ACTION PLAN
FOR THE SINGLE MARKET
Communication of the Commission
to the European Council
CSE(97)1 final, 4 June 1997
TABLE OF CONTENTS
Why an Action Plan now? ..............................
1
Four Strategic Targets
2
....................................
Strategic target 1: Making the rules more effective .............................................................................................................................................................................. 3
Action 1:
Action 2:
Action 3:
Action 4:
Action 5:
Put agreed Single Market legislation into for ce .......................................................................................................................................................................................... 3
Establish a framework for enforcement and problem-solving .............................................................................................................................. 3
Provide better access for business to the right information ........................................................................................................................................ 3
Simplify and improve national and Community rules ............................................................................................................................................................ 4
Tackle weaknesses in the existing legal framework .......................................................................................................................................................................... 4
Strategic target 2: Dealing with key market distortions ................................................................................................................................................................ 5
Action 1 :
Action 2 :
Action 3 :
Action 4 :
Remove tax distortions ............................
5
Create a common system for value-added tax ............................................................................................................................................................................................ 6
Restructure the Community framework for the taxation of ener gy products ....................................................................6
Apply a rigorous approach to competition polic y ................................................................................................................................................................................ 6
Strategic target 3: Removing sectoral obstacles to market integration ..........................................................................................................7
Action 1:
Action 2:
Action 3:
Action 4:
Break down the barriers in service markets .......................................................................................................................................................................................................... 7
Strengthen checks on products ........................................................................................................................................................................................................................................................ 8
Improve the business environment for cross-frontier operations .................................................................................................................... 8
Face the challenge of innovation and new technology ..........................................................................................................................................................8
Strategic target 4: Delivering a Single Market for the benefit of all citizens ..........................................................................................9
Action 1:
Action 2:
Action 3:
Action 4:
Action 5:
Action 6
Eliminate border controls ..................
9
Update the rules on the right of residence .............................................................................................................................................................................................................. 9
Protect social rights ..........................................
9
Promote labour mobility within the Union ...................................................................................................................................................................................................... 10
Protect consumer rights ,health and the environment ...................................................................................................................................................... 10
Develop a Dialogue with the Citizen ................................................................................................................................................................................................................................ 10
The international dimension of the Single Market...................................................................................................................................................................................... 11
Conclusion ....................................................................................
12
Annex 1: Differentiated Implementation of the Action Plan for the Single Market ...................................................... 13
Annex 2: Annotated List of Priority Actions ................................................................................................................................................................................................................ 19
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.
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 - including access for everyone to
services of general interest - 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 Action Plan announced in the
conclusions of the Dublin European
Council has the clear objective of
improving the performance of the Single
Market in the years ahead. The third stage
of EMU represents a critical juncture. The
Single Market will provide underlying
1
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 if we
succeed, 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 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. Four
Strategic Targets have been set. They 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 anticompetitive 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
2
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. Annex
1 provides for a differentiated approach
to their implementation and Annex 2
contains a much fuller description of
these actions. The approach taken is
selective: clearly action in other areas to
consolidate the Single Market will also be
pursued.
STRATEGIC TARGET 1:
MAKING THE RULES MORE EFFECTIVE
Action 1: Put agreed Single Market
legislation into force
Only 65% of Single Market directives are
fully operational in all 15 Member States.
The Single Market clearly cannot function
optimally in these conditions. Each
Member State will be called upon to
submit its detailed timetable and to
demonstrate political commitment to
eliminate urgently all delays in
transposition.
The
Single
Market
Scoreboard will be used to keep track of
progress.
Meanwhile the Commission will continue
to pursue infringement procedures
vigorously and swiftly against Member
States which fail in these obligations,
using sanctions against Member States
where necessary.
Action 2: Establish a framework for
enforcement and problem-solving
The primary responsibility for enforcing
Single Market rules rests with the Member
States. The Single Market will not operate
effectively unless they ensure that the
rules are fully respected by all concerned.
Those who breach the rules should be
subject to penalties under national law
that are effective and proportionate and
that act as a deterrent. Problems also need
to be sorted out quickly in today’s Single
Market to avoid undermining the
confidence of business and consumers.
The
informal
arrangements
for
cooperation on enforcement and problem
solving between Member States, and
between them and the Commission, have
proved only partly successful and now
need to be upgraded. The Commission
will therefore press each Member State to
designate a coordination centre within its
administration responsible for ensuring
that problems raised by other Member
States or the Commission are solved by
the national or regional authorities
directly concerned within strict deadlines.
Easily identifiable contact points must
also be
designated
in
national
administrations to which citizens and
businesses can address any Single Market
problems. These coordination centres and
contact points will be key components in
a simple but effective framework for
enforcement cooperation and problem
solving. It will provide for more
transparency
about
enforcement
structures and peer review or mutual
audit of national enforcement. Telematic
links between enforcement authorities
will be further developed under the
second IDA programme. If necessary, the
Commission will submit serious cases of
non-application to the Internal Market
Council to allow strong commitment and
involvement in problem solving to be
demonstrated at political level. The
Commission
will
accelerate
the
investigation of complaints from business
and individuals and the treatment of
infringement proceedings. For their part,
Member States must respect strictly the
procedures laid down for infringement
proceedings and ensure, expeditiously,
operational results. In cases of serious
breach of Community law which gravely
affect the functioning of the Single
Market, the Commission should be able to
take urgent action against Member States
which fail in these obligations, using
sanctions where necessary. Strengthening
of the Commission’s enforcement powers
would contribute to this end and to the
reduction of delays in problem solving.
Action 3: Provide better access for
business to the right information
Access to information is essential to
ensure that businesses are aware of
opportunities in the Single Market, how to
exploit them and how to solve problems.
Information must be made accessible
3
rapidly and in user-friendly ways. The
Commission will, in particular, set up an
Internet shop for information on all Single
Market regulations affecting business, to
complement and be coordinated with the
Euro Info Centres, which have been
assigned a “first-stop” objective under the
multi-annual programme for SMEs (19972000). The Internet shop will be part of
the Europa Website and will also be
linked to the Member States’ Websites.
Using the Internet, businesses will be able
to provide feedback on their experience
on the ground.
Action 4: Simplify and improve national
and Community rules
Over-regulation is the enemy of job
creation - the Union’s top priority. Overcomplex rules, most of them national,
impose unnecessary costs on business, in
particular SMEs. The Commission will set
up a permanent rolling programme of
simplification and improvement of Single
Market legislation, including SLIM and
other simplification exercises. The future
work programme will include VAT,
banking, insurance and securities,
fertilisers,
consumer
services,
telecommunications, customs rules and
procedures and possibly other sectors,
including company law.
Member States must also play their part
and commit themselves to a parallel
programme of simplification of national
regulatory and administrative procedures.
Such a programme should include a
comprehensive analysis of their impact,
and aim, in the first place, to simplify
national regulatory and administrative
procedures for business start-ups.
Progress should be reviewed periodically
in the Internal Market Council.
The Commission will also undertake pilot
projects
to
improve
consultation
procedures with business regarding the
costs of implementing certain new
legislative proposals. This will include, as
a pilot exercise, the establishment of a
4
European Business Test Panel. Businesses
and
citizens’
and
consumers’
organisations will be invited to alert the
Commission to national rules which they
consider to be abnormally burdensome
and affect access to the Single Market.
The Commission will publicise them and
take the most significant cases up with the
Member State concerned.
Action 5: Tackle weaknesses in the
existing legal framework
There are a number of areas where the
existing Single Market framework needs
to be improved. The Commission intends,
as a priority, to propose action in the
following areas. It expects the Council
and Parliament to give political
consideration to these areas and to act
swiftly on forthcoming Commission
initiatives.
• public procurement: this is of major
economic importance, representing
12% of GDP. Public procurement in
Europe is more open than ever before,
but further steps are needed, e.g., to
improve enforcement and encourage
electronic
tendering.
