of  the 
Single Market emergency mode:  

The use of below measures is subject to 
the  activation  of  the  Single  Market 
emergency mode:  

Emergency mode 

 

the  use  of  emergency 
provisions  of  public 
procurement 
(negotiated  procedure) 
by  individual  Member 
joint 
and/or 
States 
occasional  procurement 
several  Member 
by 
States 
the 
Procurement Directives 
  voluntary coordination 

under 

of public procurement 
action by individual 
Member States during 
the crisis 

on 

proposal 

provision 

New 
joint 
procurement/common  purchasing 
by  the  Commission  for  some  or  all 
Member States, including innovation 
procurement  if  requested  by  the 
Member  States103,  with  MS  budget 
whereby  the  Commission  draws  up 
the 
framework 
agreement  organising  in  detail  the 
joint  procurement  to  be  signed  by 
the  participating  Member  States. 
Such  procurement  would  exclude 
any 
joint/coordinated 
procurement by the same Member 
States  that  does  not  involve  the 
Commission at the same time. 

for 

New provision obliging the Member 
States  to  coordinate  with  and 
consult  other  Member  States  and 
the  Commission  prior  to  engaging 
in  individual  procurement  action 
of crisis-relevant products during the 
crisis. 

New  guidance  where  necessary  for 
the functioning of the Single Market 
in times of crises on: 

public 

to  derogate 

amendments 
Directives 

of 
the 
Targeted 
allowing 
Procurement 
from 
Member  States 
existing 
procurement 
procedures/suspend  the  application  of 
the 
for 
Procurement  Directives 
procurement of crisis-relevant products 
during  a  specific  timeframe  during  the 
crisis104. 

on 

provision 

New 
joint 
procurement/common  purchasing  by 
the  Commission  for  some  or  all  Member 
States,  including  innovation  procurement 
which  would  exclude  any  procurement 
jointly  or 
by  any  Member  States 
individually at the same time.105 It could 
allow the Commission to derogate from 
several  steps  of  normal  procurement 
Financial 
procedures 
Regulation.  (possibility  to  provide  proof 
or  evidence  on  exclusion  and  selection 
criteria 
contract 
provided that a declaration on honour has 
been  submitted  in  this  regard  before  the 
award;  

signature  of 

under 

after 

the 

the Commission may modify the contract, 
as  necessary  to  adapt  to  the  evolution  of 

103 If the emergency procurement provisions of the proposal for the Regulation revising the Financial Regulation will not be adopted by the time SMEI will be adopted 

105 If the emergency procurement provisions of the proposal for the Regulation revising the Financial Regulation will not be adopted by the time SMEI will be adopted. 

106 

 
 
 
 
 
                                                           
 
the Single Market emergency;  

possibility  to  add  contracting  authorities, 
not  identified  in  procurement  documents, 
after the signature of the contract;  

The  contracting  authorities  shall  be 
entitled to request the delivery of goods or 
services  as  from  the  date  of  sending  the 
draft 
the 
procurement  carried  out  for  the  purposes 
of  this  Regulation,  no  later  than  24  hours 
as from the award. 

contracts 

resulting 

from 

Emergency mode 

The use of below measures is subject to 
individual  activation  of  the  measures 
during  the  activation  of  the  Single 
Market emergency mode:  

Obligation  of  the  Member  States  to 
distribute possibly previously stockpiled 
products  relevant  for  a  certain  type  of 
crisis  when 
the  reserves  have  been 
financed  by  the  EU  and  there  are  dire 
shortages  of  crisis-relevant  resources  in 
times of crisis. 

As  regards  distribution  of  any  other 
national  strategic  reserves,  which  have 
been  financed  by  the  Member  States,  the 
Commission 
a 
could 
Recommendation to the Member States on 
previously 
distribution 
stockpiled  products  relevant  for  a  certain 
type  of  crisis  based  on  the  principle  of 
solidarity when there are dire shortages of 
crisis-relevant resources in times of crisis. 

possibly 

issue 

of 

 

 

the use of emergency 
provisions of public 
procurement (negotiated 
procedure) by individual 
Member States 
the use of occasional joint 
procurement by the Member 
States under the Procurement 
Directives  

The  use  of  below  measures  is 
subject to the individual activation 
of 
the 
the  measures  during 
activation  of  the  Single  Market 
emergency mode:  

below)  would 

Measures 
(recommendations  and 
empowerments  to  Member  States  as 
described 
be 
envisaged  only  where  the  industry 
is  unable  or  unwilling  to  provide 
effective 
without 
solutions 
reasonable justification, further to 
guidance by the Commission. 

Recommendation  to  the  Member 
States  on  distribution  of  possibly 
previously 
stockpiled  products 
relevant for a certain type of crisis 
based  on  the  principle  of  solidarity 
when  there  are  dire  shortages  of 
crisis-relevant  resources  in  times  of 
crisis.  

107 

8. Measures impacting 
crisis-relevant supply chains 
during emergency 

-  Distribution of crisis-
relevant goods at the 
time of dire shortages 

-  Ramping up the 

- 

production lines of 
crisis-relevant 
products 
Speeding up 
permitting 
procedures 
-  Accepting and 

prioritising orders of 
crisis-relevant 
products by economic 
operators 
-  Obtaining 

information from 
economic operators  

Guidance on distribution of 
previously 
possibly 
stockpiled 
products 
relevant  for a certain type 
of crisis when there are dire 
shortages  of  crisis-relevant 
resources  in  times  of  crisis, 
the  role  of 
to  facilitate 
industry 
ensuring 
resilience. 

in 

Guidance  on  ways  how  the 
States 
Member 
could 
encourage 
the  economic 
operators  to  ramp  up  their 
production 
of 
capacity 
crisis- 
relevant  products 
during  the  crisis,  including 
possible 
by  means 
targeted 
necessary 
financial support. 

and 

of 

Guidance  on  speeding  up 
permitting 
procedures 
during  the  crisis  in  order  to 

 
 
 
 
 
the  production 
ramp  up 
capacity 
products 
for 
relevant for the specific type 
of crisis. 

Guidance  on  the  ways  how 
the  Member  States  could 
the  economic 
encourage 
operators 
to  accept  and 
prioritise  orders  of  crisis-
relevant products in order to 
enhance  the  availability  of 
indispensable 
for 
provision of critical services 
or  other  important  reasons 
during the crisis.  

goods 

Recommendation 
the 
economic operators to share 
crisis-relevant info.  

to 

Empowering  the  Member  States 
by means of legislation to oblige the 
economic  operators  to  ramp  up 
their production capacity of crisis-
relevant  products  during  the  crisis, 
with  the  possibility  to  offer  targeted 
and necessary financial support. 

Recommendation  to  the  Member 
States  on  speeding  up  permitting 
procedures  during  the  crisis  in 
order  to  ramp  up  the  production 
capacity  for  products  relevant  for 
the specific type of crisis. 

Recommendation  to  the  Member 
States  to  encourage  the  economic 
operators  to  accept  and  prioritise 
orders  of  crisis-relevant  products 
in  order  to  enhance  the  availability 
of indispensable goods for provision 
of critical services or other important 
reasons during the crisis and to free 
the 
them 
resulting  delay  or  non-fulfilment 
of  their  contractual  obligations 
vis-à-vis third parties.  

liability 

from 

for 

Providing  for  harmonised  rules  for 
mandatory  information  requests 
of 
crisis-relevant 
information by the Member States 
in  crisis-
to  economic  operators 

targeted 

Empowering  the  Commission  by  means 
of  legislation  to  oblige  the  economic 
operators  to  ramp  up  their  production 
capacity  of  crisis-relevant  goods  (e.g. 
repurposing  their  production  lines  or 
creating  new  production 
to 
address  severe  shortages  on  the  Single 
Market  at  the  time  of  crisis  (possibly 
accompanied  by  EU-level  targeted  and 
necessary financial support106).  

lines) 

Obliging the Member States to speed up 
permitting  procedures  during  the  crisis 
by  means  of  legislation  in  order  to  ramp 
up  the  production  capacity  for  products 
relevant  for  the  specific  type  of  crisis  in 
case of severe shortages. 

to  enhance 

Obligation of the economic operators to 
accept  and  prioritise  orders  of  EU 
authorities of crisis-relevant products in 
order 
the  availability  of 
indispensable  goods  for  provision  of 
critical services or other important reasons 
during  the  crisis  freeing  them  from 
liability  for  the  resulting  delay  or  non-
fulfilment of their contractual obligations 
vis-à-vis  third  parties.  In  first  stage, 
such  priority  rated  orders  could  be 
issued  as  regards  the  input  needed  for 
production  of  the  crisis-relevant  goods. 
In the second stage, they could be issued 
as  regards  the  final  products  that 

106 In case this measure is retained, such an empowerment for the Commission would imply a need for a special financial instrument (based on the model of Emergency Support 
Instrument which was activated during the COVID-19 crisis to help the EU address the pandemic, in particular to secure the COVID-19 vaccines) to reimburse the economic 
operators for their costs in such a scenario. 

108 

 
 
 
 
 
                                                           
qualify as crisis-relevant products. 

to 

empowered 

issue 
Commission 
mandatory  requests  of  crisis-relevant 
information  to  economic  operators  in 
crisis-relevant  supply  chains,  based  on 
the  lists  of  contacts  or  relevant  ad  hoc 
information  provided  by  the  Member 
States, as to their production capacities, 
current supply chain disruptions + data 
necessary  for  assessment  of  the  nature 
and magnitude of the supply. Mandatory 
information requests to be limited to cases 
of  utmost  necessity  and  where  economic 
to  provide 
operators  have 
the 
in 
necessary 
context  of  Single  Market  vigilance,  i.e. 
clear  cases  of  non-cooperation  in  crisis 
situations.  Safeguards  for  confidentiality 
secrets 
and  protection  of  business 
foreseen. Such direct information requests 
can  be  contested  before  the  European 
Court of Justice. 

information 

targeted 

refused 

limited 

capacities, 

relevant  supply  chains  as  to  their 
production 
current 
supply  chain  disruptions  +  data 
necessary  for  assessment  of  the 
nature  and  magnitude  of 
the 
supply 
disruptions. 
chain 
Mandatory  information  requests  to 
to  cases  of  utmost 
be 
necessity 
economic 
and  where 
operators  have  refused  to  provide 
necessary targeted information in the 
context  of  Single  Market  vigilance 
measures,  i.e.  clear  cases  of  non-
cooperation 
situations. 
in  crisis 
Safeguards for confidentiality and IP 
Such 
protection 
information requests by  the Member 
States  can  be  contested  before  the 
relevant national courts.  

foreseen. 

109 

 
 
 
 
 
 
 
 
  
 
ANNEX 6: ANALYSIS OF POLICY APPROACHES PER BUILDING BLOCK 

1.  Building block 1 – Governance, coordination and cooperation 

Policy approach 1 – Informal network of experts set up by DG GROW  
Costs  related  to  policy  option  1  are  insignificant  as  it  implies  a  very  high  business  as 
usual factor for the Commission and for the Member States. Commission costs relate to 
setting up an expert group and organising the meeting. This is estimated at 30.000 EUR 
annually,  which  is  based  on  a  standard  budget  for  a  meeting  with  27  MS  experts  of 
15.000 EUR. The organisation of the meetings would require for the Commission ½ AD 
FTE  that  could  be  added  through  reallocation  of  staff.  This  would  increase  to  1  AD 
during  the  vigilance  mode  and  to  2  AD  during  the  emergency  mode,  due  to  the  higher 
recurrence of the meetings. This could be covered by reallocation of existing resources. 
The  costs  for  the  Member  States  will  be  limited  to  the  preparation,  participation  and 
follow up on the said meeting that may estimate also to ½ FTE per Member State.  
Policy  option  1  provides  economic  benefits  for  national  authorities  of  having  more 
complete  information  through  the  discussions  and  voluntary  exchange  of  crisis-related 
information  and voluntary  coordination of national  crisis.  The benefits  account  also  for 
being able to coordinate the measures with other Member States that in turn may result in 
effectiveness of decisions at EU level to manage a crisis and ensure the functioning of the 
Single Market. 

Policy  approach  2  –  Formal  Expert  Group,  called  Advisory  Group,  set  up  by 
Commission Decision  
The costs related to policy option 2 should be low and relevant for the reimbursement by 
COM of travel expenses similar to existing expert groups. These costs would be similar 
to  costs  under  Approach  1,  amounting  to  around  30.000  EUR  annually  for  the 
Commission as well as the relevant FTEs and ½ FTE per Member State. The costs for the 
Member States will be limited to the preparation, participation and follow up on the said 
meeting that may estimate also to ½ FTE per Member State. 
The  benefits  of  policy  option  2  are  reflected  by  having  more  complete  information 
gathered  through  the  mandatory  coordination  of  national  crisis  and  by  being  able  to 
coordinate  the  measures  with  other  Member  States.  The  indirect  benefits  may  be 
projected on the effectiveness of decisions at EU level to manage a crisis and ensure the 
functioning  of  the  Single  Market  due  to  more  comprehensive  information  exchanged 
between  the  Member  States  in  the  formal  group.  Overall,  there  would  be  economic 
benefits  due  to  better  crisis  response,  thanks  to  better  availability  of  crisis-relevant 
products  and  services.  In  terms  of  social  benefits,  since  this  options  may  contribute  to 
less  restrictive  measures  in  relation  to  free  movement,  there  may  be  benefits  for  cross-
border  and/or  posted  workers  and  their  livelihoods  which  rely  on  accessing  their 
workplace.  Less  restrictive  measures  in  case  of  crises  may  also  be  beneficial  for 
continued business operations and thereby reduce the risk of redundancies etc. in case of 
Single Market emergencies.  

