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
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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