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17.1.1.  The single market and EU's industrial policy

    Since the common market was not fully operational, until 1993, because of technical barriers to trade [see section 6.1], it could not have as significant an impact on industrial structures as the founding fathers of the EEC had hoped. The industrial sector certainly benefited from customs union, without which the development of the Member States' industries would probably not have been the same. But the impact of the common market was principally felt in sectors producing major consumer goods, such as the motor vehicle and domestic electrical appliances sectors, and very little on high technology industries, like information technologies and telecommunications, which were dominated by protected public enterprises.

    In the absence of a legal basis for a real industrial policy, European institutions limited themselves to examine industrial developments without being able to influence them. They thus set in place coordinated statistical instruments to measure investment in industry, the business cycle in industry and small craft industries and industrial activity [Directive 72/221 and EEA Agreement]. Later on, those industrial statistical instruments were completed with annual surveys of industrial production [Regulation 3924/91], of the labour costs in industry and the services sector [Regulation 3949/92], with structural business statistics [Regulation 295/2008, last amended by Regulation 446/2014] and with short-term statistics [Regulation 1165/98].

    The completion of the single European market, topped by the single currency, presents businesses with an opportunity to benefit from economies of scale, to cut their administrative and financial costs, to gain easier access to public procurement in other Member States and to cooperate more closely with each other across borders. Thus, the single market represents an essential base for business to look, think and act strategically beyond national borders. Certainly, the tendency of multinational enterprises to acquire a dominant position in the single market under the guise of achieving a sufficient critical size must be monitored by the competition authorities, [see section 15.4.2.], allowing, however, European companies to pursue business strategies, which may safeguard their competitiveness at world level,.

    Several objectives of the European industrial policy were attained through the completion of the single market. Thus, since the beginning of the1990s, European standardisation provides manufacturers with technical specifications recognised as giving a presumption of conformity to the essential requirements of European directives [see section 6.2.3]. European standards are not only required for the purpose of removing technical barriers to trade; increasingly they are also becoming a key element for the promotion of industrial competitiveness by lowering costs for producers and enabling the emergence of new markets, particularly for developing new technologies. At the same time, greater standardisation of products places a premium on product innovation, manufacturing excellence, design and reliability rather than on the more traditional factors of competitiveness like proximity to markets, distribution systems and customer loyalty.

    Very important for European industrial competitiveness is also public procurement, which is now opened up thanks to the legislation of the single market. Its importance for industry is threefold. Firstly, the vast size of public procurement - 16% of GDP - means that access to the public markets is very important for all firms. Secondly, public procurement may enhance technological capability by increasing the marketable demand of high technology products. Thirdly, public procurement being concentrated on a relatively small group of industries, these industries need a competitive market for public procurement in order to develop the necessary products and skills to be successful internationally.

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    Your roadmap in the maze of the European Union.

    Based on the book of Nicholas Moussis:
    Access to European Union law, economics, policies

    Translated into 14 languages

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