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The Single European Market

The Single European Market. The SEM and European business. The SEM is seen as key to solving Europe’s problems through: wider availability of economies of scale in the production process the effects of more intense competition

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The Single European Market

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  1. The Single European Market

  2. The SEM and European business The SEM is seen as key to solving Europe’s problems through: • wider availability of economies of scale in the production process • the effects of more intense competition • direct cost reductions due to abolition of border formalities and national regulations • simplification of cross-border mobility and increase in labour force potential • lower financial transaction costs • lower barriers to entry

  3. The SEM and European business Benefits to the enterprise’s logistical chain are derived from: • suppliers: sourcing from new suppliers that offer lower prices and/or better quality inputs to the enterprise • production systems: developing new locations to enter new markets with lower entry costs • distribution systems: competition in services to the firm (in areas such as transport, warehousing and retailing systems) can further increase efficiencies

  4. Barriers to SEM • Physical Barriers: these include border stoppages, customs barriers and other time delaying and cost increasing measures involved in mobility between states • Technical Barriers: these include the absence of common standards across the EU which means developing different versions of the same product for each market; also included are public procurement practices, technical regulations and differing business laws and practices (such as a culture of state support) • Fiscal Barriers: these include differentials in the levels of VAT and excise duties among the states

  5. Core to SEM is legislative framework This has number of forms: • rules set out in the treaty • rulings of the European Court of Justice • secondary legislation mainly directives which have to be implemented into national law

  6. SEM supported by flanking policies • The EU’s competition policy to ensure a level playing field for the business community • A regional policy to counter any regional imbalances that result from the advent of the SEM • The social dimension to prevent any erosion of social rights that may arise from the development of the SEM (see Chapter 14)

  7. Impact of SEM • The effects have been mixed • Growth impact limited • FDI rose but fell back • Employment effects mixed Results skewed by Euro crisis

  8. Gaps in SEM • Extending de-regulation and harmonisation • Public procurement • Cross-border mobility • Increasing importance of services • Energy markets • Transport markets • Infrastructures

  9. Re-launching the SEM Driven by three challenges: • The erosion of political and social support for market integration • The uneven policy attention given to the development of various components of SEM • The sense of complacency that emerged based on a mistaken belief that the SEM was complete and could be retired as a political priority

  10. New SEA is based on 12 levers Digital Single Market Social entrepreneurship Taxation Social cohesion Business environment Public procurement • Access to finance for SMEs • Mobility for citizens • Intellectual Property Rights • Consumer empowerment • Services • Networks

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