O raporcie Mario Monti'ego

The Coming of Age of the European Single Market

Professor Mario Monti has "always loved politics, but always hated party politics," as he himself admits. After completing his graduate studies in economics at Yale, Monti turned down several positions with the Italian cabinet so that he would not have to define himself by party lines. Perhaps it is thus not only appropriate but necessary that someone like "Super Mario" - the nickname bestowed by his colleagues - be the one to head the effort to revive an initiative about which there are many mixed feelings arising from both party lines and national borders.

Well-known for taming the likes of General Electrici and Microsoftii on antitrust and competition issues, Monti's current challenge is even more difficult: convincing the European Union that what is currently unpopular among many of its constituents - the further integration of the single market - is in fact more necessary than ever. Professor Monti, president of Bocconi University and former Commissioner for the Internal Market (appointed in 1995 by the first Silvio Berlusconi administration of the Forza Italia party) and Competition (appointment confirmed in 1999 by the Massimo D'Alema administration of the Italian Democratic Party of the Left), accepted a request last year from the President of the European Commission, José Manuel Barroso, to produce a reportiii on problems facing the single market and ways to revitalize it. What Monti presented earlier this year is a 107-page "call-to-arms" for the European Union to return its focus to tightening the economic and regulatory integration of the market by adopting a proposed "Single Market Act".

One of the dangers facing the single market in recent years has been that it has remained "yesterday's business" in the minds of many European leaders. Some are satisfied with the current level of integration, while others fear that furthering it could result in widespread, devastating damage during economic crises. This line of thinking has led some national leaders - during and in the wake of the recent crisis - to shy away from further integration in favor of economic nationalism. But Monti has warned Europe's various supranational and intergovernmental institutions that this is not the time to panic and retreat. In the wake of a recession, the EU cannot rely on fiscal balancing and tighter economic governance alone; what is needed is a deeper, wider, more clearly articulated and prioritized single market that stimulates competitiveness, productivity, and growth while dealing with the kinds of civic issues that need to be addressed in order to better serve European citizens.

The Road to a Stronger Single Market: Into the Realm of the Digital

Monti's proposed initiatives for building a stronger single market include ensuring a better functioning of the single market from the perspective of citizens, consumers, and small and medium-sized enterprises; taking advantage of the potential to support and further develop green-growth in the transition to a resource-efficient economy; ensuring geographical labor mobility; implementing a more cohesive tax policy; maintaining open yet secure external relations; and creating a "digital single market".

As a member of Committee on Legal Affairs, I am particular interested in the issue of digital single market especially from the perspective of intellectual property law. I find it of the utmost importance to overcome the obstacles to the free movement of both digital and material goods and services. As the importance of digital realm grows - for communication, commerce, intellectual property rights, and the daily lives of European citizens - so does our responsibility as legislators to create a "level-playing field" for competition to develop in the online world. The digital realm is also one of the most effective mediums through which the EU may bring the single market closer to the citizens and vice versa. I praise Professor Monti for recognizing the importance of creating a single regulatory space for electronic communications, defragmenting telecommunications services and infrastructures across Member States, and introducing and administering a system of European-wide licensing.

In the realm of e-commerce, ever more EU27 citizens are ordering goods and services through the internet. However, many barriers remain, creating disincentives to conduct cross-border e-commerce, leaving much potential for this type of growth untapped. While retailers suffer from the obstacles presented by substantial variations in national rules and regulations, consumers are equally concerned about the uncertainties surrounding issues such as confidentiality, security, and legal rights. We must demonstrate to our citizens that we are striving to make the single market work for them as well, lest we risk losing their support.

The question of online digital content is at the forefront of the effort to create a digital single market in Europe. While this project remains quite ambitious from a legal and political perspective, it is clear that it could generate many advantages. Professor Monti has put forth proposals for EU-wide copyright law that would incorporate a framework for copyright clearance and management, as well as a legal framework for online broadcasting that extends across all Member States. Without such frameworks there will remain the kind of complexity and lack of transparency that make for an inefficient and generally adverse business environment. Even though the negative effects of market fragmentation are reason enough for stronger integration measures, we should also cite the resultant economic positives as a way of justifying, promoting, and executing them. A recent study undertaken by Copenhagen Economicsiv shows that with a digital single market in place, the GDP of the EU could increase by up to 4% more over the next ten years than it would with the current base-case projections over the same time span.

Non-Digital Problems, Ambitions, and Reactions

Although making the single market stronger is a necessary condition for its implementation, it is not sufficient. I strongly agree with Professor Monti that there is a need to build a consensus on a stronger single market. Monti acknowledges that the interests of the actors involved in this initiative are diverse; therefore the reconciliation of these broad positions around the goal of a revitalization of the single market is, as he says, both necessary and possible. This will be a test of the Union's will and ability to go beyond soft compromise and take a concrete step towards real integration. Hard decisions will have to be made by national governments as well as European-wide political parties. Without this kind of hard compromise, a stubborn EU will remain in the political quicksand that has kept it stuck somewhere between a confederation and a federation.

Thus far, Mario Monti's report has been received positively by many in the S&D party, including Louis Grech (S&D, MT), whose recent report entitled "A Single Market for Consumers and Citizens" offers many similar views; and Evelyne Gebhardt (S&D, DE), who commends the emphasis on better coordinating social security rights and clarifying the directive on the posting of workers. Leaders of the group such as Martin Schulz, its chairman, have expressed their support for the report, and have stated that they are ready for a compromise.

However, one particular concern that remains is that, regardless of the content of a "Single Market Act", it is quite likely to be subject to the kinds of slow adoption processes that are all too common with directives. Therefore I strongly support Monti's proposal for the use of regulations rather than directives where possible, as well as the improved enforcement of swift transposition and application of these regulations within each Member State.

Monti's report will serve as a basis for the "Single Market Act" that is currently being outlined by the Commission, who will present it to the Parliament on October 18th during its plenary sessionv in Strasbourg. It has been 25 years since Single European Act, and the Single Market Act is tentatively scheduled to be implemented in December of 2012, the 20th anniversary of the internal market.

It seems to me this is an effort that would generate absolute gains for all actors, political and otherwise - an effort that can be realized if political parties would not worry so much about the relative gains of their rivals. It must be seen as an end in itself, and if passed, as a victory for Europe as a whole. The costs, mostly political, of completing this initiative are far outweighed by the social and economic costs that the EU will incur, over time, in the absence of a cohesive single market. Monti has recently taken part in several fruitful debates with political groups in the European Parliament, where, while pressing for the cause outlined in his report, he has explained to the MEPs that while he "can do my best to advise and persuade you, in the end, the power to adopt such a strategy is in your hands."


Lidia Geringer de Oedenberg
European Parliament Quaestor
Member of the Committee on Legal Affairs

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