FLASH EUROBAROMETER 130 INTERNAL MARKET BUSINESS SURVEY

Transcription

1 FLASH EUROBAROMETER 130 INTERNAL MARKET BUSINESS SURVEY Realised by EOS Gallup Europe upon request of the European Commission (Directorate General Internal Market ) Survey organised and managed by Directorate General «Press and Communication» (Opinion Polls, Press Reviews, Europe Direct) This document does not reflect the views of the European Commission. Any interpretations or opinions expressed in this report are those of the authors alone. SURVEY : September 2002 ANALYTICAL REPORT : October 2002

2 FLASH EB N 130 «Internal Market» (28/08/ /09/2002) - Report p. 1 A. PRESENTATION...5 Managers opinions can be summarised as follows: 7 B. LARGE COMPANIES PERCEPTIONS OF THE SINGLE MARKET MEASURES Impact of the Single Market Measures Recruitment from Member States Impact on particular aspects of company operations Importance of the influence on particular areas THE PRACTICAL EFFECTS OF THE SINGLE MARKET Impact on costs by areas Impact on unit costs Impact on the level of competition THE FUTURE OF THE SINGLE MARKET The functioning of the Single Market as a priority Activities to be included in future Single Market policy Impact of Candidate Countries Trade with Candidate Countries Trade within the Single Market Information about company rights Overall impact of the Single Market Towards a more European way of thinking thanks to the Single Market 75 C. SMALL COMPANIES PERCEPTIONS OF THE SINGLE MARKET MEASURES Impact of the Single Market measures Recruitment from Member States Impact on particular aspects of company operations Importance of the influence on particular areas THE PRACTICAL EFFECTS OF THE SINGLE MARKET Impact on costs by areas Impact on the level of competition 97

3 FLASH EB N 130 «Internal Market» (28/08/ /09/2002) - Report p THE FUTURE OF THE SINGLE MARKET The functioning of the Single Market as a priority Activities to be included in future Single Market policy Impact of Candidate Countries Trade with Candidate Countries Trade within the Single Market Information about company rights Overall impact of the Single Market Towards a more European way of thinking thanks to the Single Market 119

4 FLASH EB N 130 «Internal Market» (28/08/ /09/2002) - Report p. 5 A. PRESENTATION The objective of this opinion poll carried out by the European Commission in the 15 Member States of the European Union is to sound out managers' opinions on the differences in the general business environment within the Single Market over the last 10 years. The main topics cover perceptions of the measures taken in the construction of the Single Market and their impact on business activities, the practical effects of the Single Market on costs and competition and finally a look at future steps and priorities of the Single Market. The methodology used in this survey, which has been carried out by EOS GALLUP EUROPE, is that of the FLASH surveys of the Directorate General Press and Communication (Unit B/1 "Opinion polls") A total of managers at companies were interviewed by telephone between the 28 th of August and the 25 th of September The sample was selected according to three criteria: country, size of company and activity sector. In the Member States with the most companies (Germany, Spain, France, Italy and the UK), close to 600 managers per country were interviewed. In those with the fewest companies (Greece, Ireland, Luxembourg, Portugal, Denmark and Finland) the figure was close to 250 each, and close to 350 managers were consulted in each of the remaining EU Member States: (Belgium, the Netherlands, Austria and Sweden). The person interviewed at each company was a top-level executive either part of General Management, Sales or Marketing Management, Imports/Exports Management or indeed Management of Logistics. For each theme addressed, this report presents the results obtained in relation to: the European Union as a whole and each of its 15 Member States; the various types of companies (in terms of workforce size) is presented in two separate parts. The first part analyses the results for large companies which incorporates firms with 10 or more employees and includes the following subcategories: "small SMEs" (10 to 49 employees), "large SMEs" (50 to 249 employees) and "majors" (250 employees or more). In the second part the analysis focuses on small companies or micro SMEs incorporating companies with 1 to 9 employees. the company's sector of activity: "construction", "industry" (manufacturing companies), "trade", and "services"; the extent to which companies engage in exporting activities within the European Union: domestic markets, minor exporters (1-5 Member States), major exporters (6+ Member States) The pages that follow set out the results of the survey, using the available information as the basis for an in-depth analysis.

5 FLASH EB N 130 «Internal Market» (28/08/ /09/2002) - Report p. 7 Managers opinions can be summarised as follows: Ten years after its launch, companies interviewed are generally experiencing the positive aspects of the Single Market. For both large and small structures, the appraisal is in fact particularly positive when it comes to the elimination of administrative tasks associated with customs control as well as VAT related procedures. Even if a majority of interviewees esteem that the direct impact of the Single Market on their firm s activities in terms of sales or productivity is not perceptible, it is certainly true that the balance between advantages and disadvantages swings more often in favour of the advantages of the Single Market. The effects of the Single Market are certainly difficult to concretely perceive when it comes to the strategy of the company. However, more than one third of interviewees recognise the impact on pricing and purchasing policy within the European Union. Also, while one of the principal consequences of the Single Market lies in an increase in competition amongst companies, the effects in terms of unit costs are balanced. However, it seems as if in the minds of entrepreneurs certain barriers still remain ten years after the launch of the Single Market. Labour mobility between Member States is still limited and there are perhaps potential competencies that are not yet exploited. Elsewhere, the results of this study clearly reveal that the vast majority of large and small companies of the European Union would like to see further harmonisation of regulation procedures and with this in mind call for an alignment of national taxation systems while ensuring fair competition within the Single Market. We should not be mistaken here - while the increase of competition within the Single Market could be a positive factor for a company by increasing its market share, it could also be dangerous if uncontrolled at the European Union level. In this we see an intervention policy at its most powerful. Today, more than eight in ten companies would like to see the functioning of the Single Market developed in the future. That being the case, there is room for new policies, aimed at consolidating practices and eliminating the remaining barriers within the Single Market. In other words, for business leaders, the Single Market is an acquis that cannot be frozen in time but rather necessitates development. The overall results of this large study show that there is not a great difference between small and large structures. All companies interviewed are in fact aware of the stakes and the potential opportunities that the Single Market has to offer. The future Enlargement of the European Union is part of this enthusiasm and constitutes a new step in the development of the Single Market.