The costs of the exchange of information system under policy approach 2 fall largely on 
the  Member  States.  Their  magnitude  depends  on  the  extent  to  which  they  have 
information  available  already  in  a  suitable  format.  In  that  case,  additional  costs  for  the 
transmission  are  likely  to  be  low.  Otherwise  additional  efforts  are  needed,  but  these 
depend  on  the  nature  of  the  information  required  in  a  concrete  crisis  and  cannot  be 
estimated in the abstract. 

110 

 
 
 
 
 
 
 
  
The benefits of policy approach 2 outweigh the costs given that the governance body will 
be  equipped  with  granular  information  at  national  level  that  in  turn  will  enable  an 
accurate  assessment  of  the  situation  for  informed  crisis  relevant  decisions/actions  to  be 
taken by the relevant decision making bodies (the Commission, the Council). 
Policy  approach  3  –  High  Level  Board  with  high-level  Member  States 
representatives 
The  costs  related  to  policy  option  3  would  be  similar  to  costs  for  the  Commission  for 
running the any other High  Level  Group or Expert Group with  reimbursement costs of 
approximately  30.000  EUR/year  for  two  meetings,  as  well  as  the  relevant  FTEs.  The 
costs for the Member States are largely similar to previous Approaches, with estimated ½ 
FTE needed per Member State. 
The benefits are similar to those in Policy Option 2. 

Stakeholder’s feedback 
Most  Member  States  have  voiced  their  support  for  mechanisms  to  ensure  greater 
transparency and coordination during a crisis (for example BG, DK, DE, EE, IE, FI, LV, 
MT, NL, PL, SE, SI, letter of nine Member States of 3 June 2022). In their responses to 
call  for  evidence  and  public  consultations,  business  stakeholders  stressed  that  the 
initiative  should  ensure  cooperation,  coordination  and  exchange  of  information  and 
should  focus  on  crisis  response.  In  their  replies  to  the  Member  States  questionnaire, 
Member States recommend to build on current EU coordination fora (IPCR). In targeted 
bilateral consultations some Member States like the NL expressed their preference for the 
creation of a network of competent authorities. 

Conclusions 

Policy approach 2 is retained for further analysis based on the following justification: 

Although  the  informal  network  of  experts  of  approach  1  would  be  able  to  serve  as  a 
forum  for  discussions  between  the  Member  States  and  the  Commission,  it  would  not 
have the benefit of a clear legal mandate to gather and exchange information. Voluntary 
information  exchange  within  such  a  forum  would  depend  on  the  willingness  of  the 
Member  States  to  share  information  with  each  other.  It  would  occur  in  a  haphazard 
manner  and  at  an  unpredictable  pace;  it  would  not  be  able  to  ensure  that  all  Member 
States  and  the  Commission  would  be  aware  of  all  national  crisis  measures  in  their 
entirety  in  a  timely  manner.  Moreover,  voluntary  coordination  would  not  add  much  to 
achieve  the  coordination  of  national  crisis  measures  and  eliminate  the  harm  done  by 
uncoordinated crisis measures to the Single Market. 

The  designated  expert  group  for  Single  Market  emergencies,  envisaged  in  approach  2, 
would  be  able  to  ensure  technical  level  fact-finding,  analysis,  and  coordination  and 
information exchange during the Single Market vigilance and crisis stages. It would not 
duplicate  any  higher  level  fora,  such  as  the  IPCR.  It  would  rather  concentrate  on 
providing  the  IPCR  via  the  Commission  with  the  necessary  technical  information  for 
higher level political coordination and discussions. 

The  High  Level  Board,  envisaged  in  approach  3  would  consist  of  high  level 
representatives of the Commission and the Member States and could, combined with its 
ad hoc working groups, carry out discussions, analysis and coordination at both technical 
and political levels. But its weakness is that its level of representation is similar to that of 
the IPCR and there could be confusion as to which forum would be competent to discuss 

111 

 
 
 
 
 
 
 
Single Market crisis-related matters (similarly with the recent clashes between the Health 
Security Committee of the HERA system and the IPCR, which led to the dismissal of the 
Chairperson of the Health Security Committee). 

The  costs  for  different  approaches  are  comparable  but  their  effectiveness  differs 
significantly. 

2.  Building block 2 – Crisis contingency planning 

Policy approach 1 – Guidance on risk assessment, crisis-relevant training and drills, 
compendium of crisis response measures 
The costs and benefits are similar to business as usual for the Commission.  

Policy  approach  2  –  Recommendation  to  the  Member  States  for  risk  assessment, 
trainings and drills; Compendium of crisis response measures prepared collectively 
The  costs  for  the  Member  States  depend  largely  if  the  Member  States  follow  or  not 
Commission’s Recommendation. For some Member States such activities are business as 
usual except for the developments of emergency drills for certain preselected emergency 
cases  that  would  require  additional  human  resources  and  subcontracting  studies.  The 
costs depend on the type and complexity of the chosen emergency drills. The benefits are 
harvested during times of crisis, by diminishing the negative effects of the particular type 
of crisis  thanks to  these preparatory measures. Since the policy approach  2 is  based on 
voluntary  participation,  the  costs  and  benefits  will  strongly  depend  on  the  uptake  by 
Member  States.  It  could  be  assumed  that  Member  States  that  currently  conduct  similar 
activities, will continue to do so while only a limited number of Member States will opt-
in for measures foreseen in the recommendation. 

Policy  approach  3  –  Recommendation  to  Member  States  on  risk  assessment; 
Obligation for the Commission to develop crisis-relevant training and drills + Union 
level risk assessment + Early Warning System + crisis protocols + Compendium of 
crisis response measures 
For  the  Commission,  costs  related  to  regular  risk  assessment  could  be  regarded  as 
business  as  usual  as  similar  assessments  are  done  by  the  relevant  services  of  the 
Commission.  There  would  be  also  costs  for  the  Commission  to  provide  trainings  and 
conduct stress-tests and drills, develop crisis protocols and a compendium of measures.  
The benefits are harvested during times of crisis, by having lower negative effects of the 
particular type of crisis thanks to these preparatory measures. 

Stakeholders’ feedback 
In the public consultation, regular risk assessment by the industry was supported by 22 
out of 24 respondents, by Member States by 22 out of 24 and by the Commission by 23 
out  of  24.  Emergency  training  and  drills  were  supported  by  22  out  of  24  respondents. 
Business  stakeholders  expressed  support  for  risk  assessment  by  public  authorities 
(BusinessEurope)  and  emergency  simulation  exercises  (SMEUnited).  In  light  of  future 
crisis, most Member States having responded to the Member States questionnaire agree 
that preparedness measures such as risk assessments concerning the availability of non-
medical goods and critical raw materials that are indispensable. They acknowledge that 
in most case, national authorities are best prepared to take above mentioned measures. 

112 

 
 
 
 
 
 
 
Conclusions  

Policy  approach  2  and  policy  approach  3  are  retained  for  further  analysis  based  on  the 
following justification. 

Policy  approach  1  concerning  preparatory  actions  would  entail  soft  measures.  The 
voluntary  guidance  and  training  may  serve  to  encourage  and  support  risk  assessment 
efforts  and  build  capacity  of  economic  operators  and  national  administrations  when  it 
comes to possible future crises affecting the functioning of the Single Market.  It would 
rely on the readiness of industry players and national authorities to invest in preparatory 
actions and may not effectively change practices (or the absence thereof) when it comes 
to  such  actions.  This  option  would  reflect  maximum  subsidiarity  and  may  empower 
economic  operators  to  reinforce  their  role  in  ensuring  resilience,  however  it  may  not 
achieve  tangible  improvements,  nor  would  it  benefit  from  greater  coherence  and 
coordination of preparatory actions that may be necessary for crises affecting the Single 
Market,  i.e.  entailing  challenges  intrinsically  more  wide-reaching  than  national  and/or 
company level issues.  

Policy  approach  2  would  provide  recommendations  to  the  Member  States  for  the 
assessment  of  risks  on  a  regular  basis  including  by  expert  bodies  and  in  collaboration 
with  the  industry.  Recommendations  would  also  cover  training  and  drills  for  crisis 
vigilance and communication involving relevant national and regional experts. While this 
option  is  likely  to  entail  a  better  coordinated  approach  to  risk  assessment  at  national 
level, it may not ensure coherence, nor mandate any coordination of preparatory actions 
between  Member  States  at  the  EU  level,  which  might  be  necessary  for  anticipating  or 
mitigating crisis situations affecting the functioning of the Single Market, where industry 
action may not be sufficient. However it would require substantially less administrative 
effort from the Commission. 

Policy  approach  3  would  entail 
the  strongest  policy  approach  combining 
recommendations to Member States to assess risks in relation to strategic supply chains 
on  a  regular  basis  and  in  coordination  with  all  relevant  national  and  regional  bodies  as 
well  as  industry  stakeholders.  Moreover,  Member  States  would  report  on  their 
assessment  to  the  Commission  and  to  other  Member  States  on  a  regular  basis.  In 
addition,  the  Commission  would  carry  out  regular  assessments  of  risks  at  Union  level, 
building on the findings on national assessments which the Commission would monitor. 
Such  union  level  assessment  would  be  discussed  with  the  Member  States  on  a  regular 
basis  to  maximise  coherence.  As  part  of  this,  the  Commission  would  operate  an  early 
warning system based on early warning indicators agreed with the Member States. Such 
approach  would  appear  more  effective  than  systems  building  primarily  on  individual 
assessment at national level and/or by the industry.  

The organisation of training and drills would become mandatory both by Member States 
and  the  Commission,  the  latter  involving  designated  national  contact  points.  The 
Commission  would  moreover  develop  a  manual  containing  a  strategy  for  crisis 
communication  and  crisis  protocols  addressing  the  Single  Market  impacts  of  crises  to 
leverage  a  coordinated  approach  (mapping  out  who  does  what  at  the  EU  and  national 
level, including industry, in case of a crisis), which would be used during a crisis.  

113 

 
 
 
 
 
 
 
3.  Building block 3 – Single Market vigilance 

Policy  Approach  1  –  Guidance  to  companies  on  voluntary  targeted  information 
gathering and guidance to economic operators on voluntary stockpiling 
The costs and benefits related to this policy option are similar to business as usual since 
the  measures  are  limited  to  issuing  guidance  on  voluntary  stepped-up  information 
gathering and stockpiling. 
It  could  be  reasonably  assumed  that  the  guidance  will  encourage  Member  States  or 
economic  operators  to  start  collecting  information  or  build  stockpiling  of  goods  of 
strategic importance. 

Policy  Approach  2  –  Recommendation  to  the  Member  States  on  information 
gathering  concerning  strategic  supply  chains  and  recommendation  to  Member 
States on strategic reserves + promotion of match-making 

The  costs  depend  on  actions  ultimately  taken  by  the  Member  States  when  the  Single 
Market vigilance mode is activated. Such costs are expected to be similar to business as 
usual  as  most  of  the  Member  States  that  have  replied  to  the  targeted  questionnaire 
indicated that they have national level activities to monitor the market with early warning 
systems in place. 

In  terms  of  strategic  reserves,  the  Commission  will  prepare  the  recommendation.  Any 
costs will depend on the uptake of this Recommendation by Member States. 

Matchmaking  between  companies  in  identified  strategic  supply  chains  would  be 
primarily  coordinated  by  the  Commission,  requiring  up  to  2  AD  FTE  totalling  an 
estimated  314.000  EUR/year.  Possible  involvement  of  Member  States  in  matchmaking 
activities  may  entail  more  limited  resources,  involving  up  to  1  FTE  at  approximately 
157.000 EUR/year. 

These  measures  may  bring  economic  benefits  thanks  to  better  information  and 
predictability  of Single  Market  issues  (obstacles and possible shortages), less costs and 
better  planning  as  well  as  better  crisis  response  as  well  as  better  availability  of  crisis-
relevant  products  and  services.  This  policy  approach  may  likely  lead  to  informed 
decisions and actions that in turn may generate, for example better availability of goods 
and  services  in  terms  of  choice,  volume  and  speed  or  less  disruptions  of  working 
conditions, in particular for cross-border workers. However, there are limitations on the 
extent  of  the  benefits  of  this  option  given  that  the  monitoring  activity  is  left  at  the 
discretion of the Member States. 

Policy Approach 3 – Obligation for Member States to gather targeted information + 
promotion of matchmaking by the Commission + Obligation for the Commission to 
coordinate strategic reserves to be constituted by Member States, including lists of 
targets, recommendations and obligation to build up strategic reserves + Obligation 
to inform about individual public procurement actions 

Similar to policy approach 2 and only further to activation of the Single Market vigilance 
mode, the costs related to this policy option are largely falling on the Member States but 
activities are assumed to be carried out mostly by existing human resources in national 
ministries. The cost related to matchmaking are the same as under policy approach 2. 

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The  costs  for  coordinating  strategic  reserves  for  the  Commission  would  be  limited  to 
coordination  costs.  However,  Member  States  would  bear  the  costs  of  creating  concrete 
targets for reserves in areas where risks of security of supply in strategic supply chains 
are observed. They would also have to inform the Commission and other Member States 
about their individual public procurement actions to build up strategic reserves. 

This  option  may  bring  about  economic  benefits  thanks  to  better  information  and 
predictability  of Single  Market  issues  (obstacles and possible shortages),  less costs and 
better  planning  as  well  as  better  crisis  response  as  well  as  better  availability  of  crisis-
relevant products and services. This policy option may likely lead to informed decisions 
and  actions  that  in  turn  may  generate,  for  example  better  availability  of  goods  and 
services in terms of choice, volume, in times of crisis. 

Stakeholders’ feedback 
In  the  public  consultation,  14  out  of  24  respondents  supported  targeted  monitoring 
mechanism  (above  referred  to  as  targeted  information  gathering)  of  identified  supply 
chains to anticipate shortages. Some business stakeholders were in favour of voluntary or 
mandatory mechanisms to anticipate future shortages (for example SMEUnited, Europen, 
VDMA, ETUC), whereas others considered that it was not in line with the principles of 
proportionality  and  necessity  (BusinessEurope,  ERT,  and  Dansk  Industri).  In  the 
stakeholder  workshop,  guidance  to  Member  States  on  voluntary  targeted  monitoring  of 
identified strategic supply chains for shortages was supported by 61%. 

