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Inner market
Introduction
The EU was created after the Second World War.5 The goal was to create a close cooperation between countries inside the EU and by doing this achieve an environment where the countries dependence of each other would remove any urge for armed conflict.6 Dependence and a peacefull environment should be built on trade between the member states.7 This aim is today referred to as the inner market and is still one of the core goals of the EU.8 Abolition of trade obstacles is normally the first thing that comes to mind at the definition of an inner market. This is correct, but the definition lacks to explain the different markets that will be affected. Markets can not only be defined as geographical areas, but also divided dependent on i.e. products, customers or policies.9 This chapter shall highlight the development of the inner market as an overall concept,bringing into discussion the different markets and policies within the inner market and the EU‟s work to make all aspects work together. To understand the legislation of procurement and in what light this legislation shall be viewed, an understanding of the inner market as a concept is necessary. This chapter aims to be a platform to enhance understating of why procurement is important and how it added value and also complexity to the progress of the EU‟s inner market.
Creating the inner market
From a common market to an inner market
The most visible work the EU legislators performed up to date is the work to create an inner transparent market. The so called “four freedoms” and the member states abolition of trade obstacles have been the mechanisms to achieve this. 10 The creation of the inner market developed from a customs union in 1969 to a common market trough the adaption of the Single European Act in 1985. 11 The Single European Act who contained 280 targets for the Union to achieve was active until the end 1992.12 The targets include different areas of attention. One of the areas of attention is the procurement market. The procurement market has an effect on both the public and private market and the aim is to insert the public market into the private market and by doing this drive the public market into a more transparent borderless market.13 In 1993 the single market becomes a full size target of the EU and the commission is assigned the job to evaluate and release recommendations as to how the member states shall establish or achieve these targets.14 To be able to merge these markets, who are rather different, several obstacles and differences has to be overcome. The policy makers of the EU has recognized this difference in character as compared to the private market.15
The public market versus the private market
The private market can be segmented by supply and demand of a product or service.The market is run by the demand side, i.e. the customer side, who is the strong party in a private market.16 The aim of the market is to ensure as much profit as possible to the owners.17 Within a public market the segmentation is done solely on geographical prerequisites and its aim is not to make profit, but to serve a public interest. 18 The public interest is many times not dependent on market fluctuations, hence the need of medical care will exist during a recession. The public spending might be tighter, but the market platform still prevails. For private industries the platform and adjourned industries vaporizes the day the market platform disappears, for example there will be no gasoline cars built the day the oil runs out, hence industries only directed towards this market segment will disappear. The public market and the public interest is thereby not completely run on the same basic principle as the private market of supply and demand. Moreover the public market does not reach further than the need the procurement requires and a commercial interest cannot be pursued further than this demand due to a lack of other market participants.19 Therefore, the strong party in the public market is the public entity that performs procurement.Due to this different division of powers between the public and private markets, the rules and regulations for the two markets differ. The private market is recognized by legislation aimed at restraining companies from conducting business on unfair grounds,i.e. anti-trust law, meanwhile the public market is recognized by the need to be open and ensure access to business within the geographical area they represent.20Article 106 FEU is directed to contracting authorities who engage in business that partly or as a whole aims to satisfy public service. The article contains the obligation for the contract authority to act in a manner that does not go against the goals of the EU. However, since many of the public services are performed on a monopoly based right, the rules for competition shall be applied as far as the monopoly in question allows, article 106 (2) FEU. The most common breach of the Treaty that is done by contracting authorities is a breach against the obligation to treat all suppliers equally no matter their origin, i.e. discrimination.21 Since the public market is divided geographically it is seen that contracting authorities favor suppliers within the geographical area of their supervision.22The balance between what can be seen as lawful by a contracting authority and what is a breach against any of the articles is monitored by Commission, article 106 (3) FEU.
Abbriviatons
1 Introduction
1.1 Background
1.2 Purpose
1.3 Delimitation
1.4 Terminology
1.5 Methodology
1.6 Outline
2 Inner market
2.1 Introduction
2.2 Creating the inner market
2.2.1 From a common market to an inner market
2.2.2 The public market versus the private market
2.2.3 Protectionism versus state aid as an obstacle to trade
3 The CJEU’s use of law to enable the free inner market
3.1 Introduction
3.2 Primary law and fundamental principles
3.3 Secondary legislation
3.4 The four freedoms of the inner market
3.5 The general and primary principles in law and the CJEU‟s
interpretations of their functionality
3.5.1 The principles place in interpreting measures taken by
member states
3.5.2 How to distinguish general and fundamental principles
3.5.3 The use of proportionality to distinguish the differenace
between non-dicrimination and equal treatment
3.6 Procurement complexity concise
4 The procurement market and the Treaty of Lisbon
4.1 Introduction
4.2 Changes made trough the Lisbon Treaty
4.3 Article 3 NEU is more detailed but not defined
4.4 “ Social Market Economy” as a part of the inner market
4.4.1 Social Market Econmy from history and theory
4.4.2 The commissions interpretation of “Social Market
Economy”
4.4.2.1 The SME approach to understand the Commissions opinion
4.4.2.2 Best practice procurement according to the Commission
4.4.3 The Eurpean Parliaments opinion on “Social Market
Economy” and the current procurement legislation
4.4.4 EPSU interpretations of the “Social Economic Market”
4.5 Summary
5 Test of impact due to “Social Market Economy” in public
procurement
5.1 Introduction
5.2 For whom and to what does the directives apply
5.3 Definition and estimate
6 Analys
7 Conclusion
List of references
Appendix
Report A7-0150/2010
