DRAFT SUMMARY OF THE HEARING on The Review of the Single Market Findings and Views of Portuguese Organised Civil Society

Transcription

1 European Economic and Social Committee Section for the Single Market, Production and Consumption Single Market Observatory Brussels, 13 November 2007 DRAFT SUMMARY OF THE HEARING on The Review of the Single Market Findings and Views of Portuguese Organised Civil Society INT/SMO R/CESE 1530/2007 1

2 General remarks The Single Market Observatory (SMO) of the European Economic and Social Committee (EESC) held a hearing in Porto, Portugal at the Sheraton hotel & spa on 14 September 2007 to allow representatives of Portuguese interest groups to express their views on the developments in the Single Market, especially in anticipation of the European Commission's report on the Review of the Single Market. Some 80 participants attended the hearing and were welcomed by Mr Jorge PEGADO LIZ, president of the Single Market Observatory, as well as Mr Charlie McCREEVY, Commissioner responsible for the Single Market and Services, and Mrs Elisa FERREIRA, Portuguese Member of the European Parliament. Welcome address by Mr Bernardo HERNANDEZ BATALLER, president of the Section for the Single Market, Production and Consumption 1 of the European Economic and Social Committee (EESC). Mr Hernandez Bataller welcomed Commissioner McCreevy and Mrs Ferreira and underlined the work of the Committee on Better Lawmaking, illustrated by its recent exploratory opinion on the Simplification of the regulatory environment of the machinery sector 2 at the request of Directorate General "Enterprise and Industry" of the European Commission. He also referred to earlier opinions on the Lisbon Strategy, on Better Lawmaking and on simplifying the Community acquis. Mr Hernandez Bataller thanked participating organisations such as CNAF, CGTP and UGT for their assistance in identifying the challenges which the European Single Market was facing. He reminded the audience that the EESC was composed of representatives of civil society organisations employers, trade unions and other interests 3 - allowing them to play a role in the European decision-making process. This made the Committee a laboratory where prototypes could be test-run, striving to reach a consensus. Mr Hernandez Bataller stressed the need for the legislator to take into account the different viewpoints of organised civil society, for instance on Single Market issues. The Section organised public hearings and conferences to collect input from users of the Single Market as in the case of European Consumer Day, a topical event held once a year in an EU Presidency Member State. He briefly described the Single Market Observatory (SMO) as a monitoring instrument focusing on the removal of obstacles and the improvement of the Single Market. The SMO was organising the Porto public hearing precisely to facilitate an exchange of views with Portuguese civil society on such issues. Referring to the EESC exploratory opinion on the Strategy for the simplification of the Community acquis 4, Mr Hernandez Bataller said that in order to overcome the obstacles to the functioning of the Single Market, a balance needed to be struck between economic and social criteria as well as sustainable development, whereby the largest possible number of citizens must feel that the Single Market would be a benefit to them while compensatory measures should be 1 See for the remit of the Section for the Single Market, Production and Consumption See for the set up and functioning of the EESC INT/SMO R/CESE 1530/2007 2

3 planned for those who might not profit from it. Scepticism towards European integration could only be overcome if legislation responded to citizens' vital concerns. Mr Charlie McCREEVY 5, Member of the European Commission responsible for the Single Market and Services, referred to the exploratory opinion of the European Economic and Social Committee on the Review of the Single Market 6 and emphasised the fact that the Single Market was not an end in itself and that it brought about such concrete advantages as improved choice and comparable prices or travelling and studying in another Member State, while the mobility of European workers would potentially improve employment. He referred to the 10 million cross-border European workers and mentioned the role of EURES 7. Mr McCreevy said that small and medium size enterprises (SME), the backbone of the Single Market, deserved a special effort to design a favourable environment and simplified procedures such as those applied in Portugal or Denmark to allow for easy startups of SMEs. Ultimately, the Single Market i.e. a strong, open and united Europe - was the best reply to globalisation. The Commissioner called for better cooperation between national administrations including the setting-up of an information system on the Single Market (the "Internal Market Information System") coupled with translation facilities for mutual comprehension. Concerning consumer rights and citizenship, he stressed the fact that citizens and consumers were at the heart of future Commission initiatives such as retail financial services 8. Mr McCreevy concluded by saying that the new approach to building the Single Market with its focus on citizens had been set in motion and that consultation, listening to each other and debates were essential elements of this. In this respect, the Single Market review was a first important step with concrete actions. Mr Jorge PEGADO LIZ, president of the SMO, thanked Mr McCreevy for his support. He highlighted the deliberate choice of Porto as Portugal's most dynamic region for the public hearing of the SMO. He added that the Single Market was the only structured policy of the European Union and mentioned the various steps since 1992 with the impetus of the then President of the European Commission, Jacques Delors: the Schengen Agreement, the Euro, workers' mobility and free competition. Mr Pegado Liz drew attention to the particular vigilance required as regards the impact of the new draft treaty on the functioning of the Single Market. He called on all stakeholders to rethink the principles of a Single Market for the future with the participation and in the interests of all Europeans. This exercise should be a participative one involving civil society organisations. 5 For the Commissioner's speech see: 6 See See the Commission's Green Paper on retail financial services published in May 2007 at INT/SMO R/CESE 1530/2007 3

