Action Plan sets Agenda

The European Council in Amsterdam on 16 -17 June 1997 emphatically endorsed the Single Market Action Plan presented by the European Commission on 4 June. The Action Plan outlines details of the priority actions required to improve the functioning of the Single Market by 1 January 1999. Endorsement by the EU's leaders represents a renewed high-level political commitment from Member States to move decisively towards completion of the Single Market in parallel with the introduction of the euro. Moreover, the Summit recognised that an efficient Single Market is a corner stone of efforts to boost job creation and growth in accordance with President Santer's Confidence Pact for Employment.

The Action Plan defines four Strategic Targets: making the rules more effective, dealing with key market distortions, removing obstacles to market integration and delivering a Single Market for the benefit of all citizens. Specific actions will be implemented under a three phase timetable, with application in the very short term of urgent actions, rapid adoption of a number of existing proposals and attaining maximum possible agreement on remaining measures by 1 January 1999.

The European Council has invited the Member States and the Council of Ministers to agree to the measures within the deadlines laid down. The Commission will be monitoring Member States' commitment to implementing the Action Plan by means of a Single Market Scoreboard published regularly. A report on progress in implementing the Plan will be presented to the European Council in Luxembourg, in December 1997.

Why an Action Plan now?

The European Single Market is the world's largest domestic market. It has contributed significantly to growth, competitiveness and employment. It has been responsible for an increase in EU income of between 1.1% and 1.5% and for the creation of between 300.000 and 900.000 jobs. But its full potential has not yet been realised. Barriers still remain. Europe needs a better Single Market for more growth, more innovation and more jobs; a market that works for everyone - citizens, consumers, small companies and larger business; a market that contributes to a balanced development of the economy in all regions of the EU and the European Economic Area; a dynamic, knowledge-based market, socially responsible and sensitive to the concerns of everyone affected by it. A properly functioning Single Market will help to ensure a transition to the single currency in the most favourable conditions and will contribute to a successful enlargement of the EU. The Commission's 1996 Report on the Impact and Effectiveness of the Single Market has received a very wide degree of support from Member States. The political will is evident. This needs to be translated into targeted action.

The Single Market is not simply an economic structure. At its heart are 370 million people seeking better employment opportunities, improved living and working conditions, and a wider choice of quality products and services at lower prices. The Single Market is working in their interests. Much has already been achieved. Individuals already enjoy the right to move and work throughout the Union. The Single Market sets basic standards of health and safety, equal opportunities and labour law.

However, more needs to be done to enforce these rights effectively. In addition, social policy must help smooth the process of change, promoting a new interplay between flexibility and security, for example through appropriate information and consultation and an increased contribution from the social partners. The European employment strategy, agreed at the Dublin European Council, underpinned by the Commission's Confidence Pact for Employment, will help to give people the opportunity to upgrade and improve their skills.

Similarly, the Commission will work with Member States to help modernise social protection systems and make them more employment-friendly. The Single Market must also continue to contribute to greater convergence and cohesion in favour of Member States on the Community's periphery, backed up by continuous monitoring and, where necessary, by appropriate Community support. Further efforts need to be made to ensure coherence between Single Market and other policies.

The Single Market stands or falls on confidence. Confidence that all the key rules are in place; that they are fully and fairly applied; that problems will be addressed quickly; that the ground-rules for fair competition are fully respected; confidence for consumers in the reliability of goods and services and of information; confidence for smaller companies, the employment generators, that the market can work for them; confidence that each and every government is committed to making it work. Doing business, moving, living or working in the Union's "area without internal frontiers" should become as easy as within any Member State.

The introduction of the single currency represents a critical juncture. The Single Market will provide underlying economic support for Monetary Union and the euro will provide added value and efficiency to the Single Market. The actions proposed are ambitious. It will take considerable political will to carry them through. Time is short. But a success means that Europe will have a Single Market capable of generating more growth and more jobs, while safeguarding and developing the European social model.

The Commission will regularly publish and draw to the attention of each Internal Market Council and European Council a "Single Market Scoreboard" containing detailed indicators of the state of the Single Market and of Member States' level of commitment to implementing the Action Plan.