A
wide
consultation is now underway based
on a detailed Green Paper: an action
plan will be proposed when this
consultation has been completed by
the end of this year;
• application
of
the
mutual
recognition principle: Member
States and the Commission will need
to cooperate closely on cases notified
under Parliament and Council
Decision 3052/95, which establishes a
procedure for the exchange of
information on cases in which a
Member State denies market access to
goods lawfully produced or marketed
in another Member State. Adequate
political
attention
is
required,
including, if necessary, at Council
level, to the effective application of the
principle of mutual recognition. Unless
mutual recognition can be made more
effective,
further
technical
harmonisation in some sectors might
have to be considered;
• European
standardisation:
considerable progress has been made
in the area of standardisation, with an
average of 5 European standards being
published each day. However, there is
no room for complacency. Proposals
to
promote
further
progress,
particularly
in
relation
to
standardisation in the Information
Society will be made. The Commission
will address the question whether and
how authorities can make use of
technical specifications which are not
official standards but which are
publicly available and used in the
market-place, in particular where no
standards exist or where existing
standards are inappropriate;
• conformity marking of products:
the proliferation of national conformity
marks, both public and private, which
are affixed to products in addition to
those marks certifying conformity with
EU
legislation,
risk
creating
unnecessary costs and market
distortions for business within the
Single Market. In this context, the
Commission will undertake an
evaluation of its policy on conformity
marking;
• Community
patent
system:
proposals for the modernisation and a
more user-friendly operation of the
patent system will be made to support
innovation in Europe. The Commission
will publish a Green Paper on this
subject later this year with a view to
tabling appropriate legislative action to
redress any shortcomings;
• construction products: following the
first phase of the SLIM initiative,
modifications will be proposed to the
construction products Directive to
facilitate the free movement of
construction products in the absence
of European standards;
• customs: following the adoption of
the Customs 2000 programme, the
Commission and the Member States
are committed to act in order
substantially to improve the work of
customs services to guarantee uniform
implementation of rules and to protect
Community financial interests. The
existing commitments to computerise
transit procedures to reduce fraud and
the administrative burden on business
will be followed by action to make
wholly paperless customs clearance
available.
STRATEGIC TARGET 2:
DEALING WITH KEY MARKET DISTORTIONS
Action 1 : Remove tax distortions
Tax barriers and distortions to the Single
Market have not yet been tackled with
sufficient determination. Harmful tax
competition increases Member States’
difficulties in restructuring their tax
systems and delays progress towards a
more coherent tax system within the
Union. A co-ordinated approach, as
pursued in the Taxation Policy Group,
should contribute significantly towards
resolving such problems.
Member States are asked to confirm their
commitment to working towards
maximum possible agreement on a tax
package that will be designed to achieve
a balanced approach that meets the
concerns of various interests. In this
context, consideration could be given to:
• a code of conduct designed to reduce
effectively harmful tax competition,
which causes difficulties for every
Member State, particularly in the area
of corporate taxation;
5
• measures to eliminate distortions to
the taxation of capital income;
• measures designed to eliminate
withholding taxes on interest and
royalty payments between companies,
which form part of long-standing
efforts to remove tax disincentives to
cross-border economic activity (double
taxation);
• measures designed to eliminate
significant distortions in the area of
indirect tax legislation.
In addition, the Commission will clarify
the scope and improve the coherence of
the
application
of
Community
competition rules, including rules on state
aids.
Progress in this area should help Member
States to make their tax systems more
employment-friendly,
reducing
the
burden on labour and promoting job
creation
while
preserving
the
competitiveness of the European
economy. Further work is also needed on
removing tax obstacles affecting frontier
workers and tax barriers to the optimal
functioning of financial services. In the
longer term, further elements of corporate
taxation will be examined in order to
achieve greater consistency between
national tax systems, thereby creating a
more level playing field for companies
operating across Europe.
Action 2: Create a common system for
value-added tax:
The current VAT system imposes an
excessive burden on business and
discourages cross-frontier trade. As a first
step, the Council and Parliament are
invited to act swiftly on the forthcoming
proposals to modernise the tax and apply
it in a more coherent and uniform way,
together with the proposals to advance
administrative
cooperation
among
Member States, and to engage as quickly
6
as possible in the process of change to
the radically simpler origin-based VAT
system proposed by the Commission.
Action 3: Restructure the Community
framework for the taxation of energy
products
At present, only mineral oils are subject to
a Community system for minimum
taxation. For other products, Member
States tax at the rate of their choice or
apply no tax at all. This leads to
distortions between different sources of
energy and different Member States. The
Commission
proposes
that
the
Community minimum rate system should
be widened to all energy products and
that there should be a gradual
approximation
of national rates of
taxation for all energy products, taking
into account the need to maintain
European competitiveness.
Action 4: Apply a rigorous approach to
competition policy
The rigorous application of competition
policy is essential to ensure that anticompetitive practices on the part of
companies or national authorities do not
choke off the competitive dynamics of the
single market.
The volume of state aids granted in the
EU remains at worryingly high levels,
representing annually 95 billion ECU and
between 0.4 and 2.6% of GDP in the
different Member States during the 19921994 period. In addition, 85% of aid to
industry is accounted for by the 4 largest
economies of the Union. As well as being
a source of distortion of competition, the
high level of aid weighs on public
budgets and risks endangering the
efficient functioning of the Single Market.
Inasmuch as state aids tend to concentrate
on large enterprises they also damage the
competitive position of SMEs.
Commission action alone is not sufficient.
A dialogue with the Member States to fix
precise objectives and a timetable for the
reduction of overall aid budgets appears
therefore as a necessary complement to
the Commission’s action. To redress the
negative impact on cohesion of the
present situation, the Commission will
propose new guidelines on regional aids
aiming at reducing regional disparities by
concentrating aid in the poorest regions
and lowering the maximum levels better
to take account of the socio-economic
situation of each region. The Commission
will concentrate resources on assessment
of those aid cases which represent the
greatest threat to competition and the
functioning of the Single Market,
particularly where regional aid is
concentrated on large investment
projects. The Commission will also
tighten further the rules on rescue and
restructuring aid, while taking account of
the role of appropriate levels of aid in
cushioning the social effects of
restructuring. Furthermore, it will
examine whether state aid rules can be
modified to limit the risk of state aid
providing
unfair
incentives
for
delocalisation.
With regard to anti-trust rules, action will
be taken to focus attention on the most
serious infringements and to decentralise
the application of the competition rules to
the Member States as far as possible
without endangering the level playing
field within the Single Market.
STRATEGIC TARGET 3:
REMOVING SECTORAL OBSTACLES TO MARKET INTEGRATION
Action 1:Break down the barriers in
service markets
Service markets account for 70% of Union
GDP but they are less integrated than
other markets. In business and
professional services, there is major scope
for simplification at national level to
reduce barriers to entry and boost
competitiveness. In financial services, the
lack of a real Single Market for investment
funds handicaps Europe’s potential to
channel
savings
into
productive
investments in a significant way. Farreaching steps are required.
The
Commission will propose a directive on
Collective Investment Schemes to tackle
the remaining obstacles.
Some Member States impose strict
quantitative rules on the investment of
pension funds. These result in lower
returns, which raise indirect labour costs
(and thus reduce job creation) and reduce
the potential of a European capital
market. EMU will make currency
matching restrictions irrelevant. Member
States are called upon to move towards
the elimination of these restrictions in
anticipation of the introduction of the
euro. Further work is also needed to
improve the availability of capital to
SMEs.
Effective action on the taxation front will
lend momentum to the integration of
insurance markets. Simplification of
insurance legislation also needs special
attention.
The balanced opening-up of public
utilities, taking full account of the need to
promote access for everyone to services
of general interest, will contribute to a
better overall allocation of resources. The
liberalisation of gas supplies needs to be
agreed. The Community institutions and
the Member States must ensure that the
national measures required to implement
agreed
market
opening
in
telecommunications and electricity are
taken in accordance with the established
timetable and that networks are
effectively open to competition.
In air transport, new rules for charges; the
allocation of slots at Community airports;
and the creation of new institutional
7
structures for air safety and air traffic
management are essential for effective
market integration.
Action 2: Strengthen checks on products
At present the checks that are carried out
to ensure compliance with product rules
are uneven and could compromise both
consumer protection and fair competition.
The Commission will make legislative
proposals to strengthen common rules for
market surveillance inter alia by
providing for joint inspection schemes or
more detailed inspection procedures in
areas such as industrial and consumer
products, foodstuffs, pharmaceutical
products and medical devices. Scientific
expertise, which is important for the
application of the legislation and linked
to market surveillance, must be mobilised
and used more widely for legislative
purposes at Community level.
Action 3:Improve the business
environment for cross-frontier operations
Companies operating at Community level
are obliged to maintain unnecessary and
costly partitions in their structures and
organisations to meet the requirements of
national company law. The Commission
will consider how its proposal for a
European Company Statute should be
adapted
in
the
light
of
the
recommendations of the group chaired by
Viscount Davignon. The Council and
Parliament are called upon to reach early
agreement on any revised proposal and
to pursue actively work on the related
proposals
(European
cooperatives,
associations and mutual societies). The
Commission will shortly make a revised
proposal for a Tenth Company Law
Directive on cross-border mergers.
