Completing Unfinished Business: Development and Operation of

Single European Market

Darko Pantelić, M.A. University of Novi Sad, Serbia

Theory about Economic Integration

Preferential Trade Agreements Free Trade Area Custom Union The Common Market Economic Union Monetary Union Beyond?

From The Treaty of Rome…

European integration is based on four founding treaties:- European Coal and Steel Community (1951)- Treaty of Rome establishing European Economic Community (1957)- European Atomic Energy Community (1957)- The Treaty of European Union known as Maastricht Treaty (1992)

… to The Treaty of Nice

Moreover, founding treaties are amended on several occasions: - The Merger Treaty in Brussels (1965)- The Single European Act in Luxemburg and Hague (1987)- The Treaty of Amsterdam (1997)- The Treaty of Nice (2001)

Close up to Single Market Idea

EEC Treaty: “promoting the harmonious development of economic activities, continuous and balanced expansion, increased stability, a rapid rise in living standards and closer relations between its Member States”

Opening boarders between member countries Free movement of individuals, goods and services

and capital Common policies and common financial services

Economic History of EU

First success – July 1968 internal custom duties and quotas vanished

Hard – hitting 1970’s – “Euro-sclerosis”

1985 introduced White paper – cost of non-Europe had to be neutralized

Ten Years from…

White Paper’s dead-line – 1993- blueprint and timetable to creation of Single Market- multi area phenomenon- more freedom to…

Treaty of Maastricht – single currency perspective

Ten Years:Economic Benefits

Direct benefit to EU GDP from single market in 2002 is 1,8% OR 165 billion euros

About 2,5 million of jobs created Extra prosperity 870 billion euros in past ten

years accumulated Raising competitiveness in global markets (EU

export towards third countries raised from 6,9% to 11,2% of GDP)

Attracting foreign investors

Ten Years:Citizen/Consumer Benefits

Wider choice of goods and services Prices Lower telecommunications tariffs Lower airfares 15 million of Europeans moved across boarder Consumer protection is improved System of EU procurement rules led to savings

Ten Years:Benefits for Business

Trade within EU has become much easier Mutual recognition principle Complex and different national laws are replaced

with a single framework Boost of cross border sales Small and medium size enterprises have clear

path to new markets Opening of public procurement system SME benefited from lower electricity cost

What areas are considered successful

Movement of goods Movement of capital Financial services Transport Regulations and technical standards Intellectual and industrial property protection Public procurement

Unfinished business

Company law Taxation

Pension problems Electricity and telecommunications

Enlargement

Supporting Single Market Idea and Practice

Legislation

Transposition

Enforcement

Facilitation and promotion

Looking ahead

It is not a single dimension judgment

Perfect doesn’t exist

Intergovernmental vs. Supranational

Single currency achievement

Enlargement

Enlargement- in eyes of new members

“The EU as it is” (acquis communataire) and new members of European family

Expectations

- easier access to European markets- tougher competition on the domestic market- more transparent business practice on home market

Enlargement- in eyes of new members

- bigger inflow of foreign direct investments- more competitive conditions for acquiring new capital equipment and IT- long term strengthening of competitiveness

- difficulties in financial area- difficulties in commercial area- difficulties in technical area- difficulties in human resources area

Instead of conclusion -Reaching Lisbon target