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European Commissioner for Internal Market and Services
Speech by Commissioner McCreevy at the European Parliament's Internal Market Committee (IMCO)
European Parliament's Internal Market Committee (IMCO)
Brussels, 21 Novembre 2007
Madam Chair, Honourable Members,
Yesterday, we adopted our "Communication on a Single Market for 21 st century Europe" - laying down the priorities for the coming years. Serious effort has gone into preparing the Review and producing ideas on how we can build on what is in place and further develop the largest market in the world and, most importantly, how it should be governed in partnership with the Member States. I am pleased to have the opportunity today to set out our stall to you.
You have also asked me to provide an update on defence procurement on which the Commission will present a proposal shortly.
Single market review
First of all I would like to reiterate my appreciation for this Committee's work in bringing together and channelling to the Commission the views and concerns of the European Parliament. Parliament's resolution on the Single Market Review triggered a rich discussion on Single Market policy in the European Parliament. The Commission is thinking along the same lines.
It is worth saying a few words about the approach we are taking with this Communication, and the difference it is going to make to what we have done before. We are not just introducing adjustments at the margins. We are re-adjusting our policy and approach, as we face up to the important economic and political challenges ahead. Since 1992, Europe has more than doubled in size. Many of the rules in place were adopted originally by just 12 members of the Union - today they apply to 27. Since 1992, the shift from a manufacturing economy towards a services economy has changed the way we create wealth and jobs in Europe. Nowadays, almost 70% of Europe's gross domestic product and 96% of the new jobs created in Europe come from the services sector. So job creation comes from services, not from manufacturing - contrary to the public perception that still prevails so widely. For healthy growth and new employment, we rely more than ever on making the Single Market a place in which small firms can thrive. And in a fiercely competitive global economy, the Single Market is a vital tool in creating a competitive advantage for Europe.
We are not proposing an extensive legislative programme. Less is more in that area so there is no long list of Directives as was the case for the "Single Market Programme" of the eighties. Twenty years on, more legislation from Brussels will rarely be the answer. If we want to create open and fair markets throughout a Union of 27 we need a more flexible approach. Our objective is to help markets work better for small firms and consumers. We will press harder in areas where we know, on the basis of sound economic evidence, that barriers remain and consumers loose out. We will do so by using a mix of instruments. There may be legislation if necessary and justified, but we will also work with stakeholders to produce voluntary codes which can be adapted to local conditions. We also need to offer guidance, support and information to empower consumers and smaller businesses to enable them to play a full and confident role. And of course, we will pursue breaches of Internal Market and competition rules vigorously. In other words, we will enforce what is already in place to ensure fair play.
The content of the Single Market Review
In your own resolution, you stressed the importance of increasing stakeholders' confidence in the Single Market, of lowering administrative burdens and better taking into account the international dimension of the Single Market. I agree with those priorities. They are also closely mirrored in the Single Market Review.
Let me focus on a few areas.
A Single Market that offers more opportunities for consumers
Single Market policy is about creating welfare for citizens - consumers and employees alike. We have to create opportunities for both.
A key priority will be retail financial services. Consumers and small businesses use financial services every day: bank accounts, credit and debit cards, home loans, insurance, savings and investments. They are all crucial to citizens' economic wellbeing - and increasingly to their ability to provide for themselves in their old age. European citizens are not yet fully reaping the benefits of the Single Market. Over the years a lot of attention has gone into wholesale financial services and into setting up a supervisory and prudential framework for financial institutions. Financial institutions can now operate throughout the EU. But for consumers to benefit from this, a lot more needs to be done.
My priority lies with the customer in the street. The consumer is entitled to a better deal. On one hand, there is a lack of competition in some markets and, on the other, there is a lack of confidence on the part of the citizen in financial products and services.
A better deal for consumers means that they must have a wider choice of providers. Customers must be able to change provider easily if they are not happy and we must also address the practice of tying products together that often prevent consumers from getting the best deal.
Getting a better deal is also about making informed choices. Consumers need to better understand financial products so they can compare. Greater financial capability helps consumers to save money, time and worry. It also helps them to get a higher return and avoiding decisions that could get them into debt. Sensible choices on financial services are necessary to make adequate provision for the future.
I look forward to working with you in developing concrete initiatives to achieve this.
A Single Market for small firms
A second priority area are small firms. They are the backbone of the EU economy. 99.8% of all European companies are small- and medium-sized enterprises - 20 million in total. SMEs provide over 70% of total employment. Their potential to add more jobs is huge. Yet, while large corporates are fully exploiting the Single Market, small firms have not benefited as much.