6 FLASH EB N 130 «Internal Market» (28/08/ /09/2002) - Report p. 8 Q.1 Je voudrais savoir si les mesures suivantes développées par le Marché unique au cours des dix dernières années, ont eu un effet sur les activités de votre entreprise : - Un effet positif - Pas d'effet - Un effet négatif...? Q.1 I would like to know whether the following Single Market measures developed over the last 10 years, have had an impact on your firm's activities : - Positive impact - No impact - Negative impact...? Q.1. Positive impact of the Single Market measures on your firm The elimination of customs documentation 48% Abolition of border controls 42% VAT procedures for sales within the EU 34% European product standards 33% The liberalisation of capital movements European labelling and packaging rules 2 24% European public procurement rules 13% Rules for establishing a business in other EU countries 12% Flash EB 130 September 2002 Fig.1A 0% 40% 60%

7 FLASH EB N 130 «Internal Market» (28/08/ /09/2002) - Report p. 9 B. LARGE COMPANIES 1. PERCEPTIONS OF THE SINGLE MARKET MEASURES 1.1. Impact of the Single Market Measures * Source question: question 1 * Overall picture: -The Single Market measures: a positive yet limited impact - Looking overall at the average results concerning the eight Single Market measures included in this question, 29% of the larger companies (with 10 or more employees) consider that the Single Market has had a positive impact on their firm s activities. 48% believe that the Single Market has not had an impact on their company and only of executives state that the impact of the Single Market has been negative for their business (on average 18% are not concerned or do not answer). While the high proportion of executives who consider that the Single Market has had no impact on their firm s activities could be disappointing, the most encouraging result is that executives confirming the positive impacts of the Single Market outnumber negative responses by nearly 6 to 1. To analyse the results we will firstly take a brief look at the overall results at both the Member State level as well as for company categories and then we will examine in more detail, how these larger companies assess the impact of each of these eight measures in order of importance, starting with the measure that has the most positive impact score. * Breakdown by country in summary: Company executives in Greece are most enthusiastic when it comes to recognising the positive impact of the Single Market measures. Businesses in Austria seem to have especially benefited from the elimination of customs control (including associated documentation procedures). In Ireland European product standards have had the greatest positive impact on businesses. Businesses in Luxembourg have benefited from VAT procedures for sales within the EU. Overall, we can see that the United Kingdom ranks lowest for the positive impact of most of the Single Market measures covered in this question. * Breakdown by company category in summary: Generally speaking, companies in industry have benefited most from Single Market measures. The exception to this is companies in trade who claim that European labelling and packaging rules have had the most positive impact on business. European public procurement has had the greatest positive impact on companies in the services sector. For each Single Market measure cited in the question, majors (250+) have systematically benefited more than smaller companies. Similarly, companies who are heavily involved in intra-eu trade have benefited more from Single Market measures than those exporting to other Member States on a smaller scale or indeed non-exporting companies.

8 FLASH EB N 130 «Internal Market» (28/08/ /09/2002) - Report p. 10 Q.1 Je voudrais savoir si les mesures suivantes développées par le Marché unique au cours des dix dernières années, ont eu un effet sur les activités de votre entreprise : - Un effet positif - Pas d'effet - Un effet négatif...? d) L'élimination de la documentation douanière Q.1 I would like to know whether the following Single Market measures developed over the last 10 years, have had an impact on your firm's activities : - Positive impact - No impact - Negative impact...? d) The elimination of customs documentation 100% 80% Positive impact of "The elimination of customs documentation" Trade Construction Positive Impact "The elimination of customs documentation" 67% 5 33% 24% 60% 40% 0% 70% 48% 24% United Kingdom Osterreich MAJORS % 57% SME More than 5 EU countries 8 70% Only nat. market 2 48% 0% 40% 60% 80% 100% Flash EB 130 September 2002 Fig.1B Flash EB 130 September 2002 Fig.1C Q.1 Je voudrais savoir si les mesures suivantes développées par le Marché unique au cours des dix dernières années, ont eu un effet sur les activités de votre entreprise : - Un effet positif - Pas d'effet - Un effet négatif...? e) L'abolition des contrôles frontaliers Q.1 I would like to know whether the following Single Market measures developed over the last 10 years, have had an impact on your firm's activities : - Positive impact - No impact - Negative impact...? e) Abolition of border controls Positive Positive Impact "The Impact elimination "Abolition of of customs border controls" documentation" 100% Positive impact of "Abolition of border controls" Industry Trade Services 32% 33% 57% 67% % Construction 23% 24% 60% MAJORS 250+ SME % 60% 49% 57% SME % 4 40% 70% More than 5 EU EU countries 72% 8 24% 42% 1-5 EU countries Only nat. market Only nat. market 2 23% 61% 70% 0% United Kingdom Osterreich 48% 42% 0% 0% 40% 40% 60% 60% 80% 80% 100% 100% Flash EB 130 September 2002 Fig.1D Flash EB 130 September 2002 Fig.1E

