Source: EURLEX
Language: en
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# 52013DC0785

**REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN CENTRAL BANK, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF REGIONS AND THE EUROPEAN INVESTMENT BANK A SINGLE MARKET FOR GROWTH AND JOBS: AN ANALYSIS OF PROGRESS MADE AND REMAINING OBSTACLES IN THE MEMBER STATES - Contribution to the Annual Growth Survey 2014 - /\* COM/2013/0785 final \*/**

  

Introduction

The financial and economic crisis has shown the
need for deep structural reforms in Europe. In response to this, the Commission
has rolled out an ambitious programme to make the Single Market work better.
The Single Market Acts I and II lay down a set of legislative proposals and
other measures to boost growth and employment in Europe. The Commission has
also issued recent proposals to further complete the digital Single Market. Swift
adoption of all remaining proposals is needed to effectively unlock the full potential
of the Single Market and make the Single Market fit for the 21st century.

For the Single Market to function well however,
reforming the EU legislative framework is not sufficient. For citizens,
consumers and businesses to effectively reap the benefits of the Single Market,
rules must work in practice. Vigorous and consistent efforts are needed to
ensure that markets function well and remaining barriers are lifted.

Five years after the start of the crisis, there
are signs of recovery. Many Member States have taken steps to drive through
reforms and create better market conditions, in spite of short-term tendencies
to shield off national markets.

This report aims at reviewing in the context of
the Europe 2020 strategy the way the Single Market functions within the various
Member States. It takes stock of where progress has been made since the start of
the crisis and seeks to identify where bottlenecks remain and defines a set of
policy priorities on that basis. The report thus contributes to the overall priorities
set in the Commission's Annual Growth Survey 2014, and to the further
identification of country-specific recommendations in the context of the
European semester.

As was the case in last year’s edition, this
report focuses on key areas where growth potential is the biggest: services,
networks and the digital economy. Services sectors are growing fast and generate
most employment. Whilst progress has been made, further steps must be taken to
unlock the full potential of the services sector. In parallel, and given that
services are strongly inter-linked with other sectors of the economy and in
particularly manufacturing, work is needed to further improve the functioning
of the internal market for industrial products. In fact, whilst the
internal market for goods is a success, the EU must ensure that its legal
framework stays fit for purpose in a globalised world, where innovation is key
and products evolve rapidly. To this end, the Commission will present a review
on the internal market for industrial products by the end of the year.

This year’s report also looks at the functioning
of the financial sector, as better access to finance and better integration of
financial markets are quintessential to restoring confidence and financing the
real economy.

Networks remain the backbone of the economy. E-communications,
energy and transport activities account together for 8.9% of value added and
6.1% of employment in EU27 and are still growing in importance.[1] They also
offer essential inputs to other sectors of the economy. The digital sector is also
a main driver for productivity, creativity and innovation. In some major
economies (the G8 countries, South Korea and Sweden), the internet economy[2] has brought
about 21% of the growth in GDP in the period 2006-2011[3].

Part I of
this report offers an analysis of the key sectors mentioned above and defines a
number of policy priorities. Part II presents more horizontal findings on the
functioning of the Single Market, based on an analysis of intra- and extra EU
value chains.

Part I – The State of
The Single Market In Key Areas With The Biggest Growth Potential

2.1.
Implementation and enforcement – general overview

·
The
Communication on Better Governance of June 2012[4] announced a
set of measures to mark swift progress in key areas for growth. First, it
called for a ‘zero tolerance’ approach: Member States should transpose
and implement EU legislation listed in the annex to the Communication swiftly
and correctly so as to reduce both the transposition and compliance deficits to
0%.

·
One
and a half years later, there are some good results (see the annex). For pieces
of legislation listed in the annex to the Communication and belonging to the financial
services, digital Single Market and transport areas, the 0% transposition
deficit target is respected. At the other end of the spectrum, however,
stands the energy sector. Whilst a number of Member States have improved their
records, many Member States still fail to respect transposition deadlines, with
four Member States even failing to transpose three of the four directives
concerned.

·
The
Communication also called for a more vigorous approach and enforcement in key
areas. Where there are indications that key pieces of legislation are breached,
infringement procedures should take no longer than maximum 18 months on
average, and full compliance with Court judgments should on average not take
longer than 12 months. In several areas, steps have been taken to pursue
possible breaches of EU law with vigour, and the results of such approach are
clearly visible, for instance in the services sector (cf. infra). Having said
this, the average duration of infringement proceedings is still 29.4 months, with
some infringement proceedings lasting for more than 50 or even 84 months. The
situation is much better in the areas of energy (15 months) and transport (15.4
months).

2.2. The services markets

Market performance and obstacles to EU integration

Many Member States undertake reforms in the
services sectors to make them work better. Over the past year this
has been the case in particular in PT, ES, IT, GR and PL, and, to a lesser
extent, in SI and CZ. These reforms have been encouraged by country-specific recommendations
(CSRs) or programmes agreed with the respective governments. There is a need
for reforms in several Member States however, including in AT, BE, DE and FR,
which also received services-related CSRs.

Another spur to reform has resulted from the
Commission’s zero-tolerance exercise to ensure full compliance with the
Services Directive. Over the last year, 13 Member States have
initiated further reforms in reaction to EU pilot or infringement procedures
launched by the Commission. These relate mostly to restrictions on commercial
communication, residence requirement or the territorial limitation of the
authorisation.

Points of Single Contact (PSCs) have been
further developed in many Member States as part of
their wider efforts to offer comprehensive e-government services for businesses
(e-government issues are more widely dealt with in the section on “digital
markets” below). For businesses to thrive, they need reliable and easily
accessible information on regulatory requirements, and they need to be able to
complete the relevant administrative procedures on-line. This is the objective
of the PSCs and the recently approved PSC Charter. Some PSCs are already part
of integrated e-government structures (EE, ES, DK, NL, UK, SE, LU). Other countries have been making progress over the last year (BG, EL, FR). PSCs in BE,
DE, LV, PL and RO require particular attention however, especially as regard the
on-line completion of procedures.

Having said this, the potential of the Single
Market in boosting the development of the services sector remains strong.
The trends presented in last year's report showing that integration in services
was significantly lower than in the goods market continue to be valid. Indeed,
trade integration in the Single Market for goods stands at approximately 22%,
with that for services at around 5%[5]. Similarly,
consumers evaluate the performance of the Single Market for services less
positive than that for goods.[6]

A more ambitious approach to implementing the
Services Directive could yield benefits for growth and jobs in the EU. Measures
taken by Member States to implement the Services Directive will increase GDP by
approximately 0.8% over 5-10 years. A more ambitious implementation of the
Services Directive alone could generate an additional 0.6%-2.6% of GDP.[7]

At the same time, the recent peer review on the
implementation of the Services Directive has confirmed the earlier assessment[8] that many Member States did not carry out
significant proportionality tests on the remaining requirements in the services
sector[9]. Carrying
out such tests is necessary to assess whether these restrictions are justified
and whether the same public interest objectives cannot be reached through less
restrictive measures. As a result, there are still too many restrictions on the
right of establishment, such as the obligation for companies to have a certain
legal form or shareholding and capital requirements. These obstacles may
restrict the establishment of service companies throughout the Single Market,
impede the development of certain business models or limit investment in the
sector which affects growth and innovation.