Not only do we not want to leave this potential untapped, we cannot afford to ignore it. The Single Market offers small firms a platform to innovate, compete and grow. The Commission will make proposals to improve the environment for small firms. We will, for example, present a proposal for a European Private Company Statute in 2008, offering entrepreneurs a simpler way to create a company throughout the EU. Work is also in hand in the Commission on a European Small Business "Act" , which is a package of measures targeted at SMEs to be presented in the course of the next year. The aim is to further reduce red-tape, to improve access to markets and financing and to improve skills. Clearly the diversity of the SME community including crafts and very small companies need to be taken into account. SMEs acts as a driving force for innovation, local development, training and employment.
A Single Market that works in daily reality
The third area of attention is governance. We must ensure that what we have works on the ground. In your resolution on the Single Market Review, you stressed the "importance of strengthening and improving administrative cooperation" between national authorities responsible for the Single Market.
Too often consumers and businesses are unaware of their Single Market rights. And when they are aware, they are often not sure where to turn to solve their problems. A wealth of information sources already exist on both European and national level. But 7 out of 10 citizens do not know about them, as we discovered in a recent survey. So the Commission will intensify its work with public authorities at all levels - national, regional and local. Our experience with SOLVIT shows that many problems can be solved at local level. I want to build on this. In a few years time I would like to see a Single Market Centre in every Member State. These centres would be the focus for information, assistance and problem-solving systems within and between Member States to produce a more user-friendly access to what is available. We are aiming for a "one-stop-shop" style of service in Member States, where people can go to have questions answered and queries clarified. By Member States having a more hands-on approach on the ground in coordinating initiatives and problem solving, they will really be bringing the Single Market back home - to all 27 homes!
The Single Market in the global context
Finally the need to develop the international dimension of Single Market policy was one of the key points you made in your resolution. The Review addresses this point. The Single Market is not just an internal European affair. In many areas we lead by example.
We plan to do two main things. Open markets abroad to EU companies, allowing them draw on the benefits of the competitive edge they have developed in Europe. A new generation of "deep" bilateral trade agreements which we are launching should help with this.
We also want to step up efforts to promote regulatory convergence world-wide. This is a two-way process. Not only do we need to promote our rules as benchmarks for international standards but we need to learn from our international partners. Our leadership in implementing international provisions such as International Financial Reporting Standards and the Basel II Agreement on capital requirements for banks, or the European GSM standard for mobile phones immediately spring to mind.
Services of General Interest
I would do an injustice to the Single Market Review if I did not also highlight Services of General Interest. The Commission is firmly attached to preserving services of general interest. The services our citizens have rightfully become accustomed to are an important reflection of Europe's values. I know that some people consider the Single Market to be a threat for services of general interest. I do not see it that way. The Single Market and competition are vital for our competitiveness and growth. Without a performing economy the level of service we want to guarantee for our citizens is simply not sustainable. Single Market freedoms and competition are not in contradiction with services of general interest. Our Communication on Services of General Interest clarifies how we read the protocol agreed in the new Treaty and sets out how Member States can preserve and develop their services of general interest and how Community law applies to them.
As you asked, I also want to say a few words on defence procurement.
The Commission should shortly present, as part of the so-called "defence package" a proposal for a Directive on the procurement of defence and sensitive security equipment. This proposal is a major step forward towards the establishment of a common European Defence Equipment Market. It will help to strengthen Europe's defence capabilities, make public spending more efficient and enhance the security of our citizens.
Given this political importance and sensitivity, we have been preparing the initiative in an open and transparent way, involving all interested parties. During the past twelve months, Member States, in particular Defence Ministries, Members of Parliament and industry representatives have contributed actively to the preparation of the proposal.
The proposed Directive will apply to arms, munitions and war material, subject to Article 296 of the Treaty. It is adapted to the specific nature of such procurement. The proposed Directive will give contracting authorities the flexibility they need to negotiate in detail the terms of such contracts and allow them to ask for specific security clauses to protect sensitive information and to ensure their security of supply.
Certain sensitive procurements in the field of non-military security will also be addressed. This approach is in line with today's security environment. Certain equipment which police forces use for the fight against terrorism, for example, can have characteristics which are very similar to defence equipment, in particular in terms of confidentiality needs. In these cases, it is only logical to make the same procurement rules applicable.
The principles of the Internal Market should, finally, apply to important parts of defence and security procurement in Europe. Greater openness of defence markets between Member States is to the benefit of all: Industries will get new business opportunities and become more competitive; armed forces will get better value for money; and taxpayers will benefit from more efficiency in public spending.
Since we started with the Green Paper on defence procurement, Parliament has always been one of our strongest supporters. This is clearly reflected in Parliament's resolution of 2005. I know the proposal is eagerly awaited by the Committee.
Madam Chair, Honourable Members, I have up-dated you on two major initiatives to take the Single Market forward.
Thank you for your attention and I look forward to your questions.