News
BackOn 8th February 2011, the EU Commission held a conference in connection with the publication of the Single Market Act in October 2010. In his opening statement, José Manuel Barroso emphasised the importance of reforms aimed at job creation. However, the concrete ideas of the Commission remind more of a continuation of the little successful strategy of the Commission from the past.
Jobs through competition
In a Communication under the title “For a highly competitive social market economy”, the Commission presents 50 proposals on realizing the single market and on the creation of ‘strong, sustainable and fair growth’. Both the proposals and the discussions of the conference show, that the emphasis is not on jobs or social issues, but on the creation of a free market. Economic growth is regarded as a consequence of realizing the single market. Over the next ten years, the implementation of the Single Market Act should lead to 4 percent growth in GDP and create jobs. Bernadette Ségol, General Secretary of the European trade union federation UNI Europa, criticized the fact that thought was only given to the question how to liberalise the market without giving any consideration to the issue what labour market and single market should look like to make them acceptable for the population. It was questionable whether focussing on the completion of the single market without demand-side or social measures would be sufficient to generate economic growth in the first place.
Social standards are undermined within the framework of creating the single market, emphasised John Monks, General Secretary of the European Trade Union Confederation (ETUC). An example for this is the Posting of Workers Directive: one proposal of the Commission’s communication deals with the Posting of Workers Directive, however, the objective is not to change it, but to improve its implementation. In contrast to the current Directive, the standards of the destination country should now be applied to avoid wage and social dumping, demands ETUC among others with its proposal for a Social Progress Protocol.
The initial report on the re-launch of the single market by Mario Monti still stressed that social issues are important; however, this has been pushed back by various Member States and parts of the Commission, said John Monks. Monks pointed out that resistance against the social side of the market would still exist. If the EU would follow the French-German route of economic governance, a completely new sector of the labour market would be opened: cheaper, more flexible and with increasingly less regulation.
Taxes and Single Market
In his contribution, Algirdas Šemeta, EU Commissioner for Taxation and Customs Union, spoke about tax policies. In order to simplify the economic framework conditions for enterprises, which operate in several EU countries and to reduce their costs, it is intended to introduce a common consolidated corporate tax base. Šemeta emphasised that this was not about harmonising European rates of tax, but only about unifying the basis, from which enterprises - and in particular SMEs - should benefit. This harmonisation will not tackle tax competition or the shift of tax burden from capital to labour and consumption.
A second initiative is in respect of reforming the VAT system. The Commission plans to publish a new strategy by the end of 2011 to simplify the system. The Communication of the Commission also focuses on advantages for enterprises. “The complicated system of tax rates and tax exemptions […]are harmful to the operation of the internal market and to the competitiveness of EU enterprises.”
What now?
The Single Market Act continues the current policy of liberalisation and the orientation of the market on enterprises, even if some positive approaches, such as the demand for a better regulation of the financial markets can be found. During the coming months, the European Parliament and the Council have to set priorities within the 50 proposals. Ten to twelve of these will in the end remain and pursued further.
Communication from the Commission: Towards a Single Market Act; For a highly competitive social market economy
AK position paper on the Monti Report: A New Strategy for the Single Market
ETUC Proposal for a Social Progress Protocol
In a Communication under the title “For a highly competitive social market economy”, the Commission presents 50 proposals on realizing the single market and on the creation of ‘strong, sustainable and fair growth’. Both the proposals and the discussions of the conference show, that the emphasis is not on jobs or social issues, but on the creation of a free market. Economic growth is regarded as a consequence of realizing the single market. Over the next ten years, the implementation of the Single Market Act should lead to 4 percent growth in GDP and create jobs. Bernadette Ségol, General Secretary of the European trade union federation UNI Europa, criticized the fact that thought was only given to the question how to liberalise the market without giving any consideration to the issue what labour market and single market should look like to make them acceptable for the population. It was questionable whether focussing on the completion of the single market without demand-side or social measures would be sufficient to generate economic growth in the first place.
Social standards are undermined within the framework of creating the single market, emphasised John Monks, General Secretary of the European Trade Union Confederation (ETUC). An example for this is the Posting of Workers Directive: one proposal of the Commission’s communication deals with the Posting of Workers Directive, however, the objective is not to change it, but to improve its implementation. In contrast to the current Directive, the standards of the destination country should now be applied to avoid wage and social dumping, demands ETUC among others with its proposal for a Social Progress Protocol.
The initial report on the re-launch of the single market by Mario Monti still stressed that social issues are important; however, this has been pushed back by various Member States and parts of the Commission, said John Monks. Monks pointed out that resistance against the social side of the market would still exist. If the EU would follow the French-German route of economic governance, a completely new sector of the labour market would be opened: cheaper, more flexible and with increasingly less regulation.
Taxes and Single Market
In his contribution, Algirdas Šemeta, EU Commissioner for Taxation and Customs Union, spoke about tax policies. In order to simplify the economic framework conditions for enterprises, which operate in several EU countries and to reduce their costs, it is intended to introduce a common consolidated corporate tax base. Šemeta emphasised that this was not about harmonising European rates of tax, but only about unifying the basis, from which enterprises - and in particular SMEs - should benefit. This harmonisation will not tackle tax competition or the shift of tax burden from capital to labour and consumption.
A second initiative is in respect of reforming the VAT system. The Commission plans to publish a new strategy by the end of 2011 to simplify the system. The Communication of the Commission also focuses on advantages for enterprises. “The complicated system of tax rates and tax exemptions […]are harmful to the operation of the internal market and to the competitiveness of EU enterprises.”
What now?
The Single Market Act continues the current policy of liberalisation and the orientation of the market on enterprises, even if some positive approaches, such as the demand for a better regulation of the financial markets can be found. During the coming months, the European Parliament and the Council have to set priorities within the 50 proposals. Ten to twelve of these will in the end remain and pursued further.
Communication from the Commission: Towards a Single Market Act; For a highly competitive social market economy
AK position paper on the Monti Report: A New Strategy for the Single Market
ETUC Proposal for a Social Progress Protocol