Analytical Report. Fieldwork: July-August 2006 Report: September 2006

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1 The Gallup Organization Flash EB N o 190 Internal Market Flash Eurobarometer European Commission Internal Market: Opinions and experiences of Businesses in the 10 New Member States Analytical Report Fieldwork: July-August 2006 Report: September 2006 Flash Eurobarometer 190 The Gallup Organization This survey was requested by the Internal Market and Services Directorate General of the European Commission and coordinated by Eurobarometer Team of the European Commission. This document does not represent the point of view of the European Commission. The interpretations and opinions contained in it are solely those of the authors. Analytical Report, page 1

2 Flash EB N o 190 Internal Market: Opinions and experiences of Businesses in the 10 New Member States The Gallup Organization Flash EB Series #190 Internal Market: Opinions and experiences of Businesses in the 10 New Member States Conducted by The Gallup Organization Hungary/Europe upon the request of Internal Market and Services Directorate General of the European Commission Contract n PRS/2006/IMA/B1/62 Survey organised and managed by the Eurobarometer Team of the European Commission (Directorate-General Communication, Unit A-4) This document does not represent the point of view of the European Commission. The interpretations and opinions contained in it are solely those of the authors. THE GALLUP ORGANIZATION page 2

3 The Gallup Organization Flash EB N o 190 Internal Market Table of Contents Table of Contents... 3 Introduction... 4 Part I. Perceptions of Single Market Measures Elimination of customs documentation Abolition of border controls European product standards VAT procedures for sales within the EU The liberalisation of capital movements European labelling and packaging rules European public procurement rules Rules for establishing a business in other EU countries Part II. Effects of Single Market Measures Impact on the level of competition Influence on company strategy Recruitment from other Member States Impact of enlargement on activities Impact of enlargement on trade Barriers to trade within the Single Market as a whole Part III. Future of the Single Market Ensuring fair competition within the Single Market Doing business on the basis of one set of rules A further opening-up to competition of public utility services Removing remaining technical barriers to trade in goods Removing remaining technical barriers to trade in services Facilitating labour mobility Strengthening intellectual property rights protection and creation of an EU patent Achieving an integrated European financial market Further opening up of public procurement markets Annex tables Survey details Survey questionnaire Analytical Report, page 3

4 Flash EB N o 190 Internal Market: Opinions and experiences of Businesses in the 10 New Member States The Gallup Organization Introduction In the last 20 years the progress that has been made in developing the Single Market has been remarkable. Today, most EU citizens can live, study, work or retire in whichever country they like in Europe. And the consumers have a wider choice of high quality products and services, while companies have large and diverse markets at their disposal to develop their business with greatly reduced technical impediments. The objective of the survey Flash Eurobarometer 190: Internal Market: Opinions and experiences of Businesses in the 10 New Member States is to study senior managers opinion on the changes in the general business environment in the European Union Single Market, on the various economic reforms introduced to make doing business easier in the European Union. This Survey complements a similar one conducted in February in the old EU-15 Member States (see Flash EB 180: "Internal Market: Opinions and experiences of Businesses in EU-15"). This telephone survey was conducted on behalf of Internal Market and Services Directorate General of the European Commission. The current special target group Flash Eurobarometer survey was organised and managed by the Eurobarometer Team of the European Commission (Directorate- General Communication, Unit A-4). The interviews were conducted between the 27th of July and the 4th of August 2006 by the partner institutes of The Gallup Organization Hungary / Europe. The following aspects are covered in the survey: Perceptions of Single Market Measures Effects of Single Market Measures Future of the Single Market The target for this Flash Eurobarometer was defined as all companies agriculture, non-profit and public administration excluded employing 10 or more persons, in the 10 New Member States (NMS) of the European Union. Lists of companies qualified to be interviewed were developed by national institutes using local statistical data sources. Sampling in each country was made according to two stratification criteria: the size of the company (3 categories: 10-49, and 250+ employees), and the activity sector (6 categories: Construction or civil engineering, Production and manufacturing of goods, Trade and distribution (wholesale or retail), Transport (of goods or people), Financial services (banking, insurance, brokerage), Business services). Within each of the cells defined by these criteria, the selection of the sample units was made at random. The person interviewed in each company was a top level executive (general manager, sales/marketing manager, import/export manager, logistics manager). In the country with the most companies, Poland, 500 respondents were interviewed. In those with the fewest companies (Estonia, Cyprus, Latvia, Lithuania, Malta, Slovenia and Slovakia) about 200 respondents were interviewed, and in the remaining countries (Czech Republic and Hungary), approximately 300 managers were consulted. Overall, Gallup interviewed 2552 companies across the NMS zone. A technical note indicating the manner in which the Gallup partner institutes conducted the survey can be found at the end of this analysis. It provides further detail on interviewing methods, sampling and the statistical margins of error. page 4

5 The Gallup Organization Flash EB N o 190 Internal Market Part I. Perceptions of Single Market Measures Looking at the overall average 1 results concerning the eight Single Market measures included in this question, 35% of company executives consider that the Single Market has had a positive impact on their firm s activities. 27% believe that the Single Market has not had an impact on their company and only 5% of executives state that the impact has been negative for their business (on average one third of company executives are not concerned or do not answer 34%). If we compare these results to the data from the EU15 survey conducted in February 2 we find significant difference between the proportions of executives that consider the Single Market to have no impact on their company: company leaders from EU15 (51%) say so in twice the proportion of those in NMS10 (27%). There is only slight difference between the ratios of those who see overall positive impact (30% say it in EU15 and 35% in NMS10). The reason behind these variances could be the fact that more than one third of the executives from the New Member States as compared to only 12% of their EU15 counterparts said not to be concerned, or couldn t or didn t want to answer. To analyse the results we will first briefly look at the results at the level of the NMS10 group. Starting with the measure that has the most positive impact score, we will then examine in detail how company executives in the different countries and types of companies assess the impact of each of these eight measures. Perceptions of Single Market measures Positive impact No impact Negative impact Not concerned DK/NA The elimination of customs documentation Abolition of border controls European product standards VAT procedures for sales within the EU The liberalization of capital movements European labeling and packaging rules European public procurement rules Rules for establishing a business in other EU countries GALLUP Source: FLASH EB July 04 August 2006 Q1. I would like to know whether the following European Union Single Market measures have had an impact on your firm s activities? % NMS10 A relative majority of company executives in the NMS10 group recognise the positive impact of two of the founding principles of the Single Market: the elimination of customs documentation (62%) and the abolition of border controls (62%). Two in five believe that the European product standards and the VAT procedures for sales within the EU have positively impacted their firms activities (39-39%). Less than one in three emphasize the positive impact of the liberalization of capital movements (31%), and one quarter of the European labelling and packaging rules. For the remaining two Single Market measures (European public 1 Calculated the average for the 8 items within each of the answer categories (positive impact / no impact/ negative impact/not concerned/ DK/NA). 2 See Flash EB 180: "Internal Market: Opinions and experiences of Businesses in EU-15" Analytical Report, page 5

6 Flash EB N o 190 Internal Market: Opinions and experiences of Businesses in the 10 New Member States The Gallup Organization procurement rules and rules for establishing business in another EU country) nearly half of executives say they are not concerned (40% and 52% respectively). For the Single Market measures as liberalization of capital movements, labelling and packaging rules, public procurement rules and rules for establishing business in other country, around one third of executives indicate that they have not had any impact (ranging from 30% to 33%). Leaving the not concerned answer category out of analysis, we find more executives mentioning both that the Single Market measures have positive impact, and that these have no impact on their activities. Perceptions of Single Market measures Positive impact No impact Negative impact DK/NA Elimination of customs documentation Abolition of border controls VAT procedures for sales EU product standards Liberalization of capital movements EU labeling and packaging rules EU public procurement rules Rules for establishing business in EU GALLUP Source: FLASH EB July 04 August 2006 Q1. I would like to know whether the following European Union Single Market measures have had an impact on your firm s activities? (without Not concerned answers) % NMS10 As we see in the next table (and in the next subchapters), in all but three countries the elimination of custom documents is mentioned at the first place as the Single Market measure having positive impact on the company s activities. The abolition of border controls is considered as a measure with the most positive impact only in Poland, Slovakia and the Czech Republic. Among the top three measures having positive impact on a company s activity, the liberalization of capital movements is mentioned only in Cyprus and Lithuania and only at the third place. Perceptions of Single Market measures (% of positive impact by country, top three mentions) CZ EE LV LT CY Elimination of Elimination of Elimination of Border control 54 customs 67 customs 50 customs 61 abolition documents documents documents Elimination of customs documents EU product standards Border control abolition Sales VAT procedures Border control abolition Sales VAT procedures Border control abolition Capital movement liberalization HU MT PL SK SI Elimination of Elimination of Border control Border control customs 56 customs abolition abolition documents documents Border control abolition Sales VAT procedures EU product standards Border control abolition Elimination of customs documents EU product standards Elimination of customs documents Sales VAT procedures Elimination of customs documents Border control abolition Capital movement liberalization Elimination of customs documents Border control abolition EU product standards page 6