Fragmentation of national rules relating to labour,
taxation, health and safety, consumer protection and contract law
remains an issue. In a cross-border context, this causes compliance costs
that impact in particular micro and small enterprises.

As regards access to professional activities,
several Member States have started reforms, but entry barriers remain in a
number of professional activities. Entry barriers often take the form of professional
qualification requirements or restrictions on the number of services providers
allowed on the market. They can be justified by the need to safeguard the
quality of services, ensure the appropriate technical knowledge of
professionals and protect consumers from malpractice. At the same time, they
cause considerable restrictions to the access and conduct of professional
activities. Several Member States have launched reviews to assess whether public
policy interests cannot be achieved without imposing restrictions on market
access and competition. PT is carrying out a comprehensive screening and reform
of regulated professions. IT has revised its horizontal regulatory framework. ES
has presented a draft law delimiting the powers of professional orders across
sectors. Sector-specific reforms have also been launched in PL, CZ and SI and
have been announced in DK. The Commission will further facilitate such reviews
through a mutual evaluation exercise initiated under the revised Professional
Qualifications Directive[10], including
in countries with scope for further reforms such as AT, DE or FR.

As regards health services, many Member
States still have to set up adequately resourced National Contact Points to
help patients exercise their rights to cross-border healthcare.  Beyond
patients, the free movement of professionals and providers within the health
services sector carries considerable potential.

In the retail services sector, some reforms have
been launched and need to continue to address remaining barriers affecting
competition, including those in commercial establishment. FI has
initiated reforms to increase competition in the retail sector. ES has carried
out reforms in relation to small retail outlets, but restrictions remain for
larger outlets. While some restrictions can be justified by objectives of
public interest (e.g. environmental impact), others are more difficult to
justify as they, notably, soften competition with negative effects both on
industry (modernisation, efficiency) and consumers (less choice, higher
prices). Economic needs tests are prohibited under the Services Directive, but are
nevertheless still in place in HU, NL, and in certain regions of DE and ES. The
Commission has issued CSRs to BE, DK, FI, FR, DE, HU and ES to encourage
further reforms. As announced in the European Retail Action Plan[11], the
Commission is launching a wider debate and an exchange of best practices
between MS on commercial establishment.

Restrictions on the cross-border supply of goods
may also affect competition in retail markets. Retailers may not
always be free to source their goods at best prices across Europe. There are
valid reasons for certain price differences between national markets, but there
are also indications of territorial supply constraints that prevent lower
prices in some national markets (LU and BE), especially in the case of branded
products. The Commission intends to explore this topic further in 2014, by
consulting stakeholders on alleged territorial supply constraints, with a view
to deciding on possible next steps.

Consumers are sometimes still confronted with
situations where their nationality or place of residence hampers their
ability to purchase products and services across the Single Market, or
increases the price they have to pay, especially in the on-line world. This
situation of perceived discrimination may not always be the result of objective
market conditions and affects consumers' trust in the Single Market.

Public authorities are a major consumer of
services in Europe. The correct, efficient and transparent application of
procurement rules delivers significant gains. Several Member States have
initiated reforms in public procurement[12], including
IT, GR, PT and ES. In many Member States service providers and public budgets
could further benefit from reducing the length of procedures, enhancing
competition and transparency in public tenders and preventing irregularities
(for example by investing in the professionalization of officials responsible
for public procurement or increasing the level of notice publication) and, more
generally, improving governance in this area (for example by better monitoring,
better information and the dissemination of best practices). Reforms are particularly
(but not only) required in BG, DE, HU, IT, MT and RO, as pointed out in the
country-specific recommendations addressed to these countries in 2013. Additionally,
given their economic importance[13], better
compliance with procurement rules in the waste management and ICT sectors could
be the source of particular savings generated by improved competition in these
markets.

Policy priorities

Taking
into account of the foregoing, Member States should focus on the following key
priorities:

·
Adopt
a more ambitious approach towards the implementation of the Services
Directive by systematically screening regulatory frameworks with a view to
assessing the necessity and proportionality of the remaining obstacles.
Particular attention should be given to the restrictions that have been
identified in the context of the recent peer review on legal forms and
shareholding.

·
Take
due account of Single Market principles when adopting national rules impacting
the provision of services and establishment, such as national taxation,
labour law and consumer protection rules. Only a comprehensive approach to
services will allow significant advancement in the integration of the Single
Market for services.

·
Simplify
legislation in the services sector in such a way that it leads to
administrative simplification for businesses, especially for SMEs. E-government
is a powerful tool to achieve this. Member States should therefore further improve
the functioning of the Points of Single Contact by making them a part of
the e-government services (see also the “digital markets” section below).

·
Seize
the opportunity granted by the transparency and mutual evaluation exercise by
performing an in-depth screening of the restrictions in place at national
level which affect the access to regulated professions, examining the
justifications for maintaining them taking into consideration their knock-on
effects on other markets. Explore the possibility of less restrictive
mechanisms to guarantee consumer and public interest.

·
Strengthen
competition across the services sector including in retail services by
eliminating barriers. In particular, restrictions to commercial
establishment, which are not necessary and proportionate, should be removed and
remaining economic needs tests should be systematically abolished.

·
Foster
transparency and awareness about price differences and consumer rights across the
Single Market, in particular through the European Consumer Centres and other
responsible authorities. Work towards reducing unjustified consumer
discrimination.

·
Set
up National Contact Points to help patients seeking healthcare abroad.

·
Work
towards reducing the complexity and length of procedures, enhance
competition in public tenders inter alia through increased transparency and
the publication of rates, and invest in the professionalization of officials
responsible for public procurement. They should also actively prevent
irregularities and improve governance of public procurement. Additional
attention should be paid to the correct application of public procurement rules
in waste management and ICT sectors.

2.3. Financial services

Market performance and
obstacles to EU integration

In general, financial market fragmentation - understood
as differences in the functioning and performance of national markets caused by
obstacles to the free movement of capital or financial services - has
increased during the crisis. Even though there are now signs of
stabilisation, this trend should be reversed. Fragmentation is evident in the
replies by corporations to SAFE[14], which
document considerable cross-country differences. Fragmentation is also evident
when comparing the different interest rates for bank loans (typically important
for households and SMEs) across the different Member States, as shown in chart
1.

Chart 1: Interest rates, loans to non-financial corporates (up to 1 year maturity; outstanding amount, average rates from January to August 2013)

Source: European Central Bank. No data available for Denmark and Croatia.

