Wednesday

21st Oct 2020

Internal market to be the EU's new integration project

  • A digital union, energy union and capital markets union are all in the offing - plus stronger implementation rules (Photo: Tambako the Jaguar)

The European Commission is planning much stronger emphasis on integrating the EU's internal market in a bid to get member states focussing on practical issues after years of squabbling over how to address the economic crisis.

“We need something which is common for everybody after being in crisis management mode for seven to eight years now. I feel very strongly that this could be very good for the European project,” said Jyrki Katainen, vice-president of the European Commission.

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  • Jyrki Katainen hopes that a pragmatic focus on internal market integration will heal the political wounds of the economic crisis (Photo: European Parliament)

In the coming months plans for an energy union, a capital markets union and a digital union will be unveiled. There will also be a single market strategy focusing on how member states are implementing laws.

"I do hope that this commission will be remember for internal market development. There is a economic need but also a political need," he said.

Speaking to a group of journalists, the Finnish commissioner, in charge of growth and jobs, indicated this could heal the divisions that have arisen over the eurozone crisis, noting there is “no border line between south and north when it comes to internal market-related issues”.

Katainen was at the forefront of this division in his past job as Finnish prime minister. His goverment took a hard line in its approach to Greece's second bailout, something which eventually resulted in Helsinki demanding collateral for its loans.

More generally, the EU has seen northern countries such as Germany and the Netherlands push for deep spending cuts in bailout countries such as Greece, Portugal and Cyprus. The ideological split has been mirrored by deep differences in unemployment and poverty rates, which are generally much higher in southern member states.

Katainen points to the political element of harmonising rules and standards across a series of sectors to make it easier for people and firms to more freely consume or do business.

"This internal market exercise is extremely important because it will be the first time in many years where we all concentrate on deepening European integration."

However, it is being touted as more than integration for integration’s sake.

The Finnish commissioner is in charge of 'selling' his institution's flagship €315 billion growth plan to investors around the EU, but he notes that over the long term "the biggest impact on growth will come from the internal market side".

This focus will not only be about new proposals to break down barriers to the EU’s single market, but also clamping down on member states who don’t implement already-agreed rules.

"We are planning to get some stronger tools to monitor and to push member states to implement all internal market legislation," said Katainen.

"We should be as tough with implementation of internal market rules as we have been with fiscal policy rules," he added.

At the moment, the European Commission regularly publishes a list of member states which have failed to transpose EU laws, but the monthly exercise has little effect.

EU fiscal rules, tightened since the economic crisis, consist of a comprehensive monitoring and continuous assessment of governments attempts to stick to the deficit and debt rules underpinning the euro.

UK debate

Meanwhile, deepening the internal market could have other practical spin-offs, for instance, in relation to the UK’s domestic debate on the EU.

The country is due to have a membership referendum in 2017 if the Conservatives get back into power after the May election.

And London, traditionally one of the better pupils when it comes to putting in place EU laws, tends to frame its relation to the EU in terms of what the single market can bring the country.

Some voices in the commission believe that showing results in internal market integration might take some of the heat out of the UK’s domestic EU debate - largely focussed on immigration - and give politicians something concrete on which to centre discussion.

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