THE INTERNAL MARKET IS THE KEY DRIVER FOR
ECONOMIC GROWTH
Position of the Austrian Federal Economic Chamber
on a future Internal Market Strategy for goods and services
1 Contact:
In Brussels:
Kornelia Lienhart, Office of the Austrian Federal Economic Chamber in Brussels,
Permanent Representation of Austria to the EU, Avenue de Cortenbergh 30, 1040 Brussels Tel.: +32 2 286 58 80, [email protected]
In Vienna:
Tamara Achleitner, Austrian Federal Economic Chamber, Wiedner Hauptstraße 63, 1045 Vienna Tel.: +43 5 90 900 4593, [email protected]
All rights reserved.
Imprint:
Austrian Federal Economic Chamber, European Coordination Department Wiedner Hauptstraße 63, 1045 Wien, T: +43 (0)5 90 900 4315, E: [email protected]. Responsible for the Content: Christian Mandl
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Table of content
1.
EXECUTIVE SUMMARY ... 3
2.
COMPLETE THE INTERNAL MARKET BEFORE ADOPTING NEW LAWS ... 4
3.
DEVELOP FURTHER THE SERVICES DIRECTIVE IN A BUSINESS-FRIENDLY WAY .. 6
4.
PROVIDE BETTER INFORMATION FOR SMES IN A MORE ACESSIBLE WAY
THROUGH THE ENTERPRISE EUROPE NETWORK ... 7
5.
RAPIDLY REMEDY INFRINGEMENTS OF THE INTERNAL MARKET RULES AND
STRENGTHEN SOLVIT ... 7
6.
STANDARDISATION HAS TO BENEFIT COMPANIES – ENABLE SME PARTICIPATION
IN EUROPEAN STANDARDISATION ... 8
7.
SME INTERNATIONALISATION: AVOID DUPLICATION AND ENSURE ADDED VALUE
FOR COMPANIES ... 9
8.
FIND THE RIGHT BALANCE BETWEEN COMPANIES’ INTERESTS AND CONSUMER
PROTECTION ... 10
9.
ACCESS TO FINANCE AND THE CAPITAL MARKET ... 11
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Position of the Austrian Federal Economic Chamber on a future Internal Market Strategy for goods and services
The European Commission has announced to publish the new Internal Market Strategy for goods and services in the fourth quarter of 2015.
The Austrian Federal Economic Chamber (WKÖ) welcomes the initiative to revive the root idea of the internal market which aims to continuously advance the European internal market and to contribute to making the European Union not only an attractive place to live and work but also for investments.
The present position paper summarises the position of WKÖ on the most important topics concerning the EU-single market in the coming years. It also contains our main requests towards the European Commission on these crucial topics.
THE INTERNAL MARKET IS THE KEY DRIVER FOR ECONOMIC GROWTH
The Austrian Federal Economic Chamber welcomes any initiative at EU-level aiming at creating a business friendly environment.
1.
EXECUTIVE SUMMARY
In advance of the Commission publishing its strategy for deepening the single market for goods and services, this document sets out the most important areas.
It reflects the position of the Austrian Federal Economic Chamber and the demands on the Commission.
This includes:
the true application of the THINK SMALL FIRST principle – making it a reality in the legislative process;
the use of the principle of mutual recognition within all MS;
completing the internal market and enforcing rules already in place rather than introducing new rules;
a wise choice of the right legislative instrument and considering the compliance costs for SMEs (via the new SME-test designed by the EC) when introducing new laws; an honest application of smart regulation;
the acknowledgment that regulated professions ensure high quality services in particular vis a vis health & safety for people, machinery and buildings;
4 granting SMEs the freedom to choose with whom to enter into a contract;
enhancing the cooperation between Enterprise Europe Network and SOLVIT in order to provide better information for SMEs on the internal market, strengthening SOLVIT as the problem-solving mechanism for businesses and rapidly remedying infringements of single market rules;
the strengthening of the notification procedure according to Directive 98/34/EC;
granting appropriate access to standards for SMEs and enabling SMEs to participate in the European standardisation process;
fostering the internationalisation of SMEs where there is a clear added value of EU-level action (e.g. advocacy for common EU interests in third countries), while avoiding duplications (like Missions for Growth or EU Business Centers) of existing national structures;
finding a fair balance between companies’ and consumers’ interests taking “the responsible consumer” as guiding principle for law-making in the area of consumer protection and allowing companies scope for competition;
no mandatory “Made-in” labelling as it is expensive and does not contribute to a better protection against counterfeiting;
the expansion of alternative ways of financing for SMEs via simplifying the Prospectus Directive for SMEs, expanding financial guarantees for SMEs and creating clear and SME-friendly rules for crowdfunding.