7 The Gallup Organization Flash EB N o 190 Internal Market 1.1. Elimination of customs documentation The elimination of customs documentation is recognised by 62% of executives as having a positive impact on company activities. Only 3% state that the impact is negative. Engaging in trade without the hassle or cost of dealing with customs paperwork has had the most positive impact on companies in Slovenia (79%), Poland (69%) and Estonia (67%). Companies in Latvia and the Czech Republic appear to be comparatively unaffected by the elimination of customs documentation, but half of the executives from these countries recognise its positive impact on their business activities, too (50% and 52%, respectively). Elimination of customs documentation: % of positive impact NMS10 SI PL EE CY LT SK MT HU CZ LV NMS10 Number of employees Construction Industry Trade Services Trade with EU15 Yes No, but intention No intention Trade partners in the EU None One country 2-5 countries More than 5 countries GALLUP Source: FLASH EB July 04 August 2006 Q1d. I would like to know whether the following European Union Single Market measures have had an impact on your firm s activities? % NMS10 and by country No less than three quarters of executives working in industry confirm the positive impact of the elimination of customs documentation on their business activities. The positive impact has also been regarded high in companies in the trade sector being confirmed by more than two thirds of those interviewed. Large firms are more likely to benefit from this measure than smaller firms. As we would expect, companies actually trading with one or more old Member States, and companies regularly selling products or services to at least one member country, clearly benefit from the elimination of customs documentation. Analytical Report, page 7

8 Flash EB N o 190 Internal Market: Opinions and experiences of Businesses in the 10 New Member States The Gallup Organization 1.2. Abolition of border controls The elimination of customs documentation is one of the major factors necessary for the abolition of border controls, thus the relationship between the two would naturally lead us to expect similar opinions about both of these measures. This presumption is confirmed in that the abolition of border controls follows very close behind customs documentation in terms of the average number of managers in the NMS10 recognising its positive impact on their firm s activities, being confirmed similarly by 62%; only 2% saying that the impact has been negative, and 16% saying this has no impact. For the abolition of border controls the scores by country are rather similar to those for customs documentation, with Slovenia at 79%, preceding Poland (70%) and Slovakia (69%). Relatively few Maltese respondents state that the impact has been positive for their company (44%). Less than half of Latvians are also somewhat more critical (48%). These two main factors with impact on the NMS10 businesses (elimination of border documentation and border control) are similarly the most important ones in EU15 (48% and 45%, respectively, emphasize the positive impact of these factors). As can be seen from the data, in Malta far fewer executives recognise the positive impact of the abolition of border controls (44%) compared to those ensuing from the elimination of customs documentation (59%). A similar pattern occurs in Estonia (58%-67%) and Cyprus (54%-63%). Abolition of border controls: % of positive impact NMS10 SI PL SK LT EE CY CZ HU LV MT NMS10 Number of employees Construction Industry Trade Services Trade with EU15 Yes No, but intention No intention Trade partners in the EU None One country 2-5 countries More than 5 countries GALLUP Source: FLASH EB July 04 August 2006 Q1e. I would like to know whether the following European Union Single Market measures have had an impact on your firm s activities? % NMS10 and by country The type of company positively impacted by the elimination of customs documentation is, as we would expect, also benefiting from the abolition of border controls. Large firms and companies are the most inclined to confirm the positive impact of the abolition of border controls for their business activities. Those exporting to old Member States and those having more trading partners in the EU are the most inclined to share this point of view. page 8

9 The Gallup Organization Flash EB N o 190 Internal Market 1.3. European product standards 39% of company executives recognise the positive impact of European product standards on their business activities. Although lagging much behind the previous measures in terms of positive votes, overall this aspect ranks the third. In relatively high number, but less than one in three executives claim that their business activity has been unaffected by product standards (29%), while 8% say that for their firm s activities the impact has been negative. There are one in five executives mentioning they are not concerned (22%). In EU15 this factor comes at the fourth place, as 30% of company managers mentioned it as having positive impact on their businesses. Poland and Malta (both 49%), followed by Slovenia and Cyprus (both 48%) are the countries where company managers most appreciate the benefits of product standardisation. In the remaining six new member countries less than half of executives share this view, the fewest executives in Latvia (21%). European product standards: % of positive impact NMS10 PL MT SI CY SK HU CZ EE LT LV NMS10 Number of employees Construction Industry Trade Services Trade with EU15 Yes No, but intention No intention Trade partners in the EU None One country 2-5 countries More than 5 countries GALLUP Source: FLASH EB July 04 August 2006 Q1a. I would like to know whether the following European Union Single Market measures have had an impact on your firm s activities? % NMS10 and by country Managers working in the industry sectors are comparatively more positive about the impact of European product standards on their business compared to those operating in the services or construction sectors. The largest enterprises, with more than 250 employees, are the most positive about this measure. Companies actually exporting to the EU15 are the strongest in their assertions of the positive impact of this measure on their firm s activities, as well as those that have 2-5 trade partners in EU. Analytical Report, page 9

10 Flash EB N o 190 Internal Market: Opinions and experiences of Businesses in the 10 New Member States The Gallup Organization 1.4. VAT procedures for sales within the EU A number of developments have taken place recently with a view to harmonising the value-added tax collection systems of the Member States and provide for a uniform basis for the collection of VAT. The progress made regarding VAT procedures for sales is favourably viewed in terms of their firm s activities by 39% of company executives. Around a quarter of executives think this measure has no impact on their activities and 7% claim it has negative impact. There is another close to quarter of respondents mentioning they are not concerned (23%). The steps to harmonize VAT procedures for sales as a factor having positive impact on their businesses is mentioned by 32% of executive in EU15, and this is the third most important factor mentioned by the old Member States company managers. Less than one in two company managers in Poland (47%) recognise the positive impact of Single Market measures with regard to VAT procedures for sales on their firm s activities, being the highest result at the country level. Relatively high results are observed in Slovakia, Slovenia and Estonia (all 43%). In comparison, only 24% of executives in the Czech Republic believe in the positive impact of this measure for their business. VAT procedures for sales within the EU: % of positive impact NMS10 PL SK SI EE MT CY HU LV LT CZ NMS10 Number of employees Construction Industry Trade Services Trade with EU15 Yes No, but intention No intention Trade partners in the EU None One country 2-5 countries More than 5 countries GALLUP Source: FLASH EB July 04 August 2006 Q1f. I would like to know whether the following European Union Single Market measures have had an impact on your firm s activities? % NMS10 and by country The company category breakdown for this factor follows the tendency observed for the previous measures as regards the company attributes. Managers from the trade and industrial sectors, managers from the largest companies recognise the positive impact for their firm. Companies that actually engage in trade with old Member States are much more positive about the impact of this Single Market measure on their business activities than others, and the executives of companies trading with 2-5 European partners claim the same. page 10

11 The Gallup Organization Flash EB N o 190 Internal Market 1.5. The liberalisation of capital movements The EC Treaty prohibits all restrictions on capital movements (investments) and all restrictions on payments (for goods or services). But in some of the Member States there are exceptional clauses (derogations) absolving these states under the legislations. Executives claim in almost equal proportions both that the liberalization of capital movements has positive impact and that this has no impact on their businesses (31% and 32%, respectively). Only 2% say that the impact has been negative for their firm (and 28% that they are not concerned). The liberalization of capital movements is seen to have positive impact by 25% of the EU15 company managers. The Cypriots are placed at the upper end of the scale (50%) followed in a distance by Slovenians (39%) and Maltese (37%). In contrast, only 22% of managers in Hungary consider that the impact of this measure has been positive for their firm s activities. The liberalization of capital movements: % of positive impact NMS10 CY SI MT PL SK EE LT CZ LV HU NMS10 Number of employees Construction Industry Trade Services Trade with EU15 Yes No, but intention No intention Trade partners in the EU None One country 2-5 countries More than 5 countries Source: FLASH EB July 04 August 2006 Q1g. I would like to know whether the following European Union Single Market measures have had an impact on your firm s activities? % NMS10 and by country GALLUP Here are slightly less differences among companies from different sectors but in general the same trend can be seen here as in our previous analysis. Companies in trade, largest firms or those actually exporting to old Member States and having more partners in EU are the most convinced of the positive impact of the liberalisation of capital movements on their firm s activities. Analytical Report, page 11

12 Flash EB N o 190 Internal Market: Opinions and experiences of Businesses in the 10 New Member States The Gallup Organization 1.6. European labelling and packaging rules Labelling and packaging regulation is viewed as having positive impact on business activities by one in four company executives (25%). One third of executives didn t see any impact (33%), and 8% of them see negative effects of this measure. There are another one third of executives mentioning they are not concerned (32%). The European labelling and packaging rules are mentioned by almost a quarter of company executives from EU15 as ones having positive impact on their companies (23%), a figure very close to that we find in NMS10. Slovenians are most positive about the impact of European labelling and packaging rules on business activities but this highest figure is not covering more than the third of executives claiming so (32%). Slovenians are followed by Polish (31%) and by Cypriots (30%) on this scale which is closed by Estonians (16%). European labelling and packaging rules: % of positive impact NMS10 SI PL CY MT SK CZ LT LV HU EE NMS10 Number of employees Construction Industry Trade Services Trade with EU15 Yes No, but intention No intention Trade partners in the EU None One country 2-5 countries More than 5 countries GALLUP Source: FLASH EB July 04 August 2006 Q1b. I would like to know whether the following European Union Single Market measures have had an impact on your firm s activities? % NMS10 and by country The impact of European labelling and packaging rules appears to be the most positive on the business activities of the largest companies, and companies in the trading and industry sectors. Companies actually engaging in trade with old Member States and those planning to engage in such trade are the most positive about the impact of this measure on their firm. Also, companies with more than two trading partners claim positive impact of the labelling and packaging rules in relatively high proportions. page 12

