Ministry of Industry and Trade

Transcription

1 BUILDING EUROPE WITHOUT BARRIERS Ministry of Industry and Trade

2 TABLE OF CONTENTS TABLE OF CONZENTS INTRODUCTION 2 SINGLE MARKET A KEY ACHIEVEMENT OF EUROPEAN INTEGRATION 4 Conflict prevention through economic and political cooperation 5 Four freedoms 6 FREE MOVEMENT OF GOODS 8 Limited regulation deemed necessary 9 New Approach to technical harmonisation 9 CE Marking 10 Mutual Recognition 11 Goods Package of FREE MOVEMENT OF SERVICES 16 Services Directive a milestone on the road to a Europe without barriers 17 Negotiating the Services Directive 18 Everything you wanted to know about the Services Directive 21 EXTERNAL DIMENSION OF COMPETITIVENESS 24 WHEN THE INTERNAL MARKET IS NOT WORKING 28 Remaining barriers obstructing the four freedoms 29 Internal Market Scoreboard and transposition challenges 29 Problem Solving 30 THE 2009 CZECH PRESIDENCY OF THE EU COUNCIL 34 Objectives of the 18-month programme 35 Priorities of the Czech Presidency in the first half of

3 INTRODUCTION

4 The Czech Republic will celebrate its 5th anniversary as an EU Member State during its Presidency. Amongst the key reasons for the Czech Republic joining the EU were the economic benefits and trading opportunities that Membership would bring and we ve certainly seen evidence of these. The Single Market is one of the EU s defining achievements. However, global competition is increasing, and we therefore need to look at what further measures we can take to maximise the EU s opportunities for prosperity. INTRODUCTION We intend to promote effective implementation of the EU s internal policies, in particular the Services Directive, which alone should bring significant economic benefits to us all. Not only will it make a real difference to small and medium sized companies that are often hardest hit by the cost and time involved in trying to enter new markets, but consumers will also benefit from a greater choice of services, increased quality and lower prices. In the age of globalisation, inward looking policies are not enough. The policies of the internal market must provide the leverage to meet the challenges and opportunities of global competition and to serve as a vehicle towards a more successful integration of the EU economy into world markets. This paper provides a snapshot of where we are compared to our global competitors and who the EU s main trading partners are. This brochure explores the advances the EU has already made, and how further benefits can be reaped through work in the areas of goods and services. It should be read in the context of the EU s single market and competitiveness agenda as a whole taking into account the importance of further liberalisation of the EU s network industries; and moving forward the debate on the free movement of workers. The Czech Republic is committed to making progress also in these areas during our EU Presidency. We hope you read our brochure with interest and we look forward to your participation in the debates we will be taking forward on the Single Market. A well functioning single market is essential for a well-functioning EU and thus is at the heart of the Czech Republic motto for its EU Presidency, Europe without barriers. 3

5 SINGLE MARKET A KEY ACHIEVEMENT OF EUROPEAN INTEGRATION

6 European integration started during reconstruction after World War II through the establishment of the European Coal and Steel Community in Its objective was clear; to secure peace and stable economic growth and prosperity through closer cooperation among European nations. Conflict prevention through economic and political cooperation It was believed that growth of interdependency between nations would replace the traditional rivalry, which had led to the disastrous conflicts in the first half of the 20th century. For several decades, the progress of economic integration was rather modest. The volume of intra-european trade however grew rapidly and close economic cooperation became the cornerstone of the future Europe. In the 1980s, the Delors Commission promoted the Single Market as its major objective. The Commission produced a White Paper, which was well received and later led to adoption of the Single European Act. The Internal Market Programme in 1985 marked a significant shift from a period of stagnation by bringing back the founding Treaty s original momentum. The Commission listed around 300 legislative measures to be taken, by the end of 1992, with the intention of eliminating trade barriers between Member States and enhancing the concept of four freedoms free movement of goods, persons, capital and services. SINGLE MARKET A KEY ACHIEVEMENT OF EUROPEAN INTEGRATION The prospects of economic integration were high at that time, but successful as it was, the Internal Market Programme could not complete European market integration in one go. Various subsequent legislative efforts followed this proclamation and even today, the EU is still seeking to complete full liberalisation of the Internal Market, e.g. through the liberalisation of network industries. 5

