What were the economic benefits gained by the Single Market Act?

INTRODUCTION: SINGLE MARKET AND ITS HISTORY The construction of one big market is at the heart of the European project envisaged by the founding fathers. They had understood how important it was to come together, trade and work together while organising a richer, more creative, more intelligent, fairer and stronger society in the world. Sharing a common economic and social space while respecting diversity, the wish to be nourished together and consolidated by the wisdom of standing together: that was, and still is, the aim of the big European market. There are 20 million businesses in the EU, providing 175 million jobs and supplying the EUs 500 million consumers and many more worldwide with goods and services. A key factor in the competitiveness of these businesses is the single market. Its role is to provide an environment that is conducive to developing, buying, selling and investing freely throughout Europe and beyond. Small and medium-sized enterprises offer the highest potential for employment and are therefore worthy of special attention in the single market, as well as targeted measures to reflect their concerns (http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:0608:REV1:EN:PDF#page=2) The Single Market of the European Union is the common area between the 27 EU countries where goods, services, capital and persons can circulate freely. The Single Market also ensures that European citizens are free to live, work, study and do business where they want in the EU. The Single Market is the core of the cooperation between the 27 Member States of the European Union. Yet getting it up and running took many years. It all started with the 1957 Treaty establishing the European Economic Community (EEC). This Treaty set out a timeline for the original six founding members (Belgium, France, Germany, Italy, Luxemburg and the Netherlands) to abolish customs barriers within the Community and establish a common customs tariff to be applied to goods from non-EEC countries. This objective was achieved on 1 July 1968. In June 1985, the European Commission, under its then President, Jacques Delors, published an action programme seeking to abolish, within seven years, all physical, technical and tax-related barriers to free movement within the Community. The aim was to stimulate industrial and commercial expansion within a large, unified economic area. By amending the original 1957 Treaty, the EEC gained the enabling instrument for the Single Market. The revised Treaty the Single European Act - came into force in July 1987. The Single Market was finally put in place on 1 January 1993.

MAIN BODY: TRECUT CATRE VIITOR With these barriers removed and national markets opened, more firms can now compete against each other. This means lower prices and wider choice for the consumer. Firms selling in the Single Market now have unrestricted access to nearly 500 million consumers in the European Union. The release of these constraints will trigger a supply-side shock to the Community economy as a whole. The name of the shock is European market integration. Costs will come down. Prices will follow as business, under the pressure of new rivals on previously protected market, is forced to develop fresh responses to a novel and permanently changing situation. Ever-present competition will ensure the completion of a self-sustaining virtuous circle. The downward pressure on prices will in turn stimulate demand, giving companies the opportunity to increase output, to exploit resources better and to scale them up for European, and global, competition. Public deficits will be eased, under the dual impact of open public procurement and the economys regeneration. Inflation, traditionally growths ugly sister, will be cooled down by the drop in prices provoked by the open markets. But, perhaps most important of all, is the medium-term impact of market integration on employment. With its injection of inflation free growth, coupled with a loosening of the constraints on public exchequers in the Communitys member states, the European home market of the 1990s raises the prospect of very substantial job creation.

Between 1992 and 2006, it is estimated that the Single Market generated 2.75 million jobs and 2.15% of extra growth for the European economy that is 518 extra for every person in the EU in 2006 alone. Intra-European trade currently accounts for 17% and 28% of world trade in goods and services respectively. (http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/11/239&format=HTML&aged=0&la nguage=EN&guiLanguage=en) Europe has become the world's biggest economy. Even excluding trade within Europe, we are also the world's biggest importers and exporters. The single market is an important factor enhancing our international competitiveness. Without it, we would not count for so much in the international balance of economic power at a time when new powers are emerging. But first and foremost, the single market creates advantages for businesses and citizens in their day-to-day activities. Intra-European trade currently accounts for 17% and 28% of world trade in goods and services respectively. The 70% fall in mobile phone call charges and the 40% reduction in airfares are concrete examples of this. (http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:0608:REV1:EN:PDF#page=2) Cohesion was very important as it tackled the idea of rich and poor member states and rich and poor regions in the member states of the European Commission. There were 12 states when the SEA was adopted. This large market without frontiers, because of its size and because of the possibilities that it offers for scientific, technical and commercial cooperation, gives a unique opportunity to our industry to improve its competitivity. It will also increase growth and employment and contribute to a better balance in the world economy. (Jacques Delors, president of the Commission of the European Communities Cecchini, 1992:XI) The barriers like border controls and customs red-tape, divergent standards and technical regulations, conflicting business laws and protectionist procurement practice are well known by name. For business and government, the two main actors, the road to market integration will be paved with tough adjustments and the need for new strategies. (Cecchini, 1992:XX) For business, removing protective barriers creates a permanent opportunity, but signals a definitive end to national soft options. Cost reductions will be good news, but market opening means also the permanent threat, actual or potential, of competition. This is also good news for the company which is gearing up to capitalize on the enlarged markets enhanced opportunities for innovation and economies of scale. But profits which derive from cashing in on monopoly or protected positions will tend to be squeezed. The situation will be one of constant competitive renewal. The 12 states: Belgium, Denmark, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, Netherlands, Portugal, United Kingdom population of 320 millions. The market barriers by business: Administrative barriers, National standards and regulations, Physical frontiers delays and costs, Community law, Restrictions in capital market, Differences in VAT, Regulations of freight transport, Government procurement P 100 Single European Act The Single Market has been a valuable shield for the European Union in helping to weather the economic and financial crisis. But the effects of the crisis are still hitting Europe very hard: almost 10% of our active population 23 million people is currently unemployed. PREZENT CATRE TRECUT

In this situation, it is all the more important to exploit any additional and yet untapped potential of the Single Market to generate sustainable economic growth and additional employment. The Single Market Act proposes 12 key actions to boost European competitiveness and to unlock economic growth and jobs which, considering the crisis, we want to see adopted by the end of 2012. But the Single Market will not work properly if citizens and businesses cannot use it and experience its benefits on a day to day basis. The financial crisis has dented people's expectations and confidence in markets and sometimes in the Single Market itself. It is the objective of the Single Market Act to strengthen this confidence. If we want to kick-start new growth that is both sustainable and fair, Europe needs to equip itself properly and act with strength and determination. A collective commitment at European level is required from all the players involved European, national or regional, public or private, economic and social - making these goals their own. This is where the Single Market Act comes in. The EU executive is to announce a battery of measures to strengthen and streamline Europe's single market tomorrow in its quest for new sources of economic growth at a time of relative decline. The package of 172 measures, entailing dozens of legislative and regulatory changes and dubbed "the Single Market Act", is to be disclosed by Michel Barnier, the European commissioner for the single market. The campaign for legislative and regulatory change is also aimed at warding off the risks of protectionism heightened by the recent financial crisis. (http://www.guardian.co.uk/business/2010/oct/26/single-market-act-michel-barnier)

CALITATI VS DEFECTE

The single market is seen by many Europeans citizens as well as political leaders with suspicion, fear and sometimes open hostility. Two mutually reinforcing trends are at work: an "integration fatigue", eroding the appetite for more Europe and for a single market; and more recently, a "market fatigue", with a reduced confidence in the role of the market. The single market today is less popular than ever, while Europe needs it more than ever. (http://ec.europa.eu/internal_market/strategy/docs/monti_report_final_10_05_2010_en.pdf) The single market itself is today part of a context, which has dramatically changed. In turn, the actors to be involved in the initiative Europe's policy makers and stakeholders are more diverse and present a wider range of preferences and interests. Yet the single market is a crucial servant for the European Union. First, it is a necessary though not sufficient - condition for a good performance of the European economy, just as well-functioning domestic markets are for national economies. Secondly, and even more importantly, a robust single market is essential to the overall health of the European Union, because it represents the very foundation of the integration project Policy makers and economic agents alike felt the pressure to think and act in a wider framework, as regards both time (in 1985 they started to make plans for "1992", as the project was called) and space (they wanted to get ready for Europe-wide competition). They reacted to this challenge with enthusiasm. This helped the European economy to recover from the "eurosclerosis" of the previous years. The most important channels can be summarised as: internal and external economies of scale, faster technological progress, increased competitiveness, reduced uncertainty, lower costs of capital and a more favourable environment for economic activity.

CONCLUSION