Brussels, 19 September 2022
Today, the Commission is presenting the new Single Market Emergency Instrument (SMEI). This crisis governance framework aims to preserve the free movement of goods, services and persons and the availability of essential goods and services in the event of future emergencies, to the benefit of citizens and businesses across the EU. While the Single Market has proven to be our best asset in crisis management, the COVID-19 pandemic has highlighted structural shortcomings hampering the EU’s ability to effectively respond to emergency situations in a coordinated manner. Unilateral measures caused fragmentation, worsening the crisis and affecting particularly SMEs.
Executive-Vice President for a Europe Fit for the Digital Age, Margrethe Vestager, said:
”The COVID-19 crisis made it clear: we must make our Single Market operational at all times, including in times of crisis. We must make it stronger. We need new tools that allow us to react fast and collectively. So that whenever we face a new crisis, we can ensure that our Single Market remains open and that goods of vital importance remain available to protect European people. The new Single Market Emergency Instrument makes it possible.”
Commissioner for the Internal Market, Thierry Breton, said:
“In the sequence of crises of the past few years, we worked hard to preserve a smoothly functioning Single Market, keep our borders and supply chains open and ensure the availability of products and services that our citizens needed. But we must be better prepared to anticipate and respond to the next crisis. Rather than relying on ad hoc improvised actions, the Single Market Emergency Instrument will provide a structural answer to preserve the free movement of goods, people and services in adverse times. The SMEI will ensure better coordination with Member States, help pre-empt and limit the impact of a potential crisis on our industry and economy, and equip Europe with tools that our global partners have and that we lack.”
The Single Market Emergency Instrument complements other EU legislative measures for crisis management like the Union Civil Protection Mechanism, as well as EU rules for specific sectors, supply chains or products like health, semiconductors or food security, which already foresee targeted crisis response measures. It establishes a well-balanced crisis management framework to identify different threats to the Single Market and ensure its smooth functioning by:
- Creating a crisis governance architecture for the Single Market: A new mechanism to monitor the Single Market, identify different levels of risk and coordinate an appropriate response comprising several stages – contingency, vigilance and emergency modes. First, the contingency planning framework enables the Commission and Member States to set up a coordination and communication network to increase preparedness. Subsequently, when a threat to the Single Market has been identified, the Commission can activate the vigilance mode. Finally, in case of a crisis with a wide-ranging impact on the Single Market, the Council can activate the emergency mode. An advisory group, comprised of the Commission and Member States, will be established to assess a given situation and recommend the most suitable response measures. It will play an essential role throughout the whole process.
- Proposing new actions to address threats to the Single Market: In vigilance mode, the Member States in cooperation with the Commission would focus on monitoring supply chains of identified, strategically important goods and services as well as on building up strategic reserves in these areas. When the emergency mode has been activated, free movement in the Single Market will be upheld through a blacklist of prohibited restrictions and, more generally, through reinforced and rapid scrutiny of unilateral restrictions. The Commission may also recommend Member States to ensure the availability of crisis-relevant goods by facilitating the expansion or repurposing of production lines or accelerating permitting. Finally, it may also recommend Member States to distribute the strategic reserves built during the vigilance phase in a targeted manner. New rules will also apply to facilitate public procurement of relevant goods and services by the Commission on behalf of the Member States both in vigilance and in emergency modes.
- Allowing last-resort measures in an emergency: Under extraordinary circumstances, and only when the emergency mode has already been activated, the Commission may also make use of tools which will require a separate activation step. In this case, the Commission may issue targeted information requests to economic operators, which can be made binding. It may also ask them to accept priority rated orders for crisis-relevant products, in response to which firms must either comply or explain the grave reasons justifying refusal. Furthermore, the accelerated placing on the market of certain products through quicker testing and accreditation, including through conformity assessment, will ensure their availability during emergencies. Rules permitting such derogations are laid down in separate proposals for a Regulation and a Directive amending a number of product-specific regulatory regimes, which accompany the SMEI Regulation.
Next Steps
The proposals will now be discussed by the European Parliament and Council of the European Union. After adoption by the co-legislators, the Regulations will enter into force on the twentieth day following their publication in the Official Journal of the European Union.
Background and further links:
For almost 30 years, the Single Market has been the EU’s most important asset, offering certainty, scale and a global springboard for our companies, and wide availability of quality products and services for consumers. However, in recent crises, and particularly in the early days of the COVID-19 pandemic, businesses and citizens suffered from entry restrictions, supply disruptions and a lack of predictability of rules which fragmented the Single Market. Intra-EU export restrictions and travel limitations, adopted in response to the pandemic, but in many cases poorly designed and justified for that purpose, disrupted the free circulation of goods, services and persons, causing economic costs, delays and hampering the overall crisis response.
