Finland’s non-paper on the building blocks for the horizontal Single Market Strategy

The Strategy should strengthen the fundamentals of the Single Market, reducing fragmentation and achieving integration across policy areas. These efforts should be guided by a roadmap with clear timelines and milestones for urgent, fact-based action addressing the needs of businesses, social partners, stakeholders and citizens. The Strategy should prioritise the removal of barriers and the elimination of redundant, incoherent or burdensome rules. The new horizontal Single Market Strategy must be concrete, holistic, politically owned and systematically followed up, with tangible targets and specific actions.

The Single Market Strategy should introduce measures regarding at least the free movement of services and goods and improving the Single Market’s governance while acknowledging the vital principles of better regulation. In this non-paper, and also based on previous non-papers, we offer building blocks for the forthcoming horizontal Single Market Strategy, which the European Commission is expected to unveil by June 2025 at the latest.

Finland proposes the following action points for the Strategy:

1. Promoting the free movement of services

• A strategic approach with concrete and ambitious proposals is needed to develop the Single Market for services. The services sector has great potential and a well-functioning single market for services would increase productivity and competitiveness. Removing barriers, preventing new barriers from arising and accelerating service integration should be a priority for the Commission. Therefore, the Single Market Strategy must include an ambitious action plan for services, with timelines and milestones for urgent and concrete measures, including the removal of barriers.

• There is a need for a holistic view for promoting the single market for services, including the provision of cross-border services. Free movement of services must be promoted in various ways. New initiatives are welcome; sectoral measures can also be effective. At the same time, it is important to ensure that sectoral rules do not unnecessarily fragment the Single Market or create overlapping requirements for service providers. In addition to the sectoral approach, it is very important to ensure horizontal development and overall coherence.

• The Services Directive should be maintained as it is since much can be done within the current legal framework to promote the single market for services, for example full implementation and enforcement and uniform application of the Directive. Moreover, smooth e-procedures through digitalisation are important. The Commission’s support and guidance is needed especially on authorisation schemes, temporary service provision, proportionality assessment, notifications and Points of Single Contact.

• We need an assessment of what new action can be taken to speed up the provision of services. With regard to sectoral action, the Services Directive could serve as a framework to avoid regulatory fragmentation. Possible legislative action could be most effective in sectors which are active in cross-border business and be of greatest economic relevance to the Single Market. Business services and tourism could be potential areas, as well as those linked to manufacturing.

• The Member States and the Commission should examine the principles of necessity, non- discrimination and proportionality with regard to existing and new national authorisation schemes.

• The Member States and the Commission must ensure, by various means, that cross-border service provision is smooth and that the requirements of the Services Directive are fully complied. The Commission could also assess the development of service standards in economically significant service sectors.

• The Commission's proposal on a common e-declaration for posted workers is useful. It could bring even more added value for the Single Market if it took national information needs into account more flexibly.

• Workforce development is a cross-sectoral challenge requiring collaboration across the public and private sectors. To meet strategic needs, Europe should invest in building competences, ensuring skilled professionals in critical sectors.

• EU should enhance learning mobility ambitiously. Mobility experiences within the EU increase competence and networks, learners' and participating organisations’ understanding of different cultures, language skills and opportunities for study and research and for finding employment across Europe.

• The interconnection between education, skills, employment and working life should be well recognised. Education strengthens resilience and is the foundation for a strong democracy and equality.

• Barriers to labour mobility must be systematically removed in the Single Market, including through the smooth recognition of qualifications and skills. At the same time more effort should be put on the better use of existing instruments (including legislation) to promote the mobility of professionals. There is a particular need to strengthen the ability of working life to assess and validate expertise. In addition, the modernisation of the coordination rules on social security would facilitate greater mobility within the EU.

• The impacts and interrelations of the current legal instruments affecting the free movement of workers in the context of the changing labour market should be assessed. The expectancy of labour and skills needs must be developed together, taking into account the needs of international recruitment from third countries.

• EU-wide solutions should be developed to streamline the recognition of third country qualifications in the Member States. In particular, we need solutions that promote reliable information exchange of third country qualifications (cf. IMI).

2. Enhancing the free movement of goods

• We need to remove technical barriers to trade by focusing especially on the effective application of the Transparency Directive. Moreover, preventing new barriers from arising is essential. The notification obligation under the Transparency Directive is a central tool in this regard.