9 FLASH EB N 130 «Internal Market» (28/08/ /09/2002) - Report p. 11 * Breakdown by question item: Elimination of customs documentation The elimination of customs documentation is most widely recognised as a positive impact on company activities, being confirmed by close to one in two executives: only 3% state that the impact has been negative. It is clear that the discontinuation of the use of the Single Administrative Document and the transit document was one of the major steps taken in relation to the abolition of border formalities and has consequently increased the efficiency of intra-eu trade. * Breakdown by country: Engaging in trade without the hassle or cost of dealing with customs paperwork has had the most positive impact in companies in Austria (70%) and Greece (68%), according to executives interviewed. Companies in the United Kingdom (60%) appear to be largely unaffected by the elimination of customs documentation and only 24% of executives in the United Kingdom recognise the positive impact on their business activities. This is perhaps due to the proportion of their extra-eu trade. * Breakdown by company category: No less than two thirds 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 high in companies in the trade sector being confirmed by more than one in two of those interviewed (5). As we would logically expect, exporting companies clearly benefit from the elimination of customs documentation: 70% of "modest exporters" (1-5 Member States) and a massive 8 of "major exporters" (6+ Member States) confirm this. Majors (250+) and large SMEs (50-249) are once again more likely to benefit from this measure than smaller firms Abolition of border controls The elimination of customs documentation is one of the major factors necessary for the abolition of border controls, and so the relationship between the two would naturally lead us to expect similar opinions for both of these impacts. This reasonable presumption is confirmed in that the abolition of border controls follows closely behind customs documentation in terms of the average number of managers in the European Union recognising its positive impact on their firm s activities, being confirmed by 42% - here also only 3% say that the impact has been negative. * Breakdown by country: For the abolition of border controls the scores by country are very similar to those for customs documentation, with Austria once again at 70% and figuring just ahead of Greece at 6. As for the elimination of customs documentation less than one quarter of British respondents state that the impact has been positive for their company. The only country where opinions seem somewhat incoherent for these two related impacts is in Denmark where only 30% of company executives recognise the positive impact of the abolition of border controls while 5 recognise the benefit of the elimination of customs documentation. * Breakdown by company category: The type of company impacted in a positive sense by the elimination of customs documentation is, as we would expect, also benefiting from the abolition of border controls. Large companies ( 250+ or large SMEs) operating in industry, or indeed exporting to other Member States are most inclined to confirm the positive impact of the abolition of border controls for their business activities.

10 FLASH EB N 130 «Internal Market» (28/08/ /09/2002) - Report p. 12 Q.1 Je voudrais savoir si les mesures suivantes développées par le Marché unique au cours des dix dernières années, ont eu un effet sur les activités de votre entreprise : - Un effet positif - Pas d'effet - Un effet négatif...? f) Les procédures de TVA pour des ventes intra-communautaires Q.1 I would like to know whether the following Single Market measures developed over the last 10 years, have had an impact on your firm's activities : - Positive impact - No impact - Negative impact...? f) VAT procedures for sales within the EU Positive Impact "VAT procedures for sales within the EU" Positive impact of "VAT procedures for sales within the EU" Industry 43% 100% Trade 39% Services 28% 80% Construction 18% 60% MAJORS 250+ SME % 42% 40% SME % 0% 1 34% 51% More than 5 EU countries 1-5 EU countries Only nat. market 49% 5 United Kingdom Luxembourg Flash EB 130 September 2002 Fig.1F 34% 0% 40% 60% 80% Flash EB 130 September 2002 Fig.1G Q.1 Je voudrais savoir si les mesures suivantes développées par le Marché unique au cours des dix dernières années, ont eu un effet sur les activités de votre entreprise : - Un effet positif - Pas d'effet - Un effet négatif...? a) Les normes appliquées aux produits européens Q.1 I would like to know whether the following Single Market measures developed over the last 10 years, have had an impact on your firm's activities : - Positive impact - No impact - Negative impact...? a) European product standards Positive Impact "European product standards" 100% Positive impact of "European product standards" Industry Trade Construction 30% 40% 39% 80% Services 23% 60% MAJORS 250+ SME % 37% 40% SME % 0% 33% 60% More than 5 EU countries 1-5 EU countries Only nat. market 3 28% 47% United Kingdom Ireland 33% Flash EB 130 September 2002 Fig.1H 0% 40% 60% Flash EB 130 September 2002 Fig.1I

