Internal Market Strategy, May 2003

'The Internal Market has been a tremendous force for economic and social good. But much of its potential is being wasted: it's as if we are driving a Ferrari in second gear. Back in 1985 everybody agreed Europe needed an Internal Market. Then they went ahead and did it, sorting out the nitty-gritty without losing sight of the big political picture. We need that sort of consensus and determination again now, to meet the challenge of enlargement and to kick-start the economy.' Thus spoke Internal Market Commissioner Frits Bolkestein, announcing the publication of the Commission's latest Internal Market Strategy.

The Strategy describes itself as 'a comprehensive package of actions designed to improve the performance of the Internal Market in an enlarged Union.' Enlargement is one of three main issues driving improvements in the way the Internal Market works (from 2004 a Union of 25 Member States will offer businesses 'unprecedented' opportunities). The other two drivers are the Union's goal of becoming the world's most competitive and dynamic economy by 2010, and the global economic slowdown.

Spanning the period 2003-2006, the Strategy proposes a 10-point plan to make the Internal Market work more effectively, based on the following main actions:

• enforcing the rules
• integrating services markets
• improving the free movement of goods
• meeting the demographic challenge
• better essential services
• improving conditions for business
• simplifying the regulatory environment
• reducing tax obstacles
• more open public procurement markets
• providing better information

Amongst a number of radical ideas presented in the Strategy are:

• bringing forward a new Directive on services
• reinforcing mutual recognition with a new Regulation
• opening up the water sector to competition
• introducing a "compatibility test" for all new national law, to prevent conflict with Internal Market rules
• allowing businesses to pay all their VAT in their home country
• giving national public procurement surveillance authorities the power to bring cases before national courts

The Commission wants the Council and Parliament to endorse the Strategy, to commit themselves to adopting existing (or forthcoming) proposals within the suggested deadlines and to ask Member States to play their part by improving aspects of the Internal Market for which they are responsible.

The Commission also recognises the importance of information in helping create a fully functioning Internal Market. Initiatives such as Dialogue with Citizens and Dialogue with Business will be extended to the new Member States, a 'top class' information portal is to be established - based on existing initiatives - and a new Internal Market portal will be made available on the Europa website, 'bringing together information about policy and legislative developments relating to the Internal Market, irrespective of the Commission department responsible.'

Commenting on the Commission's proposals, the Financial Times warned that 'it will take more than 66 pages of good intentions and ambitious plans to get Europe out of second gear.'

The Internal Market Strategy has become one of the European Union's three key instruments for coordinating economic policy. The other two are the Broad Economic Policy Guidelines and the Employment Guidelines. All three initiatives now cover a three-year period, thus ensuring greater coherence and effectiveness in tackling economic reform.

Links:

European Commission:
	07.05.03:	Internal Market Strategy 2003-2006 Frequently Asked Questions [MEMO/03/100]
	07.05.03:	Internal Market: Commission presents ten-point plan for making Europe better off [IP/03/645]
	Internal Market Strategy 2003-2006 [text]
	Internal Market Strategy and Implementation [general page]
European Sources Online: Financial Times:
	08.05.03:	Shifting the single market out of second gear
European Sources Online: Topic Guides:
	The Single Market
European Sources Online: In Focus:
	European Commission urges Member States to intensify efforts to help Europe become the world's most competitive economy by 2010, January 2003
	The Single Market 10 years on, November 2002

Eric Davies
Researcher
Compiled: Thursday, 8 May 2003

The European Commission announced the publication of the Internal Market Strategy for 2003-2006 on 7 May 2003.