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Europaudvalget 2005-06
EUU Alm.del Bilag 409
Offentligt

11. september 2006

The Danish Government's reply to the Commission's public consulta-

tion on the future policy of the Internal Market

The Internal Market is one of the cornerstones of European integration

and has been an important factor in the EU's economical development.

Also in the years ahead the Internal Market will play a pivotal role in en-

suring that EU will be capable of tackling the challenges and opportuni-

ties stemming from globalisation. The Danish Government would there-

fore like to welcome the Commissions intention to launch a fundamental

review of the Internal Market to look at what more needs to be done and

how to further developing the Internal Market.

The Danish Government agrees overall with the priorities listed by the

Commission in its consultation document as well as with the Commis-

sions preliminary analysis of the Internal Market and the challenges it is

facing. Internal Market policies should result in more growth while at the

same time ensuring a high protection level for consumers, environment

and health. Although the Internal Market functions well in many aspects

it is however crucial that it continues to adapt to the changing circum-

stances not least in view of an enlarged EU as well as the effects caused

by globalisation. Overall it will be important to:

- focus on openness instead of national protectionism

- further developing a well-functioning Internal Market for services and

products

- promote simpler and better legislation including the reduction of

administrative burdens for European enterprises

- strengthening competition and further liberalisation of markets both

internally in the EU and towards external markets

The Danish Government does not believe that protecting and sheltering

our enterprises from external competition is the right way forward. In-

stead we must embrace the possibilities of globalisation by ensuring that

our markets are open and competitive both internally in the EU as well as

towards third countries. Globalisation should thus not only be one of the

priorities of the work on the Internal Market but be the horizontal theme

reflected across the board in the policies of the EU both when regulating

the Internal Market and when launching horizontal initiatives.

The EU is very dependent on global trade and open markets and therefore

it is necessary to ensure that the EU framework conditions facilitates

trade and not protectionism. We need more open markets where enter-

prises can enter and exit much more easily than it is the case today. Den-

mark would very much like to see a much stronger coupling between the

future Internal Market policy and the EU's trade policy. Therefore it is

especially important that the Internal Market regulation and thereby the

future Internal Market policy takes into account the question of openness

including EU's trade policy and the work in the WTO.

Eksp.nr. 273026

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Finally it will also be important to ensure consistency and coherence be-

tween the future policy on the Internal Market and other policy areas and

sectors. It is also important that the future policy links up with the re-

launched Lisbon strategy on Growth and Jobs. The Danish Government

urges the Commission to present a clear and very concrete plan on the fu-

ture work on the Internal Market. The plan should as well serve as a basis

for the future work of the Competitiveness Council.

Based on the above Denmark considers the following issues as being of

high importance for the future work on improving and further developing

the Internal Market and Denmark therefore urges the Commission to in-

clude them as priorities in the future policy on the Internal Market.

Fewer regulatory barriers to trade on a global scale

For European enterprises to compete on a global scale EU needs to de-

velop at least equal and preferably better framework conditions than

competitors established in third countries unless consumer, health and/or

environmental considerations call for stricter rules. If enterprises in the

EU Member States have to relate to a stricter regulatory framework that

competitors outside the EU it can lead to a weakening of the EU's com-

petitiveness.

EU should continue to be the driving force in the establishment of global

rules by not least maintaining and reinforcing its global rules. This should

be done in such a way that we continue to ensure a high protection level

for the environment, health and consumers.

Denmark supports the current approach with regulatory dialogues be-

tween the EU (the Commission) and important business partners such as

the US, China etc. Topics include discussions on competitive regional

standards that cause barriers to international trade and the possibility of

using ISO and IEC globally relevant standards, which to a minor extent

(e.g. due to climatic differences) can contain regional deviations.

The WTO/TBT Agreement includes the reference of international stand-

ards in national legislation. This is though only appropriate if the same

regulation exists in the EU as well as in our main trading countries.

Therefore it is important to establish cooperation between EU-lawmakers

and corresponding authorities in our main trading countries. A useful ap-

proach could be the setting up of common regulatory objectives either for

specific sectors or for specific regions depending on where common ob-

jectives are most needed. The EU's experiences in the regulatory field

such as the New Approach could be used in this regard.