 Four Strategic Targets

The Single Market Action Plan takes account of comments from Member States and other interested. All the actions identified in the Action Plan are essential to ensure the full and effective functioning of the Single Market, to create more jobs and generate more growth. In fact, the Action Plan follows the Commission's report on the Impact and Effectiveness of the Single Market. It sets priorities to give a clear and strategic vision of what is now needed. The four Strategic Targets are of equal importance and must be pursued in parallel:

1. Making the rules more effective: The Single Market is based on confidence. Proper enforcement of common rules is the only way to achieve this goal. Simplification of rules at Community and national level is also essential to reduce the burden on business and create more jobs.
    
2. Dealing with key market distortions: There is general agreement that tax barriers and anti-competitive behaviour constitute distortions that need to be tackled.
    
3. Removing sectoral obstacles to market integration: The Single Market will only deliver its full potential if barriers that remain - and, of course, any new ones that emerge - are removed. This may require legislative action to fill gaps in the Single Market framework, but it also calls for a significant change in national administrations' attitudes towards the Single Market.
    
4. Delivering a Single Market for the benefit of all citizens: The Single Market generates employment, increases personal freedom and benefits consumers, while ensuring high levels of both health and safety and environmental protection. But further steps are needed, including steps to enhance the social dimension of the Single Market. And to enjoy their Single Market rights to the full, citizens must be aware of them and be able to obtain speedy redress.

Within each of these Strategic Targets, the Commission has identified a limited number of important specific actions aimed at improving the functioning of the Single Market by 1 January 1999. The approach taken is selective: clearly action in other areas to consolidate the Single Market will also be pursued.

Three-phase approach

All the actions identified in the Action Plan are essential to ensure the full and effective functioning of the Single Market, to create more jobs and generate more growth. However, as preparatory work on the specific actions has advanced to different degrees, the Commission takes the view that individual actions must be differentiated in terms of the degree of progress which can be realistically achieved before 1 January 1999. The Commission therefore proposed a three-phase approach, which was endorsed by the European Council in Amsterdam.

Phase 1 features many actions which can be implemented in the very short term because they do not require additional European Union (EU) legislation, but rely instead on practical steps at EU and national level to give effect to previous commitments. Many of the actions necessary to meet Strategic Target 1, making the rules more effective, fall into this category. There are also actions where the Commission will take further initiatives before the end of the year and where it asks the Council to follow these up urgently.

Examples of Phase 1 actions include:

• elimination of all delays in transposing Single Market Directives (Member State timetables to be completed by 1 October 1997)
• putting in place structures in Member States to channel complaints from citizens and economic operators about Single Market problems, to seek rapid resolution of problems and to ensure Single Market rules are enforced at the national level (by 1 October 1997)
• extending the SLIM simplification exercise to new sectors (definition of 3rd phase by January 1998 and 4th phase by May 1998)
• effective implementation and application of liberalisation measures in the telecommunications and electricity sectors (no later than January 1998 and February 1999 respectively)
• improving and extending the EURES data base on pan-EU job opportunities
• establishing a dialogue with citizens (by beginning 1998) and economic operators (by 1 July 1998) to facilitate access to information on their Single Market rights and on how to overcome problems encountered
• Commission initiatives concerning public procurement, mutual recognition, European Standards, conformity marking, the Community patent system, construction products, Customs 2000 programme implementation and reform of transit rules (before the end of 1997).

Phase 2 covers measures that have already been proposed but need to be adopted by the European Parliament and the Council as far in advance as possible before 1 January 1999.

Phase 2 includes:

• the proposed Directive on protection of biotechnology inventions
• the proposed European Company Statute
• the proposed transparency mechanism for information society services and
• the proposed Directive on liberalisation of gas supply.

Phase 3 features actions where work is less advanced or where progress is likely to prove more difficult. The Commission undertakes to come forward with the necessary proposals within the deadlines laid down in the Action Plan, and the Parliament and Council should give them priority treatment under an informal 'fast track' approach. For some Phase 3 actions, proposals already exist, but the nature of the issue concerned means that considerable investment of time and effort by the Community institutions will be necessary for their adoption. In these cases, it is essential that the EU institutions take all steps necessary to find the maximum possible agreement by 1 January 1999.