7 SINGLE MARKET A KEY ACHIEVEMENT OF EUROPEAN INTEGRATION THE ECONOMIC BENEFITS OF THE INTERNAL MARKET In 1986, Italian lawyer and international banking and finance veteran, Paolo Cecchini, was appointed to lead a group of experts to study the 1992 single European market programme. The Cost of Non-Europe Report estimated that economic efficiency gains from the Single Market would lead to a one-off rise in total EC income of %, fully realised after 5-7 years. Richard Baldwin, taking the upper and lower bound of Cecchini s estimates, argued that the one-off and growth effects of the 1992 Single European Market programme together could eventually add anything between 3.5% and 19.5% to Europe s real standard of living, about half of it within years. Four freedoms The Single Market is based upon four basic principles (freedoms): Free movement of goods; Free movement of persons (including free movement of workers, and freedom of establishment); Free movement of services; Free movement of capital. The cornerstone of the four freedoms is the principle of non-discrimination. This principle means that out-of-state goods, persons, services and capital enjoy the same treatment as their intra-state equivalents. Less than a third of EU citizens feels informed of their Single Market rights In general, in respect of your rights within the Single Market, do you feel...? % country Very well informed Well informed Fairly uninformed Not at all informed DK CZ EU25 0% 50% 100% 6

8 Economic integration theory describes the necessary transitional stages of development of common economic space. The benefits of the Internal Market can only be realised if barriers to cross-border movement of economic forces are removed fully. The four freedoms are essential for a well functioning Internal Market, as the increasing competition provides for better economic efficiency on a larger scale; this concerns both the products of economic activities as well as the productive forces. Member State governments however need to make improvements in communicating its benefits to the public. It has been a long-term goal to deliver the Internal Market s benefits to European citizens by eliminating all the existing obstacles. SINGLE MARKET A KEY ACHIEVEMENT OF EUROPEAN INTEGRATION 7

9 FREE MOVEMENT OF GOODS

10 Limited regulation deemed necessary During the creation of the Internal Market, there have been several methods employed to provide for the regulation of the goods sector. The original integration was designed in such a way that all harmonisation measures were included in EC legislation and thus they had to be agreed by Member States through qualified majority voting. This often led to disputes regarding the highly technical specifications and it became clear that the common goal of the Internal Market would be difficult to achieve. The Commission produced many regulations in order to set the European standards, but had to wage long battles on the wording of each. New Approach to technical harmonisation It was therefore met with appreciation when the New Approach was introduced in the mid 80 s. The European Court of Justice gave a ruling in favour of mutual recognition of technical requirements for products where European harmonisation did not exist. This was a crucial step towards removing trade barriers, which are at the heart of the Internal Market. FREE MOVEMENT OF GOODS WHAT WAS THE OBJECTIVE OF THE NEW APPROACH? To ensure the free movement of goods through technical harmonisation of entire product sectors, and to guarantee a high level of protection of safety. HOW WAS IT GOING TO BE ACHIEVED? Through the definition of mandatory essential requirements, the setting up of appropriate standardisation procedures and the introduction of CE marking. Business and industry were given a wide choice of how to meet their obligations. European standards bodies were tasked with drawing up technical specifications, which offer one route to complying with these essential requirements. Fundamental principles of the New Approach Legislative harmonisation implies product conformity with essential safety requirements (or other requirements in the general interest), achieved through the following: Non-mandatory technical specifications needed for the production and marketing of products conforming to the essential requirements established by a specific directive. 9

11 FREE MOVEMENT OF GOODS An obligation on national authorities to recognise that products manufactured in conformity with harmonised standards are presumed to conform to the essential requirements. If the producer does not manufacture in conformity with these standards, he has an obligation to prove that his products conform to the essential requirements. The quality of harmonised standards must be ensured by standardisation mandates, conferred by the Commission, the execution of which must conform to the general guidelines agreed between the Commission and European standardisation organisations. The Czech Republic supports the New Approach as well as proper application of the Mutual Recognition Principle. Some industrial products, mainly those that might pose a serious risk to consumers or users, should be subject to Community legislation to ensure that only safe products circulate within the EU. Diversity of products, on the other hand, should be maintained by mutual recognition of products that are covered by national technical rules of individual Member States. CE Marking The CE Marking (on a product) is a manufacturer s declaration that the product complies with the essential requirements of the relevant European health, safety and environmental protection legislation. This conformity with the key requirements means that products can be sold across the whole European Union. The CE marking is protected as an EU collective trademark, which gives authorities and competitors additional means to take legal action against manufacturers who abuse it. National regulators (i.e. trade inspectors, customs officers) oversee and enforce the use of the CE marking within the Internal Market. In non-european markets there were reported instances of the deliberate misleading of consumers, by use of trademarks of similar appearance to the CE marking. Communità Europea 10 The CE marking symbolizes that the product it is affixed to is in conformity with all relevant essential requirements, and that the product s compliance has been established using the appropriate conformity assessment procedure(s). The essential requirements refer, among other things, to safety, public health and consumer protection.

