Strong support, criticism of failings. How do employers react to the differences between member states (highlighted in this column the day before yesterday) when it comes to the EU's economic policy guidelines? The BusinessEurope press releases keep us regularly informed on their positions. But decision-makers in the City of London are not necessarily on the same wavelength as industry and, in addition to professional specificities, there are national differences. The colloquium organised at the end of June by the “Employers” group of the European Economic and Social Committee (EESC) at the initiative of its president, Henri Malosse, brought together representatives from the European Commission and from employers' organisations (BusinessEurope, EuroCommerce), as well as individual employers. It was because of this mixture that it was so interesting.
The colloquium focused on the functioning of the unified European market, with specific discussions on public procurement and financial services. Discussions in fact also covered all economic, industrial and commercial policies of Europe. The general direction taken by the employers was as one would expect. They are convinced that the single market is the base on which Europe can be built and they acknowledge the advantages without number that it holds for all Europeans. They do, however, complain that it is still incomplete. Sometimes highly critical, they slam the states rather than the European institutions, saying that shortcomings and dysfunction are due partly to the fact that some things have not yet been carried out (such as the Community patent) or have been inadequately implemented (erring on the side of insufficiency or over-complication), but even more to the “errors and delays” that occur in the transposition of European rules into national law (see summary by Geneviève Brems in our bulletin No.9459).
Employers are calling for a “roadmap” aimed at: a) eliminating the existing obstacles. Community single market legislation should not be composed of “directives” (that go through transposition into national law with all the delays, gaps and errors that this entails), but above all through regulations that are directly applicable in member states; b) getting rid of the shortcomings concerning the Community patent, the status of European private company, and harmonisation, of professional qualifications; c) achieving projects of European dimension in research, innovation, trans-European networks, so that all companies may benefit from the Community dimension wherever they are based in the Union; d) overcoming the fragmentation of some sectors, such as services, financial markets and energy; and e) improving information for the general public on the advantages that the single market holds for citizens.
An aspect to be clarified. So far we have kept well and truly in line with the Single Act of Jacques Delors, the Cecchini Report on the cost of non-Europe and the traditional support for the four freedoms of movement (goods, services, persons and capital). But what about the subjects that cause annoyance? What about the concept of Community preference? What about intervention from public authorities in corporate life?
The members of the EESC have not been very explicit about these key points, which is understandable: - these are matters that should concern the political authorities rather than company owners or managers. In my view, however, one aspect should be clarified. Employers stress the conditions necessary for ease of trade flow within the European market. These conditions include unified quality and safety standards for products and rigorous surveillance of equitable competition conditions by independent authorities. At the same time, employers call for the borders with third countries to become increasingly open, although in most third countries the safety and quality requirements are far (sometimes very far) from meeting Community requirements.
In the EU, the European Commission not only surveys the behaviour of companies but also that of public authorities (mainly when it comes to state aid). But where is the authority that could make Gazprom comply with the competition conditions imposed on EU companies? Who surveys and destroys counterfeit goods in China, goods that come not only under intellectual piracy but which also prove increasingly dangerous for consumer health and safety? The United States sometimes has stricter rules than the EU, but it does not agree to abide by the rules laid down by supranational authorities that even the Congress would have to bow to (the exception being the WTO, in some cases). The problem, I believe, is therefore the following: - if completion of the wider European unified market presupposes such a degree of rules and surveillance, can globalisation do without comparable rules? And as long as such rules do not exist, should not the European market have its own identity, a “Community preference” towards those who do not abide by similar rules? In its formal stance on completion of the internal market, the EESC will have to give its views on such matters which were hardly touched upon during the discussion at the end of June.
The European Commission will act. EuroCommerce General Secretary Xavier Durieu considers that the calls made for Community preference are pure protectionism (this is the large retail trade theory and these are terms used by the new Chancellor of the Exchequer, Alistair Darling). He criticises the serious failings of the single market and cites services, postal services and electronic commerce. Mr Durieu also stressed, quite rightly, the contribution that the retail trade makes for employment in the EU (one million companies, 30 million employees) and to the quality of life. General Secretary of BusinessEurope Philippe de Buck said one should never forget that the EU is the world's largest exporter and that its interest lies in the opening up of international markets. He recognised, however, that uniform rules and respect of intellectual property are essential at global level, so that the other large exporting countries act “under the same conditions as ourselves”. At the internal level, there are so many failings that the European Commission ought to “get the machine going again”. He spoke of electricity, gas and services (the current directive is insufficient, not easy to implement, and has too many restrictions). When it comes to goods, “the framework is there”, but the economy cannot yet enjoy all the advantages.
Michael Murray, from Commissioner McCreevy's private office, reassured employers saying that the Commission will act, and that its first concerns were services and the Community patent. In the capital and financial markets sector, much has already been done, and improvements are foreseen with regard to flow and cost of operations, opening up the securities market to competition (the directive on this subject will take effect in early November, and the Commission has already warned 24 member states that are lagging behind that, if they do not catch up, infringement proceedings will await them) and by introducing tariff transparency and a European framework for asset management. Other fields of action foreseen concern intellectual property, public procurement and the postal sector.
Taxation and harmonisation. Several subjects were brought up during the debate and Mr Murray answered in response to speakers. He was very cautious about corporate taxation. As one knows, Mr McCreevy is opposed to harmonisation of rates (which, as he sees it, come under subsidiarity and tax autonomy of member states) but Mr Murray notes that even harmonisation of the tax base causes problems as it can have an influence on the rates and could hamper certain initiatives. After Mr Davons had said that the huge differences in the taxation of motor vehicles (which can vary by as much as 100%!) raise a problem of unfair competition, Mr Murray ruled out any upcoming development on this subject as national taxation policies are linked to the social model of member states.
Mr Pesci suggested an independent agency for monitoring compliance with single market rules. Mr Burani strongly criticised the tendency towards wholesale harmonisation including in areas that do not interest the user and for which national traditions could very well be maintained, and the president of the Single Market Observatory, Jorge Pegado-Liz, was broadly in agreement with this. The most well-informed position was that taken by the former president of this same Observatory, Bruno Vever, who, while stressing the advantages of the single market that are not only economic but also political and social, severely criticised its current failings. He made a number of suggestions (that were not always reasonable, however).
The sector-specific debates on public procurement (Workers Group disagrees with Employers Group) and on financial services deserve specific analysis - a subject to which I shall return. It is known, moreover, that many detailed documents exist on this. BusinessEurope has devoted several publications to the different aspects of the internal market from the point of view of employers and from that of general interest.
Commission and Parliament are to give their views. This autumn, the European Commission will present a comprehensive communication, completing and specifying the document on a single market for citizens, that it had presented in April this year at the spring summit.
The European Parliament will soon be giving its views on the report by Jacques Toubon (EPP Group) that has just been approved (34 votes in favour, 4 abstentions) by the internal market parliamentary committee. Aware of some misunderstanding and perplexity among the public, the report stresses that the internal market is not only an instrument for opening up trade and cooperation but also covers many other aspects such as the environment, employment, culture, and the role of SMES. The report includes strengthening the external dimension of the internal market among the actions to be undertaken.
The debate on which I have reported is symptomatic of the renewed interest aroused by the single market, when, according to some theories, it should be dissolved in globalisation. (F.R.)