Important differences are equally observable in
relation to loan volumes (see chart 2). Additionally, and whilst the data is
not strictly comparable due to differences in cyclical developments and to the
particular measures taken in some Member States (i.e. in ES, certain loans have
been transferred to a "bad bank", which is not a MFI), it is still
clear that the restricted or costly provision of credit has contributed to
substantial falls in the total volume of credit being intermediated through
banks to the real economy in the EU.

Chart 2: Loans to non-financial
corporates, Outstanding MFIs Balance Sheet

(Year on Year growth rates, August 2013)

Source:
European Central Bank. No data available for Denmark, United Kingdom and
Croatia.

Finally, fragmentation is also reflected in
consumers' assessments. Financial services[15] are
evaluated as a particularly underperforming group of markets by consumers and
record the highest differences in evaluation between different Member States.
Particularly low scores are noted in Southern and Eastern European Member
States[16].

Fragmentation has sometimes been exacerbated by
the practice of some national supervisors in both euro area and non-euro area
Member States. In order to respond to potential stability concerns triggered by
the sovereign debt crisis, some have taken prudential measures which have
"ring fencing" effects, such as measures aiming at retaining
liquidity, dividends and other bank assets within national borders[17]. While
restrictive prudential measures may be justified to maintain the stability of
financial markets, national supervisory authorities need to ensure that any
measure potentially limiting the free flow of capital is non-discriminatory and
proportionate to its objective. To that purpose, close and loyal cooperation
between national supervisory authorities under the auspices of the European
Banking Authority (EBA) is a prerequisite to mitigate fragmentation risks of
the Internal Market.

The recent adoption of the package on capital
requirements for banks[18] will make EU
banks more solid and will strengthen their capacity to manage properly the
risks linked to their activities, and absorb any losses they may incur in doing
business. The 28 Member States need to ensure that these rules are
implemented by 1 January 2014.

The development of a single rulebook, which will
ensure uniform rules, supervision and resolution across the EU and the creation
of the Banking Union aims to restore confidence and thus facilitate funding,
fostering the internal market for financial services. The completion of all
of its building blocks[19] and its
swift and effective implementation are therefore of the utmost importance.
Similarly, it is of crucial importance to ensure a correct, swift and
uniform implementation of other essential elements of the financial reform
agenda as they enter into force in order to preserve financial stability
and rebuild consumer trust and confidence.

In this context, the Single Supervisory
Mechanism Regulation requires that prior to direct supervision by the new
Single Supervisor which is the ECB an Asset Quality Review needs to be
conducted. This review will be part of a larger exercise, which involves the
European Banking Authority and will also include bank balance sheet assessments
and stress tests[20]. This
exercise should improve market confidence and contribute to further easing
financial fragmentation. For this reason, it is important for Member States to
thoroughly prepare for these exercises by making all necessary efforts,
including the establishment of appropriate backstops ahead of the completion of
the exercise and the preparation for the implementation of the revised rules
for State Aid to banks.

Before the entry into force of the Directive on Alternative
Investment Fund Managers (AIFMD)[21], the
activities of AIFM in Europe were not sufficiently transparent and the
associated risks not sufficiently addressed by the regulatory and supervisory
arrangements. Whilst the transposition deadline for the Directive was July
2013, to date, not all Member States have transposed it.

An integrated payments market in the euro area
will make payments cheaper, easier and safer. More than 10 years after
the euro has been put in place as a common currency and a common means of
payment, 28 different cash payment systems are still in place. The SEPA
Regulation[22] sets 1
February 2014 as the end-date for the migration of domestic as well as
intra-European credit transfers and direct debits in euros towards SEPA credit
transfers (SCT) and SEPA direct debits (SDD) respectively. More than 35 billion
credit transfers and direct debits, annually processed in the euro area, will
be directly affected. According to the ECB’s SEPA indicator, the overall
migration rate in the Euro-area was, in July, SCT 50% for SCT (compared to 38.2
% in February) and 4.8% for SDD (compared to 2.3 % in February). This means
that in order to meet the deadline for SEPA migration, SEPA preparedness,
communication efforts and implementation measures have to be enhanced considerably
and without delay by all involved parties.

Several steps have been taken at EU level to
improve access to finance for SMEs[23]. At national
level, Member States need to intensify their support to SMEs access to finance,
taking also advantage of the avenues of work open at the EU level, which
include regulatory, EU financial instruments, new State aid rules for risk
finance and other measures to improve the environment for SMEs.

The access to company information across the
internal market is also a crucial element for SMEs in order to facilitate
their cross-border activities and their financing. In this context, as a
necessary first step, the timely transposition of the Directive on the
interconnection of central, commercial and companies’ registers[24] whose
deadline expires the 7th of July 2014 and which requires all Member
States to link up their business registers electronically is of great
importance. Further steps will be the interconnection of insolvency registers
via the European e-Justice portal[25] and
modernising insolvency law in the EU[26].

Policy priorities

Based on the foregoing, Member States should
focus on the following key priorities:

·
Ensure
that the new rules on capital requirements for banks are implemented by 1
January 2014.

·
Make
all necessary arrangements, including the establishment of appropriate
backstops and the preparation for the implementation of the revised rules for state
aid to banks ahead of the exercises of the Asset Quality Review, the balance
sheet assessments and the stress tests.

·
Ensure
full compliance by national supervisory authorities with the cooperation requirements
set out in banking legislation, in order to prevent uncoordinated or
disproportionate actions in the context of restrictive prudential measures
being taken by national supervisors. This is particularly important before
the Single Supervisory Mechanism becomes fully operational.

·
Finalise
the implementation of the Directive on Alternative Investment Fund Managers
(AIFMD).

·
Ensure
all market participants complete their migration to SEPA before 1 February
2014.
Communication efforts and awareness actions at the national level have to be
amplified, in particular as regards SMEs, small public administrations
and local authorities.

·
Encourage
and support SMEs’ access to finance in particular by:

o Developing alternatives
to bank financing as well as innovative sources of finance, including:
options for the development of SME bonds and alternative stock markets,
promoting the emergence of stock markets specialised in listing SMEs of high
growth companies, crowd-funding, and venture capital. For the latter, this is
now possible across Europe thanks to the European Venture Capital Funds[27] and Social
Entrepreneurship Funds Regulations[28]; Forthcoming
State aid rules on risk finance will also create a more even  level playing
field among Member States and facilitate access to venture capital for SMEs;

o Improving the
quality of how credit assessments are established for SMEs, and facilitating
cross-border access to company information to achieve EU wide company
information. A first step in this regard is the timely transposition of
the Directive on the interconnection of central, commercial and companies’
registers;

o Improving the
financing flows within the supply chain, including trade finance, and combating
payment delays would contribute to alleviating SMEs liquidity constraints and
improving SMEs working capital.

2.4. The energy markets

Market performance and
obstacles to EU integration

The third energy package aims to complete
an internal gas and electricity market. However, more
than two years after the deadline there are still delays in its
transposition, enforcement and effective application on the ground. As of 25
October 2013, there are still 12 cases pending for non-transposition of the
Directives of which 9 pursued by the Commission before the Court of Justice of
the EU and 3 at the stage of reasoned opinion against 7 different Member States
(PL, SI, FI, EE, RO, IE and LT). In addition, the Commission is still in the
process of assessing compliance of national legislation, given that many
notifications came in only recently.