12 The New Approach directives are unique in that they do not contain technical details, only broad safety requirements. Manufacturers thus need to translate these essential requirements into technical solutions, i.e. by using specially developed European standards. These standards (adopted by specialised agencies, following a mandate issued by the European Commission) are so-called harmonisation standards that serve as a presumption of conformity with the directive for which they have been written. EUROPEAN COMMITTEE FOR STANDARDIZATION (CEN) The foundation of CEN, a private non-profit organisation, dates back to It was established to push the importance of the European economy forward on a global scale, while improving the welfare of European citizens and the environment. CEN constitutes an efficient infrastructure for the development, maintenance and distribution of coherent sets of standards and specifications. These harmonised standards are voluntary to allow manufacturers to choose among various technical solutions, provided they fulfil the essential requirements. FREE MOVEMENT OF GOODS WHAT DOES THE CEN NETWORK CONSIST OF? More than 60,000 technical experts as well as business federations, consumer and other organisations are involved in the CEN network that reaches out to over 460 million consumers. It is the officially recognized standardisation representative for sectors other than electrotechnical (CENELEC) and telecommunications (ETSI). Standards harmonised by these agencies are regularly adopted in many countries outside Europe, which follow European technical standards. Mutual Recognition A number of products do not fall under harmonised Community legislation; rather they may be subject to national technical rules, which often create obstacles to their cross-border movement. Applying the principle of Mutual Recognition eliminates these obstacles. The Mutual Recognition principle is a requirement on EU members not to enforce their national technical standards on goods which are legally marketed elsewhere in the EU, based on the understanding that compliance with safety and quality standards in any one Member State is universal in its scope across the whole Internal Market. 11

13 FREE MOVEMENT OF GOODS The principle is one of the cornerstones of the Single Market. It was developed by the European Commission, following the European Court of Justice s Cassis de Dijon judgment, in connection with free movement of goods. Cassis de Dijon (1979) What happened? German authorities restricted the import of Cassis de Dijon, a French liqueur, into Germany, on the grounds that there was too little alcohol in it to constitute an alcoholic beverage. The importer argued that the German legal measure in this case was equivalent to a barrier on the movement of goods. The German authorities argued that this measure did not relate to the country of origin at all, and would have applied to domestic as well as to imported products. The European Court of Justice decided that the measure was indeed a nontariff barrier to trade, equivalent to quantitative restrictions as in practice it restricted imports, even though it did not directly target imported goods. MUTUAL RECOGNITION IN PRACTICE A case relating to which vitamin formulas are food supplements and which are classified as medications? Vitamin B tablets, marketed by a Finnish company as food supplements, were prevented from being sold in the Czech Republic, on the basis of Articles 28 and 30 of the Treaty establishing the EC. The Czech Ministry of Health investigated the case in cooperation with the State Institute for Drug Control. They reached a conclusion that the product in question was not a pharmaceutical product and could be marketed in the Czech Republic as a food supplement. The mutual recognition principle was therefore enforced to allow a producer from another member state to distribute its products on the Czech market. 12 Under the principle of mutual recognition, no Member State has the right to forbid the sale of any product in its territory, which has been lawfully produced and marketed in another Member State, even if that product has been produced under different technical or quality standards. Member States may only restrict import on the basis of well-substantiated grounds, which involve overriding requirements of general public importance for example public health, protection of consumers or the environment.

14 The principle of mutual recognition ensures free movement of goods within the Single Market, while at the same time allowing diversity of products to be maintained.

15 FREE MOVEMENT OF GOODS The principle of mutual recognition ensures free movement of goods within the Single Market, while at the same time allowing diversity of products to be maintained. It is estimated that about 28% of intra-eu trade in products, which are not subject to EU harmonisation (such as various food products, furniture, bicycles, ladders, precious metals, etc) is covered by mutual recognition. Goods Package of 2008 The package was proposed by the European Commission in February 2007 and adopted by the European Council in June It consists of three measures, which are intended to boost intra-eu trade in industrial goods. These longawaited measures are intended to ensure that the Internal Market does indeed become a reality for all manufacturers and producers, and should make crossborder trade easier, especially for Small and Medium Sized Companies. The improvement of market access for goods shall however not interfere with product safety and quality requirements. A new package of measures, the so called Goods Package, comprises three pieces of legislation that deal with both harmonised and non-harmonised goods: 1) Principle for Mutual Recognition, 2) Requirements for accreditation and market surveillance, and 3) Common framework for the marketing of products. The Czech Republic supported all three proposals from the very beginning. Industrial products such as electrical products, machinery, pressure equipment etc, are already subject to Community legislation, but the new proposal strengthens the framework within which the goods are manufactured and traded, building upon existing mechanisms, to ensure that safe products circulate. The testing, certification and inspection bodies who are involved in product checking will be subject to more stringent controls in the form of accreditation, to ensure that there is a level playing field both for manufacturers and for the bodies themselves. Due to significant openness of its economy (Export + Import / GDP), the Mutual Recognition principle is of great importance to the Czech Republic. 14