However, some Member States, such as DK, emphasise that gathering information would 
potentially require a great deal of work and coordination. This would imply in their view 
significant  burdens  for  public  authorities  and  businesses  subjected  to  reporting 
requirements,  and  also  entail  risks  around  forced  disclosure  of  sensitive  business 
information.  Member  States  have  pointed  out  in  their  replies  to  the  Member  States 
questionnaire  that  the  private  sector  could  be  further  involved  in  management  of 
stockpiles. 

On  strategic  stockpiling,  some  stakeholders  were  in  favour  (SMEUnited,  VDMA) 
whereas others were not or called for it to be done at the national level (Eurocommerce, 
Eurochambres, Dansk Industri). A number of Member States have voiced concern about 
including  in  the  scope  of  the  initiative  measures  such  as  stockpiling.  Similar  concerns 
were expressed in individual letters from DK, IE, NL, FI, and SE, also drawing attention 
to the need to follow strictly the principles of necessity and proportionality of measures 
and to avoid the related administrative burden. 

Conclusions 

Policy  approach  2  and  policy  approach  3  are  retained  for  further  analysis  based  on  the 
following justification: 

Under  Policy  approach  1,  which  is  subject  to  the  activation  of  the  Single  Market 
vigilance  mode,  the  Commission  would  provide  guidance  on  targeted  information 
gathering  of  identified  strategic  supply  chains  and  obstacles  to  free  movement  to 
companies  which  are  part  of  such  supply  chains.  This  option  although  voluntary,  may 
have the benefit of increased and more coherent monitoring by industry, who would be 
well  placed  to  carry  out  such  information  gathering  within  specific  fields.  Companies 

115 

 
 
 
 
 
 
 
may subsequently, again on a voluntary basis, flag emerging issues to public authorities. 
The voluntary nature of this option may however limit its effectiveness when it comes to 
identifying  shortages  and  addressing  them  jointly  by  public  and  private  players,  as  it 
would  in  part  rely  on  the  readiness  of  companies  to  pass  on  information,  etc.  While  it 
may  support  targeted  and  effective  industry  initiatives  to  remedy  possible  shortages,  it 
could  have  limited  usefulness  for  informing  policy  discussions  between  Member 
States/at  EU  level,  in  the  event  that  public  intervention  may  prove  necessary  to 
complement industry action in building up resilience.  

Policy  Approach  2,  also  subject  to  the  activation  of  the  Single  Market  vigilance  mode, 
provides  for  recommendations  to  Member  States  on  the  information  gathering 
concerning  identified  strategic  supply  chains  and  obstacles  to  free  movement  based  on 
their national competences, concerning the companies that operate in their territory and 
form part of such value chains. Member States would invite industry stakeholders in the 
selected  supply  chains  to  voluntarily  provide  targeted  information  on  factors  impacting 
the availability of goods and services therein. In addition, the Commission together with 
Member States would actively promote matchmaking among companies in the strategic 
supply  chains  concerned.  The  Commission  will  also  issue  recommendation  on 
stockpiling  of  goods  of  strategic  importance.  This  approach  may  lead  to  a  more 
comprehensive  and  coherent  approach  to  prioritising  and  organising  information 
gathering by Member States in full collaboration with industry present on their territory. 
It would also be favourable in terms of subsidiarity, since Member States would maintain 
autonomy  in  relation  the  organisation  of  information  gathering.  However,  this  option 
may  fall  short  of  being  effective,  since  information  gathering  would  remain  voluntary. 
There would also be no obligation to share the findings thereof, or to foresee any follow-
up actions such as early warning systems. This option may therefore not serve to inform 
EU level policy discussions between Member States in a structured manner, which would 
be needed in the event that public intervention proves necessary to complement industry 
action in building up resilience.  

Policy approach 3, again subject to the activation of the Single Market vigilance mode, 
foresees  that  Member  States  carry  out  regular  and  targeted  information  gathering 
concerning supply chains of strategic importance, in view of ensuring the functioning of 
the  Single  Market.  It  would  be  accompanied  by  guidance  including  on  indicators,  as 
appropriate, for a targeted yet comprehensive and coherent approach. This option would 
oblige  Member  States  to  identify  supply  chains  of  strategic  importance  according  to 
certain  criteria  and  in  full  collaboration  with  industry  stakeholders.  In  addition,  the 
Commission together with Member States would actively promote matchmaking among 
companies in the strategic supply chains concerned. Altogether, this option would entail 
a structured and consistent approach to information gathering across Member States, who 
would  however  maintain  autonomy  when  it  comes  to  its  precise  organisation.  The 
involvement of industry would be facilitated, including through dedicated administrative 
means for collecting information from companies. By formally involving all levels in the 
targeted  information  gathering  based  on  common  criteria/indicators,  this  option  would 
ensure a coherent approach. Moreover, it foresees that national level findings be shared 
with the Commission and other Member States in an EU level forum, to enable targeted 
discussions, further analysis and to inform coordinated policy action if necessary. 

As regards strategic reserves, policy approach 3 foresees empowering the Commission to 
request  information  from  Member  States  on  their  levels  of  strategic  reserves.  Together 
with Member States, the Commission would create concrete targets for reserves in areas 

116 

 
 
 
 
where  risks  of  security  of  supply  in  strategic  supply  chains  are  observed.  The 
Commission  would  then  issue  recommendations  to  Member  States  in  relation  to  their 
strategic reserves to meet such targets. Subject to additional activation, the Commission 
could oblige Member States to build up strategic reserves for selected goods of strategic 
importance that would correspond to such targets. 

4.  Building  block  4  –  Key  principles  and  supportive  measures  for  facilitating 

free movement during emergency 

Policy approach 1 – Guidance or Recommendations on free movement 
The costs for the Commission are insignificant and they are equivalent with business as 
usual. The costs for the Member States would be less than business as usual, as it implies 
that  Member  States  will  issue  less  national  measures  in  times  of  crisis.  The  key 
principles’  objective  is  to  keep  the  national  measures  to  bare  minimum  aligned  to 
necessity and proportionality principles. The benefits could be significant in terms of less 
national  restrictions  affecting  the  free  movement  with  overall  economic  and  societal 
to  follow  such  guidance  and 
benefits 
Recommendations107.  If  not,  this  option  would  bring  about  significant  social  costs  for 
frontier  workers  and  cross-border  workers  and  service  providers  who  rely  on  their  free 
movement rights for their income. Such workers and service providers will therefore be 
at a greater risk of loss of income and poverty and will require income support measures 
from  the  Member  States  concerned.  Given  that  the  initiative  aims  also  to  ensure  free 
movement of medical professionals during public health emergencies, non-compliance of 
the  Member  States  with  the  guidance  can  also  bring  about  significant  costs  for  the 
Member States that rely on cross-border health care and care professionals.  

the  Member  States  would  decide 

if 

Policy approach 2 – Reinforcing key principles of free movement of crisis-relevant 
workers, service providers, goods in binding rules  
There  are  no  additional  costs  for  the  Commission  for  developing  key  principles  as  the 
key principles will already be embedded in the legal text of the initiative. 

The benefits are to be seen in less national measures restricting the free movement, given 
that  it  is  expected  that  the  Member  States  will  use  the  key  principles  in  assessing  the 
necessity  and  proportionality  of  their  national  crisis  measures  that  in  turn  will  limit 
restrictive  actions.  To this  end, it is  estimated that  the  benefits  outweigh  the costs. The 
Single Market impact of the crises includes social costs for crisis-relevant workers such 
as longer working hours, less resting time, higher exposure to health and safety risks and 
environmental hazards, limitations of the right to strike and assembly. The facilitation of 
the free movement of such workers during the crisis will bring about a decrease increase 
in those costs. All the workers will further benefit from the possibility to continue their 
professional activities and to preserve their income during the crisis. 

Policy approach 3 - Binding rules on free movement in times of crisis  
The  costs  for  the  Commission  to  develop  binding  rules  are  expected  to  be  low  and 
covered by existing resources. The costs to Member States are expected to be lower than 

107 The European Court of Auditors has pointed out in its “Special Report on Free movement in the EU at 
the time of COVID-19 pandemic” that even one year after the beginning of COVID-19 pandemic, Member 
States’ practices show that responses were still mostly uncoordinated and were not always consistent with 
Commission guidance and Council Recommendations on free movement, see p. 5 of the Special Report. 

117 

 
 
 
 
 
 
 
                                                           
under  business  as  usual  and  under  option  1  as  they  may  not  have  to  develop  any  new 
national rules. 
Under this policy approach, it is expected that workers would fully benefit of their free 
movement rights, therefore increasing their well-being due to employment opportunities 
and no loss of income. 
There  could  be  significant  economic  and  societal  benefits  like  the  availability  of  the 
goods  and  services  needed  for  the  proper  functioning  of  the  Single  Market  and  timely 
support to the functioning of health care and care systems of the Member States, given 
that  intra-EU  exports  and  imports  of  goods  and  services  as  well  as  free  movement  of 
persons remains fully functional in times of crises that may affect the Single Market. 

Stakeholders’ feedback 
Member  States  have  widely  supported  measures  to  ensure  free  movement  of  persons, 
goods  and  services  (for  example  BE,  BG,  DK,  IE,  EE,  FI,  LU,  NL,  PL,  PT,  RO,  SE, 
letter  of  nine  Member  States  of  3  June  2022).  21  out  of  21  respondents  to  the  public 
consultation supported providing key principles concerning crisis measures restricting the 
free  movement  of  certain  categories  of  goods  as  well  as  persons,  workers  and 
professionals. 19 out of 21 respondents supported setting out key principles to identify a 
blacklist  of  national  measures  restricting  the  free  movement  of  goods,  services  and 
persons  incompatible  with  the  particular  crisis  situation.  Business  stakeholders  widely 
supported  measures  to  ensure  free  movement,  singling  out  the  needs  of  cross-border 
workers,  critical  occupations  and  supporting  solutions  such  as  key  principles  and 
blacklists. 

Conclusions 

Policy approach 2 is retained for further analysis based on the following justification. 

Policy  approach  1  is  very  light  in  terms  of  any  administrative  burden  for  the  Member 
States and also for the Commission, containing some principles that the Member States 
are suggested to follow when applying the free movement. However, it is also clear that 
Member States who will not follow the Recommendations or guidance will only receive 
a suggestion to align themselves to the Recommendation. This being said, Member States 
continue to  be bound by the relevant  provisions of EU law, under which restrictions to 
the  free  movement  of  persons  may  only  be  adopted  on  the  basis  of  public  interest 
grounds and if they comply with the general principles of EU law, such as proportionality 
and non-discrimination. 

The aim to  ensure free  movement  of crisis-relevant  workers, service providers,  persons 
and goods at the time of the Single Market emergency can remain largely unattained for 
the  businesses,  workers  and  citizens  concerned  if  the  Member  States  would  not 
voluntarily  adhere  to  the  recommendations  and  guidance  as  it  happened  during 
COVID/19  pandemic  (see  section  2  of  the  Impact  Assessment).  It  appears  also  that 
Member States did not know how to interpret the terms used in the recommendations and 
guidance documents, as they were not defined in sufficient detail. Some Member States 
have  contacted  the  Commission  for  additional  guidance  on  the  contents  of  such  terms 
(e.g. Lithuania asked whether essential travel would concern business representatives of 
retail businesses when they travel for business). This raises questions of efficiency. 

Policy approach 2 aims to lay down the key principles (a set of framework rules) that the 
Member  States  need  to  observe  at  the  time  of  crisis  when  applying  the  free  movement 

118 

 
 
 
 
 
rights  in  the  Regulation  for  a  Single  Market  Emergency  Instrument,  complementing  it 
with a Recommendation for all other aspects. These concretised rules, and blacklists of 
free movement restrictions that would be in any case prohibited during the Single Market 
emergencies, would allow the Member States to understand clearly what  is expected of 
them during the crisis, when designing their crisis response measures. According to the 
building block 5, Transparency  and administrative assistance, other Member States and 
Commission  would  provide  feedback  on  notified  Member  States  crisis  response 
measures.  Finally,  if  any  crisis  measures  of  the  Member  States  would  still  contain  free 
movement  restrictions  that  do  not  comply  with  the  Treaty  obligations,  the  persons, 
workers,  services  providers  and  truck  drivers  could  rely  on  such  concretised  rules  (key 
principles and blacklists) against any uncooperative Member State authorities. 

This  approach  would allow for defining the terms and types of persons that  need to  be 
granted  their  free  movement  rights  even  at  the  time  of  very  restricted  movement,  thus 
providing for more clarity and a somewhat more efficient legal framework. It would also 
foresee  some  supportive  measures  that  would  facilitate  the  free  movement  of  persons 
during  the  crisis,  defining  essential  travel  and  essential  worker  in  a  legally  binding 
document. Where necessary for the specific types of crises, it would be complemented by 
means  of  crisis-specific  recommendations  on  free  movement  of  crisis-related  persons, 
goods, services and workers at the time of that particular crisis.  

Policy approach 3 would provide for a comprehensive legal framework facilitating free 
movement  of  all  persons,  services,  goods  and  workers  during  the  crisis,  adding  at  the 
same time another layer of protection to the free movement of crisis-relevant goods and 
persons  in  times  of  crisis  in  binding  rules  where  appropriate  for  effective  crisis 
management.  The  comprehensive  legal  framework  of  Option  3  would  extend  the  key 
principles  and  blacklists  to  free  movement  of  all  persons,  services,  goods  and  workers 
during the crisis. Such rules supporting and facilitating free movement during the crisis 
would  also  concern  the  free  movement  of  civil  protection  workers.  However  this 
approach would be extremely far-reaching and therefore it would not be in line with the 
principle  of  subsidiarity,  as  EU-level  rules  under  this  approach  would  fully  replace  the 
possibility of Member States to introduce their own rules. Therefore this approach is not 
retained. 

