Bienkowska: Single Market Initiative 2015 will grow the economy. She will have to convince some leftist factions in the European Parliament

by Monika Golaszewska & Doru P. Frantescu

On Wednesday, October 28th, the Commission has launched a single market plan, which aims at unleashing its full potential and creating new opportunities in the global economy.

Commissioner for the internal Market, Elzbieta Bienkowska, has started her public diplomacy campaign by saying that she is very enthusiastic about the new opportunities for innovation and she “fell in love” with the single market while working on new strategies of its upgrading. “EU is the biggest market in the world, with 500 million consumers, but we have not realized its full potential” stressed Bienkowska. She sees the main problems in the barriers and protectionist measures, which hold back the entrepreneurs. The Commission has been working on a new approach to industrial competitiveness, to build an open and efficiently functioning product and service market.

However, the Commission will still have to build political support in the European Parliament, whose political factions are split on how the single market should be managed.  In particular, the leftist forces are more reluctant to support the completion of the internal market in the services sector, which some say would destabilise the job market in some Member States, as some jobs will be transferred across the national borders.

In the previous EP term, the pro free-market groups that looked at the benefits of the economy as a whole, held a majority for promoting the completion of the internal market for services. However, after the 2014 elections, this majority is no longer available to the Commission, who will therefore have to work harder to convince MEPs from the left, such as those from the Socialists and Democrats group.

Bienkowska is hoping to alleviate any concerns with her 3 core priorities: creating more opportunities and fewer barriers for consumers, professionals and businesses.  She is also keen on boosting modernisation and innovation of the EU economy, not only by developing new products, but also by establishing new business models.

She stressed that the EU needs to support businesses in their modernisation efforts. In her opinion, the key challenge will be to ensure delivery on the ground: “EU needs, above all, to be smart in enforcement”, said Bienkowska.

According to the Polish commissioner, there are three areas of modernisation: upgrading the standard system, faster and more transparent procurement procedures and intellectual property framework.

A better working single market would bring more opportunities for consumers, professionals and businesses in the EU. The implementation of the new initiative would strengthen the industrial competitiveness and offer services and products in lower prices.

Bienkowska emphasized also the role of small and medium-sized companies and the obstacles they are facing right now, for example, the access to finance. For this reason, many entrepreneurs decide to leave Europe. Bienkowska said that the EU should show a guideline and create opportunities for start-ups, which are the backbone of the EU, but are being hindered by bureaucracy, various restrictions and aspects of company law and the complexity of VAT regulations.

“Single market rules are undermined not just by public authorities but also by companies”,  said Bienkowska. To help the SMEs, the Commission wants to improve the access for companies to private finance, simplify VAT requirements, cut red tape for SMEs, reduce the cost of company registration and give entrepreneurs, who fail, a second chance by putting forward a proposal on insolvency.

The future actions of the European Commission include also fighting against the unfair different treatment of consumers based on their residence or nationality, removing obstacles for retailers, improving the functioning of the product and service markets and working on the issue of compliance and enforcement. According to Bienkowska, the infringement procedure is clearly too long and lasts on average almost 30 months. Many companies struggle with the understanding of the rules, lack of enforcement or additional regulations, which impedes the full use of their potential.

Bienkowska stressed in the end the importance of cooperation between member states, which is crucial for a success of single market and added that the EU will strengthen also its market surveillance.

The statements of Mrs. Bienkowska were made during a policy briefing organized by the European Policy Centre on Wednesday, October 28th.