Removing obstacles to single market success

The European Union proposes to complete the Single Market by 1 January 1998. But when European Commissioner Van Miert met Spanish telecommunications minister Salgado in Brussels, they failed to agree a date when the Spanish telecommunications market will be open to Europe-wide competition.

Spain wants its national telephone company to compete in the EU, of course, but is reluctant to see European telephone companies operating in Spain.

An open market in telecoms and the new information industries is worth over 300bn ECU a year and is growing by 7% a year. Yet UK telecoms companies are denied the right to sell their services in countries such as Spain.

Even a partially complete single market has been one of the great success stories of the EU. Opening a market of 370 million people and 16 million enterprises is no mean achievement, but there are two problems.

The first is that many of the directives adopted in the single market programme are not being properly enforced. Some have not even been transposed into national law. The second is that barriers to free competition remain, particularly in areas where UK business is strong. But the completion of the single market is crucial to UK firms and UK jobs.

The single market has performed worst in areas which are crucial to this country, such as biotechnology and public procurement.

There is no open market in electricity or gas. Nor is the financial services market entirely open. The rules are in place but they are not properly enforced. There are major loopholes and discrimination against providers.

There is no single market for pension fund management or insurance. And there is no open market for goods and services bought by the public sector.

Across the EU, public procurement accounts for around 15% of gross domestic product, but only 2% of the contracts are awarded beyond national boundaries. Again, legislation is in place but the rules are not enforced.

Labour has identified road blocks to completing the single market. They are the persistence of technical barriers to trade; over-bureaucratic application within member states of approved directives; failure of the European Council to agree on enabling directives; and the need to strengthen competition policy.

Labour wants to set a deadline of June 1998 for completing the single market and give new impetus to the most important aspect of the Union.

This means that between now and the General Election we must carry the argument to our European partners, so that much of the groundwork will be laid prior to the UK assuming the presidency of the Union on 1 January 1998.

Stuart Bell is the Labour MP for Middlesbrough.