The beginnings of the European Union can be traced back to the 1950s. Since then, the idea of a common economic and political system has grown and expanded into what is today a unique economic and political alliance of 27 European countries.
The formation of the EU has led to an improvement in the standard of living of its citizens, to the introduction of a single currency and, eventually, to the completion of the single European market, which ensures the free movement of goods, services and capital, and promotes the free movement of persons between Member States.
In the single European market, people, goods, services and capital can move as freely as within a single country. EU nationals are free to live, work, and study in any Member State. Consumers are able to benefit from a wide choice of goods and services at more affordable prices. Besides, the single market opens up new opportunities for businesses as it provides them with easier and faster access to markets outside their home country.
Today, the single market is the heart of the Union. Its implementation is the fruit of several years of combined efforts by the Member States. During this time the EU has passed many regulations and removed many legal and administrative barriers which impeded free trade and movement. Provided for by the Treaty Establishing the European Union, the single market was formally launched in 1993. More+
What does it mean?
- Free movement of goods
The free movement of goods, one of the cornerstones of the internal market, is based on the principle which prohibits Member States from imposing any restrictions on trade in products which are legally put on the market in any other Member State.
The regulations, standards, supporting technical infrastructure, monitoring of the safety of products on the market, as well as various measures related to the trade in goods are aimed at removing all obstacles that might impede the free trade in goods within the EU Member States.
One of the priority tasks of the single market is to ensure the safety, quality, and compliance of products.
For certain products (e.g. children's toys, electrical equipment, machines, personal protective equipment and elevators) regulations have been put in place which define the conditions for CE marking such products. The CE mark (Communautés Europénnes) on a product shows that the product complies with all the relevant EU legislation and that it can be marketed and sold on the market of the European Union. The act of fixing the mark to the product constitutes a declaration by the manufacturer that the product is fully in accordance with the requirements applicable to CE marking, and is as such suitable to be marketed and sold in the whole territory of the European Economic Area.
Food products are also governed by strict requirements regarding product safety and health compliance, as well as traceability throughout the food chain. Similarly strict are the requirements for cosmetic and pharmaceutical products. The information flow between the Member States keep countries alert and means that urgent measures can be taken if necessary. More+
Free movement of capital
The second pillar essential to the smooth functioning of the internal market is the free movement of capital as the basis for the consolidation of European financial markets. The liberalization of the capital market has reached a key point in the process of economic and monetary connections within Europe. It was the first step towards the formation of the European Economic and Monetary Union and the introduction of a common currency – the euro.
European nationals have benefited significantly from the capital market liberalization as they can now manage or invest their funds in any EU Member State, open accounts with foreign banks, trade in securities issued by foreign issuers on foreign stock markets, purchase and sell real estate outside the borders of their home country, and take out loans abroad.
The free movement of capital is of strategic importance for businesses because it enables them to buy, own and manage shares in companies established abroad. Besides, it ensures easier and better access to international trade activities, creates opportunities for investment alliances, and improves access to the financial sources needed for business growth.
- Free movement of services
The principle of free movement of services among the Member States constitutes another key pillar of the single European market.
The fundamental requirement arising from the principle of free movement of services obliges the Member States to create conditions which enable the unrestricted setting up of businesses and the unrestricted provision of services (or cross-border/temporary provision) in all Member States, if these services are temporary in nature.
Freedom of establishment
Freedom of establishment means that any person is free to establish a business in his or her home country or in any other EU Member State. The provider becomes fully integrated in the economic environment of the Member State in which the former is legally established. Such freedom of establishment shall entail the abolition of any discrimination which is based, directly or indirectly, on the nationality or place of registered office of the service provider. Service providers of all Member States are free and equal in their right to establish an undertaking and to select their place of establishment.
Freedom to provide services
In practice, the freedom to provide services enables economic operators (self-employed persons and companies) who comply with the conditions for the pursuit of a business activity in their home Member State to offer services on a temporary basis in another Member State, without having to be established in that country.
Both fundamental rights promote unrestricted trade in services across the whole territory of the EU.
Member States may impose restrictions on the free movement of services only in cases where such restrictions are justified on the grounds of public order, safety, health, or protection of the environment.
With the aim of enhancing the free movement of services, the Directive on services in the internal market (hereinafter referred to as: the Services Directive) was adopted in 2006. The implementation of the Services Directive started a process which has enabled and will continue to enable businesses and consumers to benefit from the opportunities which the single internal market offers in the field of services.
In order to promote the implementation of the Services Directive, Member States have been required to take measures aimed at simplifying administrative procedures, to eliminate administrative barriers to service activities, and to introduce electronic procedures and points of single contact to assist service providers.
In this respect, the Services Directive is an important challenge for the Member States in their effort to simplify the legislation and update the functioning of national administrative bodies, which will improve the quality and accessibility of public administration services.