11 FLASH EB N 130 «Internal Market» (28/08/ /09/2002) - Report p VAT procedures for sales within the EU A number of developments have taken place with a view to harmonising the value-added tax systems of the Member States and provide for a uniform basis for the assessment for VAT. The progress made regarding VAT procedures for sales is favourably viewed by just over one third of company executives who consider its impact to have been positive on their firm s activities. Although somewhat behind the first two impacts in terms of positive votes this measure ranks third. * Breakdown by country: More than one in two company managers in Luxembourg recognise the positive impact of VAT procedures for sales on their firm s activities, being the highest result at the country level. In comparison, only 1 of executives in the United Kingdom believe in the positive impact for their business. * Breakdown by company category: The breakdown for the 3 factors under review follows the tendency as for previous measures: 43% of company managers in the industrial sector recognise its positive impact for their firm; 5 of companies who engage in extensive intra-eu trade (6+ Member States) are positive about the impact of this Single Market measure on their business activities; and 44% of majors (250+) benefit from this measure European product standards 33% of company executives recognise the positive impact of European product standards on their business activities. 4 of executives claim that they have been unaffected by product standards, while only 8% say that for their business activities the impact has been negative. * Breakdown by country: Ireland (60%), Portugal (59%) and Greece (57%), are the countries where company managers most appreciate the benefits of product standardisation. The positive impact is least recognised in the United Kingdom () and Germany (23%). * Breakdown by company category: Managers working in the construction sector are more positive about European product standards for their business than any other of the Single Market measures proposed, with 30% of those interviewed saying the impact has been positive. However, a higher proportion of management in industry (40%) and trade (39%) recognise the positive impact of this measure on their firm s activities compared to other sectors. Non-exporting companies are more positive about European product standards than any other measure suggested (28%). Nevertheless, companies exporting to more than 5 Member States are strongest in their assertions of the positive impact of this measure on their firm s activities. There is no particular company size that stands out in this regard.

12 FLASH EB N 130 «Internal Market» (28/08/ /09/2002) - Report p. 14 Q.1 Je voudrais savoir si les mesures suivantes développées par le Marché unique au cours des dix dernières années, ont eu un effet sur les activités de votre entreprise : - Un effet positif - Pas d'effet - Un effet négatif...? g) La libéralisation des mouvements de capitaux Q.1 I would like to know whether the following Single Market measures developed over the last 10 years, have had an impact on your firm's activities : - Positive impact - No impact - Negative impact...? g) The liberalisation of capital movements Positive Impact "The liberalisation of capital movements" 100% Positive impact of "The liberalisation of capital movements" Industry Trade 2 33% 80% Services Construction 18% 60% MAJORS % SME % 40% SME % 0% 10% 2 54% More than 5 EU countries 1-5 EU countries Only nat. market 1 32% 43% United Kingdom Ellas Flash EB 130 September 2002 Fig.1J 2 0% 40% 60% Flash EB 130 September 2002 Fig.1K Q.1 Je voudrais savoir si les mesures suivantes développées par le Marché unique au cours des dix dernières années, ont eu un effet sur les activités de votre entreprise : - Un effet positif - Pas d'effet - Un effet négatif...? b) La réglementation européenne en matière d'étiquetage et d'emballage Q.1 I would like to know whether the following Single Market measures developed over the last 10 years, have had an impact on your firm's activities : - Positive impact - No impact - Negative impact...? b) European labelling and packaging rules Positive impact of "European labelling and packaging rules" Positive Impact "European labelling and packaging rules" 100% Trade 31% Industry 30% 80% Construction 18% Services 14% 60% MAJORS % 40% SME SME % 0% 13% 24% 52% More than 5 EU countries 1-5 EU countries Only nat. market 2 32% United Kingdom Ellas 24% Flash EB 130 September 2002 Fig.1L 0% 40% 60% Flash EB 130 September 2002 Fig.1M

13 FLASH EB N 130 «Internal Market» (28/08/ /09/2002) - Report p The liberalisation of capital movements The EC Treaty prohibits all restrictions on capital movements (investments) and all restrictions on payments (for goods or services). 2 of executives believe that the freedom of capital movements has had a positive impact on their business activities. Only 3% say that the impact has been negative for their firm. * Breakdown by country: Once again the proportion of company executives in Greece (54%) and Portugal (47%) recognising the positive impact of the liberalisation of capital movements on their firm activities is higher than in any other Member States. In contrast, only 10% of managers in the United Kingdom express their belief in the positive impact of this measure on their business. * Breakdown by company category: Companies in industry, majors (250+) or indeed those exporting to more than 5 Member States are most convinced of the positive impact of the liberalisation of capital movements on their firm activities European labelling and packaging rules The regulation of labelling and packaging is viewed as having a positive impact on firm activities by almost one in four company executives. * Breakdown by country: Company managers in Portugal (47%) and Spain (4) approach the opinions of managers in Greece (52%) regarding the positive impact of labelling and packaging on business activities. The impact of this measure is perceived as positive by only 13% of company executives in the United Kingdom. * Breakdown by company category: The impact of European labelling and packaging rules is most positive on business activities for companies in industry and trade. Also, companies engaging in intra-eu trade with more than 5 Member States are most positive about the impact of this measure on their firm.