13 The Gallup Organization Flash EB N o 190 Internal Market 1.7. European public procurement rules Total public procurement in the EU is estimated at about 16% of the Union's GDP or EUR1500 billion in The legislative package of public procurement Directives, approved in 2004 by the European Parliament and the EU's Council of Ministers, will help simplify and modernise procurement procedures, for example by facilitating electronic procurement in the public sector. The deadline for transposition of these Directives into national law was on 31 January According to current opinion among business executives, public procurement rules are not yet positively affecting the vast majority of companies in the Single Market. Only 14% observed positive impact of this measure, one third of them mentioning this has no effect at all (33%), and a small minority that it has negative impact (4%). Comparing to other Single Market measures, the ratio of those executives is very high who say they are not concerned (40%). We saw the same low ratios of positive impact answers in EU15 where 12% of business executives emphasize this factor. Public procurement figures are relatively low in all new Member States. For this measure Cyprus tops the list with 28% of respondents confirming positive impact on their business activities, followed by Slovenians (21%), and at the end of the scale with the Czech (9%). European public procurement rules: % of positive impact NMS10 CY SI LV LT SK MT PL EE HU CZ NMS10 Number of employees Construction Industry Trade Services Trade with EU15 Yes No, but intention No intention Trade partners in the EU None One country 2-5 countries More than 5 countries Source: FLASH EB July 04 August 2006 Q1c. I would like to know whether the following European Union Single Market measures have had an impact on your firm s activities? % NMS10 and by country GALLUP Other types of companies emphasized the positive impact of European public procurement rules more than in the case of the previously discussed Single Market measures. Construction and services companies are slightly more enthusiastic about the impact of European public procurement rules on their firm s activities compared to other sectors. Medium sized and large companies are also positively impacted by these European public procurement rules. We also see that European public procurement rules have had a positive impact on those companies that plan to trade with EU15, as well as those that do not yet have any trading partners in the European Union. Analytical Report, page 13

14 Flash EB N o 190 Internal Market: Opinions and experiences of Businesses in the 10 New Member States The Gallup Organization 1.8. Rules for establishing a business in other EU countries The principle of freedom of establishment enables an economic operator (whether a person or a company) to carry out an economic activity in a stable and continuous way in one or more Member States. The objective of the Services proposal, adopted by the Commission in January 2004, is to achieve a genuine Internal Market in services by removing legal and administrative barriers to the development of service activities between Member States. The proposed Directive would guarantee service providers more legal certainty if they want to exercise two fundamental freedoms (freedom of establishment and freedom to provide services) enshrined in the EC Treaty. 3 The results show that there is considerable room for improvement regarding the rules of establishing a business in other Member States. As few as 10% of respondents consider that the rules for establishing a business in other EU countries has had a positive impact on their company activities - the lowest positive score out of all eight measures. It is interesting to note that the ratio of those executives is the highest that mentioned they are not concerned (52%). In EU15 this factor is mentioned in the lowest rate, too, by executives as a factor with positive impact on their businesses (12%). Cyprus ranks highest with 24% of executives acknowledging that their firm has benefited from Single Market rules for establishing a business in other EU countries, followed by Slovenia (23%). In the least proportion, only 6% of Estonian executives agree. Rules for establishing a business in other EU countries: % of positive impact NMS10 CY SI MT LT SK LV PL HU CZ EE NMS10 Number of employees Construction Industry Trade Services Trade with EU15 Yes No, but intention No intention Trade partners in the EU None One country 2-5 countries More than 5 countries Source: FLASH EB July 04 August 2006 Q1h. I would like to know whether the following European Union Single Market measures have had an impact on your firm s activities? % NMS10 and by country GALLUP Again we see that large companies, companies exporting to old Member States and those with at least one trading partner in the EU have benefited more than other types of firms from the rules for establishing a business in other EU countries. As a conclusion of this section, on a very general level we can say that company executives in Slovenia, Poland and sometimes in Cyprus figure among the most enthusiastic when it comes to recognise the positive impact of the Single Market measures on their business. On the other hand, we see that Latvia, Hungary, and the Czech Republic rank among the lowest with positives perceptions of the Single Market measures covered in this question. However, we see some fluctuations by different measures in individual countries. 3 page 14

15 The Gallup Organization Flash EB N o 190 Internal Market The results show that in most countries either the elimination of customs documentation or the elimination of border controls has had the most widespread positive impact on business activities. Generally speaking, companies in industry and trade have benefited most from the covered Single Market measures. However, the exception to this pattern occurs for the liberalization of capital movements, European procurement rules and establishing a business in other EU countries measures where comparatively higher proportions of executives in the construction and/or service claim that these have positively impacted their firm. For each Single Market measure dealt with in the question, large companies have systematically benefited more than smaller companies. As we might expect, companies which engage in trade with the old Member States and those who have more trading partners in the EU have benefited more from the Single Market measures than their competitors which have not yet tapped into these markets. The only exception is with regard the positive impact of European public procurement rules as executives from companies that only plan to trade with EU15 and from companies that do not yet have any EU partners emphasized this in the highest proportions. Analytical Report, page 15

16 Flash EB N o 190 Internal Market: Opinions and experiences of Businesses in the 10 New Member States The Gallup Organization Part II. Effects of Single Market Measures In this chapter we present the effects of the Single Market on the level of competition coming from different type of firms, how important is its influence on the different aspects of companies strategy. We are also interested if the companies from NMS10 recruit or not staff from other member countries and if not, what are the main reason. The executives also evaluate the effects of EU enlargement on their companies profit, productivity, prices, costs and other activities, and the perceived barriers within the Single Market Impact on the level of competition It is often assumed that in any economic marketplace, the level of competition increases as the extent to which goods, services, people and capital are free to circulate is widened. In parallel with the construction of the Single Market, the European Commission adopted a strict approach to competition policy and introduced a comprehensive series of Regulations and Directives in order to foster and enforce fair competition within the Internal Market. In this section, we will assess the general impact of the Single Market on competition. Impact on the level of competition Increase No change Decrease DK/NA Domestic firms Other EU firms Non-EU firms GALLUP Source: FLASH EB July 04 August 2006 Q3. As a result of the Single Market, have you noticed an increase or a decrease in the level of COMPETITION in [COUNTRY] coming from...? % NMS10 From the average results for the NMS10, it seems as if the Single Market increases the level of competition coming from domestic or other firms for nearly half the companies in the New Member States (53% and 49%, respectively), while it introduces no change in competition from non-eu firms (58%) 4. We apply a new index for assessing the extent and direction of the impact. The overall results for the differences perceived between the increase and decrease of the different types of competition are as follows: Other EU firms Domestic firms Non-EU firms Competition 47 points 46 points 19 points 4 The executives from EU15 companies perceive an increase in competition coming from other firms in 46%, from domestic firms in 42% and from non-eu firms in 30%, while decrease in competition coming from other EU firms in 3%, from domestic firms in 6% and from non-eu firms in 3%. page 16

17 The Gallup Organization Flash EB N o 190 Internal Market Comparing these scores to those of EU15 measured in February 2006, we can see the same order. Nevertheless, the difference between the increase and decrease of level of competition coming from other EU firms and domestic firms is lower (43 and 36 points, respectively, in EU15), and competition from non-eu firms is higher (27 points in EU15) than in NMS10. Initially, when asked if the level of competition has increased, 49% of company executives considered that the level of competition has increased due to other EU firms as opposed to 2% who perceived the opposite. Therefore, the balance between these two perceptions clearly leans in favour of an increased level of competition from other EU firms (impact score of 47 points). Executives emphasize an increase in competition coming from domestic firms in the highest number (53%), but the perceived decrease is also the highest (7%). The balance leans in favour of a perceived increase in competition stemming from domestic firms, too (impact score of 46 points). One quarter of executives believe that the level of competition has increased as a result of non-eu firms (23%). However, the balance leans towards a perceived increase in competition from non-eu firms (impact score of 19 points). 66% of company executives in Latvia claim that the level of competition coming from domestic firms has increased. The impact on the level of competition stemming from domestic firms has also been high in Lithuania (64%) and Cyprus (62%). The ratio of executives who vote for a perceived increase in the level of competition coming from other EU firms is the highest in Poland (55%), followed by Latvian (54%) and Slovenian (51%) executives. Regarding the impact on the level of competition from other non-eu firms, the results are fairly similar for all New Member States with the exception of Estonia, Slovakia and the Czech Republic where lower proportion of executives noticed an increase in the level of competition from non-eu firms. Impact on the level of competition by type of company NMS10 Countries CZ EE CY LV LT HU MT PL SI SK Size of company employees employees 250+ employees Construction Industry Trade Serv ices Trade with EU15 Yes No, but intention No intention Trade partners on None One country 2-5 countries More than 5 Domestic firms Other EU firms Non-EU firms NMS10 Countries CZ EE CY Increase LV LT HU Decrease MT PL SI SK Size of company employees employees 250+ employees Construction Industry Trade Serv ices Trade with EU15 Yes No, but intention No intention Trade partners onthe EU None One country 2-5 countries More than 5 countries GALLUP Source: FLASH EB July 04 August 2006 Q3. As a result of the Single Market, have you noticed an increase or a decrease in the level of COMPETITION in [COUNTRY] coming from...? % by country Companies in the trade and services sectors have been most exposed to an increased level of competition coming from domestic firms compared to firms in other sectors. Competition coming Analytical Report, page 17

