Boosting the potential of the EU: the Single Market Act

20 January 2011

Jonathan Faull, Director General for Internal Market and Services, European Commission said the single market’s importance has never been greater, because it is probably the main way out of the current crisis for the EU. It is especially important in the digital age, and for the next generation of Europeans. And it is also a major source of fast sustainable growth and employment.

The Commission have recently issued a consultation paper, The Single Market Act. He hoped that public consultation would result in a consensus that will regroup the Commission, the Council, and the European Parliament in a set of agreed policy directions and specific policy objectives in the form of practical measures. But it wouldn’t be easy – there are very complex and controversial issues. The Commission also hoped to make progress very soon on a European patent, although this would not initially encompass all the member states.

Mr Faull outlined two “extremely promising” but complicated and controversial areas likely to be sources of future employment and future development of the single market - the digital economy and the service economy.

On the digital economy, Mr Faull said there is a danger of alienating a generation of Europeans, if the digital economy in Europe did not meet expectations. “Until we sort out intellectual property rights, copyright laws and one or two other issues across the European Union, it will not be possible for genuine pan-European digital distribution of services to take place,” he said.

The digital economy is one of the big frontiers of the single market and it is essential to “sort it out quickly”, or Europe will fall behind the rest of the world quite dramatically and fail to serve a new generation of European citizens by not giving them the basics of the single market promised so famously almost 20 years ago.

The service economy is a very large part of the economy – about 70% of GDP – and a considerable source of actual and potential growth and employment. He hoped that the Single Market Act was a convincing combination of ideas and measures to provide further impetus to the free movement of goods across borders and further liberalisation of the European single market. But, he warned, the single market will not work unless it secures the support of the citizens of the member states, for whom it has been designed. “It can’t be simply a top-down system,” he said.

Finally, he made the point that, for the digital economy to work, consumers need to have confidence in the system.