16 Contribution of trade in goods and services (as a percentage of GDP) Goods Services Exports Imports Exports Imports EU-27 10,1 11,5 3,8 3,3 Euro area 16,5 16,2 5,1 4,6 Czech Republic 66,7 64,0 9,6 7,9 Japan 14,1 12,3 2,7 3,1 United States 7,8 14,1 3,1 2,6 Source: Eurostat The package of measures will have an impact on a large number of industrial sectors, representing a market volume of around 1500 billion a year. FREE MOVEMENT OF GOODS Freedom of Choice disparities in car pricing within the EU Since 1992, every six-months the Commission publishes a report on car pricing within the Internal Market. It serves as an indicator of actual market integration and provides information in order to help EU citizens fulfil their freedom of choice when purchasing a new car. The car price report provides manufacturers recommended prices for app. 100 car models of 25 different brands. According to the report, the same model in the European Union sells on average within a 7% price range. 15

17 FREE MOVEMENT OF SERVICES

18 The 1957 Treaty of Rome guarantees freedom of movement of services, as well as people, goods and capital. While goods are now freely traded in the EU, services have lagged behind expectations. Despite generating two-thirds of the EU s economic activity and employing nearly 70% of its workforce, there are still barriers preventing the development of service activities between Member States. Under these circumstances, the European Commission decided to take a step forward and drafted their first proposal, hereinafter called the Services Directive. FREE MOVEMENT OF SERVICES Services Directive a milestone on the road to a Europe without barriers The Services Directive removes legal and administrative barriers, and encourages cross-border competition. It was adopted on 12 December 2006; the implementation process in all Member States must be completed within three years after its publication, by no later than 28 December The Directive covers two fundamental freedoms. It establishes general provisions facilitating the freedom of establishment for service providers and the free movement of services (or the right to provide services in other member states on a temporary basis), while maintaining a high quality of services. Due to the Directive s large scope, this commitment constitutes a significant challenge for Member States. Considering the wide range of issues it addresses, it will be the most complex implementation of new European legislation in the EU s history so far. Member States are supposed to go through all their respective legislature and administrative practices and modify them, wherever they do not comply with the Directive. Member States have also voiced their concerns regarding the practical implementation of the Services Directive s provisions and novelties, such as the establishment of Points of Single Contact and a mutual commitment to have the electronic communication (i.e. e-signatures and document conversion) operational throughout the EU-27 by the end of

19 FREE MOVEMENT OF SERVICES External trade of EU-27, 2007 (EUR million) Credits Debits Other business services 126,9 95,7 Transportation 109,7 96,2 Travel 71,1 85,1 Financial services 41,9 17,4 Royalties and license fees 23,4 32,6 Computer and information services 21,0 9,7 Construction services 14,2 7,2 Insurance services 12,1 6,6 Communications services 8,7 9,8 Government services, n.i.e. 7,9 6,9 Personal, cultural and recreational services 4,6 5,8 Source: Eurostat Negotiating the Services Directive The Directive is one of the most controversial and disputed pieces of European legislation in recent years. It set off labour union protests across Europe and was even suggested by some as being one of the reasons why the French public voted against the Constitutional Treaty in Social and consumer rights are protected and the main principles of the Services Directive have not been undermined Evelyne Gebhardt before the Parliament vote on the Directive. Despite the fairly open framework for liberalising services within the Internal Market, there was a strong resistance to the Commission s draft proposal from a number of Member States, Parliamentarians, and a great number of interest groups, incl. trade unions and NGOs. The Czech Republic always advocated a broad scope for the Services Directive. During negotiations, Czech diplomats emphasised the fact that differentiated sectoral regulation, embracing the same amount of service activities, would take too much time and resource to complete. 18

20 Many critics were opposed to the concept of a horizontal framework Directive for services, asserting that it was not appropriate to attempt to regulate so many different service sectors in one instrument. The Commission countered that the work required to pass individual pieces of legislation for the 83 non-financial service sectors covered by the Directive would mean that barriers to the services would not be removed before the Lisbon target date More harmonisation through sector-specific legislation is needed If we try to harmonise everything, we will wait forever FREE MOVEMENT OF SERVICES MEP Evelyne Gebhardt (PES) MEP Malcolm Harbour (EPP) The country of origin principle was by far the most vigorously disputed aspect of the Directive. The principle states that, where a service is performed in one country but received in another, the applicable law is the law of the country where the action or service is performed. Critics feared that service providers from the newest EU members from Central and Eastern Europe would flood the market, with their services being offered at much cheaper prices than those of the older members. It was feared that this would lead to a race to the bottom by pushing down wages, lowering standards of workers protection and undermining collective agreements. In the face of such opposition, the European Council called for the Directive to be fundamentally reworked to preserve the European social model. 19

