Internal market drive to target key sectors

The European Commission will next month advocate that the single market should be advanced by focusing on the most important sectoral markets with the greatest economic impact.

The Commission will identify financial services, post and telecommunications and professional services as the service industries with the greatest untapped potential. In manufacturing, the Commission highlights electrical machinery and radio, TV and communications.

The plan is set out in a review of the European single market that the Commission will be publishing on 13 November, setting out ways of "translating vision into action".

The Commission will declare its intention to examine the most important sectors in detail to see why the single market is so weak. It suggests that possible causes might be a lack of openness and integration, a low degree of competition, a poor regulatory environment and insufficient capacity for innovation.

Carlos Almaraz of the European employers’ lobby, BusinessEurope, welcomed the Commission’s approach. He said: "We are in principle happy with the approach because it is an economic approach."

He said that a key issue for business in the Commission’s new strategy would be effective compliance and enforcement.

In the paper, the Commission reiterates its intention to concentrate on enforcement, prioritising big infringement cases.

Almaraz said: "The good functioning of the internal market is not happening right now. There’s a long way to go."

EU member states are currently preparing to liberalise parts of their service sectors in 2009 by implementing the services directive agreed in 2006. In November, the Commission is also launching the biggest review of regulation of electronic communica-tions, including telecoms, since the existing rules were set in 2002.

The Commission admitted in a green paper on retail financial services published last May that markets were still fragmented along national lines because of consumer preferences for domestic service providers.

The Commission’s paper will establish priorities for an overhaul of the single market policy to be agreed by EU leaders at their economic summit in March next year.

But the Commission paper said there would be a shift of focus "from removing legal obstacles to cross-border activities to a more impact-driven approach of making an integrated market deliver efficiently and effectively".

The European Commission will next month advocate that the single market should be advanced by focusing on the most important sectoral markets with the greatest economic impact.

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