18 Flash EB N o 190 Internal Market: Opinions and experiences of Businesses in the 10 New Member States The Gallup Organization from other EU firms increased mostly in industrial sectors, while in the trade sector competition coming from non-eu firms is perceived so. Large companies are more inclined to perceive a greater increase in the level of competition and we can say the same about companies having more than 2 trading partners in the European Union, regardless whether the competition comes from domestic, other EU or from non-eu firms. Companies that actually do not trade with EU15 but plan it perceived the highest increase in competition from domestic firms, while those companies that actually trade with EU15 mentioned in the highest proportion other EU firms and non-eu firms posing increased competition Influence on company strategy In average, more than half of the business leaders recognise the significance of the impact of the Single Market on company strategy (53 points) 5. This index is significantly higher than the one we calculated from EU15 data (28 points) 6. In order to give an overall view of the influence of the company strategy related factors at the NMS10 level, we converted the scores into an index calculated as follows: very important = 100, rather important = 66.7, rather not important = 33.3, not at all important = 0. Influence on company strategy Very important Rather important Rather not important Not at all important Not relevant - Not concerned DK/NA Index Purchase from EU Products /services price Marketing strategy Cooperation agreements with companies from EU Selling to EU Offer services in EU Distribution in EU Companies from EU investing in your company Setting up businesses in EU Investing in EU companies GALLUP Source: FLASH EB July 04 August 2006 Q2. For each of the following areas, how important has the influence of the European Union Single Market been for your company s strategy? % NMS10 The fact of purchasing from other European Union countries has borne an important influence on the strategy of 57% of companies contacted, thereby confirming the practical effect of the free movement of goods or services across the European Union. There are only 16% saying this influence is rather not and not at all important. One quarter of respondents is not concerned or did not find this question relevant (27%). The average index for this area is 69 points. (In EU15, 35% of business executives consider the influence of purchasing from other EU countries important on their companies.) 5 This figure is the mathematical mean of the 10 indexes calculated for each of the items; for the calculation of indexes see the second sentence on this page. 6 This index of EU15 data is calculated as the average of the following individual indexes (indexes of Q2-items from EU15 listed in the order of the items from the above graph): 38, 41, 29, 29, 33, 27, 32, 14, 18 and 16. page 18

19 The Gallup Organization Flash EB N o 190 Internal Market In the spirit of improving the business environment and ensuring that market integration is not undermined by anti-competitive practices, pricing of products or services is considered the second most influenced area. 48% of executives say that the influence of the Single Market has had an important influence on their pricing strategy while 26% say it was not important (the average index amounts to 59 points). (39% of EU15 company executives mentioned this factor as having the most important influence on their business.) Five areas mainly related to selling and distribution with indexes ranging from 55 to 62 points follow next. 45% of company executives state that the Single Market has been important for the development of their marketing strategy and 26% say the contrary. Nearly half of company managers claim the importance of co-operation agreements with companies from other EU countries (44%), while 19% state the opposite. Four in ten executives say that the possibility of selling directly to other EU countries has had an important effect on their company strategy (43%), but 19% say this has an unimportant effect. For one third offering services in other EU countries has been important for their company strategy (33%), while for 21% it is not. Similarly, for 34% of company executives the Single Market has had an important impact on distribution in other EU countries and for 21% has not. (In EU15 all mentions considering important the influence of the factors mentioned above on the companies strategy are lower than in NMS10 26%, 24%, 29%, 21% and 27%, respectively.) The last three areas relate to setting up businesses in other Member States and investment (both inward and outward) are confirmed as being influential factors in the strategy of between 11% and 18% of companies. For these three areas the number of those executives claiming that the influence of the Single Market is unimportant outnumber of those saying the contrary. We should also emphasize the high ratio of those executives who are not concerned in these questions (62%, 59% and 65%, respectively). In EU15 the ratios of those considering these three factors important with regard to their company s strategy are between 9-11%. If we omit from our analysis those executives for whom the questions are not relevant, we get a slightly different picture regarding the first five areas that influence the company strategy. While the highest influence area ( purchase from EU ) remains the most influential one with this calculation, the influence on products and services prices becomes only the fourth most mentioned (and not the second one as we saw previously). The influence of Single Market measures on cooperation agreements with EU companies comes up from fourth to the second place and the influence on selling to EU from fifth to the third place, while the influence on marketing strategy drops from third to fifth place. Influence on company strategy Purchase from EU Cooperation agreements with companies from EU Selling to EU Products /services price Marketing strategy Offer services in EU Distribution in EU Companies from EU investing in your company Setting up businesses in EU Investing in EU companies Not important Important GALLUP Source: FLASH EB July 04 August 2006 Q2. For each of the following areas, how important has the influence of the European Union Single Market been for your company s strategy? (without Not relevant / Not concerned answers) % NMS10 Analytical Report, page 19

20 Flash EB N o 190 Internal Market: Opinions and experiences of Businesses in the 10 New Member States The Gallup Organization In order to assess the influence of the Single Market on company strategy at Member State level, we will take each of these items in turn and highlight the highest-ranking countries for the proportion of important answers and in parallel identify those Member States where most executives believe that the influence of the corresponding area has been not important. The next table presents only the top three mentions of important answers in each country. The influence on purchase from EU is emphasized on the first place in all but two countries. The two exceptions are Latvia and Slovakia where executives mention the influence on products and services prices in the highest number. In these two countries the purchase from EU is mentioned only on the third and second places respectively. The influence of the Single Market on products and services prices is mentioned on second and third places in six of the ten countries, while the cooperation agreement with EU companies and marketing strategy both in 5 countries. The executives mentioned among the top three the influence of Single Market on selling to EU as important only in the Czech Republic, and we find among the top three most influenced areas the setting up businesses in EU only in Slovenia. Influence of Single Market measures on company strategy (% of important by country, top three mentions) CZ EE LV LT CY Purchase from Purchase from Products Purchase from EU EU /services price EU 59 Cooperation Cooperation Products Marketing 40 agreement with agreement with /services price strategy EU companies EU companies 58 Selling to EU 37 Products /services price 52 Purchase from EU 40 Products /services price 49 Purchase from EU Products /services price Marketing strategy HU MT PL SK SI Purchase from Purchase from Purchase from Products EU EU EU /services price 56 Cooperation Products Marketing Purchase from 51 agreement with /services price strategy EU EU companies 54 Marketing strategy 39 Marketing strategy 40 Cooperation agreement with EU companies 50 Cooperation agreement with EU companies 48 Purchase from EU Products /services price Setting up businesses in EU 56 Purchasing from other European Union countries is important for the strategy of companies mainly in Slovenia (74%), and executives from Estonia (63%) and Poland (62%) but in somewhat less number. On the other hand, in Cyprus and in Latvia (both 26%) this has not been important for the strategy of a majority of companies (see slide on next page). The impact of the Internal Market on the pricing of products or services and the consequent increase in price competition has been particularly significant for the development of the company strategy of firms in Slovenia (64%), followed in a distance by firms in Slovakia (56%), Estonia (52%) and Cyprus (52%). As observed with the previous item, Latvia (35%) and Cyprus (32%) are again the countries where most company executives believe that the influence of the Single Market has been unimportant in their firm s pricing strategy. The Single Market has had an important influence on the marketing strategy of a majority of companies in Slovenia (54%), Poland (53%) and Cyprus (51%). 45% of executives in Latvia and 37% in Estonia state that the Single Market has not borne an important influence on their firm s company strategy. Co-operation agreements with companies from other EU countries are significantly important for companies in Lithuania (58%), Estonia (54%) and Slovenia (52%). In Slovenia not only those page 20

21 The Gallup Organization Flash EB N o 190 Internal Market executives are in high proportions who see the positive impact of the Single Market on cooperation agreements, but also those who disagree (28%). Cypriot executives emphasize in the highest proportion the unimportance of influence in this area (29%). Intra-EU sales have had the biggest impact on company strategies in Slovenia (53%) and Poland (49%). This has not been important for company executives in Cyprus (30%), Estonia (25%) and Latvia (25%). The Single Market exercise the highest effect on offering services in the EU in Slovenia (44%) and Poland (40%), while this influence is not perceived by Cypriot (33%) -- and Slovenian executives (29%). Influence on distribution in the EU is considered important by Slovenians (46%) and Polish (40%), and unimportant by Cypriots (36%), Lithuanians (31%) and Latvians (30%). Unlike the findings in the previous analysis, the influence of Single Market on companies from EU who invest in the respondents companies has the largest importance in Cyprus (28%) and Lithuania (26%). Executives from Slovenia (39%) and Cyprus (38%) mentioned in the highest number that this kind of influence is not important for their companies. More than half of the company managers in Slovenia state that setting up businesses in other EU countries has had an important influence on their company strategy (56%), and the same opinion is held in relatively high number the executives from Lithuania (33%) and Cyprus (27%), too. On the other hand, setting up businesses in other EU countries has not been important in the largest proportion for the strategy of Cypriot (34%) and Estonian (31%) companies. As regards investment patterns in EU companies, similarly to inward investments, companies in Cyprus are the highest investors (and recipients) of investments in the EU (22%), followed by Maltese companies (20%). In contrast, companies in Slovenia rank among the lowest both for inward (39%) and outward (39%) investment patterns. Influence on company strategy by country Not important Important NMS1 0 CZ EE CY LV LT HU MT PL SI SK Purchase from EU NMS1 0 CZ EE CY LV LT HU MT PL SI SK Products/services price NMS1 0 CZ EE CY LV LT HU MT PL SI SK Marketing strategy Cooperation with EU companies NMS1 0 CZ EE CY LV LT HU MT PL SI SK NMS1 0 CZ EE CY LV LT HU MT PL SI SK Selling to EU Offer services in EU Distribution in EU Companies from EU investing in your company Setting up businesses in EU Investing in EU companies NMS1 0 CZ EE CY LV LT HU MT PL SI SK NMS1 0 CZ EE CY LV LT HU MT PL SI SK NMS1 0 CZ EE CY LV LT HU MT PL SI SK NMS1 0 CZ EE CY LV LT HU MT PL SI SK NMS1 0 CZ EE CY LV LT HU MT PL SI SK GALLUP Source: FLASH EB July 04 August 2006 Q2. For each of the following areas, how important has the influence of the European Union Single Market been for your company s strategy? % by country Analytical Report, page 21

