AmCham Macedonia 1/2019 - Page 8

COVER STORY Joining the European Single Market - Opportunities and Challenges Marija Risteska, Executive Director Ana Krstinovska, Program Manager Center for Research and Policy Making T he basic idea behind the “European project” was economic cooperation that would help post-World War 2 countries recover, and establish closer ties in order to prevent war from happening again. What started as the European Coal and Steel Community, went on to become a free trade area, customs union, common (single) market and finally an economic and monetary union, with the ambition to reach the level of “ever-closer political union”. Throughout the process, most of the newly adopted EU rules, measures and court rulings were aimed at removing the obstacles to the free flow of goods, services, workers and capital. These actions responded to either identified weaknesses or evolutionary challenges that distorted the European market and in time led to the creation of the European Single Market (EU Member States, Norway, Switzerland, Iceland and Liechtenstein) as one of the greatest achievements of the European integration process and one of the biggest benefits for EU’s citizens and companies. The European Single Market - Why is it Important for Us? The Single Market offers businesses unlimited access to over 500 million consumers, which enables them to exploit economies of scale and leads to improved efficiency. It is designed to remove all non-tariff barriers, to promote trade and increase fair competition between companies, ultimately leading to greater choice 8 EMERGING MACEDONIA of goods and services, better quality, and lower prices for consumers. Competition and pressure from other markets encourages companies to restructure and reorganize in order to improve competitiveness and minimize costs. In addition, it facilitates trans-national joint ventures and technological alliances, accelerates the gains from trade and specialization between countries. In addition, the free movement or workers as one of the advantages of the Single Market aims to contribute to better and more efficient allocation of human resources and reducing the mismatch between labor demand and supply within the national labor markets. It will also have practical impact on cutting red-tape and facilitating procedures for Macedonian businesses wishing to operate abroad. Nevertheless, in order for companies and countries to benefit from the Single Market and not succumb to the more developed and more experienced competitors, they need to achieve a certain level of preparedness before Macedonia joins the EU. Previous enlargements have generated evidence on the impact of the Single Market on a number of outcomes (GDP per capita, consumption per capita, investment and employment). To this end further progress needs to be made, especially in areas such as the fight against the shadow economy, improvement of the business environment, contract enforcement, employability and employment, research and development, and digitalization. The last area increasingly gains importance on the EU agenda to the extent that