1 common market. 2 outline completion of the internal market free movement of goods public...

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Common market

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Outline Completion of the internal market Free movement of goods Public procurement Free movement of workers Freedom of establishment and

recognition of diplomas Freedom to provide services Free movement of capital

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Completion of the internal market

The creation of a common market was the fundamental objective of the Treaty of Rome

Article 2: “The Community shall have as its task, by establishing a common market and progressively approximating the economic policies of the Member States, to promote throughout the Community a harmonious development of economic activities, a con-tinuous and balanced expansion, an increase in stability, and accelerated raising of the stan-dard of living and closer relations between the States belonging to it.” (1957!)

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Common market – to remove all the barriers to intra-Community trade

Single market – the merger of national markets

Internal market – full integration of the individual markets of MSs: “an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured”. (Art. 14)

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1970 memorandum on industrial policy: no genuine single market The proof: big differences in prices The reason: compartmentalisation of

markets 1971: dissolution of the Bretton

Woods system 1980s: Euro-slump, Euro-pessimism

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1985 – Jacques Delors promises to put an end to the image of a feudal Europe that offered only barriers, customs, formalities and red tape.

All internal borders should be eliminated by the end of 1992.

White paper on the completing the internal market. (Lord Cockfield)

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1985 – Milan European Council convenes an inter-governmental conference Political co-operation Completion of the internal market

Single European Act – in a “single framework”

Signed in January 1986 by the foreign ministers

Entered into force: July 1987.

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Free movement of goods

Harmonisation of legislations Prevention of new technical obstacles Common standardisation and

certification policy Protection of intellectual and

industrial property

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SEA: proposes 300 directives The essence of the internal market:

elimination of physical technical fiscal

barriers to trade.

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Free movement of goods Why are legislations indispensable?

Standardising industrial production Guaranteeing the safety of workers Protecting the health of consumers Preventing or reducing environmental pollution

The problem was not the existence of national regulations but their differences!

Different approaches of producing and importing countries

Advantages of large firms vis-à-vis SMEs

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Free movement of goods Safeguarding measure: infringement

procedure, triggered by information complaint

Transposition of the directives Robert Schuman action programme

(1997): to improve knowledge of Community law among the legal professions

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Harmonisation of legislations

Vested interests in existing rules A need for changing production

technologies Previous investments!

250 directives issued up to now Type-approval of motor vehicles Foodstuffs (additives, colourings,

sweeteners) European Agency for the Evaluation of

Medicinal Products


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Prevention of new technical obstacles

MSs were tempted by protectionism (1970s!) and adopted new legislation creating further technical obstacles to trade

The Commission’s endless efforts (“Danaides”)

Cassis de Dijon case (1979) – a very broad definition of obstacles to free trade which were prohibited.

Any product lawfully manufactured and marketed in a Member State should in principle be admitted to the market of any other MSs – principle of equivalence


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Exceptions:

public morality, public policy or public security; the protection of health and life of humans,

animals or plants; the protection of national treasures possessing

artistic, historic or archeological value; or the protection of industrial and commercial

property. Such prohibitions or restrictions shall not,

however, constitute a means of arbitrary discrimination or a disguised restriction on trade between MSs.


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Prevention of new technical obstacles

National restrictions cannot discriminate against imported products.

Procedure for the provision of information on any new technical standards and regulations (1983) – notification.

Restrictions introduced without notification are inapplicable.


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Common standardisation and certification policy

“New approach” to technical harmonisation – 1985

Where full harmonisation cannot be introduced, legislative harmonisation is confined to the adoption of essential safety requirements

European standardisation bodies prepare technical specifications – voluntary standards – CE

CEN, CENELEC, ETSI The principle of mutual recognition


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Protection of intellectual and industrial property

Copyright and related rights – ensuring a fair balance between the interests of right holders and the interests of consumers

Directive protecting on the territory of the Community every trade mark (1989)

Application in a single procedure: Office for the Harmonisation in the Internal Market (OHIM) – Alicante

Protection of industrial designs (1998)


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Public procurement In a common market, public sector also has

to be open to competition. What is public sector?

Central civil service Regional and local authorities Public undertakings and bodies

Covers 15% of the Community GDP. Late 1980s: 2% of the services and goods

were supplied by companies not originating in the given Member State.

