Another area that arises from the harmonisation of standards is Custom and Excise duties. These would also have to be dealt with given current circumstances. Agreed convergence measures consequently became enforced although major price differentials still exist between countries making the ‘booze cruise’ a favourable reality where consumers can exploit the lower duties that exist outside the UK on for example alcohol. Additionally, The Commission will propose a Directive on services before the end of 2003, based on mutual recognition, administrative co-operation, harmonisation and encouraging European codes of conduct in service industries.The Strategy also emphasises the need to complete the Financial Services Action Plan and for more progress on creating an Internal Market in retail financial services. Although not fully achieved by the deadline, most of the 1992 target had been met. Over 90 % of the legislative projects listed in the 1985 White Paper had been adopted, largely by using the majority rule. Trade, is another feature of the programme.

The SEM was designed to stimulate trade growth, generate beneficial results in terms of employment, and other related performance measures.The Cecchini report published in 1988, carried out on behalf of the commission summarises the costs of ‘non-Europe’. The report attempted to identify the potential gains of the single market.

Upon completion, approximately i?? 216 billion would have been generated. The removal of trade barriers would have meant huge savings. The report projected the following benefits. Regarding trade, the Single European Market appears to have stimulated EU trade both externally and within the community.2003 saw a disappointing outlook regarding employment, unemployment is forecast to increase to 8.

1% in the EU. Economic growth seems to be suffering with a disappointing growth performance rate of only 0. 8% although there is a more positive outlook for next year.

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A worsening of the general government position resulted in the general government deficit being 0. 2% lower than forecast at 2. 7% of GDP. Again the forecast for 2004 are very much favourable at the current time reducing to 2.

6%Further, the implications for business firms have been very varied. Small and medium sized enterprises are the backbone of the European Economy. On one hand, there have been very positive benefits for the small and medium sized businesses but, there have also been an escalation in the threats they face. Regulatory burdens arising from harmonised standards cause a potential threat for the SME’s. For most enterprises the most obvious impact of the SEM will probably be the implementation of EU social and employment legislation.The commission has addressed many of the threats faced by SME’s and introduced a manifesto hoping to initiate further expansion and create an optimal competitive environment to promote success, growth and cooperation.

Arising from this are new measures to simplify their administrative, tax and regulatory environments. Benefits for the individual business include: the mutual recognition of standards means that manufacturers are subject to fewer restrictions and thus sell their products all over the EU. The removal of barriers to intra-EU trade has allowed firms to operate unhindered in a wider Europe of around 376 million consumers.However, despite these gains businesses have been forced to challenge these threats to their operations and take action against the increased competition that now exists.

These smaller operations are potentially now more vulnerable to take-over bids from the larger powerhouses of Europe who favour the Single Market proposal. These smaller firms will now be faced with increased competition resulting in reductions in market share. Market entry will inevitably put pressure on profits and margins within established markets and prices will tend to promote a contraction in prices.

The removal of protectionist measures from external competition will increase the rate of business closures amongst the least efficient firms and sectors. Uneven enforcement of market rules and regulations combined with state aid may threaten the ability of smaller inefficient firms to compete in specific markets. Another characteristic that should arise from the programme is price convergence. Increased competitiveness and an open access market should inevitably result in the marketplace determining prices on similar commodities.Prices should realistically be harmonised converging to a common price level resulting in little or no price differentiation.

This currently however is not the case. The European Commission is currently working on a Strategy to make the Internal Market work better. This plan aims to build on the 2. 5 million jobs and i?? 877 billion of wealth it has already created since Europe’s frontiers were dismantled at the end of 1992.

Mutual recognition has resulted in a reduction in technical and regulatory barriers promoting and enhancing intra community trade.Single market liberalisation has resulted in keener price realisation for consumers and mutual recognition of qualifications has further enhanced the freedom of movement of workers. However, the removal of border controls has meant that measures have to be put into place in order to combat arising issues such as cross-border crime, drug trafficking and terrorism. It appears far to early to say whether the SEM has or has not been a success there has been success and there has been failure, although progress has been a slow process, the programme is in itself one of extensive.Although, as outlined above there still exist many policy areas where true integration has not been completed, over the last fifty years there has been significant progress with the integration process. The Commission has put in place a strategy to combat any remaining barriers along with operational problems that still exist and the interface between the SEM and the international trading system appears to have been a success for both the Union and its trading partners resulting in long term prosperous growth.Fiscal barriers on indirect taxation has been harmonised with the introduction of a standard VAT rate band.

There are still problematic areas to be dealt with within the SEM, removal of all internal barriers and the problem of indirect taxation. If the Community were to fully approximate indirect taxation, Britain for example, would be legally obliged to place VAT on items that currently incur not VAT, such as books, newspapers, clothes and food.The SEM is 40% larger than its US equivalent and 150% larger than the Japanese market yet the Community/Union still lags behind those markets in terms of employment and wealth creation. Progress remains slow and steady, although the programme has been a The SEM is 40% larger than its US equivalent and 150% larger than the Japanese market yet the Community/Union still lags behind those markets in terms of employment and wealth creation success; the reality is that the internal market may never be completed in terms of full economic and political integration.

The regulatory burden imposed on SMEs is gradually being removed. EU support for enterprise is gradually improving endeavouring to create a favourable environment for SME activity and providing services to support growth and maintain their flexibility thus enhancing the competitiveness of these smaller firms.