The 30th anniversary of the Single Market

The Single Market is not yet complete and serious challenges remain, as there are still several obstacles to, amongst others, the free movement of workers. In the coming year, it is essential to ensure that the Single Market really works for MET companies.

On 16 March 2023, the European Commission published a communication to summarise and take stock of 30 years of implementation of Single Market rules, alongside a communication on preserving its competitiveness post 2030. Ceemet welcomes this global perspective and will continue its discussions in order to constantly improve the Single Market.

On the basis of this overview, the EU recognised that “directives need to be properly transposed and applied on the ground, with particular attention to issues of unjustified ‘over-regulation’. Ceemet agrees with this position as “over-regulation” is one of the main problems facing businesses in the Single Market. It is crucial that policymakers find the right balance when regulating in order to ensure that legislation is fit for purpose.

The Posting of Workers Directive is one of the best examples in this respect. Recently, the European Commission has launched some very useful initiatives for our companies and their freedom to provide services and post workers abroad, such as the electronic declaration (e-declaration) to notify posted workers or the ESSPASS for mobile workers. Ceemet fully supports these initiatives as they will contribute to preserving the free movement of workers and the freedom to provide services. A patchwork of national regulations currently still makes these freedoms very difficult to exercise and leads to a disproportionate and unnecessary administrative burden. This is increasingly the case with regard to the (short-term) posting of workers providing services in the EU.

Sometimes, as in the case of electronic declaration, regulation can facilitate the implementation of the Single Market and is necessary to avoid a patchwork of national regulations. We must also ensure the correct transposition of European occupational safety and health regulations in the area of chemicals in order to guarantee the level playing field.

However, Ceemet warns against the effects of over-regulation at European level, which goes against the values of the Single Market. This is the case, for example, with the proposed Directive on Corporate Sustainability Due Diligence. This Directive will increase the administrative burden on European companies. The EU has a tendency to over-regulate, which puts our companies at a competitive disadvantage compared to companies from third countries. Ceemet agrees that the Single Market has supported the competitiveness of European companies, but notes that on the other hand legislation from the EU level also hinders competitiveness.

Greater consistency in regulation in this area will make it easier for businesses to operate within the Single Market.

Ceemet calls on EU policy makers to be realistic and proportionate in their regulations while ensuring the process of better regulation.

Ceemet welcomes and fully supports the objectives to “enforce existing Single Market rules and remove Member State-level barriers, in particular barriers to the cross-border provision of services, in the industrial ecosystems with the greatest economic integration potential … and continue to foster the green and digital dimensions of the Single Market as a source of innovation, growth and competitiveness” as highlighted in both communications.

European MET companies are key actors in the Single Market, as they do not only produce high-tech goods, but also provide services for these goods. Therefore, free and frictionless labour mobility within the Single Market is of vital importance.

The EU recognised that “the coordination of social security rules, regarding rights to pensions and healthcare when they live abroad, and rules on health and safety at work ensure fair competition and high standards for all, wherever they work” is one of the key of the success of the Single Market. However, the Social Security Coordination Regulation also causes unnecessary and excessive burden on companies and hinders labour mobility as the obligation of notifying every short trip abroad creates a significant amount of administrative burden on companies. The goal of tackling illegal employment and illegal postings will not be resolved by the prior notification of very short assignments abroad as these are not the subject of illegal postings.

Therefore, the rules regarding the notification of workers that are sent abroad for work related purposes need to be simplified in order to facilitate access to the Single Market. Exempting a limited number of days from this requirement is of main importance in order to avoid unnecessary red tape.

• Invest to preserve long-term competitiveness and create employment

The European Commission has also published a new Communication on the occasion of the 30th anniversary of the Single Market on the long-term competitiveness of the EU beyond 2030. It is the view of MET employers that a well-functioning Single Market will not only continue to provide the jobs and GDP growth we have become accustomed to, but it will also continue to promote innovation and entrepreneurship. Ceemet considers that employment and investment are the two major axes on which policymakers must focus in the future to preserve long-term competitiveness.

In recent years, in the face of several crises and the challenges imposed by digital and green transitions, the Single Market has had to adapt more and faster. It is therefore essential to stimulate economic growth, particularly in a globalised environment and market, notably through investment.

The Commission considers that private and public investment contributes to maintaining the competitiveness of businesses in the Single Market. It encourages “Member States to provide general tax incentives for research and innovation activities”. It also relies on the multiplication of public-private partnerships, support measures for R&D&I, including in the framework of Important Projects of Common European Interest (IPCEI) to reduce the risks associated with innovation.

For employers operating under market economy conditions, private investment is extremely important, but it must also be supported by public investment. Indeed, public investment is essential to ensure that businesses have access to the right services. For example, good access to broadband internet has been shown to boost business productivity. Further steps should be taken to increase and stimulate investment in Europe, in particular to support research and innovation. This also includes strengthening the IPCEI programmes to ensure a level playing field with other global competitors.

The EU and moreover the Member States should put in place the right framework condition for employment to flourish. Competitiveness can be gained through innovations. Those innovations, as well as the twin transition, can create new jobs while at the same time exacerbating skills shortages. A recent example is the appearance of Artificial Intelligence which has the possibility to create plenty of new employment opportunities in the MET industries. Moreover, if it is implemented wisely, AI has the potential to contribute to good working conditions and quality jobs for European workers as well as companies’ competitiveness.

The EU faces potential demographic challenges and skills shortages which become increasingly present and harder to manage. It is more and more urgent to upskill and reskill workers to keep the competitiveness of companies.

Ceemet and its members stand ready to pursue their work with the EU and national policymakers to contribute to improvements of the Single Market.