• The Commission should analyse together with the Member States what product requirements could be harmonised to further enhance the free movement of products.

• The principle of mutual recognition must be strengthened with adequate measures based on the ongoing evaluation of the Mutual Recognition Regulation. There is need for a thorough assessment of national requirements, awareness-raising and the provision of guidelines for uniform application and interpretation. Moreover, the need for a revision of the Mutual Recognition Regulation should be assessed.

• It is imperative to safeguard the European standardisation system and maintain its operational conditions in order to secure European competitiveness. Transparent dialogue between the Commission and Member States is important, especially when the European Standardisation System is evaluated together with the Regulation.

• Standardisation should be harnessed as a strategic asset. Standardisation is central to European competitiveness, because whoever sets the global standards gets the competitive edge with opportunities to scale. In digital technologies, standardisation of future telecoms technologies can create a competitive edge for trusted European technology suppliers.

• To tackle the challenges of e-commerce, the Commission and the Member States must rigorously enforce and effectively implement the existing legislation, such as the Digital Services Act and the General Product Safety Regulation. Moreover, including appropriate measures into the Customs reform is central. Cooperation and coordination between market surveillance, customs and extended producer responsibility authorities in the EU needs to be improved. When it comes to legislative proposals, we must be cautious and avoid overlapping legislation. We must also avoid obligations that burden European businesses but de facto cannot be enforced for businesses outside the EU.

• The New Legislative Framework (NLF) needs to be adapted to make it future proof. In particular, it needs to be made fit for the digital and green transition and suitable for products enduring life cycle changes. It is important that horizontal issues not be tackled separately in each sector but rather in the NLF horizontally and only to the extent that these issues are not already addressed in other EU legislation.

• We must ensure predictable and coherent EU regulation and communications that support and enable the development of and investments in the bioeconomy.

• Advancing the Single Market for waste and secondary raw material is vital. This includes leveraging and effectively enforcing the existing legislation as well as improving processes related to End-of-Waste and taking into account the interfaces of sectoral legislation.

3. Improving the Single Market’s governance framework Preventing barriers

• We should improve the efficiency, transparency and user-friendliness of the existing notification procedures. In addition, the added value of extending the scope of the existing notification obligations could be explored while safeguarding the efficient functioning of existing notification schemes under the Transparency and Services Directive.

• The framework of the Transparency Directive could be utilised more efficiently in preventing barriers, since parts of the current Directive remain underused. The Commission should use all its powers granted by the Transparency directive including detailed opinions. Issuing a detailed opinion, when necessary, should be a standard procedure. Special attention could be paid to national measures where the Commission has issued a detailed opinion. Further preparation of these national measures should be monitored systematically.

• Notifying national rules should be as easy as possible to promote better compliance and reduce the unnecessary burden and duplication of information. Smooth technical procedures and clear guidelines would facilitate this.

• There is a need for more transparency on notifications, especially on the follow-up given by the European Commission and the notifying Member State after comments or detailed opinions have been received.

• In addition to preventing and removing regulatory barriers, it is also important to promote the removal of administrative barriers and the streamlining of procedures.

Collaborating with Member States

• We believe that proper implementation and enforcement of existing rules should be ensured through systematic cooperation between the Commission and Member States.

• There is a need for the consistent use of implementation groups in a regular and timely manner, preferably via existing expert groups or committees, and with open dialogue in the form of an informal exchange of views. This would coordinate and streamline implementation and ensure a level playing field. It would be beneficial to also involve the relevant competent authorities alongside representatives from the Ministries.

• We need to strengthen the cooperation between the authorities of different Member States to streamline the exchange of information and overcome language barriers. The Commission could facilitate this process by:

  • offering – and using – existing platforms and support to discuss challenges and questions on the interpretation of Single Market rules;

  • mapping gaps in the current cooperation in order to identify best practices and share them as well as to identify possible solutions for improving cross-border cooperation;

  • giving guidance in different policy areas where desirable; and

  • offering training in relevant policy areas.

• The Commission and the Member States should increase the visibility of IMI, which is the default tool for Single Market cross-border administrative cooperation. To remedy the underuse of IMI by national authorities, we propose additional training and networking sessions organised by the Commission for all users.

