The Internal Market - Ten Years without Frontiers
It is ten years since the borders came down within the European Union and the Internal Market was freed from a mass of obstacles that had prevented it from delivering its economic promise. This was the result of the 1985 White Paper (*) - drafted by Commission President Delors and Commissioner Lord Cockfield - which set out for the first time a comprehensive list of what needed to be done to banish borders in Europe and established 31 December 1992 as the deadline for doing it.
Ten years on, this paper provides a broad-brush picture of the main benefits that have accumulated and the main further achievements made since then. It deliberately focuses on the positive side of the balance sheet, without failing to point out areas where the Internal Market has done less well.
The benefits of the measures set out in the White Paper are clearly being felt, as more and more individual citizens and businesses take advantage of the opportunities on offer. The Internal Market has not of course been the only factor at work: other major forces are also transforming our economies - ie. rapid and accelerating globalisation and the rise of new technologies, in particular the internet. The relationship between these forces and the Internal Market is complex and mutually reinforcing. Together, they have contributed to opening up the Member States' economies to more competition and brought immense benefits in terms of increased efficiency and competitiveness.
Moreover, the Internal Market has been further developed and strengthened in the last ten years. It has been extended into new sectors, such as air transport, telecommunications energy and financial services, which are crucial to the competitiveness of the economy as a whole. Consumer and environmental protections have been significantly enhanced. More has been done to improve the enforcement of Community law. And now, with the arrival of the euro, the pace of economic integration has been stepped up and many of the benefits of the Internal Market have been reinforced.
Yet, despite these successes, the Internal Market is not complete. Indeed, creating a genuinely integrated market is not a finite task, but rather an ongoing process, requiring constant effort, vigilance and up-dating. Whatever our achievements so far, new challenges are constantly arising. As many obstacles have been removed, other barriers have come to light and will go on doing so.
After enlargement in May 2004, the challenge will be to ensure the effective operation of an Internal Market of some 452 million citizens. Enlargement will offer major opportunities, but it also carries risks. There is likely to be a second harvest as the Internal Market expands across the continent. But it may be harder to remove existing barriers and prevent the emergence of new ones in a Union of 25 Member States.
The second challenge is to meet the Lisbon target of becoming the most competitive and dynamic knowledge-based economy in the world by 2010. This is a daunting challenge but it is achievable. Success will require far-reaching economic and structural reforms. The Internal Market is the essential context for these reforms.
Structural reform is vital - not as an end in itself but as a means of creating the wealth to pay for an inclusive society. It is particularly important if the EU is to cope with the impact of an ageing population. In the next decade, millions of EU citizens will retire, reducing the proportion of workers compared with those in retirement. We must create more wealth if we are to pay for pensions, health and long-term care while enabling the standard of living to rise for the population as a whole.
- Read the full text
- Background document: The
Macroeconomic Effects of the Single Market Programme after 10 Years
Source: European Commission, Directorate General for Economic and Financial Affairs
(*)
"Completing the Internal Market", White Paper from the
Commission to the European Council (Milan, 28-29 June 1985)
COM (85)310 - Main text 
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Annex
Date: 16/05/2006
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