Drawing lessons from the Covid-19 pandemic and the consequences of the Russian invasion of Ukraine on the internal market and the movement of goods and services, the European Commission intends to present a regulation with a gradual approach to preserve the integrity of the internal market depending on the severity and scale of the crisis, according to a document seen by EUROPE on Friday, 2 September.
The regulation will be based on Article 114 TFEU which aims to approximate the laws, regulations and administrative provisions of the Member States relating to the functioning of the internal market. The Commission explains that the proposed regulation will introduce procedures that complement the Single Market Transparency Directive, among others. It clarifies the relationship between the existing legal frameworks, “but without changing the respective legal frameworks”. However, Regulation 2679/98 establishing an intervention mechanism to deal with obstacles to the free movement of goods attributable to a Member State will be repealed, says the EU institution.
The regulation will adopt a graduated approach depending on the level of severity of the disruption to the functioning of the single market. Thus, the text is structured around four axes: - an advisory group; - a framework for contingency planning; - a framework for Single Market vigilance; - a framework for Single Market emergencies.
A central advisory group
The role of the advisory group will be to ensure proper coordination between the different actors and to advise the Commission on appropriate measures in case of crisis.
It will propose the activation of the Single Market Emergency and analyse the information collected by “voluntary or compulsory” means, including from economic operators.
This “central” body will be composed of the Commission, a representative of each Member State competent in single market issues, as permanent members, and observers representing other bodies with competence for crisis management, such as the EU Council’s Integrated Political Crisis Response Group, the HERA Committee, the Semiconductor Committee, etc.
A planning framework
The planning framework aims to define crisis protocols, communication, training and exercises. The European Commission will carry out an analysis, after consulting the advisory group, to identify strategically important goods and services and “vulnerable areas” of the single market. This framework will also aim to put in place an early warning system for significant disruptions to the functioning of the Single Market and supply chains.
A framework for surveillance
The Single Market Surveillance Framework will cover major incidents that have not yet developed into a full-blown Single Market Emergency.
Here, particular attention will be paid to the supply chains of strategically important goods and services. This monitoring will be carried out by the Member States.
The constitution of strategic reserves could then be decided by the European Commission. The EU institution, after consultation with the advisory group, may draw up lists of individual, non-binding targets for strategic reserves that Member States should maintain.
However, if the European Commission considers that the efforts of one or more Member States are not sufficient, it may, “in exceptional circumstances”, take the decision to make these individual targets mandatory. In the text, it is mentioned that 14 Member States can ask the European Commission to issue a binding decision.
An emergency framework
Finally, the activation of the Single Market Emergency will immediately trigger the application of a number of emergency measures, including: - the obligation for Member States to notify any draft measures concerning goods and services in crisis situations and restrictions on the free movement of persons as a last resort and on the basis of evidence subject to peer review in the advisory group, but also to review by the European Commission.
The proposal provides for a series of restrictions that are prohibited, for example a decision by a Member State to prohibit the export within the Single Market of goods or services related to the crisis that would seriously disrupt supply chains and the functioning of the Single Market.
Finally, the text provides for the possibility of joint procurement by the European Commission on behalf of the Member States of goods that are relevant in times of crisis. It may request information from economic operators. The institution will also be able to make targeted and coordinated distributions of strategic reserves.
The recurrent costs, which arise from staff costs within the Commission for the planned training activities and the necessary extension of the IT tool used for the notification system, would be covered either by the ‘Administrative Expenditure’ heading or by the ‘Single Market’ programme, the EU institution says.
Positive reaction from the European Parliament
“The measures proposed to protect the internal market are considerable. They go as far as setting up strategic reserves of certain goods and services, which are compulsory for the Member States, and their planned distribution in the internal market”, welcomed Anna Cavazzini (Greens/EFA, German), Chair of the Committee on the Internal Market and Consumer Protection (IMCO).
The crucial points, in her opinion, will be the quality of the data collected, but also the precision of the definition of “strategic” goods and services. However, she regretted “that the free movement of persons is not so vehemently guaranteed”. (Original version in French by Pascal Hansens)