Considerable investment in energy
infrastructure, such as transmission pipelines and electricity
networks, storage and LNG projects is still needed so that energy flows
freely and be traded across borders in order to strengthen the ensure security
of supply. In 2013 CSRs have been addressed to 13 Member States (BG, EE, FR,
DE, IT, LV, LT, MT, PL, RO, SK, ES, UK) regarding the need to increase
electricity and/or gas interconnections. Since then, interconnections both for
gas and electricity have improved (e.g. gas interconnections on the
Africa–Spain–France corridor, electricity interconnections between PT and ES,
the UK, IE and in the Baltic region and the development of reverse flow gas
projects especially in Central and Eastern Europe). These projects have
contributed to a better functioning of markets. In October 2013, the European
Commission has adopted a list of 248 key energy infrastructure projects of
common interest which will benefit from faster and more efficient permit
granting procedures and improved regulatory treatment and may also have access
to financial support from the Connecting Europe Facility (CEF).

The generation market is still highly
concentrated. In eight Member States more than 70% of power generation is
still controlled by the historic incumbent[29]. There is a
particularly high concentration (with a market share above 75%) in EE, LV, FR, LU and SK. The lowest market share of the largest generation company at national
level can be observed in PL and ES. On the gas retail side, apart from LV, where only one entity dominates the national sales market, figures above 90 % for the
largest retail company can be found in LT, PL and in EE. A relative small
market penetration for the largest retail company on national level (below 30%)
can be observed in DE, HU and IT.

Consumers rank the electricity and gas markets
among the poorly functioning markets[30]. Both
markets score lower than average on choice, comparability, switching of suppliers
and tariffs, suggesting that consumers do not actively participate in the market.
Overall, the electricity and gas markets have improved the most in BE, but the
electricity market in EE and BG has deteriorated the most.

Rolling-out of smart metering systems will enable
consumers to get more accurate and frequent feedback on their energy
consumption, will minimize errors, facilitate invoicing or switching and reduce
infrastructure. 16 Member States have already decided to roll-out smart
electricity metering by 2020 at the latest, representing about 84% of the
consumers in the EU and an investment of about €35 billion. For gas, 7 Member
States already decided to roll this out which represents about 30% of the users
and an investment of about €15 billion. For a succesful implementation,
consumer trust is an important element, as was the case in the roll out in SE
and FI. Attention needs to be given to existing data protection and security
concerns.

Member
States should phase out retail price regulation. This regulation tends
to deter competitors' market entry and investment by both newcomers and
incumbents. In the absence of retail price regulation, more competition and
Member States action for greater transparency in retail energy markets and
better information tools for consumers would keep prices in check and empower
consumers to exercise choice and reap the benefits of competition. As a
consequence of retail price regulation, service quality and innovation tends to
be lower. As regulated prices are being phased out, support
for vulnerable consumers needs to be strengthened, through the
implementation of energy efficiency measures combined with specific support
measures (including for example financial assistance to help vunerable consumers
pay their bills). Steps in the right direction have been taken in AT, DE, NL,
SE where the support is linked to the market price of energy. BG, FR, HU, PL,
RO have received a CSR on regulated prices in 2013.

In order for Member States to reach
the binding renewables targets for 2020 - overall 20% of the gross final
energy consumption needs to be generated from renewable energy sources -
significant investments are also needed in the generation capacity. While in
2011 most Member States had already reached their 2011/2012 interim target
(except BE, FR, LV, MT, NL and the UK), there is no room for complacency. In
the short-to-medium term support for renewable energy technologies is still
needed for many technologies. It should be applied  in line with the
best practice guidance issued by the Commission[31].

Capacity remuneration mechanisms are
sometimes needed to ensure the continued ability of power generation given the
increased sharing of renewable energy (wind, solar). However such mechanisms
potentially significantly distort the market and therefore should be a last
resort option only
after making full use of the demand response, energy efficiency and crossborder
cooperation measures.

Policy priorities

Based on the foregoing, the Member
States should focus on the following key priorities:

·
Timely and comprehensive transposition of the Third Energy Package
directives and proper application of the third energy package regulations.

·
Adoption
and application of electricity and gas network codes, governing
the day-to-day functioning of the market in terms of facilitating trade and
operating the networks cross-border.

·
Increase
interconnection capacity with neighbouring countries, i.a. through fully applying
the Regulation containing guidelines for trans-European infrastructure. At
the same time, Member States should adopt a greater cross-border perspective in
addressing security of supply challenges.

·
Empower
consumers by
ensuring that they have better access to transparent and simple information,
are better equipped to participate in open markets, and can make use of the frequent
metering data that will be available through the roll-out of smart
metering systems.

·
Phase out of regulated prices whilst ensuring the protection of
vulnerable consumers. The support should target the
specific needs of vulnerable consumer while not disproportionately affecting
competition in energy markets.

·
Rethinking state intervention in line with the best practice
identified by the Commission[32] in
order to avoid subsidies, support schemes, taxes or levies, in
the energy sector which have distortive effects on market functioning or
which have an unnecessary and disproportionate impact on energy affordability
for households and businesses.

2.5.
The transport markets

Market performance and obstacles to EU integration

Given the limited progress in
integration of transport services, in 2013 major initiatives for rail and
aviation sector were proposed by the Commission[33].
Nevertheless, to achieve a true internal market for transport services, more
needs to be done at Member State level, as divergent national
priorities and the fragmentation of the transport market continue to negatively
affect the quality of transport services in Europe.

The market for
train services is perceived as one of the poorest performing service sectors by
consumers. In 2013, the market ranks 25th out of 31 services markets.
On the positive side, market performance has increased slightly since 2012,
when it ranked 27th.[34] While the
market for airline services is evaluated relatively well overall, a fifth of
all cross-border complaints related to passenger or luggage transport by air[35].

Regarding the enforcement benchmarks (see
details in the annex), there is a good score in the transport sector,
with all Member States having finally transposed all seven related directives.
Nevertheless, there are still difficulties in
adequate transposition and implementation of the key legislation in this field. As a result, there are 20 pending
infringment cases for non-conformity with transport legislation against 14
Member States.

Looking at the specific transport
modes, bottlenecks to integration in the rail services sector are the
most persistent. Market access continues to be a major problem in spite of
the opening of the rail freight services to competition in 2007 and international
passenger services in 2010.

Several Member States maintain a
legal monopoly in the domestic passenger market (FI, FR, ES, BE, NL[36]).
Many other Member States award directly public service contracts without open
competition (BE, CZ, EL, ES, FR, HR, IE, LU, RO, SI)[37].
Moreover, in some countries opening of the market de jure has not changed the
situation, because open tenders for public services failed to find new market
entrants (BG, LT, LV, SK).