Increasingly long delays in payment have
serious consequences for all European
firms. This is particularly the case for
SMEs whose cash-flow, profitability and
competitiveness and opportunities to
trade across frontiers are undermined and
8
whose competitive position as suppliers
to larger firms is often distorted by
deliberately long payment delays. It is not
only for businesses to improve their
payment record; the public sector should
also set a better example. A report shortly
to be published by the Commission will
show that little action has been taken by
Member States to reduce this problem,
and that the payments situation is
deteriorating. In the absence of an
appropriate response by Member States
before the end of the year, the
Commission will propose a directive to
reduce late payments in Europe.
Action 4: Face the challenge of innovation
and new technology
Electronic commerce offers enormous
opportunities for cross-border trading in
Europe and for improving international
competitiveness. A clear regulatory
framework will give
consumers the
confidence to use it and businesses the
incentive to make the necessary
investment. The Commission will address
a number of issues related to electronic
commerce, both of a horizontal and of a
specific nature, in order to ensure the free
flow of this new form of trade within the
Single Market. The Commission seeks
early agreement on its proposal for a
transparency
mechanism
and, as
indicated in its recent Electronic
Commerce Initiative, it will make
legislative proposals on distance-selling of
financial services, copyright, digital
signatures and conditional access
services.
Biotechnology will be the basis for the
third generation of new pharmaceutical
products. Without an appropriate
framework for protection of investment in
intellectual property in this field,
investment in this industry in Europe will
not be as high as it could be. The crucial
importance of biotechnology demands
urgent adoption of the Commission’s new
proposal
on
the
protection
of
biotechnological inventions.
STRATEGIC TARGET 4:
DELIVERING A SINGLE MARKET FOR THE BENEFIT OF ALL CITIZENS
Action 1: Eliminate border controls
The continued existence of controls on
individuals at internal frontiers represents
the Single Market’s most important failing
for many citizens. Subject to the outcome
of discussions in the IGC, the Commission
calls upon the Council to agree and the
Member States to apply the flanking
measures necessary to provide a secure
framework for the free movement of
people so as to permit adoption by the
Council of the Commission’s proposals on
eliminating frontier controls.
Action 2: Update the rules on the right of
residence
The High Level Panel on the Free
Movement
of
People
and
the
Commission’s report on Citizenship of the
Union have highlighted a number of
shortcomings in the way citizens and the
members of their families can exercise
their right to move and reside freely in
other Member States. In order to remedy
this situation, the Commission will
propose, inter alia, arrangements for
short-term residents and adaptation of the
right to reside and to remain in the host
Member State. Member States are called
upon to act swiftly on these proposals in
order to give full value to citizenship of
the Union.
Action 3: Protect social rights
Social policies have a crucial role to play
in the development of the Single Market
by defining a new interplay between
flexibility and security. This will help
create the conditions for change, and
promote new ways of working while
guaranteeing adequate social rights. As
recent experience has shown, failure to
ensure adequate enforcement of social
rules in individual cases can lead to
negative reactions and damage to public
confidence in the Single Market.
The social dialogue will continue to play
a vital role. The results of negotiations
between the social partners on part-time
work are expected to be announced
shortly, and the recent Green Paper on
partnership for a new organisation of
work has launched a broad debate on
how to respond to these new challenges.
This will be followed by specific
initiatives in the framework of a new
Social Action Programme in early 1998.
Industrial restructuring resulting from
market integration is beneficial to the
Union’s economy but can have serious
social consequences for the communities
involved. A series of actions is under way
to deal with this important issue.
Following recent cases, the social partners
are examining the question of the social
implications of industrial restructuring.
For its part, the Commission will monitor
closely the application of the Community
rules on the consultation of workers. It
calls on the Member States to review
national provisions for the enforcement of
these rules and the penalties that apply.
The
Commission
has
launched
consultation of the Social Partners at
European level on possible Community
framework rules on information and
consultation at national level. This
consultation will be in two phases, the
first on the desirability of action and the
second on the possible content of a
Community initiative. The Commission
will continue to define a more balanced
and coherent approach in the application
of all Community policies affecting
industrial restructuring. It will include
efforts to encourage companies and the
Member States to anticipate the
consequences of restructuring and ensure
the employability of workers by adapting
training and social protection systems.
In line with its recent Communication on
modernising and improving social
9
protection in the European Union, the
Commission
will
encourage
the
development of social protection systems
which contribute to improving the
employability of those who are out of
work.
To ensure balanced and efficient social
rules in the Single Market, the
Commission will publish before the end
of this year a consultative White Paper on
the sectors excluded from the Directive
on the organisation of working time,
including considering the possible
adaptation of these principles to different
modes of transport.
Action 4: Promote labour mobility within
the Union
Although the Treaty has long guaranteed
European citizens the right to live and
work in any Member State, labour
mobility in the Single Market remains low.
This is partly due to remaining barriers to
the free movement of workers, which
must be eliminated. Building on the
report of the High Level Panel referred to
above, the Commission will propose a
package of measures designed to
overcome these barriers. In parallel, it will
present a proposal on supplementary
pensions, and work towards the
simplification and modernisation of the
system coordinating social security
arrangements for people moving about
the Union. The Council and Parliament
are also called on to act swiftly on
forthcoming modified proposals on
extending the scope of family reunion
and consolidating the right to equal
treatment as regards social benefits.
To raise awareness of job opportunities in
other Member States and increase labour
mobility the Commission will improve the
EURES database on pan-EU employment
opportunities. Member States will be
invited to make this information more
widely available by integrating it into the
mainstream of their public employment
services.
10
Action 5: Protect consumer rights, health
and the environment
Consumers may hesitate before buying
goods and services, including financial
services, across frontiers because they are
unsure of their rights. Agreement on the
proposal on consumer guarantees would
be one of the important steps for
improving consumer confidence.
Consumer health protection will be
reinforced through more effective use of
scientific advice, control and risk analysis.
This will be used to ensure that consumer
health is taken into account during the
drafting of new legislation, to check that
current legislation is properly applied and
to reinforce the defence of Community
interests in the international context. In
addition, the Commission is considering
whether primary agricultural products
should be obligatorily covered by
Directive 85/374 on producers’ liability
for defective products.
The Commission will produce a
Communication defining its approach to
the Single Market and the environment,
with particular emphasis on how to
render both policies more mutually
supportive and how to remedy potential
problems quickly and efficiently.
Action 6: Develop a Dialogue with the
Citizen
Most European citizens are keen to find
out more about the rights and
opportunities offered by the Single
Market; more than half a million people
have already made use of Citizens First to
find out what they need to do in practice
to reside, study or work in another
Member State. Building on experience,
the Commission will develop a
permanent mechanism for dialogue with
citizens, in particular on their rights and
how to exercise them, and it has now put
forward specific proposals. A Signpost
Service will also be made available to
advise citizens who run into problems
and need help. Future feedback from this
mechanism will help to identify and
eliminate administrative obstacles and
keep the Commission informed about
how Community rules are respected in
practice.
THE INTERNATIONAL DIMENSION OF THE SINGLE MARKET
The Single Market cannot be considered
in isolation from its wider economic and
political environment. Its size and
potential growth already constitute an
asset in terms of attracting international
trade and investment to Europe. The
Single Market is providing the conditions
for improving European international
competitiveness and its success serves as
a model for other regions. These strengths
will be reinforced by a single currency.
The Union should capitalise more on
these advantages.
An important step will be to ensure full
Community participation in international
organisations,
particularly
those
responsible for the development of
technical regulations and standards and
full exploitation of other frameworks,
such as the Trans-Atlantic Business
Dialogue. The policing of the Union’s
external frontiers requires further action
to strengthen the ability of customs
authorities to work together as effectively
as possible, particularly in the fight
against fraud.
The Single Market is a reflection of
Europe’s open economy, with its rules
and standards a reference for many
countries. As a result, the Union should
be able to play a stronger role in
international fora, provided it speaks
clearly with one voice. Action will be
pursued in the following areas:
liberalising financial services (GATS);
strengthening and expanding WTO
disciplines
for
competition
and
investment; favouring the use of
international standards; negotiation of
mutual
recognition
agreements;
coordination of Member States in
international fora for telecommunications;
a common negotiating position for air
transport; approximation of systems and
rules in the Euro-Mediterranean area;
attacking technical barriers to trade in
third country markets; fighting intellectual
property fraud; improving the ability of
European companies to raise capital on
international markets by avoiding
divergence
between
Community
Directives and international accounting
standards; and assisting SMEs to compete
in world markets.
With the accession of new Member States,
there will be new opportunities for an
enlarged Single Market. After the
accession of new Members, full
enforcement and correct implementation
of the acquis in all parts of the Single
Market will continue to be a vital
condition for maintaining confidence in
the proper functioning of the Single
Market.