• The Commission should further develop the Single Notification Window to encompass all the Single Market notification procedures for national authorities while improving the supervision and enforcement of all notification requirements for national legislation. The Single Notification Window should also be an information tool where businesses and citizens can inform themselves on specific national legislation affecting the Single Market (could be linked to Your Europe).

• The SMET should be strengthened for example with more impactful projects and increasing their monitoring. Moreover, SMET’s transparency and stakeholder cooperation should be increased. The barriers encountered in different Member States should be systematically removed and the Commission should support Member States in this work.

Digitalising processes and procedures

• The Commission and the Member States must vigorously drive forward the development of e-governance solutions to respond better to businesses’ and citizens’ needs. We must ensure easy access to information and procedures for making seamless and user-friendly cross-border public e-services a reality.

• The Member States must strengthen the implementation of the Single Digital Gateway. Moreover, we believe that it is useful to further expand the scope of the SDG Regulation to cover new procedures, especially taking into account the needs of SMEs. The Once Only Technical System should also be enhanced, with a strong emphasis on ensuring its usability and user-friendliness.

• The once-only principle could be utilised in reporting so that there is no need to report the same information to different authorities in different ways and the information is exchanged between the authorities. This could be achieved through centralised reporting of data at the EU level or data hubs.

• We need further standards for the functioning of Points of Single Contact (PSCs), Product Contact Points (PCPs), Construction Product Contact Points (CPCPs) and other sectoral contact points. These standards could be monitored through the Single Market Scoreboard once they are adopted. Moreover, improving the quality of information, using assistance tools and AI, providing guidance, and raising awareness is needed.

• It is important to implement the EUDI Wallet properly. EUDI Wallets should become part of basic digital infrastructure and it should be possible to utilise wallets when developing other e-government services in the future, including when exploring the feasibility of the dedicated SME passport. It is vital that the wallets can be widely used by various members of society, such as citizens and businesses.

• Data exploitation is key to accelerating digitalisation. A functioning data infrastructure enables the seamless movement of data, regardless of where it is stored or processed. Therefore, interoperable data infrastructure, including data spaces, is central to the use and development of digitalisation and new technologies, which must take into account not only the Single Market but also international cooperation. We must also enable data-driven decision-making, aiming for seamless data exchange and utilisation across Member States

• As the Data Union is currently being developed, it is important to bring together the different building blocks: EU legislation, data infrastructures including soft infrastructure, cloudification/edge computing and AI in an interoperable and scalable format.

• Cloud-edge transition aims at growth and sustainability, scalability, security, portability and interoperability. To accelerate the cloud-edge transition, communication networks, data transmission and data governance structures, as well as high-performance computing and artificial intelligence, should be developed through cloud services and edge computing.

• Interoperability and the standardisation of data are essential to drive innovation, improve digital services and enable data-driven decision-making. By harmonising data standards and regulations across Member States, we can facilitate seamless data exchange and utilisation. It is vital to promote the adoption of competitive, interoperable semantic standards such as e-Invoicing, e-Receipts, e-Waybills and digital product passports. Standardising business data and unifying taxonomies will significantly reduce the reporting burden on companies while enabling efficient data sharing among agencies, authorities and Member States. Moreover, ensuring that standardisation remains technologically neutral will foster fair competition and encourage the development of innovative solutions.

• The Commission should focus on the effective and consistent implementation of recent digital legislation and avoid unnecessary regulatory burden. At the same time, traditional legislation needs to be updated to align with the goals of the Digital Decade.

Enforcing agreed rules through corrective action where required

• The Commission and the Member States must utilise the current compliance toolkit better and more efficiently. A balance should be found between instruments such as infringements and notifications under the Transparency and Services Directive and instruments like SOLVIT and SMET. These instruments should be efficiently applied to the situation at hand in order to reach the best possible outcome.

• As a guardian of the Treaty, the Commission should properly use the infringement procedures.

• The Commission should support Member States in implementation, i.e. in the form of cooperation, training, exchange of information and guidance. Moreover, the quality of the implementation should be monitored more closely and systematically.

• It is important that citizens and businesses have sufficient information and receive practical advice on the application of EU law and on various problem-solving and dispute resolution methods. The Commission and the Member States must take measures to promote this.

• Gathering data on structural and recurrent problems in the Single Market through SOLVIT is valuable. This information should guide future policy decisions when possible.