To achieve the effective functioning of the internal market in the field of service activities, it is vital to strengthen mutual trust between Member States and, in particular, the trust of service providers and consumers into the internal market.
The implementation of the Services Directive is a dynamic process that will evolve and grow over the years, generating more and more benefits for service providers and consumers. More+
Free movement of persons
The single market is also implemented through the principle of the free movement of persons. Any EU resident has the right to live, work, and travel within the entire territory of the EU. The free movement of persons is constituted through the right to enter all EU Member States and to live and work in any other Member State.
Entry and residence in an EU Member State
EU nationals may enter an EU Member State with a valid personal identity card or passport. No permits are required for residence of up to three months, regardless of the purpose of stay.
For a longer period of residence (more than three months), a citizen needs to apply for a residence permit. EU nationals may only reside in another Member State if they can prove that they have sufficient resources to maintain themselves, and if they carry appropriate health insurance coverage.
The Member State grants an EU resident long-term resident status if the person has resided within its territory for a certain period of time and complies with the relevant conditions.
Entry and residence in an EU Member State may only be restricted on the grounds of public order, safety, and health.
Residence and work
EU nationals do not need to obtain work permits if they reside in a host Member State for the purpose of work or gainful employment.
This principle serves to implement the right of EU and EEA nationals to carry out work in the host Member State under the same conditions as that country’s nationals. Access to employment shall entail the abolition of any discrimination based on nationality (except in work positions which are related to the enforcement of official authority and the responsibility for safeguarding the general interests of the State).
EU nationals have the right to:
seek employment in another Member State,
work in the host Member State without needing a work permit,
reside in the host Member State for that reason,
remain in the host Member State after the end of the employment,
enjoy equal treatment with the nationals of the host Member State with regard to access to employment, working conditions and all other social and tax benefits.
- Mobility of workers and professionals within the EU market
The free movement of persons enables qualified professionals to seek employment and work anywhere within the EU. This increases the mobility of workers and transfer of knowledge, and promotes scientific and technological development.
However, persons seeking work and employment in other EU Member States may face several barriers. Different education systems, regulated professions, and diverse national requirements for the pursuit of certain economic activities may prevent or hinder access to labour markets in other Member States.
Recognition of professional qualifications
Each EU Member State may freely decide to define the legal conditions for access to and exercise of a profession in a special professional qualification or to establish specific requirements for the pursuit of an economic activity (the so-called regulated professions or regulated activities).
In order to overcome these differences within its territory, the EU has put in place a system of mutual recognition of professional qualifications, which enables EU nationals to perform the profession or activity, for which they have acquired appropriate knowledge and the full professional qualifications, in other Member States.
The rules concerning the mutual recognition of professional qualifications are stipulated in the Directive 2005/36/EC on the recognition of professional qualifications, which lays down three systems of recognition procedures:
- automatic recognition of professional qualifications (minimum training conditions) – applies to seven professions known as the 'sectoral' professions: doctors, nurses, midwifes, pharmacists, dentists, veterinary surgeons, and architects,
- automatic recognition of professional experience – applies to professions in the craft, industry and commerce sectors,
- a general system for the recognition of evidence – applies to all other regulated professions.
Coordination of social security systems
Work in another Member State, travels across Europe, study abroad within the EU territory – these are important events in the life of every individual. Any residence outside the borders of one’s home country for reasons of study, employment or work is closely connected with the issue of social protection.
The EU Member States are free to decide on the system of social security for their citizens and to define the conditions and rights attached to pension benefits, unemployment benefits, family benefits, and other social security benefits.
Striving to ensure the Europe-wide provision of social rights to EU nationals, the European Union has defined a set of common rules which must be followed by the national authorities when deciding about the social security rights and obligations of their citizens.
In the EU Member States, Iceland, Norway, Liechtenstein, and Switzerland, the rules on social security coordination are applied to the national legislation with regard to the following: sickness, maternity and equivalent paternity benefits, old-age pensions, pre-retirement and invalidity benefits, survivors' benefits and death grants, unemployment benefits, family benefits, benefits in respect of accidents at work and occupational diseases.
At the EU level, the exercising of rights and obligations arising from social security insurance within the framework of the social security coordination system is based on the following common principles:
You are covered by the legislation of one country at a time, so you only pay contributions in one country. The decision on which country’s legislation applies to you will be made by the social security institutions. You cannot choose.
You have the same rights and obligations as the nationals of the country where you are covered. This is known as the principle of equal treatment or non-discrimination.
When you claim a benefit, your previous period of insurance, work or residence in other countries are taken into account if necessary.
If you are entitled to a cash benefit from one country, you may generally receive it even if you are living in another country. This is known as the principle of exportability. More+