One can already spot 31 December 1992 on the horizon but the internal market is not yet a reality. The Community Institutions will have to make a great effort if they are to be in time for their appointment with a border free Europe.
At this stage the right of initiative of the Commission has been successfully exercised. The 282 measures outlined in the White Paper have been tabled before the Council. The latter has adopted 233 legal texts. What remain are 39 laws which the Council has partially adopted and 4 draft directives.
Amongst these measures are many which have great importance for the efficient operation of the internal market. These comprise measures relating to the free movement of persons and the complete elimination of fiscal barriers. With regard to the latter the Council agreed in December 1991 a Directive establishing a transitory regime for VAT which will be in effect until 1996.
This directive cuts across every decision relating to the draft harmonisation of indirect taxation proposed by Lord Cockfield in 1987. According to the most optimistic prognoses the directive should guarantee the abolition of tax frontiers, but in practice maintains the principle of payment of VAT in the country of destination. It is, in particular for this reason that the system foreseen is unlikely to guarantee the most smooth operation of the Single Market, or indeed, the elimination of any risk of competition distortion or tax evasion within the EC. The administrative cooperation which is intended to eliminate these risks appears to be insufficient while some of the measures foreseen may end up by increasing rather than reducing the burdens which business will encounter, finally, no definitive decision has been taken regarding the harmonisation of tax rates which is an essential condition for the real abolition of fiscal barriers.
The free circulation of persons remains at the moment the area lagging most behind as far as realization of the White Paper Programme is concerned. The EC Commission is increasingly more unseasy about the problems connected with the removal of frontier controls. These problems will prevent the free circulation of persons within the Community.
To reach the so-called "Objective '92" it is essential that all Community countries can adopt the national implementing measures in order to ensure the correct application of Community law. Even if in some ares the national measures have been taken, the situation remains most worrying. At the end of 1991 the number of Community laws in force was 173. But according to a report of 18 December 1991 drawn up by the Commission and presented to the Internal Market Council, only 49 legislative measures had been transposed in all Member States. The updating of this report which was presented during the Council of ministers of 25 February 1992 shows that the White paper measures in force are 193 at the moment of which 156 require national implementing measures. The countries which have transposed the greatest number of acts are Denmark (125), France (121) and UK (113). Against that the most delatory Member State is Luxemburg (90 measures implemented). Italy has made up much of its delay by transposing 40 White Pap
er measures since the end of the year. At the present time the Community rate of transposition has reached 72% and 56 measures have been transposed by all Memeber States.
The transposition goal becomes even more important when one considers the ruling of the European Court of Justice of 19 November 1991 in the matter of Francovich and Bonafici. The Court confirmed that Community law imposes a priciple whereby member States are required to compensate individuals for damages suffered by breaches of Community law which are attributable to the State. The possibility of reparations at the cost of the State is, according to the Court, particulary important since the real effect of a Community regulation is dependant on the condition of specific action on the part of the State, such as the transposition of a Directive.
In the short term - 1992 must see, in almost every Member State, the transposition of Directives relating to the abolition of physical controls on frontiers, taking into account the importance of the Commission places on this matter which offers the single most concrete and visible signal of the completion of the Internal market.
But there are also other major areas where a special effort is required by national governments. These comprise, notably, sectors such as financial services (banks, insurance), the public procurement markets (the works and supplies directives), vetinary norms as well as company law.
One of the major preoccupations of the Commission now is that several Member States have indicated difficulties in transposing the most recently agreed Directives. The anxiety grows if one bears in mind that in the coming months the laws which will come into force are more and more complex.
1992, therefore, is a key year for the completion of the Internal Market. We call on national parliaments and administrations to take their responsibility to transpose the maximum number of the directives into their national legal system.
