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Single Market as a driver for a competitive economy

Speech to Members of the Committees of the Greek Parliament Athens, 16 May 2008

Presidents, Honourable Members of Parliament,

It is a great pleasure for me to be here with you this morning. It is, indeed, an honour for me to be here in the cradle of civilisation and the birthplace of democracy. This is my first visit to Greece as Commissioner for the Internal Market. In particular I am glad to have the chance to listen to your views and experiences about the Single Market and on how it should be taken forward. You have the invaluable experience of being involved in implementing various pieces of EU legislation on national level, and this of course includes Single Market rules. What is more, being members of Committees on Economic, Social and European affairs, you follow and analyse Single Market issues from a range of different angles and perspectives, whether economic, social, national or European. So I am very much looking forward to our exchange of views.
I am going to speak today about competitiveness and the role the Single Market has to play in that context. Competitiveness is very much the overriding objective now. I am sure you deliberate on competitiveness just as often here in your national policy discussions as we do in Brussels. There is a reason for that. Globalisation presents us with a challenge. The rising economic strength of countries such as India or China, means that there is no option for Europe but to do everything it can to remain competitive on the world stage.
The Lisbon Strategy for Growth and Jobs is our comprehensive approach to achieve this. And I am glad to say that after its revision in 2005, the Strategy is now delivering and has contributed to a better and sound economic structure, helping to create growth and jobs and to increase our ability to resist economic turmoil.
To give you some figures that illustrate this: structural reforms have helped increase the potential estimated growth rate of GDP in the euro zone by 0.2 percentage points since 2005, to some 2.25% in 2007. Almost 6.5 million new jobs have been created in the last two years, and another 5 million are expected in the run up to 2010. Unemployment is expected to fall to under 7%, the lowest since the mid 1980s. For the first time in a decade, strong increases in employment have gone hand in hand with robust productivity growth. What all this means is that the Lisbon Strategy is helping to position Europe and European citizens to succeed in the age of globalisation. It means that Europe's economy today is robust .Robust enough – I am confident – to weather even the difficulties triggered by the financial turmoil that we have seen.
The added value of the current Lisbon process is that it is now properly focused on the key issues necessary for growth and jobs and brings together all the necessary reforms in the different fields of macro and micro economic, and employment policies. It also now pulls together the necessary reforms at both national and Community level. Last but not least, it is not a one-off process. Progress at national and Community level is reviewed every year and on this basis, recommendations are given on what needs to be done in the year ahead. This has introduced more transparency and peer pressure. All of this has started to bear fruit. We should keep up the momentum. I can only advise all Member States to continue addressing their Lisbon key challenges as a matter of priority.
This brings me to the Single Market and its role. The Single Market has served Europe well. It has led to more growth and jobs. It also helps Europe's economy to stay competitive in today's globalised world. For example, the work we have done so far in financial services, through the Financial Services Action Plan, has fundamentally changed - and greatly improved - the global competitiveness of the European financial services sector. But the Single Market is not just an economic success. It creates real opportunities for all of us. We can choose whether to live, work or study abroad. We can travel and telephone more cheaply as prices of flights and phone calls have reduced drastically. And we have a bigger choice of better quality goods in our shops.
But there is much work ahead. We have not yet fully realised the Single Market's potential. That is why last November, the Commission embarked on an ambitious review of the Single Market policy. Many of you will remember the 'Europe 1992' programme. This was a visionary programme designed back in 1985, a few years after Greece joined the EEC, which determined to make the Single Market a reality. The Europe 1992 programme focused on integrating European markets, mainly through EU legislation. We have come a long way since. With the Single Market Review, we are now entering a new, but not less ambitious phase. The primary aim is now to make sure that the Single Market works effectively for all. Integrating markets is not sufficient on its own – we must ensure that everyone reaps the benefits, and that everyone is included into the Single Market story. This means not only big business, but also consumers and small enterprises.
Here are some examples of what we will do for both of those constituencies. To begin with consumers: Retail financial services is the first policy area that comes to mind given how essential bank accounts, credit and debit cards or mortgages are to citizens' economic wellbeing. We have launched here an ambitious package of initiatives to make retail financial markets work better for consumers. For instance, I have asked the banking industry to come up with a "code of conduct" to facilitate switching bank accounts between different banks in the same Member State. I have also made it clear that there should be no discrimination against customers on the basis of nationality or residence when opening bank accounts cross-border. I hope that by working with the banking and insurance industry and with consumers we can get good results, without needing to resort to legislation.
