Single Market Strategy

On February 22 the Committee on the Internal Market and Consumer Protection of the European Parliament discussed Lara Comi's draft report on the Single Market Strategy.

By Andrei Geica

23 Feb 2016

Lara Comi (EPP, IT) introduced the key points of her draft Report, which concentrates on the Single Market’s potential, jobs, and SMEs:

  • On SMEs and start-ups, Ms Comi said it is important that their innovation capacity be supported in any way possible, since it represents the leading factor of growth generation. Nevertheless, she stressed that not only new companies can innovate, but also existing ones, such as the manufacturing industry. What is needed, she said, is a common definition of SME, innovative start-up, and objective identification criteria;
  • Ms Comi referenced President Juncker, recalling his speeches on a Fiscal Union to obtain a Political Union. She sees the introduction of a Single Tax on electronics as a first step towards this, levied from a uniformed VAT. She emphasised that she is convinced of the resistance posed by different fiscal regimes in different Member States, yet she urged her colleagues to not be afraid;
  • Another priority is that of facilitating dialogues between national SME and industrial representatives, stating that there is no communication between them;
  • While the Late Payment Directive was a step in the good direction, answering the calls from both the economic actors and citizens, Ms Comi lamented the fact that it is either not applied or badly applied, and recollected that only in Italy around 5000 firms have closed due to credits, and not debts. She thus suggests a compensation mechanism between credits and tax;
  • The MEP believes that the EU should intervene to help those entrepreneurs who have failed for reasons that are not connected to the entrepreneurs’ capacities;
  • The introduction of European Standards, particularly important for TTIP talks, with particular emphasis on the principle of reciprocity;
  • Ms Comi welcomed the European Patent and urged the European Commission to apply pressure so that all Member States speed up adoption;
  • Market Surveillance and Geographic Indications are seen as fundamental to give back trust to citizens;
  • She said she is in favour of a Service Passport, so long as it proves its added value and does not simply add another layer of administrative obstacles;
  • On sharing economy, the Rapporteur believes it could give a push to jobs and growth, but it is equally important to have a clear and shared definition of it. On this note she proposed the principle of ‘same rules for same services’. She further added before concluding that the issue of geoblocking and cost discrimination are also factors that need to be tackled.

Evelyne Gebhardt (S&D, DE) replaced the S&D’s shadow rapporteur Marlene Mizzi (S&D, MT) and read her annotations on the Report: firstly the S&D would like to strengthen the social and environmental aspects of the Single Market based on the Lisbon Treaty obligations. The Group urges for a broader strategy that establishes a balance between economic and social rights in order to integrate citizen interests in the Single Market. Secondly, the Shadow Rapporteur warned against the possibility of providing opportunities for dishonest businesses to circumnavigate existing rules when attempting to support SMEs and micro-enterprises. Regarding the sharing economy, the S&D believes that while it represents a huge opportunity, it can also provide challenges and legal uncertainties that might affect consumers, workers, trade associations and suppliers. In conclusion, the Shadow Rapporteur calls for a fairer Single Market and will introduce amendments regarding consumer protection, transparency, information requirements and redress mechanisms.

Vicky Ford (ECR, UK) replaced the absent ECR Shadow Rapporteur Daniel Dalton (ECR, UK) and introduced the Groups’ position: firstly, having a uniform level of VAT across levels is not considered a good idea. Ms Ford suggested to take the route of the Gebhardt-Kallas Report on the Digital Single Market, which focuses on a uniform consistency approach and thresholds for micro-entities as a regime that is more business-friendly. On the sharing economy, the ECR believes it to be a positive development since it allows people to work who were previously unemployed. Regarding the Services Passport, the ECR wants to make sure that it has potential benefits and does not allow for a race to the bottom in services. Ms Ford said that the mutual recognition approach could prove helpful in this regard. According to the MEP, what the ECR holds most firm is the issue on market surveillance, since it believes it is urgently needed. As such she announced that the ECR amendments will focus mainly on market surveillance and also to make sure there are no unreasonable Geographic Indication requirements, since placing the country of origin on every product is not something the ECR is ready to support.  

Antanas Guoga (ALDE, LT) explained that the ALDE Group’s priorities are stimulating the digital single market, integrating global supply chains, new business models, market facilitation, standardisation and licensing of professionals. Mr Gouga welcomed the actions foreseen in the strategy, particularly on simplifying VAT regulation, reducing cost for company registration and the proposals on business insolvency. He hoped that initiatives on e-Governance and interoperability aspects will also be introduced, since it is important for businesses to receive assistance online. For this reason the ALDE Group supports the idea of a single digital gateway as an entry point for both businesses and consumers in Single Market legislation. The ALDE MEP stated that he would like to see more emphasis on standardisation in the report. Regarding Market Surveillance he was of the opinion that the European Commission should try to break the deadlock in the Council or withdraw the package and propose a brand new one with no reference to ‘country of origin’ provisions, since ALDE sees it as protectionist measures with no benefit for consumers.

