Some basic freedoms’ aspects in the EU’s internal market

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Membership in the EU means accepting “four basic freedoms of movement”: people, capital, goods, establishing and providing services. They are supposed to cope with the EU-wide main values: representative democracy, equality, rule of law and human rights. Besides they are serving as a safeguard for the European competitiveness in the world.

Single market’s “deeper program”

In the EU perspectives in integration process, the single market performs the following main functions: a) guaranteeing the success of the EU’s green and digital transitions, b) defining the EU’s new industrial strategy, and c) driving the European competitiveness, growth, post-pandemic recovery and resilience.

The EU institutions adopted the single market program for 2021-27 with the following main objectives: – increasing single market’s effectiveness, – supporting the EU business and SMEs competitiveness, – facilitating effective development of European standards, – empowering and protecting consumers, – ensuring sustainable and safe food chain, – promoting healthy existence of people, vegetation/plants and supporting animal welfare, -as well as establish a EU-wide high-quality statistics. The new program is consolidating into one political direction a number of activities that were previously (in view of more efficiency) financed separately; the new internal market program’s budget reached over €4.2 billion.

More on “deeper program” in: https://www.consilium.europa.eu/en/policies/deeper-single-market/

Open boarders: dark side

The single market is one of the EU’s greatest achievements. However, recently the internal mobility has had a “dark side,” according to former Italian PM Enrico Letta: the brain drain from places like Romania, Poland, Portugal and Italy toward other European countries greatly damaged the EU-wide internal/single market’s concept.

Lately, the Belgian and Spanish rotating presidencies of the Council of the EU tasked the member states’ leaders with the ideas of possible reforming the single market and tackling the brain drain, which is becoming a top priority.

Of course, citizens have “the freedom to stay home”, but according to the EU basic law and due to the single market, they have acquired a freedom of movement. Quite rarely politicians are “combining” these two “freedoms”: i.e. freedom to move and “freedom to stay”.

Divisions in society: “somewhere” vs. “anywheres”

Some say that modern societies are divided between the “anywheres”, these are the people that “value self-expression and individuality over group’s ties”; usually these are well-educated and cosmopolitans, working in the knowledge economy.

On another side of the spectrum, as the British journalist David Goodhart hypothesized recently, are the “free-wheeling citizens”, who often move away from their home country for work other places, so-called “somewheres”. They represent a group of citizens that value “group attachments, familiarity and security”; they tend to live in, or close to, places they were born in; their jobs tend to be attached to the physical world, and they have a strong sense of belonging to some place.

Recent economic trends have favored the anywheres over the somewheres: for example, through the digitization of work and the rise of the remote economy. The divide between these two groups is deep and affects how they work, who they trust, and what they value: “they continue to be at odds, and will clash again”, D. Goodhart concluded. However, the anywheres are usually characterized as more liberally minded and progressive than the somewheres.

Source: https://memod.com/jashdholani/the-hidden-crack-behind-our-polarized-world-3339

British economist Paul Collier argued in his book, published by Oxford University Press, that certain governments welcome emigration as a means of getting rid of some of the social classes they believe could strengthen their opposition. It is about the way migration affects migrants as well as the countries that send and receive the migrants, and the implications this has for development economics and the quest to end poverty. Collier focuses on the challenges posed by the nexus of immigration and multiculturalism; he also claims that brain drain is one of the main, often overlooked, drawbacks of migration.

Reference to: https://en.wikipedia.org/wiki/Exodus:_How_Migration_Is_Changing_Our_World

However, Collier argues that Western immigration policy has been driven not by reason, but by emotional responses to postcolonial Western guilt “while stifling consideration of wider problems of global poverty.”

He meant it was likely that some politicians in the Eastern Europe (like Jarosław Kaczyński in Poland) had not been particularly disappointed to see their countries’ anywheres packing their bags and leaving for Western states.

More in: Collier P. Exodus: How Migration Is Changing Our World. -2013, Oxford University Press. ISBN 978-0195398656.

Human capital

Probably, the most difficult issue is that of retaining human capital in the EU member states. Having the freedom to stay in one’s home country is a key consideration for some politicians: while it is clear that mobility is a “way to give opportunities” it’s also weakening some regions and representing a problem of human capital.

