The Single M arket
of the European Union-achievements,
problems and challenges
M a łg o rz a ta C z e r m iń s k a P h D
D e p a rtm e n t of Foreign Trade; Faculty of Law, A d m in istratio n a n d In ternational Relations, Andrzej Frycz M odrzew ski C racow University.
Abstract
The aim o f this article is to discuss the main benefits o f and problems with the creation o f the EU single market an d to indicate the m ain activities to eliminate the still existing barriers. The EU single m arket is the greatest success o f European integration. It enables a free m o vem ent o f people, goods, services a n d capital; fo r consumers, this means a greater choice in goods an d services as well as lower prices. 'She EU single market also poses an opportunity fo r employees a n d businesses as administra tive burdens involved in trans-border activity are decreased. However, in reality, there are a number o f barriers hindering the smooth func tio n in g o f the single market. For the fu tu r e o f the F.U single market, it is key to remove these barriers; therefore, it is with this purpose above all that the E U ini tiatives a n d activities f o r the m arket growth are undertaken. In addition, there are appearing new challenges connected with globalization, technological progress, the growing importance o f services, the increase in unem ploym ent in certain countries, and climate and the environm ent protection.
1. Introduction
A single m arket is a h igher stage of integration in com parison with a free trade area a n d a customs union, It also involves, ap art from rem oving duties, abolishing o th e r barriers to m utual trade and developing c o m m o n trade policy tow ards third countries, a free m o v e m en t o f p ro duction factors including capital, labour force a n d services.
The idea o f the F.uropean single m arket could n ot have been realized w ithout W hite Book of 1985 co ntaining the p ro g ra m for removal o f the basic physical, technical and fiscal obstacles to m o v e m e n t o f goods, w hich allowed the four freedom s to be introduced. With the p rogram for th e single m ark e t presented in W hite Book, th e f o u n d i n g T r e a ti e s o f th e E u r o p e a n C o m m u n i t i e s were changed by signing the Single E uropean Act o n 17th February, 1986. The treaty stated that the C o m m u n ity w ould take all the necessary steps to create an interna! m arket by 31s! Decem ber, 1992. M ost decisions co ncerning th e internal m a rke t were also agreed to be m ade dif ferently. A m uch greater n u m b e r o f the decisions were to be m ade by qualified m ajority a n d not, as until then, unanim ously, which accelerated and facilitated w ork on legal acts. The basis o f the fu n ctio n in g o f the single m arket is defined in the 2009 Treaty on th e F unctioning o f th e European U n io n (TFF.U) (Table 1).
Table 1: M ain reg ulations o f th e EU's in tern a l m a rk e t
TFEU Content
Article 18 A p ro h ib itio n o f discrim ination on grounds o f na tionality Article 20 Citizenship o f th e European Union
Article 26 Realization o f the idea o f the single m arket understood as an area w ith th e four freedoms: the m ovem ent o f people, services and capital
Article 28 Customs union
Article 29 A free m ovem ent o f goods from th ird countries after com p letin g customs form alities and m aking customs payments, if these are required
Article 30 A pro hib itio n o f im p o rt and exp ort duties in m utual trade
Article 34-35 A pro hib itio n ofq uantitative restrictions on the im p o rt and exportand on measures o f similar nature
Article 36
Exceptions to the ban on qu an tita tive restrictions - protection o f morality,order, security, health and lives o f people, animals and plants, o f industrial and intellectual pro pe rty as well as o f cultural pro pe rty o f historical, artistic or archeological value
Article 45 A free m ovem ent o f employees Article 49 Right o f establishment Article 56 A free m ovem ent o f services
Article 63 A free m ovem ent o f capital and payments
Source: own study based on the Treaty on the Functioning o f the European Union, consolidatedtext, O.J. C 83, 30 02.2010.
The aim o f this article is to discuss the m ain benefits an d problem s co n cerning the building o f the EU single m arket a n d to indicate the m ain activities to elim inate the still existing barriers to the m ovem ent o f goods, people a n d capital.
