The EU's Single Market, the domestic market of the world's largest economy (over 500 million people), is the most important source of jobs, growth and prosperity in the EU.
Some 98% of Single Market legislation is implemented and applied by Member States. However, when Member States breach their obligation to respect EU rules that ensure the Single Market functions properly the Commission pursues infringement cases against them (e.g. has referred Austria, Germany and Greece to Court over incomplete implementation of the Services Directive and Hungary to Court over illegal taxes on telecommunications companies).
In December 2011 the European Council agreed to fast-track adoption of a series of important Single Market proposals, including 12 key measures featured in the Single Market Act proposed by the Commission in April 2011.
The 12 key measures are:
- Improving access to finance for the more than 20 million European SMEs by introducing legislation to make it easier for venture capital funds established in one Member State to invest freely in any other Member State.
- Facilitating the mobility of citizens by modernising legislation on the recognition of professional qualifications awarded in another Member State.
- Supporting research and innovation by establishing a unitary patent protection and a unified patent litigation system.
- Helping consumer-business relations by facilitating alternative dispute resolution in the Single Market. It is estimated that increased confidence in cross-border e-commerce would boost EU gross domestic product by approximately 0.02 %, i.e. €2.5 billion.
- Boosting the free movement of services by facilitating the definition of services standards at European level. A well-functioning services market is of utmost importance in generating growth and jobs in Europe. When growth in the European economy was on average 2.1% per year between 1998 and 2008, the services sector was growing by 2.8% year. Jobs in the services sector have increased by 2% per year, compared to an average of 1% for the economy as a whole.
- Improving transport and energy infrastructures by introducing legislation to identify and implement strategic European projects in order to obtain a seamless, efficient and ecologically friendly network. By 2020, investment in these could create 775000 jobs and increase GDP by €19 billion.
- Developing the digital Single Market by ensuring the pan-EU operation of electronic identification and signatures.
- Facilitating social entrepreneurship by setting up a European framework for the development of ethical investment funds.
- Improving energy taxation by ensuring a consistent tax treatment of different energy sources.
- Enhancing social cohesion by improving the application of legislation on the posting of workers from one Member State to another and by ensuring that social rights are applied. Today, more than 1 million people are posted to another Member State in the framework of service provision.
- Improving the regulatory business environment by simplifying accounting rules which can generate potential savings of €1.5 billion per year for 1.1 million small companies and of €5.2 billion per year for 5.9 million micro-enterprises.
- Modernising public procurement legislation to make rules more simple and flexible and to foster demand for environmentally sustainable, socially responsible and innovative goods, services and works. The open and transparent tendering procedures required under EU public procurement rules mean more competition, stronger safeguards against corruption and better service and value for money for taxpayers.
- The Commission will follow up the original Single Market Act with another 12 proposals to enhance the Single Market in October 2012.
The Commission has also initiated a discussion, by issuing a Green Paper in November 2011, on bonds issued on behalf of euro area countries as a whole (so-called 'Stability Bonds') as a complement to further strengthened economic governance and budgetary discipline.
The Green Paper finds that the common issuance of Stability Bonds would have significant potential benefits, namely:
- the prospect of stability bonds could potentially quickly alleviate the current sovereign debt crisis, as the high-yield Member States could benefit from the stronger creditworthiness of the low-yield Member States
- they would make the euro area financial system more resilient to future adverse shocks and so reinforce financial stability
- they would improve the effectiveness of euro area monetary policy
- they would promote efficiency in the euro area sovereign bond market and in the broader euro area financial system and
- they would facilitate portfolio investment in the euro and foster a more balanced global financial system.
Structural funds spending
In order to ensure that fiscal consolidation is coupled with growth to promote job creation, measures have been taken to boost EU structural fund spending.
In August 2011, the Commission adopted a proposal allowing a temporary increase in EU co-financing up to 10% for programme countries receiving special macro-economic assistance. This proposal was adopted by the European Parliaments and Member States in record time, by December 2011.
To accelerate spending in areas with the most growth potential, the EU proposed advance payments from the European Regional Development Fund (ERDF) and the European Social Fund (ESF) totalling €11.25 billion. It also allows for greater flexibility in reprogramming.
The Commission also called on Member States to use available combined EU funding and national co-funding totalling €22 billion of ESF money still not committed to projects. These funds could improve the employment situation in Member States by:
- Creating large-scale support schemes for young people, in particular
- Helping Member States to utilise remaining ESF funds. The Commission is providing €4.3 million of technical assistance through the ESF to help Member States develop apprenticeship schemes and programmes for young entrepreneurs.
In Greece, structural funds can now be used to provide investments for existing SMES, which represent the largest creators of new jobs in Europe over the last decade. Previously this option was only available to new companies. The 'Taskforce for Greece', established in mid-2011, is also reinforcing the Greek authorities' capacity to accelerate the implementation of structural funds investments 'on the ground.'