Single Market Act: Correcting the flaws to boost growth

The two Communications outline a course of action to ensure that Single Market rules can work better in practice. The Commission is proposing measures to improve the way the services sector works, which is vital as the Services Directive accounts for more than 45% of EU GDP. It is assumed that if Member States further open up services covered by the Directive, significant further GDP growth could be achieved. Furthermore, better transposition and implementation of EU legislation could promote growth by reducing administrative burdens for businesses, leading to an overall saving of nearly 40 billion euro and better chances for Small and Medium Enterprises (SMEs) to succeed.

 The first Communication, The implementation of the Services Directive, shows that implementation of the Services Directive must be improved in order to boost growth. The Commission calls upon Member States to eliminate discriminatory regulations, such as rules discriminating on the basis of nationality or residence, obliging service providers to carry out "economic needs tests". It stresses that it will open infringement procedures against violations of the Directive. Moreover the Commission plans to work with Member States to maximize the economic benefits of the Directive through, for example, structural reforms in key sectors such as business services, construction, tourism and retail (almost 30% of GDP).

 With regards to the second Communication, Better governance for the Single Market, the Commission is proposing to focus efforts on sectors with the largest growth potential. In 2012-2013, the sectors identified are services and network industries. In these areas, the Commission calls on Member States to commit to zero tolerance for late and incorrect transposition of Directives. The Commission will provide enhanced transposition assistance in order to smooth out potential problems. In case of infringements, procedures should be sped up and Member States should comply with Court rulings within 12 months.

To make the Single Market work more effectively, the Commission also recommends making better use of IT tools to empower citizens and businesses. It calls on Member States to strengthen tools and set up Single Market Centres to better monitor how the rules work.

Moreover, European Commissioner for Internal Market and Services, Michel Barnier announced that a second Single Market Act will be launched on the occasion of the 20th anniversary of the Single Market. He stated that one of the purposes of the new package is to make it a vector of social and territorial cohesion.

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