Denmark supports the Commission's efforts, for example through the

Trade Barrier Regulation (TBR), to help European businesses overcome

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trade barriers while operating in markets outside the EU. To intensify the

Commission's efforts in this area it could be very useful to facilitate direct

cooperation between public authorities in Europe and our main trading

partners, for example the US. This should be done in such a way that it

enables the relevant authorities to get in direct contact with each other

when such obstacles to trade and/or unfair foreign trade practices occur

and thereby to ensure a swift and smooth case handling. Denmark would

therefore suggest to the Commission to set up a low cost problem-solving

mechanism which could facilitate such a direct point of contact. This

mechanism could be constructed in a similar fashion as the SOLVIT net-

work.

A stronger and intensified dialogue with the US could also be pursued

through regular consultations between the Commission and the US in the

preparatory legislative process to avoid legislation containing barriers to

trade.

Regulating the Internal Market

After about 20 years of implementing the Internal Market the legal

framework is now largely in place. There are however still areas which

needs to be further regulated, areas where regulation needs to be updated

and changed and areas which are still non-regulated. In this regard it is

important to keep in mind that many things have changed since the

launch of the Internal Market project such as the needs and demands of

consumers and businesses, interdependence between markets, globalisa-

tion and technological development.

It could therefore be very useful if the Commission's review of the Inter-

nal Market could include an evaluation of our Internal Market "toolbox".

Questions to be considered could be the following; do we regulate where

needed and with the right regulatory tool, is legislation in one sector

(still) coherent with legislation in others, how can different ways of regu-

lating take globalisation sufficiently into account and how do we ensure

that regulation keeps up with market - and technological development?

At the same we need to continue to make sure that regulation provides for

a high level of protection for consumers, health and the environment. It is

crucial that the future development of the Internal Market also brings in-

creasing and real benefits to the consumers also in the areas which have

not yet been regulated. These needs also call for the possibility for Mem-

ber States - in accordance with the treaties - to maintain or introduce na-

tional legislation with a higher protection level for consumers, health and

the environment.

Better implementation and enforcement

Enforcement should be one of the keywords in the future Internal Market

Policy. As mentioned above the regulatory framework of the Internal

Market is now largely in place. However even in the areas where the reg-

ulatory framework is in place barriers to the free movement of goods

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however still occur. This is primarily caused by a lack of enforcement

measures such as insufficient market surveillance, ignorance of the prin-

ciple of mutual recognition etc. The fact that the Internal Market does not

function optimally creates unnecessary barriers for businesses when op-

erating across borders and deprives consumers and business of their

rights.

Transposition of Internal Market directives

Although transposition of EU- legislation has improved we need to keep

a constant eye on the timely transposition of directives. The Internal

Market can only reach its full potential if legislation agreed at the Euro-

pean level is effectively implemented and applied by all Member States.

The Commission should therefore continue to monitor Member States

transposition of Internal Market legislation. The semi annual Internal

Market scoreboards have proved very useful in this regard.

However, as pointed out by the Commission in its consultation paper, it is

also important that Internal Market legislation is transposed correctly and

sufficiently to avoid barriers caused by "gold-plaiting" etc. The Commis-

sion should therefore not only monitor the timely implementation of di-

rectives but also the amount of Internal Market legislation which is not

correctly transposed and add these results to its scoreboards. This will not

least serve as a constant reminder to Member States that not only should

EU legislation be transposed in time but also in an adequate manner.

Cooperation among Member States

A successfully implemented Internal Market also depends on the coop-

eration between Member States. Close administrative cooperation serves

to create understanding and mutual trust in each others decisions and

systems and results in a more efficient and well-functioning Internal

Market.

There are several areas where this works unsuccessfully. In the area of

public procurement the Member States cooperate actively within the Pub-

lic Procurement Network, which was set up in 2003. From a Danish point

of view the network is an effective platform for the exchange of experi-

ences and best practices between the Member States. Further the network

helps solving cross-border procurement problems in an informal manner.

From a Danish point of view there is however a genuine possibility of

improving the competent authorities’ (national authorities, customs) cross

border cooperation in the area of market surveillance.