Thus, the problem of mobility could be “the dark side of mobility”; as to the details of this “freedom to stay”, the main point is that of rethinking the EU state aid policy. The layer has become a hot topic in Europe, given the fact that lately, Germany and France have been responsible for the lion’s share of the Commission-approved subsidies to companies. And the subsidies are huge: the total amount of the EU state aid authorizations in the last few years almost equals to the US administration’s $738 billion Inflation Reduction Act. Italian politicians argue that it is “a really huge demonstration” that state aid policy “has to be at the very core of the debate at the European level”.

Some latest figures show that as much as €760 billion in state aid was approved under the Temporary Crisis and Transition Framework (or based on its principles) by the end of 2023. In the so-called “notified state aid”, Germany is responsible for 47.2 percent, France 22.6 percent and Italy 7.7 percent.

On another side, there is a search for a “new way” as the EU cannot continue its exceptionally high amount of state aid, which was brought in to fight the pandemic and impacts of Russia’s war in Ukraine. Some think that the state aid is an exception, and it must remain so; for example the member states need a EU-wide industrial policy, not a national fragmentation. At the same time, there is no way of coming back to pre-pandemic governance in the EU institutions and in the states (including financial issues); true, there should be some new methods and means…

For example, Jacques Delors, the founding father of the single market mentioned (before he died in 2022) that when he launched the single market, he also launched the cohesion policy (a program of convergence and solidarity among less developed EU states), to be an integral part of European competitiveness.

However, the waves of far-right movements in some member states often cope with the Euro-skeptic’s far-right parties; in such a liaison they are expected to make big gains in June-2024 EU Parliament election. Thus, former Italian PM Enrico Letta in his “big fear” once said that the ballot will become “a sum of national debates in a frame of the European elections”, but it is in reality, a sequence of national domestic polls”.

More on the EU future in: https://futurium.ec.europa.eu/en/about-futurium

Single Market: 30 years

Celebrating the 30th anniversary of the single market, the Commission issued in 2023 the report which confirmed that the single market remained a key tool to address Europe’s current challenges and highlighted the importance of continuously improving its functioning, as well as highlighting its impact in increased added value for the EU’s economy.

The report included the following key findings of three decades of development:

= A strong Single Market underpins Europe’s ability to tackle key challenges. The report focuses the market’s ability to leverage its power in ensuring the availability of critical goods, services, skills and capital needed for Europe’s twin transitions. However, it finds that progress is needed in boosting the resilience of supply chains, addressing strategic dependencies, especially for critical raw materials, improving integration in the services market, and ensuring Europe has the technologies and skills to tackle these challenges. The report provides additional evidence on results achieved so far in terms of competitiveness, trade, economic resilience and twin transitions, pointing to areas for possible improvements; the latter include, e.g. reducing barriers to exercising EU-wide professions and/or recognizing professional qualifications, improving public and private investments, supporting SMEs and pursuing national efforts in twin transition.

= Highlighting strong potential of digital tools and data to improve the single market’s governance. It underlined some new approaches, such as better use of digital technology and e-government solutions (like the Single Digital Gateway and the Once Only Technical System, OOTS), which would lead to a better trust among member states’ authorities and reduce the burden for businesses and administrations.

= Single market brings growing added value to the EU-wide economy: the report assess the benefits and increased trade among the member states enabled by the Single Market since its creation. It specifically shows growing post-pandemic trade integration; thus, e.g. in mid-2022, trade within the EU block represented 60 percent of the total European overall trade.

= Businesses benefit from better enforcement of rules and general conditions, but difficulties remain. Thus, the report concludes that the implementation and enforcement of single market rules are improving: it is reflected in fewer infringement proceedings against the states in 2021, a first in 4 years. The report also shows better use and application of several essential market tools like the Internal Market Information System, the Single Market Transparency Directive, as well as increased use of the SOLVIT network, etc. They all help to prevent or remove obstacles in the single market: e.g. businesses across most states perceived regulatory burdens to have decreased in 2021 but face increasingly issues around late payments by public authorities, especially due to the post-pandemic’s impact.

References to: https://ec.europa.eu/commission/presscorner/detail/en/IP_23_466

 

 

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