5.  Building  block  5  –  Transparency  and  administrative  assistance  during 

emergency 

Policy approach 1 – Member States share national crisis measures voluntarily  
Costs for the Member States related to policy Option 1 are largely similar to business as 
usual  whereby Member  States may  choose to  notify or not  measures such as entry  and 
exit bans affecting the free movement of persons or adopted measures restricting the free 
movement of agri-food products across the Single Market.  
The costs  for the Commission  are also  largely business  as usual.  The Commission  will 
follow  up  on  the  measures  voluntarily  notified  by  the  Member  States  as  it  is  currently 
foreseen. The cost for setting up the electronic platform are similar to the costs for Re-
open  EU  platform.  These  costs  are  estimated  to  include,  in  addition  to  normal 
coordination  of  activities:  1  FTE  dedicated  Contract  Agent  (CA  IV):  100.000  EUR, 
updates  (current  and  further  support  performed  by  subcontracted  service  providers): 
433.000 EUR, IT maintenance 67.000 EUR, for a total of 600.000 EUR per annum. 

119 

 
 
 
 
 
 
Citizens, businesses and other Member States have benefits out of the policy approach 1 
given that they will have access to information about national and EU level crisis info, in 
particular on the introduced national restrictions, obtained voluntarily.  

Policy  approach  2  –  Binding  simplified  fast-track  notification  mechanism  +  flash 
peer review  
The  costs  for  notification  mechanism  are  slightly  higher  than  current  costs  for  Single 
Market  Transparency  Directive  and  the  costs  of  notification  mechanism  under  the 
Service  Directive  due  to  obligations  imposed  to  the  member’s  states  to  notify  any  free 
movement  restrictions.  Based  on  the  impact  assessment  on  Services  Directive 
notification proposal108 from Member States, the average time spent to comply with the 
notification procedure is 12 hours per notification. This leads to  administrative costs of 
€385.20  per  notification  assuming  the  EU  average  of  hourly  earnings  for  civil  servants 
holding  a  university  degree  of  €32.10.  For  restrictions  affecting  the  free  movement  of 
persons, we calculate additional resources of 2 AD officials. 
The  costs  for  the  Commission  for  setting  up  an  electronic  platform  for  disseminating 
crisis-related information is similar to the costs for the Re-open EU platform, which are 
600.000 EUR per annum, see above under policy approach 1. 
As regards the costs for the Commission for the policy approach 2, based on the impact 
assessment report on Services Directive notification proposal, on average, the assessment 
of a notification by a Commission staff member will take 2-3 hours. In case comments or 
questions  addressed  to  the  Member  State  concerned  are  to  be  prepared,  it  is  estimated 
that  this  will  lead  to  an  additional  5  hours  of  work.  This  option  will  impact  the 
Commission in that it will lead to additional work stemming from the comments received 
from  stakeholders  who  will  be  granted  access  to  the  notifications  to  be  considered. 
Another  element  could  be  the  possible  increase  of  notifications  from  those  Member 
States  currently  not  completely  fulfilling  the  obligation  under  the  Services  Directive. 
Further  to  this  increase  in  workload,  there  is  likely  to  be  an  impact  on  the  translation 
costs.  Currently  a  notification  from  a  Member  State  is  translated  into  English.  The 
current translation cost is on average €26 per page. Notifications are on average between 
2 and 3 pages long. This leads to an average translation cost per notification of €65109. 

Policy approach 3 – Binding full-fledged fast-track notification mechanism + flash 
peer review + possibility to declare the adopted measures null and void  
The costs for notification mechanism are similar as under policy approach 2 but could be 
slightly  higher  as  the  notification  will  be  not  simplified  but  fully  fledged  i.e.  probably 
requiring more hours of work both the Commission staff and by the Member States also 
provide  quicker  feedback,  as  compared  to  the  current  urgency  procedure  under  the 
SMTD. As the notifications are binding, the same increase it the number of notifications 
is  to  be  expected  as  under  policy  approach  2.  The  same  costs  related  to  setting  up  an 
electronic platform are expected as under policy approach 2. 

Stakeholders’ feedback 
Stakeholders  have  largely  supported  actions  regarding  information  sharing  and/or 
notifications of national crisis measures as a solution to the crisis situations. 20 out of 22 
public  consultation  respondents  were  in  favour  of  specific  mandatory  notification 

108  The  cost  estimate  based  on  the  impact  assessment  on  Services  Directive  notification  proposal  from 
2016, SWD(2016)434 (europa.eu). 
109 See previous. 

120 

 
 
 
 
 
 
 
                                                           
mechanisms  followed  by  flash  peer  review.  Voluntary  information  sharing  was  also 
supported (14 out 21 respondents). 21 out of 22 respondents expressed support both for 
EU-level and national level contact points, as well as for publishing the summary of the 
national  crisis  measures  on  a  dedicated  EU  website.  In  the  stakeholder  workshop, 
majorities  of  participants  supported  obligatory  notifications  and  disseminating 
information  via  electronic  platform  and  a  single  point  of  contact  in  the  EU,  with  less 
support for voluntary options. 

Business stakeholders stressed the need to address difficulties to access information and 
the  need  for  Member  States  to  share  information  about  national  measures,  supported 
notification mechanism and called for dedicated information interface and hotline. 

Some Member States have warned about the difficulties of introducing a new notification 
obligation and/or the need to build on the existing mechanisms (for example joint letter 
of  11  March  2022  and  individually  DK,  IE,  FI,  SE),  while  stressing  the  importance  of 
ensuring transparency for citizens and businesses with regards to measures taken across 
Member  States  (joint  letter  of  11  March  2022)  and  calling  for  an  online  platform 
providing  standardised  information  on  measures  (BE,  LV,  PL).  In  its  replies  to  the 
Member States questionnaire, LV recommends setting up a dedicated platform where all 
the necessary information would be available in times of  crisis: webpage for up-to-date 
information,  like  the  existing  Re-open  EU  platform  that  provides  information  on  travel 
and health measures. 

Conclusions  
Policy approach 3 is retained for further analysis based on the following justification. 

Policy  approach  1  which  invites  the  Member  States  to  share  their  crisis  response 
measures that restrict free movement of goods, services and persons with other Member 
States and the Commission on a voluntary basis, does not allow the Commission, other 
Member States as well as businesses and citizens to get during a crisis a full and timely 
picture  of  the  national  crisis  measures  in  all  Member  States.  Therefore  the  economic 
operators and citizens may not adjust their behaviour and business activities to the crisis 
realities in an optimal manner. Even if some information would be published voluntarily, 
economic  operators  and  citizens  would  be  facing  the  need  to  frequently  verify  the 
voluntarily  published  information  with  each  of  the  host  Member  States  where  they 
operate.  They  would  also  need  to  request  for  administrative  assistance  from  many 
different  national-level  authorities  in  local  languages  to  be  able  to  comply  with  any 
crisis-related formalities and procedures.  

Policy  approach  2  builds  upon  the  existing  Single  Market  Transparency  Directive, 
broadening its scope of application to measures affecting free movement of persons and 
all types of services as regards notification of draft crisis measures, but does not require 
notification  of  adopted  crisis  response  measures  that  restrict  free  movement  rights  and 
does not provide for any procedures for following up on voluntary notifications of such 
adopted crisis measures. Similarly to the SMTD system, it provides for the peer review 
by the Member States, and for a possibility for the Commission to provide comments on 
the notified draft that the notifying Member States are obliged to take into account. This 
option allows Member States to avoid the notification of adopted urgent crisis measures 
or swift follow-up to any notified adopted crisis measures. 

121 

 
 
 
 
It  obliges  the  Member  States  to  put  in  place  single  points  of  contact  for  the  crisis 
measures that would provide the citizens, businesses, workers, service providers, posted 
workers  with  crisis-related  information  which  is  tailored  for  their  specific  needs  and 
would  provide  assistance  for  completion  of  any  crisis-related  administrative  formalities 
and procedures in the given Member State.  

Policy  approach  3  would  require  Member  States  to  notify  their  draft  crisis  response 
measures that restrict free movement of goods, services and persons (including workers) 
at  the  time  of  crisis  and  would  require  the  Commission  and  Member  States  to  provide 
quicker feedback, as compared to the current urgency procedure under the SMTD. Where 
the Member States need to take the crisis measures immediately, they would be obliged 
to  notify  such  measures  immediately,  and  the  Commission  would  be  able  to  follow-up 
any non-compliant measures by means of a Commission Decision that would declare the 
non-compliant measures null and void. Therefore this approach would be most effective 
in terms of ensuring an effective follow-up by the Commission of the measures taken by 
Member States. 

It would be completed by means of national and EU-level single points of contacts that 
would provide information on national and EU level crisis response measures and would 
provide administrative assistance for fulfilment of national and EU level additional crisis-
related formalities and procedures. 

Stakeholders  have  also  strongly  supported  the  introduction  of  an  effective  obligatory 
notification mechanism. Policy approach 2 would only contain a soft means of follow-up 
(a  peer  review  in  the  Expert  Group)  without  any  binding  powers  and  would  therefore 
lack  effectiveness.  In  contrast,  under  policy  approach  3  there  would  be  an  effective 
means  of  follow-up  by  the  Commission  of  the  measures  taken  by  Member  States. 
Therefore policy approach 3 is retained for further analysis. 

6.  Building block 6 – Speeding up the placing of crisis-relevant products on the 

market during emergency 

Policy approach 1 – Guidance on increasing availability of products  
The costs and benefits are similar to business as usual – the Commission will develop the 
guidance under the usual activities for managing the application of single market product 
framework. Some economic and societal benefits may be brought forward by this option 
if the Member States choose to follow the Commission guidance. 

Policy  approach  2  –  Targeted  amendments  to  Single  Market  harmonisation 
legislation on placing on the market + technical specifications for harmonised/non-
harmonised  products  +  MS  to  prioritise  market  surveillance  for  crisis-relevant 
products 
Under this option, there are limited costs for the Commission, expected to be covered by 
existing  resources.  Regarding  the  costs  for  the  Member  States,  no  additional  costs  are 
expected  –  familiarising  with  the  new  technical  specification  developed  by  the 
Commission  and  prioritising  market  surveillance  would  fall  under  business  as  usual. 
There will be less costs for the economic operators, including SMEs, given that they can 
place products on the market while conformity assessment is not finalised. There will be 
economic  and  societal  benefits  thanks  to  a  swift deployment  of  crisis-relevant  products 
on  the  market  in  times  of  crises.  The  risk  of  placing  non-compliant  products  will  be 
mitigated due to increased market surveillance. 

122 

 
 
 
 
 
Policy Option 3 - Targeted amendments to Single Market harmonisation legislation 
on placing on the market + technical specifications for harmonised/non-harmonised 
products  +  MS  to  prioritise  market  surveillance  for  crisis-relevant  products  + 
European standards  
There  are  limited  costs  for  Commission,  expected  to  be  covered  by  existing  resources 
and there are no major costs on the Member States similar with the policy option 2. There 
will  be  economic  and  societal  benefits  thanks  to  a  swift  deployment  of  crisis-relevant 
products  on  the  market  in  times  of  crises,  e.g.  personal  protective  equipment  masks. 
However,  in  terms  of  societal  benefits,  this  option  may  raise  safety  concerns  given  the 
use of European standards not assessed for presumption of conformity against the health 
and safety requirements of the product legislation. 

Stakeholders’ feedback 
Streamlining EU product rules (such as mandatory conformity assessment and standards) 
and  prioritising  products’  controls  for  a  limited  time,  to  enable  a  swift  deployment  of 
products  of  potential  relevance  to  a  crisis  on the  market  was  considered  as  an  efficient 
solution  by  14  out  of  17  respondents  in  the  public  consultation.  Business  stakeholders 
expressed support for facilitating procedures for placing relevant products on the market 
(for example BusinessEurope, SMEUnited, VDMA, Dansk Industri). 

When  it  comes  to  ensuring  availability  of  crisis-relevant  goods,  Member  States  have 
expressed  support  for  measures  such  as  coordination  of  public  procurement,  fast-track 
conformity assessment and improved market surveillance (joint letter of 11 March 2022, 
also AT, FR, DE). 

Conclusion:  
Policy approach 2 is retained for further analysis based on the following justification. 

Policy approach 1 would build on the experience of the pandemic and build on the soft 
law  tools  taken  during  this  time.  It  would  turn  the  ad  hoc  specific  actions  into  a  more 
permanent  body  of  guidance.  Thus  specific  guidance  and  recommendations  could  be 
envisaged  along  the  lines  of  the  Recommendation  on  PPE.  Such  an  approach  would 
however  provide  less  predictability  to  all  actors  involved  and  could  therefore  decrease 
legal  certainty.  Also,  it  would  not  be  possible  to  adopted  technical  specifications 
providing a presumption of conformity which would therefore not resolve the problem of 
missing harmonised standards. 

Policy  approach  2  entails  targeted  amendments  of  existing  Single  Market  legislation 
enabling national  market  surveillance authorities to  authorise the placing on the market 
of critical products while conformity assessment is ongoing during the time the crisis is 
activated.  As  such,  crisis-relevant  products  for  which  no  conformity  assessment 
procedure has been initiated may be authorised by the Member States to be placed on the 
market  provided  that  the  products  concerned  ensure  an  adequate  level  of  health  and 
safety  in  accordance  with  the  essential  requirements  laid  down  in  the  specific  Union 
product  harmonisation.  This  option  also  gives  the  Commission  the  possibility  to  adopt 
technical specifications where no harmonised standard exists. To this end, Commission is 
empowered  to  adopt  technical  specifications,  via  implementing  acts,  for  the  essential 
health  and  safety  requirements  set  out  in  the  sectorial  legislation.  The  process  for 
adopting the technical specification will be quicker than the standard process provided by 
the  Standardisation  Regulation  1025/2012  whereby  the  European  Standardisation 

123 

 
 
 
 
Organisations will develop harmonised standards only following a specific request by the 
Commission. 

