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Bolkestein urges greater internal market reform

BRUSSELS- EC internal market commissioner Frits Bolkestein has aired his frustrations at the pace of structural reform to the internal market and suggested that the Barcelona European Council is an opportunity for Europe’s political leaders to inject a renewed sense of urgency.

In a speech to the EU economic and social committee on Friday he said old protectionist reflexes have blocked progress on a number of key issues. “Member States are strong on rhetoric but short on action. The Commission's recent report to the Barcelona European Council makes very clearly the point that the "delivery gap" must be closed.

“Without structural reform to unleash the full potential of the internal market, we will fall well short of meeting our objective of becoming the most competitive economy in the world,” he said.

Bolkestein conceded there had been encouraging developments in many areas. “We are making steady progress on the implementation of the Financial Services Action Plan which contains 42 measures all aimed at the creation of a deep and liquid financial market in Europe.”

This is an area in which it is important to maintain momentum. “I will be pressing the Spanish Presidency also to advance with ensuring an internal market in safe and sustainable pensions,” he said.

Another pressing issue is improving the tax environment by tackling obstacles to cross border activity. He said there is no convincing evidence to support statutory rates or to fix a minimum rate and that he remains convinced rates should be a matter for member states.

“That said, the root cause of many of the obstacles identified is the requirement for companies to comply with up to 15 separate sets of tax rules. Therefore, some form of common consolidated tax base is vital in the longer term, and I believe this should be the ultimate policy objective,” he said.

He confirmed that during the Spanish Presidency, they will continue to work on what he called the "tax package" where the Council has committed itself to reach a final agreement no later than the end of 2002.

For other areas including public procurement, patents and the liberalisation of the gas and electricity sectors, he had less praise. “On several major reforms, where the internal market desperately needs a shot in the arm, we have seen only little progress, despite promises and pledges at the highest political level.”

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