Guide answers to Questions for study and review Chapter 6 From the Single Market to the ‘New Europe’

Guide answers to Questions for study and review

Chapter 6

From the Single Market to the ‘New Europe’

Tariffs had been removed so fragmentation was caused by non-tariff barriers, the most important of which were:

• 
  frontier controls;
  
• 
  differences in technical specifications and standards;
  
• 
  restrictions on competition for public purchases;
  
• 
  restrictions on providing certain services (in particular financial and transport services) in other EC countries, and
  
• 
  differences in national tax systems.
  

This could be used as a research question using the Cecchini Report or Emerson.

Cecchini, P. (1988) The European Challenge: The benefits of a Single Market, Wildwood House, Aldershot.

Emerson, M. et al. (1989). The Economics of 1992: The EC Commission's Assessment of the Economic Effects of Completing the Single Market, Oxford University Press, Oxford.

European Commission (2007) A Single Market for 21^st Century Europe, COM(2007)724, www.ec.europa.eu/internal_market.

Essentially the Single Market was expected to increase the competitiveness of Community industry by reducing prices and costs. A good reply to this question would present and explain Figure 6.1 (which is taken from Emerson).


3. Indicate the main steps in introducing the SEM Programme.
Guide answer

In March 1985 the new President of the Commission, Jacques Delors, presented his programme for the Single Market to the European Parliament.

Later that year the Cockfield White Paper, ‘Completing the Internal Market’ was presented at the European Council in Milan. This called for the elimination of barriers between EC countries by the end of 1992 and set out 282 measures necessary to achieve this aim. The Milan Summit also had to decide on the intergovernmental conferences to prepare the necessary revision to the existing Treaties.

Guide answer

This could be treated as a research question with students being encouraged to look up the Internal Market scoreboard at: http://ec.europa.eu/internal_market/score/index_en.htm

Much of the difficulty here lies in different regulatory frameworks for banks and other financial institutions. There is much debate as to whether regulation of the EU securities market should be carried out on the basis of co-operation and mutual recognition among the national authorities of the member states, or whether there should be a single central regulator.

Many of the specific measures to introduce a Single Market for financial services were indicated in the context of the 1999 Financial Services Action Plan (FSAP): creating a single wholesale financial market to allow firms to raise capital on an EU-wide basis, completing a single EU retail market; ensuring state-of-the-art prudential rules and supervision, and eliminating tax obstacles to financial market integration. See http://europa.eu/scadplus/leg/en/lvb/l24210.htm

7. 
   Why was it so difficult to introduce a common transport policy?
   

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  Differences in interpreting the Treaty;
  
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  Different attitudes about the form that intervention in transport should take, and
  
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  Conflicts of interest between the member states.
  

7. 
   What developments from the mid–1980s led to acceleration in introducing common transport measures?
   

Since 1985 progress in introducing common transport measures has been rapid for a number of reasons:

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  Transport was an integral part of the 1993 Programme.
  
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  In 1985 the European Court ruled that the Council should adopt measures to liberalise transport ‘within a reasonable time’.
  
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  There was an international trend towards the liberalisation of transport, which was particularly evident in the United States during the Reagan years.
  

7. 
   What measures do you consider necessary for the improvement of the EU transport system, and how far is the EU introducing such measures?
   

In 2001 the European Commission published the White Paper, European Transport policy for 2010: Time to Decide’, which describes many of the shortcomings of EU transport. These include the need to: reinforce passengers’ rights, improve road safety, encourage sustainable mobility, prevent congestion, develop high-quality urban transport, harmonise taxes on fuel for professional road transport, and improve the trans-European infrastructure networks. The White Paper also sets out the EU programme to realise these objectives. The White Paper and later assessments of EU policy are available on the website of the DG of the Commission responsible for transport: http://europa.eu/pol/trans/index_en.htm.

The answer should compare the estimates of the Cecchini Report, with later studies, such as European Commission (2007) A Single Market for 21^st Century Europe, COM(2007)724, www.ec.europa.eu/internal_market.

11. 
    Why is it probable that the Single Market will never be achieved?
    

Regulatory and other barriers continue to prevent completion of the Single Market, in particular with regard to services, taxation and public procurement. Resistance to opening of markets may occur at the level of firm, industrial sector(s) or member state and may be backed by strong lobbies. The reply could describe a specific case such as the long battle over the Services Directive, which was finally agreed in a watered-down form in 2006.

1. 
   Choose a specific EU industry; examine the role of the EU Commission in promoting the achievement of the SEM in that industry; the expected benefits that would come from the SEM in the sector considered and the potential obstacles (short-term and long-term) remaining to completing the SEM in that industry.
   

A starting point for the research could be the EU home page on the Internal Market: http://ec.europa.eu/solvit/site/about/index_it.htm

2. 
   Analyse the activities of the Solvit Office in your country, using case studies.
   

A starting point for the research is the Solvit home page: