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We must strengthen EU’s single market

EU’s single market is a huge success. The common legislation gives companies access to 500m consumers and has created growth and prosperity for Denmark. But there are still hurdles to encounter with lack of common EU rules or where rules are interpreted and enforced differently from country to country. DI has therefore launched the EU check-up aimed at locating these hurdles and plane them.
Denmark has won in the single market but there are still areas where there are not common EU rules, or where the rules are interpreted and enforced differently.

Publiceret: 29.11.2017
Af Niels Brandt Petersen mail

When the furniture company OX DENMARQ receives an order from a Swedish customer, they are first and foremost happy. But when they receive payment in Danish kroner, they are extremely surprised.

While it typically costs a Danish company DKK 15-30 to receive payment in EUR and DKK 40-50 to receive payment in DKK, companies in the neighbouring EU countries will get away with paying only DKK 2-3.

It does not sound like a lot but when a Danish company issues thousands of export invoices it runs up.

- The fee cost us a lot of money every year. It has the same effect as an export tax. It is not consistent with a well-functioning single market, says Jakob Hanghøj, co-owner of OX DENMARQ.

The higher costs means that Danish companies like OX DENMARQ come off badly compared with their competitors from other EU countries. It also means that the company will have less money to invest.

- The money we pay in fees for receiving payments for our exports could e.g. pay for participation at a trade fair in a new market. So there is no doubt that the fees would cost on investments, growth and employment, says Jakob Hanghøj.

See also: New poll: 7 out of 10 Danes are optimistic about the future of the EU

Peculiar and unfair

The reason why Danish banks are entitled to impose these high fees is that Denmark has not acceded to a European regulation that establishes that the banks are not allowed to charge higher fees for at foreign payment than a domestic. The regulation is mandatory for the Euro countries but voluntary for the remaining countries. E.g. Sweden has acceded to the regulation.

- It does not seem fair or reasonable that Danish companies should come off more badly compared with other companies from e.g. Germany or Sweden, says Jakob Hanghøj.

He finds it hard to understand why changing Danish governments have not requested that Denmark accedes to the regulation so that Danish companies can have the same sensible rules as companies from other EU countries.

See also: EU citizens more positive about EU after Brexit

The single market must be even better

The example with OX DENMARQ shows that there is still a great potential in an even better single market. According to Dansk Industri (DI) there is a potential of DKK 375bn if you only remove all the obstacles to the free movement of goods in the EU.

Therefore, DI has launched a new initiative called the EU check-up. The initiative must, in close dialogue with DI’s member companies, find the hurdles that prevent the EU single market from not functioning as intended.

- The EU check-up is a tribute to the single market and the values it stands for. It is a tribute to the union and the belief that we by shedding light on the challenges and bringing the solutions on the table will be able to strengthen the single market. And it is our contribution to do the work to improve the single market as concrete as possible, says DI’s Managing Director, Karsten Dybvad.

He emphasises that DI always focusses on a well-functioning single market on the agenda and undertakes to safeguard European interests on a daily basis.

-  But with the EU check-up we make an extra effort, says Karsten Dybvad.

DI is asking for input from the companies as to how the single market works in practice.

-  In that way we can reveal more examples that we can examine. And if it turns out that there is a solution we can take it to the political level and have it changed, says Karsten Dybvad.

See also: In the middle of a crisis - support for the EU

Searching for the positive tale

A report for the Ministry of Industry from February this year shows that EU’s single market means a financial gain for Denmark’s GDP of five percent annually, corresponding to DKK 100bn extra than if we had been trading according to the general international principles of  free trade. 

Karsten Dybvad believes that the positive tale of the EU and the single market is often long forgotten in the ever so critical talk about the European Union.

- The single market was not established spontaneously. It is the result of a sustained cooperation between the European countries that have removed thousands of physical and technical barriers which have made it significantly easier to be a business and a consumer across the borders in Europe, says Karsten Dybvad.

See also: Without the EU, Denmark would be DKK 99 billion poorer

EU countries interpret differently

In a survey among DI’s member companies , 33 percent indicated that they  benefit ”to some extent” from EU’s single market, while 25 percent indicated to a large extent. Especially companies with international sales are positive.

In the survey, the companies also indicated whether the EU countries apply, enforce and interpret EU rules differently. Here almost one out of five indicated ”to a large extent”, and 25 percent indicated ”to some extent”.

The same survey shows that every fourth of DI’s members believes that a weakened EU and single market is one of the greatest threats to their business in the coming years.

See also: EU benefits large and small Danish companies

Must throw themselves into the fight

And when the companies experience hurdles in an ever so smooth single market, industry and politicians must throw themselves into the fight for an even better single market to find solutions, explains Karsten Dybvad.

- We do it by working for targeted harmonisation and for making the EU rules similar not only on paper but also the same in terms of enforcement and interpretation from country to country. And to break away from special national rules and excess implementation that makes it cumbersome and expensive to trade across the borders of the European Union, he says.

Karsten Dybvad points to the fact that the politicians have already started to encounter the challenges in Denmark through two government forums – that DI is also represented in: Business forum for simpler rules and EU implementation council focussing on prevention of excess implementation, unnecessary rules and administrative hassle. Many of the cases from the EU check-up will be raised by DI in these forums.

Revelation of examples

DI has already pressed for Denmark to accede to the regulation that will reduce the bank fee for companies such as OX DENMARQ. The European Commission has also caught sight of the fee and has lodged a proposal in consultation to deal with the high prices.
Jakob Hanghøj is satisfied with this development.

-  I think it is really positive that companies can consult with DI when they are experiencing problems. And it is even better when DI is actively working on solving the problems, says  Jakob Hanghøj.

FACTS: The EU check-up

”The EU check-up – full benefits of the single market” was launched by the DI with the aim to make it easier for your company to do business in Denmark as well as throughout the EU’s single market.

With the EU check-up, DI is asking for input from companies as to how the single market works in practice. For instance: What laws lead to challenges? Do you encounter extra tests and demands for your products? Do you experience requirements for specific education when you provide services in other EU countries? Are there any areas in which you miss common rules? - Read more about the EU check-up here.

I think it is really positive that companies can consult with DI when they are experiencing problems. And it is even better when DI is actively working on solving the problems

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PUBLISHED: 11/29/2017 LAST MODIFIED: 11/29/2017