The Commission will shortly issue its
opinions on the applications for
accession. The degree of commitment of
applicants to the Single Market and their
capacity to take over the obligations with
respect to its proper functioning will be a
key element for consideration. In order to
help the CEECs to prepare for their
integration in the Single Market, the
Commission published its 1995 White
Paper on Single Market legislation. The
Commission is also vigorously pursuing
its technical assistance efforts through
Phare and the Technical Assistance
Information Exchange Office (TAIEX).
Technical assistance will continue to be
an essential contribution to prepare
11
accession. It should allow the CEECs to
introduce the legislation and put in place
the administrative infrastructures to help
them reap the benefits of a fully
functioning Single Market.
In the
meantime, where the Community acquis
has been fully integrated for a particular
sector in the area of technical standards,
the Conformity Assessment Agreements
offer the possibility of access to markets
in anticipation of accession.
The Action Plan is the key to unlock the
full potential of the Single Market. It
should improve the competitiveness and
job-creating capability of business. The
Plan adopts a balanced and coherent
approach which seeks to take full account
of the concerns of individual citizens with
regard to their personal rights; the
environment; and the protection of health
and safety. It emphasises the need for
coherence between Single Market policy
and other policies, developing the wider
social
dimension
and
ensuring
harmonious development so that the
benefits of the Single Market are felt in all
regions of the Union.
• endorse immediately the actions listed
as Phase 1 in Annex 1 and the
associated timetable to ensure that
existing rules for the Single Market are
made as effective as possible;
CONCLUSION
The prize for success is immense. With
rising confidence will come increased
prosperity across Europe. The Union will
be able to draw strength from the
convergence
of
several
major
developments at the turn of the century: a
first-rate single market, the single
currency, new pan-European market
opportunities as previously closed sectors
open up and enlargement of the Union developments that should, indeed must
all
lead
to
more
employment
opportunities, greater solidarity and
economic and social cohesion between
all the Member States.
All Community institutions and the
Member States must play their full part in
ensuring a positive and rapid response to
this call for action.
The Council is invited to:
• endorse the overall objective and the
four Strategic Targets of the Action
Plan as an agreed basis for action to
improve the effectiveness of the Single
Market;
12
• seek early adoption, as far in advance
as possible of 1 January 1999, of a
limited number of priority measures in
the Action Plan listed as Phase 2 in
Annex 1 (notably the liberalisation of
gas supply, the European Company
Statute, biotechnological inventions
and the transparency mechanism);
• take all steps necessary to secure the
maximum possible agreement by 1
January 1999 on the remaining actions
in the Action Plan listed as Phase 3 of
Annex 1;
• to review progress in delivering the
Action Plan at each meeting of the
Internal Market Council and of the
European Council in the run-up to
December 1998. The Luxembourg
European Council in December 1997
could
specify
further
priority
commitments
with
regard
to
Commission initiatives announced in
this Action Plan and presented before
the end of 1997.
The Commission invites the European
Parliament to give its full and active
support to ensure that the Action Plan is
implemented to the maximum extent
possible and to provide for the necessary
priority treatment of the legislative
proposals it contains. The Commission,
for its part, will make every effort to
present its proposals in good time to
allow the other institutions to meet their
targets.
ANNEX 1
DIFFERENTIATED IMPLEMENTATION OF THE
ACTION PLAN FOR THE SINGLE MARKET
13
ANNEX 1
Differentiated Implementation of the
Action Plan for the Single Market.
All of the actions identified in the
Commission’s 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.
In preparing its Action Plan, the
Commission has therefore sought to
distinguish between the following three
phases for action in the period before
January 1, 1999, based on the attached
timetable (annex 2):
Phase 1
Immediate implementation of
actions in accordance with the
timetable laid down in annex 2:
Many of the actions in question do not
require
additional
Community
legislation, but rely on practical steps
taken at Community and national level
to give effect to previous political
commitments. Strategic Target 1
provides for concrete, operational
action to make existing Single Market
rules more effective. The Commission
calls for immediate endorsement of
these phase 1 measures and their
urgent implementation.
Phase 2
Adoption of existing proposals by
the
earliest
possible
date:
Commission proposals have already
been tabled to plug some critical gaps
in the Single Market framework. The
Council and the European Parliament
are already actively discussing these
areas with a view to finalising
Community
legislation.
The
Commission urges the Council and
European Parliament to demonstrate
the necessary political determination
to achieve early adoption of a limited
number of proposals as far in advance
as possible of 1 January 1999.
Phase 3
Attain the maximum possible
agreement on remaining measures
by 1 January 1999. All the remaining
actions are similarly of fundamental
importance for the realisation of an
effective Single Market, but here the
process of defining and agreeing
appropriate actions will require a
greater investment of time and effort
by the Community institutions.
In some cases, the Commission has yet
to come forward with its proposals,
(e.g. to complete
a balanced
regulatory framework to encourage
electronic commerce in Europe, on
financial services and on market
surveillance).
The
Commission
undertakes to make the necessary
proposals announced in the Action
Plan as soon as possible and in
accordance with the timetable laid
down in annex 2. The Commission
also invites the Council and the
European Parliament to give them the
necessary priority treatment. The
European Council in December 1997
could
specify
further
priority
commitments to action in these areas.
In other cases, additional efforts and
time will be needed to seek
agreement, including the area of
taxation where, on the basis of
discussions in the Taxation Policy
Group, there is growing awareness of
the need for increased coordination
between Member States.
The Commission invites the Council to
take all steps necessary to secure the
maximum possible agreement on the
remaining actions in the Action Plan by 1
January 1999.
15
Strategic Target 1
Strategic Target 1.: Making the rules more effective.
Action
Phase
All delays in transposition of Single market legislation to be eliminated.
1
Establishment of a framework for enforcement and problem-solving.
1
Establishment of an Internet shop for information on all Single Market rules
affecting business.
1
Extension of SLIM and other simplification work to new sectors.
1
Simplification of national rules, including regulations on business start-up.
1
Note Commission’s intention to consult a European Business Test Panel for
certain legislative proposals.
1
Follow-up to Commission initiatives concerning public procurement,
mutual recognition, European Standards, conformity marking, the
Community patent system, construction products, implementation of
Customs 2000 programme and reform of transit1.
1
1
The Action Plan
calls for
endorsement that
these areas are the
most deserving of
priority treatment
for the effective
functioning of the
Single Market. The
Commission will
endeavour to come
forward with
proposals in respect
of these areas
before the end of
1997. On the
occasion of the
Luxembourg
European Council,
undertakings to
reach agreement
before 01.01.1999,
may be sought in
respect of specific
proposals which the
Commission has
tabled in these
areas.
2
In the areas of the
exclusive
competence of the
Commission, the
Council is invited to
note the
Commission’s
commitment to
pursue its activities
as regards the
definition of new
guidelines for
assessing the
compatibility of state
aids with the Treaty
(cf. also 5th State
aid report) and as
regards the targeting
and simplification of
anti-trust rules.
Strategic Target 2: Dealing with key market distortions.
Action
Phase
Tax package based on discussions in the Taxation Policy Group, including
work towards maximum possible agreement on a ”Code of conduct”,
measures to eliminate distortions to the taxation of capital income, crossborder payment of interest and royalties, and elimination of significant
distortions in the area of indirect tax legislation.
3
Forthcoming proposals for the modernisation and more coherent
application of VAT.
3
Restructuring the Community framework for the taxation of energy
products.
3
State aids:
Note Commission’s intention to2:
• adopt new guidelines concerning regional aids;
• adopt multi-sectoral framework on state aid to large investment projects;
• reinforce controls on aid for rescue and restructuring.
-
Agree streamlined notification requirements for Member States in respect of
state aid schemes for horizontal purposes.
3
Agree to codification and clarification of state-aid procedures.
3
Note Commission’s intention to pursue simplification and targeting of antitrust rules.2
-
16
Strategic Target 1
Strategic Target 3: Removing sectoral obstacles to integration.
Action
Phase
New Directive on Collective Investment Schemes.
3
Reduction of restrictions on investment by pension funds.
3
Agreement on liberalisation of gas supply.
2
Effective implementation of Directive on internal market for electricity.
1
Implementation of telecommunications liberalisation on time.
1
New rules on allocation of airport slots and airport charges.
3
Agreements on creation of European Air Safety Agency and new Eurocontrol
Convention.
3
Strengthen rules on market surveillance in certain sectors.
3
European Company Statute.
2
Tenth Company Law Directive on cross-border mergers.
3
Regulations on European Statutes for cooperatives, associations and mutual
societies.
3
Directive on late payments.
3
Electronic commerce related measures.
• Transparency Directive for Information Society services;
2
• Copyright and authors’ rights;
3
• Distance selling of financial services;
3
• Digital signatures;
3
• Conditional access services.
