CEPS’ emergence coincided with the reinvigoration of the internal market. In November 1982, when several foundations were deciding whether to offer assistance to get CEPS up and running, the first-ever Internal Market Council was held on the initiative of then-Commissioner Karl-Heinz Narjes.
Since then, we’ve had 40 years of building the single market and despite criticism and much work still to be done, it remains one of the EU’s most potent tools and one of its greatest successes.
When CEPS was founded in 1983, the famous Albert/Ball report was presented to the European Parliament, the beginning of a momentous turnaround in strategically approaching the internal market and with few taboos attached. In January 1985, CEPS hosted Wisse Dekker, CEO of Philips and chairman of the European Round Table of Industrialists, who presented a detailed five-year calendar for deepening and widening the internal market, back then regarded as a really daring ambition.
Later that year, the Single European Act would rewrite the EEC treaty, now with qualified majority voting and firmer language on the goals of the internal market. It worked, and far better than expected.
Today’s discussions suggest ‘the’ single market has now existed for 30 years but this is of course mistaken. The idea for a common market was formulated in 1957 and the basics of the idea never changed. Nor did 1992 deliver ‘the completed’ internal market.
True, the title of the 1985 White Paper on the single market employed the term ‘completing’ but that was more an advertising ploy. Since 1993 a near-endless series of reports and initiatives have been published, highlighting what more needed to be done to deepen the single market and make it more robust.
During those 30 years much has been accomplished. Today’s single market is deeper, wider and stronger than at the end of 1992, to the great benefit of the EU. The ideological Brexit experiment that cast the UK out of the single market has failed. Many erstwhile leave voters are now suffering a severe case of ‘bregret’. The UK may well find that there is no easy way back, even if a majority of British voters wish to return.
The challenges ahead
Today and tomorrow’s single market is subject to multiple pressures. These include cries for even more deepening (e.g. in services), an insistence on faithful and proper enforcement (especially at Member State level), less cumbersome (national) procedures, less intrusive and/or restrictive conditions for establishing retail outlets in other Member States, reducing the restrictiveness of Member States’ regulations for professional services, and calls to shun heavy bureaucratic procedures in several new directives.
Business is also worried about overly detailed EU regulation (often leading to inconsistencies with the established acquis), a concern also noticed by the independent Regulatory Scrutiny Board. What’s also painful is the Commission’s stubborn disregard of sharp criticism from standardisation bodies, business associations and prominent law firms about the Commission’s intrusion into one of the EU’s most successful achievements, within the EU and worldwide – European Harmonised Standards.
In an era where truly global digital standards matter most, and with ETSI (the European Telecoms Standards Institute) delivering them thanks to innovative market players and China – as well as the US – being part of the many ETSI committees, the Commission distancing itself from ETSI in an unwise move. There is no stand-in for ETSI, all other options imply global fragmentation and non-European leadership.
The EU is rightly concerned with the Green Deal and the digital transformation, including the competition aspects, but it is crucial not to let sectoral or ‘narrow-green’ considerations prevail. These larger initiatives ought to fit the single market and not weaken or distort it. There is a risk, too, of engendering an ‘unjust’ transition between Member States.
The single market would also undoubtedly benefit from successfully accomplishing the capital markets union. Member States ought to be more pro-active here, even when this implies domestic reforms. A capital markets union would offer greater scope for private risk sharing in the banking union when eurozone countries hesitate about public risk sharing. Such private risk sharing works well in the US – it implies a deeper single banking market with greater overall resilience.
A final beneficial aspect of the single market is the Unitary EU patent (for 25 Member States), which will be operational by June 2023. The considerable advantages compared to today include much lower application costs, single validity for all 25 countries, and a single specialised court for enforcement issues. All this implies a great stimulus for innovation because, in economics, the most important driver of innovation remains market size. With a single and low-cost patent, nearly the entire single market will be covered.
The EU’s trump card
Complaints about the state of the single market, lengthy wish lists and calls for ‘urgent’ action should be taken seriously but not lead to the conclusion that the EU single market is too fragile or ‘nearly broken’.
This is absolutely not the case.
Indeed, EU trade policy, the EU’s ‘export’ of regulatory approaches or, more recently, the (vague) notion of ‘open strategic autonomy’ are all based on the strength and the credibility of the single market and the sheer economic heft of the EU-27.
If competitiveness is maintained by business and is supported by appropriate EU regulation where justified, the single market will not only remain the ‘hardcore’ of the Union but also the EU’s trump card in the world economy for many years to come.