2.
COMPLETE THE INTERNAL MARKET BEFORE ADOPTING NEW LAWS
The full implementation of existing fundamental freedoms for entrepreneurs within the single market should take priority over the adoption of new legislation.
Make use of the principle of mutual recognition
As a principle, not everything should be regulated in detail on the European level. Wherever possible, the principle of mutual recognition should be given priority. This guarantees the free movement of goods and services even without harmonisation of national laws. It ensures compliance with the subsidiarity principle, as it avoids the systematic development of cumbersome rules at EU level.
New legislative acts should only be proposed if, firstly, the area to be regulated is not yet covered by any other legislative act, and, secondly, the impact assessment shows both a clear European and economic added value.
Choose the legislative instrument wisely
Where regulation is needed, it should be reviewed case-by-case which legislative instrument (directive or regulation) is more appropriate. In order to avoid diverging national implementing measures it should especially be considered, where the use of regulations instead of directives would be more efficient.
5 Consider Compliance Costs
New laws should be designed in a way that they are efficient and entail little administrative burden. This must include the consideration of compliance costs. Adaptation for the implementation of new laws, including necessary training for personnel, can be very costly for enterprises. The new SME-test designed by the Commission already provides for the calculation of compliance costs.
Think Small First!
In order to avoid disadvantages for SMEs in the Single Market, it is necessary to adhere to the principle “Think Small First”. As 99% of all European businesses are SMEs, laws should primarily be written for SMEs. It should be easy to manage and to apply them.
Exceptions for microbusinesses from certain pieces of European legislation following a thorough examination (properly conducted SME-tests!) are welcomed. However, we are strictly against a general exemption for SMEs. A general exemption would clearly disrespect the “Think Small First” principle laid down in the Small Business Act and would lead to a fragmentation of the internal market. Furthermore, SMEs would be excluded from the development of such provisions, but they would nevertheless have to comply with them since they are part of complex supply chains. Legislation has to be designed in a way that all businesses can comply with them.
Enforce impact assessment of laws, regulatory decisions and standards
It is crucial to ensure that new laws are designed according to the principles of smart regulation. There are several ways to avoid new rules that create unnecessary burdens for businesses: make efforts to improve and expand the impact assessment, consistently apply the SME-tests and carry out consultations on planned laws. The planned laws and standards should be subject to a cost/benefit analysis that is carried out in cooperation with the representative European business associations.
The commission´s Better Regulation Program already provides for a comprehensive consultation phase (throughout the whole legislative process) and for the examination of existing provisions through evaluations and fitness-checks within the REFIT program. However, before adopting new laws it should be examined if it is appropriate to limit the lifetime of a new act of legislation or not.
With the new Regulatory Scrutiny Board replacing the Impact Assessment Board, the supervisory body for impact assessments and evaluations becomes more independent. The involvement of external experts in this restructured board will guarantee this independence. In addition, it will have a greater scope of activities, as it is responsible for impact assessments, evaluations and fitness-checks.
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3.
DEVELOP FURTHER THE SERVICES DIRECTIVE IN A BUSINESS-FRIENDLY WAY
It is of great importance that the Services Directive is transposed completely, in a targeted way and with high quality in all member states.
