EU Commission puts Single Market Act II forward to encourage growth
The proposal was made while elements of its predecessor are still being discussed in the European Parliament. The act would make cross-border business simpler within the EU.
If brought into effect, the act would open up domestic railway transport and energy provision to competition from across all 27 member states. It also proposes to simplify e-commerce, modernise bankruptcy proceedings and improve high-speed broadband internet coverage.
The European Parliament voted the original Single Market Act into law in April 2011. It was passed as a response to the European economic crisis. The European Commission’s proposal for a second act comes while unemployment in Europe rose for the 16th successive month.
Proposals to open up domestic energy and transport markets to competition across Europe will be welcomed by consumers. The commission estimates the EU could save €13 billion if all consumers adopted the most cost-efficient energy tariff.
However, there is a danger that weaker economies would see their domestic industries overrun by better funded companies from stronger economies within the EU.
Transport and energy companies from stronger economies would have the cash reserves to absorb the cost of out-competing those from weaker economies. In the long run, this could lead to a handful of countries holding a monopoly on energy and transport.
Whilst consumers in weaker countries would benefit from cheaper prices in the short term, the long term effects might not be so welcome. It is likely to mean fewer jobs in these large industries for citizens of the weaker economies.