Toespraak Eurocommissaris McCreevy over de interne markt - verworvenheden en uitdagingen (en)

International Scientific Conference co-organised by the Commission Representation and the Faculty of International Affairs of the University of Economics

Bratislava, 29 November 2007

Ladies and Gentlemen,

Let me first thank Ms Andrea Elscheková-Matisová, Head of the Commission Representation in Slovakia and Professor Rudolf Sivák, rector of the University of Economics for organising this conference and inviting me. I am very glad to be here with you in the beautiful Smolenice castle and to speak to such a distinguished academic audience.

I love to listen to success stories. Such as that the foreign direct investments in Slovakia increased by 600% since 2000, or that by 2009 Slovakia may have the highest per capita car production in the world. I do really enjoy such news.

I hope you like to listen to success stories as well. Because I firmly believe that the two I want to focus on today - the Single Market and enlargement - have been a resounding success. Back in the 1980's when the Commission made plans for a Single Market a lot of research was done and predictions made about expected impacts. Many have been concerned that we have not seen that much analysis and interest in the Single Market since. I am very glad to see that this is not the case. Let me share with you the latest news, hot off the press from Brussels, the Commission's vision for "A single market for the 21st Century" presented last week. To explain how, moving forward, we plan to build on our successes.

The benefits of the Single Market

When we make a comparison between the Single Market before the 1985 White Paper on the accomplishment of the Single Market and today - the difference is astounding. We started from fragmented economies of 12 Member States and we now have the Single Market which is home to 500 million citizens and over 20 million businesses. It has been not only a political but also an economic success. Since its beginning in 1992, the Single Market has created nearly three million extra jobs. In 2006 alone, it has brought additional increase in prosperity of EUR 518 for every citizen. We feel the effects of the Single Market in our every day lives. You can choose whether to live, work or study abroad. The prices of flights and phone calls have reduced drastically. There are more and better goods in our shops. Just a few years ago it was unthinkable to shop for demänovka [djemenouka] in Madrid or for parenica [parenitza] [1] in Brussels! Today I can even get bryndzove halusky [2] in some restaurants in Dublin. In many cases we do not need to show passports on borders or carry different currencies in our wallets. I am glad that this will be soon true for Slovak citizens as well - in the case of passports, already before Christmas!

Some of these benefits have become such a fixed part of our every day lives that they are taken for granted and are not connected in people's minds to the Single Market. But this is not the case for your country. Here the benefits of the Single Markey are still more recent and therefore, more tangible. When we asked 25 000 EU citizens about their satisfaction with the Single Market in a recent EU-wide survey, most of the new Member States scored above the EU average. In Slovakia, 89% of respondents said that worker mobility had a positive effect on the country. 85% thought that the Single Market had a positive effect on the range of available goods and services in Slovak stores. I am glad to see such positive views - the trust of citizens in the Single Market is crucial to building it further.

Single Market and enlargement

Around 2004 many feared that a larger number of Member States will increase diversity and distort the Single Market. That with many more countries and legal systems, there might be delays in transposition of Single Market rules. As you know, very well these fears have, with some limited exceptions, proven largely unfounded as far as the new Member States are concerned. The new entrants who joined the EU in 2004 are effectively putting EU rules into their national legal systems. Especially Slovakia which is one of the three best performers.

And enlargement has benefited the EU economy even further. It has given it a new impetus. Enlargement did help, not hamper, Europe to adapt to globalisation and compete with other economies. European firms have invested in the new Member States and therefore kept and created many jobs within the EU. The top three foreign investors in Slovakia - German Deutsche Telecom, Austrian Neusiedler (Austria), and French Gaz de France, are from the European Union. Also labour mobility, where it has been liberalised, has been a big macro-economic bonus. For instance, in my country, Ireland, economists have estimated that no less than a quarter of the growth rate in 2005 to 2006 could be attributed to migrant labour from the new Member States. So those two success stories - the Single Market and enlargement have mutually reinforced each other.

Single Market Review

I find very relevant for the Single Market of today Darwin's famous saying - that it is "not the strongest, nor the most intelligent who survive, but those who adapt best to change". The economy and the Union we have today are very different to those for which the Single Market was created. We have more than doubled in size. Most of the rules were adopted by 12 members of the Union - and now need to apply to 27, hopefully more soon. It is also a different economy that we are facing. The shift from a manufacturing economy towards a services economy has changed the way we create wealth and jobs in Europe. Today, almost 70% of Europe's gross domestic product and 96% of the new jobs created in Europe come from the services sector. And let us not forget that in today's global economy the Single Market represents Europe's main competitive advantage.

All these changes make us rethink the Single Market policy. And this is exactly what the Commission did. Last week we presented our new approach to the Single Market policy. Let me briefly explain some of the main directions in which we want to take the Single Market in the future.