Examples of Phase 3 measures which the Commission will be proposing include:

• phasing out of restrictions on investments by pension funds (Green Paper in June 1997, action to follow consultations)
• a new Directive on Collective Investment Schemes (by December 1997)
• new proposal on cross-border mergers (by 31 December 1997)
• proposal for Directive on late payments (during second half of 1997)
• proposal for Directive on copyright and related rights in the Information Society (second half of 1997)
• proposal for Directive on distance selling of financial services (second half of 1997)
• proposal for Directive on digital signatures (second half of 1997)
• proposal for Directive on legal protection of conditional access services (second half of 1997)
• proposals to adapt the right to reside and remain in another Member State (during 1998)
• proposals for the modernisation and more coherent application of Value Added Tax (VAT)
• proposal for Directive on supplementary pension schemes for workers on secondment to another Member State (by October 1997)
• proposal for a Council Regulation on streamlined notification requirements for horizontal state aids (by November 1997)
• proposal for a Council Regulation on procedures for notification of state aids, time limits for Commission decisions and rights of third parties (by early 1998).

Phase 3 measures where proposals already exist but require particular commitment to reach maximum possible agreement by 1 January 1999 include:

• tax package of measures, including a code of conduct to tackle harmful tax competition, measures to tackle distortions in the taxation of capital, elimination of withholding taxes on interest and royalty payments between companies and indirect tax distortions;
• proposal for a Directive restructuring the Community framework for the taxation of energy products;
• proposals on abolition of frontier controls, restrictions on the right to movement and the right to travel, plus adoption of accompanying measures to ensure security;
• proposal for a Directive on the sale of consumer goods and associated guarantees.

Conclusions of the Amsterdam European Councilon the Single Market Action Plan

"The European Council reaffirms the importance it attaches to a well functioning internal market as an essential element of the overall strategy to promote competitiveness, economic growth and employment throughout the Union. It welcomes the Commission's "Action Plan for the Single Market" and endorses its overall objective. The four strategic targets in the Action Plan should form the basis for a renewed political effort to remove remaining obstacles so as to ensure that the full potential benefit of the Single Market is realised.

The European Council agrees on the importance of ensuring full coherence between actions in the field of the internal market and other policies of the Union, in particular the social dimension, regional cohesion, competition policies, development of small and medium-sized enterprises, protection of the environment, health and consumers' rights.

The European Council underlines the necessity of differentiating in time between various categories of action in the Action Plan. In the first instance, the Community institutions and the Member States should focus their attention on areas where actions can be undertaken immediately or where negotiations can be completed quickly on existing proposals.

As an area where actions can be undertaken immediately, the European Council emphasises the first strategic target of the Action Plan: to make existing rules for the Single Market more effective.

The European Council underlines the crucial importance of timely and correct transposition of all agreed legislation into national law, the need fully to inform citizens and business about the Single Market, and the necessity of active enforcement of Community law in the Member States and the introduction of more rapid and effective procedures for problem-solving including deliberations at Council level in cases of recurrent problems. The European Council requests the Commission to examine ways and means of guaranteeing in an effective manner the free movement of goods. It requests the Commission to submit relevant proposals before its next meeting in December 1997.

The European Council confirms its strong commitment to simplification of existing and new legal and administrative regulations in order to improve the quality of Community legislation and reduce the administrative burden on European business, particularly small and medium-sized enterprises. The Commission is invited to set up a task force for this purpose. Furthermore, the European Council calls on the Commission to broaden its Rolling Programme of Simplification in consultation with all parties concerned, and invites the Member States to pursue comparable simplification activities at national level.

The European Council urges the Council and the European Parliament to seek early agreement on a limited number of priority measures identified in the Action Plan, on the basis of existing proposals where possible before the end of the year. It further invites the Council to take the necessary steps, where appropriate on the basis of further proposals by the Commission, to reach the widest possible agreement by early 1999 on the other key areas of the Internal Market.

The European Council welcomes the commitment by the next three Presidencies to give priority to the Action Plan. It invites the European Parliament to lend its political support to the Action Plan with a view to accelerating, to the maximum extent possible, the adoption of those legislative measures concerned. It invites the Commission to report on progress in implementing the Plan to the Council as well as to the European Council in December 1997."