In addition there is a great need to strengthen the administrative coopera-

tion between Member State authorities in the field of the services di-

rective. But also in other fields covered by EU directives, administrative

cooperation is needed. To support this administrative cooperation and fa-

cilitate the communication among the Member States the proposed Inter-

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nal Market Information System (IMI) is a useful instrument. Thus, Den-

mark supports the development of IMI while at the same time making

sure that is as simple and user-friendly as possible.

Infringement cases

The last Internal Market scoreboard from December 2005 suggests that

more needs to be done in order to reduce the amount of infringement cas-

es. As rightly stated by the Commission one infringement case is one too

many since it is costly and can take a long time to resolve.

The Commission is each year dealing with a large amount of infringe-

ment cases (Art 226). It is however not clear exactly how

many complaints the Commission receives on an annual basis and

how many of these that actually ends up in the formal infringement pro-

cedure (Art 226). Furthermore it is not clear which economic impact

the complaints to the Commission and the launch of a formal infringe-

ment procedure have for the Internal Market.

In order to ensure a faster case handling, increase transparency and di-

minish the economic costs for businesses it is suggested that the Commis-

sion strengthens cooperation with Member States and make better use

of instruments complementary to the infringement procedure such as

SOLVIT. Naturally there should still be the option of sending the case

back to the Commission if the case cannot be solved by

the complementary mechanisms. Furthermore the Commission is en-

couraged to identify the "most serious" cases for which the infringement

procedure should be dealt with promptly. This would help to better en-

sure a more swift handling of cases with the least economic loss as possi-

ble.

Experiences with recent infringement cases in the area of public pro-

curement have shown that often a constructive and open dialogue is im-

portant to reach an amicable solution of a case. In this respect the so-

called "Package-meetings" have proven to be a successful instrument.

These meetings provide for a possibility to exchange views on the issues

raised by the Commission and to discuss the case at an early stage. The

Package-meetings also provide for the opportunity to clarify potential

misunderstandings and to solve the problems before a formal infringe-

ment procedure is initiated. Therefore Denmark would encourage the

Commission to continue this practice and to copy this to other areas were

appropriate.

Screening of national legislation to reduce barriers in the Internal Mar-

ket

Denmark is very much in favour of Member States carrying out national

screening exercises on existing and new rules as well as administrative

procedures with the aim of removing existing barriers in the Internal

Market. Results of the work made by the Danish Taskforce for the Inter-

nal Market (TIM) have highlighted that obstacles to well-functioning

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markets do not only stem from barriers to cross-border trade. Often, con-

sumers and/or enterprises fail to get the most benefit of the Internal Mar-

ket as a result of both anti-competitive practices or structures and lack of

proper implementation of Internal Market rules.

Member States should be encouraged to evaluate their national legislation

to ensure that it does not conflict with the EU's legal framework, is easy

to understand and thus easy to comply with. National screening undertak-

en at the same time in several Member States - either as horizontal

screenings or screenings of specific areas - would be highly beneficial for

the improvement of the legislative environment of the Internal Market.

The Commission could extend its scoreboard to also include these find-

ings. This would increase transparency and provide the Commission,

governments and European businesses with information on where barri-

ers still exists with the aim of further reducing such barriers.

The Commission has also launched initiatives to identify and alleviate

obstacles to cross-border trade and integration of the financial sector. We

support these initiatives as further dynamic consolidation of the financial

sector is beneficial for both consumers and business.

Revision of the New Approach

Denmark strongly welcomes the introduction of market surveillance re-

quirements in the revision of the New Approach. It is necessary to in-

crease the political focus on the necessity of market surveillance in the

Internal Market to create a level playing field for industry and safe prod-

ucts for consumers. Supplementary to the new regulation it could be use-

ful if the Commission could take on a best practice analysis on Member

States surveillance systems.

In addition we support enhancing the horizontal elements in the New Ap-

proach through a regulation including harmonised definitions of eco-

nomic operators, strengthening of the European Accreditation system,

the rules of the functioning of notified bodies and clarification of the CE-

mark and its relationship to voluntary marks. We also recommend the

promotion of the Keymark as

the

European compliance mark to voluntary

standards, and we strongly support the efforts in the Commission Action

Plan for European Standardisation (October 2005) to improve and pro-

mote the Keymark system.