A Single Market that offers more opportunities for consumers and businesses

Single Market policy has always been about creating welfare for consumers and businesses. That is why we are now putting a new emphasis on opportunities for both, consumers and businesses of all sizes in the Single Market. How are we doing it?

Now we no longer need the nearly 300 legal acts that were necessary to establish the Single Market in the 1980s. What we need now is a more flexible approach. We will propose legislation only when justified. Otherwise we will look for other solutions. We will work with stakeholders to produce voluntary codes which can be adapted to local conditions. We will offer guidance, support and information.

And we will base ourselves in what we do on sound economic data to better understand how markets work and where the gaps are. Working in academia, I am sure that you will approve of such an evidence-based, analytical approach.

The area of retail financial services - one of the key priority areas for the Commission and my area of competence - provides a very good example of this new approach. Bank accounts, credit and debit cards, home loans, insurance, savings and investments are all crucial to citizens' economic wellbeing. But there is still a lack of competition in some markets, and a lack of confidence in financial products and services among consumers. I want consumers to be able to shop around for the best deal in financial services - in the same way that they do when buying a TV or a car.

That is why we have announced an ambitious package of initiatives. It aims to improve competitiveness of retail financial services and increase consumers access to them. I will be asking the banking associations to come up with codes of practice to achieve these aims. This would be my preferred way of handling this. But if it is deemed necessary - at the end of the day, I do not rule out a regulatory approach.

Our priority is to enable consumers to make informed choice from a wide range of high quality financial products and to switch providers more easily.

Transparency in pricing and access to markets is essential for improving competition and choice. We will assess the possibility of improving transparency and comparability of certain products such as motor insurance. We have also just launched a call for evidence to review the transparency and distribution rules for substitute retail investment products.

Finally, enhancing consumer confidence is essential in empowering consumers. Promoting financial education by Member States, improving redress mechanisms, particularly for cross-border financial service provision, are key in this regard. However, what good is education and confidence if consumers are unable to access even basic banking facilities? Supporting financial inclusion by ensuring that nobody is denied access to a basic bank account is a key element in our retail programme.

A Single Market that works in daily reality

We want to ensure that Single Market opportunities are real and available. That consumers and small businesses know their rights and how to use them. Unfortunately, this is often not the case. According to a recent public survey 7 out of 10 EU citizens have not heard of information, assistance and problem-solving networks that the Commission has put in place. I am glad to state that the situation in Slovakia is better than that - more than half of people surveyed knew of the Commission's information services. However, there is still a lot of work to do. Therefore, we will intensify our cooperation with public authorities - at national, regional and local level. And we try to make the information we provide as accessible and consumer - and SME-friendly as possible. We will create a single gateway linking many of the currently existing Commission information services. In consequence, if in the near future you are searching for a position at a research institute in another Member State, or you move to another EU country and experienced a problem with having your qualifications recognised, all the information and advice will be available for you under one single portal. This will empower all to better exercise their freedom of movement.

Single Market for knowledge and innovation

Our economy has undergone a technological revolution. Now we live in a knowledge economy, where human capital, innovation and productivity matter most. The Single Market has the potential to strengthen the development of knowledge and innovation in the EU. We need further efforts to promote free movement of knowledge and innovation as a "fifth freedom" in the Single Market.

A number of schemes exist already to encourage mobility within academia on different levels. For instance, over 1.5 million young people have studied in another Member State thanks to the Erasmus programme. I hope that they include a good number of Slovak pupils! Marie Curie programmes offer fellowships for researchers in various scientific disciplines and therefore, encourage their movement between research institutions in different Member States. Now work is also under way to introduce a "researcher passport" that would remove barriers to researcher mobility and facilitate exchange of researchers.

The groundwork has also been laid for decisions to be taken on a common EU framework for patent protection. Our aim is, after long discussions, to deliver a simple, cost-effective and high-quality patent system for Europe. The Commission will undertake further work in the field of industrial property rights. This includes the setting up of a network of IPR helpdesks across Europe to improve the awareness and enforcement of IPR by SMEs. If this network had been in place in 1914, Stefan Banic, who was born here in Smolenice, would not have needed to have gone to the United States to get his parachute invention patented. We will also publish some recommendations on how best publicly-funded research institutions should manage IPRs.

I hope that these initiatives I have described give you a good flavour of the future policy for the Single Market we want to create. It needs to benefit all citizens - be they consumers, small businesses, researchers or users of financial services. And we need to do it in a thought-through, flexible way - using different instruments, not only legislation, and drawing on economic analysis.

Ladies & Gentlemen, Slovakia, I have no doubt, has a bright economic future ahead of it within the EU and by exploiting the rapidly increasing opportunities that the Single Market presents, but let me stop here because I want to listen to your views on the developments for the Single Market that I have just outlined.

Thank you very much indeed.

[1] Slovaks are very proud of Demänovka is a herb liquor similar to Czech Becherovka. Parenica is very typical smoked cheese

[2] Slovak national food - potato dumplings with liquid sheep cheese