Limited success for single market plan

Date: 18/12/1997

By Leyla Linton

PROGRESS towards completing the single market was slow in 1997, with only patchy success.

One had to look hard to spot the stars that Internal Market Commissioner Mario Monti had dotted around his action plan to complete the single market by 1999 to show steps that were successfully completed.

True, stars were given to European Commission decisions to adopt two communications on the simplification and targeting of anti-trust rules, a Green Paper on reducing restrictions on investments by pension funds, proposals for directives on issues such as supplementary pensions, a White Paper on the organisation of working time and talks with the social partners on consultation with workers.

But that has left much to be done, with more than 50 moves still to be completed before the introduction of the euro.

It was in an effort to inject some much-needed momentum into the process that Monti got EU leaders to agree at their June Amsterdam summit to set a new deadline for plugging the remaining gaps in the internal market by the launch of the single currency on 1 January 1999.

In particular, he underlined the need to enforce existing Union legislation.

However, he met with only limited success. None of the Union's 15 member states managed to meet an October deadline to produce complete timetables for ending delays in implementing the single market measures already agreed.

By the end of 1997, more than a quarter had yet to be applied by EU national governments, a situation Monti described as "intolerable".

Austria came bottom of the league with a non-transposition rate of 10%, with Germany following close behind at 8.5%. Denmark and the Netherlands came top of the class, with transposition rates of 3.2% and 3.5% respectively.

Non-implementation of single market laws was particularly high in the transport sector (60%), public procurement (55.6%) and intellectual and industrial property rights (50%).

And when it came to cooperating with Commission investigations into alleged infringements, member states took, on average, twice the 60-day limit to reply to requests for information.

A business survey published in November found that while around 45% of the companies interviewed thought the competition resulting from the single market had been positive, they also complained of continuing difficulties with "effective problem solving" - in other words, ensuring national governments enforced single market rules.

Monti, exasperated by strike action by French truckers in the autumn which hampered the free movement of goods, announced proposals to allow the Commission to take tough action against member states which did not ensure that single market rules were respected.

Whether these proposals will be accepted remains to be seen, but the Commissioner did achieve one notable success in 1997: the agreement finally reached by internal market ministers - and approved by the European Parliament - on the patenting of biotechnological inventions.

Other long-running disputes, such as over the harmonisation of rules on the content of chocolate, remain unresolved, although some progress was made towards the end of the year with signs of a change of heart in a few member states which had been fiercely opposed to allowing the use of non-cocoa butter vegetable fats.

There was, however, seemingly no progress at all on one of the Commission's priorities: getting agreement based on the plan drawn by former European Commissioner Etienne Davignon for a European Company Statute.

The proposals would allow firms to set up one head office in the EU rather than separate ones for each member state. But a fundamental disagreement between the UK and Germany over worker representation on company boards stymied efforts to broker a compromise.

Part of the European Voice 'Review of the Year'.