Further we invite the Commission to consider where the use of the New

Approach can be expanded to other areas – as a regulatory and innovation

friendly harmonisation technique. New Approach directives restrict prod-

uct legislation to essential requirements necessary to make products safe

and leave different implementation opportunities to industry via reference

to European harmonised standards. However the dependency of the New

Approach on European Standards sets the European standardisation sys-

tem under constant pressure to make procedures and the development of

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standards more efficient and fast. The European standardisation organisa-

tion (CEN) have committed itself to guaranteeing that standardisation

projects launched after 2002 will be fully developed in a maximum of

three years. Today projects can take up to 7 years or more which unnec-

essarily stifles the implementation of the Internal Market. We need to

have a stronger political focus on the efficiency of the European standard-

isation organisations. Accordingly, to ensure that CEN lives up to its

commitment, information on the speed of mandated harmonised stand-

ards should be included in the Commission's Internal Market Scoreboard.

Additional voluntary standards would clearly be beneficial in the service

area, where many barriers still exist. Supplementary to existing and

planned activities within the CEN, Denmark has proposed standards

within the following service fields; standards for construction services,

standards for handling of food security and hygiene standards in the

health care sector.

When introducing standards in the service sector some efforts must be

made vis-à-vis documenting the added value for participating companies.

In some service areas companies are reluctant towards the introduction of

standards since part of the pricing of their product is based on storytell-

ing, identity and other non-measurable factors. It is important that these

problems are properly dealt with to ensure that companies will take part

in the standardisation process.

High quality regulatory framework

Better and simpler legislation contributes positively to growth and jobs.

Equally more understandable and clearer rules is also to the benefit of

consumers. It enhances transparency and enables consumers to make the

full benefit of the Internal Market. Better regulation should be the under-

lying principle behind all policies directed at companies and citizens. At

the same time better regulation is a balanced approach which should not

lead to a lowering of the protection of the environment, health and con-

sumers. Better regulation is not deregulation but instead a possibility of

obtaining better and more coherent legislation as well as a better way of

reaching a high level of protection for the environment, consumers and

health.

Consultation of stakeholders

Denmark very much supports that all new policies – within the Internal

Market and elsewhere – should be developed after sufficient consultation

of all relevant stakeholders. Experiences made with consultations such as

of the green book on public- private partnerships, the revision of the

Remedies directives on public procurement and the REACH directive

have shown that consultations are very useful as they provide all relevant

stakeholders with an opportunity to comment on the Commission’s initia-

tives. Consultations are also an important mechanism for testing the im-

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pact of the regulatory measures and thus ensuring a more balanced regu-

latory framework.

The Commission is encouraged to consider various means to ensure that

consumer interests are taken well into account in all consumer related is-

sues before the launch of an legislative initiative. This could include the

setting up of an independent consumer panel.

Impact assessment on EU-level

Denmark welcomes the Commission’s updated guidelines for impact as-

sessments. However it is important that impact assessments are thorough

and take sufficiently into account the costs of non-action as well as the

full analysis of all three elements of sustainable development (social,

economic and environmental aspects). Denmark has experienced prob-

lems with inadequate impact assessments which lacked a sufficient as-

sessment of the environmental impact as well as of the administrative

burdens put on enterprises. The updated Commission guidelines should

serve as a good basis for reaching this objective. Denmark very much ap-

preciates the inclusion of the EU Net Cost Model to measure administra-

tive burdens as a central part of the guidelines. Measuring the expected

administrative burdens of draft proposals can help ensuring that we only

legislate where the benefits of the regulation outweighs the costs. It is

important to keep in mind that impact assessments are not a goal in itself

but is a tool by which political decision-makers can reach better policy

solutions.

The Commission's recent impact assessment on the amendment of the

Remedies directives proves as a good example. The assessment gives a

good overview on the problems that the Commission has identified, the

possible solutions and the impact of the proposed measures. This shows

how impact assessment helps to establishing a better foundation for the

regulatory initiatives and is therefore a valuable instrument to ensure

higher quality of the legislative framework.

However, to make sure that the guidelines will have the intended effect

and be used in uniform manner by the Commission services the Commis-

sion is encouraged to set up an horizontal unit to monitor the quality of

impact assessments across policy areas. This unit should ensure adequate

application of the Commission’s guidelines and help maintain high stand-

ard impact assessments.

Furthermore, Denmark suggests setting up an internal screening system

in the Commission to prevent new burdens in future regulation included

in the Commission annual work programmes. According to such a sys-

tem, proposals with expected administrative burdens exceeding a certain

threshold could be sent to the Competitiveness Council Commissioners

Group for deliberations. This would help to ensure that new administra-

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tive burdens only arise when the benefits of the legislation exceeds the

costs.

To increase the Commission's knowledgebase when developing consum-

er related policies the Commission could consider establishing a com-

mon European database containing the results of annual polls on con-

sumer satisfaction in all relevant markets. This would not least improve

the foundation on which decision-makers base their decisions on con-

sumer issues. It could also be useful to make use of the database to evalu-

ate whether the effects of a legislative initiative are as intended.

Simplification of legislation

Denmark welcomes the Commission's efforts to simplify the community

acquis. Denmark very much supported the Commissions decision to con-

sult stakeholders in June 2005 when preparing for its new rolling simpli-

fication programme and would like to encourage the Commission to take

on a similar consultation of stakeholders in 2007.

Denmark would like to see the EU Net Cost Model applied to existing

legislation in order to identify and reduce the burden caused by EU legis-

lation. A recent Danish study indicates that € 1,4 bn in growth is gained

each time burdens on businesses are reduced by € 1 bn. The rationale for

reducing the burdens is clear. But naturally this does not only apply to the

European level but also at the national level. The Net Cost Model is today

used by 17 Member States. It could help tremendously if all Member

States would make use of this model. This could also make it possible to

identify best practice on implementing EU-directives on national level.

Quantitative targets

According to Danish figures, the administrative burdens on Danish busi-

nesses alone constitute around 2,1 pct. of GDP. Approximately 40 pct. of

these burdens stem from EU rules. Denmark would therefore like to see

ambitions but realistic targets set for the reduction of the burden on busi-

nesses in specific sectors of EU regulation as also requested by the Euro-

pean Council. The following sectors would be obvious candidates (in

brackets the percentage of the administrative burdens stemming from EU

legislation is included); statistics (95 pct.), agriculture (80 pct.), company

law (58 pct.) and financial services (38 pct.). Denmark welcomes Vice

President Günther Verheugen's announcement to set up a 25 percentage

reduction target and looks forward to the Commission plans on how this

will be implemented.

Digitalisation of EU legislation

Studies made on digitalising procedures have shown that there are huge

benefits to be gained if legislation, where possible, provides for digital

solutions. This saves enterprises time and resources which they instead

can devote on strengthen their competitiveness. Studies also show that

the main obstacles to digital administration are signatures and require-

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ments to submit paper forms which both relatively easily can be replaced

by a digital solution.

The Danish Government authorities has put in place an instrument which

easily can identify whether a legal act prior to its initialisation includes

obstacles to digitalisation with the aim of reducing such obstacles.

Expe-

riences have shown that some of the barriers can however not be removed

due to requirements in EU regulation such as in the area of agriculture.

Denmark suggests on this basis the Commission to apply a tool in its leg-

islative preparatory phase as well as on existing legislation with the aim

to identify and thereby remove barriers to digital solutions. To focus the

work a target could be set up on how much of the EU legislation (as a

percentage) should facilitate digitalisation by 2008.

A well-functioning patent system

Innovation is crucial for the future growth and jobs. The Internal Market

should be functioning in such a way that frame work conditions are as

conducive to innovation as possible. A well functioning patent system is

an important prerequisite for a successful and innovation friendly internal

market. The patent system should provide:



easy access for all types of users independent of nationality and

financial capacity

short processing times for patent application

a high degree of legal certainty

high quality patents and trivial patents should be avoided.

cost efficient and accessible litigation systems with a high degree

of legal certainty

However the present European patent system faces challenges within

several areas that hinder the achievement of the above mentioned goals.