3
Directive on the protection of biotechnological inventions.
2
17
Strategic Target 1
Strategic Target 4: Delivering a Single Market for the benefit of all citizens.
Action
Phase
Accompanying measures and 3 Directives on abolition of frontier controls,
restrictions on the right to movement and the right to travel.
3
Adaptation of the right to reside and remain in another Member State.
3
Note Commission’s consultation of the social partners on the information
and consultation of workers at national level.
1
Note Commission’s intention to publish White Paper on sectors excluded
from Directive on organisation of working time, particularly transport
services.
1
Directive on supplementary pensions.
3
Build on Commission efforts to improve and extend use of the EURES
employment database
1
Directive on the sale of consumer goods and associated guarantees.
3
Note Commission’s intention to publish communication on the Single
Market and the environment.
1
Establishment of a mechanism for dialogue with citizens.
1
18
Strategic Target 1
ANNEX 2
ANNOTATED LIST OF PRIORITY ACTIONS
19
20
Strategic Target 1
Strategic Target 1: Making the rules more effective
Action
Action required by:
Action 1: Put agreed Single Market
legislation into force
All delays in transposition of the Single
Market legislation to be eliminated
Member States are asked to put forward, by
1 October 1997, a detailed timetable
showing their programme of transposition to
tackle urgently all delays in transposition
and to ensure that deadlines for
transposition falling between now and 1
January 1999 are respected. These
timetables, in conjunction with the Single
Market Scoreboard, will be used to measure
progress and will be discussed in the Internal
Market Council. In the meantime, the
Commission will pursue cases against
Member States which have not complied with
their legal obligations.
By 1 October 1997, Member States will
submit time-tables to the Commission.
Action 2: Establish a framework for
enforcement and problem-solving
By 1 October, 1997:
1.
With a view to ensuring strict
application in practice of Single Market
rules and rapid cost-effective resolution
of problems, the Commission proposes
the designation by each Member State of
a coordination centre. This structure will
facilitate contacts between enforcement
authorities of different Member States in
order to ensure that problems raised by
other Member States or the Commission
are solved rapidly by the specialist
departments of their administration
within an agreed deadline.
1. Member
States shall
designate
coordination centres for processing and
resolution of problems relating to the
implementation of Single Market rules,
and agree deadlines within which
problems should be resolved.
2.
Member States who have not already
done so should set up contact points in
administrations to which business and
citizens can address single market
problems. These contact points should
be established in accordance with
Council Resolution of 8 July 1996 (OJ C
224 of 01.08.96).
2. Member States to confirm that contactpoints have been established and
provide relevant information to
Commission and other Member States.
21
Strategic Target 1
Action
Action required by:
3.
The Commission also calls on Member
States to provide information on
enforcement structures and procedures
for examination by the Commission and
other Member States.
3. Member States to inform Commission
and other Member States regarding
enforcement structures and procedures.
4.
The Commission will accelerate the
investigation of complaints from
business and individuals, and the
treatment of infringement proceedings.
For their part, Member States should
ensure that the respect strictly the
deadlines for replies laid down in
infringement proceedings.
4.
Commission, Member States.
Action 3: Provide better access for
business to the right information
Establishment of an Internet shop for
information on all Single Market rules
affecting business
Details of all Single Market rules affecting
business will be made available, primarily
through a permanent Internet shop which
will be established during the first half of
1998.
It will complement and be
coordinated with the Euro Info Centres in the
context of multi-annual programme for SMEs.
The Internet shop will enable SMEs to search
all European and national regulations and to
report difficulties that they experience in
trying to access the Single Market. Advice
will be available on how to overcome
difficulties, in particular, through the
Internet shop.. To the extent possible, the
information available through the Internet
shop will be expanded to include material
on, for example, EU R&D programmes,
information on public tendering gathered
through the TED database and other
information on Community projects.
22
Strategic Target 1
By 1 July, 1998, Commission will establish
Internet shop, in cooperation with Member
States and industry.
Action
Action required by:
This Internet shop will be operated through
the Europa web-site and will be linked to
Member States’ web-sites. Business will be
asked to comment and provide input on the
information to be provided before the
Internet shop is set up.
Action 4: Simplify and improve national
and Community rules
a) Extension of SLIM and other simplification
work to new sectors
T he re will be a rolling programme of
simplification of Single Market legislation,
drawing on the experience of the SLIM pilot
project (Simpler Legislation for the Internal
Market) carried out in 1996, to eliminate any
unnecessary regulatory burdens on business.
The novelty of the SLIM methodology lies in
the
assessment
of
simplification
recommendations by small working teams
gathering
experts
from
national
administrations and users of legislation. In
the first phase of SLIM, four small teams,
comprising four or five experts from Member
States with the same number of
representatives of legislation users, made
recommendations on the simplification of
legislation on Intrastat, recognition of
diplomas, construction products and
ornamental plants.
By December 1997, the Commission will
complete its set of proposals designed to
give effect to recommendations in sectors
covered by first phase of SLIM.
By November 1997, the Commission will
present conclusions and recommendations
concerning the second phase of SLIM to the
Internal Market Council.
By January 1998, the Commission will define
subjects and establish teams for third phase
of SLIM.
By May 1998, the Commission will define
subjects and establish teams for fourth
phase of SLIM.
In 1997, these recommendations are being
followed up by the Commission, while the
new areas to be examined are Value Added
Tax requirements, banking services, the
combined nomenclature for external trade
and legislation on fertilisers. The rolling
programme of simplification will combine
the SLIM methodology and other
simplification exercises to simplify several
areas of legislation such as insurance and
securities,
consumer
services,
telecommunications, customs rules and
procedures and possibly other sectors,
including company law.
23
Strategic Target 1
Action
Action required by:
b) Simplification of national rules, including
regulations on business start-up
Member States are asked to commit
themselves to a programme of legislative
simplification at national level, beginning
with the rules on business start-ups, to
eliminate unnecessary costs and delays, in
line with the Commission’s recommendation
on this subject (C(97) 1161 of 22 April
1997). The Member States shall submit
periodic reports on the results which will be
reviewed at meetings of the Internal Market
Council, beginning in November 1997.
Member States are invited to initiate or
extend the simplification of national rules,
including the area of business start-up, and
to keep the Commission and other Member
States informed of activities in this domain
on a periodic basis, beginning with the
Internal Market Council of November 1997.
c) Consultation of a European Business Test
Panel for certain legislative proposals
The purpose of consulting a Test Panel of
enterprises, including SMEs, is to assess the
costs and administrative consequences for
business of proposed new legislation. It
would not replace, but would complement,
the normal wide consultation undertaken by
the Commission in the preparation of its
legislative proposals, for example, through
Green Papers and similar documents which
set out objectives and policy options. The
Test Panel would focus on the important
issue of the compliance costs and
administrative burdens likely to arise from
the specific legislative solution proposed at
a later stage in the process of preparing the
legislation. The Commission will test this
approach on the basis of pilot projects.
24
Strategic Target 1
During the course of 1998, the Commission
will establish test panel and launch pilot
projects.
Action
Action required by:
Action 5: Tackle weaknesses in the
existing legal framework
a) Follow-up to Commission initiatives
concerning public procurement, mutual
recognition, European Standards, conformity
marking, the Community patent system,
construction products, implementation of
the Customs 2000 programme and measures
to reform transit
a) By December 1997, the Commission will
propose initiatives in the areas of public
procurement and patent systems.
b) Implementation of the Customs 2000
programme and measures to reform transit
b) By July 1997, the Commission will
submit a work programme to implement
Customs 2000 and the reform of transit.
In addition, the Commission will
undertake the following actions:
The main objectives of the Customs 2000
programme, adopted by the Council and
European Parliament in December 1996, are:
•
to guarantee that Community law is
applied in such a way as to achieve
equivalent results and equivalent levels
of protection at every point of the
Community customs territory;
•
protect Community financial interests.
In partnership with the Member States, the
Commission will, inter alia, support action to
promote modern working methods such as
audit techniques and risk analysis. The
Commission will also propose a Regulation
on the approximation of administrative
sanctions in the customs field. As a priority
within the Customs 2000 framework, the
Commission will forward measures to reform
the Community transit system. This focuses
on:
1.
2.
3.
4.
management and supervision of transit
operations;
computerisation of procedures;
introduction of a single transit system
for Europe;
coordination of fraud prevention and law
enforcement.
1. Commission to table new legislative
proposals by end 1997;
2. Member States and Commission to
introduce trial phase by mid 1998 and
operational phase by end 1998;
3. Commission proposal by mid-98;
4. new
legislative
provision
and
coordination by end 1997 for action by
the Commission and Member States.