2. Towards the EU single market - achievements and problems
O ne of the basic freedom s o f a single m arket is a free m o v e m en t o f goods, the im plem entation o f which involves removal o f physical, technical a n d fiscal barriers. Physical barriers to free m ove m ent o f goods are bo rd er controls betw een m e m b er states a n d various custom s and tran sp o rt docum ents; fiscal barriers are related to differences in tax systems and tax rates, a n d technical ones result from differences in national technical norm s, in regulations o n pro d u cts placed on the m arket and in m arket surveillance. Technical barriers form the biggest obstacle to a free m ovem ent of goods. It is estim ated that in 1985 there were over 100 000 various national te c h n i cal specifications in the C om m unity, every one o f w hich was a potential obstacle in m utual trade. At the same time, 76% o f th e value o f the trade in the Twelve EU C o untries was subject to o b ligatory technical specifications (both national ones a n d the ones regulated by specific c o m m o n regulations in the C om m unity). W h e n national technical specifications or o th e r requirem ents for adm ission to trading varied across m e m b e r states, exporters h ad to m ake a difficult decision w hether to adapt products for foreign m arkets or to ab a ndon exporting. A dapting a p ro d u ct involves additional p ro duction costs.
Elim inating delays at borders th ro u g h rem oving physical barriers (removal o f internal custom s borders, controls a n d formalities) resulted in additional savings o f at least ECU 400 mln.
The total cost o f delays at b o rd e rs a n d at the sam e o f savings as they w ere rem oved was even bigger a n d was estim ated to be E C U I m ln (m eans o f tr a n s p o r t were used to a greater extent as a result o f sh o rte r transit; drivers n o lo nger h a d to m ake stops at borders, etc.). The benefits of this are difficult to estimate, however, they are considerable. N ew enterprises a n d business ideas, such as E uropean d istribution o r logistics centers, arose due to th e fact that internal b order controls were rem oved, the m o v e m en t o f goods stream lined and tran sp o rt services liberalized. In the years 1987-1992 (the im plem en ta tio n o f the single m a rke t regulations), logistics costs o f b u si nesses decreased by ab o u t 29%, o n average, from 14,3% to 10,1% o f the total revenue; th e num ber o f days betw een placing an o r d e r a n d receiving a c o n sig n m e n t sh o rten e d from 21 in 1987 to 15 in 1992,
Rem oving technical b arriers involves m a inly technical alig n m e n t at the level o f the Union, w hich takes th e form o f directives. Previously used o ld approach (OA) directives included d e tailed technical req u irem en ts c o n c ern in g the m anu fa ctu re o f products. Preparing such directives at the level o f th e C o m m u n ity w as very difficult a n d tim e-consum ing, especially that a u n a n i m o u s decision o f the C o uncil was n e e d ed for them to be acceptcd. In mid-80s, due to a need to accelerate w ork on im plem en tin g a single in ternal market, a new ap p roach (NA) towards tech n i cal alig n m e n t a n d n orm alization was in troduced. The new approach directives are o f a different nature; they n o longer rec o m m e n d the tim e-co n su m in g alignm ent o f regulations with regard to technical specifications; they focus on basic req uirem ents c o n c ern in g security, health, c o n su m e r a n d the en v iro n m e n t protection. M ost of th e new approach directives require a producer to in troduce the “CE” label for p ro d u cts m eetin g basic requirem ents o f the directives. Until now, tw enty nin e new7 approach sector directives on technical alignm ent a n d norm alization have been accepted in over twenty industrial sectors. It is estim ated that the value o f the trad e in the p r o d ucts from these sectors w hich fall u n d e r the n ew ap p roach directives is EUR 1,5 trillion.