Another impediment to entry of new
operators and efficient provision of rail services is the insufficient
independence of and the lack of financial transparency between infrastructure
managers and service operators, which can result in discriminatory
behaviour and market distortions. In 2013, there were 42 on-going infringement
procedures (situation as of June 2013) launched against nearly all Member States
concerning rail services, while a number of complaints have also been filed
under competition rules. Lack of progress in establishing open and competitive
railway markets can be particularly harmful for the entire European economy
when it concerns transit countries and/or large markets with greater potential
for entry. This concern is reflected in the 2013 CSRs, where AT, DE, ES and FR
were advised to enhance competition in the rail market, while BE, BG, IT, PL
and RO received a recommendation to strengthen the role of the regulator(s).

Approximately 40% of Single Market
goods are transported via short sea shipping between EU ports. However,
shipping services between Member States are regulated by slow and rigid
procedures, as a consequence of the fact that maritime transport is treated as
going beyond the external borders. With its “Blue Belt” initiative[38], the
European Commission wants to establish a true Single Market for maritime
transport by no longer subjecting EU goods transported between EU ports to
administrative formalities that apply to goods arriving from overseas ports and
simplified procedures. This increases the attractiveness of this transport
mode.

The developments in the aviation
sector show the potential benefits of market liberalisation. The number of
passengers flown inside the EU has been growing steadily since the 90's while
the fares have been substantially reduced. Between 1995 and 2011 the number of
passenger-km travelled by air in the EU increased by over 66% and air transport
accounts now for almost 9% of the EU passenger market. Nonetheless, the EU
airspace is still fragmented leading to higher costs and putting EU operators
at a disadvantaged position compared to their foreign competitors. In this
context, operational benefits resulting from the implementation of Functional
Airspace Blocks and a strong EU Network Manager are necessary elements for
further market integration. Furthermore, air navigation service provision
(ANSP) remains closed to competition and requires improvements in terms of
quality and cost-efficiency. In June 2013, the European Commission
made proposals to speed up the reform of Europe's air traffic control system[39].

Regarding enforcement, the
correct implementation of the airport charges Directive continues to pose
problems in several Member States, which is illustrated especially by cases
of discriminatory airport charges.

State Aid formal investigation procedures were
opened in 2012/2013, in particular in DE, FR, IT but also in RO, PL, DK, SE, to
ensure that the public financing granted to airports and airlines does not
impede a fair competition within the aviation sector.

Market opening has also proven to be
successful in international road transport. International road haulage
increased by 32% in 2000–2011 and accounts for almost 33% of total haulage.
Nevertheless, optimal matching of transport supply and demand is impeded
because of persisting restrictions to the temporary provisions of domestic
road haulage services and restrictions on the permanent access to domestic road
transport markets[40].

Domestic road haulage markets remain
sheltered from international competition[41]. Operational
and time restrictions on cabotage limit the freedom of road haulage operators
to provide services. As a result, cabotage remains a minor segment of the EU
road haulage market (around 2% of all transport volumes). In addition, certain
Member States (FI, DK) have adopted additional measures to protect their
markets from competition from non-resident hauliers. Other Member States, such
as ES continue to impose restrictions on the permanent establishment of small
businesses. In that regard, the Commission will also focus on the clarity of
interpretation and more uniform enforcement of the existing legislation both as
regards market access and social standards. The removal of the restrictions on
the activities of hauliers from the EU-12 on the other hand, has had led to a
strong increase in their participation in the international road haulage market
(two thirds of their transport volumes is carried out internationally).

Member States need to increase their efforts to complete and
upgrade cross-border connections and infrastructure for European transport of
goods and passengers. This could be
achieved in particlar through the implementation of the new TEN-T core network
corridors, the deployment of the Intelligent Transport Systems (ITS), and the better
management of the congestion in cross-border transport[42]. In addition, infrastructure charging should avoid potential
discrimination of occasional users by the implementation of distance-based
charges for infrastructure. This system has so far only been used in AT, CZ,
DE, PL, SI, SK for charging heavy duty transport and in EL, ES, FR, IE, IT, PL,
PT for charging all road users on specific parts of the road network[43].

Policy priorities

Based on the foregoing, Member
States should focus on the following key priorities:

·
Ensure a timely and high-quality transposition of the transport
acquis, in particular in the railway sector.

·
Open domestic rail passenger services to competition
and ensure that public service contracts are well defined and awarded following
a fair, open and transparent tendering procedure. The institutional set-up should
guarantee the independence of the infrastructure manager in order to allow
effective competition in railway markets ensuring and guaranteeing equal access
to infrastructure.

·
Remove red tape in ports easing customs formalities for intra-EU
shipping and easing customs formalities for ships that dock in
third country ports.

·
Accelerate the implementation of the Single European Sky (SES)
(e.g. progressing in the defragmentation of the Air Traffic Management network
through the implementation of Functional Air Blocks and meeting the performance
targets for the period 2012-2014) to improve safety, capacity, efficiency and
the environmental impact of aviation.

·
Review any remaining national restrictions to access to domestic
road haulage and road passenger markets with the
view to ensuring their full compatibility with existing EU legislation in
respect of the freedom for foreign road hauliers and passenger transport
operators to carry out certain cabotage operations and to establish in any
Member State.

·
Remove bottlenecks and modernise transport infrastructure by
completing the TEN-T corridors, improving cross-border connections, coherent
deployment of ITS and implemention of non-discriminatory distance-based charges
whilst avoiding investing in transport infrastructure that is not part of a
coherent network design and risk underutilisation and costly maintainance.

2.6. The digital markets
Market performance and obstacles to EU integration

Several inter-related factors contribute to the
good performance of digital markets. Advanced countries in
e-commerce typically display a high intensity of the e-economy. The good
performers, such as SE, DK and UK[44]
all enjoy high levels of broadband penetration, high internet use and strong
internet skills across the population. Trust in the internet as a sales channel[45] and awareness
of rights and obligations online[46]
is also high in these Member States. A strong correlation of online sales with
per capita GDP can be observed in SE and DK.

The availability of fixed broadband
infrastructure, which is crucial for digital markets, has progressed moderately
but steadily. However, fixed rural coverage is still below 80% in ten
Member States, and remains a challenge in Member States such as PL, SK, SI, LV and RO, with some progress registered in LT and CZ. Whilst more than half of the
EU households are covered by high speed broadband, IT, HR, EL, FR, IE and
PL need to upgrade their networks to keep pace[47].

The mobile sector has generally benefited from competition
and continuously growing take up of mobile broadband[48],
but is hampered by delays in spectrum release. The coverage of 4th
generation mobile broadband access networks tripled to 26% in just one year,
but the continued growth of wireless
broadband will require further major investments in the enabling networks. This
is possible only if sufficient spectrum is available. Yet more than half of the
Member States have still not made available the 800 MHz band for wireless
broadband, which was to be effected by 1 January 2013[49]. Mobile network sharing, in compliance with
competition rules, can allow for a better use of the already assigned spectrum.
There is also a need to remove unjustified restrictions to the roll-out of
wireless broadband networks.

