Monti mixes carrot with stick

Date: 24/10/1996

By Chris Johnstone

INTERNAL Market Commissioner Mario Monti is preparing to use carrot-and-stick tactics in a clamp-down on member states which fail to comply with single market rules.

He aims to police more closely the conformity of national laws with EU aims and to make greater use of infringement procedures - with their ultimate sanction of legal action in the European Court of Justice - to bring countries into line.

The Italian Commissioner will also offer governments more help from his staff to ensure they apply EU rules properly first time round.

Monti will spell out the twin strategy to his European Commission colleagues during the coming weeks, emphasising the need to use existing powers more forcefully rather than rely on a raft of new proposals.

Monti has become increasingly exasperated since the start of the year at governments' slow progress in implementing the various measures, and five months ago he openly criticised national ministers for failing to make the single market work.

The Commissioner drew comfort from the support he received at the Florence summit in June, when EU leaders underlined the crucial role the single market could play in boosting growth and jobs.

However, by mid-October Monti was confronted by an almost unchanged situation, with 90.9&percent; of single market rules in place, as against 89.7&percent; in May.

More worrying for those trying to ensure a level playing- field for EU competitors was the fact that only 54.3&percent; of the directives agreed had become law in all 15 member states.

Officials also claim that, even where national legislation has been passed in good time, it often fails to conform completely to EU rules and so draws member states and the Commission into fresh disputes.

European employers are likely to welcome Monti's moves to kick-start the single market, but believe the programme should be accompanied by fixed targets.

“There should be a list of priority actions and the dates by which they should be taken, with the final date being 1999. It would be like the 1992 programme, but we would call it the 1999 programme,” said Zygmunt Tyzskiewicz, secretary-general of the European employers' federation UNICE.

The degree of satisfaction in Europe with single market progress is mixed, even in the manufacturing sector - one of its biggest beneficiaries - according to a survey carried out by the European statistics office Eurostat.

A majority of manufacturers who expressed an opinion in Belgium, Spain, France, Luxembourg, Portugal, the Netherlands, and the UK disagreed with the statement that the single market had helped their companies.

Foot dragging by governments has made public procurement and insurance almost no-go areas for the single market and only three countries - Denmark, the Netherlands and Luxembourg - have enacted measures to open up their lucrative public contracts to all-comers.

Not surprisingly, industry critics complain that EU procurement rules have failed to prise open closed markets. The European Federation of Engineering Consultancy Associations (EFCA) maintains that state-owned companies are creating hybrid public/private subsidiaries to avoid Union rules designed to ensure big public contracts are opened to competitive bids.

EFCA secretary-general Soren Knudsen, insisting that flouting of rules is especially - but not exclusively - flagrant in southern Europe, takes the example of a 1992 directive on public procurement. This called for all major public and utility contracts where there was a monopoly provider to be subject to transparent, competitive bids.

The EFCA claims that in Ireland, the publicly-owned railway company and airport management firm both entrust project management to their own in-house engineering consultancies even when EU funding is involved.

In both France and Ireland, monopoly electricity companies have formed subsidiary firms to carry out all their engineering work.

The association is submitting contributions to the Green Paper reviewing public procurement rules being prepared by DGXV, the Directorate-General for the internal market.

It argues that the current legislation is too general to be able to tackle properly the different circumstances of services contracts and suggests that specific guidelines for each service sector should be added.