This  option proposes  obligations to  the Member States to  prioritise  market  surveillance 
for crisis-relevant  products  that are placed on the market  without CE marking, pending 
the completion of their conformity assessment.  

Policy  approach  3  proposes  targeted  amendments  of  existing  Single  Market  legislation 
for products derogating from existing conformity assessment procedures during the time 
the  emergency  situation  is  activated.  This  could  entail  specific  amendments  of  the 
standard  conformity  assessment  procedure  of  a  given  product  such  as  reducing  certain 
requirements  to  be  carried  out  during  the  procedure.  This  could  be  a  reduction  of 
timeframes  or  requiring  a  document  check  instead  of  product  testing.  To  this  end, 
manufacturers are allowed to place products on the market derogating from the standard 
procedure  of  conformity  assessment  required  by  the  product  legislation.  These 
amendments  would  have  to  be  chosen  very  carefully  in  each  individual  case  to  ensure 
that the overall level of safety of such products is not endangered by the derogations. 

Also  normal  European  standards  that  have  not  been  harmonised  could  be  identified 
where  no  harmonised  standards  exist.  This  does,  however  raise  questions  on  legal 
certainty  about  the  presumption  of  conformity  with  the  essential  requirements  of  the 
legislation in question. This would also ultimately raise questions concerning the safety 
of the products concerned.  

7.  Building block 7 – Public procurement during emergency 

Policy approach 1 – Guidance 
This option provides for costs and benefits that are considered business as usual. 

Policy  approach  2  –  New  provision  on  coordianted  procurement/common 
purchasing 
The costs under this policy option are similar to the costs for setting up Commission-led 
procurement of COVID-19 vaccines, which could be considered business as usual for the 
Commission. The benefits will outweigh the costs given that crisis relevant goods of dire 
are made available when they are most needed. 

Policy  approach  3  –  Targeted  amendments  of  the  Procurement  Directives  +  New 
provision on coordinated procurement/common purchasing 
The costs for the Member States are lower than business as usual under this option due to 
possible derogation from procurement rules. Minor one-off costs may be incurred for the 
transposition  of  the  targeted  amendments.  The  costs  for  the  Commission  are  similar  to 
approach 2. 

Stakeholders’ feedback 
Business stakeholders were in favour of guidance on public procurement (Eurochambres) 
and  did  not  see  the  need  to  modify  the  rules  (BusinessEurope,  Dansk  Industri).  In  the 
stakeholder  workshop,  joint  procurement  by  the  Commission  on  behalf  of  the  Member 
States was supported by 53% and guidance on emergency procurement in Member States 
by 49% of participants. 

Conclusion 

124 

 
 
 
 
  
 
Policy approach 2 is retained for further analysis based on the following justification. 

Policy  approach  1  would  suggest  to  adopt  new  guidance  and  would  rely  on  voluntary 
coordination of public procurement action by individual Member States during the crisis. 
This option would not be efficient, as the Member States may choose not to follow the 
guidance or Recommendation. In case there would be a need to leverage the purchasing 
power  of  the  Commission,  the  Commission  would  need  to  procure  jointly  with  the 
Member States based on the Financial Regulation. This would be more time consuming 
and  less  effective  and  efficient  than  the  possibility  of  common  purchasing  by  the 
Commission.  

Policy approach 2: Allowing Member States to engage in joint public procurement under 
the Public Procurement Directives before the Commission would take any procurement 
action, would take into account the primary role and competence of the Member States in 
the area of public procurement. 

Moreover the guidance could facilitate the use of the existing procurement provisions by 
the  Member  States  at  the  time  of  the  crisis,  addressing  any  uncertainties  as  to  how  to 
apply such provisions. Such guidance seems therefore effective, efficient and coherent. 

from 

to  derogate 

Policy  approach  3  would  propose  targeted  amendments  of  the  Procurement  Directives 
allowing  Member  States 
existing  public  procurement 
procedures/suspend  the  application  of  the  Procurement  Directives  for  procurement  of 
crisis-relevant  products  during  a  specific  timeframe  during  the  crisis.  While  this  would 
increase  the  efficiency  and  effectiveness  of  the  national  crisis  response  in  case  of 
shortages of crisis-relevant goods resulting from severe disruptions of the free movement 
of  goods,  persons  or  services  or  from  disruption  of  supply  chains,  it  would  go  further 
than necessary for the attainment of those objectives. It would also be problematic since 
there  would  be  no  control  over  the  public  procurement  and  no  respect  for  fundamental 
principles of procurement, such as prevention of corruption and avoidance of conflict of 
interest  would  be  ensured.  It  would  therefore  not  be  coherent  with  the  EU  level  public 
procurement framework.  

8.  Building  block  8  –  Measures  impacting  crisis-relevant  supply  chains  during 

emergency 

These  are  measures  that  will  be  applied  only  after  the  Single  Market  emergency  mode 
has  been  activated  and  are  applicable  to  the  Commission,  Member  States  and  those 
businesses operating in the value chain of goods and products relevant for that particular 
type of crisis, depending on the design of the options.  

Policy  approach  1  –  Guidance  on  distribution  of  strategic  reserves  +  guidance  on 
speeding  up  permitting  procedures  +  guidance  on  prioritisation  of  orders  + 
recommendation to economic operators to share information  

This policy approach provides for costs and benefits that are considered business as usual 
for  the  Commission  and  Member  States.  All  the  measures  are  of  voluntary  nature  and 
limited  to  recommendations  and  guidance.  Companies  may  acquire  indirect  economic 
benefits  which  will  depend  on  the  uptake  of  the  guidance  by  the  Member  States  and 
companies.  Such  indirect  benefits  are  harvested  by  redressing  the  functioning  of  the 
Single Market during emergencies thanks to adequate availability and allocation of crisis-

125 

 
 
 
 
 
 
 
relevant  goods  to  tackle  the  crisis  at  stake.  However,  there  is  likely  to  be  only  a  very 
limited  take-up  of  such  measures  and  the  benefits  for  the  Single  Market  and  for 
companies are expected to be very limited. 

For  information  requests  to  businesses,  policy  approach  1  which  encourages  the 
businesses  and  the  representative  organisations  to  share  the  necessary  crisis-relevant 
information by means of a recommendation is not capable of addressing the problem of 
lack of crisis-relevant information on supply chain disruptions and production capacities 
in  a  satisfactory  manner.  It  appears  that  companies  cite  business  secrets,  the  need  to 
preserve the rating of listed companies, etc. as reasons why they would not wish to share 
the relevant information with the relevant national authorities and the Commission. 

Policy approach 2 – Empowerment for Member States for mandatory information 
requests and mandatory ramping up of production following industry non-action + 
recommendations 
Member  States  costs  to  follow  the  Commission  recommendation  on  distributing 
previously stockpiled products would be business as usual. The costs related to speeding 
up permitting procedure might slightly increase by additional resources to deal with the 
administrative procedures in a quicker and more effective manner. However, such costs 
depend on each Member State’s arrangements and are estimated to be insignificant and 
will depend on the uptake of Recommendation. 

The policy approach 2 gives the empowerment to MS to oblige to ramp-up production, 
with  financial  support  as  appropriate.  The  number  of  companies  falling  under  the 
obligation will depend on the type of crisis and the decision of a MS – these are however 
the  companies  operating  in  the  value  chains  of  a  limited  number  of  goods  or  products 
relevant  for  a  certain  type  of  crisis  activated  by  strict  criteria.  The  economic  operators 
affected by these measures are expected to recover additional investment  and operating 
costs  through  increased  sales  and  due  to  financial  support  from  Member  States  as 
appropriate.  

In terms  of costs related to  mandatory information requests to  companies, the costs are 
similar with those indicated by the impact assessment on the Single Market Information 
Tool (SMIT) proposal  (option 4)110. For companies affected by mandatory info request 
the IA estimated costs to be approximately 0.29 million EUR. Costs for Member States 
were estimated to be up to 0.72 million EUR and costs for the Commission about 0.15 
million EUR per year. However, it has to be noted that the measures proposed in SMEI 
related to information requests to companies are targeted and focused to a limited number 
of  companies  in  the  EU  economy,  that  activate  in  supply  chains  that  have  a  crisis  –
relevance  for  the  Single  Market,  and  for  a  limited  period  of  time,  as  long  as  the 
emergency  is  activated.  Those  information  requests  will  take  full  account  of  and  will 
respect  the  rights  to  privacy  and  data  protection  and  freedom  to  conduct  a  business 
activity  of  the  economic  operators  under  Articles  7,  8  and  16  of  the  EU  Charter  on 
Fundamental Rights respectively. 

Policy  approach  3  –  The  Commission’s  right  to  oblige  Member  States  for 
mandatory  distribution  of  strategic  reserves  +  Oblige  companies  to  ramp  up 
production  +  Oblige  Member  States  to  speed  up  permitting  procedures  +  Oblige 

110 Impact  Assessment of  the  SMIT proposal, SWD(2017)217. The European Commission  withdrew this 
legislative proposal on 29 September 2020. 

126 

 
 
 
 
                                                           
companies to accept priority-rated orders + Issue mandatory information requests 
to economic operators 
All the obligatory measures under this approach would be subject to individual activation 
via Commission implementing acts,  thus  giving the Member States  the full  control and 
providing the subsidiarity check. 
The  benefits  for  this  approach  are  significantly  higher  than  those  of  approach  2  as  it 
would provide a very strong and effective toolbox to ensure availability of crisis-relevant 
goods. 
The costs associated with approach 3 are higher given that Member States and economic 
to 
operators  are  subject 
recommendations that may or may not be followed. These costs will depend strongly on 
the nature of the crisis. 

to  mandatory  requirements 

instead  of  being  subject 

Stakeholders’ views 
A  number  of  Member  States  have  voiced  concern  about  including  in  the  scope  of  the 
initiative  of  measures  to  address  difficulties  in  supply  chains,  also  drawing  attention  to 
the need to follow strictly the principles of necessity and proportionality of measures and 
to avoid the related administrative burden. On the other hand, MS such as PL, RO, EL, 
AT,  LU  have  spoken  in  favour  of  addressing  crisis  preparedness  and  supply  chains 
disruptions.  

Respondents to the public consultation considered that ramping up  production capacity, 
e.g.  by  repurposing  or  extending  existing  production  lines  on  a  voluntary  basis  was 
efficient  (13  out  of  17  respondents),  whereas  doing  so  on  mandatary  basis  with 
government support less so (5 out 17 respondents). Targeted and coordinated distribution 
of products  relevant  for  a certain  type of crisis  was  considered efficient by 6 out  of 17 
respondents.  Obligation  on  undertakings  to  accept  and  prioritise  orders  of  goods  and 
services  relevant  to  a  crisis  in  order  to  enhance  their  availability  during  a  crisis  was 
considered  efficient  by  3  out  of  16  respondents.  Business  stakeholders  did  not  support 
mandatory  ramping  up  of  production  (BusinessEurope,  ERT)  and  considered  that 
recommendations would be sufficient (Eurochambres), stressing that businesses are best 
placed to manage their own supply chains (ERT, VDMA). In the stakeholder workshop, 
recommendations gathered more support than obligatory solutions, with recommendation 
to  businesses  to  ramp  up  production  capacity  of  crisis-relevant  products  was  supported 
by 73% and recommendation to businesses to prioritise orders of crisis-relevant products 
by 63% gathering particular support.  

Most  Member  States  agree  in  their  replies  to  the  Member  States  questionnaire  that  in 
light  of  future  crisis,  tools  that  allow  to  increase  the  availability  of  non-medical  goods 
and  critical  raw  materials  (speeding  up  permitting  procedure,  targeted  mandatory 
information  requests  to  businesses  on  their  stocks  and  production  capacities,  priority 
rated orders) should be taken. They acknowledge that in most cases, national authorities 
are best prepared to take such measures. 

They  also  point  out  in  their  replies  to  the  Member  States  questionnaire  that  the  private 
sector  could  be  further  involved  in  management  of  stockpiles  and  the  continuity  of 
supply  chain.  Supply  chain-wise,  the  private  sector  should  have  the  capacity  to  switch 
production  from  their  day-to-day  items  to  key  items  in  times  of  crisis.  Meanwhile,  the 
public  sector  would  continue  the  coordination  efforts,  knowing  they  can  rely  on  the 
private  sector.  The  public  sector  may  need  to  finance  the  additional  capacities  of  the 
private sector. 

127 

 
 
 
 
 
In the public consultation, respondents were supportive of targeted information requests 
from industry in order to manage crisis, on issues such as information regarding current 
primary  disruptions  (17  out  of  20  respondents  said  yes  and  2  said  maybe),  production 
capacities (9 said yes, 9 maybe) and existing stocks of goods (9 said yes, 10 said maybe). 
Business  stakeholders  however  called  for  the  information  to  be  disclosed  on  voluntary 
basis and insisted that industry should not be burdened by excessive requirements, with 
BusinessEurope,  ERT,  Europen  and  others  objecting  to  disclosure  of  business 
confidential  information,  and  even  stronger  in  the  context  of  monitoring.  In  the 
stakeholder  workshop,  in  terms  of  obtaining  information  from  businesses,  participants 
were  in  favour  to  encourage  voluntary  sharing  (75%).  Member  States  questioned  the 
inclusion of mandatory information requests and drew attention to the need to respect the 
principles  of  necessity  and  proportionality  (letter  of  nine  Member  States)  and  due 
consideration  of  possible  administrative  burdens  on  businesses,  also  stressing  that 
information requests should not be mandatory (DE, PL, BG). 