4 He said that EU citizens had both the right and the obligation to question Members of the European Parliament (MEP) in this respect. He thanked Mrs Elisa Ferreira, Member of the European Parliament, for attending the hearing. Mrs Elisa FERREIRA, Member of the European Parliament, referred to the report drafted by Mr Jacques Toubon (MEP) on the Review of the Single Market, which she hoped would be taken into account by the European Commission. She thought that citizens' approval of the Single Market depended on the way they experienced it in their daily life. She said that the report stressed such concepts as cooperation, solidarity and competition, which were three dynamic principles that needed to undergo renewal and adaptation in line with the evolution of the Single Market. She underlined the need for a review of the Single Market coupled with a streamlining of EU legislation. In this respect, she deemed it necessary for Single Market rules to be standardised and harmonised as well as followed-up on the ground. Mrs Ferreira was keen to see EU legislation being properly transposed and implemented by Member States so as to avoid shortcomings. She was however aware of differences in the interpretation of legislation by national tribunals and in the practical knowledge of those in charge of the application of Single Market rules. She said that public services i.e. health services, education and social services should take into account the specific needs of the most disadvantaged citizens and the ageing of the European population. She further called for a generalisation of the principle of country of origin. Mr Ferreira deplored the lack of transparency in financial services, also mentioning the inherent risks and complexity. She emphasised vigilance as regards citizens' rights and competition in the insurance sector whereby the European Parliament would support citizens in this context. She said that social and regional disparities were increasing and raised the question of the perceived benefits of the Single Market, not only for citizens but also for small and medium size enterprises, which played a major role in the consolidation of the European Single Market. Mrs Ferreira concluded by mentioning the international dimension of the Single Market and the expectations of European integration in view of the challenges of globalisation and competition with such emerging economies as China and India. She mentioned the WTO negotiations in the context of which the EU tried to protect its products. She insisted on sharing social and environmental values as well as principles of fair competition at global level. More coherence within the European Union would therefore allow it the better to face global challenges including competition. In this respect, a long term strategy and a review of the Lisbon Agenda, particularly as regards innovation and research and technology, was needed. Mr Bernhard FRIESS, Head of Unit at the Directorate General "Internal Market and Services" of the European Commission underlined the input of organised civil society through the European Economic and Social Committee. He underlined the general satisfaction of the public especially citizens and consumers with the Single Market and the fact that 70% of citizens thought that mobility would have a positive impact on employment. However, he said that the public's knowledge of such aspect as health and financial services was rather limited and that subsequently more information needed to be provided on INT/SMO R/CESE 1530/2007 4