It takes longer to liberalize services across th e EU than to introduce a free m ovem ent o f goods because services are u n d e r m o re co n tro l in m e m b e r states. Services arc the driving force o f the E U s econ o m ic grow th since they generate approxim ately 65% o f the em ploym ent (2012) and 73% ot th e value ad d e d (2013). After m any years, the services directive was passed, however, it was a d isa p p o in tm en t with regard to a fully free m o v e m en t o f services across the EU. It lacked the solutions to remove the basic existing b a rrie rs hin d e rin g a free m ovem ent o f services, the so- called “C o u n try of O rigin Principle" in the case o f cro ss-b o rd er provision o f services, in p a rtic u lar. The application o f the principle w ould m e a n that w h en services areprovided across borders, th e applicable law is the law o f th e c o u n try o f th e service provider and n ot that o f the country w here the servicc is p erform ed. This w o u ld allow service providers to be com petitive if costs in the c o u n try w here they are established are lower (e.g. salaries) tha n the ones in the coun try where the y provide services.
'lh e m a in principles o f th e directive c o n trib u ted to th e rem ova l/reduc tion o f the existing b ar riers in cro ss-b o rd er provision o f services, however, to a different extent d e p e n d in g o n a country an d sector: considerably below 10% in Austria, Malta, and th e N etherlands, 61% in Sweden and over 50% in Spain an d Slovakia. Roughly speaking, on average, th e scale o f the reduction o f the barriers after the services directive was im p lem ented in m e m b e r states is approxim ately 20%. The scale o f red uction o f the previously existing barriers varies d ep e n d in g on sectors and oscillates betw een over 80% in the case o f travel agents o r hotel services a n d 60% in that o f accounting services.
Fiscal barriers, w hich are related to differences in tax systems and tax rates, form one o f the m a in obstacles to the m a rke t in tegrationin all sectors, especially in financial services as well as in
trans-border activity. Elim inating fiscal barriers by h arm o n izin g indirect taxes was an im p o rta n t element of the form ation of the single m arket as tax is a crucial ingredient o f a price of a given product o r service. Currently, the EU ’s institutions are allowed to determ in e only VAT rates (n o t lower than th e ones agreed on in the FU) a n d m inim al excise rates on h a rm o n iz e d excise p r o d ucts such as m ineral oils (fuel), alcohol, tobacco products, and, since 2004, on electricity a n d energy resources used for heating purposes.
In the case of both trans-b o rd er transactions between tax payers, b o th c o m m o d ity a n d se rv ice ones, the so-called B2B, it is a general rule to p u t on tax according to the law and rates of the country where a service recipient resides. Consequently, tax on services varies d e p e n d in g on w hether a transaction is o f national or inter-union nature. In the case o f B2C (business-to- consumer - services provided by a business for a consum er), the provision o f services is taxable in the country where the service provider is established, therefore, the buyer purchases services for gross prices. Since 1st January, 2015, there have been new rules co n cerning VAT tax on telecom m unications services connected to TV' and radio transm issions a n d on electronic ones provided for consumers. Regardless o f in which co u n try a physical p erson purchases an e-service, they pay the VAT tax according to the rates o f the c o u n try where they live. The directive m akes it im p o s sible for service providers to escape to low VAT countries (tax rates in the EU range from 17% to 27%) and allows to tax service providers from third countries, e.g. from the US, w ho were n ot subject to VAT tax.
A free m ovem ent of capital is related to in d e p en d e n t financial transactions w hichdo not involve m ovement of people, goods or services. A free m ovem ent o f capital refers to all its forms, such as direct investments, sale or purchase o f securities, c u rre n t accounts, b a n k deposits, credit and loan transactions, purchase o f property. The M aastricht treaty forbids all lim itations o n m o v e m ent of financial capital and paym ents in m utual relations or in relations with th ird countries. This rule has been effective since 1st January, 1994, the tim e w hen Stage 2 o f the Econom ic and M onetary U nion was started. Im plem enting a free m o v e m en t o f capital was beneficial n ot only to businesses w hich can place capital in the form o f FDI o r portfolio investm ents in o th e r m e m b er states but also to the EU citizens and the U nion’s entrepreneurs. The latter were allowed to choose where they would like to o p en their b an k account.
A broadly u n d erstood free m ovem ent o f people involves mainly: • a free m ovem ent of workers,
• m utual recognition of professional qualifications,
• civil rights (voting rights an d a residence perm it; the latter was originally in ten d ed only for workers b u t later covered the unem ployed as well),
• coordination o f social security systems.