25
Strategic Target 1
Strategic Target 2: Dealing with key market distortions.
Action
Action required by:
Action 1: Remove tax distortions
Tax package
As regulatory restrictions are dismantled, tax
hindrances and distortions are becoming
increasingly visible. Tax systems must evolve
in a way which allows cross-border economic
activity to develop, while safeguarding
against destabilising losses of revenue
through tax avoidance, arbitrage or fraud.
The Commission will come forward with
proposals and invites Member States to work
towards maximum possible agreement on a
tax package, based on work in the Taxation
Policy Group (TPG). In this context,
consideration could be given to:
•
•
•
•
a code of conduct designed to
effectively
curtail
harmful
tax
competition which constrains the taxraising activities of Member States and
distorts the allocation of productive
resources across the Single Market.
Discussion which is currently underway
in the Taxation Policy Group, focusing
on corporate tax, will facilitate
agreement between Member States.
the elimination of distortions in the
taxation of capital income. Differences
in taxation can cause serious distortions
to capital allocation and flows which are
expected to increase once currency risk
and interest rate differentials disappear
between
Member
States
which
participate in the single currency;
measures designed to eliminate
withholding taxes on interest and
royalty payments between companies,
which form part of long-standing efforts
to remove tax disincentives to crossborder economic activity (double
taxation);
measures designed to eliminate
significant distortions in the area of
indirect tax legislation.
26
Strategic Target 2
Member States are called upon to work
within the Taxation Policy Group towards
maximum possible agreement on a “Code of
Conduct”. Building on work carried out in the
Taxation Policy Group, the Commission will
submit proposals on taxation of capital
income, withholding taxes on interest and
royalty payments and in the area of indirect
taxation.
Action
Action required by:
Action 2: Create a common system for
value-added tax
Forthcoming proposals for the
modernisation and more coherent
application of VAT
The Commission has outlined a sequenced
approach for the preparation of the
switchover to an origin-based VAT system in
its strategic work programme. It is of critical
importance for the functioning of the Single
Market that the Council and Parliament
commit themselves to the transition to a
simpler origin-based VAT system on the basis
of Commission proposals.
Council and EP are called upon to act swiftly
to adopt forthcoming Commission proposals,
to be submitted as part of the preparatory
phase for the switchover to an origin-based
system.
This strategy includes a preparatory phase
covering agreement on change to the status
of the VAT committee, agreement on mutual
assistance for the recovery of VAT paid by
operators to partner country authorities, and
enhanced administrative cooperation. These
proposals will be tabled in the near future ,
and the Member States are invited to commit
themselves
to
agreement
and
implementation of these measures before
01.01.1999 as an important step in the
modernisation of VAT systems and the
preparation for progress towards an originbased system.
Thereafter, the Commission envisages three
packages of formal proposals:
•
a first set of measures relates to the
definition of taxable operations, VAT
liable operators, taxable base, attitude
to exemptions, and the conditions under
which tax deductibility can be conferred
and operated, followed by new proposals
regarding approximation of rates of VAT;
•
a second set of measures is designed to
pave the way for the elimination of the
concept of taxation at point of
destination. This group of proposals
relates to the territorial field of
application of VAT, place of taxation
27
Strategic Target 2
Action
Action required by:
and Community level organisation of
transactions carried out by VAT liable
persons, obligations and rights of VAT
liable persons, methods of control, etc.;
•
in the final package of measures, the
Commission will propose mechanisms for
the reallocation of VAT revenues
between Member States, as well as
proposals relating to special regimes
and transitional
measures.
The
Commission will then also unveil its
proposals for the final stage in the
approximation of rates.
Action 3: Restructuring the Community
framework for the taxation of energy
products
The Commission has tabled a proposal for a
Directive on the taxation of energy products.
This proposal aims for the extension of
Community policy to excise duties on energy
products (where used as carburants or
combustibles) other than mineral oils.
Mineral oils represent only 40% of final
energy consumption in the Community and a
coherent policy for Community taxation of
energy products must take account of these
other energy sources. Passage to Community
minimum duties will be phased in over 4
years for combustibles, electricity and
natural gas. Community minima will become
immediately effective for carburants used for
industrial and comme rc ial purposes
(excluding natural gas).
The proposals maintain a large degree of
flexibility for Member States, notably as
regards the composition of indirect tax base.
The cumulation of all forms of indirect
taxation relating to an energy product will be
taken into account when determining
compliance with agreed Community minima.
Above the agreed minima, Member States
will remain free to modulate rates applicable
to a product in the light of objective quality
criteria or the category of user.
28
Strategic Target 2
Council, EP
Action
Action required by:
Action 4: Apply a rigorous approach to
competition policy
a) State aids:tightening up guidelines on
regional aid, rescue and restructuring aid and
aid for large investment projects;
streamlining of notification requirements for
certain categories of horizontal aid:
The Commission will publish new guidelines
to give effect to these proposals. Member
State authorities are requested to lend their
active support to implementation of this
package of reform proposals.
In the area of state aid control, the
Commission will undertake a wide-ranging
reform of existing guidelines and procedures.
This overhaul will involve the following
elements:
1.
adoption of new guidelines concerning
regional aids foreseeing, inter alia, a
global reduction or permissible aid
intensities and a concentration of aid on
the areas most in need.
2.
adoption
of
a
“multi-sectoral”
framework to tighten up controls on
regional aid to large investment
projects. The objective is to introduce
rules which take explicit account of the
impact of aid to large investment
projects on competition in the sector
concerned.
3.
reinforcement of controls on aid for
rescue and restructuring purposes.
Stricter assessment of restructuring aid
will be undertaken with a view to (a).
avoiding the award of aid above and
beyond that required to restore
operators to viability, and (b).
examining the feasibility and realism of
the restructuring plan as a basis for
restoring the company to viability
without the need for further injections
of aid.
1. Commission to finalise guidelines by end
1997.
2. Commission framework by end 1997.
3. Commission revision of 1994 guidelines
by December 1997.
29
Strategic Target 2
Action
Action required by:
4.
introduction of streamlined notification
requirements for Member States in
respect of aid schemes for horizontal
purposes. The Commission will table
proposals for a Council Regulation based
on Article 94, authorising it to institute
a system of block exemptions from ex
ante notification requirements for
certain categories of aid scheme.
4.
By November 1997, Commission
proposals on a Council Regulation to be
tabled
regarding
effective
and
streamlined systems for notification and
monitoring of certain categories of state
aid. Member States to work towards
speedy agreement.
5.
proposal for a Council Regulation on
procedures codifying and clarifying state
aid procedures, in particular with regard
to notification procedures, time-limits
for the examination of aid by the
Commission, the right of Member States
against which a procedure is opened
under Article 93(2) to be heard, and the
right of third parties in state aid
proceedings.
5.
By early 1998 Commission proposal to be
tabled, with a view to adoption before 1
January 1999.
b) Simplification and targeting of anti-trust
rules
The Commission aims to target its activities
on those forms of agreement or practices
which are most likely to dampen competition
in the Single Market. The emergence of
effective competition authorities at national
level has also created scope for a more
rational division of labour between
Community and national bodies. In the light
of these considerations, and in order to
alleviate the burden of compliance with antitrust rules, the Commission will adapt
Community anti-trust rules in the following
ways:
1.
2.
broadening the “de minimis” rule
applicable to vertical agreements by
increasing the market share thresholds
below which Article 85 no longer
applies;
decentralisation of the application of
Articles 85 and 86 to Member States to
the extent that such decentralisation
leads to more efficient application of
Community competition rules.
30
Strategic Target 2
1. By September 1997 the Commission will
adopt a revised communication on
agreements of minor importance.
2. By July 1997, the Commission will
publish a draft communication on
cooperation between the Commission
and Member States in respect of
decentralisation.
Strategic Target 3: Removing sectoral obstacles to market integration.
Action
Action required by:
Action 1:Break down the barriers in
service markets
a) New Directive on Collective Investment
Schemes
The Commission will table proposals to
ensure an effective Single Market for all
kinds of collective investment schemes
investing in financial instruments and to
eliminate the major interpretative doubts
relating to the 1985 Directive on
undertakings for collective investments in
transferable securities (which will remain in
place). The solution envisaged is to move
away, for collective investment schemes
other than UCITS, from an approach based
on harmonisation of specific financial
products towards a regime which defines the
conditions (relating primarily to consumer
protection) under which operators will be
authorised to provide asset management
services throughout the EU on the basis of a
single passport. The emphasis will be on the
service provider, rather than on the financial
product, as is the case for other financial
services sectors.
By December 1997, the Commission will table
a proposal.
