Report on the State of the single

market integration 2013

Kamil Kiljański, Economic Analysis and Impact Assessment, DG MARKT, European Commission

Meeting of the Committee on the Internal Market and Consumer Protection, European Parliament 28–29 November 2012

Motivation and Context

Why yet another report?!

• Reinforce SM dimension in AGS • MS specificities matter • No easy wins for econ growth • Enforcement needs prioritisation • Follow-up on Governance 2

The European Semester: timeline

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January 2012 European Council

The Commission will report annually on progress

made towards releasing the

including as regards network industries.

growth-creating

potential of a fully integrated Single Market,

June 2012 Communication on

Better Governance for the Single Market

To this end, the Commission will prepare an Annual report on the integration of the Single Market. This report will present an analysis of the state of Single Market integration and look at the way the Single Market functions in practice.

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The report

Concise  Horizontal assessment: status of integration in

4 freedoms

  Focus on priority sectors: services, energy, transport, digital markets  Main obstacles and good practices in Member States and at the EU level  Key policy priorities at national and EU level Country specific recommendations will be put forward later in the European Semester process 5

22 21 20 19 18 17

Goods (intra- vs extra-EU)

Intra-EU trade (in % of GDP)

70 69 68 67 66 65 64 63 62 61

Intra-EU trade (in % of EU export to or import from the whole world)

Average of export and import reported by Eurostat.

Export Import 6

Services (establishment)

The average share of the enterprises controlled by an entity from the other EU Member States in value added (in %) in 2003–2009*

35 30 25 20 15 10 5 0 HU EE CZ RO PL BG SK LU LV LT AT DK MT FI NL IE SE EU UK DE FR ES PT IT SI CY Broad services*** Whole economy** * Specific years differ for some countries due to data availbility.

** Except financial intermediation, agriculture, and fishing.

*** Whole economy except mining, manufacturing, agriculture, and fishing.

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Goods vs services (price dispersion)

Coefficient of variation (standard deviation / mean, GDP weighted average)

0,21 0,19 0,17 0,15 0,13 0,11 0,09 Goods Services 8

Goods vs services (consumer opinion)

Average Market Performance Indicator (2012)

84 82 80 78 76 74 72 70 LU EE DE FI MT LT LV SI SK FR DK BE NL AT HU CY UK EL CZ PL IE PT RO IT SE BG ES Goods Services 9

 

Assessment of services markets (key points)

    Double regulation (both home and host country rules) of cross-border service providers persists Uncertainty about the rules applying in MS to x border service provision on a temporary basis

Heterogeneous regulation of professions

(reserved activities and entry/conduct restrictions)

Quality of Points of Single Contact diverse

Restrictions in business services (e.g. on capital form or ownership) Economic needs tests still required in some MS for autorisation of establishment in retail 10

Main policy priorities in services markets

    More ambitious implementation of the Services Directive, especially as regards restrictions in:    fixing tariffs for certain professions company structures and capital ownership construction, business services, and tourism  process assisted by the Commission peer review Assess the rationale for the restrictions of the access and the conduct of regulated professions Retail: remaining economic needs tests should be abolished Improve the Points of Single Contact 11

Assessment of network industries (key points)

Specific chapters for each sector:  Energy: both gas and electricity  Little convergence in retail prices across the EU   Considerable investment in infrastructure needed (interconnections, smart grids, storage capacity, LNG terminals) Delays in transposition and enforcement of third energy package 

Transport:

 Difficulties with application of key legislation     Rail least competitive, especially domestic passenger transport Port services still fragmented Sea shipping between Member States often still considered as going beyond the external borders Fragmentation of the Europe's airspace 12

Assessment of digital markets (key points)

 Low coverage of rural areas with broadband  Insufficient spectrum available  E-commerce: lack of trust or information, privacy and/ or security+difficulties with parcel delivery  Uneven use of e-procurement  Shortage of ICT professionals 13

Main policy priorities in network industries

           

Energy:

implement acquis (3 rd energy package directives) monitoring and projection of investment in generation and consumption support consumers' informed choices and energy-efficient behaviour phasing out regulated prices while ensuing protection of vulnerable consumers stronger enforcement of competition rules

Transport:

     implement acquis open domestic rail passenger services remove red tape and entry barriers in the port services accelerate implementation of the Single European Sky allow more cabotage opportunities in road freight

Digital markets:

accelerate deployment of fixed and wireless broadband implementation of Consumer Rights Directive and E-commerce Directive more e-government e.g. e-procurement and e-health invest in ICT training 14

Next steps…

 Adopted together with the AGS 2013 yesterday.

 Discussed by the Council and the Parliament and the Spring European Council.

 Will help to assess the Member States’ programmes thus contributing to country-specific recommendations.

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