14 FLASH EB N 130 «Internal Market» (28/08/ /09/2002) - Report p. 16 Q.1 Je voudrais savoir si les mesures suivantes développées par le Marché unique au cours des dix dernières années, ont eu un effet sur les activités de votre entreprise : - Un effet positif - Pas d'effet - Un effet négatif...? c) La réglementation européenne des marchés publics Q.1 I would like to know whether the following Single Market measures developed over the last 10 years, have had an impact on your firm's activities : - Positive impact - No impact - Negative impact...? c) European public procurement rules Positive Impact "European public procurement rules" 100% Positive impact of "European public procurement rules" Services Construction 1 14% 80% Trade Industry 11% 11% 60% MAJORS % SME % SME % 0% 13% 3 More than 5 EU countries 1-5 EU countries Only nat. market 14% 12% 18% United Kingdom Portugal 13% Flash EB 130 September 2002 Fig.1N 0% 40% 60% Flash EB 130 September 2002 Fig.1O Q.1 Je voudrais savoir si les mesures suivantes développées par le Marché unique au cours des dix dernières années, ont eu un effet sur les activités de votre entreprise : - Un effet positif - Pas d'effet - Un effet négatif...? h) La réglementation pour l'établissement d'une entreprise dans d'autres pays de l'ue Q.1 I would like to know whether the following Single Market measures developed over the last 10 years, have had an impact on your firm's activities : - Positive impact - No impact - Negative impact...? h) Rules for establishing a business in other EU countries Positive Impact "Rules for establishing a business in other EU countries" 100% Positive impact of "Rules for establishing a business in other EU countries" Industry Trade 1 13% Services 10% 80% Construction 60% MAJORS 250+ SME % 27% 40% SME % 12% 0% Danmark Ellas Flash EB 130 September 2002 Fig.1P 2 More than 5 EU countries EU countries 14% Only nat. market 7% 12% 0% 40% 60% Flash EB 130 September 2002 Fig.1Q

15 FLASH EB N 130 «Internal Market» (28/08/ /09/2002) - Report p European public procurement rules Public procurement is one of the areas of the Single Market where the results of the liberalisation drive have not been meeting expectations. This led to the Commission s communication in 1998, Public procurement in the European Union which suggests ways and means of improving contract award procedures. According to current opinion among business executives, public procurement is not yet affecting the majority of companies in the Single Market (54% state that there has been no impact on their firm activities). Only 13% of company executives believe that the impact has been positive - almost as many (9%) believe the impact has been negative. * Breakdown by country: For public procurement figures are relatively low in all Member States. For this measure Portugal tops the list with 3 of respondents confirming the positive impact on their business activities. * Breakdown by company category: Companies in services are more enthusiastic about European public procurement rules on their firm activities compared to the other sectors. The Commission s communication in 1998 was particularly targeting supplier participation among SMEs. However, we see that the impact of European public procurement rules, has had a positive impact on only 13% of small SMEs (10-49) and 1 of large SMEs (50-249), compared to 23% of majors (250+) Rules for establishing a business in other EU countries There is considerable room for improvement regarding rules for establishing a business in other Member States. Only 12% 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. However, positive responses outweigh negative responses by 4 to one. * Breakdown by country: Only Greece (2) and Portugal (22%) have figures above. * Breakdown by company category: Once again we see that companies exporting to more than 5 Member States or majors (250+) have benefited more than other firms from the rules for establishing a business in other EU countries.

16 FLASH EB N 130 «Internal Market» (28/08/ /09/2002) - Report p. 18 Q.2 Votre entreprise dans [NOTRE PAYS] a-t-elle recruté du personnel d'un autre état membre qui s'est installé dans [NOTRE PAYS]? Q.2 Has your company in [OUR COUNTRY] recruited staff who have moved to [OUR COUNTRY] from another Member State? Q.2 Has your company in [OUR COUNTRY] recruited staff who have moved to [OUR COUNTRY] from another Member State? L 80% 19% IRL 44% 5 UK 27% 72% B 2 74% P 23% 77% ES 23% 77% OST 23% 7 D 22% 78% SW 22% 77% 21% 79% DK 18% 81% FIN 1 8 I 1 8 EL 1 8 F 14% 8 NL 13% 87% 0% 40% 60% 80% 100% Flash EB 130 September 2002 Fig.2A Yes No [dk/na] (à ceux qui disent non en Q2) Q.3 Quelles sont les deux raisons principales pour lesquelles votre n'a pas entreprise recruté de personnel provenant d'un autre état membre? (to those who answer no in Q2) Q.3 What are the two main reasons for which your company has not recruited any staff from another Member State? Q.3 Main reasons for which your company has not recruited any staff from another Member State? Suffic local empl. market 4 Lack of info. about it Poor lang. skills of cand 14% 13% Diff. assessing exp./qualif. 11% Reluctance to move : family 4% Wage and financial differ. 3% Admin. diff. soc. security 3% Diff. with pension provision 1% Other 22% [dk/na] 0% 40% 60% Flash EB 130 September 2002 Fig.2B

