Select Committee on European Scrutiny Second Report


COM(01) 198 

Commission Communication: "Working together to maintain momentum" — 2001 Review of the Internal Market Strategy.

Legal base:
Document originated: 11 April 2001
Forwarded to the Council: 11 April 2001
Deposited in Parliament: 20 June 2001
Department: Trade and Industry
Basis of consideration: EM of 21 June 2001
Previous Committee Report: None
Discussed in Council: 30-31 May 2001
Committee's assessment: Politically important
Committee's decision: Cleared


26.1 The aim of the Internal Market Strategy is to improve the workings of the Single European Market. The Strategy, which was originally agreed in 1999, is subject to an annual review and revision. The Strategy comprises the following four Strategic Objectives:

    "— Enhancing the efficiency of Community capital, product and services markets ('Markets');

    — Improving the business environment ('Business');

    — Improving the quality of life of citizens ('Citizens'); and

    — Exploiting the achievements of the Internal Market in a changing world ('External')"

26.2 These longer­term strategic objectives are combined with operational objectives and shorter­term target actions which are reviewed and updated annually. The first review of the target actions took place in May 2000 and prioritised those which it was felt would have the greatest and most immediate impact in improving the functioning of the Internal Market.

The document

26.3 The Communication sets out the second review of the target actions. The choice of priority target actions is largely based on the Conclusions of the Stockholm European Council which, amongst other things, re­affirmed the importance of the Internal Market as the driving force behind economic and structural reform in the Union.

26.4 The format of the new Strategy broadly follows that of the 2000 Review document and comprises an initial commentary followed by two annexes. The Minister for Competition, Consumers and Markets at the Department of Trade and Industry (Miss Melanie Johnson) says:

    "The commentary in the revised Strategy is more detailed than in the 2000 Review and for the first time includes a discussion of horizontal target actions i.e. those with relevance to more than one of the Strategy's objectives. The first annex is a list of the target actions from the previous Strategy which are expected to be completed by June 2001. The second annex is a consolidated table of target actions due for completion in the period to December 2002. This list includes ongoing and rescheduled target actions from the previous Strategy as well as new target actions, with the Commission identifying those it views as priorities.

    "The structure of the previous Strategy has in general been maintained, although the new document is more streamlined. The four longer-term strategic objectives from the 2000 Review have been retained, but there are a reduced number of linked operational objectives (from 15 to 11):

      "i Enhancing the efficiency of Community capital, product and services markets

        — Ensure financial services deliver their full potential;

        — Encourage creativity and innovation and maximise the benefits of frontier technologies; and

        — Market opening legislation in the utilities and transport sectors.

      "ii Improving the business environment

        — Removal of anti­competitive practices which threaten market integration;

        — Eliminate tax barriers and unfair tax competition; and

        — Improve the regulatory and administrative environment for business, particularly SMEs [small-medium sized enterprises].

      "iii Improving the quality of life of citizens

        — Ensure that the Internal Market contributes to sustainable and balanced development;

        — Enhance citizens' health and safety and promote their economic interests; and

        — Reinforce and promote citizens' rights.

      "iv Exploiting the achievements of the Internal Market in a changing world

        — Enhancing the Internal Market's interaction with a global trading system; and

        — Ensure that the Internal Market contributes to a successful

      enlargement of the Community."

26.5 The number of shorter­term target actions has also been reduced, from around 130 to under 80, although some of this reduction reflects less duplication of horizontal target actions. In revising the Strategy, the Commission has based its selection of priority actions on a number of sources, including the Stockholm European Council Conclusions, those of the 12 March 2001 Internal Market Council (IMC) and opinions on the Strategy adopted by the European Parliament and the Economic and Social Committee.

26.6 The document states that of the 36 target actions scheduled to be achieved by June 2001, only 20 (56%) are expected to be completed on time and that of 12 priority areas eight were delivered on time.

The Government's view

26.7 The Minister says that:

    "The Government supports the Commission's desire to improve the operation of the Internal Market. Currently, there are a number of weak areas in the Internal Market which need to be addressed, and the Strategy offers a valuable long-term strategic view and framework for this ongoing work. In particular, the Strategy provides transparency to the Commission's plans and its more streamlined structure is of assistance in prioritising key issues. The UK shares the Commission's concern at the low number of target actions completed within the deadlines set in the Strategy and believes increased focus will be needed to deliver key actions. The UK's priorities for action for completion by the end of the year which are reflected in the Strategy include the Community Patent and the Public Procurement legislative package. In the longer term, the UK looks forward to further work on other key Internal Market elements, such as the Internal Market Strategy for Services and the co­ordinated Strategy to simplify the regulatory environment. The UK considers the inclusion of a small minority of the target actions in the Strategy, such as modification of the Regulation extending social security schemes to third country nationals, to be premature and the UK will make this clear in the appropriate European fora."


26.8 We clear the document.

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Prepared 2 November 2001