Price differences between the Member
States remain generally high[50]
and have been persistent over time[51].
This, combined with persistent barriers to switching operators[52] highlight the
need to deepen the Single Market for electronic communications, where the
independence and good resourcing of national regulators and proper implementation
of the regulatory framework are crucial. The recently proposed
legislative package for a Single Market for electronic communications will
bring down remaining barriers and bring the regulatory certainty required for
investments in infrastructure. In case of market failures there will however
also be a need for continued targeted public support, including from the
Structural Funds which, in some Member States, have been under-used and/or
faced considerable absorption problems.

On average for the EU, online commerce continues
to grow domestically as well as cross border. However, it is still a mainly
domestic commerce. The number of individuals ordering or buying over
the internet in the previous 12 months rose to 45% in 2012, from 43% in 2011
and 40% on 2010[53],
with Member States starting from a particularly low level (‘catch-up’
countries) growing particularly fast. However, many of them continue to exhibit
lower than average domestic e-commerce levels (rates of 25% or below in HU, EE,
HR, PT, CY, EL, LT, IT, BG, RO).

Cross-border e-commerce is still
limited, with the proportion of individuals in the EU making purchases from
other EU Member States increasing but only marginally (from 10% to 11%)[54]. While the
eCommerce Directive is generally well implemented, issues remain in some Member
States in terms of prior authorisation requirements and the enforcement of
information obligations for traders. Furthermore, areas warranting renewed
attention are the availability and security of payments, personal data privacy,
the delivery of ordered goods, information for online contracts and easy access
to redress mechanisms as well as general contract and consumer protection laws.
Costs for businesses and consumers to engage in the online economy could be
brought further down by effective cyber security strategies, which however only
half of the EU Member States have in place (AT, CZ, EE, FI, FR, DE, HU, LT, LU,
NL, PL, RO, SK, UK)[55],
with AT, DE, DK, FI, FR, NL, SE and UK[56]
having particularly good national capabilities.

ICT for public sector
efficiency is an underestimated lever for growth-friendly fiscal consolidation
and structural reforms, notably through eGovernment, cloud-based services[57],
eHealth and smart and interoperable energy and transport grids, as well as
through the opening up of public sector information. Since the last year,
steady progress is being made with public sector modernisation: 87% of
enterprises use e-government services and several Member States are introducing
mandatory online services. The proportion of citizens using eGovernment has
also increased over the last year to 44% (both up by 3 percentage points). IT, HR,
BG, CY, CZ, RO, PL and EL would benefit from a stronger up-take. Although the
use of electronic tools in public procurement remains limited, some Member States
have seized its opportunity, particularly PT (e-submission mandatory for most
procedures), LT, IE, SE and the UK. The use of e-invoicing is already mandatory
for the majority of public authorities in DK and SE and should become the rule
across the EU.

The EU's “intellectual
property infrastructure”[58] must be reinforced. The
ICT sector, as well as those increasingly opting for the Internet as a
distribution channel, are often very reliant on intellectual property rights,
which increase their attractiveness for finance and ensure the necessary
returns on investment. Registration systems for national rights must be
affordable and accessible[59].
Furthermore, specialised IP sections in national courts can substantially speed
up proceedings and improve the quality of rulings.

Even state-of-the-art networks and technologies
cannot deploy their full potential for growth and jobs, if companies and citizens
do not use them fully[60].
This potential for growth and jobs is currently being held back, in particular,
due to a
lack of ICT skills in the work force. Some 50% of EU citizens have no or low computer
skills[61];
yet 90% of all jobs are forecast to require some ICT
knowledge by 2015[62]. ICT skills need to become a part of the
general education system at all levels. In addition there is a need for a
stronger interaction between the education and business communities, given the
current acute lack of ICT professionals[63].

Policy priorities Based on the foregoing, Member States should focus on the following key priorities: · Ensure the proper functioning of the electronic communications markets by reinforcing their national regulatory authorities and by implementing regulation that supports a competitive deployment of high speed broadband and with targeted public support where necessary, notably through an efficient use of the European Structural and Investment Funds. · Complete the assignment of the 800 MHz frequency bands as soon as possible and bring the radio spectrum available for wireless broadband to a total amount of at least 1200 MHz, and remove barriers to the efficient deployment and use of wireless broadband networks. · Put in place favourable conditions in the various areas affecting online services, including by correctly and timely implementing relevant legislation, from e-commerce – as the legislative centrepiece for the provision of on-line services - to taxation, from parcel delivery to payments, from consumer protection legislation such as Consumer Rights Directive[64] to dispute resolution mechanisms such as ADR/ODR legislation[65]. · Support the use of ICT, and of broadband Internet in particular, by improving access to financing the connectivity and usage for SMEs. Member States should also invest in ICT skills, notably with the use of European Social Fund, by integrating them more and better into their education systems, promoting partnerships with business, attracting cross border mobility and adopting the eCompetence Framework. · Adopt a comprehensive and up-to-date cyber-security strategy and designate an entity for its implementation and for cooperation with other Member States. · Increase the availability of user-friendly on-line public services, including through cross-border interconnection and infrastructures, make e-procurement interoperable and roll it out more widely across the various levels of administration, and promote more frequent use of e-invoicing. Member States should promote open cloud based services to develop digital service infrastructures and stimulate demand. Member States should also deploy eHealth interoperable solutions, including electronic health records and e-prescription for more efficient public healthcare and clinical research and further promote the use of ICT for interoperable smart energy and transport grids. · Without prejudicing the quality of granted patents and trademarks, Member States should consider possible reductions of costs and average delays for registering national patents and trademarks. They should moreover ensure specialised IP chambers are in place and have the necessary resources.

Part II – Single market integration
through the lens of value chain integration

This part offers some horizontal findings about
the state of Single Market integration, based on an analysis of value chains,
i.e. the supply and purchase of production inputs. A full report of the
analysis can be found at the following link.

Strengthening cross-border production chains is
an important means to foster competitiveness and growth,[66] and the
overall long-term employment effects are likely to be positive as well. In
addition, strengthening value chain integration within the EU may also help
restore external balances since it opens up markets in Member States with
external surpluses.

The
analysis shows that, overall, cross-border inputs in EU production, both
intra- and extra-EU, have increased. This shows that the pace of Single
Market integration has continued. Notwithstanding these positive overall
trends, there are marked differences between Member States[67].

Graph 1. The importance of cross-sector production inputs in the EU The sector labels are explained in the table in the annex of the full report to be found at the following link. The numbers represent shares of the intra-EU (cross-border and domestic) inputs relative to the output of the destination sector (in per cent).

The
analysis also suggests that intra-EU and extra-EU trade in production inputs
are complementary[68].
This shows that efforts to further deepen the Single Market and to
foster EU free trade agreements with partner economies outside the EU reinforce
each other.

Further,
services sectors provide the largest input into other sectors’ activities, in
particular manufacturing. Therefore, well-functioning services markets have positive
effects on EU manufacturing and vice versa, as is illustrated by Graph 1.

The
analysis also suggests that, with a view to maximising the benefits from the
Single Market, Member States should concentrate their reform efforts on
reducing trade barriers in sectors that are relatively large but not yet very well
integrated. This is particularly true for sectors where extra-EU
integration is high as compared to intra-EU integration, since this may show
that capacity for intra-EU cooperation is underexploited and may, therefore,
suggest that significant barriers remain.

Graph 2. The strongest intra-EU production linkages (domestic and cross-border) across sectors The thickness of an arrow corresponds to the size of the coefficient: input from one sector to another as % of an average of both sectors’ outputs. The respective coefficients are shown next to the middle of each arrow. Sector labels are explained in link.

Viewed
from this perspective (i.e. focusing on trade flows within
production value chains), there seems to be scope for further reducing barriers
in non-market services,[69]
real estate activities and retail[70].

In
addition, more economic growth could be achieved if Member States were to
implement policies to improve productivity in already highly-integrated
sectors. Such reforms are likely to result in productivity spill overs to
partner sectors, especially where inter-relationships between sectors are
strong. As Graph 2 shows, within services, renting of machinery and equipment
and other business activities have the strongest linkages with the largest
number of partner sectors. Manufacturing had strongest connections with renting
and other business activities, as well as with wholesale and retail trade on the
input side and with construction on the output side. The transport sector has
the strongest links with the wholesale markets.

Annex

[1] European Commission Occasional Papers 129 “Market Functioning in
Network Industries – Electronic Communications, Energy and Transport”, February
2013

[2] All activities linked
to the creation and use of internet access networks as well as the services
offered on the internet (IP telecommunications, manufacture and maintenance of
IT material intended for the Web, Internet based service activities, and all
activities using the internet as a medium, from e-commerce to online advertising).

[3] “Internet
matters, the net’s sweeping impact on growth, jobs, and prosperity”, McKinsey
Global Institute, May 2011, which looks at these countries and at
Brazil, China and India.

[4] European Commission Communication « Better
Governance for the Single Market », COM(2012)259 final, June 2012

[5] Trade integration is given by the average
of imports and exports of goods and services divided by GDP.

[6]
Cf, the Consumer Market Monitoring Survey 2013 commissioned by DG SANCO and to
be used in the forthcoming 10th Consumer Markets Scoreboard, http://ec.europa.eu/consumers/consumer\_research/consumer\_market\_monitoring\_survey\_en.htm

[7] European Commission Economic Paper 456: “The economic impact of
the Services Directive: A first assessment following implementation”, June 2012

[8] European Commission
Communication on the implementation of the Services Directive "A
partnership for new growth in services 2012-2015", COM(2012) 261 final,
June 2012

[9] Commission Communication
on evaluating national regulations on access to professions, COM(2013) 676
final, October 2013 and Staff Working Document on the outcome of the peer
review on legal form, shareholding and tariff requirements under the Services
Directive, SWD(2013) 402 final, October 2013

[10]
http://ec.europa.eu/internal\_market/qualifications/policy\_developments/index\_en.htm#maincontentSec1

[11] Commission Communication “Setting up a European Retail Action
Plan”, COM(2013)36 final, January 2013

[12] E-procurement
aspects are dealt with in the “digital markets” section

[13] The value of waste collection and
treatment contracts awarded amounted to € 12674 million in 2010, i.e. a 10% of
the total industry turnover in the same year or around one third of general
government expenditure on goods, works and services for waste management. The value of contract award notices for ICT hardware, software or
services in EU27 in 2010 amounted to € 22483 million. For more information please consult: “Sector
analysis of Public Procurement, criteria for selecting sectors and initial
analysis of two sectors: waste collection & treatment and ICT contracts”, 25 June 2013.

[14] http://www.ecb.europa.eu/stats/money/surveys/sme/html/index.en.html

[15] Markets for loans, credit and credit card,; bank accounts,
mortgages, investment products, private pensions and securities and individual
pension funds.

[16] Consumer
Market Monitoring Survey 2013 commissioned by DG SANCO, to be used in the
forthcoming 10th Consumer Markets Scoreboard, http://ec.europa.eu/consumers/consumer\_research/consumer\_market\_monitoring\_survey\_en.htm

The evaluation refers to the Market Performance
Index (MPI) which is a composite index which includes consumer evaluations on
comparability, trust, problems and complaints, and satisfaction of specific
markets.

[17] The Commission Services have received confidential information
from national supervisors about prudential measures taken in different Member
States to address financial stability concerns, which may have ring fencing
effects.

[18] Directive
2013/36/EU of 26 June 2013 on access to the activity of credit institutions and
the prudential supervision of credit institutions and investment firms,
amending Directive 2002/87/EC and repealing Directives 2006/48/EC and
2006/49/EC and Regulation (EU) No 575/2013 of 26 June 2013 on prudential
requirements for credit institutions and investment firms and amending
Regulation (EU) No 648/2012

[19] Including, in particular, the Single Resolution Mechanism with a
Single Resolution Fund and the Bank Resolution and Recovery Directive .

[20] http://www.ecb.europa.eu/press/pr/date/2013/html/pr131023.en.html

[21] Directive 2011/61/EU of 8 June 2011 on Alternative Investment
Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations
(EC) No 1060/2009 and (EU) No 1095/2010

[22] Regulation (EU) No
260/2012 of 14 March 2012 establishing technical and business requirements for
credit transfers and direct debits in euro and amending Regulation (EC) No
924/2009

[23] At the EU
level, the Commission launched in 2011 an Action Plan on access to finance for
SMEs, and a public consultation in March 2013 was also launched on long term
financing including access to finance for SMEs; two Regulations establishing a
European passport for investment funds targeting unlisted SMEs and social
enterprises have already been adopted and are in force since 22 July 2013. The
European Commission and the EIB are closely cooperating to develop an
initiative to expand risk-sharing instruments between the European Commission
and the EIB and EIF with the support of ESI Funds to leverage private sector
capital market investments in SMEs.  This SME initiative was endorsed by the
October European Council and is currently being reviewed by the European
Parliament. Support for SMEs, including through financial instruments,
currently totals almost EUR 70 billion of ERDF and ESF through Cohesion Policy,
and will continue to be a key priority for the European Structural and
Investment Funds in 2014-2020

[24] Directive
2012/17/EU of 13 June 2012 amending Council Directive 89/666/EEC and Directives
2005/56/EC and 2009/101/EC as regards the interconnection of central,
commercial and companies registers

[25]
This
follows the pilot project with a group of Member States and the Commission
proposal amending the Regulation on insolvency proceedings – for further
details see Proposal
for a Regulation amending Council Regulation (EC) No 1346/2000 on insolvency
proceedings,
COM (2012) 744 final, December 2012

[26] Communication on a new European approach
to business failure and insolvency, COM (2012) 742, December 2012

[27] Regulation (EU) No 345/2013 of 17 April 2013
on European venture capital funds

