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 1970s – Euro-sclerosis 1985 introduced White paper – cost of non-Europe had to be neutralized

Ten Years from… White Papers dead-line – 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 doesnt 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