The Schengen Borders Code o f 2006 com pleted, at least formally, the fo rm ation o f the co m m o n borderless area. This regulation stipulates that people crossing internal bord ers betw een m e m b e r states of the EU should n ot be subject to b o rd er control a n d regulates rules for b o rd e r control o f people crossing external borders o f the EU.
3. The single market - the m ain effects
In th e integration theory, a few econom ic effects o f a single m arket are noted, the m ost im portant o f w hich are:
1. The com m ercial im p act in the form o f atrade increase between m e m b er slates (thelrade creation effect) a n d a trade decrease with th ird countries (the trad e diversion effect). 2. D y nam ic effects - m ediu m - a n d long-term ones in the form of higher efficiency o f p ro d u c
tion. A single m arket is a prem ise for high efficiency of resource allocation a n d im proved business com petitiveness. I h e w idening o f a national m arket th ro u g h an easier access to a larger m arket involves econom ies o f scale an d larger business profits. Businesses can o pti m ize th e ir processes by creating m u ltinational p ro d u c tio n lines and using their com parative advantages.
3. Im proved m obility o f the workforce and access to a larger labour m arket as well as lower transaction costs d u e to liberalized capital flows.
4. I h e levelling o f p ro d u c t prices (convergence) in m e m b e r states.
5. A Long-term grow th b onus a n d prosperity effects - im proved com petitiveness activates processes of restructuring, innovation, w hich involves a growth b onus resulting from te ch nological a n d know ledge spillovers. Consequently, integrating econom ies move from co m p le m entarity tosubstitutability.
O n 1st January, 2013, the single m ark e t celebrated its 20th anniversary. There are a num b e r o f b oth ex-ante an d ex-post studies discussing the consequences o f this event. A ccording to the E u rop ea n C om m ission, the single m arket created additional jobs (2,77 mln in the years 1992-2008) a n d G D P grow th (2,13% in the sam e period), I h e effects o f a single, integrated m arket with four basic freedom s can be discussed in the context o f th e value of intra an d extra trade in th e total tu rn o v er o f th e EU countries (“the im p o rta n ce level" o f the EU) o r in the relation to GDP (the trade o p enness index) - th e freedom o f m o v e m en t o f goods a n d services; the share o f FDI in G D P or the share o f intra - EU FDI in total capital flows - the freedom of m ovem ent of capital; the share o f workers from o th e r m e m b e r states - a freedom o f m ovem ent of people.
In the early 90s o f the 20th century, i.e. from 1990 to 1992, the share if inter-union m erchandise trad e was at 65% -66% o f the total export of the F,U m e m b e r countries (intra + extra) a n d at ap prox. 63% o f the global im p o rt o f the EU countries. From the second half of th e 90s up to the e n largem ent in 2004, inter-E U trade decreased significantly in favour o f the trade with Central and East European countries w hich were in th e process o f trade liberalization u n d e r the association agreem ents w ith the E U and with East Asian ones, especially with China, w hich joined the W T O in 2001. 'line EU enlargem ent in 2004 provided an im pulse for increased in tra com m o d ity tra d e - 67,6% in e x p o rt an d 66,2% in im port. In recent years, the share of the intertrade, both in im port a n d export, has fallen again (approx. 62%). C hanges in inter-union trade cannot be discussed in isolation from the ec o n o m ic situation, tren d s in w orld ec onom y or international trade. This is illustrated by a decrease in intra tu rn o v er in 2008 (the financial crisis) or increased significance o f em erging m arkets (e.g. China). 'Ihis is also the case with capital flows in the form o f EDI. 'Ihe significance o f th e EU internal m arket is best show n in the fact tha t in every m e m b e r state, the value o f inter-u n io n trade in goods is higher th a n that o f the trad e with th ird countries - in recent years, there have also been exceptions: the UK (43% in 2013) a n d M alta (44, 3%). 'th e following coun tries h ad the largest share in 2013: Slovakia - 82,6%, Luxenberg - 81%, the Czech Republic - 80,8%, H u n g ary - 76,4%, Poland - 74,8%.