Regulated professions
With regard to regulated professions it must be kept in mind that this sector ensures a particularly high quality of services due to a targeted education of the service providers. This benefits the consumers since they can rely on the high quality of the service (preventive consumer protection). In these cases the requirement to have a specific qualification in order to start a business is not to be seen as an obstacle to the functioning of the internal market. It rather ensures the necessary skills of the supplier as well as the quality and safety of the service. That is why member states should not be urged to reduce the number of regulated professions.
Implementation of article 20 (2) of the Services Directive (non-discrimination)
Businesses are usually not interested in rejecting customers or in treating them differently without any objective reason. However, from the perspective of the service provider, certain circumstances make unequal treatment or supply restrictions necessary. For instance, businesses often face different legal provisions in the different member states. Especially for SMEs it is not possible to comply with 28 different legal systems. Hence, unilateral restrictions of cross-border deliveries can be reasonable. Also, linguistic barriers as well as different transport and delivery costs can be a reason for restrictions.
As a general rule, it is up to the service provider to decide with whom he wants to do business. Article 20 (2) of the Services Directive prohibits discrimination and reads as follows:
Member States shall ensure that the general conditions of access to a service, which are made available to the public at large by the provider, do not contain discriminatory provisions relating to the nationality or place of residence of the recipient, but without precluding the possibility of providing for differences in the conditions of access where those differences are directly justified by objective criteria.
Different legal framework conditions, for instance, are objective criteria. Thus, businesses cannot be obliged to provide their services in other member states.
Hence, Article 20 (2) of the Service Directive does not preclude different admission requirements, which are justified by objective criteria. This provision certainly does not create an obligation for service providers to enter into a contract.
It is crucial to regard the matter not exclusively from the recipient’s perspective. The perspective of the service provider must be considered as well. What might look like an unjustified discrimination from the recipient’s perspective might look completely different in the situation of the service provider. It should be determined case-by-case if unequal treatment of recipients is justified by objective criteria.
7 Points of single contact
Points of single contact (PSC) are an essential element of the Services Directive. A PSC is an official body that centrally provides information for businesses on all important aspects of the Services Directive. Several aspects that are closely related to the provision of services are not covered by the directive (e.g. posting of workers, tax issues, social security provisions, professional qualifications). These aspects should nevertheless be included in the information service of the PSC in order to provide one-stop-shops with real added value. Furthermore, it would be important to provide the information at least in English in addition to the national language.
4.
PROVIDE BETTER INFORMATION FOR SMES IN A MORE ACESSIBLE WAY
THROUGH THE ENTERPRISE EUROPE NETWORK
The EU-institutions provide extensive online-information on the internal market. However, the way it is being presented is often rather confusing. It is difficult for entrepreneurs to find and understand the relevant information. The Enterprise Europe Network as an SME-oriented advice and information service for all EU-related matters should be reinforced and promoted. It should also be used more actively for the targeted distribution of important information for businesses. SMEs can rely on practical and tailored support from the Enterprise Europe Network.
We would welcome a further deepening of the cooperation between SOLVIT and the Enterprise Europe Network in the member states. This would create synergies both at EU and national levels and should be promoted by the European Commission.
5.
RAPIDLY REMEDY INFRINGEMENTS OF THE INTERNAL MARKET RULES AND
STRENGTHEN SOLVIT
Infringements of internal market legislation have to be remedied quickly, efficiently and in a non-bureaucratic way. It is essential to accelerate the procedures, to increase transparency and to reduce red tape within the different complaint mechanisms in the internal market.
Strengthen SOLVIT as the problem-solving mechanism for businesses
From the outset SOLVIT has proven to be an efficient problem-solving mechanism for Europe’s businesses in case of unjustified internal market barriers created by authorities. In order to strengthen SOLVIT the Commission should follow up well-grounded but unsuccessful SOLVIT complaints through accelerated infringement procedures.
Granting Associated SOLVIT partners (e.g. Enterprise Europe Network partners) access to the SOLVIT data-base would make SOLVIT an even more efficient tool as it ensures rapid help for businesses that struggle with barriers in the internal market.