[28] Regulation (EU) No 346/2013 of 17 April 2013
on European social entrepreneurship funds

[29] http://epp.eurostat.ec.europa.eu/statistics\_explained/index.php/Electricity\_market\_indicators

http://epp.eurostat.ec.europa.eu/statistics\_explained/index.php/Natural\_gas\_market\_indicators

[30] Consumer
Market Monitoring Survey 2013 commissioned by DG SANCO, to be used in
the forthcoming 10th Consumer Markets Scoreboard, http://ec.europa.eu/consumers/consumer\_research/consumer\_market\_monitoring\_survey\_en.htm

[31] Commission
Staff Working Document “European Commission guidance for the design of
renewables support schemes” http://ec.europa.eu/energy/gas\_electricity/doc/com\_2013\_public\_intervention\_swd04\_en.pdf

[32]
European
Commission Communication on “Delivering the internal electricity market and making
the most of public intervention “ http://ec.europa.eu/energy/gas\_electricity/doc/com\_2013\_public\_intervention\_en.pdf

[33] 4th Railway Package (January 2013), Single European Sky
2+ (June 2013), Consultation on the draft Guidelines on State aid to airports
and airlines (July 2013).

[34] Consumer
Market Monitoring Survey 2013 commissioned by DG SANCO, to be used in the
forthcoming 10th Consumer Markets Scoreboard, http://ec.europa.eu/consumers/consumer\_research/consumer\_market\_monitoring\_survey\_en.htm

[35]Recorded by the European Consumer Centres
Network in 2012 (http://ec.europa.eu/consumers/ecc/ecc\_key\_statistics\_en.htm)

[36] Tendered contracts or open access for
commercial services account for less than 5% of the total market

[37] Tendered contracts or open access for commercial
services account for less than 5% of the total market

[38] Commission
Communication “Blue Belt, a Single Transport Area for shipping, COM(2013), 8
July 2013

[39] http://ec.europa.eu/transport/modes/air/single\_european\_sky/ses2plus\_en.htm

[40] Although conditions for establishment
are set out in Regulation (EC) No 1071/2009, this Regulation also allows
Member States to impose additional requirements for the establishment of a road
haulage undertaking.

[41] Domestic road transport operations carried out by hauliers from
other Member States, also known as cabotage, is limited
to three operations in the seven days following an international carriage under
Regulation (EC) No 1072/2009

[42] In
that regard, the Commission has proposed, and the co-legislators have agreed,
with the two major pieces of legislation the TEN-T Regulation and the
Connecting Europe Facility Regulation, which aim to achieve a fully functional
pan-European transport network – the backbone of the Single Market.

[43] CE Delft et al. (2012), An inventory of measures for
internalising external costs in transport.

[44] In these Member States, respectively 74%, 73% and 73% of citizens
have bought online at least once in 2012 (source: Eurostat).

[45] In DK, UK and SE 80%, 75%, 71% of respondents in recent surveys
said they have trust in internet sales from domestic retailers, compared to an
EU average of 59%.

[46] http://ec.europa.eu/public\_opinion/flash/fl\_358\_en.pdf

[47] For the market data in this section please see in particular the
Digital Agenda Scoreboard at:
https://ec.europa.eu/digital-agenda/sites/digital-agenda/files/DAE%20SCOREBOARD%202013%20-%20SWD%202013%20217%20FINAL.pdf

[48] Mobile broadband take-up increased by
another 11 percentage points from January 2012 to January 2013.

[49] Between July and October 2013 the Commission granted derogations
(new deadlines) to eleven Member States (AT, CY, FI, EL, HU, LV, LT, MT, PL, RO and ES). In countries such as BE, EE, SI and SK, availability has been hampered
by administrative delays.

[50] For example, there is a seven-fold difference in the average price
per minute of a national mobile call between the most expensive (NL) and least
expensive Member State (LT).

[51] For a comprehensive account of the evolution over time of these
price and non-price disparities in both fixed and mobile markets, please see
European Economy Occasional Papers 129: "Market Functioning in Network
Industries – Electronic communications, Energy and Transport" (February 2013)

[52] Consumer market study on the functioning of the market for
internet access and provision from a consumer perspective" (2012) –
conducted on behalf of the European Commission by Civic Consulting.   http://ec.europa.eu/consumers/consumer\_research/market\_studies/internet\_services\_provision\_study\_en.htm

[53] Eurostat - Community survey on ICT usage
in Households and by Individuals – Digital Agenda for Europe key performance
indicator.

[54] Eurostat - Community survey on ICT usage
in Households and by Individuals – Digital Agenda for Europe key performance
indicator.

[55] ENISA mapping of national cyber security strategies in the world,
April 2013.

[56] Impact assessment report accompanying the proposal for a Directive
concerning measures to ensure a high level of network and information security
across the Union, SWD(2013) 32 final, February
2013.

[57] See the Commission's Cloud Computing Strategy, COM(2012) 529 final, September 2012.

[58] Encompassing EU and national systems of recognition, registration,
exploitation and enforcement of intellectual property.

[59] For example, the cost of applying for and
registering a trademark in three classes varies within the EU, ranging from 78
euro in CY to 419 euro in SE.

[60] In this regard, one European out of five
has never used the Internet and the rates of non-use are above 40% in some
Member States.

[61] Eurostat,
based on a representative
sample of the adult (16-74) population in the EU. Country differences are
considerable; they range from 26% to 79% of individuals having no or low
skills.

[62] IDC White Paper "Post Crisis:
e-Skills Are Needed to Drive Europe's Innovation Society" (November 2009).

[63] From 2011 to 2012, more than 100 000 software engineering jobs
were created. Combined with stagnating ICT graduate numbers, the result is a
growing shortage on the labour market.

[64] Directive 2011/83/EU of 25 October 2011 on consumer rights,
amending Council Directive 93/13/EEC and Directive 1999/44/EC and repealing
Council Directive 85/577/EEC and Directive 97/7/EC

[65] Directive
2013/11/EU of 21 May 2013 on alternative dispute resolution for consumer
disputes and amending Regulation (EC) No 2006/2004 and Directive 2009/22/EC and
Regulation (EU) No 524/2013 of 21 May 2013 on online dispute resolution for
consumer disputes and amending Regulation (EC) No 2006/2004 and Directive
2009/22/EC.

[66] See Chapter 2 at http://ec.europa.eu/enterprise/policies/industrial-competitiveness/competitiveness-analysis/european-competitiveness-report/comprep2012\_en.htm

.

[67] For a country-specific analysis of changes in integration
intensity, see the full report at the following link.

[68] The 2006–2009 average share of non-domestic intra-EU production
inputs in output was positively correlated with the average share of extra-EU
production inputs across the Member States.

[69] Public administration, defence, education, and healthcare.

[70] This analysis takes into account the extra-EU integration in these
services as a benchmark. However, when assessing the overall integration of services markets in
the EU, other channels of integration beyond the scope of this chapter (notably
the provision of services through establishment) should be taken into
consideration to complement these findings.

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