If the degree o f the single m arket openness, m easured w ith th e share o f m erchandise trade in GDP, is to be focused on, the n for intra trade, it has increased from approx. 17% (the e n d o f the 90s) to 22% in 2013; for extra trade, from over 8% to 13%, respectively. In the case o f services, for intra trade, this index was 5%-6,5% a n d lor extra trade: 3%-4.6%, respectively.
The share of outw ard a n d inw ard FDI in the EU's G D P has been decreasing since 2008: from 9.5% (outward) and 8% (inw ard) to less th a n 2% in 2013, a n d it has been on the increase in the years 2004 2007. Since 2002, the share o f intra-E U FDI in total outw ard FDI o f the EU ’s countries has been systematically falling: from 70% to 30% o n average in the past few years. The decrease in the cash flow from investing activities in the EU is m u c h m o re significant; in the past few years, the capital inflow to the F.U from o th e r m e m b er states has been less th a n 4% of the GDP, which m eans it has halved com pared to the p erio d before the crisis. The changes in th e m ovem ent o f intra-EU FDI resemble, as m entio n e d above, the tendencies in m erchandise trade.
Figure 1 shows the price convergence indicator calculated as the sta n d ard deviation o f c o n sum ption expenditure o f households in the EU. Until 2010, the price dispersion o f w hite goods in the EU h ad been on the decrease. Price convergence is greater in the Fifteen EU countries, espe cially in the second half o f th e 90s o f the 20lh century, which is after the single m arket was created (Figure l).The accession o f the Eastern E uropean countries d id not affect the price convergence significantly in these countries. Since the mid-90s, a decrease in price dispersion has been o b served as well in the Twenty-Seven EU countries. However, in the past few years, th e process o f price convergence has slowed dow n b o th in the Fifteen EU coun tries a n d in the new m e m b e r states, which was caused by the 2008+ financial crisis.
Figure 1: Price convergence indicator (coefficient o f variation o f com parative price
Tiie integration o f the services m arket is at a considerably lower level th a n that of the goods m a rk e t as the trad e integration on th e single goods m a rke t is at approx. 22% (approx. 17% in 1999) a n d on th e services one at approx. 5%.
The differences in th e price dispersion o f services result from the character o f services (serv ices ca n n o t be w arehoused o r reexported), however, the differences in tren d s betw een prices of services a n d those o f goods (in th e case of goods, dispersion is on the decrease) m ight indicate an insufficient level o f com p etitio n in this sector (Figure 2).
Figure 2: Price d ispersion o f goods and services in th e EU (stan d ard deviatio n)
Source: European Commission (2012); Report to the European Parliament, the Council, the European Central Bank, the Eco nomic a n d Social Committee, the C omm ittee o f the Regions and the European Investment Bank, State o f the Single Market Integration 2013, Contribution to the A nnual Growth Survey 2013, COM (2012) 752final, Brussels, p, 5.
It is o f note that m obile p h o n e ro am in g charges in the EU are to b e abolished on 15th June, 2017; the n et n eutrality principle makes it im possible for com panies providing net access to discrim i nate against individual online services providers. Therefore, there is n o threat that telecom m u nications service providers will p u t higher charges for the Internet access on selected subjects, especially o n providers o f specific electronic services.
The freedom to underta k e em ploym ent in any m e m b e r state did not affect (he employee mobility in th e EU15 countries. U ntil 2004, less th a n 2% o f employees came from a different m em ber state. The situation changed after the EU enlargem ent in 2004, m ainly because o f significant differences in in c o m e betw een th e EU15 countries an d th e new m e m b e r states. For fear o f an influx of a considerable n u m b e r o f workers, the m ajority of th e “old" m e m b e r states decided to open their job m arkets gradually (within m a x im u m 7 years). In the whole o f th e EU, these fears proved to have n o grounds, however, increased regional migration cou ld be observed. Approximately 70% of all em ig ran ts from the EU Eastern E nlargem ent em ig rate d to the U K and Ireland and 80% o f R om anians a n d Bulgarians to Spain and Italy. In the EU28, at th e beginning o f the second decade o f th e 21st century, th e share o f employees from o th e r m e m b e r states doubled in com parison w ith th e begin n in g o f th e 90s w hen it was a ro u n d 3%. In 20 i 1, labour force resources o f the EU27 were estim ated at 236 m ln, 7,2 m ln o f which came from o th e r m e m b e r states (in 2005 - 2,2%).