17 FLASH EB N 130 «Internal Market» (28/08/ /09/2002) - Report p Recruitment from Member States * Source questions: questions 2 & 3 - One European company in five has already recruited staff from another Member State - * Overall picture: The free movement of workers is of 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 have been guaranteed to both employed persons and those seeking employment in the European Union. Employers are more motivated to employ staff from another Member State as they can enhance the diversity of their workforce without having to deal with any extra administrative burden. Overall just over one in five company executives have recruited personnel who have moved from another Member State, compared with four in five who have not. Company executives who have not recruited staff from other EU countries were asked to identify the two main reasons for this. The principle factor, cited by 4 of company managers, is that local or national employment market is sufficient. It is worth noting that this option was not specifically proposed in this question, and managers themselves spontaneously gave this reason. Therefore, close to one in two companies do not see the need to recruit staff from outside their country. Over in one in five executives indicated answers other than those proposed. One of the main recurring reasons was that a national from another Member State has never applied for a position in their company. Lack of information about how to find and recruit staff in other Member States is a prohibitive factor for 14% of company executives. Another item related to lack of information is difficulty in assessing professional experience or qualifications. Taking these two items together, we can see that one in four managers would be in a better position to recruit staff from another Member State if provided with information on recruiting staff together with a reference guide for comparing qualifications across Member States. 13% of company executives have not recruited staff from another Member State due to the poor language skills of candidates. This is something that could perhaps be tackled in the education system by giving children the opportunity of learning foreign languages from an earlier age. Issues to do with wage differentials, social security and pension provision are not major inhibiting factors for recruitment abroad. * Breakdown by country: In 13 of the countries of the European Union between 13% (the case of the Netherlands) and 27% (the case of the United Kingdom) of company executives have previously recruited staff from another Member State, leaving two countries that particularly stand out: Ireland with 44% and Luxembourg with no less than 80% (see fig 2A). Luxembourg has traditionally been an attractive destination for citizens throughout the European Union seeking employment. Moreover, the results are perhaps inflated because of the high number of commuters working in Luxembourg yet living over the border. The high proportion of companies in Ireland who have recruited staff from abroad is most certainly a reflection of the healthy economy that has consequently attracted employees from various Member States.

18 FLASH EB N 130 «Internal Market» (28/08/ /09/2002) - Report p. 20 Q.2 Votre entreprise dans [NOTRE PAYS] a-t-elle recruté du personnel d'un autre état membre qui s'est installé dans [NOTRE PAYS]? Q.2 Has your company in [OUR COUNTRY] recruited staff who have moved to [OUR COUNTRY] from another Member State? Q.2 Has your company in [OUR COUNTRY] recruited staff who have moved to [OUR COUNTRY] from another Member State? Services Industry Construction Trade 24% 18% 7 80% 80% 82% MAJORS % 39% SME % 70% SME % 82% More than 5 EU countries 3 64% 1-5 EU countries Only nat. market 17% 79% 83% 21% 79% 0% 40% 60% 80% 100% Flash EB 130 September 2002 Fig.2C Yes No [dk/na]

19 FLASH EB N 130 «Internal Market» (28/08/ /09/2002) - Report p. 21 * Breakdown by company category: Companies in services, majors (250+) or companies exporting to at least 6 Member States are most likely to recruit staff from another country of the European Union. Looking at the type of company where executives are of the opinion that the local or national market is sufficient, we see that they are most often in the industrial sector. Companies in construction or small SMEs (10-49) appear to have more difficulties than others in assessing professional experience or qualifications of candidates from other Member States and hence have not recruited staff from other countries in the European Union. When it comes to recruiting personnel from another Member State language skills seem more of an issue for companies in construction or services. Companies in construction or majors (250+) are more likely to have been discouraged from recruiting staff from another Member State due to administrative difficulties related to social security rights.

20 FLASH EB N 130 «Internal Market» (28/08/ /09/2002) - Report p. 22 Q.4 Pour chacun des paramètres suivants relatifs au fonctionnement de votre entreprise, diriez-vous que le Marché unique a contribué à leur augmentation ou leur diminution (soit directement ou indirectement)? Q.4 For each of the following aspects of your firm's operations, has the European Union Single Market contributed to an increase or a decrease for each of them (either directly or indirectly)? Q.4 Has the European Union Single Market contributed to an increase or a decrease of Productivity 2 63% 7% 4% Sales to other EU countries 2 64% 4% 8% Sales in your country 2 58% 1 2% Profitability 22% 59% 1 3% Employment 19% 68% 11% 2% Sales to non-eu countries 17% 71% 4% 8% 0% 40% 60% 80% 100% Flash EB 130 September 2002 Fig.3A Increase No change Decrease [dk/na] Q.4 Has the European Union Single Market contributed to an increase or a decrease for "Sales to other EU countries" SW 38% 48% 1% 12% B 34% 51% 10% I 30% 63% 2% ES 29% 5 2% 14% IRL 29% 4 3% 24% L 28% 5 3% 14% D 27% 62% 3% 7% NL 27% 5 4% 13% DK 2 60% 3% 11% 2 64% 4% 8% OST 22% 6 7% FIN 77% 1% 3% P 51% 9% F 19% 7 3% 2% EL 14% 50% 32% UK 13% 7 4% 0% 40% 60% 80% 100% Flash EB 130 September 2002 Fig.3B Increase No change Decrease [dk/na]