22 Flash EB N o 190 Internal Market: Opinions and experiences of Businesses in the 10 New Member States The Gallup Organization Business leaders in industry are generally likely to believe that the Single Market has important influence on their company strategy. There are however some exceptions: companies from the service sector consider in the highest proportion the influence on inward and outward investments to be important. Furthermore, the strategy of medium-sized and large companies has been more influenced by the Single Market than smaller companies. The strategies of companies which engage in exports with old Member States and have more trading partners in the EU are considerably more likely to be influenced by the Single Market for all of the areas covered in this question. Influence on company strategy Products /services price Purchase from EU Selling to EU Distribution in EU Offer services in EU Setting up businesses in EU Investing in EU companies Companies from EU investing in your company Cooperation agreements with companies from EU Marketing strategy NMS Size of company employees employees employees Construction Industry Trade Services Trade with EU15 Yes No, but intention No intention Trade partners in the EU None One country countries More than 5 countries page 22

23 The Gallup Organization Flash EB N o 190 Internal Market 2.3. Recruitment from other Member States The free movement of workers is one of the underlying objectives of the Single Market. Equal treatment as regards employment, remuneration and other conditions of work and employment, between nationals of a Member State and nationals of another Member State has been guaranteed to both employed persons and those seeking employment in the European Union with serious limitations in the NMS zone. However, such restrictions are not characteristic to the labour market of the NMS zone. The NMS10 employers are not very active in recruiting staff from another Member State: only 10% of companies confirm they recruited personnel who have moved from another Member State. Employers from EU15 are more active in recruiting staff from another Member State: 27% of company executives confirmed they recruited employees, and this ratio is increasing (in % of EU15 executives said so). There are only two countries among the New Member States that relatively stand out: Cyprus with 26% and Malta with 23%. (Mark that Cyprus has the highest GDP per capita in Purchasing Power Standards in the NMS10 in 2006, while Malta has the fourth highest one 7.) The Czech Republic (15%), Hungary (13%) and Slovenia (13%) follow next with around one in seven companies claiming to have recruited staff who moved from another Member State. In the remaining countries, less than or equal to 10% of company executives have previously recruited staff from another Member State, with the lowest proportion of mentions in Latvia (3%). Recruitment from other Member States NMS10 10 CY 26 MT 23 CZ 15 HU 13 SI 13 SK 10 LT 8 PL 7 EE 6 LV 3 yes no DK/NA NMS10 Number of employees Construction Industry Trade Services Trade with EU15 Yes No, but intention No intention Trade partners in the EU None One country 2-5 countries More than 5 countries GALLUP Source: FLASH EB July 04 August 2006 Q4. Has your company in [COUNTRY] recruited staff who have moved to [COUNTRY] from another Member State? % by NMS10 and by country The largest firms, and companies in the construction and service sectors, those actually trading with EU15 and those having more trading partners in the EU are the most likely to recruit staff from another country of the European Union. 7 GDP per capita in PPS for 2006, Eurostat Analytical Report, page 23

24 Flash EB N o 190 Internal Market: Opinions and experiences of Businesses in the 10 New Member States The Gallup Organization Company executives who have not recruited staff from other Member States were asked to identify the most important and the second most important reasons that explain this 8. The principal factor spontaneously cited by 60% of company managers is that the local or national employment market is sufficient, 49% mentioning this as the most important, and 11% as the second most important reason. We underline the fact that this option was not specifically proposed in this question, it was a spontaneous option near by the other and DK answer categories. In EU15 the same item was the principal, but much less cited factor, only by 36% of executives (mark that the formulation of the questions was not the same in the two surveys: while in NMS10 we asked about the first and the second most important factors separately, in EU15 the question only asked what are the two main reasons.) More than half of the executives indicated answers other than those proposed when asked to specify (56%), and one in five didn t want or couldn t answer the question (22%). Main reasons of not recruit any staff from other Member States Sufficient local or national employment market Most important Second most important Wage differentials and financial incentives 9 9 Lack of information how to recruit 7 7 Difficulties in assessing professionalism Poor language skills Social security right difficulties 1 4 Immobility Pension provision difficulties Other DK/NA GALLUP Source: FLASH EB July 04 August 2006 Q5. What are the main reasons your company has not recruited any staff from another Member State? Tell me what is the most important? And let me read it again, and tell me that what is the next most important reason? % NMS10 Base: those who have not recruited any staff One of the main recurring reasons was the wage differentials and financial incentives (18%), followed by reasons as lack of information on how to recruit (14%) and difficulties in assessing professional experience and qualifications (9%). Taking these last two items together, we can see that a significant proportion of managers would be in a better position to recruit staff from another Member State if provided with general information on recruiting staff from EU countries together with a reference guide for comparing qualifications across Member States. Regarding these three reasons, only the wage differentials and financial incentives item is significantly differently rated in EU15: a mere 3% of executives from EU15 companies consider it a burden to recruit staff from another Member State. Insufficient language skills played a primary role for only 8% of company executives not to recruit staff from another Member State. This reason is much more cited in EU15: 15% of executives mentioned it. Issues that involve social security right difficulties, immobility and pension provision are not major inhibiting factors for recruitment from other Member States (5%, 4% and 1% respectively). Neither are these reasons have overrated effects in EU15; only 5%, 3% and 1% of executives, respectively, mentioning it. 8 The item Transitory measures put in place for workers from the new Member States asked in EU15 countries is not applicable in NMS10. page 24

25 The Gallup Organization Flash EB N o 190 Internal Market Industry and trade sectors are those where executives are the most often on the opinion that the local or national market is sufficient. Companies in construction are more likely to have been discouraged from recruiting staff from another Member State due to administrative difficulties related to social security rights, to difficulties in assessing professionalism and lack of information. The services sector mentioned in the highest rate the difficulties in assessing professionalism as the reason not to recruit staff from another Member State. Large firms appear to have more of a problem with candidates poor language skills, with immobility and wage differentials and hence have not recruited staff from other countries in the European Union (see the Annex for detailed data) Impact of enlargement on activities The graph below presents the results for the perceived impacts of the enlargement of the Single Market in May 2004 at the level of the NMS10. Except with the impact on cost of raw materials and cost of wages, the answers relating positive experience outnumber those based on negative ones. Impact of enlargement on activities Positive impact No impact Negative impact DK/NA Access to new markets Productivity Profitability Selling prices Growth in employment The cost of wages The cost of raw materials Source: FLASH EB July 04 August 2006 Q6. For each of the following, could you please tell me whether the 2004 enlargement of the EU had a positive or negative effect on... % NMS10 GALLUP In all but one country the access to new markets is mentioned in the highest rate as the area where enlargement has positive impact. The only exception is Latvia, where executives emphasize the profitability as such an area. Profitability, mentioned on the third place in NMS10, is situated among top three in other four of the ten countries (in Estonia, Poland, Slovakia and Slovenia). Productivity is among top three mentions (second highest mention at NMS10 level) in all countries except in Latvia and Lithuania. In these two countries the cost of wages, the access to new markets, and the growth of employment are mentioned in the second and third highest rate as areas where enlargement induces positive impact. Among the top of three mentions we find the positive impact of enlargement on selling prices in the Czech Republic and in Malta, while the positive impact on growth of employment in Cyprus (and in Lithuania as we already mentioned). Analytical Report, page 25

26 Flash EB N o 190 Internal Market: Opinions and experiences of Businesses in the 10 New Member States The Gallup Organization Positive impact of EU enlargement on company activities (% of positive impact by country, top three mentions) CZ EE LV LT CY Access to new Access to new Access to new Access to new Profitability markets markets markets markets Productivity 38 Productivity 39 Cost of wages 50 Cost of wages 58 Productivity 24 Access to new Growth in Growth in Selling prices 20 Profitability markets employment employment HU MT PL SK SI Access to new Access to new Access to new Access to new Access to new markets markets markets markets markets Productivity 27 Productivity 22 Productivity 55 Productivity 48 Productivity 44 Cost of wages 17 Selling prices 19 Profitability 42 Profitability 36 Profitability Since a majority considers that the latest enlargement did not impact the Single Market in all of the areas covered (average of no impact answers is 43%, positive impact answers average at 33% and negative impact answers at 19%), we decided to assess the difference between the positive and negative results by simply subtracting the latter from the former in order to construct an impact score. Impact score for enlargement on activities (the difference between the positive and negative results) The cost of raw materials -14 The cost of wages -8 Selling prices 2 Profitability 13 Growth in employment 17 Productivity 40 Access to new markets 50 GALLUP Source: FLASH EB July 04 August 2006 Q6. For each of the following, could you please tell me whether the 2004 enlargement of the EU had a positive or negative effect on... % NMS10 This impact score shows that company executives recognise the widening of the Single Market. The balance leans towards access to new markets (+50 points) and to productivity (+40 points). The score is positive for the growth in employment, profitability and selling prices areas, too (+17, +13 and +2 points, respectively). However, when it comes to costs of either raw materials or wages, more company executives consider the impact to be negative than those with a positive perception (-14 and - 8 points). We note that the proportions ranging from 54% to 71% of EU15 executives stating that the Single Market has no impact on their activities are much higher than in NMS10. There are only two areas with perceived positive impact scores: access to new markets (+27) and productivity (+6). The difference between positive and negative perceived impact is negative in all other areas, with a -22 impact score on selling prices. page 26

27 The Gallup Organization We also analyse the impact scores by individual countries. Impact score for enlargement on activities by country (the difference between the positive and negative results) Flash EB N o 190 Internal Market Access to new markets Productivity Profitability NMS1 0 CZ EE CY LV LT HU MT PL SI SK NMS1 0 CZ EE CY LV LT HU MT PL SI SK NMS1 0 CZ EE CY LV LT HU MT PL SI SK Selling prices Growth in employment Cost of wages Cost of raw materials NMS1 0 CZ EE CY LV LT HU MT PL SI SK NMS1 0 CZ EE CY LV LT HU MT PL SI SK NMS1 0 CZ EE CY LV LT HU MT PL SI SK NMS1 0 CZ EE CY LV LT HU MT PL SI SK GALLUP Source: FLASH EB July 04 August 2006 Q6. For each of the following, could you please tell me whether the 2004 enlargement of the EU had a positive or negative effect on... % points by country Regarding the positive impact of enlargement on access to new markets and to productivity, in all countries the value of impact score is positive indicating that executives from all countries recognize the positive impact on these areas, especially in Poland (+63 and +51 points). Regarding profitability and selling prices, there are three countries with negative impact scores; Hungary (-25 and -26 points respectively), Malta (-18 and -15 points) and Cyprus (-10 and -12 points). In all other countries positive impact scores were found, with the highest values in Latvia (+34 and +19) and in Lithuania (+18 and +27). More executives mentioned that the growth of employment was positively affected than negatively in all but two countries. Only in Estonia (-25 points) and Hungary (-6 points) do negative effect answers outnumber the positive ones. While at the NMS10 level we see that the enlargement affected negatively the costs of wages and raw materials, some exceptions can be emphasized at individual country level. The number of executives from Lithuania (+37 points) and Latvia (+20 points) saying enlargement has positive effects on cost of wages outnumber those executives saying the contrary, and more Slovenians executives emphasize the positive effect on the cost of raw materials than the negative (+5 points). Analytical Report, page 27

28 Flash EB N o 190 Internal Market: Opinions and experiences of Businesses in the 10 New Member States Impact of enlargement The Gallup Organization The cost of raw materials The cost of wages Access to new markets Selling prices Productivity Profitability Growth in employment NMS Size of company employees employees employees Construction Industry Trade Services Trade with EU15 Yes No, but intention No intention Trade partners in the EU None One country countries More than 5 countries Executives of large and medium sized firms, companies operating in the industrial sector and, as we might expect, those trading with the old Member States and having more trading partners in the EU are most positive about the fact that the enlargement of the Single Market to 10 new countries has given their firm the opportunity to access new markets. Large firms are the most positive about the impact of the Single Market enlargement in May 2004 on productivity, profitability and the cost of raw materials, while medium sized firms about selling prices and the cost of wages. Companies engaging in construction are the most positive about the effect enlargement has on profitability, selling prices, growth of employment and cost of wages, while those engaging in industry emphasized the positive impact on access to new markets, productivity and cost of raw materials. Those from the trade sector see the positive impact on productivity, profitability and growth in employment. page 28

29 The Gallup Organization Flash EB N o 190 Internal Market 2.5. Impact of enlargement on trade More than half of the company executives engage in the trade of products or services with the old Member States: 6% for less than two years and 48% for more than two years. A further 13% intend to do so in the coming 3 years, while nearly one third of company executives do not intend to exploit this market in the short term (29%). These figures significantly differ from those of EU15 where 53% of company executives mentioned they do not and don t intend to engage in trade relationship with new Member States. There are only a quarter of EU15 companies having trade relationships with NMS10 companies (26%). Impact of enlargement on trade No, and I don't intend doing so over the next 3 years; 29 DK/NA ; 3 Yes, for less than 2 years; 6 No, but I intend doing so over the next 3 years; 13 Yes, for more than 2 years; 48 GALLUP Source: FLASH EB July 04 August 2006 Q7. Could you please tell me whether your company engages in the trade of products or services with one or more old EU Member States? % NMS10 In the graph below we grouped the first two response options yes, for less than 2 years and yes, for more than 2 years. Slovenia is the most engaged in trade with old Member States and here three quarters (76%) of executives confirm that they are trading products or services with EU15. Malta ranks next with 61% of companies engaging in the trade of products or services with old Member States, followed by Slovakia at 60%. Impact of enlargement on trade Yes No, but I intend doing so over the next 3 years No, and I don't intend doing so over the next 3 years DK/NA NMS NMS10 Number of employees SI MT Construction Industry SK PL Trade Services Trade with EU HU CY Yes No, but intention CZ No intention 100 Trade partners in the EU LT None EE One country countries LV More than 5 countries GALLUP Source: FLASH EB July 04 August 2006 Q7. Could you please tell me whether your company engages in the trade of products or services with one or more old EU Member States? % NMS10 Analytical Report, page 29

30 Flash EB N o 190 Internal Market: Opinions and experiences of Businesses in the 10 New Member States The Gallup Organization In five of ten new member countries 52%-57% confirm that their company engages in trade with the old Member States. Companies in Latvia and Estonia are the least likely to engage in trade with the countries already members of the EU before Companies in industry are considerably more likely to engage in trade with the old Member States than firms in other sectors. Large firms are also more likely to engage in trade with the EU15 than SME's. It was highly expected that companies with more than five trade partners in the European Union are also more engaged in trade with EU Barriers to trade within the Single Market as a whole 49% of companies are currently not exporting to other Member States. (This figure is very close to the 52% we see in EU15.) In this section we will explore the possible reasons why these companies are not tapping into the Single Market. 9 Barriers to trade within the Single Market as a whole More than 5 countries; 13 Your local demand is sufficient Your products are not suitable for export You would like to export but you would need more information You lack the financial means to export countries; 27 None; 49 You have not yet considered the possibility 6 5 One country; 11 You have already tried to export, but encountered problems You would like to export but you are worried about encountering barrieres Other DK/NA A3. Apart from [COUNTRY], in how many countries of the European Union do you regularly sell products or services? GALLUP Source: FLASH EB July 04 August 2006 Q9. What is the main reason your company is not exporting to other countries within the Single Market? % by NMS10 Base: only those who don t regularly sell products or services in any other country From the graph above we can see that for 29% of companies not selling products or services to other EU countries, local demand is perceived to be sufficient and that it is therefore not necessary to export to other Member States. Another relatively widespread issue is the perceived unsuitability of products for export with 19% of executives mentioning this. These two reasons are the most important ones also in EU15 for not exporting to other Member States, but much higher proportions of executives emphasized them: 62% and 43%, respectively. A very significant one quarter of executives in NMS10 mentioned a reason that the survey did not anticipate in the list of possible answers to explain why they not export to the EU (23%). 7% of companies explicitly confirm that they would like to export but need more information. These results demonstrate the slight potential for a rise in intra-eu trade. Slightly more executives from EU15 mentioned this item as an obstacle (11%). 6% are prevented from exporting within the Single Market for financial reasons and another 6% underline the fact that their company does not export within the EU because they have not yet 9 This question was asked from all those who answered none at A3 Apart from [OUR COUNTRY], in how many countries of the European Union do you regularly sell products or services? page 30

31 The Gallup Organization Flash EB N o 190 Internal Market considered the possibility of doing so. 5% of companies have already tried to export but encountered problems, and in the smallest mention rate, 4% state that they would like to export but are worried about encountering barriers. All these reasons play more significant roles for EU15 companies: financial reasons are mentioned by 14% of executives, not yet considering the possibility by 30%, trying but encountering problems by 7%, and worrying about encountering barriers by 13% of company executives. As the table of the top of three mentions below shows, in five of the ten New Member States, the primary reason given by company executives for not exporting to other countries within the Single Market is that local demand is sufficient (executives from the Czech Republic, Estonia, Lithuania, Poland and Slovakia say so). This reason is mentioned among top three by executives in the remaining Five New Member States. The reason not suitable products for export we see mentioned on the first place by Latvian and Maltese executives, while the remaining three countries (Cyprus, Hungary and Slovenia) claim other reason for not exporting within the Single Market. Barriers to trade within the Single Market as a whole (% of top three mentions by country) CZ EE LV LT CY Products not Sufficient local Sufficient local Sufficient local suitable for 25 demand demand demand export Products not suitable for export 27 Products not suitable for export 23 Sufficient local demand Other 22 Other 22 Other Other 25 Products not suitable for export HU MT PL SK SI Products not Sufficient local Sufficient local Other 37 suitable for demand demand export Sufficient local demand Products not suitable for export 24 Other 30 Other 19 Other Sufficient local demand 18 Products not suitable for export 17 Products not suitable for export 36 Other Products not suitable for export Sufficient local demand Other Products not suitable for export Sufficient local demand As the chart below shows, company executives in Estonia and Lithuania mentioned in the highest rate as a reason for not exporting that the local demand is sufficient for meeting supply (37% and 36%, respectively), while in Slovenia (15%), Malta (18%) and Cyprus (19%) executives share less of this feeling. Maltese executives consider in the highest proportion that their products are not suitable for export (30%), while Lithuanians say so in lowest proportion (14%) Analytical Report, page 31