21 FREE MOVEMENT OF SERVICES In the Czech Republic, the implementation of the Services Directive involved screening more than 800 legal acts. The outcome revealed 115 different authorisation procedures in 54 pieces of legislation covered by the Services Directive. The negotiation and adoption of the Directive was especially significant in strengthening the role of the European Parliament, which acted on the concerns of the trade unions and NGOs, who had manifested their opposition across Europe. In these circumstances it was perhaps inevitable that the Directive didn t survive in the form initially proposed. The Services Directive should be seen as more of a triumph than a failure. However it is still too early to celebrate until the Directive is thoroughly transposed into national legislation, and citizens and businesses take full advantage of barrier-free conduct of business in services. 20

22 Everything you wanted to know about the Services Directive Do providers currently have difficulties providing services in other countries? Free movement for services, as well as people and goods, is guaranteed in the 1957 Treaty of Rome. But in practice many barriers still existed. Some identified by the Commission included: long and complicated procedures to obtain licences and permits, lack of information on legal requirements, requirements to establish a permanent base in a country, and discrimination on nationality grounds. Example: Why is the Services Directive so important? A Czech architect intending to provide his services on a temporary basis in another Member State was required to fulfil certain discriminatory requirements (such as obtaining registration prior to his arrival) and experienced obstructions in setting up a local office. Although ECJ case law prohibited the imposition of conditions on the free movement of services in the case of cross-border conduct of services, the Member State in question did not respect this. After implementation of the Services Directive, it will no longer be legal to impose such requirements. FREE MOVEMENT OF SERVICES What exactly is the Services Directive? The Services Directive aims to create a free market for the services sector. It is a tool that removes the legal and administrative barriers that can hinder businesses from offering their services in another country, and encourages crossborder competition. Why Europe needs it? It is anticipated that the Directive, once implemented, will create jobs, boost economic growth and increase quality and choice for consumers. Economic analysts have predicted a 0.3% rise in GDP and a 0.7% increase in employment. The European Commission s estimates point to a 1.8% increase in GDP and 2.5 million new jobs. According to the recent analysis of the Institute of Finance and Administration, the Services Directive will, after its implementation, boost economic growth in the Czech Republic by 0,5 to 1,2 percent GDP, while creating more than 15,000 new job opportunities. 21

23 FREE MOVEMENT OF SERVICES What kinds of services are covered? The Services Directive covers a vast range of business activities, e.g. construction, hotels and restaurants, car hire, advertising services and estate agencies, advice provided by professionals such as architects etc. It however excludes a number of areas, including broadcasting, postal services, audiovisual services, temporary employment agencies, social services, public transport, gambling, and healthcare. There are legitimate reasons a country could cite for restricting the activities of foreign service providers. These include e.g. public policy; public security; public safety; public health; and environment protection. I d like to hire a Polish plumber, because it s hard to find a plumber for our house in Northern France Internal Market Commissioner Frits Bolkestein, upon introducing the first Services Directive proposal. What has been the main point of controversy? The main fear in countries with high standards of social protection is that cheaper foreign competitors could price domestic companies out of the market. Some Member States feared this would lead to firms relocating to countries with lower safety rules, consumer and environmental protection. Does the Directive facilitate doing business in another country? Yes, indeed. To reduce the administrative burden, each country must set up Points of Single Contact for foreign companies, which will deal with all the formalities (by electronic means, if requested), instead of obliging a company to deal with different authorities at national, regional and local level. At the same time the Directive brings transparency into the free movement of services and supports the non-discriminatory principle of EU law. 22

24 Evolution of trade in services with EU-27 (EUR million) Credits Debits Credits Debits Credits Debits Total 368,1 321,7 402,9 350,0 441,6 373,1 United States 117,9 109,3 123,2 118,2 134,7 122,1 EFTA 61,3 44,9 65,4 49,0 70,4 49,4 Japan 18,4 11,1 19,6 12,3 18,9 12,9 Russia 9,4 7,4 12,3 9,1 14,2 10,8 China 9,3 7,7 12,3 9,6 12,8 11,3 Canada 8,3 7,1 9,0 7,6 10,2 8,2 India 3,9 3,9 5,4 4,8 7,0 5,5 Hong Kong 7,1 5,2 8,3 5,6 6,9 6,7 Brazil 3,7 3,5 4,6 4,0 5,2 4,6 Other countries 128,7 121,7 142,8 129,7 161,3 141,5 Source: Eurostat FREE MOVEMENT OF SERVICES What will be next? The scope of the Services Directive is a compromise and as such it doesn t cover all the sectors of services containing the original draft proposed by the Commission. For the sectors that were eventually excluded from the Directive, sectoral regulation may now be the only viable solution. Therefore the Czech Republic supports the Commission in presenting proposals concerning the so-called left-overs. 23

