Shane Fitzgerald

A portfolio of writing on politics and policy in Europe and Asia

Tag: European Commission

Single Market Act Update 2012

Though Europe’s financial and sovereign debt crisis rumbles on and continues to dominate the Brussels policy-making agenda, it is important to also reflect on those medium and longer term EU policies which will play an important role in shaping the European economies in the years ahead.

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Single Market Act Update

Though the bulk of recent European policy commentary has been understandably focused on the need to grips with what remains an existential crisis of the euro, it is important to also reflect on those medium and longer term EU policies which will play an important role in shaping the European economies in the years ahead.

Prime among these is the Single Market Act, which we covered in some detail upon its launch earlier this year. The Act comprises twelve levers designed to boost growth and strengthen confidence in the EU’s common market, which are being launched over the course of the next year or so by the European Commission with the support of the European Parliament and national governments.

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Eurobonds a Non-Starter for Now

The establishment of a system of Eurobonds, whereby bonds are issued on behalf of the Eurozone as a whole, has been proposed by many commentators as a way of ending the European sovereign debt crisis. Political proponents include Jean Claude Juncker, Giulio Tremonti, Guy Verhofstadt and even George Osborne. Opponents include Otmar IssingJan Kees De Jager and, crucially, Angela Merkel.

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Single Market Act – A European Patent

An effective patent regime is a key driver of innovation. But the current system of patent registration, protection, translation and litigation in the European Union is expensive and tortuously complex. Although a European Patent Office exists, individual patents still have to be validated and enforced separately in each jurisdiction. And, according to the European Commission, an EU patent validated in only 13 member states can cost up to €18,000, €10,000 of which relates to translation fees. That’s about 10 times higher than the cost of a patent for all of the US.

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Relaunching the Single Market

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

(5) Services

(6) Networks

(7) The Digital Single Market

(8) Social Entrepeneurship

(9) Taxation

(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.

Corporate Tax Battle Looms

The European Commissioner for Taxation, Algirdas Šemeta, has today presented long-awaited new proposals on a Common Consolidated Corporate Tax Base (CCCTB).

The goal is to introduce common rules about what corporate profits are taxable (the base) and to consolidate where they should be paid. The proposals cover tax bases but not rates, which would remain the prerogative of national governments.

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Taxing Times for the EU Budget Commissioner

The EU Budget Commissioner, Janusz Lewandowski, yesterday disturbed a placid political August by outlining proposals he will bring forward at the end of September to revamp the way the EU funds itself. Controversy was already anticipated over planned attempts to reform the Common Agricultural Policy and to tinker with the delicate system of national quotas and rebates which determines each country’s share of EU costs. But Lewandowski seems determined to plough ahead with an even more flammable idea, namely that the EU should be permitted to raise its own resources through direct taxation.
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MGQ and Innovation Ireland

How can the EU help build a Smart Economy?

Members of the Oireachtas Joint Committee on European Affairs recently congratulated Maire Geoghegan Quinn (known to a generation of Irish journalists as MGQ) on her appointment as Commissioner for Research, Innovation and Science. The appointment has met with a positive response from Irish commentators both because of MGQ’s perceived competence and because of the relative importance of the portfolio, not to mention its “appropriateness” to Ireland’s stated policies and priorities.

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