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Its a better life - How the EUs single market benefits you

By Lynn Fisher,2014-11-13 15:28
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Its a better life - How the EUs single market benefits you

European Commission

    Directorate General Press and Communication

    Manuscript completed in August 2002

    It’s a better life

    How the EU's single market benefits you

    The creation, growth and development of the European Union have over the last fifty years freed its citizens from all sorts of restrictions. Progress has been especially marked since the creation of the EU’s ‘single market’ a decade ago. National frontiers between EU countries have been virtually dismantled. The resulting single market means that goods, people and services can move freely throughout the EU and it has opened up economic and working opportunities that have transformed the lives of hundreds of millions of Europeans.

    This booklet describes some of the many benefits EU citizens now enjoy. It sets out to show that the single market is not a dry and dusty concept relevant only to big business. It is delivering a better life for everyone.

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Contents

A liberating experience

Reaping the benefits

    From uncommon market to single currency

Freedoms without strings

    Keeping competition clean, free and fair

Protecting our freedoms

Aiming to be a world leader

New challenges

Further reading

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A liberating experience

    You do not have to be very old to remember a time when moving around Europe was a big headache. Not so long ago people living in the 15 countries that are now EU Member States could take very little cash out to travel abroad. They had to put up with long queues at customs posts and passport controls every time they crossed a border.

    Goods worth more than EUR 600 were immediately trapped in a web of paperwork, red tape and import taxes. The tax system alone required some 60 million customs clearance documents a year a huge burden to companies, who had to pass on these

    costs to their customers.

    Moving from one country to another for work reasons can still pose administrative problems today, but it was infinitely more difficult with the nightmare bureaucracy of old times.

    Now, thanks to the European Union and its constantly developing single market, we have many new freedoms.

    They are freedoms to travel, work and do business abroad, choose from more goods and services and enjoy full consumer rights when shopping outside your own country.

    And they are freedoms from many unnecessary rules and regulations, from ‘rip off’ prices in markets closed to competition and from artificial restrictions on choice.

    We have had a frontier-free single market in Europe since 1 January 1993, a decade ago.

Gone are most of those barriers physical, procedural, bureaucratic and commercial

     that tended to confine people, goods and money behind national, protectionist walls. Now those barriers have been broken down, peoples’ opportunities, experiences and horizons are widening.

    Of course, the process of opening up Europe is far from complete and much work remains to be done. Not all the principles behind the single market are yet fully applied in practice. However already, the single market has transformed for the better many aspects of European life.

    And the achievement of the last decade or so is not just an economic one. Without losing any of their national characteristics and cultural traditions, citizens of the Member States have also become citizens of Europe (see box).

European citizenship and the Charter of Fundamental Rights [Box]

    In December 2000 the European Union’s heads of state and government endorsed the Charter of Fundamental Rights of the European Union. This draws together in a single, easy-to-read text all the personal, civil, political and social rights that

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    European citizens are guaranteed. The concept of European citizenship is clearly defined. Not only can EU citizens stand for office in their own country, they also have the right to stand in European Parliament and municipal elections in the EU country where they live. (europa.eu.int/abc/cit1_en.htm)

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Reaping the benefits

    No other region in the world can match Europe’s achievement in banishing borders without diminishing the importance of national languages, cultures and traditions.

People move freely across most borders: more Europeans are visiting their EU

    neighbours for a holiday or study break than ever before. Going to work in another Member State is much easier now countries recognise a wide variety of each other’s

    professional qualifications.

The Schengen Agreement [box]

    The Schengen Agreement, named after the Luxembourg border town where it was signed in 1985, is a cornerstone of the border-free Union. The agreement removes checks on travellers (irrespective of their nationality) at most of the EU’s internal borders, harmonises controls at the EU’s external borders and introduces a common policy on visas. Once a visitor has legally entered a country in the ‘Schengen area’, he or she can travel freely to all others without prior permission or even a passport. Schengen covers all EU Member States except Ireland and the UK which cooperate with their partners on police and judicial affairs but have not ended border controls. That is why passports still have to be shown when travelling between the UK or Ireland and the rest of the EU.

    Goods are no longer delayed for hours or days at borders by heavy paperwork: this makes delivery times shorter, allowing manufacturers to save money and reduce prices for customers. One international express delivery company calculates that open highways have cut operating costs by 15%.

    Consumer choice is vast: the range of products on sale across the EU is wider than ever and in most cases prices are easily compared thanks to the euro. Manufacturers

    have to keep prices down because they are selling into one huge competitive market. Mutual recognition of technical standards means products which are legally sold in one Member State can be marketed in all others.

Cross-border services are rapidly taking off: insurance, property, transport and

    tourism are among a wide range of services being marketed by companies in one Member State to customers in other countries.

Home loan information [box]

    Most people buy a mortgage in their own country and never think of shopping cross-border for the loan, even though they can sometimes get better value by doing so. The lack of transparent financial information often made it difficult to compare home loan products across borders. In 2001, after three years of negotiations brokered by the European Commission, the mortgage industry and consumer organisations agreed to a Voluntary Code of Conduct to help consumers compare the cost of cross-border mortgages. Lenders signing up to the code agree to publish or to provide detailed information on the products they offer, including types of interest rates and all additional costs associated with mortgages.

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Capital the investment that businesses need to start and to grow flows

    easily within the single market, sustaining companies and generating jobs. The

    arrival of the euro will be followed by important gains for savers and investors. The EU is implementing an action plan to develop a real Europe-wide market in financial services by 2005. This will reduce the costs of borrowing and provide consumers with a wider choice of investment products such as savings plans and pensions

    which they will be able to buy from anywhere in Europe they choose. A more developed single market in financial services will also make it easier and cheaper for companies to borrow money, bringing down the cost of goods and services for everybody.

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From uncommon market to single currency

To grasp fully the European Union’s achievement in building its single market, we

    need to look back much further than just the past decade or so.

    For centuries, Europe was the scene of frequent and bloody wars. France and Germany fought each other three times in the period 1870 to 1945, with terrible loss of life. That is why, in 1951, they and four other European countries (Belgium, Italy, Luxembourg and the Netherlands) signed a treaty to tie their coal and steel industries so closely together that they could never again go to war against each other.

    Within a few years, these same six countries decided to widen the scope of this ‘economic integration’ between them, as a further guarantee of future peace and prosperity. So in 1957 they signed the Treaty of Rome, creating the European Economic Community (later the European Union) with its ‘common market’. By July

    1968 they had eliminated all quotas and ‘tariffs’ — duties on imported goods from

    trade in goods between them. But that was the easy bit.

Persistent barriers

It proved much more difficult to remove the so-called ‘non-tariff barriers’ — things

    like differences between the Member States’ safety or packaging requirements or between national administrative procedures. These differences in practice prevented manufacturers from marketing the same goods all over Europe. The only genuine single market was for agriculture.

    What is more, trade between the EU countries was often disrupted by shifts in the exchange rates between their currencies. That is why, in 1978, the European Monetary System was launched. It brought greater stability to the market by tying the national currencies more closely together.

    However, by the early 1980s, progress had been virtually halted. The main reason was simply that Europe’s increasingly uncompetitive national economies were too rigid and fragmented, and the European countries could not reach the unanimous agreements necessary to change the situation. An impasse had been reached: these were the years of so-called ‘eurosclerosis’ when Europe’s economies and

    technological capacities appeared in serious danger of falling irrevocably behind the United States and Japan.

Putting an end to ‘eurosclerosis’

    The European Commission, under its new president Jacques Delors, seized the initiative in 1985: it published a comprehensive blueprint for welding together the fragmented national markets to create a genuinely frontier-free single market by the end of 1992. All the Member States agreed on this goal and the EU which by now

    included Denmark, Greece, Ireland and the United Kingdom suddenly acquired a

    galvanising purpose.

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    But to achieve the1992 objective would require more than political will from the Member States. It also needed major changes in the way the EU took decisions. It would be impossible to meet the 1992 deadline if most decision-making still required unanimity. So, in 1986 (the year Spain and Portugal joined), the EU adopted the Single European Act. This made it possible for certain necessary decisions to be taken by a majority vote in the Council of Ministers, where each Member State has a number of votes, which is weighted in a way that takes into account the size of the population.

Less, and more simple regulation

    Between 1986 and 1992, the EU adopted nearly 280 separate items of legislation prising open hitherto-closed national markets. In many areas, 12 sets of national regulations there were only 12 members then were replaced by one common

    European rule vastly reducing the complications and costs for any business trying to market a product throughout the Union.