25 EXTERNAL DIMENSION OF COMPETITIVENESS

26 Despite progress in the economic reforms, and a robust economic performance in some individual Member States, the Internal Market continues to lag behind the US and parts of Asia in economic growth, productivity and employment creation, and may be losing ground to rising economies such as China and India. If present trends continue, the gap in output between Europe and other major economies will continue to grow, threatening Europe s living standards and ability to fund future social systems and infrastructure. The Lisbon strategy for growth and jobs must remain the bloc s number one priority despite the likely concentration of efforts on rescuing the Lisbon Treaty EXTERNAL DIMENSION OF COMPETITIVENESS Graham Watson, European Parliament. LISBON STRATEGY Is an action plan to make the EU the most dynamic and competitive knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion, and respect for the environment by 2010 set against the background of productivity in the EU being below that of the US. The Lisbon Strategy was developed to deal with the low productivity and stagnation of economic growth in the EU, through the formulation of various policy initiatives to be taken by all EU member states. These include better policies for the information society and R&D, as well as stepping up the process of structural reform for competitiveness and innovation and by completing the internal market. The outlook is complicated by new challenges on the horizon. Demographic changes, including the ageing of the population, could lead to future shortages of qualified workers. 25

27 EXTERNAL DIMENSION OF COMPETITIVENESS EU exports to the rest of the world account for 17% of total manufacturing production, and this share is substantially higher for some industries. The EU-27 is a major player in world trade in manufactured goods; exports originating in EU-27 countries, including intra-eu-27 trade, account for almost half of total world exports. Of total world trade, one third takes place between the EU-27 countries. Asia and North America are two other key players. Together the EU-27, North America and Asia account for 89% of the total world trade exchange. Competitiveness effect contribution to country growth Ireland Slovakia Luxembourg Poland Finland Greece Hungary Spain UK Netherlands Portugal Denmark Austria Sweden Belgium Czech Republic France Italy Germany % Source: calculated from Groningen Growth and Development Centre, 60-industry Database, September 2006, 26

28 Main trading partners for exports of goods, EU-27, 2006 (% share of extra EU-27 exports) Exports United States 23,2 Switzerland 7,5 Russian Federation 6,3 China (excluding Hong Kong) 5,5 Turkey 4,3 Japan 3,9 Norway 3,3 rest of the world 46,0 Source: Eurostat North America with 32% is the main destination of EU-27 exports, while Asia (19%) is on a rise. Similar patterns can be found in imports. 43% of EU-27 imports originate in Asia, followed by North America (23%). Imports from Non- EU countries account for 22% of total EU-27 imports. EXTERNAL DIMENSION OF COMPETITIVENESS Main trading partners for imports of goods, EU-27, 2006 (% share of extra EU-27 exports) Imports China (excluding Hong Kong) 14,4 United States 13,2 Russian Federation 10,4 Norway 5,9 Japan 5,7 Switzerland 5,3 Turkey 3,1 rest of the world 42,0 Source: Eurostat 27

29 WHEN THE INTERNAL MARKET IS NOT WORKING

30 The creation of the Internal Market has brought significant benefits to Europeans, offering citizens and businesses many opportunities. Czech exporters and citizens have taken advantage of both new markets and improved conditions for services expansion. The process is not without difficulties though. While the Internal Market generally works well, it occasionally needs some fine-tuning, as the process is not yet completed. Remaining barriers obstructing the four freedoms Legal uncertainty and adherence to bureaucratic regulations. Impediments to exercise the right of establishment or service opportunity. Uneven enforcement of legislation and principles along with lack of trust between national authorities. Insufficient information regarding opportunities. Internal Market Scoreboard and transposition challenges Intellectual property (11) 1.3% WHEN THE INTERNAL MARKET IS NOT WORKING Consumers (18) Public procurement (8) Energy and transport (136) Environment (96) Social Policy (73) Financial services (96) Free movement of persons (16) 1.4% 1.4% 1.6% 1.8% 2.9% 4.5% 7.9% 0% 1% 2% 3% 4% 5% 6% 7% 8% Transposition deficit by by sector Situation Situation as of as 13 of May May (sectors that that have have a transposition a deficit deficit below below 1% are 1% not are included). not included). (#) Number of directives in in the the sector The Internal Market Scoreboard is a tool that serves for better adjustment of national legislation with EU directives. It explains in what sectors Member States lag behind in the transposition of directives and it points to deficiencies in the functionality of the Internal Market. The greatest room for improvement is in the free 29