Conclusion 
All three policy approaches are retained for further analysis. 

The  policy  approach  1  is  based  on  guidance  and  recommendations.  While  this  could 
result  in  some  improved  availability  of  crisis-relevant  products,  it  would  not  lead  to 
direct action and would not guarantee the necessary coordination.  

Under  policy  approach  2,  the  Member  States  would  be  empowered  by  means  of 
legislation  to  oblige  the  economic  operators  to  ramp  up  their  production  capacity  of 
the  crisis.  There  would  also  be  a  number  of 
crisis-relevant  products  during 
recommendations  to  the  Member  States.  This  option  would  provide  an  incentive  for 
Member States to act and would give them some means to ensure availability of crisis-
relevant  products,  but  would  not  significantly  enhance  their  possibility  of  action  and 
would not assure coordinated crisis response at the EU level.  In terms of data requests, 
the  required  coordination  between  the  national  level  authorities  and  the  Commission 
would  also  take  time  and  might  therefore  not  make  the  information  available  to  all the 
Member States in a speedy manner. 

Policy approach 3 offers the strongest toolbox for direct action and provides for such a 
toolbox  at  the  EU  level.  This  approach  is  expected  to  provide  the  strongest  means  of 
direct action in the last resort situation and would be most effective in terms of ensuring 
the  availability  of  crisis-relevant  products  in  the  times  of  crisis  that  requires  quick  and 
efficient  response.  In  terms  of  information  requests,  this  approach  would  provide  for  a 
quick  and  timely  solution,  but  requires  the  cooperation  of  the  Member  States  in 
identifying  the  relevant  companies  that  are  affected  by  crisis-relevant  supply  chain 
disruptions.  Policy  approach  3  however  may  raise  potential  concerns  as  to  the 
subsidiarity of the proposed measures. 

128 

 
 
 
 
 
 
ANNEX 7: SME TEST 

The initiative is considered as relevant for SMEs.  

Step 1/4: Identification of affected businesses 

With  regards  to  the  main  affected  businesses,  to  the  extent  that  the  instrument  will 
improve the overall EU crisis response, all businesses and SMEs will benefit. 

In  particular  for  what  concerns  the  measures  on  key  principles  for  free  movement  and 
supporting measures, as well as transparency and administrative assistance, the benefits 
of  these  measures  will  apply  widely  to  all  companies  operating  across  borders  on  the 
Single Market, as well as their customers and suppliers, as these measures will improve 
the  flow  of  goods,  services  and  persons  and  legal  clarity  and  predictability  associated 
with the possible restrictions of free movement. Many of such businesses are SMEs. 

For  measures  in  building  blocks  6-8,  i.e.  placing  the  products  on  the  market  during 
emergency,  public  procurement  during  emergency,  and  measures  on  supply  chains 
during emergency, the measures in these building blocks will affect more specifically the 
businesses involved in the relevant sectors and supply chains, i.e. producing and trading 
of  crisis-relevant  products  and  services.  The  specific  sectors  concerned  will  depend  on 
the nature of the crisis. 

Key question:  

To  what  extent  is  the  initiative  relevant  for  SMEs?  (not  relevant,  relevant,  highly 
relevant) 

This  initiative  is  considered  relevant  for  SMEs  as  they  represent  99%  of  all  EU 
companies. The initiative was considered as relevant for SMEs by the SME Filter. 

Step 2/4: Consultation of SME Stakeholders 

Individual  SMEs  did  not  submit  specific  observations  in  the  context  of  the  public 
consultation  questionnaire. Business organisations  representing SMEs, and in  particular 
SMEUnited, participated in the stakeholder workshop on 6 May 2022. SMEUnited also 
submitted  a  position  paper,  in  which  it  expressed  support  for  the  initiative  and  in 
particular for measures such as EU and national single points of information, facilitation 
of free movement of workers, acceleration of conformity assessment procedures during 
crises, as well as preventative measures such as a monitoring system to anticipate future 
shortages and a possibility to oblige companies to prioritise orders in times of crisis. 

The  planned  initiative  was  presented  and  discussed  during  a  meeting  with  SME 
associations (in the context of a Small Business Act follow-up meeting) on 11 May 2022. 
SMEs aspects were also discussed in the meeting with the SME Envoy Network on 20 
May  2022  were  also  observers  such  us  business  organisations  representing  SMEs 
participated. The  general comments  expressed in that discussion included a call for the 
initiative to be focused on the functioning of the Single Market, notably free movement, 
rather  than  looking  at  preparedness  elements.  In  particular  for  stockpiling,  the  costs  on 
businesses  have  to  be  analysed.  For  notifications,  there  was  a  call  to  use  the  existing 
structures such as TRIS for disseminating information to businesses and citizens. 

129 

 
 
 
 
 
 
 
Step 3/4: Assessment of the impact on SMEs 

As all companies, SMEs will benefit from the overall better EU-level crisis response due 
to less obstacles to free movement and better availability of crisis-relevant products. 

Under Policy Option 1, SMEs are likely to be specifically affected by the measures under 
building  blocks  3-8.  SMEs  will  benefit  from  promotion  of  match-making  (block  3). 
SMEs  are  particularly  affected  by  the  obstacles  to  the  free  movement  and  the  lack  of 
transparency  of  measures  as  their  activities  could  be  easily  disrupted  by  restrictions 
especially  in  cross-border  regions.  Therefore  the  positive  impacts  of  easing  free 
movement  (block  4)  are  expected  to  be  especially  pronounced  for  SMEs.  They  will 
particularly  benefit  from  better  transparency  (block  5).  SMEs  will  benefit  from  the 
possibility  to  place  products  faster  on  the  market  (block  6).  Finally,  SMEs  may  be 
somewhat affected by the joint procurement, however the precise effect is impossible to 
predict as it will depend on the nature of the crisis. Nevertheless it is possible that due to 
the larger overall size of tenders, SMEs may have less opportunities to win such a tender 
(block  7).  Under  Policy  Option  1,  it  is  not  expected  that  SMEs  would  be  impacted  by 
voluntary  measures  such  as  information  requests  or  stockpiling  or  prioritising  orders 
(block  8)  as  companies  will  be  able  to  decide  on  their  own  if  they  are  willing  to 
participate  in  these  measures.  Under  this  Policy  Option  2,  SMEs  could  be  additionally 
affected  by  some  of  obligatory  measures  in  block  8.  In  particular  certain  SMEs  in  key 
sectors for the crisis  response could  be  affected  by the mandatory information  requests 
and by the obligation to ramp up their production capacity. For SMEs it could be easier 
to  constitute  data  on  production  capacity  and  supply  disruption  in  the  case  of  an  SME 
due  to  its  size  but  at  the  same  time  SMEs  have  less  resources  and  more  limited 
capabilities to deal with such information requests. The obligation to ramp up production 
capacity with appropriate financial support from Member States could be net beneficial 
for SMEs in question. Under Policy Option 3, the effects (positive and negative) could be 
even more important for SMEs than for all companies. In particular, priority-rated orders 
could impact the whole production capacity of SMEs, whereas for larger companies they 
may represent only a fraction of their production as they may have diversified production 
portfolio. Speeding up permitting could be decisive for economic success of an SME in a 
crisis situation. Distribution of strategic reserves could also be of a very high benefit to 
the SMEs that would be concerned and their customers and suppliers. Like under Policy 
Option  2,  for  mandatory  information  requests,  it  could  be  easier  to  collect  the  data  on 
production  capacity  for  an  SME  due  to  its  smaller  size,  however  SMEs  may  have  less 
resources  and  more  limited  capabilities  to  deal  with  such  requests.  The  obligation  to 
ramp  up  production  capacity  with  appropriate  financial  support  from  Member  States 
could be net beneficial for SMEs in question.  

Overall, no costs for SMEs are therefore expected under Policy Option 1. SMEs could be 
particularly  negatively  affected  by  the  mandatory  information  requests  under  PO2  and 
PO3.  SMEs  could  particularly  benefit  from  the  obligation  to  ramp  up  production  with 
appropriate  financial  support  under  PO2  and  PO3.  SMEs  could  further  benefit  from 
measures to speed up permitting and from priority-rated orders under PO3. 

130 

 
 
 
 
 
 
 
Step 4/4: Minimising negative impacts on SMEs 

Some measures have been considered to mitigate the impacts on SMEs. These are:  

  For  measures  likely  to  lead  to  strong  impacts  and  potential  costs  for  SMEs,  in 
particular  measures  under  block  8  such  as  mandatory  information  requests, 
requests  to  ramp  up  production  and  to  accept  priority-rated  orders,  during  the 
additional  activation  of  such  measures  specific  analysis  and  assessment  will  be 
done as to  their impact  and  proportionality, in  particular their impact  on SMEs, 
by  the  Commission  in  consultation  with  the  governance  body.  This  assessment 
will be part of the process of additional activation of these specific measures by a 
Commission  implementing  act  (additional  to  the  overall  triggering  of  the 
emergency mode). 

  When  designing  the  tools  to  be  used  for  retrieving  information  requests  from 
companies, particular attention will be paid to make them easy to operate, thereby 
reducing costs, in particular for SMEs. 

  Depending on the nature of the crisis  and the concerned strategic supply chains 
and crisis-relevant products, specific accommodations will be provided for SMEs. 
While it is not possible to except microenterprises completely from the scope of 
measures such as mandatory information requests, as these enterprises may have 
specific  unique  know-how  or  patents  of  critical  importance  in  a  crisis,  specific 
accommodations  will  include  simplified  survey  designs,  less  onerous  reporting 
requirements, and longer deadlines for responses, to the extent possible in view of 
the need for urgency in the context of a specific crisis. 

131 

 
 
 
 
  
 
 
ANNEX 8: OVERVIEW OF RESILIENCE MEASURES OF KEY INTERNATIONAL PARTNERS 

This annex provides an overview of resilience measures taken by our key international partners for comparison and reference. It 
does not prejudge our possible assessment of these measures in terms of their compliance with WTO rules. 

Table of Resilience Measures 

1.  Early Warning System: Market and Supply Chain Monitoring, In-depth Analysis 
2.  Collection of Key Supply Chain Information from Member States and Industry 
3.  Funding/Subsidies, Tax Incentives, Support to Investments, R&D etc., in Specific Sectors/Values Chains 
4.  Public Procurement Measures Used in Support of Domestic Production Capacities, Resilience, and Security of Supply, etc. 
5.  Stockpiling of Critical Inputs 
6.  Prioritisation of Supplies of Goods and Services 
7.  Trade Policy measures such as Tariffs, Export Restriction, Anti-coercion Measures 
8.  Specific measures for Critical Raw Materials 
9.  Specific Measures for Semiconductors 
Included Countries: US, UK, Japan, China, Singapore, Korea, India, Australia 

132 

 
 
 
 
 
 
 
 
Early warning system: market and supply chain monitoring, in-depth analysis (strategic 
dependencies, industrial capacities, etc.) 

▪  US:  Executive  Order  14017  ‘America’s  Supply  Chains’:  100-days  in-depth  reviews  of  industrial  bases  in  4  sectors: 
semiconductors, high-capacity batteries, including for electric vehicles; critical and strategic minerals, including rare earths; and (4) 
pharmaceuticals and their active ingredients. Results and recommendations to ensure resilient supply chains will be published June 
2021 and February 2022.  

▪  US: Supply Chain Disruption Task Force coordinating inter-agency process on supply chain issues.  

▪  Korea: Korea has an early warning system in place to monitor 20 key raw materials to ensure stable supplies.  

▪  The  Quad  (US,  Australia,  India,  and  Japan)  has  set  up  a  Critical  and  Emerging  Technology  Working  Group  to  monitor  and 

improve the security of supply chains for critical technologies. 

▪  Japan: Economic Security Promotion Act (ESPA) will select “designated critical commodities” and will publish policy papers on 
ensuring  their  steady  supply  chains  that  will  analyse  potential  bottlenecks,  required  measures  and  actions  by  public  and  private 
sectors with deadlines, funding, etc. 

▪  Singapore:  Singapore  has  established  a  Future  Economy  Planning  Office  (FEPO)  within  its  Ministry  of  Trade  and  Industry 

(MTI). FEPO’s key roles include develop industry transformation maps (ITMs), to secure Singapore’s economy resilience.  

▪  Singapore: Within Singapore’s Prime Minister Office resides the Centre for Strategic Futures (CFS). CSF is a foresight department 
whose mission is to position the Singapore government to navigate emerging strategic challenges and harness potential opportunities. 
Latest publication: the Driving Forces Card. 

▪  UK: Department of International Trade established a Global Supply Chains Directorate in April 2020 to strengthen resilience across 
critical global supply chains. The directorate will prioritise by criticality the UK’s supply chains, assess vulnerability and agree on the 
maturity of the UK’s response. 

▪  Australia: In 2021, The Australian government created the Office of Supply Chain Resilience under the Prime Minister dedicated to 

monitor Australian supply chains’ resilience.  

133 

 
 
 
 
 
 
 
 
 
 
▪  Australia and the UK set up a joint Australia-UK supply chain resilience capability building initiative with the goal of increasing 

shared understanding and insight about common dependencies and critical supply chain risks.  

Collection of key supply chain information from industry 

▪  US: The Defense Production Act (DPA) allows the US government to obtain information from businesses, including information 

needed for industry studies. 

▪  US:  Subpoena  power  of  the  Federal  Trade  Commission  enables  the  consumer  protection  agency  to  have  authority  to  order 
companies to turn over information for research purposes, a power it has used to study the privacy practices of broadband providers 
and start-up acquisitions by the five U.S. tech giants, among other areas. 

▪  Japan:  Under  ESPA  Business  operators  (including  foreign)  engaged  in  the  production,  import  or  sale  of  “designated  critical 
commodities” may be required to report data on the production, import, sale, procurement or storage of such commodities or related 
raw materials, and may be subject to on-site inspections. 

▪  Australia:  The  Security  of  Critical  Infrastructure  Act  2018  creates  a  register  for  Critical  Infrastructure  Assets  to  build  a  clearer 
picture of critical assets ownership. The Act also empowers the Department of Home Affairs to obtain detailed information on critical 
assets, notably in the case of cyberattacks. 

Funding/subsidies, tax incentives, support to investments, R&D etc., in specific sectors/values 
chains 
▪  US: Energy Storage and Tax Incentive and Deployment Act creates investment tax credit for energy storage. US  Innovation and 
Competition Act: $250 billion supply chain resiliency and crisis response program (to be adapted and passed in first half of 2022).  

▪  US:  Investment  and  Infrastructure  Jobs  Act  makes  available  $1.2  trillion  investment  in  transport,  power  and  broadband 

infrastructure with domestic preference requirements (Buy America) attached. 

134 

 
 
 
 
 
 
 
▪  US:  The  Export-Import  Bank  offers  medium-  and  long-term  loans  and  loan  guarantees  available  for  "export-oriented  domestic 
manufacturing  projects,"  with  a  particular  focus  on  sectors  such  as  semiconductors,  biotech  and  biomedical  products,  renewable 
energy, and energy storage.  

▪  Japan:  State-owned  Japan  Oil,  Gas  and  Metals  National  Corporation  (JOGMEC)  supports  exploration  and  technological 
development  by  Japanese  companies  through  equity  capital  and  liability  guarantees.  Investment  by  JOGMEC  in  rare  earth  overseas 
projects involving Japanese companies to diversify supply. Its purpose, scope, structure, and obligations are defined in the JOGMEC 
ACT. 

▪  Japan:  Under  the  planned  revision  of  JOGMEC  ACT  to  be  submitted  to  the  Diet  JOGMEC  is  to  strengthen  financial  support  for 

Japanese businesses’ rare earths exploration and refining operations111.  

▪  Japan: Under ESPA, specific companies supplying designated critical commodities can receive a variety of public support tailored to 
their  needs,  including  financial  and  fiscal  support  (e.g.,  subsidies)  over  medium  to  long  term.  Moreover,  critical  commodities 
designated as special goods will receive additional public support. 

▪  Japan: Under ESPA, the government will designate critical technologies that will be eligible for public support for R&D, notably in 

space science, marine science, quantum science and AI.  

▪  Supply  Chain  Resilience  Initiative  by  Australia,  India,  and  Japan  to  cooperate  on  supply  chain  resilience  in  the  Indo-Pacific 
region. Cooperation consists of sharing of best practices on supply chain resilience; and holding an investment promotion/buyer-seller 
matching event.  

▪  Australia:  Australia’s Supply Chain  Resilience  Initiative provides businesses up to  $2 million to establish or scale a manufacturing 
capability  or  a  related  activity  to  address  supply  chain  vulnerabilities  for  a  critical  product  or  input  identified  in  the  Sovereign 
Manufacturing  Capability  Plan.  The  main  new  policy  tool  established  in  September  2021  is  the  SCRI  grant  (AUD  50  million)  to 

111 The revised legislation is reported to: i) increase the ceiling of JOGMEC's loan and investment ratio by expanding government’s support though JOGMEC from the current level of 50% to 75% of 
investment in projects; ii) allow JOGMEC to invest in or grant debt guarantees to domestic Japanese mineral-refining operations (at present JOGMEC can only support refining operations overseas, in 
practice in China); iii) allow JOGMEC to actively support overseas mining and projects involving Japanese companies (risk money support). 

135 

 
 
 
 
                                                           
 
improve access to critical products in times of crisis. 

▪  Korea: ‘Korean New Deal’ on investment in digital infrastructure with tax rebates for R&D and for facility investment.  

▪  China: Significant amounts of state aid in strategic sectors – consumer subsidies and rebates, exemption from sales tax, expert support 
on  R&D  and  public  procurement  are  some  examples  of  advantages  received  by  New  Energy  Vehicle  manufacturers  over  the  past 
decade (estimated at more than USD 100 billion). 

▪  Singapore:  Singapore’s  research priorities and funding have been detailed in  the Research  Innovation Entrepreneurship Programme 
(RIE2025).  RIE2025  gives  priority  to  health,  sustainability,  digital  economy,  advanced  manufacturing,  and  security.  RIE  strategies 
respond to new technological and societal driving force.  

▪  Singapore: In February 2021, Singapore has announced the establishment of the Southeast Asia Manufacturing Alliances (SMA) a 
tripartite  alliance  (public-private)  to  secure  supply  chain  resilience  in  the  region.  Grants  up  to  S$  1,  5  million  are  provided  by  the 
Economic  Development  Board  of  Singapore  (The  Ministry  of  Trade  and  Industry’s  economic  development  body),  while  Enterprise 
Singapore  (government  agency  for  business  development)  provides  matching  events  and  platform.  A  network  of  private  sector 
“Strategic Partners” offer preferential services (reduced costs on leasing and logistics) for businesses that join the Alliance.  

Public Procurement Measures Used in Support of Domestic Production Capacities, Resilience, 
and Security of Supply, etc. 
▪  US:  Buy  America  -  The  Infrastructure  Investment  and  Jobs  Act  (IIJA),  enacted  in  November  2021,  extended  the  “Buy  America” 
requirements to all federally funded infrastructure projects. All iron, steel, manufactured products, and construction material need to be 
produced in the United States. A product is considered to be manufactured in the US if 55% of its components are US-made. 

▪  US: ‘Buy American’ rules for procurement not covered under the WTO Agreement on Government Procurement. The rules apply to 
all U.S. federal government agency purchases or federally financed purchases of goods valued over the micro-purchase threshold (US$ 
10 000). To be considered as being produced in the U.S., goods must be manufactured in the U.S. and at least 55% of the cost of their 
components must come from the U.S. Waivers can be granted for the public interest, non-availability or if the cost of U.S. products is 
unreasonable compared to equivalent foreign products. IT and “Commercial off-the-shelf” products are exempt. It remains to be seen 
how this will affect the US’ international commitments under the Government Procurement Agreement (GPA).  

136 

 
 
 
 
 
  
▪  China: China applies Buy National policy, with a few exceptions. Under its Government Procurement Law, it applies de jure market 
access barriers, including “buy national policy” and “indigenous innovation,” which give preferential treatment to goods and services 
developed locally. In theory, foreign-invested companies in China are to be treated like domestic companies, but in practice domestic 
companies  are  preferred.  For  example,  the  2006  Medium  and  Long  Term  National  Plan  for  Science  and  Technology  Development 
directs  government  agencies  to  buy  products  listed  in  certain  procurement  catalogues,  which  include  only  qualified  indigenous 
innovation products (with few exceptions).  

▪  Japan:  Under  ESPA,  the  government  will  designate  critical,  core  and  sensitive  infrastructures  in  14  sectors  including  aviation, 
railways,  gas,  oil  etc.  The  government  will  have  the  right  to  pre-screen  any  projects  in  those  sectors,  recommend  remedies  and 
potentially order operators to change suppliers or abandon transactions.  

▪ 

India: India’s 2017 “Preference to Make in India” Order gives preference to local production of goods and services for a wide range of 
products within public procurement markets. The Order introduces classes suppliers (Class I, II and non-local suppliers) in function of 
how much local content those suppliers use (above 50%, 50%> and 20%> respectively). Sensitive sectors such as railways or defence 
require the supplier to be Class I or II for a bid to be eligible. Greatest procurement priority is allocated to tender submissions with the 
highest percentage of local content and the government may mandate technology transfers.  

Stockpiling of Critical Inputs 

▪  US: The U.S. Department of Energy (DOE), Department of Defense (DoD), and Department of State (DOS) signed a memorandum of 
agreement (MOA) that sets the foundation for a critical minerals stockpile to support the U.S. transition to clean energy and national 
security needs. DoD, which manages the National Defense Stockpile (NDS), currently stockpiles critical minerals for national security 
purposes. The MOA creates a new, interagency process for stockpiling minerals that enable vital clean energy technologies. 

▪  Japan:  JOGMEC  operates  a  national  stockpiling  system  of  rare  metals  to  secure  long-term  raw  materials  supply.  Stockpiles  are 
sufficient to meet 60 to 180 days’ demand. In addition, under the planned Mining Act to be adopted by the Diet, Japan is to restrict 
access to rare-earth resources in Japan’s exclusive economic zone (offshore deposits).  

137 

 
 
 
 
 
 
 
 
 
▪  Korea: State owned Korea Resources Corporation runs a stockpile storage system for rare metals.  

▪  China: it is estimated that China stockpiles 1.5 million to 2 million tons of copper, 800,000-900,000 tons of aluminium, and 250,000-

400,000 tons of zinc. China is also believed to have around 7,000 tons of cobalt, a key metal used in battery manufacturing.  

▪  Singapore: Particularly in the field of food, the government can use its discretionary power to ensure a minimum quantity of private 
stockpiles,  which  need  to  be  maintained  for  a  stipulated  period  of  time  (such  as  the  Rice  Stockpile  Scheme).  Seen  its  exposure  to 
Malaysia and Indonesia imports, Singapore has stockpiles of food to prevent crisis. The presence of the stockpiles is known but not the 
actual numbers to affect their negotiation with overseas suppliers. 

o  UK:  The  UK  is  creating  strategic  reserves  of  water  treatment  chemicals:  monitoring  stockpiles  of  chemicals  and  exploring 

stockpile requirements  

▪  Australia: Australia maintains a National Medicine Stockpile storing medications, vaccines, antidotes and PPE to be used in case of 

supply chain disruptions in the health sector. 

Prioritisation of Supplies of Goods and Services 

▪  US: The Defense Production Act gives the US President the authority to expedite and expand the supply of materials and services 

from the U.S. industrial base needed to promote the national defence. DPA authorities may be used to: 
-  Require acceptance and preferential performance of contracts and orders. 

-  Provide financial incentives and assistance for U.S. industry to expand productive capacity and supply needed for national defence 

purposes. 

-  Provide  antitrust  protection  for  businesses  to  cooperate  in  planning  and  operations  for  national  defence  purposes,  including 

homeland security. 

-  The DPA provides authority to obtain information from businesses, including information needed for industry studies. 

-  US will establish a DPA Program to provide loans, grants, and other financing to build and expand the health resources industrial 

138 

 
 
 
 
 
 
 
 
base. 

▪  China: Dual Circulation Strategy is a new paradigm being rolled out since summer 2020. It calls for relying principally on China’s 
large domestic market  and leveraging/building its strengths,  including  comprehensive  and deep supply  chains.  Economic  exchanges 
with the rest of the world are also encouraged, not discouraged, but ‘domestic circulation’ must be able to function autonomously in 
case of problems with foreign supplies. 

  UK: Via UK Make, the UK is encouraging development of domestic production capacities for PPE within the health sector. 

Trade & Investment Measures such as Tariffs, Export Restriction, Anti-coercion Measures 

▪  US:  “Section  232  investigations”  can  lead  to  the  imposition  of  tariffs  on  third  country  imports  and  serve  also  to  collect  market 

information from companies and stakeholders. 

▪  US: The DPA sets up the Committee on Foreign Investment in the United States (CIFUS). CIFUS can review foreign investments 
and real estate transactions by foreign persons in the US in case those investments could present a risk to national security. CIFUS x-
can  impose  conditions  on  the  acquisitions  or  refer  the  case  to  the  President  for  decision.  Australia,  Canada,  NZ  and  the  UK  are 
exempted from review by CIFUS but the EU is not.  

▪  Korea: Promotion of tech acquisition through overseas M&A for areas where it is difficult to secure “core tech” among essential 
items in domestic value chain. Acquisition funds of EUR 2 billion + advisory, consulting, and follow-up integrated management.  

▪  China: Export Control Law is a comprehensive framework for restricting exports of military and dual-use products and technology 
for national security and public policy reasons. Exports and transfers of products, technology, and services are subject to licensing 
requirements  and  may  be  prohibited  based  on  the  product  features,  end-users,  destinations,  or  end-uses.  The  law  also  permits  the 
imposition of temporary export controls on non-listed goods, services, and technology up to two-years. Since January 2022, the list of 
products subject to export control also includes all rare earth metals. 

▪  UK: The UK passed in 2021 the National Security and Investment Act (NSIA). NSIA sets up a FDI screening regime with mandatory 
notifications  to  the  government  for  acquisitions  in  17  “most  sensitive”  economic  sectors,  including  defence,  communications  and 
energy. The government can review and potentially block acquisitions if they risk undermining the UK’s national security.  

139 

 
 
 
 
 
 
▪  Australia:  Reforms  to  the  Foreign  Investment  Review  Board  (FIRB)  in  2020  introduced  a  mandatory  notification  procedure  for 
acquisitions  connected  to  “national  security  business”  or  “national  security  land”  or  linked  to  critical  infrastructure.  Critical 
infrastructure cover 15 sectors including electricity, gas, water, port, healthcare and cloud among others. The government can order 
divestment or prohibit the acquisition if it finds that it could present risks to national security.  

▪  US:  Export  Control  Reform  Act  allows  the  US  government  to  enact  controls  on  exports,  re-exports  and  transfers  of  emerging  and 
foundational  technologies  if  they  could  be  used  to  threaten  the  national  security  of  the  US  or  if  they  give  a  qualitative  military  or 
intelligence advantage to the US. 14 emerging technologies are identified, including biotech, AI and semiconductors 

Specific Measures for Critical Raw Materials 

▪  Korea: has an early warning system in place to monitor 20 key raw materials to ensure stable supplies.  

▪  US: Executive Order ‘America’s Supply Chains’: in-depth reviews of industrial bases. The reviews include requests for comments 

with detailed questionnaires, as well as recommendations for strengthening resilience.  

