Brussels, 20/11/2007 (Agence Europe) - Unveiling the European Commission's new Internal Market Strategy (see EUROPE 9531), Jose Manuel Barroso, President of the European Commission, said on Tuesday 20 November 2007 that the single market was the jewel in the European crown, and was entering a new cycle where it would be able to operate even better for citizens and small and medium-sized enterprises (SMES). Highlighting consumer law in a cross-border context and against the international backdrop to the Common Market, the strategy does not announce any big legislation but rather some targeted initiatives in areas like retail financial services. It calls for a palette of legally binding or voluntary instruments, moving away from the Jacques Delors approach of the 1980 of launching vast harmonising legislative projects in order to establish the minimum conditions for the circulation of goods and services. 'Make no mistake. The Single Market fully matches the European vision of those who created it and those who have nurtured it. But the world is changing. Europe is changing. The single market must change with them', he added. The Commission is placing on an equal footing its renewed strategy for the single market and its social vision for Europe in the twenty-first century, unveiled on the same day by EU Employment and Social Affairs Commissioner Vladimir Spidla (see below), confirming its desire to pursue a specific sector-based approach for EU regulation on services of general economic interest (SGEI) (see EUROPE 9535).
Joined-Up Package. Jose Manuel Barroso focussed on the joined-up nature of the European Commission's new strategy. 'Consumers, small business people, workers and users of public services do not live in separate worlds. Most of us are more than one of those things…. And this is a single market package that can put a new spring in the step of the single market.' Discussing the barriers to trade circulation lifted since the creation of the single market, the European Commission President said that other barriers, subtler and less visible, remained in place and action was required at EU level to tackle them. He gave the example of the recent announcement of planned reforms in the telecoms industry (see EUROPE 9542), initiatives under way in postal services and future initiatives on the labelling of food products, facilitating SME action and class action consumers can take in court when they feel they have suffered damages. To this should be added the new Commission methodology to better assess changes in 23 key goods and services markets like energy, water distribution and financial services. Barroso said the Commission would intervene on the said markets but not in a precipitate manner. The Commission does not see legislation as a panacea and will use a range of options including the launch of infringements proceedings and the SOLVIT network.
Retail Financial Services. EU Internal Market Commissioner Charlie McCreevy focussed his speech on the European Commission's work programme in the field of retail financial services. 'Essentially, I want consumers to be able to shop around for the best deal in financial services - in the same way that they do when buying a TV or a car. This will keep retain financial institutions on their toes and working harder to meet consumer needs.' Recognising that the supply of the bulk of financial services will remain local, McCreevy said work was required in three areas: 1) barriers to moving one's bank account to different countries; 2) tackling the tied-in sale of financial services whereby vendors try to sell life insurance packages, for example, to people taking out a loan; and 3) the financial education of consumers. To this end, he said he would continue to pursue voluntary agreements and, where these do not work, would then use tougher instruments. The Commission will urge the banking industry to self-regulate and introduce a series of measures to boost bank mobility in the first half of 2008. These would cover discriminating bank behaviour based on nationality or residence, the reduction of deadlines and the need to improve consumer information. Annexed to the revised Single Market Strategy is a document announcing other initiatives like a White Paper on mortgages before the end of the year which will set out initiatives for increasing the range of products on offer while ensuring high consumer protection levels; and a report on financial education of consumers, who are faced with a mushrooming of products these days.
SGEI. Why doesn't the European Commission propose a 'horizontal' system for public services at EU level? Jose Manuel Barroso says the European Commissioners all agree that a framework directive on SGEI would not be useful and would be the wrong way to respond to the huge diversity of public services. There will never be agreements among governments or at the EP on this issue, he added, noting that any attempt to introduce legislation would be a waste of time and energy. He said the Commission wanted to respond in a very tangible way to problems encountered in enforcing single market, state aid and public tender rules for SGEI. He said the Commission would be coming forward with sector-specific legislation in this domain.
Presenting the Commission's communication on Services of General Interest (SGI), including Social Services of General Interest (SSGI), which is accompanying revision of the internal market, Vladimir Spidla asserted that, “the protocol to be annexed to the Treaty of Lisbon is providing the SIG with a new framework”. This communication is, “helping clarify the EU role and express the Commission's commitment to providing concrete responses to questions posed by the application of Community rules”, he added. Spidla believes that these clarifications focus on, “the notion of economic activity” that allows for a distinction to be made between SIG and SIEG and the Commission initiative to create, “an inter-active information service, through which responses will be brought to the most frequently posed questions” via a “specific internet site”.
Reactions. Reactions from the two main political groups from the European Parliament will not be short in coming. Unsurprisingly, the announcement of the continued sectoral approach to SGEI was welcomed as a major victory by the EPP-ED group, according to a press release by Malcolm Harbour. He said they fully supported the Commission's argument that a framework directive on SGI is not necessary. He also affirmed that, “member states should be free to organise their public services as they want, including the use of private services if they respect the rules of the internal market”. The socialist group of the EP was deeply disappointed. The German social democrat president of the group, Martin Schulz said in a press statement that the Barroso declarations were a “real provocation”. The PES will continue its campaign for a European legal framework for public services, together with social partners, civil society and regional and local authorities.
Social vision for Europe of 21st century
Commissioner Spidla declared, “today's package brings a real package of important progress for how social services in the Union work. I am aware that some hoped for a legal instrument. The Europe of Results is about resolving concrete problems without being left paralysed by symbolic debates”. He added that the internal market package presents a strong social dimension that included the Commission's social vision for Europe of the 21st century. It illustrates the opportunities for citizens to take part in increasing prosperity and how they will do this in the epoch of globalisation where all Union citizens can have access to resources that improve their chances of social progress. Spidla also said that it included elements of consultation, open till February 2008 and which drew up a balance sheet of the social situation in Europe which would enrich the Commission's renewed social agenda it would be presenting in mid-2008.
SIG and SSGI, such as social housing have increasingly become economic activities. The Commissioner asked whether the rules for the internal market and competition applied to them. He was delighted that, “social services occupied a privileged place in the communication” today. As Barroso emphasised, “it is clear that in the communication there is a clear distinction between SIG and SSGI and that competition rules do not apply to non economic services…The commission is therefore responding to a lot of question on the application of social service rules”. The Commission president said, “most of these local level services will be outside the notification rules on state aid”. In a reply to a journalist, he said, “non-economic SIG, such as the police, the legal system and social security are exonerated from all European competition rules”.
Commissioner Spidla also announced the setting up of an “inter-active information service” and indicated that the two documents, “Questions and Answers” annexed to the communication was the first contribution to this future site: one involves application of competition and state aid rules and the other focuses on the application of public procurement rules. In the second document he indicated that this text, “also clarified the legal framework applicable by stressing flexibility enjoyed by social services and the possibility of defining quality criteria” and underlined that “Community law in no way demands public authorities to outsource the provision of social services”. He announced that the Commission would be elaborating a strategy on quality of social services which focused on “support for initiatives developed by actors on the ground in view of identifying voluntary quality standards, as well as the development of training initiatives. Mr Barroso said that, “this concept of rules on quality demonstrated that there is a synergy between the internal market and the social services of general interest”. (M.B/G.B)