History of the EU Single Market

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History of the EU Single Market

In this paper I intend to look at the two communications presented by the European Commission, to the European Parliament, the European Council, the European Economic and Social Committee and the Committee of the Regions. These two communications, Single Market Act I & Single Market Act II, both talk about proposals that if implemented, should make the Single Market of the European Union much better by eliminating any obstacles which were found in the systems at the time of writing. To understand better the Single Market, one should look at the history of this on-going process and then, take a look at what the Commission proposed through these two communications. This should lead to a better understanding of how these proposed set of actions would strengthen the EU’s internal market.

History of the EU Single Market

Moving freely within the European Union (EU) today seems to be a very common activity and very often it is taken for granted. Looking back in time and seeking the beginning of this concept, one can better understand why this was necessary and important for the EU, what were the steps needed and what it took to achieve this goal. It is important to mark the landmark political decisions and historical facts that brought us to live this dream, which is also considered as one of the EU’s greatest achievements. The need of a common market has been long discussed from 1957, since the Treaty of Rome which created the European Community. The main objective of this proposal was to give Europe a new push, to take integration to an upper level and to have free movement of goods, services, capital and persons, therefore a common market. Of course, this was a vital step since one cannot build a common Europe without having a common market. These four fundamental freedoms were the basis of the real European Economic Community (EEC). This common market became a reality with the removal of barriers and internal borders within the European Union. Although on 1st July 1968 the customs duties on goods going around in the EU member states were completely removed, there remained “non-tariff barriers” like differences in the requirements of safety and packaging of different member states or between national administrative procedures. Consequently, these barriers did not allow the manufacturers to market the same goods in different European countries. [1] After this step, it took until 1985 for the leaders to decide to come back to the realisation of this single market. The single market was a response for a long-standing crisis in the EEC especially created in the 1970s; the things that mostly effected the economy were the oil crisis of 1973 & 1979 (which caused a lot of inflation with rising prices and which therefore created unemployment), the rapid advancements in technology, the changes occurring in the economy world and also the emergence of new strong competitors such as Japan and newly industrialising countries from South East Asia. [2] The European Commission led by Jacques Delors, in 1985 presented a common response to that of the leaders themselves. The Community decided to complete the construction of the great internal market in stages which was to be finalised at the start of 1993, and therefore, the ambitious date and goal were written into the Single European Act signed in February 1986. This led to the gradual removal of internal barriers and borders within the European Community, national standards were getting harmonised, and rules determining the way governments should buy services and goods were created. There was also the liberalisation of financial institutions, the Value Added Tax (VAT) rates were being set to a standard level and there was also the setting of European business laws. All these measures were taken to create the single market. [3] Until 1992, the national regulations of the 12 member states were replaced by one rule which was common to all of them and regulated all the countries in the same manner after the EU adopted nearly 280 pieces of legislation. The monetary union was also planned and the Maastricht Treaty was the first step of the creation of the Euro, which came into use on 1st January 2002. After all these steps and hard work towards this dream, on 1 January 1993 the physical borders between EU countries vanished completely and the European Single Market was officially a reality for the member states of the EU. [4] 

12 levers of the EU Single Market

After all the work done to create the Single Market of the EU, there were still some things which were not functioning as they were meant to be and according to their original purpose of creation. Although one of the main benefits of the Single Market was that of bringing economic growth in the member states of the EU as was predicted and argued in the Cecchini Report [5] , it has been proven by ma