31 WHEN THE INTERNAL MARKET IS NOT WORKING movement of persons (7.9%). There is also a high percentage of non-transposition in the financial services sector (4.5%). As a consequence, the Internal Market cannot fully deliver to its citizens and enterprises two out of their four basic freedoms. Health and Consumer Protection Financial services Free movement of persons Free movement of goods Services Public procurement Employment Energy and transport Taxation and customs union Environment 46= 4% 52= 4% 84= 6% 86= 7% 87= 7% 92= 7% 133= 10% Infringement cases per sector Situation as of 30 April = 11% 237= 18% 297= 23% Number of cases What are the main sources of the infringement cases? Environmental rules account for most non-compliance cases (23%), followed by taxation and customs union rules (18%). One may ask; why is it that the sectors, which score the worst for transpositions do not also have the highest number of infringement cases? Do financial services pose fewer reasons for infraction? What is the source of failure to meet the environmental standards? Problem Solving Overall, there are three important tools, which not only strengthen knowledge of Internal Market rights, but resolve problems and encourage dispute resolution: SOLVIT, FIN-NET / Financial Dispute Resolution Network, and ECC-NET / European Consumer Centres Network. It is in the best interest of manufacturers, service providers and consumers across Europe that the Internal Market works as efficiently as possible. The Commission therefore assisted in setting up a network of SOLVIT Centres, whose main objective is resolving problems informally and speedily without the need for legal action. The Czech SOLVIT operates at the Department of Internal Market & Services at the Ministry of Industry and Trade. 30

32 SOLVIT BASICS HOW IT WORKS HOME SOLVIT CENTRE Work together to present problem and discuss solution Citizen or Company COUNTRY A Work together to find solution problem arise problem solved COUNTRY B Work together to negotiate problem LEAD SOLVIT CENTRE National Public Authority SOLVIT deals with cross-border problems between a business or a citizen on the one hand and a national public authority on the other, where there is possible misapplication of EU law. The majority of cases are resolved through direct discussion with the country, where the problem has arisen. Because SOLVIT is an Alternative Dispute Resolution Mechanism, there are certain instances when it cannot be used. These include when legal proceedings are already underway; or when deadlines under national law need to be respected to maintain rights. WHEN THE INTERNAL MARKET IS NOT WORKING The policy areas SOLVIT has mostly dealt with so far are: recognition of professional qualifications and diplomas, access to education, residence permits, voting rights, employment rights, driving licences, motor vehicle registration, border controls, market access for products and services, establishment as self-employed, public procurement, taxation, and free movement of capital or payments. SOLVIT in the Czech Republic The Czech Republic s SOLVIT has an outstanding performance and efficiency history. With a resolution rate of 100% in 2007, it performed best out of SOLVIT offices across Member States (closely followed by Germany and Austria) and well above the EU s average 78% success ratio. 31

33 WHEN THE INTERNAL MARKET IS NOT WORKING On average time needed to resolve a case, the Czech Republic s SOLVIT scored fourth (after Germany, Austria and Romania) with 34 days needed to get the work done, well bellow the EU s average of 53 days. 32

34 SOLVIT ASSISTANCE IN A DAY-TO-DAY LIFE A Czech taxi driver wanted to provide taxi services in Vienna. He intended to sign up for a training course and take the special exams needed in order to obtain a taxi certificate issued by the Austrian authorities. The Chamber of Commerce in Vienna informed the taxi driver that he was not eligible for the exams, as he didn t posses an Austrian driving licence. SOLVIT voiced its opinion that any MS driving licence should be recognised in accordance with Art. 1(2) of Directive 91/439/EEC and that the person should be allowed to attend the training course and take the exams in order to get the certificate. After the intervention of SOLVIT centres in Czech Republic and Austria, the taxi certificate requirements have changed to: Austrian or European driving licence. 78% of SOLVIT cases solved SOLVIT case distribution according to policy areas: Recognition of professional qualifications 1 % Market access for products 16 % Social security 14 % Taxation 11 % Motor vehicle registration 7 % Market access for services 6 % Residence permits 5 % Employment rights 4 % Other 16 % WHEN THE INTERNAL MARKET IS NOT WORKING 33

35 CZECH PRESIDENCY OF THE EU COUNCIL

36 Presidency of the EU Council The Presidency of the Council of the European Union is a responsibility over the functioning of the Council of the European Union, which is rotated between European Union member states every six months. There is no single president but rather the task is undertaken by an entire national government, which allows that Member State to influence the overall direction of European Union policy for its term. The Presidency, which is sometimes informally called the EU Presidency, organises and chairs all meetings of the Council as its primary responsibility, and also works out compromises to resolve difficult issues. Although it rotates every six months, as of 2007 troika Presidencies have been formed whereby each successive three Presidencies cooperate on a common political programme (in a single 18-month period). Objectives of the 18-month programme France (presiding over the EU in the second half of 2008), the Czech Republic (in the first half of 2009) and Sweden (in the second half of 2009) have teamed up to coordinate their efforts in order to accomplish their objectives during the three Presidencies. WHEN THE INTERNAL MARKET IS NOT WORKING Since it is expected that a number of Internal Market issues will stretch from one Presidency to another, the three Member States have negotiated their priorities and have agreed upon a joint agenda (the 18-month programme) that will provide guidelines ensuring their respective objectives are met. Among the challenges of direct interest to the citizens that the EU will have to fully concentrate on in the coming years are: shaping globalisation in the interest of citizens; improving growth and competitiveness, facilitating the creation of more and better jobs, enhancing the Internal Market and pushing for a stronger global role for Europe. A specific effort will have to be made to promote the EU s competitiveness and its ability to make use of opportunities and face external challenges. This will require a fully integrated and well-functioning internal market. 35

37 WHEN THE INTERNAL MARKET IS NOT WORKING Internal Market France, the Czech Republic and Sweden are committed to continue work on removing remaining Internal Market barriers through harmonisation as well as mutual recognition. The Presidencies will focus on those proposals and initiatives listed in the Single Market Review that will deliver prosperity, growth and jobs. It is necessary for the EU to monitor the Internal Market and improve the cooperation between national authorities and EU Institutions regarding the implementation of EU legislation and streamlining problem-solving mechanisms, so that citizens and businesses can fully reap the benefits of the Single Market. The three Presidencies are also committed to taking forward sectoral initiatives and finalising work on individual dossiers, such as the Defence package. Being aware of the Single Market s external dimension, as well as globalisation challenges, new measures will be sought to stimulate competitiveness of European producers in a global marketplace. Priorities of the Czech Presidency in the first half of 2009 The Czech Republic is committed to close cooperation with of its troika Presidency partners, France and Sweden. The Presidency will also facilitate discussions between the European institutions and all Member States. The main task of the Presidency is to ensure continuity in policy direction and smooth running of the EU, while striking a balance between the national interests of the Czech Republic and the agenda of the EU as a whole. The key objectives were therefore set realistically. The Czech Presidency s planning has taken into account the European Parliament elections and the end of the current Commission s mandate. The Czech Presidency will be guided by current EU policies and concepts. In planning for the Presidency, the Czech Republic will also need to consider work in progress and issues passed on from the preceding Presidencies and issues due for decision in the first half of Of all horizontal initiatives, the Single Market Review (SMR) is the one of a crucial importance to the Internal Market completion. The Czech Presidency believes in effective functioning of the Internal Market and is therefore determined to fully support the European Commission in its SMR implementation schedule. 36

38 The Czech Republic is committed to the implementation of the Services Directive. At the Conference on Services in Prague, the Czech Presidency will promote transposition of the Directive, as well as further discussion on the future of the service sector in the Internal Market Although there are plenty of mechanisms and regimes to encourage European citizens to reap the benefits of the Internal Market, the public is often poorly informed about them. Therefore all Czech Presidency priorities, in one way or another, reflect the Europe without Barriers motto. What can you expect from CZ PRES? EUROPE WITHOUT BARRIERS! WHEN THE INTERNAL MARKET IS NOT WORKING The Czech Presidency will do its best to consolidate these efforts (such as interconnecting out-of-court dispute settlement mechanisms SOLVIT, FIN-NET, and ECC-Net) in order to improve the functionality of non-legislative measures and thus, allowing the European citizens and businesses to make the most of Internal Market opportunities. Another way of fostering the Internal Market will be a smoothly working Information system (IMI), which serves for the administrative purposes of Member States and provides a simple and direct way of cooperation. The Czech Presidency considers the IMI system to be a significant improvement and a real solution to coordination problems among European institutions. It represents another step on the ladder to a barrier-free Europe, where the Single Market can deliver. 37

39 USEFUL ONLINE RESOURCES USEFUL ONLINE RESOURCES: EURES - European Job Mobility Portal SOLVIT Effective problem solving in Europe EurActiv.com - European Union Information EUROPE DIRECT - General information on EU matters and policies Citizens Signpost Service Guidance and advisory service Development of innovative business in the Czech Republic Ministry of Industry and Trade - EU and Internal market Ministry of Industry and Trade - Czech Presidency European Consumer Centre Information and assistance on consumer rights in the EU 38