5 citizens' rights as well as on the instruments for the resolution of problems in the Single Market such as SOLVIT 9. He deplored the lack of resources allocated to this still recent network (set up in 2002) at Member State level. Mr Friess indicated that the business sector argued that the Single Market was not yet complete, for example in such areas as services, retail financial services (representing up to 70% of employment and 20% of intra-community trade), insurance, taxation, intellectual property and mobility. He added that businesses called for a more rigorous application of EU legislation by Member States 10 and that both harmonisation and mutual recognition applied for goods in the Single Market. Mr Friess acknowledged that Single Market policies were sometimes considered to benefit businesses in the first place and that other constituencies called for the further development of a social dimension. This required more communication especially with civil society. He concluded by stating that the European Commission's final report was due to be adopted in mid-november. Mr José Antonio DA SILVA, President of the Portuguese Confederation of Commerce and Services, said that mass marketing and financial services were among the most developed sectors in the EU. However, he pointed at organisational problems in facing the major challenge of balanced and fair development also in a global context, whereby SMEs in particular found it difficult to assert themselves. He argued for a citizen-orientated approach to the Single Market, focusing on those who suffered from competition. He indicated that more than 90% of Portuguese enterprises were small and medium size enterprises - or even micro enterprises - accounting altogether for 78% of employment in Portugal. He added that Portugal had the highest density of small retailers in the EU and underlined the role of SMEs in social development. Mr da Silva deplored the lack of positive discrimination in favour of SMEs, particularly fiscal advantages. Taxes put a strain on profits and jeopardised the economic viability of small enterprises in Portugal. He drew attention to the fact that Portugal was ranked among the first in the EU in terms of social inequalities and that impoverishment was gaining ground even in the middle class. This development was highly detrimental to social cohesion. Ultimately, the small business sector had fallen from 84% to 8% of the Portuguese market within a few years while the ageing of the population resulted in new mobility problems. Mr da Silva raised the question of how to respond to increasing specific mobility needs and sustainability. He finally mentioned the closing down of a large number of SMEs (including retail outlets and petrol stations) located near Spain due to different tax rates on both sides of the border. In this context, he thought that the State should play a regulatory role and not only in the telecommunication, energy or financial sectors and that letting the market operate was not a solution. He added that the services sector was losing jobs as well. Mr Manuel CARVALHO DA SILVA, Secretary General of the Portuguese Workers Confederation (CGTP), stated from the outset that without denying its contribution, e-consultation could not substitute for direct dialogue and regretted the "absolutist" 9 The SOLVIT website: 10 See Scoreboard n 16: INT/SMO R/CESE 1530/2007 5

6 approach of the European Commission in this respect and the subsequent hegemony of on-line consultation. He said that social aspects and issues related to working conditions were too often left aside and that this was the reason for the fragility of Single Market rules and the public's mistrust towards European integration. The discussion on the services directive showed the effect of the imbalance between economic and competitive issues and the social dimension. Indeed, social aspects were the cornerstone of public services and Mr Carvalho da Silva mentioned the action taken by the ETUC 11 to oblige the European Commission to create a framework law protecting public services. He called for due consideration of the social impact of globalisation, especially in terms of health and safety. He stated that the EU's approach was a rather strategic one and hence did not always focus on citizens' concerns. The dichotomy between economic and financial measures on the one hand and social aspects on the other was at the source of citizens' mistrust towards the Single Market. In his opinion, market globalisation had made things worse. Referring to the poor quality of employment policies, Mr Carvalho da Silva indicated that illegal growth was high and recommended that inspiration be drawn from those Member States displaying fewer inequalities. Mr Carvalho da Silva said that there were four real issues, which he knew were very sensitive for the Committee: Defending the productive sector and non-speculative activities, Protecting the values of the European social model, Promoting rules ensuring that wealth be properly distributed, Restructuring companies and public administrations. He added that anti-dumping measures were late and contradictory and did not focus on citizens' interests, and questioned the existence of a European social model, especially in the context of a European union with 27 Member States. He warned against a downwards trend in social issues and called for a harmonised system of progress, whereby social rights should have a universal dimension going beyond the "narrow" needs of competitiveness, as in the case of flexicurity, which involved a number of complementary parameters. In his view, the European project needed to be rebalanced. He concluded his intervention by acknowledging the role of the European Economic and Social Committee in the consultation process and underlining the consensual nature of its composition. He wished to see the EESC act as an alarm system and as a flanking instrument for EU policies. Mrs Eva BELABED, vice-president of the Single Market Observatory of the EESC, said that statistical evidence of the advantages of the Single Market was one thing while reality on the ground could give another picture. She therefore deemed it necessary to listen to civil society organisations, which were best placed to provide realistic feedback. 11 The European Trade Union Confederation. INT/SMO R/CESE 1530/2007 6

7 Mr João DIAS DA SILVA, President of the Portuguese General Union of Workers (UGT), acknowledged the contribution of the European Economic and Social Committee as a privileged forum for social and civil dialogue in the EU decision-making process, and said that one must realise what was being invested in such consultative mechanisms allowing for concrete stakeholder participation. He argued for a consolidation of tripartite social dialogue for the sake of a successful social Europe creating more and better jobs on the basis of an efficient economy, which invested in the future. He added that a social Europe had to be seen as a component of the solution to the problems of our times. He further pointed at the discrepancy between the goals of the Lisbon Strategy set in 2000 and the state of affairs in 2005, whereby the revised agenda seemed to give preference to competitiveness in line with a deregulatory approach and to neglect social cohesion and environmental issues. He reminded the audience that the social dimension of the Single Market was a fundamental part of the European project. Mr Dias da Silva touched on a number of issues of importance for a social Europe. Workers' mobility, recognition of qualifications and the right to vocational training were key aspects. The portability of pension rights was also important. He warned against the risk of mobility ending up by worsening working conditions. He deemed it necessary to further promote research to ensure the EU's future competitiveness. Free and fair competitiveness based on clear rules was the key to a sustainable Single Market and he pointed at concerted practices, especially in the energy sector. Mr Dias da Silva said that the risk of deregulation, as illustrated by the Bolkestein Directive, had been alleviated by the European Parliament and he hoped that the Services Directive would be applied under acceptable terms by 2010, with particular regard to services of general interest. He stated that "flexicurity" was to be put in relation to the EU employment strategy and the quality of employment, and urged to combat deregulation of working conditions, especially in SMES, in striking a balance between social and economic aspects. Concerning consumer protection, Mr Dias da Silva noticed a growing discrepancy between fostering of competition (e.g. liberalisation of the markets for telecommunications, gas and electricity and utilities) and limited ambitions in terms of social policy. He referred to the directive on distance selling which needed to be revised in conjunction with the directive on consumer protection. He concluded his statement by calling for the setting-up of efficient mechanisms that were not mere "rituals". Mrs Eva BELABED reminded the audience that the call for a level playing field was discussed mainly in relation to businesses but that this should also apply to workers, especially in the context of standards and the balance of power between business and the workforce. Mr Edwin CALLEJA, member of the SMO, referring to Mr Friess' statement, said that services were difficult to classify but thought that this classification needed to be better explained and more assessable so as to have a better picture of the economic weight of this sector. Mr Manuel ALMEIDA DOS SANTOS, from the "Centro de Informação de Consumo e Arbitragem" in Porto, mentioned the legal consequences of the Single Market such as the multiplication of court cases. Two million had been reported in Portugal, with a constant upward trend. He said that the Single Market had not alleviated conflicts involving consumers, workers and INT/SMO R/CESE 1530/2007 7

8 employers. He added that arbitration centres in Portugal, which were supposed to act free of charge, had recently imposed fees. He also deplored a lack of communication and participation and considered this trend to be impossible to revert. A Portuguese participant 12 said that it was necessary to identify a set of agreed and clear rules concerning such fundamental rights as working conditions. These rules should have been laid down in a more stringent text than a Green Paper. The latter did not examine objectively the reality of Europe's labour market and based itself on some economic determinism that jeopardised collective bargaining while preserving the approach to "flexicurity" without envisaging further discussions. This participant said that the increase in the number of disputes in Portugal was also due to a tradition of not complying with the law. He called for a social and political commitment to changing attitudes as well as the way in which the Portuguese legal system operated being both complex and expensive to use. He noted that an economic and financial power was asserting itself while at the same time a "political devaluation" was taking place, threatening the balance of power. Mr Luís SILVEIRA RODRIGUES, member of the board of the Portuguese Association for Consumer Protection (DECO) 13, briefly introduced his organisation by stating that it was a non-profit association defending consumer rights and affiliated to the EU umbrella organisation BEUC. DECO, the largest consumer protection organisation in Portugal, was set up in early 1974 and was based in Lisbon with six regional offices in Portugal. Its branch "DECO protest" was created later and issued consumer protection periodicals, distributed to its 20,000 members. He said that if the Single Market allowed for better choice, quality and prices it also brought threats such as mass production, lower protection in case of disputes, greater legal uncertainty and more aggressive advertising. Mr Silveira Rodrigues said that if the "acquis communautaire" was a big step forwards it did not resolve all the problems faced by consumers and businesses. Therefore, better lawmaking was an important option to allow for more transparency and efficiency. He added that DECO advocated a horizontal instrument whereby vertical ones could also come to play whenever necessary. It was essential to be adequately equipped to respond to market changes and he regretted that the directive on unfair practices was now out of date. The new Commission approach consisting of full harmonisation had led to lower consumer protection and DECO believed that this option did not meet the needs of consumers, all the more so since it was very difficult to reach an agreement with 27 Member States all having different economic situations. He indicated that case law also varied between Member States and even within Member States and that minimal harmonisation seemed therefore more likely to protect consumers' interests. However, full harmonisation could be necessary in specific cases. He deplored for instance that deadlines for redress which varied depending on the type of contract induced confusion among consumers and businesses. As for cross-border disputes, Mr Silveira Rodrigues advocated jurisdictional competence of the consumer's Member State in order to strengthen confidence while recognising that business might then face different legal 12 He did not introduce himself INT/SMO R/CESE 1530/2007 8

9 systems. Indeed, consumers would not buy goods or services in another Member States if they did not know what law would apply in case of a dispute. For the Single Market to be achieved, appropriate procedures and resources were needed to deal properly with disputes. He referred to collective actions 14 and their use in such Member States as Portugal, Spain, France, Germany and Italy as an appropriate approach to dealing with cross-border disputes and mentioned a case in relation to telecommunications, when DECO represented some two million Portuguese consumers 15. He concluded his statement by saying that better legislation making it clear to consumers what their rights were would improve confidence in the Single Market. Mr Edgardo Maria IOZIA, member of the SMO, raised the dual question of proceedings costs in the case of redress and compensation to the benefit of consumer associations. He pointed at the "28 th regime", which in his view could be seen as an alternative to national jurisdictions and an option to protect consumers' interests. Mr Bernardo HERNANDEZ BATALLER was convinced that European integration implied legal integration as well and that hence economic rules needed to be given legal translation to ensure compliance and enforcement so as to avoid detrimental consequences for citizens especially in cross-border commerce. He continued by saying that national legal systems were not yet ready to deal with collection actions since national jurisdictions were tailored to limited complaints. The essential question was to what extent we could expect to standardise this type of complaint and legal action. Would a directive streamlining for instance the submission of evidence or suing of damages suffice or should we adopt a full set of EU-wide regulations? Mr Jorge PEGADO LIZ underlined the question of enforcement of rules and their implementation into national law, for instance in the case of time share. He referred to the fact that defective directives were also a reason for deficient transposition at national level. Better lawmaking played an essential role in this respect. Mr Alfredo CORREIA, member of the EESC, referred to an EESC opinion on Credit and social exclusion in an affluent society 16 and referred to an action launched by DECO against the Portuguese financial system for wrongly calculating rounding off and reference interest rates to the detriment of consumers. Mr Wautier ROBYNS DE SCHNEIDAUER, member of the SMO, thanked Mr Silveira Rodrigues for his statement on collective actions and raised the question of the definition of the nature of the conflicts and of the amount of damages in such cases. Mrs Benedicte FEDERSPIEL, member of the SMO, referred to Mrs Ferreira's statement on the rule of law allowing for effective enforcement of consumer rights, especially in the area of financial services. She also raised the complex question of the principle of country of origin while mentioning that the European Parliament had called for a combination of this principle with minimum The term "class actions" sometimes erroneously used refers to the American model. In this particular case, the telecommunications clients concerned obtained free communications over three weekends in compensation. Ref. CESE 1459/2007, rapporteur: Mr J. Pegado Liz. INT/SMO R/CESE 1530/2007 9