Julia Reda (Greens/EFA, DE) stated that while there is a lot in the report the Greens agree with, they are concerned about missing elements concerning social and environmental factors. Firstly, Ms Reda believed that the IMCO Committee should treat the Circular Economy package within their Single Market Strategy since the European Commission was not ambitious enough. As an example, the Greens would like to introduce eco-labelling as an issue to be discussed. On patents, Ms Reda noted how the report focuses on facilitating access by SMEs to the patent system yet there are many innovative SMEs based on an open-business model that do not use it. Another element not present in the report that should be introduced according to the Greens is the manufacturing waver for generic medicines, since it creates a situation in which medicines cannot be produced in the EU but can be sold within the market and are being produced elsewhere. Ms Reda said that this situation leads to job loss and unnecessary restrictions regarding access to medicines. On geoblocking, while the Greens appreciate the clear language, believe more should be done. While all the Groups have declared themselves against unjustified geoblocking and urged the Commission to specify its meaning, Ms Reda believes that the European Parliament should specify the subject itself. Lack of tax coordination could be more ambitious in the text and she concurs with her S&D colleagues that greater attention needs to be paid to the social effects of liberalisation and conduct impact assessments. The Green MEP also appreciated the recognition within the report of the difficulties SMEs and start-ups face regarding access to finance and suggested that crowdfunding should be addressed specifically. The Greens Group will thus introduce amendments concentrating on these points.

Marco Zullo (EFDD, IT) noted that from his experience in the European Parliament an inertia by Member States in the application of Single Market legislation does represent an obstacle to the full realisation of the Single Market. Nevertheless, he stated that the Committee must pay attention to the overall design in order to avoid contradictions. What the EFDD Group wants is to assure SMEs are competing on equal footing, particularly regarding credit and taxation, although they defer finding solutions to a later discussion. Mr Zullo declared himself against statements by previous MEPs regarding Geographic Indicators, stating that they are linked to the culture, quality and history of the product, which is an added value for both consumer and producer. He continued saying that Europe should seek to use its diversity and not uniform at all cost. Regarding the sharing economy, the EFDD MEP said that it is a phenomenon that will present itself more and more frequently, and as such legislation needs to be flexible enough to adapt quickly.

Adam Szejnfeld (EPP, PL) lamented missed chances in the Report, something which he believes happens in all the European Parliament’s documents: namely that it calls upon the European Commission to provide solutions without making any specific suggestions, without constructive polemics. He then stated that a European flat-tax is either utopia or un-European. He also warned against killing industries with across-the-board harmonisation as well as hampering innovation through additional legislation.

Olga Sehnalová (S&D, CZ) drew the attention on the different quality certain products have in different Member States, something that she has been tackling with since 2011 in the previous Parliamentary term. She said that if the objective is to have a fairer Single Market then all forms of discrimination must be tackled.

Andreas Schwab (EPP, DE) recalled the words of former Commissioner Mario Monti who said in the IMCO Committee that there are internal market measures that can be already implemented by DG Competition in order to accelerate the integration of the Single Market. He also noted that the current Commissioner has the same approach, to look for solutions below the level of primary legislation. Mr Schwab then disagreed with Ms Ghebhardt regarding the Services Passport, saying that it is designed for those professionals who wish to operate in a different Member State than their own, and provides legal security and confidence. Furthermore, he stated that the Single Market should not be uniform according to a single ‘taste’. Finally, he declared that the EU should do its own homework regarding SMEs and start-ups and stop continuously looking at the US or Asia.

Lara Comi (EPP, IT) responded to her colleagues by stating that consumers are a central piece of her Report, since anyone can be defined as a consumer, including the entrepreneur. What she sees as fundamental is to create a culture of compliance in Member States, otherwise it becomes useless to legislate if the laws are not applied. Ms Comi then said that she does not agree that the European Commission should pull the market surveillance package from the Council, since it would throw away a lot of hard work. She then referred specifically to the EFDD MEP, saying that sometimes Italian producers hide behind the ‘Made in Italy’, which has been transformed in a brand, by applying a sticker to olive oil which is completely Spanish. As such, traceability becomes fundamental. She then explained that in her report there is an example of furniture manufacturers who spontaneously and voluntarily created an ‘ID card’ for their products, which is an important initiative that can be used as an example. Regarding innovation, Ms Comi stated that the regulatory framework needs to be such that allows SMEs and start-ups to participate autonomously in innovation. In her concluding remarks she noted that this would be made a lot easier if legislation would be conducted through Regulations rather than Directives in order to not lose time with half-applied rules.

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