Internal Market

Mario Monti hands over his internal market report to European ©BDI

German business considers that the wide range of proposals in the Monti report on the future of the internal market presents a mixed picture

further work on completion of the European internal market can give an important stimulus for growth and prosperity. Nevertheless, the Monti report also contains a series of proposals which if implemented would probably have a highly negative effect on competitiveness, growth and employment in Europe.

The following ideas are assessed positively:

• creation of a European private company statute,
• further competition of the internal market for goods as well as rapid implementation of the EU services directive,
• removal of uncertainties about implementation of the posting of workers directive through easier access to information and stronger cooperation between administrations in the member states,
• introduction of an EU Community patent, on condition that it is truly unitary, cost-effective and provides legal certainty,
• elimination of further tax barriers in the internal market, in particular better cross-border offset of losses as well as prevention of double taxation,
  common consolidated corporate tax base.

By contrast, German business is especially critical of the following proposals:

• Introduction of collective redress at EU level. Monti speaks out against the US class action system and in favour of alternative dispute resolution mechanisms, but the introduction of collective redress without the drawbacks of the US system is likely to prove very difficult in practice. Hitherto all proposals from the Commission have contained numerous elements of the US system, so that collective redress without the concomitant collateral damage seems hardly possible.
• Inclusion of a provision guaranteeing the right to strike along the lines of article 2 of Council regulation (EC) no. 2679/98. A worker’s right to strike is comprehensively enshrined in article 28 of the EU charter of fundamental rights, on which the ECJ also bases its rulings. A further guarantee is not necessary. The EU has no competence in the area of the right to strike (cf. Article 153 paragraph 5 TFEU).
• Introduction of Eurobonds. This proposal would result in profligate EU countries being able to refinance at the expense of more prudent countries, and would remove incentives for consolidation measures.
• The proposal whereby public procurement would be deployed more strongly than in the past as an instrument for general policy objectives such as climate protection, energy efficiency and social aspects should be rejected.

It is to be hoped that the Commission will proceed in a measured way and with an eye to economic realities in its efforts to develop the internal market. Unnecessary politicisation and excessive regulation of the market would ultimately lead to a loss of competitiveness, transparency and prosperity, and thus place a question mark over the legitimacy of the internal market.