Future of the EU Single Market

Article by Illiana Ivanova, MEP for the Parliament magazine EP Today

Europe is suffering deeply from the severe economic crisis. We have always underlined unity in diversity as one of the core values of European integration. The EU internal market has always been respected as one of the best achievements of European integration. At the same time, we have never fully used effectively its potential. And that shall definitely be our priority in coping with the crisis.

On 9 May 2010 Prof. Mario Monti has presented a report to the President of the European Commission on "A New Strategy for the Single Market - at the Service of Europe's Economy and Society". At the same time the Parliament voted on 20 May 2010 a report on delivering a single market to consumers and citizens. Both documents address the future of the single market policy, its strengthening and the full realization of its potential.

We, the politicians, whether on European or national level, share common understanding that we need a new impetus for the development of the internal market. The core principles of existence of the European Union and specifically the single market are the four freedoms of movement - of goods, services, persons and capital. The free movement of persons and particularly workers is in the Treaties since 1957. However, even today, in 2010 it is not the case with citizens of the new member states. They do not have the right to work freely, to apply for a job and be employed. This is in contradiction not only with the principle of free movement, but also with the principle of non-discrimination.

Currently, ten member states impose restrictions that do not allow EU citizens from Bulgaria and Romania to work freely within their national labour market.

Starting at the end of last year, I have initiated a campaign against the restrictions on workers in the EU, because I believe that there should be equality and no double standards in the Union, regardless of the country of origin, and because we, as European citizens, are stronger as one whole and have common goals for the prosperity of the single market.

The right of EU citizens to travel freely through other member states of the EU, to start work and reside there with their family members is essential. Having restrictive measures in place, impacts the smooth functioning of the internal market and the EU idea as a whole.

Over three years ago when Bulgaria and Romania joined the EU, their accession treaties included transitional provisions on free movement of workers. At the end of the first stage of the whole restriction period the European Commission is required to prepare a report to enable the Council to review the first stage of the transitional provisions.

At the end of 2008 the Commission presented a report on the impact of free movement of workers in the context of EU enlargement[1]. The main goal of the document was to serve as a basis for a review by Council of the first two years of the transitional arrangements for the free movement of workers in accordance with paragraph 3 of Annexes VI and VII of the 2005 Bulgaria and Romania Accession Treaty.

According to the Commission workers from Bulgaria, Romania and the EU-10 Member States have helped to meet higher demand for labour in the receiving countries and have thus made a significant contribution to sustained economic growth. Evidence at hand suggests that post enlargement intra-EU mobility has not led - and is unlikely to lead - to serious labour market disturbances. In addition, the volume and direction of mobility flows are driven rather by general labour supply and demand and other factors than by restrictions on labour market access. On top of that, restrictions may delay labour market adjustments and even exacerbate the incidence of undeclared work.

Even after these strong and categorical conclusions, some Member States decided to continue implying labour restrictions. The Commission recommended to national governments to consider whether they need to continue applying restrictions in the light of the situation of their labour markets. In light of latest economic developments and their possible impact on the labour market situation, experience shows that cross-border labour mobility tends to be self- regulating and decline in times of economic downturns. National governments mainly took into account national political considerations when deciding whether or not to lift the restrictions. Ten Member States continued their restrictive measures for the second period - till 31 December 2011. And this would be definitely a defeat for European integration, as the founding fathers of the EU would have seen it.

Those restrictions have certainly contributed to what Prof. Monti describes in the report for the new strategy for the internal market - "Surveys show that attitudes towards the single market today range from lack of interest to open rejection. Much of the disillusionment however comes from frustration with remaining barriers or the feeling of disempowerment that citizens experience when dealing with the single market.". The report also concludes that closed national labour markets or job sectors shielded from competition, will deliver neither greater employment nor faster growth. Labour mobility is also the key to absorb asymmetric shocks and respond to local restructuring processes within the euroarea, where exchange rate and monetary policy are tools no longer available to national authorities. Yet, Europe still lacks the labour mobility it needs to enhance labour markets efficiency and to ensure a correct functioning of its monetary union.

After being elected as a member of the European Parliament, I have undertaken a number of measures and steps to enable the rights of citizens of the new member states and ensure that no direct or indirect discrimination against EU employees and their families based on their country of citizenship is applied throughout the Union. Many EU citizens complain to me about restrictive measures, heavy and costly administrative procedures they need to pass applying for a job. This should not be allowed in a Union of solidarity, as we claim the EU to be.

Even Bulgarian students in the Netherlands, who have officially the right to work for ten hours per week, in order to pay for their education, also face difficulties, the university statute is not applied and they need to apply for an employment permit. We, as politicians, apply restriction towards the education of our children, of the forthcoming generations, and that would lead to no positive results. We have to put an end sooner, rather than later!

In March 2010 I sent a written question[2] to the European Commission asking what the political will of the new College is and whether the problem with the restrictions and the negative economic effects would be addressed. Commissioner Andor on behalf of the Commission has assured me that as a matter of principle, the Commission is in favour of the full application of the four freedoms, including freedom of movement for workers throughout the EU. The Commission will also continue to recommend that those Member States that continue to maintain restrictions on labour-market access review their position in the light of above mentioned report of November 2008, which found that the overall impact of post-enlargement mobility has been positive.

Last, but not least, on 20 May 2010 the European Parliament voted in Strasbourg a report on Delivering a single market to consumers and citizens. This political resolution aims at outlining the leading guidelines for the future of the single market. Members of the European Parliament have underlined that certain labour restrictions for workers from the new Member States still exist within the single market; and call on Member States, taking into account all the positive and negative effects of opening up of national markets, to consider removing the existing restrictions. Even MEPs from countries that still apply restrictions have voted for this text. Because this should be the internal market - with no internal frontiers.

The employment restrictions are damaging, especially in times of economic crisis. The unequal treatment of the new member states deepens the division in the European Union and prevents the effective utilization of all possibilities for economic recovery of Europe. As the report of Prof. Monti states - with the restrictions we breach the image of the EU among its citizens.

One of the main challenges for the EU has always been the citizens' perceptions of the Union, the EU image among Europeans. Thus, labour restrictions towards citizens of the new Member States are generally against fundamental European values as freedom of movement, non-discrimination, equal rights and brining the EU closer to its citizens.

Today, more than ever, we need the support of EU citizens for going ahead with European integration. And we are still awaiting for the ten member states to consider removing the labour restrictions towards Bulgarian and Romanian workers as soon as possible, in the interest of the EU itself, in the interest of all EU citizens.