With the Maastricht Treaty, in 1992, the European Community will now be a single market composed of twelve countries, with no more barriers between them. This change was of course studied and analyzed before coming into force. The European Commission, in 1986, mandated Mr Cecchini to make an investigation, in order to point out precisely the benefits the Community could get from this single market. This work is based on the White paper 1985, which contains detailed proposals, a schedule, and a mechanism to achieve the Single European Market. The inquiry was completed in 1988, and shows clearly the point in implementing this SEM. Nevertheless, more than ten years later, the expectations born from this study are not always verified.
[...] The sales volumes will be increased as well. As a consequence, the Single Market will offer important economies of scale for businesses, permitting them important cost savings. The inquiry estimates a cost reduction from 1 to depending on the industries and calculated that the consumer prices will deflate by an average of 6%. The prices fall is even expected to be from 10 to or even more, in the industries where governments' involvement is important (Cecchini Report). Indirect dynamic effects will also be an improvement of industry efficiency and structure, a wider consumer choice and an increase in intra community trades (Effects of removing pilot barriers were analyzed and classified using the following model). [...]
[...] The Community will, in this purpose, need to adopt economic policy measures (as Cecchini recommended to make the removal of barriers more efficient), and even though the Single Market seems to be the best environment for these measures, this ambitious objective is far from being reached. The Internal Market made Europe a lot more attractive for foreign investors: FDI in Europe is four times more important in 2001 than in 1992, which permits improving innovation, productivity, and above all growth. [...]
[...] "The Internal Market ( ) has helped to increase our prosperity and jobs" states Patricia Hewitt, Minister for Trade and Industry in the UK (The Internal Market Ten Years without Frontiers. p.1). The Single European Market introduced the concept of free movements of goods, capital, services, and people inside the borders of the Community, and indeed, the observation we can do is that now, the intensity of competition has clearly increased, and so has the flexibility of the labour market. [...]
[...] The removal of those barriers clearly appears as a beneficial measure for the whole European Union, but Cecchini furthermore analyzed them with precise figures. The main benefits from the barriers removal, according to the Cecchini report, would be: growth, job creation, economies of scale, improved productivity and profitability, healthier competition, professional and business mobility, stable prices and consumer choice. The Single Market, giving way to a wide access to the whole European labour market for every citizen of any member state, would clearly boost employment. [...]
Online readingwith our online reader
Content validatedby our reading committee