According to the European C om m ission, em ployee m obility in the EU is n o t satisfactory. This as pect o f the free m ovem ent o f people is significant in the conditions o f unem ploym ent, especially am ong the youth.
4, The deepening and d evelopm ent o f the single m arket in the face
o f new challenges
The developm ent of a single m arket is a con tin u o u s process. A single m arket m u st respond to processes in the world economy, an d the social a n d dem ographic challenges, new technologies as well as priority issues m ust all be taken into account in creating the policy for its development.
Four drivers o f the new econom ic growth of a single m arket can be differentiated:
1. Developing fully integrated networks in the Single M arket (the single tra n sp o rt a n d energy market).
2. Fostering mobility o f citizens and businesses across border. 3. S upporting the digital econ o m y across Europe.
4. Strengthening social entrepreneurship, cohesion a n d co nsum er confidence.
They involve the m ost im portant directions in the deepening o f the single market, such as: • M onitoring and enforcing the im p lem entation of E uropean law. Legal proceedings in cas
es concerning violations o f treaty regulations take too m uch time, especially if a dispute is heard by C o u rt o f Justice o f the European Union, formerly E uropean C o u rt of Justice. D irec tives on the functioning o f the single m arket can be effective only w hen they are fully a n d correctly transposed into national law. At th e F.U level, b oth th e transposition deficit (the gap between the n u m b e r of single m ark e t directives adopted at the EU level a n d those tr a n s posed in m em ber states) an d the com pliance deficit (the n u m b e r o f incorrectly transposed directives) are m onitored. M em ber states need m ore a n d m ore tim e (8 m o n th s on average) to transpose directives into th e ir national legal systems.
• The services directive should be im plem ented consistently, and all th e double regulations should be abolished just as the econom ic test which makes issuing a p e rm it d ep e n d en t on proving econom ic or m arket dem and. In som e m e m b er states, it is necessary to ca rry out a n u m b e r of reforms as they still have n o t im plem ented the services directive fully, A m ore consistent im plem entation of the regulations of the directive would generate an additional GDP increase by 0,6% to 2,6% in the long te rm perspective.
• Form ing an energy union for securing energy supply in Europe. A large concentration on energym arkets in some m e m b er states calls for specific action in this area. Especially high concentration (the m arket share above 75%) can be observed in Estonia, Latvia, France, Lux em burg and Slovakia. Therefore, there is a need for a single internal energy m arket, w here on one hand pow er com panies com pete w ith each other on the EU energy market, a n d where, on the other hand, consum ers are free to choose th e ir energy suppliers. An integrated energy m arket will contribute to transm itting energy where it is needed; it will ensure im proved energy security and enable to lower the emissivity o f the existing energy systems. In o rd e r to create an integrated energy m arket, the re is a need n ot only to liberalize regulations b u t also to m odernize electrical grids a n d build trans-b o rd er connections.
• O pening up the national passenger m arket in rail transport for licensed tran sp o rt c o m p a nies from other m e m b er states a n d granting th e m the right to bid for public p ro cu rem e n t contracts for services in o p en te nder procedures. In the case of transport, one can talk of the
single m arket, however, w ith the exception o f railway tran sp o rt, hence the need to take such steps. This will contribute to m ore com petitive railway services a n d to m o re attractive prices. A single m arket for m a ritim e tra n sp o rt is also being built by rem oving adm inistrative and custo m s formalities c o n c ern in g the goods tr a n sp o rte d betw een th e E U s ports. Currently, ships travelling betw een the E U ’s p o rts carrying goods released for free circulation leave the un io n ’s custo m s zone, hence the n eed to observe adm inistrative and custom s formalities. The E uropean C o m m issio n p resented th e c o n c ep t of a E uropean borderless m aritim e transport area, w hose aim is to simplify procedures in m a ritim e tra n sp o rt, especially between the EU’s ports. W ith time, a “Blue Belt” o f free m a ritim e m o v e m e n t in a n d a ro u n d Europe will be created.
