The Centre for European Policy Studies (CEPS) has unveiled a report on the EU Single Market that pulls no punches. It says that while there has been progress in some areas, for decades the Single Market has been largely neglected and there has been a lack of political will pushing it, especially when it comes to enforcement.

As a result the project that was conceived by Jacques Delors in the mid-1980s is still far from completion, and poorly enforced due to political inertia and vested interests at member state level, the report says, while acknowledging that Europeans have enjoyed some benefits over the years.

Its author, CEPS Senior Fellow Professor Jacques Pelkmans calls for a shake up in the way EU institutions manage what many people see as the EU’s economic crown jewels. If his 10-point plan is followed, Professor Pelkmans believes EU gross domestic product in the EU could be boosted a whopping 9 percent over the next decade.

“That’s the equivalent of the combined GDP of Belgium, the Czech Republic and Ireland,” he said, adding: “It sounds a lot, but that illustrates how much the Single Market today is underperforming.”

“The EU needs the Single Market much more than some people realise. In the long-term the Single Market is the key determinant of Europe’s competitiveness,” he added.

The CEPS report, sponsored by Europe Unlocked, identifies the broad obstacles holding the Single Market back and proposes concrete action to address them. They include call for a detailed programme of medium-term priorities to be adopted this summer, and for the incoming European Commission and European Parliament to commit to meeting the targets during their term in office.

The plan calls for reforms in the three key EU institutions, as well as in infringement procedures that end up at the European Court of Justice.

European Parliament

The Internal Market Committee (IMCO) needs to be beefed up so that it plays a more supportive role to the Commission in enforcing single market laws. Once a year the committee should meet to address infringements by member states. The Single Market hearings will give voice to third parties including companies and consumers, that are impacted by member states’ failure to uphold EU laws.

The Committee will have no powers to punish member states, but it will add to European Commission pressure being put on countries that don’t transpose EU laws properly.

“The Commission is tip-toeing through this problem. There needs to be much more pressure on member states to respect the laws underpinning the Single Market,” professor Pelkmans said.

“There are many infringement cases each year. Dealing with them takes so long and costs so much. If a company is impacted negatively by an infringement it could take years for it to be resolved. There has to be more pressure on member states,” he said.

Council

Beef up the Council Troika comprising past, present and future EU presidencies. The European Council of heads of government should instruct the presidencies to work closely together on a revolving basis based on the overall  commitment to implement Single Market programme. them a specific mandate to ensure continuity and commitment to the Single Market.

“In the early years of the Single Market in the mid to late 1980s the Troika was used to push priority areas of policy, but more recently it has limited itself to being a vehicle to help with the practicalities involved in the handover from one presidency to another, “ the professor said.

European Commission

There hasn’t been a dedicated Single Market commissioner since 2015, when the Commission combined internal market, entrepreneurship, SMEs and EU industrial policy into one directorate, unclearly called DG Grow, under one commissioner.

“There needs to be a senior member of the next Commission dedicated to the Single Market. This should either be a vice president, or there should be a structure created linking the Commission president with the Single Market Commissioner,” professor Pelkmans said.

European Court of Justice

For cases of significant Single Market concern, the report calls for the creation of a fast-track procedure  to the European Court of Justice (CJEU), and/or the automatic suspension of a national law that contradicts Single Market laws at the outset of an infringement proceeding.

The CEPS report also calls for a specific action plan on the implementation of the Services Directive. It focuses on professional services, retail and construction, which it said are in particular need of intervention.

And it warns that deep-rooted resistance by some member states to opening their markets up to competition from within the Single Market has been economically damaging, especially in telecoms, spectrum, air traffic control and copyright.

The report also points to a “steep and unmatched increase in the regulatory burden” for businesses, especially during the mandate of the current Commission. And it urges the EU to establish a methodology  for measuring the cumulative burden of regulation.

And while the report sees the Single Market helping the EU to address the challenges posed by the green and digital transitions, it also warns that well-intended initiatives “often create rigidities”, and could even feed vested interests that hinder common EU solutions.

“Do we want the Single Market to become significantly more dynamic or do we want to continue with a half-baked Single Market?  With a limping Single Market, the engine of economic progress risks stuttering, no longer engendering the expected mobility and dynamism,” Professor Pelkmans said.

The report said that if we don’t act now there’s a serious risk that world class EU enterprises would be inclined to invest elsewhere. Meanwhile, more must be done to encourage European start-ups and mid-caps. Member states and the EU should do far more to help these companies to become more dynamic. That means, for example, giving them easier access to markets and to private risk finance from venture capitalists and capital markets, he said.

But there is much more to be done to realise the full potential of the Single Market, the report said.

“There needs to be a common commitment on the main elements of this medium-term programme from all three institutions, and there needs to be follow-through afterwards, setting milestones” he said.

Download the full report