The judicial and structural framework of the present European patent sys-

tem should be better tailored to meet an ever increasing amount of appli-

cations and the needs of local users. A well functioning Internal Market

requires that companies have easy access to protection of IPR on their

home markets. A well functioning internal market further requires that

equal opportunities are provided to all European companies. The present

European patent system does not provide such equal opportunities since

the structure of the present patent systems disadvantages SME's and local

companies.

Structural deficiencies of the European patent system

To ensure further economic growth it is necessary to address the current

problems with prolonged patent application processing times in Europe

and not least The European Patent Office. Both the applicant and third

Further information can be found (in eng) on the following Government homepage:

www.e-administrerbarhed.dk

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parties rely on the outcome of the search report for taking decisions on

whether or not to utilize an invention commercially.

To improve this situation a future European Patent system needs instead

to embrace the possibilities that modern information technology offers

the patent system in relation to reutilization of work and outsourcing. Re-

utilization of work is essential if duplication of work is to be avoided

which is one of the keys for bringing down the patent application pro-

cessing time in Europe. Therefore we need a close cooperation between

the European Patent Office and the national patent offices which also

should entail the creation of a European patent network where re-

utilization of work done by other offices can be implemented.

Quality is essential in any work sharing scheme. Therefore, a prerequisite

for re-utilization, work sharing and outsourcing is the establishment of a

common European patent quality system and a European standard for

search and examination.

There is a need to address the issues of quality in patents and patent

quality should thus be put high on the policy agenda. The effort to

achieve a consistent high quality of patents requires a new focus on the

inventive step requirement. Although actual changes in patent law should

only be undertaken after thorough studies, considerations should be made

as to how we in the short term can ensure strict and uniform appliance of

the inventive step requirement.

Public procurement

To achieve a stronger and globally competitive European market through

more innovation and market dynamism Internal Market policies need to

be developed which can foster and facilitate innovation and marked entry.

In this respect it is also very relevant to focus on public procurement.

The market for public contracts constitutes a significant share of the Eu-

ropean economy and is thus an important aspect of the Internal Market.

Denmark supports therefore the Commissions view that further efforts

need to be devoted to ensuring an open, dynamic and innovation-friendly

procurement market and looks in this regard forward to the Commissions

initiative on the connection between public procurement and innovation.

As the Commission has pointed out the legal framework for public pro-

curement has been improved with the adoption of the new procurement

directives in 2004. The objectives of the new procurement legislation

were simplification and modernisation of the rules, particularly by

providing for the possibility to conduct procurement procedures in a fast-

er, less bureaucratic and less costly way. Further to that the new pro-

curement directive contains a new and more flexible procurement proce-

dure, the competitive dialogue, which is suited for developing innovative

solutions and enhancing public-private partnerships.

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Denmark agrees with the Commission that the legal framework is an im-

portant precondition, but is not sufficient to ensure a dynamic and open

procurement market. Therefore the future policy in the field of public

procurement should focus on stimulating the use of the new procurement

rules in an effective manner and to their full potential.

Public authorities awareness of the opportunities the EU public pro-

curement framework offers for fostering innovation

The new public procurement directives were implemented in Denmark in

2004 and have been applied since January 2005. Denmark endorses the

Commission’s initiative to prepare a manual setting out the opportunities

to foster innovative solution, which the EU public procurement directives

offer. In this respect it is important that the manual aims at stimulating

the use of the new procurement methods, e.g. the competitive dialogue, at

their full potential and allowing the contracting authorities to take ad-

vantage of the flexibility, which these new methods offer.

More competition for public contracts

Effective competition for public contracts is an important tool for stimu-

lating innovation in both the public and the private sector. Today not all

public service contracts are subject to competition according to the de-

tailed rules of the procurement directives. Today a large number of ser-

vices – the so-called B-services - are not fully covered by the directives.

However, these contracts constitute a large percentage of the total volume

of public spending in the EU.

The Commission is encouraged to analyse whether the European Market

for some of the B-services is sufficiently developed with a view to con-

sider transferring these services to the full procurement regime. This

would of course require a legislative initiative.

