Evaluating impact on investment and proper functioning
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Scope
Does the option contribute to improving the conditions for investment and for the proper functioning of markets?[1]
Definition
The single market is the core of today's Union. To make it happen, the EU institutions and the member countries strove doggedly for seven years from 1985 to draft and adopt the hundreds of directives needed to sweep away the technical, regulatory, legal, bureaucratic, cultural and protectionist barriers that stifled free trade and free movement within the Union.[1]
With the removal of these obstacles and opening of national markets, more firms can compete against each other. This means lower prices for the consumer - with the added bonus of a greater choice of goods and services. Firms selling in the single market know they have unrestricted access to more than 450 million consumers in the European Union - enabling them to achieve economies and efficiencies of scale, which translate in turn into lower prices. The single market also provides a useful springboard for European firms to expand into today's globalised markets.
The four freedoms of movement - for goods, services, people and capital - are underpinned by a range of supporting policies. Firms are prevented from fixing prices or carving up markets among them by the EU's robust anti-trust policy. People can move around more freely for work because member states recognise many of each other's academic and professional qualifications. Governments have agreed to take decisions affecting the single market by a system of majority voting rather than by unanimous agreement - which is much harder to achieve.[1]
The creation of the single market gave European Union countries a stronger incentive to liberalise previously protected monopoly markets for utilities such as telecommunications, electricity, gas and water. The independent national regulators who supervise the now-liberalised markets for telecoms and energy coordinate their activity at EU level. Not just big industries, but households and small businesses across Europe are increasingly able to choose who supplies them with electricity and gas.
The European Commission's Enterprise policy aims at creating a favourable environment for enterprises and business in Europe, thus creating productivity growth and the job and wealth necessary to achieve the objectives set by the European Council in Lisbon in March 2000 ("The Lisbon Strategy").[1]
The recent Report from the High Level Group chaired by Wim Kok, "Facing the Challenge" (November 2004), assessed the current situation and identified measures which could form a consistent strategy for the European economies to achieve the Lisbon objectives and targets: reducing the total administrative burden; improving the quality of legislation; facilitating the rapid start-up of new enterprises; and creating an environment more supportive to businesses.
The legal basis for the Commission activities in this field is article 157 of the Treaty, which calls on the Community and Member States to "ensure that the conditions necessary for the competitiveness of the Community industry exist" and to encourage entrepreneurial initiative and enterprise (particularly SMEs) growth. [1]
Result
EC related information:
European Commission: Enterprise Policy
Indicators[1]
The following Eurostat Structural Indicators (Economic Reform) are relevant to address the key question:
- Comparative price levels]
- Price convergence between EU Member States]
- Prices in the network industries:
-Price of telecommunication (local, national, international calls)
-Electricity prices (industrial users, households)
-Gas prices (industrial users, households)
- Market structure in the network industries:
-Market share of the largest generator in the electricity market
-Market share of the incumbent in fixed telecommunications
-Market share of the leading operator in mobile telecommunication
- Trade integration of goods and services
- Market integration - Foreign Direct Investment intensity
- Business investment
- Business demography
- Public procurement
- State aid by type of aid
- Convergence in interest rates by type of loan[1]
The following Eurostat Sustainable Development Indicators (Economic Development) are relevant to address the key question:
Investment as a percentage of GDP[1]
See also
References
This text is for information only and is not designed to interpret or replace any reference documents. The text is partially adapted from: