Charlie McCREEVY
European Commissioner for Internal Market and Services

Making the Internal Market work

Mr. Chairman, Ministers,

I would like to start by thanking Martin [Minister Jahn] for his contribution. It is always refreshing to see the positive attitude the new Member States display - in words and actions - towards the Internal Market. They have brought great energy to the cause.

I would also like to thank the UK Presidency for offering us this chance to take stock of where we are going.

Sceptic citizens

Let's not kid ourselves. The European Union is experiencing turbulent times. Our citizens are asking deep and searching questions and are demanding answers that are meaningful to their everyday lives.

They see us talking about constitutions and institutions and it leaves them cold. These are important matters - if the Union doesn't have the right machinery it won't function properly. But they are hardly an adequate response when what people crave most is security - job security, personal security, economic security. They want a better future for their children.

In the face of uncertainty, people want more than warm words and lofty aspirations. They want leadership and direction and they want action.

The way I see it, if globalisation is the challenge we face, then a properly functioning internal market has to be a key plank in our response. Strategically, it is the way to go.

Communicating the benefits of the internal market

It is not a question of the countries of Europe huddling together in the hope that the rest of the world will retreat. Rather it is about working together to exploit to the full - internally and externally - the benefits membership of the Union brings.

The first ten years of the internal market added 1.8% to our GDP. It created 2.5 million extra jobs. In the enlarged Union, the internal market now offers 450 million potential consumers to our businesses - a huge advantage in a globalised world. It allows for economies of scale. It helps to create and drive a dynamic culture of innovation. It encourages wider competition, which in turn improves productivity and efficiency and boosts economic growth.

The benefits are real and tangible and easily communicated. The internal market offers a win for Europe's economy, its consumers and its citizens. It is as simple as that.

I know that here among Competitiveness ministers I am preaching to the converted - but we do sometimes need to remind ourselves of why we believe in things as strongly as we do.

Changes in the internal market - debate on the Services Directive

We also need to prepare ourselves to take the next steps forward. The internal market is a success, but it is not yet complete.

The climate is a difficult one, there is no doubting that. But, to hesitate now would be to sell ourselves short. If we don't get our house in order internally, we will not be ready to compete globally. Sacrificing long-term gain for short-term comfort is a very bad bargain and one we cannot afford to make.

Even those most opposed to change know in their heart of hearts that the tide can only be held back for so long. Change is coming. There is no avoiding it. It can be managed or it can be resisted. But how much better it is to be ready for it, to embrace it, and to harness it for good. We need to be courageous and bold.

So, where does that leave our discussion of the internal market?

One thing is clear. We need progress on services. There is enormous untapped potential that needs to be unleashed. But, I don't need to tell you how sensitive a question this is.

The previous Commission put its proposal on the table. It is now in your hands and in the hands of the Parliament. I have said clearly that I am open to change. I want agreement. I want practical solutions. I want a Directive that works and that can command widespread support.

But let me also be clear, I don't want a piece of legislation that stands the original purpose on its head.

We can all accept that there has been a great deal of heat and sometimes not enough light in the debate. Emotions have run high. That we have now entered a more calm and considered phase is very welcome.

There is a constructive atmosphere and a determination to achieve something worthwhile in both the Council and in the Parliament. I am ready to put my full weight behind securing a positive outcome. Early success would send a very strong signal not only about the seriousness of our commitment to jobs and growth, but also about our ability to compromise and to achieve consensus in the interests of the common good. Europe needs a win.

The effort will absorb much of our energies for the next few months. But we should also start longer term thinking. I very much welcome the UK Presidency's intention to initiate a debate about this.

Simplifying and adapting the internal market

We are entering a new phase. The Internal Market is now mature. The legislative framework is largely in place. It is not perfect. It needs to be simplified in places. It needs to adapt to meet changed realities in the market place. I stand ready to do what is needed. But basically, services aside, the framework is there.

Our task is to make it work. I have to say that for much that needs to be done, the buck stops with you. From now on, the Internal Market will be driven forward - not by civil servants and Ministers working in Brussels - but by a much larger number of people at all sorts of different levels in the Member States.

How can we make sure we are all pulling in the same direction?

First, we need to make sure the rules we have are the right ones. You have already heard about the work underway in the Commission to screen existing and proposed legislation to see whether any serves no useful purpose and can be scrapped. Member States also need to look again at their own laws, practices and procedures. Not just to see if they impose unnecessary burdens on your own businesses - I know many of you do that already - but also to weed out those which, although they may make sense nationally, place unfair burdens on companies from other Member States wishing to enter your markets.

Secondly, we must get all our administrations joined up. The Commission is creating tools to help you do this but we must all start co-operating more effectively. Mutual recognition - the basis for a very large share of the trade in goods in Europe - can only work if people know what rules they are being asked to recognize and where to go to find out.

This will be even more important for services. A Services Directive, whatever its final shape, will contain some demanding requirements for administrative co-operation. This will not be easy to achieve given the multiplicity of languages, administrative structures and administrative cultures across the Union.

But we are ready to help. We are working intensively with your staff to set up the Internal Market Information System or IMI for short. Building on the SOLVIT system, this will use IT to allow national administrations to co-operate effectively. You will be hearing a lot about it in future.

I hope that you will not only be able to give it your active support, but also the resources it will need if it is to function properly.

Finally, we need to change mindsets. Survey after survey shows that there is a worryingly low appreciation of the benefits of the internal market among citizens and businesses. The internal market is an enormous strength and benefit of the Union. We are not making the most of it. We need to get people thinking more on a European scale.

We rarely have an opportunity to get together to think in broader terms about where we are heading. We should make the most of the opportunity we have today.

In the wider debate about the Union and its future direction, we should not lose sight of the very valuable asset we have in the internal market.

It represents the very essence of the Union. It is about acting on a level that makes sense and offers advantage to all. Economic growth, more successful and competitive businesses, more jobs and a better deal for consumers.

While we must tackle problems where they remain, we should, at least occasionally, allow ourselves to sing its praises.