A paradise for inefficient suppliers.

Free movement of goods & services

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Public procurement Award of public works contracts

1970s: the principle of abolition of restrictions on freedom to provide services envisaged by a Directive

1990s: the real opening up of the sector to Community competition Publication of the notices of public works

contracts (>EUR 5 mn) in the OJ Common rules on the selection of

candidates Reference has to be made to European

standards


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Public procurement Public supply contracts – 1990s

Hospital equipment, scientific research equipment, goods necessary for army maintenance (of not military character!)

Calls for proposals have to be published in the OJ, following a uniform pattern Candidacy – restricted procedures Tender – open procedures Selection criteria have to be published in

advance Identical treatment of all tenderers coming from

Member States


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Public procurement Public utility sectors (1993)

Originally excluded from Community legislation (why?)

Exclusive government regulated networks or concession rights

Sectors covered: railway, port and airport authorities, gas and electricity distributors, oil and gas extraction, telecommunication, water and urban transport


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Public procurement Public service contracts (1993)

Transparency and non-discrimination is required Maximum transparency in sectors suited to

cross-border transactions: Maintenance and repair, computer technology,

advertising, architecture, engineering, financial services

Non-priority services: Hotel business, education and training, social

services and legal services


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Free movement of workers

The common labour market Social security and other measures

for migrant workers

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The advantages: Better living and working conditions Improvement in the standards of living Reduction of social pressure in the

poorest regions Facilitates the adjustment of the labour

supply to varying demand Increases the efficiency of economic

policies throughout the Community

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Disadvantages: Impoverishment of regions of emigration Overloading of the social services in the

regions of immigration Social protection has to be ensured to

migrant workers An effective regional policy is

necessary for easing the tensions

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The common labour market EEC Treaty:

Envisaged the creation of a common labour market

Free movement of workers Limitations justified on grounds of public

policy, public security and public health Abolition of any discrimination based on

nationality of workers of MSs (!) as regards employment remuneration and other conditions of work and employment


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The common labour market What are workers entitled to?

to move freely in other MSs to stay in a MS for the purpose of employment to remain in that MS after employment

Achieved by 1968 1994: extended to all workers in the EEA Automatic renewal of residence permits –

no work permits are needed! Now: all persons residing legally in a MS

have equal rights of movement and residence in the other states of the Union


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The common labour market ECSC and EAEC Treaty – free movement for workers in

the specific fields In national public services, limitations prevail –

except: administering commercial services, public health care, teaching in State schools, non-military research

The Bosman case Community law covers also sports Transfer rules constituted an obstacle to the free

movement of workers It is illegal to limit the number of players from other

MSs This can be tolerated in the case of national teams


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Social security of migrant workers

Adequate protection is necessary for the effective use of the free movement

Pensions Aggregation of all periods – the pension must not

exceed the benefits obtained if the person had stayed in any one country

Civil servants have equal treatment – statutory pension rights

Supplementary pension rights of employed and self-employed people are guaranteed


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Social security of migrant workers

Unemployed people Unemployment benefits paid by the country of

origin for three months Family allowances

Paid in the country of residence, at the level prevailing there

No minimum period of residence is required. E 111 – helps transfer the social rights EURES – European Employment Service,

providing information


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Freedom of establishment

Right of establishment Recognition of diplomas

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Freedom of establishment Free movement of self-employed

persons – equal treatment also applies

Freedom of establishment includes the right to take up and pursue business as self-

employed persons to set up and manage undertakings

to set up agencies, branches or subsidiaries (secondary establishment)

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Right of establishment It entails a permanent installation in

another MS It includes the right to enter and to reside

in the other MS The right is extended to spouses, children

and other members of family Residence permits have to be issued Reyners case: Dutch legal practitioner

wishing to pursue his profession in Belgium – the Treaty applies directly (1974)


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Recognition of diplomas Detailed criteria for pursuing industrial

and commercial activities can impede free establishment if they differ from country to country

TEC empowers the Council and the Parliament to issue directives for the mutual recognition of diplomas, certificates and other evidence of formal qualifications

Directives have been issued (1970-1993): nurses, dentists, veterinarians, midwives, architects, pharmacists and doctors


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Recognition of diplomas 1989/2001: general system for the recog-

nition of higher-education diplomas of at least three years' duration

Principles of recognition Mutual trust between MSs Comparability of university studies between MSs No need for prior harmonisation of the conditions

for taking up and pursuing occupations Any divergence between MSs, in particular as

regards training, should be offset by vocational experience.