10 harmonisation. This, in her view, was very difficult and consumer organisations were very hesitant about this option. She acknowledged the fact that Portugal had long ago set up a properly functioning complaint system which could be a model for other Member States. Concerning collective actions, Mrs Federspiel did not agree with the streamlining of national court systems. She mentioned such options as opt-in and opt-out and referred to the cases of Sweden, which for some time had had the opt-in system, and of Denmark and Norway, which had recently introduced both opt-in and opt-out. She said that businesses were also consumers with specific requirements. Mr Luis SILVEIRA RODRIGUES replied to Mr Iozia's statement by saying that case law needed to be updated so as to avoid its being overturned. Proceedings as we knew them were both costly and risky. Under certain circumstances, enterprises in the wrong could be fined, with a given percentage of the fine to be paid to Portuguese consumer associations this was not the case in the telecommunications issue mentioned earlier. Referring to the option of an EU framework directive, he said that when reviewing the acquis, we should not have different payment periods. Contractual clauses concerned both consumers and nonconsumers. Ultimately, DECO favoured a framework system in which each national jurisdiction could operate, rather than full harmonisation. Mr Silveira Rodrigues said that Portuguese legislation defined the scope of collective actions, e.g. public health, environment, consumer protection, quality of life, with any citizen or representative organisation, the public prosecutor or the Government's Directorate for consumer protection being entitled to take action. He noted that it was preferable to have a European collective action along with the right instruments and that certain Member States already had such a system while others were working towards it. Mr Silveira Rodrigues added that Member States might find it difficult to enact legislation based on directives as their laws were more protective. This applied to Portugal for instance in the case of contractual clauses on guarantees or distance selling and time share. He mentioned the didactic role and the multiplying effect of Portuguese arbitration centres acting as small informal courts for consumers, and called business to join in this exercise. Mrs Rosarinho MELANCIA, representing the Portuguese SOLVIT centre 17, illustrated the activities of the Portuguese SOLVIT centre with a few very concrete cross-border cases. She said that SOLVIT aimed at rapid resolution of problems which citizens and enterprises faced as a result of misapplication of EU legislation by national public administrations. Most requests to SOLVIT concerned car registration and driving licenses, social security and professional qualifications a clear proof of the increasing mobility of EU citizens. She underlined the high resolution ratio of all EU SOLVIT centres with an average of more than 80% Contact in Portugal: solvit@dgac.pt and postal address: Ministério dos Negócios Estrangeiros, Direcção Geral dos Assuntos Europeus, Serviço do Mercado Interno, Rua Cova da Moura, 1, PT Lisboa INT/SMO R/CESE 1530/

11 Referring to the success of the German SOLVIT centre, Mrs Isabel ALFONSO, executive director at the Porto Centro de Informação do Consumo e Arbitragem, wished to know to what extent Portuguese citizens were aware of the activities of their national SOLVIT centre. She said that the Centro de Informação do Consumo e Arbitragem and various on-line services also provided solutions but that information and awareness needed to be improved. She raised the question of the difference between misapplication and non-application of Single Market rules. Mrs Benedicte FEDERSPIEL congratulated the European Commission on its initiative in setting up the SOLVIT network. She wished to have some information on the percentage of businesses especially SMEs and citizens using SOLVIT. Mrs Rosarinho MELANCIA said that too much EU-related information made coordination difficult, whereby certain messages would barely come across in spite of great efforts by the SOLVIT team (e.g. leaflets, information meetings, contacts with embassies, public administrations and social partners). She appealed to citizens and businesses to make use of SOLVIT. Mrs Melancia added that if much of the legislation had been transposed, many national administrations still ignored the rules. Information and training of officials were most necessary in this respect. Mrs Melancia said that relatively few SMEs resorted to the SOLVIT centres and wished that more small and medium size companies would contact this network. Large companies had their own resources to face problems due to misapplication of EU legislation. Ultimately, less than a third of all cases submitted originated from businesses. She pointed at the possibility for a company to make a formal complaint to the European Commission if the cross-border problem they encountered could not be solved by SOLVIT but admitted that businesses were reluctant to engage in legal procedures. Mr Jean-Pierre FAURE, Head of the SMO secretariat, made a brief presentation of the self- and co-regulation database which the SMO and the European Commission had developed with a view to mapping initiatives taken by interest groups in the European Union to foster alternatives to regulation. This database, due to be formally launched early , included some 110 such initiatives and was the only on-line instrument allowing for an EU-wide overview of this particular aspect of Better Lawmaking. Mr Bryan CASSIDY concluded the hearing by thanking participants for their contributions. He also thanked Mr Tatiana MENDONÇA, from DECO, who actively participated in the organisation of this public hearing. 18 The test phase was started in November 2007 with the setting up of a small test user group. INT/SMO R/CESE 1530/