As regards SMEs, we will introduce this summer a Small Business Act, which will bring together various SME-targeted measures, such as getting rid of administrative burdens or increasing SME participation in funding programmes. One of the legislative measures I will put forward is a European Private Company Statute. Enterprises that did not qualify under the European (Public) Company Statute –the SE Statute-will now have a tailor-made legal form especially for them. With the European Private Company Statute or SPE, they will be able to carry out their business according to one set of corporate rules across the EU. These measures should encourage SMEs to engage to a much larger extent in cross-border business activities.
However, the Single Market Review is not just about presenting a list of new initiatives. It also focuses on making what we have, work better on the ground. There is a gap between the Single Market as it stands in the Statute book, and the everyday reality. Too often, Single Market rules are not properly transposed, implemented or enforced. And very often there is not enough political awareness and information about the Single Market among the national administrations and citizens.
What we need to improve this situation is a strong partnership between authorities at all levels– at the EU, national but also regional and local levels. This work simply cannot be accomplished from Brussels and by the Commission alone. That is why we have launched discussions with all Member States to identify best practices and agree on common guidelines on how to transpose, implement and enforce Single Market laws; how to spread information on the Single Market; and how to enhance cross-border cooperation between administrations. We count on your involvement in this new initiative.
And we are especially keen to make sure that Member States live up to their legal obligations. The Internal Market Scoreboard is one of the main tools developed in this regard. The most recent Scoreboard of February 2008 showed that although Greece was one of the five Member States with a higher number of untransposed Directives than the 1.5% target, it made very good progress in the last half of the year[1]. Within six months, it cut its backlog from 39 to 27 Directives. My message to you today, however, is that the Greek authorities really need to keep up the good work for the remainder of 2008, particularly because the European Council has now set a new and tougher target for March 2009 of a 1% transposition deficit target.
In addition to this, more work is still necessary when it comes to implementing the Single Market rules properly. Greece is one of 11 Member States with higher number of infringement proceedings than the EU-27 average - although there has been a steady trend of decreasing their number in the last years[2]. I hope that this progress continues and I am looking forward to seeing further improvements in the months to come.
Yet despite these efforts, I think that the Single Market still sometimes suffers from a lack of political attention. National parliaments – such as yours – need to devote their attention to the Single Market. In this respect, I think it is really positive that the Treaty of Lisbon, via the new Article 12, duly recognises the important role of National Parliaments in contributing to "the good functioning of the Union".
And as surveys show, too often citizens and firms are not sufficiently aware of the many opportunities offered by the Single Market. They show that 76% of Greek citizens questioned feel uninformed about their Single Market rights and if they do, they do not know where to turn to if they have a question about their rights or seek to enforce them. For instance, 72% are not familiar with the services put in place to provide information about the Single Market, such as SOLVIT or European Consumer Centres. The situation is fairly similar across the EU. There is a lot more information to be made public also at national level. SOLVIT has been a big success but needs proper staffing and funding to do its job well. Let me say that I believe national parliaments – such as the Hellenic Parliament - can play an important role in helping that citizens can exercise their rights everywhere in the EU.
Last but not least, there is one further element of the Single Market, I would like to mention today - the social angle of our work on the Single Market. There are some who say that the Single Market policy does not take sufficient account of the social dimension. I accept that those who say so express their genuine concerns. But I would like to try to dispel these concerns. The development of the Single Market has gone hand in hand with the development of European social policies and both are mutually reinforcing. What is more, in an effective Single Market, Member States are able to pursue social policy objectives more effectively than without it. For instance, sound public procurement will help reduce pressure on the public purse and make more public funds available for social policy objectives. We need to keep this balance between economic and social policies in the future.
So in conclusion, I believe we can say two things: the Single Market is a key asset for increasing EU's competitiveness and achieving the targets set by the Lisbon Strategy. And the Single Market works for all citizens, consumers and workers. It will deliver even more for Europe's citizens in the future. I hope that we can count on your support in achieving this goal. Thank you for your attention and I look forward to answering your questions.
[1] According to the February 2008 Internal Market Scoreboard: the Greek transposition deficit amounts to 1.7% with 27 Directives which still need to be transposed. This is an improvement as compared to 2.4% deficit and 39 Directives according to the July 2007 Scoreboard.
[2] It has 88 infringement cases for incorrect application of Single Market rules as compared to EU-27 average of 49. Italy and Spain have the worst performance with 134 and 113 cases, respectively. It has improved its performance slightly by one case in comparison with the July 2007 Scoreboard.