Council, EP
b) Reduction of restrictions on investment by
pension funds
Some 1 200 billion ECU of savings are
currently held by EU pension funds. However,
this vitally important segment of EU capital
market remains fragmented. A large number
of Member States, ostensibly for prudential
reasons, restrict equity investment by
pension funds and require that a high
proportion of investments be placed in
assets denominated in the national currency.
One consequence is that Europe’s capital
markets are less liquid than they could be.
There is empirical evidence that pension
funds are prevented from holding optimal
portfolios and returns are lower for a given
By June 1997, the Commission will table its
Green Paper.
Member States concerned to phase out
restrictions on foreign-currency denominated
holdings of pension funds within a secure
framework.
31
Strategic Target 3
Action
Action required by:
level of risk. The effect of lower returns is
increased employers’ pension contributions,
which affects adversely employment levels.
The introduction of the single currency will
remove the need for many of these
restrictions, at least as far as investments
within the participating states are
concerned.
The Commission is committed to ensuring a
secure environment for current and future
pension-holders with proper prudential
controls, which permits optimal investment
conditions. The Commission will produce a
Green Paper in 1997 for a more flexible and
appropriate regime of prudential regulation
which allows pension funds to achieve their
potential.
c) Agreement on liberalisation of gas supply,
and effective implementation of Directive on
internal market for electricity
1.
Agreement on the liberalisation of gas
supply: The Council and EP should
conclude their deliberations on
liberalisation of the gas market at the
earliest possible date, making sure that
final arrangements in respect of “takeor-pay” contracts, public service
obligations and emerging markets are
resolved in a manner which permits
genuine and reciprocal levels of crossborder trade.
1. Council, EP to finalise negotiations on
Directive for liberalisation of gas market
at the earliest possible date.
2.
Effective implementation of the
electricity Directive: (Directive 96/92 of
19 December 1996 concerning common
rules for the internal market in
electricity) to allow these provisions to
take full and immediate effect by the
date of entry into force (1 February
1999).
2. Commission, Member States to work in
close
partnership
in
clarifying
arrangements for timely implementation
of electricity Directive.
32
Strategic Target 3
Action
Action required by:
d) Implementation of telecommunications
liberalisation on time
The
Community
telecommunications
regulatory framework for the creation of a
liberalised and harmonised European
telecoms market is now largely in place. The
date for full liberalisation in most Member
States, January 1 1998, is six months away
and many of the intermediate deadlines laid
down in the framework have already expired.
The Commission will continue its efforts to
ensure full implementation of the regulatory
package, based on a twin-track strategy of
bilateral contacts with national regulatory
authorities or their precursors, and formal
infringement proceedings. This activity will
focus on ensuring both punctual and
effective application of Community rules,
enhancing transparency, assessment of
national licensing schemes, and contacts
within established technical fora (ONP, ACTE,
nascent Licensing Committee).
Commission, Member States,
regulatory authorities (NRAs)
national
e) New rules on allocation of airport slots and
airport charges
1.
Slot allocation: Existing rules for slot
allocation have ensured transparency
and non-discrimination. However,
capacity problems are becoming worse
and access to a number of airports is
rendered increasingly difficult. Airports
are anxious to increase capacity but are
faced with environmental restraints. It
is therefore becoming urgent to ensure
that existing capacity can be used in the
most efficient manner and that
competition will not be eliminated. For
these reasons, amendments will be
proposed in 1997 which should ensure
mobility in the market giving a
preference to possibilities for increasing
competition.
1. Commission proposals to be tabled.
Council, EP.
33
Strategic Target 3
Action
2.
Action required by:
Airport charges: Airport charges
represent a substantial part of airline
costs. In a situation where airlines are
subject to increasing competitive
pressure, it is therefore desirable to
ensure that such charges are not
excessive. Therefore airport charges
must be cost related. The aim must be to
ensure transparency in order to enable
airlines to establish the justification for
the
charges
and
to
propose
improvements. At the same time, a
certain flexibility in the application of
principles of cost-relatedness should be
possible in order to promote the highest
utilisation rates of available capacity for example, through peak hour pricing
and noise related charges.
2. Council, EP.
f) Agreements on creation of European Air
Safety Agency and new Eurocontrol
Convention
1.
creation of a European authority for air
safety: The objective is to reinforce the
efficient use of European air-space and
to enhance safety levels through the
definition of common rules for the
design, manufacture, maintenance and
exploitation of aircraft as well as for
staff and organisations involved in
these tasks. This approach will also be
furthered by the introduction, where
necessary,
of
certificates
or
authorisations attesting to conformity
with these requirements and control
mechanisms.
1. Council is invited to adopt a mandate
for negotiations to establish this
authority at European level.
2.
strengthening of Eurocontrol and
membership of the Community: The
objective is to reinforce regulatory
powers of Eurocontrol regarding the
supply of air traffic control services in
order to develop the quality of service
and the consistency of common
standards. Community membership
should contribute to achieving
convergence of action with the areas of
community responsibility.
2. Council is called upon to provide for
signing of the convention by the
Member States and for a mandate for
Community membership.
34
Strategic Target 3
Action
Action required by:
Action 2:Strengthen checks on products
Strengthen rules on market surveillance in
selected sectors
Consumers and business operators must have
confidence that there is effective control and
enforcement of Single Market rules,
particularly in areas where they are designed
to ensure a high level of public health and
safety. In areas with major public health
implications,
such
as
food
and
pharmaceuticals, the competent authorities
of the Member States exercise a high level of
official control. In the areas of technical
legislation covered by the New Approach,
responsibility for ensuring conformity lies
with producers, while certification is carried
out by “notified bodies”. Nevertheless the
competent authorities of the Member States
remain responsible for ensuring the
competence of the notified bodies, for the
respect of the essential requirements of the
Directives on the market, and for overall
supervision of the effective implementation
of the Directives. The Commission will review
arrangements for control and supervision of
products covered by Single Market measures
and bring forward initiatives tailored to the
needs of the specific sectors concerned:
1. Foodstuffs sector: The emphasis will be
on developing and improving the
arrangements laid down in existing
legislation; rapid alert systems,
exchange of information about national
control systems; coordinated Community
control programmes; audit missions to
Member States to verify
the
effectiveness and equivalence of official
controls;
2. Pharmaceuticals sector: The priority will
be given to extending the current
requirements for Good Manufacturing
Practices to starting materials and to
the setting up of a Community
inspection system of pharmaceutical
manufacturers of both finished
medicinal products and starting
materials;
Commission to table proposals to give effect
to approach in the three sectors.
Member States to improve market
surveillance on basis of Commission
proposals, to be agreed by Council and EP.
35
Strategic Target 3
Action
Action required by:
3.
Areas covered by the New Approach:
Actions to be proposed in the first stage
will cover:
•
the elements of market surveillance
(organising
checks,
requiring
information,
sampling,
supplying
information to risk groups, carrying out
effective withdrawal) and defining the
conditions of their deployment;
•
mutual assistance between enforcement
authorities and defining the conditions
under which this assistance will take
place, ranging from information
gathering up to the application of the
safeguard clause;
•
providing technical expertise in support
of the preparation and management of
the Directives and of surveillance
activities, in particular in the case of
safeguard clauses.
4.
Consumer products as covered by the
Directive 92/59 on General Product
Safety: Measures will be taken to:
•
strengthen the application of in the
Member States of the mandatory market
surveillance requirements of the
Directive;
•
further develop and institutionalise the
systems of cooperation between the
Member States and between the
Commission and the Member States
under the Directive;
•
accelerate the functioning of the alert
and information systems on dangerous
products;
•
improve the distribution of information
on dangerous products.
36
Strategic Target 3
Action
Action required by:
Action 3:Improve the business
environment for cross-frontier operations
a) European Company Statute, related
proposals for statutes on cooperatives,
associations and mutual societies, and the
Tenth Company Law Directive on crossborder mergers of public limited companies
1.
European Company Statute:
Adoption of the Council Regulation for
the European Company Statute requires
a solution to the problem of worker
participation which has stalled progress
on this initiative for over a decade. A
working group chaired by Viscount
Davignon, commissioned to suggest
solutions to this problem, has submitted
proposals in May 1997. These proposals
serve as the basis for renewed political
discussion on this subject, to be
pursued actively with a view to adoption
at the earliest possible date.
1. Council, EP.
2.
The Commission will come forward with
a new proposal for a Tenth Company Law
Directive regarding cross-border mergers
of public limited companies.
2. By 31 December 1997, Commission to
table proposal..
3.
Regulations on European Statutes for
cooperatives, associations and mutual
societies. The adoption of these
Regulations
will
enable
the
incorporation of European forms of
cooperatives, associations and mutual
societies, allowing them to promote
their transnational activities, without
losing their characteristics while
offering them more equal treatment visà-vis companies with share capital.