21 FLASH EB N 130 «Internal Market» (28/08/ /09/2002) - Report p Impact on particular aspects of company operations * Source question: question 4 - The most positive impact of the Single Market has been on sales to other EU countries - * Overall picture: The graph opposite (fig 3A) presents the results at the level of the European Union for the six aspects of firm operations. Although business operations have not changed for the majority of companies interviewed, in comparing the results for increase and decrease we can see that overall the results are positive. To make it easier to analyse these positive results we have converted each item into an "impact score" on the basis of the following calculation: we subtract the figure for decrease from that of increase and ignore the figure for no change. Consequently, we rank below the six aspects according to our "impact score" method: Sales to other EU countries Productivity Sales to non-eu countries Sales in your country Employment Profitability Average Impact score 21 points 19 points 13 points 10 points 8 points 6 points 13 points We can see that for each of these aspects the balance is always on the increase side. In other words, of those companies who have noticed that the Single Market has affected their activity, the impact has been positive for each of the six aspects covered in this question. It comes as no surprise that of these six aspects of firm operations, intra-eu sales is where companies have most benefited from the Single Market (2 of respondents report an increase and 4% a decrease). It is interesting to note that company productivity follows as a close second in terms of the positive contribution of the Single Market (2 increase v. 7% decrease). We can see that the Single Market has contributed more to boosting extra-eu sales than domestic sales. It is certainly encouraging to see that company executives confirm that the impact of the Single Market on employment has also been positive (19% increase v. 11% decrease). Even if profitability has the least positive score of the six criteria, there are still more company executives reporting an increase (22%) than a decrease (1). * Breakdown by country: In looking at the average results at the Member State level, we see that company executives in Ireland (3), Portugal (32%) and Italy (31%) are most convinced that the Single Market has contributed to an increase in their firm s operations. At the other end of the scale few company managers in the United Kingdom (12%), France (14%) and Denmark (19%) are of the opinion that the Single Market has boosted their business activities. Looking firstly at sales, we can see that domestic sales have mostly increased in Ireland (49%), Portugal (40%) and Greece (38%) as a result of the Single Market. The Single Market has contributed to an increase in intra-eu sales (sales within the Member States) in Sweden (38%), Belgium (34%) and Italy (30%) more than in any other Member State (see fig 3B). Companies in Italy (2), Germany () and Belgium () have seen a boost in their extra-eu sales (sales outside the Member States) as a result of the Single Market. The Single Market has had the least positive impact on domestic, intra- and extra-eu sales for businesses in the United Kingdom.

22 FLASH EB N 130 «Internal Market» (28/08/ /09/2002) - Report p. 25 Productivity in the Mediterranean countries of Italy (40%), Portugal (38%) and Spain (37%) increased as a result of the Single Market more than in any other Member State. In 1992, the Maastricht Treaty made economic and social cohesion one of the EU s priority objectives, which led to the setting up of the cohesion fund the main objective of which was to help the four least prosperous Member States at that time, namely Spain, Greece, Ireland and Portugal, to overcome the difficulties in the preparation for monetary union. It is certainly encouraging to see that profitability has mostly increased in three of the four cohesion countries : Ireland (4), Portugal (42%) and Greece (37%). Few company executives in the United Kingdom claim that the Single Market has increased the productivity or profitability of their business. A particularly high proportion of company executives in Luxembourg (4) and Ireland (44%) credit the Single Market with boosting employment in their firm. Once again business leaders in the United Kingdom (10%) are least convinced that the Single Market has increased employment in their business. * Breakdown by company category: Companies in industry credit the Single Market with an increase in domestic, intra-eu and extra-eu sales more than other sectors. Companies in trade are on a par with those in industry when it comes to increase in domestic sales as a result of the Single Market. Productivity and profitability of companies in industry is more likely to have increased due to the Single Market than other sectors. The Single Market has contributed more to increasing employment in companies in services more so than other sectors. The greater the extent to which companies are involved in exporting to other Member States, the more likely that the Single Market has a positive impact on their business operations. This tendency is true for each of the operations cited in the question. The results for company size indicate that the larger the company the more they have benefited from the Single Market.

23 FLASH EB N 130 «Internal Market» (28/08/ /09/2002) - Report p. 26 Q.5 Dans chacun des domaines suivants, l'influence du Marché unique de l'union européenne sur la stratégie de votre entreprise a-t-elle été : - Très importante - Plutôt importante - Plutôt pas importante - Pas importante du tout...? Q.5 For each of the following areas, how important has the influence of the EU Single Market been for your company's strategy : - Very important - Rather important - Rather unimportant - Not important at all...? Q.5 Influence of the EU Single Market for your company's strategy "Very important / Rather important" Pricing of your products and services Purchasing from other European Union countries 3 34% Marketing strategy 27% Selling directly to other EU countries 24% Distribution in other EU countries Co-operation agreements with companies from other EU countries 22% 21% Setting up businesses in other EU countries Investing in companies in other EU countries Companies from other EU countries investing in your company 11% 9% 8% Flash EB 130 September 2002 Fig.4A 0% 40% 60%

