A new report highlights the importance of the EU’s 20-year-old single market and calls for further integration to boost productivity and competitiveness. The report was written by former Italian Commissioner Mario Monti. Professor Monti presented his report to the IMCO Committee
In October2009, José Manuel Barroso, president of the European Commission, announced that he had mandated Mr. Monti to prepare a report on the future of the single market. Mr. Barroso said that the recent crisis has shown a strong tendency to undo the work that has been done on single market and seek refuge in forms of economic nationalism.
The report falls into the framework of the EU’s new strategy for sustainable growth and jobs: the Europe 2020 strategy. On the basis of a consultation process, Professor Monti created recomendations for legislative proposals to improve the EU’s single market. The Commission should present a proposal by July.
In his "Political guidelines for the new Commission" President Barroso identified the single market as a key strategic objective for Europe, to be pursued with renewed political determination. Mr. Monti`s report examines the challenges that the single market faces and outlines a a strategy to make a relaunch economically and socially viable.
The report identifies three challenges to the single market. The first challenge is a decline in political and social support for market integration in Europe. Many people living in the EU and policy makers view the single market with suspicion.
The second challenge comes from the various components of a successful single have developed unevenly and are not given the same level of attention. There is an incomplete "welding together" of the national markets into one European market The expansion of the single market to new sectors of the economy has been left unfinished.
The last challenge arises from a sense of complacency. The single market has not been prioritised due to the fact that many individuals act as if it had been already completed. Attention had also been diverted from the single market due to the need to focus on other challenges in the EU, such as monetary union, enlargement and institutional reforms.
With the entry into force of the Lisbon Treaty, Professor Monti calls for attention to be focused on the single market. The single market itself is a part of a context, which has dramatically changed. Currently, the actors and stakeholders are more diverse and represent a wider range of interests.
The report identifies different concerns over time (before the economic crisis, during the crisis, following the crisis and in the long term), by areas of concern (consumers’, citizens’, social, environmental and business concerns) and by Member States.
A new strategy is put forward to protect the single market from the
economic nationalism, to extend it to new areas important to Europe’s
growth and to develop consensus. The approach consists of three broad
sets of initiatives:
1. Initiatives to build a stronger single market;
2. Initiatives to build consensus on a stronger single market;
3. Initiatives to deliver a stronger single market.
The report further presents initiatives to build a stronger single market. These initiatives aim at removing bottlenecks and filling gaps that hinder innovation and growth potential in the single market. They are grouped in clusters of recommendations concerning:
ensuring better functioning of the single market in the perspective of citizens, consumers and SMEs;
creating a digital single market;
ensuring geographical labour mobility in the single market
Several recommendations are formulated to develop the tools necessary to relaunch the single market. Two aspects are discussed:
ensuring light but effective regulation in the single market;
The report concludes that the economic, fiscal and social legacy of the crisis highlight the need to reinforce the single market. Making the single market more efficient will also be beneificial to growth and job creation. Likewise, the growing support of the public to tackle inequalities brought on the the Crisis, may lead to greater coordination of policies within the framework of the single market.
Finally, the tensions which recently occured in the Eurozone demonstrate the need to make full use of the single market to facilitate productivity and competitiveness in Euro-area economies. For the new strategy to be successful, the role of the single market in the overall context of the EU policy making will have to be revisited.
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