These texts are accompanied by a
proposal for a Directive on employee
participation in the decision-making
process of their firm.
3. Council, EP.
37
Strategic Target 3
Action
Action required by:
b) Directive on late payments
Late payment represents an increasingly
serious obstacle for the development of
European enterprises, in particular SMEs, and
for the success of the Single Market. The lack
of action in most Member States to tackle
the problem of late payment has led the
Commission to conclude that it is necessary
to make proposals for minimum requirements
to combat late payment in Europe which
should be incorporated into national
legislation. Those requirements will be based
on the package of measures set out in the
Commission’s recommendation of 12 May
1995 on payment periods in commercial
transactions, including the statutory right to
compensation for late payment (such as a
statutory right to interest on late payments),
efficient and inexpensive redress procedures
for obtaining payment and a maximum
payment period for public procurement
contracts.
By July 1997, Commission to publish
findings suggesting that Directive is needed.
Second semester of 1997, proposal to be
tabled.
Action 4: Face the challenge of innovation
and new technology
a) Electronic commerce-related measures
1.
Transparency Directive for Information
Society services: The Commission
proposal seeks to establish a system for
information
and
administrative
cooperation in respect of future national
laws concerning on-line services in order
to prevent new obstacles to their free
movement within the Single Market and
to promote their further development.
38
Strategic Target 3
1. Council, EP to seek early adoption
Action
Action required by:
2.
Copyright and authors’ rights: The
harmonisation of certain authors’ rights
and related rights in the Information
Society is required to level the EU
playing field for copyright protection in
the new technological environment in
the framework of the Single Market. A
coherent initiative in this area will be a
crucial element in the emerging Single
Market framework for the Information
Society as the contents of most of the
new products and services are protected
by intellectual property. This will focus
on
on-line
communications,
reproduction, and distribution of
protected material.
2. Commission proposals to be tabled in
second semester, 1997.
3.
Distance selling of financial services:
The Commission will propose a Directive
on
financial
services
contracts
negotiated at a distance, to remove
obstacles to the cross-border provision
of services while enhancing consumer
protection.
3. Commission proposals to be tabled in
September 1997.
4.
Digital signatures: The Commission’s
initiative will aim at ensuring the legal
recognition of digital signatures in the
Single Market and setting up minimum
criteria for certification authorities.
4. Commission proposals to be tabled in
second semester, 1997.
5.
Conditional access services: The
Commission’s proposal will seek to
establish an adequate legal protection
of conditional access services across the
Single Market in order to protect service
providers against the piracy of their
services by illicit decoders, smart cards
or other piracy devices.
5. Commission proposals to be tabled in
second semester, 1997.
39
Strategic Target 3
Action
Action required by:
b) Di re ct i ve on the pro te ction
biotechnological inventions
of
Biotechnology will be the basis for a new
generation of pharmaceutical products.
Without an appropriate framework for
protection of investment in intellectual
property in this field, investment in this
industry in the EU will be handicapped.
Consequently, the Commission has come
forward in 1995 with a proposal for a
Directive on the legal protection of
biotechnological inventions under national
patent law. These proposals provide for
adequate and full protection of innovations,
and create the certainty which both
producers and the public require.
40
Strategic Target 3
Following
forthcoming
EP
opinion,
Commission revised proposal in Sept. 1997.
Adoption at earliest possible date.
Strategic Target 4: Delivering a Single Market for the benefit of all citizens.
Action
Action required by:
Action 1:Eliminate border controls
Accompanying measures and 3 Directives on
abolition of frontier controls, restrictions on
the right to movement and the right to travel
The Commission’s proposals on the abolition
of frontier controls are: (i) proposal for a
Council Directive on the elimination of
controls on persons crossing internal
frontiers; (ii) proposal for a Council Directive
on the right of third- country nationals to
travel in the Community; and (iii) proposal
for a European Parliament and Council
Directive amending Directive 68/360/EEC on
the abolition of restrictions on movement
and residence within the Community for
workers of Member States and their families
and Directive 73/148/EEC on the abolition of
restrictions on movement and residence
within the Community for nationals of
Member States with regard to establishment
and the provision of services. Certain
flanking measures which must first be
adopted by the Council and implemented by
the Member States will ensure that the above
proposals can be adopted in conditions
which ensure adequate security. The
adoption of these flanking measures will be
facilitated if agreement is reached within the
IGC on transferring competences from the
present Title VI to the EC Treaty.
Council, EP
Action 2:Update rules on the right of
residence
Adaptation of the right to reside and remain
in another Member State
The step-by-step way in which the right of
residence and the right to remain in another
Member State have evolved, becoming
increasingly dissociated from the pursuit of
an occupation, means that these rights tend
to be applied in a piecemeal way which is no
longer in keeping with today’s mobile
society. The Commission will therefore
During the course of 1998, the Commission
will complete proposals in respect of all
categories of Community national residing in
other Member States.
Council, EP.
41
Strategic Target 4
Action
Action required by:
propose that the rules be updated, including
improved arrangements in respect of the
right of residence of short-term residents.
Action 3: Protect social rights
a) Consultation of social partners on the
information and consultation of workers at
national level
The right to information and consultation
has been stepped up in response to the
liberalisation of the economy and the
completion of the Single Market. The social
partners are already engaged in extensive
discussions in preparation for the High Level
meeting of the social dialogue which is
scheduled for June 1997. Further to the
Commission communication on the
information and consultation of workers of
14 November 1995, and the reactions
received from the social partners and the
other
Community
institutions,
the
Commission considers it necessary to initiate
action in this area. In accordance with the
provisions of the Agreement on Social Policy
attached to the Protocol on Social Policy,
social partners at European level are being
consulted on the need for Community action
as regards information and consultation
mechanisms in place at national level.
First phase of consultation to be completed
by August 1997.
Commission, social partners, Member States.
b) Commission White Paper on sectors
excluded from the Directive on the
organisation of working time, particularly
transport services
This White Paper will permit an examination
of how the principles laid down in Directive
93/104/EC concerning certain aspects of the
organisation of working time can be adapted
to the requirements of the different modes of
transport service.
42
Strategic Target 4
Commission to publish White Paper in June
1997
Action
Action required by:
Action 4: Promote labour mobility within
the Union
a) Directive on supplementary pensions
The freedom of movement of workers is a
fundamental principle of the Union. At
present certain obstacles to this freedom are
created by membership of supplementary
pension schemes. These obstacles were
highlighted by the report of the High Level
Panel on the free movement of people. As a
first step the Commission intends to propose
a directive to remove restrictions to allow
inter alia workers seconded temporarily to
another Member State to remain affiliated to
the supplementary pension scheme in the
State in which they were previously working.
By October 1997, the Commission will table
proposals.
Council, EP.
b) Improvement and wider use of the EURES
employment database
EURES, which provides information on crossborder job opportunities in the Union, will
be further developed. Member States need to
integrate it fully into their public
employment services so as to help them to
become a more effective force for a flexible
labour market. The Commission will promote
awareness of this system and aim at
reinforcing
cooperation
between
employment services.
Commission, Member States.
43
Strategic Target 4
Action
Action required by:
Action 5: Protect consumer rights, health
and the environment
a) Directive on the sale of consumer goods
and associated guarantees
A survey of consumers has shown that 52%
cited problems with the exchange or repair of
goods purchased in another Member State as
the main obstacle to cross-border
purchasing. The draft Directive on the sale
and guarantees of consumer products
(COM(95) 520) aims to provide consumers
dissatisfied with a defective product with
basic rights throughout the Union through
an approximation of existing national laws
on guarantees. The results of economic
impact analysis, currently underway, will
open the way to early agreement on this
proposal.
Council, EP.
b) Commission communication on the Single
Market and the environment
In this Communication, the Commission will
define its approach to the Single Market and
the environment, with particular emphasis
on how to render both policies mutually
supportive and how to remedy potential
conflicts.
By 31 December 1997, the Commission will
publish its communication.
Action 6: Develop Dialogue with Citizens
Establishment of a mechanism for Dialogue
with Citizens
A permanent mechanism will be established
for Dialogue with Citizens on their rights and
opportunities in the Single Market from the
beginning of 1998. By building on the
experience of the last two years (1996/97),
the mechanism will offer factual material and
rapid advice to citizens, and will encourage
feedback from people on the difficulties that
they encounter in exercising their rights.
This feedback element of the dialogue will
operate through a telephone service and
advisory (“Signposting”) service and an
Internet web-site. This web-site will serve as
the hub for a “virtual Single Market”,
allowing citizens to exchange information on
their activities and experiences in the
context of a Single Market.
44
Strategic Target 4
By the beginning of 1998, the Commission
will establish mechanism