Opinion
31 Oct 2014 09:06am

Jonathan Faull: These reforms will help build a more resilient and stable financial system, and improve efficiency

A strong European market with effective competition and a level playing field for European companies is vital for competitiveness. Following the financial crisis, the European Union overhauled the regulatory and supervisory framework of the financial system to ensure a safe, responsible and transparent financial sector that supports sustainable growth. The Banking Union, the reinforced prudential framework for banks (‘CRD IV package’) and for financial markets (MiFID II, EMIR), are prominent examples

These reforms will help build a more resilient and stable financial system, restore and deepen the EU’s single market, and improve the system’s efficiency. The development of the Single Rulebook in financial services means a more integrated market, ensures a level playing field, increases legal certainty and reduces compliance costs for cross-border operations. Some of our measures explicitly remove barriers, others facilitate market entry. These new rules need to be made to work effectively, and all major global financial centres need to make sure their rules on regulation and supervision converge.

COMPLETING THE SINGLE MARKET

 

Much remains to be done to complete the single market: we have the rules, now they need to be applied correctly. This is especially the case for the Services Directive. We need to cut red tape, increase transparency for businesses and consumers, eliminate unjustified or disproportionate requirements and set up business-friendly e-government portals. And we must ensure existing legislation remains fit for purpose in the digital era.

It is vital for the EU to attract – and invest in – creative and innovative talent. Europe cannot compete globally on wages and should not do it on social rights. Where we can make a difference is in the high end of the production chain, using our skills, traditions and savoir-faire. A prerequisite for this is an efficient intellectual property infrastructure that makes it worthwhile for inventors to bring their works to market and build on the innovations of others. The creation of a unitary patent for the EU and a Unified Patent Court will further an efficient patent system.

Public procurement is of enormous economic importance. Every year, public authorities spend 19% of EU GDP on goods, works and services. A single market for public procurement means higher quality and lower prices, which means that citizens get more – and more value – for their money, and companies all across Europe get more business opportunities. The single procurement market is thriving; but cross-border public procurement has not yet reached its full potential.

UPDATING THE RULES

 

To address this, public procurement rules have been updated to remove red tape, introduce more flexibility, and make electronic procurement mandatory starting in early 2016. These changes will make the procurement process less costly and more efficient and improve transparency. They also make it possible for national governments to pursue policy objectives in important areas, such as the environment and social policy.

There are several ways in which the Commission can help to ensure the rules work well on the ground. By making sure public buyers have the necessary technical training and carry out proper market intelligence; by exchanging best practice; through joint purchasing initiatives which achieve better value-for-money; by reducing malpractice and corruption in public procurement by improving monitoring and reporting, and leading by example.

Several important challenges are still ahead of us. We want national governments to seize this opportunity to reform, where necessary, their public procurement systems. Another challenge is to make public procurement smarter – lean, clean, business-friendly and strategic in terms of pursuing other policy objectives in the social and environmental field.

This is an extract from the ICAEW publication Europe’s Future in Global Markets

To read in full visit bit.ly/1qh7NDm


 

Jonathan Faull is director general of Internal Market and Services at the European Commission


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