32 Flash EB N o 190 Internal Market: Opinions and experiences of Businesses in the 10 New Member States The Gallup Organization Barriers to trade within the Single Market as a whole: % of mention Local demand is sufficient Not suitable products for export Need more information Lack of financial means to export NMS1 0 CZ EE CY LV LT HU MT PL SI SK NMS1 0 CZ EE CY LV LT HU MT PL SI SK NMS1 0 CZ EE CY LV LT HU MT PL SI SK NMS1 0 CZ EE CY LV LT HU MT PL SI SK Not yet considered the possibility Encountered problems Worried about encountering barriers Other reason NMS1 0 CZ EE CY LV LT HU MT PL SI SK NMS1 0 CZ EE CY LV LT HU MT PL SI SK NMS1 0 CZ EE CY LV LT HU MT PL SI SK NMS1 0 CZ EE CY LV LT HU MT PL SI SK GALLUP Source: FLASH EB July 04 August 2006 Q9. What is the main reason your company is not exporting to other countries within the Single Market? % by country Base: only those who don t regularly sell products or services in any other country Lack of financial means to export is mentioned by 1% (in Estonia) to 13% (in Latvia) of executives in each of the member states and comparatively low proportions of business leaders also mentioned they have not yet considered the possibility of exporting within the EU (ranging from 2% in Hungary to 8% in Estonia, Latvia and Slovakia). Now we look at those countries where there is perhaps somewhat greater potential for launching exporting activities to other Member States. The response of managers in Cyprus, Hungary and Slovenia is slightly higher than that in other Member States, with one in seventeen managers who would like to export but are concerned about encountering barriers. Company executives in Poland (9%) would like to export but are in need of more information. In Slovenia, 8% of companies tried to export to other Member States but encountered problems. As the table below shows, among the companies which don t regularly sell products and services in any country, the most convinced that local demand is sufficient are those active in the construction sector, the smallest firms, and those which don t trade with the old Member States. Companies whose products are not suitable for export are generally in services, are medium sized companies and those who have no intention to trade with EU15. In assessing firms that have not yet considered the possibility but could potentially present an opportunity for increasing intra-eu trade tend to be from the trade sector and medium sized firms. SME s and industrial companies are more likely to lack the financial means to export. Companies that present an explicit interest in increasing intra-eu trade (answered that they would like to export but need more information or are worried about encountering barriers) tend to be in the smallest companies from the industrial sector. The largest companies and those which are actually trading with EU15 companies have already tried to export but encountered problems. page 32

33 The Gallup Organization Flash EB N o 190 Internal Market Base: only those who don t regularly sell products or services in any other country Your local demand is sufficient Your products are not suitable for export You would like to export but you would need more information You lack the financial means to export You have not yet considered the possibility You have already tried to export, but encountered problems You would like to export but you are worried about encountering barriers Other DK/NA NMS Size of company employees employees employees Construction Industry Trade Services Trade with EU15 Yes No, but intention No intention Analytical Report, page 33

34 Flash EB N o 190 Internal Market: Opinions and experiences of Businesses in the 10 New Member States The Gallup Organization Part III. Future of the Single Market The guarantee of fair competition is identified as a priority area for future Single Market policy in the New Member States. The large majority of executives emphasized this question as important (66% as very important and 25% rather important) to be tackled in the future by a Single Market policy. There are only 7% who consider this issue unimportant for their company (3% of them saying it is not at all important). The fair competition is seen as the most important one to be included in the future EU policy not only in NMS10 but also in EU15 companies. However less executives from the old Member States emphasized it important (82%) than in NMS10. Activities to be included in the future Single Market policy Important Unimportant DK/NA Ensuring fair competition within the Single Market Ensuring that companies can do business throughout the Single Market on the basis of one set of rules A further opening up to competition of public utility services Removing remaining technical barriers to trade in goods Removing remaining technical barriers to trade in services Facilitating labour mobility Strengthening intellectual property rights protection Creating a patent valid in all EU countries Achieving an integrated European financial market Further opening up of public procurement markets GALLUP Source: FLASH EB July 04 August 2006 Q8. I would like to mention a number of activities which could be part of future Single Market Policy. Could you tell me whether you consider that for your company it is very important, rather important, rather unimportant or not important at all that future Single Market Policy tackles the question of... % NMS10 The graph above sets out the activities that could be potentially part of a future Single Market policy and ranks these according to responses of company executives. As regards the first four activities in the above graph, the order is the same in EU15 as in NMS10. The item that displays rather different behaviour in NMS10 and EU15 is the removing remaining technical barriers to services: while in NMS10 we find it on the fifth place, in EU15 it only ranks on the ninth. Earlier we saw that companies have been subjected to increased competition in various forms. As we already described, 91% of business leaders call for a guarantee of fair competition, a domain that is indeed related to the establishment of a common set of rules. The European Commission has been particularly active in the area of Competition Law and its enforcement and business leaders believe that fair competition should continue to be a top priority for EU decision-makers. Mentioning in the second highest rate, 83% of company executives consider that one of the most important areas of focus for future EU policy makers is establishing a common set of rules as the basis for business rather than separate rules in each individual Member State. In EU15 slightly less executives, 79% consider it important. Following next, 80% of business leaders are calling for a further opening-up of public utility services. In EU15 countries a much smaller proportion of executives agreed (68%). page 34

35 The Gallup Organization Flash EB N o 190 Internal Market Three quarters of company executives are convinced of the importance of removing remaining technical barriers to trade in goods (77%), while 73% consider that removing technical barriers to trade in services is important. These figures are 64% and 59%, respectively, in EU15. Company executives are also strong in their conviction that a future Single Market policy should facilitate labour mobility (73%). Previously (in Chapter 2.3.), we saw that only 10% of company executives recruited staff from another Member State suggesting that there is considerable room for improvement in order to further facilitate labour mobility. We find again lower figures in EU15: only 61% of company executives consider the facilitation of labour mobility as an important future activity. The Action Plan for the Single Market covered the field of intellectual property and set out a series of measures with a view to harmonizing certain copyright rules, protecting providers against pirating, counterfeiting, etc. The directive on the enforcement of Intellectual Property rights 10 has been adopted in April 2004, and the transposition deadline was in April The effects of this new legislation can be perhaps assessed in the New Member States by this survey. This study shows that 73% of business leaders give their support for prioritizing the further strengthening of intellectual property rights. Similarly to all other items, this is mentioned in lower proportions by EU15 executives (64%) than by their NMS10 counterparts. The Action Plan also included measures to modernize the European patent system. In the wake of the Lisbon European Council in March 2000, the Commission put forward on 1 August 2000 a proposal for a Council regulation on the Community patent. The effective entry into operation of the Community patent system requires the adoption of this regulation by the Council and of subsequent implementing regulations to be adopted in comitology procedure. In the framework of the creation of a unitary Community patent, two Commission proposals have also been presented on December 2003 on the establishment of a Community patent jurisdiction 11. The business community in the NMS10 is clearly in favour of this regulation going through with 71% of business leaders viewing the creation of a patent valid in all EU countries as being an important area which needs to be tackled. 61% of EU15 company executives agree with this idea. Executives consider important in the same number to achieve in the future an integrated European financial market (71%). In EU15 60% of executives consider it important. The area to which business leaders attach the least importance for a future Single Market policy is the further opening-up of public procurement markets (57%). Similarly, EU15 company executives attach the least importance to this activity, as well (48%). The ratio of executives considering these above-described activities to be unimportant varies between 7% and 34%. In highest number, one third of companies claim that further opening-up of public procurement markets is not an important future policy for their companies (34%). Fair competition within the Single Market is the area where executives consider it unimportant in the least proportion (7%). As the top three mentions table of important answers shows below, the executives see fair competition as the most important future policy the Single Market has to ensure in all but two countries. The exceptions are Slovenia and Latvia, where ensuring one set of rules (Slovenia) and the opening-up to competition of public utility services (Latvia) are seen as the most important future policy. These three future policies are mentioned either on second or on third places in the rest of the countries, too. Among the top three mentions of future policies considered important by executives we see the wish for removing remaining technical barriers to trade in services (in Slovenia and Estonia) and in goods (in Poland and Malta), and also the wish for facilitating labour mobility (in Cyprus). 10 Directive 2004/48/EC of the European Parliament and of the Council of 29 April Analytical Report, page 35

36 Flash EB N o 190 Internal Market: Opinions and experiences of Businesses in the 10 New Member States The Gallup Organization Activities to be included in the future Single market policy (% of important answers by country, top three mentions) CZ EE LV LT CY Open-up of Ensuring fair Ensuring fair Ensuring fair public utility competition competition competition services Uniform rules 72 Open-up of public utility services 70 Open-up of public utility services Remove barriers to trade in services 79 Ensuring fair competition 87 Open-up of public utility services 63 Uniform rules 80 Uniform rules 78 Ensuring fair competition Uniform rules 78 Facilitate labour mobility HU MT PL SK SI Ensuring fair Ensuring fair Ensuring fair Ensuring fair Uniform rules 92 competition competition competition competition Open-up Ensuring fair Uniform rules 84 of public utility 80 Uniform rules 91 Uniform rules competition services Open-up f public utility services 84 Remove barriers to trade in goods 80 Remove barriers to trade in goods 83 Open-up of public utility services 77 Remove barriers to trade in services Next we analyse each of the policies considered important for the future activity of the Single Market by individual countries and by type of companies Influence on company strategy: % of important Ensuring fair competition within the Single Market Do business throughout the Single Market on the basis of one set of rules A further opening-up to competition of public utility services Removing remaining technical barriers to trade in goods Removing remaining technical barriers to trade in services NMS10 Countr i es CZ EE CY LV LT HU MT PL SI SK Si ze of company employees empl oy ees 250+ empl oy ees Construction Industry Trade Ser v i ces Trade with EU15 Yes No, but intention No intention Trade partners in the EU None One country 2-5 countr i es More than 5 countries GALLUP Source: FLASH EB July 04 August 2006 Q8. I would like to mention a number of activities which could be part of future Single Market Policy. Could you tell me whether you consider that for your company it is very important, rather important, rather unimportant or not important at all that future Single Market Policy tackles the question of... % by country and by type of company page 36