8 SOLVIT is also getting increasingly known among businesses. A stronger cooperation between SOLVIT and the Enterprise Europe Network would have a multiplying effect for both and would positively affect the services provided to European businesses on EU and national levels.
Involve SOLVIT-Centers and Enterprise Europe Network partners in the EU pilot
Sometimes SOLVIT-cases are closed during the proceedings because the European Commission initiates an EU pilot against the concerned member state. In these cases the Commission should give information on the EU pilot to the concerned SOLVIT-Center and also to the Associated SOLVIT partner involved that assists the company during SOLVIT proceedings.
Integrate SOLVIT in the Secretariat-General of the European Commission
When a SOLVIT case cannot be solved, European SMEs need a fast, efficient and qualified reaction by the Commission. Following some unsolved SOLVIT cases, the Commission initiates EU-pilots or infringement procedures. In order to make best use of synergies and share knowledge and information it would be useful to integrate SOLVIT in the Secretariat-General of the Commission and thus pool CHAP, SOLVIT and the EU pilot in one place. This would also enhance professional expertise within the Commission and facilitate the exchange of knowledge in the field of internal market legislation if lawyers working on “informal” and “formal” complaint procedures sit together in one department.
Strengthen the notification procedure according to Directive 98/34/EC
The information procedure in the field of standards and technical regulations according to directive 98/34/EC should be strengthened in the same way as SOLVIT. The preventive character and the SME-friendly design of the procedure in accordance with this directive can be considered as best practice. However, the follow-up by the Commission in cases where the concerned member state does not take detailed opinions into account, is a weak spot. In order to remedy this, the Commission should initiate accelerated infringement procedures in these cases.
6.
STANDARDISATION HAS TO BENEFIT COMPANIES – ENABLE SME
PARTICIPATION IN EUROPEAN STANDARDISATION
The “New Approach” entails a high factual significance of standards and requires that SMEs are involved in the European standardisation process. SMEs must be able to access information about standards in an uncomplicated, transparent and affordable way.
Standards contribute to the competitiveness of companies and create growth potential for the economy. They support technology transfer and show innovation and performance. It has to be mentioned that standardisation is based on a voluntary cooperation of stakeholders. The Commission also acknowledges this principle. However, microbusinesses do not have enough financial, organisational and human resources to participate in the standardisation process in order to acquire all relevant norms and keep them up to date.
9 Against this background, we urge for a simplified access to norms for SMEs and for the involvement of SMEs in the standardisation process. In addition, a system for impact assessments involving relevant stakeholders has to be introduced. This would also meet the efforts of the Commission with respect to administrative simplification.
In no event should standards be developed in order to pursue political objectives,
tackle social challenges,
constitute non-tariff barriers to trade.
The standardisation process needs to reflect a specific demand and economic efficiency in order to serve its purpose.
7.
SME INTERNATIONALISATION: AVOID DUPLICATION AND ENSURE ADDED
VALUE FOR COMPANIES
The increase in international trade in goods, services and investments is not only good for growth, economy, employment and consumers, but in particular also for SMEs since it facilitates their access to global markets.
International trade should be promoted by reducing unjustified trade barriers, strengthening common trade rules, enhancing legal certainty and predictability for exporters, importers, service providers and investors, and by strengthening economic relations with strategically important partners.
Through what is called “European Economic Diplomacy” the EU is planning to intervene increasingly in the field of export promotion in the member states although there is no EU competence in this area. For example, the EU creates EU-Business Centers or organises trade missions (so-called “missions for growth”). It has to be made sure that there is no duplication of existing services, instruments and networks and that the activities are based on what companies need.
In previous activities these principles have not always been respected. There has to be a clear added value of EU-activities. This would be possible in the areas of market access or common representation of EU interests in third countries.