    In other areas, to avoid having to adopt new legislation, the Member States simply agreed to give each others’ laws and technical standards the same validity as their own. In other words, if a product could legally be sold in one country of the EU it could be sold in all twelve. This is the ‘mutual recognition’ principle.

‘Harmonised’ legislation — new EU law with detailed rules applying across the

    Union was required only where existing national rules (usually on health, safety or environmental protection) were too different.

    Already, by 1994, the total income in EU countries was probably 1.1 to 1.5 percentage points higher thanks to the single market, with somewhere between 300 000 and 900 000 extra jobs created. The impact was particularly positive in the poorer regions of the EU: the less wealthy countries enjoyed the highest growth rates.

One currency for one market

    Soon after the adoption of the Single Act, the Commission and member governments began to ask whether the single market would be complete and truly efficient without a single currency, which would ensure financial stability, further reduce business costs and give Europe a stronger voice in the world, as well as making it much easier for consumers to compare prices and to travel without having to pay exorbitant exchange commissions. By 1990, there was a consensus in favour, strengthened by the desire for greater political integration after the reunification of Germany.

    So European leaders made Economic and Monetary Union an objective for the European Union. This was laid down in the Maastricht Treaty, signed in 1992, which said that those EU Member States who wished to introduce a single currency would do so by 1999.

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    At their meeting in Madrid in December 1995, European leaders agreed that the new currency would be called the euro. From 1 January 1999, all national currencies were to become sub-divisions of the euro, which from that date would be used in all non-cash transactions within and between participating Member States. By the time euro notes and coins were introduced on 1 January 2002, twelve of the fifteen Member States were in the euro zone: Denmark, Sweden and the UK remain outside.

Fair bank charges

    But even once people had euro notes and coins in their hands, they were still paying more in bank charges to withdraw euros from cash machines or to buy things with credit or payment cards when they travelled to other EU countries than they would pay for similar transactions in their own country.

    The Commission felt this was unacceptable. So it proposed an EU Regulation, which was quickly agreed by the European Parliament and Member States, on payments in euro. This aims at creating a ‘single payment zone’. As a result, since 1 July 2002, card withdrawals and payments in euro up to EUR 12 500 have cost the same whether they are made in the customer’s own country or elsewhere in the EU. That means

    significant savings for people travelling on holiday or on business.

    From 1 July 2003, credit transfers in euro from one bank account to another will also cost the same whether the accounts concerned are held in the same country or in two different EU countries.

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Freedoms without strings

    The European Union is a great deal more than a marketplace with its own currency. It is home to some 390 million people who, for the last decade, have been free to live, work, study, shop and travel whenever and wherever they like in the EU’s 15 member countries.

    There are no strings attached to these freedoms. They embody the real benefits of being a citizen of the European Union.

    The EU has worked hard to make the single market freedoms and benefits a reality. It is constantly trying to iron out practical problems that deter people from taking advantage of those freedoms. It is doing its utmost to strip away red tape.

Social security

    One reason why people think twice about going to live and work in another country is that they are afraid of inadequate health or unemployment cover, or of losing their rights to social security.

    Now they have much less to worry about because EU citizens enjoy proper welfare protection wherever they live and work in the EU:

    ; the length of the working day is regulated for most industrial sectors;

    ; minimum safety conditions have been set;

    ; the right to paid holidays is established in law;

    ; minimum entitlements for maternity and paternity leave have been agreed;

    ; costs of medical treatment in another EU country can be reimbursed. EU law prohibits discrimination in employment on grounds of sex, race, colour, religion, handicap, or sexual orientation. The EU is a leading force in the ongoing fight to make sure equal opportunities become a reality, for everyone.

Safer food

    The Union is radically revising its laws and practices affecting the safety of food. The European Food Safety Authority has now been set up. Its main task is to provide scientific advice and support for all EU legislation and policies which affect the safety of food and animal feed.

Trust what you eat [box]

    A wide-ranging reform of EU food legislation is under way which will make the food and animal feed businesses responsible for ensuring that only safe products are marketed and that anything unsafe is withdrawn. It also includes rules on the traceability of all foodstuffs, animal feed and feed ingredients and procedures for developing food law and dealing with food emergencies.

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