• A m o re effective, tra n sp a re n t public procurem ent.
• Increasing em ployee mobility; this is necessary for creating a true European labour market enabling to m atch em ployers a n d job seekers, w hich w ould elim inate the high u n em ploy m e n t rate in th e EU countries. To serve this purpose, the EURES p o rtal needs to be devel o p ed in such a way th a t it can becom e a truly E uropean tool helping to find em ploym ent and c o n d u c t rec ru itm en t processes. E uropean E m ploym ent Services were form ed in 1993; their aim is to develop a E uropean labour m arket and to facilitate employee mobility at the inter national a n d tra n s-b o rd e r levels in the coun tries o f E uropean Econom ic Area.
• A single digital m a rke t in Europe. This involves investing in high speed bro ad b a n d networks an d benefiting from a c o m m o n use o f e-docum ents.
• S trengthening external EU borders an d establishing an integrated external b o rd er m anage m e n t system as well as stren g th en in g the m and ate o f Erontex, th e E uropean Agency for the M anagem ent o f O p erational C oop e ra tio n at the External Borders o f the M em ber States of th e E uropean Union, in th e area o f placing Rapid B order In tervention Teams at the border in coop e ratio n with ap propriate m e m b e r states. This is an answer to the challenge of an in creased influx o f refugees to Europe in recent time.
5. Sum m ary
In the evolution o f the internal m arket, b o th negative a n d positive integration can be observed. The negative integration m eans rem oving the existing obstacles to trade, the m ovem ent o f capital o r people; the positive one in this case involves harm o n iza tio n , alignm ent o f regulations a n d the creation of co m m o n tools a n d institutions c o n d itio n in g the functio n in g of the single market. The single m a rk e t is th e biggest achievem ent of the European integration. It enables a freer m ovem ent o f people, goods, services a n d capital; for consum ers, this m eans a greater choice in goods and services as well as lower prices. The EU single m arket also poses an o p p o rtu n ity for employees a n d businesses as adm inistrative b u rd en s involved in tran s-b o rd er activity are decreased. The single E uropean m a rke t involves additional costs as well. O n one h an d , these are the costs of excess regulation a n d inefficient bureaucracy, on th e o th e r hand, those o f adjustm ent for the coun tries and regions w here com p an ie s are less com petitive than foreign ones.
However, in reality, there are a n u m b e r o f barriers h in d e rin g the s m o o th fu n ctioning o f the single m arket. For the future o f th e EU single market, it is key to rem ove these barriers; therefore, it is w ith this p u rp o se above all that the EU initiatives a n d activities for th e m arket growth are u n d erta k en . In addition, the re are appearing new challenges conne cted w ith globalization, tech nological progress, the growing im po rta n ce o f services, the increase in unem ploym ent in certain countries, a n d climate a n d the e n v iro n m en t protection. The crisis show ed that the European U nion m u st take steps to im prove econom ic growth, increase com petitiveness and develop the
single market, The single m arket is a key factor in econom ic growth. However, to benefit from it, regulations for its functioning m u st be correctly im plem ented a n d enforced.
In o rd er to create a tru e borderless internal m arket, there is a need to take steps to build a single market for services, to im plem ent the services directive m ore effectively and to remove the still existing barriers to trans-b o rd er activity. Special attention is paid to developing a single energy and transport market, w hich also m eans, apart from d em onopolization a n d open in g u p m arkets for service providers from o th e r m e m b er states, considerable investing in infrastructure. In the case of the free m ovem ent of people, the m ain aim for the next few years is to ensure g eographi cal labour force mobility w ithin the single market. A new challenge is a considerable influx o f refugees into Europe, in the context o f w hich there are m o re and m ore voices for reintroducing border controls, which w ould be against the Schengen Borders Code. There is a need to build e- Europe, e-adm inistration, e-customs, w hich in tu rn necessitates im proving access to an d security o f online services as well as investing in infrastructure.
References
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