The SMEI package presented today follows calls by the European Council, which in its Council Conclusions of 1-2 October 2020 stated that the EU should draw the lessons from the COVID-19 pandemic and address remaining fragmentation, barriers and weaknesses of the Single Market in facing emergency situations. In response, the Commission announced in its Updated Industrial Strategy Communication of May 2021 that it would present a dedicated instrument to ensure the freedom of movement of goods, services and persons as well as greater transparency and coordination in times of crisis. The European Parliament welcomed the Commission’s plan to present a Single Market Emergency Instrument and called on the Commission to develop it as a legally binding structural tool to ensure the free movement of persons, goods and services in case of future crises. Before presenting the proposal, the Commission undertook extensive consultations, including by publishing a call for evidence and a public consultation as well as a Member States’ survey, in addition to organising a large stakeholder workshop and numerous more targeted stakeholder consultations.
For More Information
- Questions & Answers
- Factsheet
- Video on SMEI
- Proposal for a Regulation establishing a Single Market Emergency Instrument and repealing Council Regulation (EC) 2679/98
- Proposal for a Regulation for the laying down measures to facilitate the supply and availability of crisis-relevant goods in the context of a Single Market emergency and amending Regulation (EU) 2016/424, Regulation (EU) 2016/425, Regulation (EU) 2016/426, Regulation (EU) 2019/1009
- Proposal for a Directive amending Directives 2000/14/EC, 2006/42/EC, 2010/35/EU, 2013/29/EU, 2014/28/EU, 2014/29/EU, 2014/30/EU, 2014/31/EU, 2014/32/EU, 2014/33/EU, 2014/34/EU, 2014/35/EU, 2014/53/EU and 2014/68/EU and introducing emergency procedures for the conformity assessment, adoption of common specifications and market surveillance in the context of a Single Market emergency
Speech by Executive Vice-President Vestager on the Single Market Emergency Instrument
Brussels, 19 September 2022
Today, we adopt a proposal: the Single Market Emergency Instrument.
For almost thirty years – it has its 30th anniversary the coming January the Single market has been the fundament of our European construction. It is the world’s largest trading bloc. Providing opportunities for millions of businesses around the world. It has made Europe come to life for millions of consumers across our region.
But the Covid 19 crisis showed us our Single Market isn’t perfect. It is strong, but not unbreakable.
Unilateral measures taken by Member States and the lack of transparency damaged the free movement of supplies when we most needed it. This increased shortages of crisis-relevant goods in high demand.
Together with national authorities and businesses, we managed to end this negative spiral. We created green lanes for trucks to pass the borders, as an example.
But the lesson learned remains clear: we need to make our Single Market operational at all times, including in times of crisis. We need to make it stronger.
We need new tools that allow us to react fast and collectively, so that whenever we face a new risk of crisis, we can ensure that:
- our Single Market remains open, fair and continues to provide the most important things for doing business;
- and that goods of vital importance remain available to meet the needs of people in Europe.
The new Single Market Emergency Instrument will give us such tools.
It follows a progressive and balanced approach, depending on how close we find ourselves from a possible new crisis.
First – Outside of crisis, we will work on establishing the necessary protocols to make us better prepared. We will also run crisis management simulations and ask Member States to send early warnings in case the supply of a critical product may be at risk.
Second – Whenever the threat of a new crisis becomes clearer, we will activate a so-called “vigilance phase”. In this phase we will ask Member States to voluntarily share information regarding their supply chains of goods and services of strategic importance. Such information could have helped us anticipate the lack of facemasks during the Covid crisis. In exceptional circumstances – and only in exceptional circumstances – the Commission can ask Member States to build-up its reserve of such strategic goods and services.
Third – An “emergency phase”, which will be activated by the Council when a sudden and unexpected crisis hits our Single market and severely disrupts the free movement or the availability of vital products. In this phase, the Single Market Emergency Instrument’s first objective will be to ensure that Member States only limit the free movement – being of goods, services or people – to what is absolutely necessary to face the crisis. To do so, we will require Member States to notify any restrictions they may take. As such, we will increase coordination and communication between countries, which were lacking during the Covid-19 crisis.
To ensure the availability of vital goods and services, the Commission will also be able to recommend companies to expand or repurpose their production of crisis-relevant products. We saw for instance during Covid how several companies in the fragrance or drinks business repurposed their production to make hydro-alcoholic gel. In exceptional circumstances, the Commission may also request information to companies regarding their production, accelerate the placing of well-needed products on the market or invite companies to prioritise orders for specific goods that will be needed during the crisis. But we would leave a chance to companies to provide a justification in case this is not doable, we will listen well to what they can provide.
Before I pass-on to Thierry, I would like to stress again an important point. Our Single Market Emergency Instrument is making the Single Market work, also in times of crisis. It is designing a collective, collaborative pathway to deal all together with crises that cannot be anticipated, and for which businesses cannot get prepared. For the benefit of us all. That is why we have foreseen precise definitions of what a crisis means, and strict thresholds for the activation of the different phases. So that the vigilance and emergency phases can only be activated when really justified. Likewise, the different tools, including strategic reserves and the priority orders will only concern goods that are of vital importance to the safety of people in Europe.
That’s also why Member States are closely involved in all steps of the process. With an advisory role as members of the advisory group that will be created. And with a decision role in the activation of the different modes and measures.
One of the lessons of the past two years has been that Europe’s resilience relies on a strong Single Market. Resilience is all about the ability to absorb shocks and overcome crises by taking action and doing that together.
Source – EU Commission