By assisting only individual companies, this added value cannot be achieved. A successful internationalisation strategy of companies and especially SMEs is a process that starts locally, i.e. close to the company, and that needs to be easy to understand. Assistance by chambers of commerce and the Enterprise Europe Network partners in the home country is the best support for SMEs. Hence, bureaucratic initiatives on EU level are not helpful.
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8.
FIND THE RIGHT BALANCE BETWEEN COMPANIES’ INTERESTS AND CONSUMER
PROTECTION
Ensure a fair balance between consumers’ and companies’ interests
The standards of consumer protection on European level have already reached a very high level. For any future legislation it is therefore crucial to balance consumers’ and companies’ interests. Unfortunately, in recent consumer protection legislation (Consumer rights directive and package travel directive) this balance has not been found.
Make the Think Small First Principle a reality in the legislative process
During the legislative process in the field of consumer protection the Small Business Act is, unfortunately, in reality still a mere lip service. The great majority of companies in Europe are SMEs. It is therefore imperative that all future measures in the area of consumer protection legislation are consistent with the principles of the Small Business Act. This would mean to eliminate and avoid unnecessary burden for SMEs.
Take “the responsible consumer” as guiding principle for law-making
The obligation to inform consumers about legal aspects of business operations must not be increasingly put on the companies. In this context the concept of the “responsible consumer”, as described by the European Court of Justice, must be used as benchmark in law-making. Moreover, existing information requirements should be reviewed to see if they are fit for purpose. Excessive information requirements for companies contradict the commitment to cut red tape and do not benefit anyone.
Give companies scope for competition
Too strict rules that limit the freedom of contract severely restrict the companies’ scope of action. A company must have the possibility to voluntarily grant better conditions than the legally required minimum. For example, the longer the mandatory warranty period is, the more unlikely it gets that companies are able to grant longer periods as marketing instrument in the open market competition.
This is why we call for a very careful approach to the questions if legal minimum requirements are at all necessary, in which areas they could be necessary and what they should look like (e.g. duration of warranty period). Every legal requirement, also in the field of consumer protection, needs to be based on an objective justification why it seems necessary to deviate from the freedom of contract. Also with respect to the Charter of Fundamental Rights (freedom to conduct a business!) one must be careful when restricting this freedom.
No mandatory “Made in” labelling
The topic “made in” was brought up again in the context of the product safety package of the Commission. Mandatory origin labelling is not useful, it is expensive, it creates unnecessary administrative burden, and does not improve competitiveness.
11 Moreover, companies already have the possibility to label their products with an indication of origin on a voluntary basis. Furthermore, “made in”-labelling does not contribute to a better protection against counterfeiting. Origin labels are not harder to imitate than the brand labels themselves.
9.
ACCESS TO FINANCE AND THE CAPITAL MARKET
Companies need a broad range of financing opportunities. Alternative ways of financing that can also contribute to innovation and thus foster a company’s competitiveness, need to be expanded.
EU prospectus directive: introduce simplifications for SMEs
WKÖ welcomes the capital markets union. As a first step simplifications for SMEs should be introduced into the prospectus directive (e.g. rules concerning a simplified prospectus, increase of the threshold leading to a mandatory prospectus). Since loan financing remains the most important source of external financing for SMEs, it should be avoided to overburden banks with regulatory requirements so as to safeguard their ability to issue loans.
Expansion of guarantees for SMEs
Under Basel III loan financing still remains the most important external source of financing for local companies. WKÖ welcomes the expansion of financial instruments during the financial period 2014 – 2020 including the funds provided for in the investment package (€ 5 billion coming from EFSI that should trigger investments of € 75 billion by SMEs). A swift and non-bureaucratic implementation is now of utmost importance.
Crowd investing and Crowdfunding
WKÖ welcomes considerations concerning the creation of a European legal framework for crowdfunding. The EU should aim at creating rules that support the development of the crowdfunding market as a new funding source and simultaneously provide for the necessary protection of capital-seeking companies and investors. It should also be kept in mind that the regulatory framework for crowdfunding platforms has to be appropriate for microenterprises.