24 FLASH EB N 130 «Internal Market» (28/08/ /09/2002) - Report p Importance of the influence on particular areas * Source question: question 5 - More than one third of business leaders recognise the impact of the Single Market on purchasing and pricing policy - * Overall picture: In order to facilitate the global analysis of the potential influence of each of these factors on the strategy of companies in the European Union, we converted these scores into an index calculated as follows - very important = 100, rather important = 66.7, rather unimportant = 33.3, not important at all = 0. So we rank the 9 items below in order of importance. As the proportion of respondents saying Not Relevant/Not Concerned varies considerably from one area to another, the relative importance of the different items can be deceptive - for example, the percentage of people who say the influence of the Single Market is important for pricing is a higher percentage than for purchasing, but the index shows the real order of influence on company strategy. Index Very important Rather important Rather unimportant Not important at all Purchasing from other EU countries 42 11% 23% 24% 24% Pricing of your products & services 41 12% 24% 28% 27% Selling directly to other EU countries 36 7% 17% 23% 2 Marketing strategy 35 8% 19% 29% 30% Distribution in other EU countries % 27% Co-operation agreements with companies from other EU countries Setting up businesses in other EU countries Companies from other EU countries investing in your company Investing in companies in other EU countries % 29% 24 3% 8% 19% 31% 22 3% 21% 34% 21 2% 7% 33% The fact of purchasing from other European Union countries has been of most influence to company strategy, being confirmed by one third of company executives. Therefore, we can confirm that the free movement of goods and services is affecting a considerable number of company strategies across the European Union. In the spirit of improving the business environment and ensuring that market integration is not undermined by anti-competitive practices, pricing of products and services has become more competitive. 3 of executives say that the influence of the Single Market has been important (5 say unimportant) for the pricing of their products and services. Following these two, there is a group of four areas where the indexes are similar (32-36), with % of company executives indicating that these have had an important influence on their company strategy. 27% of executives say that the Single Market has had an important effect on their marketing strategy. For 24% of company executives direct sales to other Member States has impacted their company strategy. 22% of company executives have accounted for the Single Market in the development of their distribution strategy. Just over one in five company managers have taken advantage of co-operation agreements with companies from other EU countries. The last three areas concern setting up businesses and investment (inward and outward) and are confirmed as being an influential factor on the strategy of 8-11% of companies.

25 FLASH EB N 130 «Internal Market» (28/08/ /09/2002) - Report p. 28 Q.5 Dans chacun des domaines suivants, l'influence du Marché unique de l'union européenne sur la stratégie de votre entreprise a-t-elle été : - Très importante - Plutôt importante - Plutôt pas importante - Pas importante du tout...? Q.5 For each of the following areas, how important has the influence of the EU Single Market been for your company's strategy : - Very important - Rather important - Rather unimportant - Not important at all...? Purchasing from other European Union countries IRL EL L P OST SW B FIN NL I ES 62% 62% 57% 50% 47% 44% 40% 38% 38% 38% 3 34% F D DK UK 30% 30% 30% 2 0% 40% 60% 80% 100% Flash EB 130 September 2002 Fig.4B IMPORTANT Pricing of your products and services P EL 70% 6 L IRL SW NL I B OST FIN ES 5 52% 48% % 41% 38% 38% 3 DK D UK F 32% 30% 27% 2 0% 40% 60% 80% 100% IMPORTANT Flash EB 130 September 2002 Fig.4C Marketing strategy EL P 5 60% L I IRL SW NL B OST ES 39% 38% 38% 3 34% 34% 30% 28% 27% DK FIN D F UK % 19% 1 0% 40% 60% 80% IMPORTANT Flash EB 130 September 2002 Fig.4D

26 FLASH EB N 130 «Internal Market» (28/08/ /09/2002) - Report p. 29 * Breakdown by country: In order to assess the influence of the Single Market on company strategy at the Member State level, we will take each of these items in turn and highlight those countries who rank highest for the proportion of important answers and in parallel we will identify those Member States where most executives believe that the influence of the area has been unimportant. Purchasing from other European Union countries is important for the strategy of 62% of companies in Greece and Ireland (see fig. 4B). On the other hand, in France (5) and Germany (5), this has been unimportant for a majority of companies. The impact of the Internal Market on the pricing of products and services and the consequent increase in price competition has been significant for the development of company strategy in firms in Portugal (70%) and Greece (6) (see fig. 4C). Once again, we see that it is in France (68%) and Germany (63%) where most company executives believe that the influence of the Single Market has been unimportant when it comes to influencing pricing strategy. The Single Market has had an important influence on the marketing strategy for the majority of companies in Greece (60%) and Portugal (5) (see fig. 4D). This time Finland (70%) features as the country where most company executives believe that the influence has been unimportant. Intra-EU sales have had the biggest impact on company strategies in Greece (37%), Sweden (3), as well as in Ireland, Italy and Portugal (34% in all 3 countries) (see fig. 4E). This has been unimportant for company strategies in France (61%) as well as in Germany and Belgium (58%). As we would expect, the importance of distribution in other countries is linked to the significance of intra-eu sales (the same 5 countries rank highest). For executives in Greece (49%) and Ireland (43%) co-operation agreements with companies from other EU countries has been an important influencing factor on strategy (see fig. 4F). In France (62%) and Belgium (59%), the influence of co-operation agreements on company strategy has been unimportant. Companies in Portugal (30%) and Greece (27%) have benefited from the Single Market by setting up businesses in other EU countries (see fig. 4G). Only 4% of companies have invested in this way in Denmark and Finland. As regards inward and outward investment patterns in companies, Greece and Portugal are both the highest investors and recipients of investments in the European Union. In contrast, companies in Belgium rank lowest for both.