IMPORTANT LEGAL NOTICE - The information on this site is subject to a disclaimer and a copyright notice.
No 15 (December 98/Décembre 98/Dezember 98)
The European Commission, the EU's Council of Ministers and the European Parliament have met two thirds of their commitments under the June 1997 Single Market Action Plan, according to the latest issue of the Scoreboard presented to the Vienna European Council. Member States have achieved steady progress on implementing Single Market legislation and a survey of over 4000 businessmen interviewed in September indicates that most companies are benefiting from the Single Market even if trade barriers are broadly similar to those a year ago.
I. New Scoreboard
The Scoreboard reveals steady improvement on implementing Single Mar ket
legislation with a percentage of Directives not yet applied by all Member
"The transparency introduced by the Scoreboard is proving to be a useful tool for highlighting where Single Market problems persist and for encouraging Member States to rectify these problems", commented Single Market Commissioner Mario Monti. "The latest issue of the Scoreboard confirms that we will have to continue to focus our efforts on ensuring Single Market rules are applied in practice through enforcement and raising awareness".
Success of the Action Plan
The June 1997 Action Plan can already be counted as a success. Forty individual actions have already been delivered, including:
The effects of the Action Plan, which comes to a close at the end of the year, will not all be felt immediately by citizens and businesses. This is particularly the case of proposals yet to be adopted or Directives yet to be implemented in national law. Other actions are lagging behind. However, the Action Plan has laid the groundwork for a stronger Single Market in which citizens and businesses will be better able to take advantage of the opportunities opened up by the single currency.
Progress in implementing Directives has been encouraging but variable. Some Member States (Finland, Denmark, Sweden and the Netherlands) continue to perform well; others (Austria, Germany and Belgium) have improved their record. However, those with a static performance (namely Luxembourg, Ireland and Portugal) have now fallen behind. As of 15 October there remained 203 Directives not yet implemented by one or more Member States. Luxembourg and Ireland have for example 100 and 96 Directives yet to be notified. While almost all Member States have speeded up implementation of new Directives, the average delay of notification is still in excess of 12 months. Moreover, it is now clear that it is unlikely that all outstanding Directives will be implemented before the end of 1998.
Most implementation difficulties occur in the areas of telecommunications, public procurement and transport.
Infringement procedures increasing
One effect of improvements introduced to the Commission's handling of infringement procedures has been a noticeable increase in the number of infringements compared to the previous issues of the Scoreboard. This is largely because the Commission now tends to send Member States a letter of formal notice (first stage of the infringement procedure under Article 169 of the EC Treaty) rather than an informal request for information.The distribution of infringements between Member States is very uneven. Moreover, several Member States that are most often late in implementing Directives (France, Italy, Belgium and Greece) also have the highest share of infringement cases for incorrect implementation and failure to apply Single Market rules.
Feedback from national administrations
It is essential that Single Market rules are not only put in place, but applied properly. A number of mechanisms have been set up recently to enable Member States to channel feedback to the Commission and exchange information regarding problems arising in the day-to-day functioning of the Single Market: namely the co-ordination centres and contact points for citizens and business and the application of Decision 3052/95, which obliges Member States to notify measures taken in derogation to the principle of mutual recognition.
All these mechanisms confirm that most commonly reported Single Market obstacles concern imposition of national specifications and standards, testing and certification and the absence of mutual recognition of different national specifications. These findings closely mirror the views of companies reported in the business survey which was carried out alongside with the Scoreboard to provide feedback on business' perception on the functioning of the Single Market.
II. Business survey
The vast majority of large and small companies are participating actively in the Single Market by buying, selling and manufacturing in other Member States, according to an opinion poll carried out for the European Commission in September 1998 of more than 4000 business executives. Most companies consider the Single Market has had a positive effect on their business over the last two years, and a small majority of large companies consider that trade barriers are decreasing. However, companies identified a considerable range of trade barriers that continue to prevent them realising the full benefits of the Single Market and two thirds of companies did not attempt to challenge these barriers.
Positive effects of the Single Market
82% of companies surveyed actively participate in the Single Market, through exporting, directly sourcing goods or services, manufacturing or providing services in another Member State. All sizes of company exhibit high rates of participation: 92% of large companies (those with more than 250 employees), 87% of medium sized firms (50-249 employees) and 77% of small companies (10-49 employees) do business in at least one other Member State.
Significantly, companies from the three newest Member States perceived the impact of the Single Market most positively (51% of Finnish and Austrian companies and 46% of Swedish companies reported the Single Market had benefited their companies' performance). This seems to indicate a certain maturity of the Single Market, with those participating in it longest building their perceptions of its benefits into their normal expectations of the business environment.
In general, larger companies operating in the Single Market were more positive than the small and medium sized companies (SMEs). Of large companies, 41% thought that the Single Market had affected their company positively in the last 2 years, compared with 28% of medium-size companies (50 to 250 employees) and 23% of small companies (10 to 49 employees).
This table hides some variations amongst the different sized firms, 50% of large companies said that they had seen a reduction in barriers to doing business, whilst only 37% of SMEs claimed that obstacles to doing business in the Single Market had decreased.
These results have changed very little from September 1997, when the Commission first conducted such a business survey (see SMN N°10). Although not strictly comparable, the results are remar kably uniform - the main concerns last year were VAT (38%), obligations to modify products or services for national specifications (36%) and unusual testing, certification and approval procedures (35%).
Around 15% of firms reported that public authorities had refused permission outright for companies to sell their products or services legally marketed in other Member States. This confirms the Commission's view that the procedure established under the Decision 3052/95/EC, for notification of such refusals to the Commission, is underused.
Persistence of barriers
Companies thought that the persistence of these obstacles to trade and business activities could be attributed to the lack of uniform European rules (35%), the lack of information about EU rules (25%), overly complex legislation (25%), over-zealous application of national rules by public authorities (24%) and lack of familiarity on the part of public authorities with the applicable rules (16%). These responses are broadly similar regardless of the size of company.
Most firms believe that there are still some barriers to doing business in the Single Market, with the majority thinking these are due (at least in part) to the manner in which rules and regulations are applied. Many of the obstacles are related to compliance with national specifications for goods and services, VAT systems, and discriminatory behaviour by public authorities and so have not changed to any great extent over the last 12 months. Similar numbers of firms seem to face such barriers, and two thirds of companies did not attempt to challenge these barriers. Not surprisingly, companies' information needs and their priorities for improvements in administrative procedures reflect the nature of the barriers they are facing.
TEL: (+32 2) 296 19 53
FAX: (+32 2) 296 09 50