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Recognition of diplomas 1992/2001: recognition of diplomas with

less than three years' duration Higher education Post-secondary education

1999: A simple mechanism exists for recognising qualifications for professional activities – principle of the equivalence of qualifications

The host MS has to compare the knowledge and skills covered by the certificates issued by other MSs Hotel-restaurant, motor vehicle repair,

construction sectors (1980s)


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Freedom to provide services

Banking Insurance Stock exchanges and financial

services Services of general interest

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Freedom to provide services Freedom to provide services within the

Community shall be “abolished in respect of nationals of Member States who are established in a State of the Community other than that of the person for whom the services are intended”. (TEC – Art. 49)

Any discrimination concerning the provision of services on the basis of nationality is prohibited by the Treaty. (No need for secondary Community legislation.)

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Freedom to provide services What are services?

Normally provided for remuneration In so far as not governed by the

provisions relating to freedom of movement of goods, capital and persons

Must have a cross-border character Cover all activities of

An industrial or commercial character Craftsmen Professions

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Freedom to provide services More than 60% of Community GDP Diverse activities

Banking, insurance, transport, tourism, data processing, management consultancy etc.

“Linchpin” for the smooth operation of the internal market

Liberalisation is based on the principle of mutual recognition No need for complying in every detail Except for consumer protection Control has to be exercised in the country of origin. Host country checks whether basic rules relating to

commercial conduct are observed.

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Banking Since the 1970s: all restriction on freedom

of establishment abolished Minimum capital requirement Reporting systems Rules of consolidating balances Basle rule (8%) etc.

Single regulatory framework for taking up and pursuing business of financial institutions (2000-2004)

“Single bank licence” – based on the mutual recognition of the supervisions


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Banking Cross-border credit transfers

Within reasonable time limits (5+1 banking day)

Without restricting competition No double-charging by the two banks

involved Deposit-guarantee scheme

In case of failing of the deposit-taker EUR 20,000 (EUR 15,000: ES, PT, GR, LU)

Electronic money: banking dir. Applies Financial Services Committee


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Insurance Direct non-life insurance

Co-ordination started in 1973 The freedom to provide insurance is effective Also covered:

Credit insurance, suretyship insurance Legal expenses insurance

Life insurance Free choice for and protection of consumers Co-ordinated basic rules of financial and prudential

supervision Brokers’ activities checked in the country of origin


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Insurance

Single authorisation system No need for authorisation in any other MS Insurance Committee helps the Commission

Civil liability in respect of the use of motor vehicles For victims of road accident

Compulsory cover for all passengers Covering the whole territory of the EC No need for checking cars’ insurances at the

border if they come from an other MSs


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Stock exchanges and financial services

Single market in securities has been achieved (2001-2003)

Directive on markets in financial instruments (2004) Comprehensive regulatory framework for

Exchanges, other trading systems and investment firms

“Single passport” for investment firms Same level of protection for investors throughout

the Community Prudential supervision based on uniform rules


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Stock exchanges and financial services

Adequate equity capital is required To safeguard market stability To protect investors in the case of

bankruptcy (1993) Minimum compensation for investors

(1997) In cases of insolvency collateral

security is provided (1998) – common rules (2002)

Prohibition of insider trading (2003)


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Services of general interest

Post, telecommunication, transport, electricity, broadcasting etc.

The rules of competition of apply in so far as the application does not obstruct the

performance of the tasks “Universal service” – a set of general

interest requirements (2000/01) All citizens have to get access to them Example: public service broadcasting

Public funding acceptable


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Free movement of capital

Liberalisation of payment transactions Borrowers can obtain capital from where it

is cheapest Lenders (investors) can offer their capital

where the gain is biggest Full liberalisation of capital movements

(1988, 1994) This applies to non-Member States as well Safeguard measures are possible

On serious political grounds In case of serious difficulties for the functioning

of the economic and monetary union

1 common market. 2 outline completion of the internal market free movement of goods public...

Documents

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common market slide

genuine single market

internal frontiers

internal borders

free movement of goods

industrial property

vis smes slide