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30 May 2013

Applied smart regulation: EC country recommendations

29 May: The European Commission has adopted recommendations to EU Member States designed to move Europe beyond the crisis and strengthen the foundations for growth. The package includes a Communication outlining the main findings of the Commission's country by country analysis, and how this can boost growth and job creation in the EU as a whole, and a series of 24 sets of country-specific recommendations (CSR), one set for every Member State - excluding Greece, Ireland, Portugal and Cyprus.
The CSRs offer bespoke policy advice that guides national policies on the basis of a review of each Member State's economic and social performance in the previous year, their national reform plans (example French NRP) and EU-wide priorities for jobs and growth set out in the Commission's Annual Growth Survey (MEMO/12/910). CSRs are arrived at by a thorough system of fact finding and discussions with officials of the MS concerned, in a process honed since the early 2000s with the Lisbon strategy monitoring.
Alongside the heavy advice on macroeconomic balance, which carries some clout in the countries concerned we smart regulators can find relevant developments, which come under the "structural reforms." All but 5 MS (UK, Denmark, Sweden, Netherlands and Luxembourg) need to improve their record on this count. For instance, in France, fiscal consolidation and pension reform were the most noticed items, but the removal of obstacles to competition in regulated professions such as notaries, or taxis, was also discussed by the media.

How to find the relevant information:

1/ Download the CSRs of your country, from the Europe 2020 site: here is an example of the type of suggestions, taking the case of France COM(2013) 360 final (excerpt):
"France should take action to:
  • Take measures to improve the business environment and develop the innovation and export capacity of firms, in particular SMEs and enterprises of intermediate size. In particular, launch the announced simplification initiative of the regulatory framework, and improve the framework conditions for innovation, by enhancing technology transfer and the commercial exploitation of research, including through a reorientation of the competitiveness poles.
  • Take action to enhance competition in services; remove unjustified restrictions in the access to and exercise of professional services, notably regarding legal form, shareholding structure, quotas and territorial restrictions; take action to simplify authorisation for the opening of trade outlets and to remove the ban of sales at a loss; remove regulated gas and electricity tariffs for non-household customers and strengthen interconnection capacity with neighbouring countries; in the railway sector, open domestic passenger transport to competition."
2/ Get detail from the corresponding Staff Working Paper. Continuing with France, here is an extract of SWD(2013) 360 final: "Many regulated sectors and professions face unjustified restrictions limiting their growth potential. A number of professional services also face restrictions as regards the legal form and shareholding rules of the company through which they want to provide services. For example, lawyers or veterinarians are compelled to own no less than 75% of their share capital. In addition to these restrictions, other significant barriers (such as heavy restrictions on commercial communications, quotas or territorial restrictions) still remain in a number of sectors covered by or excluded from the scope of the EU Services Directive (taxis, certain health professions, notaries and other legal professions). The retail sector is still subject to a number of regulations which limit competition. In particular, the authorisation procedure for the establishment of retail outlets continues to be cumbersome, to the detriment of consumers. The French competition authority has also pointed out that the existing regulation on the ban to sell below costs had adverse impacts, in particular on the transparency of the relationships between suppliers and distributors." See also page 28 for an assessment of modernisation of public administration.

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