IMPORTANT LEGAL NOTICE - The information on this site is subject to a disclaimer and a copyright notice.
No 12 (May 98/Mai 98/Mai 98)
The Single Market is the fundamental pillar of Economic and Monetary Union. The single currency, by achieving Monetary Union, will improve the functioning of the Single Market through greater price transparency, thus leading to a more efficient allocation of resources. The Single Market will be crucial to the success of EMU by strengthening the ability of the economy to cope with shocks and to deliver its ultimate objectives, growth and employment: once Member States participating in the euro have given up the exchange-rate and an autonomous monetary conduct as policy instruments, their adjustment to economic shocks will have to rely largely on the flexibility of their markets for products and factors of production. In this context, and following the Luxembourg European Council resolution on economic policy coordination, Finance Ministers meeting informally in York, on 20-21 March, underlined the importance of the economic performance of EMU in terms of growth and employment, and the crucial role of structural reforms and applying Single Market disciplines in achieving that performance.
Commissioner Mario Monti indicated his satisfaction with the results of the Ministers' discussions, notably in terms of concrete follow-up to the European Council Resolution. Mr Monti also reiterated his warning that increased competition within the EU as a result of the greater price transparency brought by the single currency could tempt Member States to erect explicit or hidden obstacles to the Single Market, so that strict application of Single Market rules will be all the more necessary.
Economic and structural reform
Chancellor Gordon Brown, drawing the conclusions of the discussion on this item, stressed the broad consensus reached on the need to enhance economic integration with the advent of the single currency. This has to be achieved through reforming employment policies as well as product, service and capital markets. These reforms fall primarily under Member States' responsibility, but efforts are also needed at Community level to ensure compliance with Single Market rules, promote competition and thus exploit all potential benefits in terms of growth and employment. At the final press conference Mr Brown pointed out that the challenge is the sustainability of EMU, and to meet the final goal of better employment, the European Union needs more competition and more mobility of factors of production, labour and capital. He also stressed that this will bring a sharp reduction of prices for consumers within a few years. The Action Plan for the Single Market is a key component of this policy.
Ministers agreed on the importance for Member States and for the Community of the broad economic policy guidelines provided for under Article 102a of the Treaty, and that Ecofin should encourage their application in full. They also agreed to enhance co-ordination of national policies which should particularly focus on: budget policies, tax matters and labour markets. Ministers welcomed the Commission's willingness to contribute to a reinforced monitoring process on the completion and effectiveness of the Single Market in terms of both proposing the appropriate methodology and providing appropriate implementation indicators.
The Ministers therefore asked the Commission to provide a report based on in-depth analysis of the situation of particular markets to assess the economic and financial integration so far achieved in the Union.
Mr Monti indicated that enhanced monitoring tools could assess two interrelated dimensions of the Single Market:
The integration of financial services markets
Ministers agreed that integrated capital markets will make a permanent contribution to welfare and growth in the EU. In doing so, it will place Member States on a firmer footing when facing the challenges which lie ahead - from adaptation to the new disciplines of the euro to enlargement.
The single currency represents a historic opportunity to harness the full potential of Community financial markets in support of employment and growth. This will require wide-ranging action to dismantle remaining impediments to cross-border activities in the wholesale and retail financial markets.
The Commission is rising to this challenge. In addition to measures already in hand, it will present more detailed suggestions for resolving the outstanding obstacles to the Single Market in financial services by the year-end.
TEL: (+32 2) 295 73 57
FAX: (+32 2) 296 09 50