More liberalisation and competition in the Internal Market

Denmark is in favour of a well-functioning Internal Market in both the

product - and the services markets. While the Internal Market for prod-

ucts is largely in place there is still more to do in the field of services. The

Services Directive will be a very important step in this direction. The

Service Directive commits the Member States to screen and evaluate their

authorisation systems and other national requirements relating the access

to a Member State's market. Denmark looks forward to this screening

procedure and the connected mutual evaluation procedure, because it will

remove unjustified barriers for service providers.

Denmark would also like to encourage the Commission to take further

steps, including legislative measures such as directives, in order to ensure

effective competition in the energy- and banking sectors as well as in

other sectors which are listed below.

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Energy sector

Barriers for a competitive internal energy market should be removed – if

necessary through new legislation. Denmark supports the Commission in

relation to improving the implementation of the internal energy mar-

ket

All Member States must ensure that unbundling is implemented in a

manner that guarantees independent network operation. Denmark has

successfully introduced ownership unbundling of electricity and gas

transmission from trade and production of energy. It is clear

that ownership unbundling, at least of network operation, is the most ef-

fective approach. Denmark is also in favour of the promotion of suffi-

cient infrastructure between member states and emphasises that effective

and independent regulators are necessary to secure an effective internal

energy market.

Financial sector

The European Competition Authorities (ECA) Financial Services Sub-

group has published a report regarding competition issues in retail bank-

ing and payment systems markets in the EU. The Danish Government

supports the recommendations made by ECA. Among other things, the

report presents recommendations in order to stimulate customer mobility

within the retail banking market. Compared with other markets, customer

mobility in the banking sector seems to be somewhat low, and initiatives

that improves customer mobility will most likely enhance competition.

This is also in line with the proposals of the Commission’s white paper

on financial services 2005-2010. One aim of the white paper is to en-

hance competition in the financial sector both in the retail and the whole-

sale banking markets. Concerning the retail markets the white paper lists

initiatives on payment services and mortgage credits The Commission

will also establish an expert group to analyse issues of consumer mobility

including how to make it easier and cheaper for consumers to make cross

boarder payments. We support the objectives of achieving further integra-

tion of the banking markets in particular if it will be for the benefit of

consumers and enterprises.

Infrastructure sectors

Finally Denmark is also very much in favour of continuing liberalising

the infrastructure sectors such as the postal sector, the air transportation

sector as well as the railroad sector. A review of the regulation in the tel-

ecommunication sector including a further deregulation of the sector

would also be useful. Denmark will also like to encourage the Commis-

sion to take further steps to liberalise new infrastructure sectors such as

the pilotage sector.

Reduce trade distorting subsidies in the Internal Market as well as glob-

ally

While there is a case for well targeted public subsidies to boost innova-

tion, mainly by way of funding of R&D-projects and disseminating the

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results, increased scrutiny is needed to ensure a reduction in state aid

within the EU as well as globally. There is some evidence that increased

competition for firms at the global level have increased the availability of

incentive schemes, often targeted at R&D and innovation, despite limited

evidence that such schemes are productive. A concerned effort should be

put in place to improve transparency about the costs and benefits of such

schemes as well as systematic use of EU and WTO review mechanisms

to achieve the desired reductions of distorting instruments.

Improving information on the benefits of the Internal Market

There is a growing sentiment among European citizens that cooperation

in the EU has to bring concrete results and benefits to the citizen. The In-

ternal Market has in fact produced many positive and concrete results.

Unfortunately these seem not to be very visible to the public. This situa-

tion needs to be improved since the success of the Internal Market also

very much depends on the support from the citizens. Therefore both the

Commission and the Member States have an important role to play in

communicating the obvious benefits of the Internal Market to the Euro-

pean citizens- enterprises as well as consumers. We would like to high-

light to the Commission the following concrete actions to be worth con-

sidering:



improving the Your Europe Portal as concerns the information avail-

able to businesses by for example creating a visual geographical ap-

pearance of the Your Europe Portal – instead of a text based appear-

ance

undertaking impact analyses and marketing campaigns directed at in-

dustry and other stakeholders, showing standardisation as an innova-

tion catalysing process

promoting the forthcoming IMI system together with the existing

SOLVIT network.

in coordination with the national and European consumer organisa-

tions to develop targeted and relevant information material to inform

consumers about the benefits of the Internal Market