▪  US: ‘section 232 investigations’ serves to collect market information from companies and stakeholders. The Trump Administration 
launched two investigations, on aluminium and steel, which conclusions led to tariff hikes of 10 and 25% respectively. More recent 
investigations on vanadium and titanium sponges have not led to actions yet.  

▪  US:  Executive  Orders  13817  (A  Federal  Strategy  To  Ensure  Secure  and  Reliable  Supplies  of  Critical  Minerals)  and  13953 
(Addressing the Threat to the Domestic Supply Chain From Reliance on Critical Minerals From Foreign Adversaries and Supporting 
the Domestic Mining and Processing Industries). EO13817 launched an in-depth review of critical minerals supply chains necessary 
for the US economy and national defence and looked into expanding mining production in the US. EO13953 charged the Secretary of 
the Interior to produce every 180 days a report on critical minerals supplies and potential risks from foreign powers.  

▪  Japan:  JOGMEC  supports  exploration  and  technological  development  by  Japanese  companies  through  equity  capital  and  liability 
guarantees.  Investment  by  JOGMEC  in  rare  earth  overseas  projects  involving  Japanese  companies  to  diversify  supply.  Its  purpose, 
scope, structure, and obligations are defined in the JOGMEC ACT. 

▪  Japan:  Under  the  planned  revision  of  JOGMEC  ACT  to  be  submitted  to  the  Diet  JOGMEC  is  to  strengthen  financial  support  for 

140 

 
 
 
 
 
Japanese businesses’ rare earths exploration and refining operations112.  

▪  Japan:  JOGMEC  operates  a  national  stockpiling  system  of  rare  metals  to  secure  long-term  raw  materials  supply.  Stockpiles  are 
sufficient to meet 60 to 180 days’ demand. In addition, under the planned Mining Act to be adopted by the Diet, Japan is to restrict 
access to rare-earth resources in Japan’s exclusive economic zone (offshore deposits).  

▪  Korea: State owned Korea Resources Corporation runs a stockpile storage system for rare metals.  

▪  China: big state-owned enterprises are encouraged to take a leading role in their sectors, to ensure market stability, compliance with 
government directives and maximum benefit for China. The government actively supports consolidation into few powerful companies, 
often also state-owned. 

▪  The  UK  and  Australia:  The  two  countries  have  set  up  Working  Group  on  critical  minerals  in  2021.  Australia  and  the  UK  are 
continuing to identify investment opportunities that would bolster Australia’s critical minerals sector and the UK’s manufacturing and 
energy ambitions.  

▪  UK: Plans to adopt the Critical Minerals Strategy later this year to set out steps to ensure the UK’s long-term security of supply 
for critical minerals. It will help create the conditions needed to grow this vital sector and set out how the UK aims to work with other 
countries to create international standards and ensure supply chains are robust.  

▪  UK: The UK also plans to establish the Critical Minerals Intelligence Centre, which will provide ongoing intelligence on the supply 

of and demand for critical minerals. 

112 The revised legislation is reported to: i) increase the ceiling of JOGMEC's loan and investment ratio by expanding government’s support though JOGMEC from the current level of 50% to 75% of 
investment in projects; ii) allow JOGMEC to invest in or grant debt guarantees to domestic Japanese mineral-refining operations (at present JOGMEC can only support refining operations overseas, in 
practice in China); iii) allow JOGMEC to actively support overseas mining and projects involving Japanese companies (risk money support). 

141 

 
 
 
 
 
 
                                                           
 
Specific Measures for Semiconductors 

▪  US: Chips Act to include a $52 billion budget directed towards domestic semiconductor research, design, and manufacturing. House 

and Senate are currently trying to agree on a common bill, which is supposed to be adopted before the summer. 

▪  US: The  Facilitating American-Built Semiconductors (FABS) Act,  still under discussion is  to  provide semiconductor investment 

tax credits. The bill has not been adopted yet. 

▪  Japan:  Specific  subsidies  have  been  proposed  in  ESPA,  targeted  at  the  semiconductors  sector  to  support  domestic  production.  A 
package worth approx. JPY 800 billion (EUR 6.15 billion) to support the domestic semiconductor industry, with the highlight being the 
construction of the Taiwan Semiconductor Manufacturing Co. (TSMC) chip plant in Kumamoto Prefecture 

▪  Korea: Korean tax incentives and subsidies to chipmakers to encourage them to spend a combined about EUR 379 billion by 2030 

to facilitate Korea becoming a global powerhouse in memory and non-memory chips.  

▪  China: Tax breaks, cheaper utility rates, low-interest loans, free or discounted land for chipmakers to meet higher technical standards 
and to advance technology and to incentivize reshoring and development of local capacity (foreign invested companies are also eligible 
for these breaks).  

142 

 
 
 
 
 
 
 
 
List of Acronyms 

DPA: Defense Production Act, US  
EBA: European Battery Alliance, EU  
ERMA: European Raw Materials Alliance, EU  
ESPA: Economic Security Promotion Act, Japan  
FABS: Facilitating American-Built Semiconductors Act, US 
FEPO: Future Economy Planning Office, Singapore  
FIRB: Foreign Investment Review Board, Australia 
GPA: Government Procurement Agreement – Multilateral Agreement  
IIJA: Infrastructure Investment and Jobs Act, US 
IPCEI: Important Project of Common European Interest, EU  
IPI: International Procurement Instrument, EU 
JOGMEC: State owned Japan Oil, Gas and Metals National Corporation, Japan 
NDICI – Global Europe: Neighbourhood, Development, and International Cooperation Instrument - Global Europe, EU 
NDS: National Defense Stockpile, US  
NSIA: National Security Investment Act, UK  

143 

 
 
 
 
 
 
Trade & Investment Measures such as Tariffs, Export Restriction, Anti-coercion Measures 

▪  US:  “Section  232  investigations”  can  lead  to  the  imposition  of  tariffs  on  third  country  imports  and  serve  also  to  collect  market 

information from companies and stakeholders. 

▪  US: The DPA sets up the Committee on Foreign Investment in the United States (CIFUS). CIFUS can review foreign investments 
and real estate transactions by foreign persons in the US in case those investments could present a risk to national security. CIFUS x-
can  impose  conditions  on  the  acquisitions  or  refer  the  case  to  the  President  for  decision.  Australia,  Canada,  NZ  and  the  UK  are 
exempted from review by CIFUS but the EU is not.  

▪  Korea: Promotion of tech acquisition through overseas M&A for areas where it is difficult to secure “core tech” among essential 
items in domestic value chain. Acquisition funds of EUR 2 billion + advisory, consulting, and follow-up integrated management.  

▪  China: Export Control Law is a comprehensive framework for restricting exports of military and dual-use products and technology 
for national security and public policy reasons. Exports and transfers of products, technology, and services are subject to licensing 
requirements  and  may  be  prohibited  based  on  the  product  features,  end-users,  destinations,  or  end-uses.  The  law  also  permits  the 
imposition of temporary export controls on non-listed goods, services, and technology up to two-years. Since January 2022, the list of 
products subject to export control also includes all rare earth metals. 

▪  UK: The UK passed in 2021 the National Security and Investment Act (NSIA). NSIA sets up a FDI screening regime with mandatory 
notifications  to  the  government  for  acquisitions  in  17  “most  sensitive”  economic  sectors,  including  defence,  communications  and 
energy. The government can review and potentially block acquisitions if they risk undermining the UK’s national security.  

▪  Australia:  Reforms  to  the  Foreign  Investment  Review  Board  (FIRB)  in  2020  introduced  a  mandatory  notification  procedure  for 
acquisitions  connected  to  “national  security  business”  or  “national  security  land”  or  linked  to  critical  infrastructure.  Critical 
infrastructure cover 15 sectors including electricity, gas, water, port, healthcare and cloud among others. The government can order 
divestment or prohibit the acquisition if it finds that it could present risks to national security.  

▪  US:  Export  Control  Reform  Act  allows  the  US  government  to  enact  controls  on  exports,  re-exports  and  transfers  of  emerging  and 
foundational  technologies  if  they  could  be  used  to  threaten  the  national  security  of  the  US  or  if  they  give  a  qualitative  military  or 
intelligence advantage to the US. 14 emerging technologies are identified, including biotech, AI and semiconductors 

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Specific Measures for Critical Raw Materials 

▪  Korea: has an early warning system in place to monitor 20 key raw materials to ensure stable supplies.  

▪  US: Executive Order ‘America’s Supply Chains’: in-depth reviews of industrial bases. The reviews include requests for comments 

with detailed questionnaires, as well as recommendations for strengthening resilience.  

▪  US: ‘section 232 investigations’ serves to collect market information from companies and stakeholders. The Trump Administration 
launched two investigations, on aluminium and steel, which conclusions led to tariff hikes of 10 and 25% respectively. More recent 
investigations on vanadium and titanium sponges have not led to actions yet.  

▪  US:  Executive  Orders  13817  (A  Federal  Strategy  To  Ensure  Secure  and  Reliable  Supplies  of  Critical  Minerals)  and  13953 
(Addressing the Threat to the Domestic Supply Chain From Reliance on Critical Minerals From Foreign Adversaries and Supporting 
the Domestic Mining and Processing Industries). EO13817 launched an in-depth review of critical minerals supply chains necessary 
for the US economy and national defence and looked into expanding mining production in the US. EO13953 charged the Secretary of 
the Interior to produce every 180 days a report on critical minerals supplies and potential risks from foreign powers.  

▪  Japan:  JOGMEC  supports  exploration  and  technological  development  by  Japanese  companies  through  equity  capital  and  liability 
guarantees.  Investment  by  JOGMEC  in  rare  earth  overseas  projects  involving  Japanese  companies  to  diversify  supply.  Its  purpose, 
scope, structure, and obligations are defined in the JOGMEC ACT. 

▪  Japan:  Under  the  planned  revision  of  JOGMEC  ACT  to  be  submitted  to  the  Diet  JOGMEC  is  to  strengthen  financial  support  for 

Japanese businesses’ rare earths exploration and refining operations113.  

▪  Japan:  JOGMEC  operates  a  national  stockpiling  system  of  rare  metals  to  secure  long-term  raw  materials  supply.  Stockpiles  are 

113 The revised legislation is reported to: i) increase the ceiling of JOGMEC's loan and investment ratio by expanding government’s support though JOGMEC from the current level of 50% to 75% of 
investment in projects; ii) allow JOGMEC to invest in or grant debt guarantees to domestic Japanese mineral-refining operations (at present JOGMEC can only support refining operations overseas, in 
practice in China); iii) allow JOGMEC to actively support overseas mining and projects involving Japanese companies (risk money support). 

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sufficient to meet 60 to 180 days’ demand. In addition, under the planned Mining Act to be adopted by the Diet, Japan is to restrict 
access to rare-earth resources in Japan’s exclusive economic zone (offshore deposits).  

▪  Korea: State owned Korea Resources Corporation runs a stockpile storage system for rare metals.  

▪  China: big state-owned enterprises are encouraged to take a leading role in their sectors, to ensure market stability, compliance with 
government directives and maximum benefit for China. The government actively supports consolidation into few powerful companies, 
often also state-owned. 

▪  The  UK  and  Australia:  The  two  countries  have  set  up  Working  Group  on  critical  minerals  in  2021.  Australia  and  the  UK  are 
continuing to identify investment opportunities that would bolster Australia’s critical minerals sector and the UK’s manufacturing and 
energy ambitions.  

▪  UK: Plans to adopt the Critical Minerals Strategy later this year to set out steps to ensure the UK’s long-term security of supply 
for critical minerals. It will help create the conditions needed to grow this vital sector and set out how the UK aims to work with other 
countries to create international standards and ensure supply chains are robust.  

▪  UK: The UK also plans to establish the Critical Minerals Intelligence Centre, which will provide ongoing intelligence on the supply 

of and demand for critical minerals. 

Specific Measures for Semiconductors 

▪  US: Chips Act to include a $52 billion budget directed towards domestic semiconductor research, design, and manufacturing. House 

and Senate are currently trying to agree on a common bill, which is supposed to be adopted before the summer. 

▪  US: The  Facilitating American-Built Semiconductors (FABS)  Act,  still under discussion is  to  provide semiconductor investment 

tax credits. The bill has not been adopted yet. 

▪  Japan:  Specific  subsidies  have  been  proposed  in  ESPA,  targeted  at  the  semiconductors  sector  to  support  domestic  production.  A 
package worth approx. JPY 800 billion (EUR 6.15 billion) to support the domestic semiconductor industry, with the highlight being the 
construction of the Taiwan Semiconductor Manufacturing Co. (TSMC) chip plant in Kumamoto Prefecture 

▪  Korea: Korean tax incentives and subsidies to chipmakers to encourage them to spend a combined about EUR 379 billion by 2030 

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to facilitate Korea becoming a global powerhouse in memory and non-memory chips.  

▪  China: Tax breaks, cheaper utility rates, low-interest loans, free or discounted land for chipmakers to meet higher technical standards 
and to advance technology and to incentivize reshoring and development of local capacity (foreign invested companies are also eligible 
for these breaks).  

__________________________________________________________ 

List of Acronyms 

DPA: Defense Production Act, US  
EBA: European Battery Alliance, EU  
ERMA: European Raw Materials Alliance, EU  
ESPA: Economic Security Promotion Act, Japan  
FABS: Facilitating American-Built Semiconductors Act, US 
FEPO: Future Economy Planning Office, Singapore  
FIRB: Foreign Investment Review Board, Australia 
GPA: Government Procurement Agreement – Multilateral Agreement  
IIJA: Infrastructure Investment and Jobs Act, US 
IPCEI: Important Project of Common European Interest, EU  
IPI: International Procurement Instrument, EU 
JOGMEC: State owned Japan Oil, Gas and Metals National Corporation, Japan 
NDICI – Global Europe: Neighbourhood, Development, and International Cooperation Instrument - Global Europe, EU 
NDS: National Defense Stockpile, US  
NSIA: National Security Investment Act, UK 

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