37 The Gallup Organization Flash EB N o 190 Internal Market 3.1. Ensuring fair competition within the Single Market Almost all company executives in the NMS10 countries believe in the importance of ensuring fair competition in future EU policies, far topmost in Hungary and Poland (both 95%). At the other end of the scale, just 81% of company executives in Estonia believe in the importance of ensuring fair competition as part of the future Single Market Policy. The largest companies in industry are the strongest in their conviction on the importance of fair competition. Firms with the intention of engaging in trade with the old Member States over the next 3 years are the most likely to attach more importance to fair competition, and also those that trade with 2-5 countries from the EU Doing business on the basis of one set of rules Company executives in Slovenia (92%) and Poland (91%) are the most convinced of the importance of a common set of rules as the basis for doing business. In all New Member States there is a strong majority in favour of this, with the lowest results in Estonia (58%). As observed for the importance of ensuring fair competition, large companies, companies in industry and trade have a greater tendency to be more in favour of this future policy approach. Those that already have trading relationships with old Member States and those that have more than 5 trading partners in the EU are also more inclined to consider this future activity important for their company A further opening-up to competition of public utility services Companies in Latvia (88%), Hungary (84%) and Poland (82%) are the most certain of the importance of opening-up public utility services to the forces of competition. Business managers in the Czech Republic (70%) are, on the other hand, the most reluctant here. Companies in trade, firms that actually are engaged in trade with the old Member States and firms that have more than 5 trading partners in the EU are the most in favour of further liberalising public utility services Removing remaining technical barriers to trade in goods Similarly to the rating of the first item ( ensuring fair competition within the Single Market ), company executives in Hungary and Poland (both 83%) are the strongest in their appeal for the removal of remaining technical barriers to trade in goods, and managers in Estonia (55%) attach the least importance to this. Companies in trade and industry are more convinced than other sectors of the importance of removing technical barriers to trade in goods. The largest firms are also more inclined to attach importance to removing these barriers. Executives of companies engaged in trade with old Member States and those that have 2-5 trading partners in the EU attach greater importance to the fulfilment of this Single Market principle. Analytical Report, page 37

38 Flash EB N o 190 Internal Market: Opinions and experiences of Businesses in the 10 New Member States The Gallup Organization 3.5. Removing remaining technical barriers to trade in services The objective of the Services Directive proposal, which is expected to be adopted by the European Parliament and Council by the end of 2006, is to achieve a genuine Internal Market in services by removing legal and administrative barriers to the development of service activities between Member States. The proposed Directive would guarantee service providers more legal certainty if they want to exercise two fundamental freedoms (freedom of establishment and freedom to provide services) enshrined in the EC Treaty. Among New Member States, Slovenia (82%) and Hungary (81%) are those where the highest proportions of company executives are in favour of the prioritisation of the removal of remaining technical barriers to trade in services, and those from the Czech Republic are in favour of this in the least number (62%). Company executives in the construction sector, executives who actually do or intend to export to the old Member States within the coming 3 years are the most likely to attach importance to the removal of these kinds of barriers. The same opinion is held by company executives who have one, or who have more than 5 trading partners in the EU. Influence on company strategy: % of important Facilitating labour mobility Strengthening intellectual property rights protection Creating a patent valid in all EU countries Achieving an integrated European financial market Further opening up of public procurement markets NMS10 Countr i es CZ EE CY LV LT HU MT PL SI SK Size of company employees employees 250+ employees Construction Industry Trade Ser v i ces Trade with EU15 Yes No, but intention No intention Trade partners in the EU None One country 2-5 countr i es More than 5 countries GALLUP Source: FLASH EB July 04 August 2006 Q8. I would like to mention a number of activities which could be part of future Single Market Policy. Could you tell me whether you consider that for your company it is very important, rather important, rather unimportant or not important at all that future Single Market Policy tackles the question of... % by country and by type of company 3.6. Facilitating labour mobility The European Commission named 2006 the European Year for mobility of workers. Poland (80%) is most convinced of the importance of including labour mobility in future Single Market policy-making, the country from which the active population went to work in foreign countries in the highest proportion. Facilitating labour mobility seems to be viewed in a negative light mostly by Estonian business leaders (59%). Company managers in construction are the most convinced of the importance of facilitating labour mobility. The general tendency is that companies which intend to engage in trade with old Member page 38

39 The Gallup Organization Flash EB N o 190 Internal Market States in the coming 3 years are more inclined to attach importance to the inclusion of labour mobility in future Single Market policy actions, and the same we can say about those companies who have 2-5 trading partners in the EU Strengthening intellectual property rights protection and creation of an EU patent The majority of company executives in the New Member States is convinced of the importance of strengthening intellectual property rights protection but managers in Hungary (80%) are the strongest in this belief. Executives from Estonia view the strengthening of intellectual property rights protection as being important for future Single Market Policy in the least proportion (52%). Along with Hungary, Latvia comes out on top for the level of importance attached to the creation of a patent valid in all European Union countries (80% and 79%, respectively), while the Czech Republic goes to the end of the list regarding this future policy of the Single Market (58%). Managers of companies in the industry sector are the most in favour of strengthening intellectual property rights protection including the creation of a patent recognised in all EU countries. Companies having in plan to engage in trade with old Member States and those who have more than two trading partners in the EU are the most convinced of the importance of these two policies. While the largest companies emphasized the importance of the strengthening intellectual property rights for the future of the Single Market, SME s hold the same view in higher proportion regarding the creation of a patent valid throughout the EU Achieving an integrated European financial market Company executives in Hungary (79%) and in Slovenia (78%) rank the highest for their belief in the importance of achieving an integrated European financial market. In the least proportion, 58% of company executives in Estonia are only convinced of the importance of achieving an integrated European financial market. Large companies in services are the most convinced of the importance of achieving an integrated European financial market, as are those, too, that currently are engaged or intend to engage in trade with old Member States, and who have more than five trading partners in the EU Further opening up of public procurement markets Company managers in Latvia (74%) and Lithuania (70%) mentioned in the highest rate that the opening-up of public procurement markets in future Single Market policy-making is important for their companies. Executives in the Czech Republic are the least convinced of this (44%). Medium size companies, construction sector companies, those intending to export to the old Member States and those having 2-5 EU trading partners are the most likely to recognise the importance of further opening-up of public procurement markets. Analytical Report, page 39

40 Flash EB N o 190 Internal Market: Opinions and experiences of Businesses in the 10 New Member States The Gallup Organization Flash EB Series #190 Internal Market: Opinions and experiences of Businesses in the 10 New Member States Annex Tables and Survey Details THE GALLUP ORGANIZATION page 40

41 The Gallup Organization Flash EB N o 190 Internal Market Annex tables Table 1. Respondents status in the company Table 2. Main activity of the company Table 3. Impact of the European product standards Table 4. Impact of the European labeling and packaging rules Table 5. Impact of the European public procurement rules Table 6. Impact of The elimination of customs documentation Table 7. Impact of the Abolition of border controls Table 8. Impact of VAT procedures for sales within the EU Table 9. Impact of The liberalization of capital movements Table 10. Impact of Rules for establishing a business in other EU countries Table 11. Influence of the EU Single Market on Pricing of the company s products or services Table 12. Influence of the EU Single Market on Purchasing from other EU countries Table 13. Influence of the EU Single Market on Selling directly to other EU countries Table 14. Influence of the EU Single Market on Distribution in other EU countries Table 15. Influence of the EU Single Market on Offering services in other EU countries Table 16. Influence of the EU Single Market on Setting up businesses in other EU countries Table 17. Influence of the EU Single Market on Investing in companies in other EU countries Table 18. Influence of the EU Single Market on Investment from other EU countries Table 19. Influence of the EU Single Market on Co-operation agreements Table 20. Influence of the EU Single Market on the company s Marketing strategy Table 21. Change in the level of competition coming from Domestic firms Table 22. Change in the level of competition coming from Other EU firms Table 23. Change in the level of competition coming from Non-EU firms Table 24. Recruiting staff who have moved to the countrty from another Member State Table 25. Main reasons for the company not recruiting any staff from another Member State Table 26. Main reasons for the company not recruiting any staff from another Member State Table 27. Effect of the 2004 enlargement on The cost of raw materials Table 28. Effect of the 2004 enlargement on The cost of wages Table 29. Effect of the 2004 enlargement on Access to new markets Table 30. Effect of the 2004 enlargement on Selling prices Annex Tables, page 41

42 Flash EB N o 190 Internal Market: Opinions and experiences of Businesses in the 10 New Member States The Gallup Organization Table 31. Effect of the 2004 enlargement on Productivity Table 32. Effect of the 2004 enlargement on Profitability Table 33. Effect of the 2004 enlargement on Growth in employement Table 34. Trading of products or services with one or more old EU Member States Table 35. Single Market Policy - Removing remaining technical barriers to trade in goods Table 36. Single Market Policy - Removing remaining technical barriers to trade in services Table 37. Single Market Policy - Creating a patent valid in all EU countries Table 38. Single Market Policy - Strengthening intellectual property rights protection Table 39. Single Market Policy - Further opening up of public procurement markets Table 40. Single Market Policy - Achieving an integrated European financial market Table 41. Single Market Policy - Ensuring fair competition within the Single Market Table 42. Single Market Policy - Further opening-up to competition of public utility services Table 43. Single Market Policy - Companies can do business on the basis of one set of rules Table 44. Single Market Policy - Facilitating labour mobility Table 45. Main reason of not exporting to other countries within the Single Market page 42

43 The Gallup Organization Flash EB N o 190 Internal Market Table 1. Respondents status in the company Question: A1. What exactly is your title and your responsibility in the company? % Sales, Marketing Management, responsible for operations in Europe % Import/ Export Management % General Total N Management NMS COUNTRY % Logistics Management Czech Rep Estonia Cyprus Latvia Lithuania Hungary Malta Poland Slovenia Slovakia SEGMENTS Company size Small (10-49 emp.) Medium ( emp.) Large (250+ emp.) Construction Industry Trade Services Trade with EU-15 Currently trading Plans to trade No intention to trade Trade partners in the EU None One country countries More than 5 countries Annex Tables, page 43