The common area between all EU countries where people, goods, services and capital can circulate freely, the Single Market is perhaps the most tangible and beneficial element of European cooperation and integration. But after a decade and a half of successful momentum, the initiative has struggled recently in the face of national protectionism, criticism that its benefits are unfairly distributed, and a failure to complete the push into difficult sectors such as finance, energy, and the digital economy.
Mario Monti visited the IIEA last year to launch his comprehensive New Strategy for the Single Market. That document was a response to a request from Commission President Barroso, who was concerned that the Single Market was waning at just the moment that Europe was looking to exit the crisis, regain competitiveness, and mobilise new sources of growth.
Monti’s report proposed an ambitious “new strategy to safeguard the single market from the risk of economic nationalism, to extend it into new areas key for Europe’s growth and to build an adequate degree of consensus around it.”Less than a year later, President Barroso and the Commissioner for Internal Market and Services, Michel Barnier,formally adopted the Single Market Act (SMA) on Wednesday. The Act draws on the Monti report and aims to relaunch the Single Market by the end of 2012, the twentieth anniversary of the original Single Market Programme.
Barnier first floated a version of the SMA in October 2010 which contained over 50 different initiatives (pdf). This wascriticised at the time for being somewhat unfocused and unwieldy. An extensive, four-month, public consultation has since taken place, during which more than 850 contributions from interest groups were considered. The European Parliament’s Internal Market and Consumer Protection Committee also made a number of recommendations in three resolutions adopted earlier this month. As a result, those 50 proposals have been whittled down to a package of twelve ‘instruments’, each of which will be backed up by a ‘flagship initiative’ and a concrete set of legislative measures.
In keeping with the new Commission mantra of ‘Smart, Sustainable and Inclusive Growth’, the Act’s focus is on the following:
1) Access to Finance for SMEs
(2) Mobility for Citizens
(3) Intellectual Property Rights
(4) Consumer Empowerment
(7) The Digital Single Market
(8) Social Entrepeneurship
(10) Social Cohesion
(11) The Business Environment
(12) Public Procurement
The political initiative and momentum behind this proposal are refreshing. European economic debate has in recent months been dominated by somewhat chaotic wrangles arising out of the EU’s interwoven financial and sovereign debt crises. Discussions have been marked by a despairing focus on debt, austerity, and the need for individual countries to regain competitiveness. The urgency of these arguments has caused them to become fractious, fraught with political tension and presented on almost ‘zero-sum’ terms.
But there is now a window of opportunity to bring back the political focus on the Single Market, which has traditionally been the most tantalising win/win rationale for further European integration. There can be no doubt that the EU is in need of such a rationale now, when further integration seems ever more necessary and ever less popular. A successful renewal of the Single Market would provide a positive narrative of European collaboration while delivering benefits to citizens, consumers, the environment and investors. But for all that to happen, something of the vision and coherence of the Monti report must survive, or the SMA risks becoming just another ragtag bundle of initiatives of varying success that fails to transcend the sum of its parts.