European Common Market

The Common Market European , or European interior market , often more known under the simple name of Common Market , is the economic Union installation gradually by the European Union. The Goods, the Services, the Capital and the people (one speaks about “four freedoms”) there circulate freely. It is about largest the Common Market of the world.

The citizens have the possibility of travelling, of studying, of working everywhere in Europe. The companies trade in the whole of the Union. As for the consumers, they profit from less expensive and more varied products.

If all that is possible today, it is thanks to the integration of the markets, initiated in 1957 by the the Treaty of Rome. The interior market was used as base with the majority of the common policies, who were born in answer to the problems raised by the opening of the national markets.

The progressive installation of the Interior market

In 1957, the the Treaty of Rome establishing the European Economic community (the EEC) mark the opening of an ambitious process: the progressive integration of the European economies to create an interior market. If its founders see in the Common Market a means of instigating the economy of the Member States, they are also animated by an political ambition: the bringing together of the people of Europe by the means of the economic exchanges. For that purpose, the European countries undertake to remove with internal barriers with freedom of movement of the goods, services, capital and people (“four freedoms”).

The first stage is the removal of the barriers to the movement of the goods. In 1968, ten years after the coming into effect of the treaty, the customs duties between the countries of the EEC are abolished. In parallel, a Commun Customs Tariff is established with regard to third countries, which implies the definition of a common marketing policy. The effects of this opening are remarkable in terms of growth: between 1958 and 1972, the intra-Community trade are multiplied by 9, contributing to the total enrichment of Europeans.

For as much, the Common Market is far from being completed. Nontariff obstacles continue to distort the exchanges between the countries of the EEC: technical rules, administrative obligations, medical standards, monetary devaluations, differences of indirect taxation Of course, measurements as the medical standards are essential for the consumer protection. But the administrations and the national companies tend to make an abusive use of it, with fine protectionists, to discourage the product imports Community.

As of its arrival with the head of the European commission in 1985, Jacques Delors is fixed for objective to complete the realization of the single European market before January 1st 1993 (from now on, one does not speak only any more about Common Market). The European Single act contains two measurement-keys which must make it possible the EEC to achieve the fixed goal: extension of the vote in the majority qualified to the Conseil of the European Union (what attenuates political blockings) and the generalization of the principle of mutual recognition, preferred with a total harmonization of the various technical and medical standards.

The domino effect of the interior market on the Community activity is undeniable: parallel to the dismantling of the obstacles to freedom of movement, the Europe develops health policies, of consumer protection, environment, of social protection, mainly to meet the need for unification of the market. The policy of competition is it also essential for the realization of the interior market: it prevents that the behavior of certain companies does not distort the market and does not harm the interests of the consumer and other producers.

The objective of free movement of the goods and the capital is achieved in 1993. The liberalization of the services takes more time: the markets of telecommunications, energy and transport opened only at the end of the Nineties. As for freedom of movement of the people, it is effective since 1995, date of the coming into effect of the agreements of Schengen, which do not relate to however the totality of the Member States of the European Union.

Contributions of the Interior market

For the European citizens, the interior market represents the possibility of travelling, of residing, of working in the country of the European Union of their choice, by preserving their social protection and by seeing their recognized diplomas of one country with the other. As consumers, they profit from a wider range from products and services, new systems distribution and more advantageous price. They can buy in another country and bring back freely, for their personal consumption, clothing, foods, electronic devices…

For example:

in the field of new technologies, the opening of the national markets of the Union made it possible to reduce by 50% the price of the national phone calls since 1998;
under the pressure of competition, the promotional air transport charges in Europe fell significantly;
in 2003,120 000 French bought their vehicle in another Convention country, thus realizing substantial savings.

The companies benefit from the size of the market (459 million consumers) and of the intensification of the interior exchanges: 60% of the commercial exchanges are done between country of the European Union. With the elimination of customs controls between the twenty-five countries, the times and the costs of transport are reduced. Moreover, the government contracts of all the Member States are opened with all the companies of the countries of the European Union. The liberalization of the movements of capital within the interior market returned possible that of the finance departments, thus allowing the banks, companies and private individuals to invest their money in the country of their choice. To help them to benefit from the interior market, the European Union set up structures of assistance at the companies, and more particularly at SME.

With the beginning of the year 1990, the poorest areas of the European Union (Spain, Greece, Ireland and Portugal) feared to be losing interior market, to be able to adapt to foreign competition and the technological innovation. Their economies on the contrary approached those of the remainder of the Union, drawing the benefit from the interior market and the assistances of the Europe to the development of the areas.

To complete the Interior market

In theory, the interior market will be truly completed when there is no more difference between the European market and a national market. In practice, there will always remain within the European Union of the differences which are due to the heterogeneity of the Member States in terms of culture, history, company. The interior market is thus something towards which one tends, but who “will never truly be completed”.

Gradually, the economic evolutions within the interior market give birth to from new needs for harmonization between the Twenty-five. Among the recent projections, one will note the definition of a statute of the European company, the emergence of the European right of Intellectual property or the development (in progress) of a community patent. And then it there with the membership of the Euro area, which relates to for the moment twelve countries. With the creation of the Euro, the single European market approaches even more than one interior market since the exchange transactions are removed and the price stability from one country to another is guaranteed.

It still remains of many sensitive topics, like the taxation, where the Member States do not seem not laid out with going in the direction of a harmonization. Another delicate question: how to make disappear the last obstacles with the free performance of service, which account for 70% of the GDP and employment in the EU? Certain countries, whose France, refuse that an additional opening of the service market, under consideration by the project of Directive services, is done with the detriment of the rights of the workers. The completion of the interior market thus raises many questions which the European Union will try to answer in the future. In parallel, the European commission decided to simplify the legislation of the interior market, lightening it of the regulations and directives considered to be useless or obsolete, in order to improve economic efficiency of the EU.

See too

economic Single act
Union and monetarist
Strategy of Lisbon
European Union

External bond

Principle of mutual recognition on the site of the European commission

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