On Monday 19th September,the European Commission announced a new proposal for a Single
Market Emergency Instrument (SMEI) intended to provide a structured response to disruptions to the free movement of people, goods and services across the EU’s economic bloc in times of crisis, as was seen throughout the pandemic.
The instrument builds on lessons learnt from the pandemic and creates a framework that enhances the Single Market’s resilience through appropriate and necessary crisis preparedness and crisis management actions to guarantee its smooth functioning in times of crises.
This way, the SMEI will strive to avoid barriers to free movement of persons, goods, and services in the European Single Market and especially the disruption of supply chains.
In recent crises, such as the war in Ukraine 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 on Monday 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.
Indeed, the different travel rules across the EU throughout the pandemic, widespread slowdowns in major ports and transportation hubs due to fragmented pandemic response rules led to devastating economic costs. Therefore, SMEI proposed on Monday by the Commission is an attempt to learn from such challenges and avoid repeating the same outcome in future crises.
So, how will this work?
The SMEI establishes a crisis management framework to identify different threats to the Single Market and ensure its smooth functioning by:
The Malta Business Bureau reacts
The Malta Business Bureau, which acts as the EU-business advisory office of The Malta Chamber and The Malta Hotels and Restaurants Association, expressed support for the Commission’s effort at securing a properly functioning single market in times of crises, “if this is done under well-defined criteria that would trigger crisis-mitigating measures”.
“It is crucial that the scope of SMEI is narrow and targeted in ensuring that in crisis situations the imposed emergency controls are timely and information is easily accessible to businesses and citizens alike. It must be clear that the imposition of this definite response framework needs to be imposed only during extraordinary circumstances and that the definition of what constitutes this must be clear and homogenously agreed on.
Commenting on the development, MBB President Alison Mizzi said:
“Although we support an overarching crisis response framework this needs to subscribe to the principle of proportionality and avoids the imposition of excessive market monitoring. The Commission should only be required to obtain commercially sensitive information from businesses through a common agreed framework where an emergency mode has been activated. Companies must also be guaranteed that any information provided is protected.”
In its first reaction, the MBB therefore believes that companies may benefit from the SMEI instrument through better foresight and planning for emergencies, less trade restrictions, less delays in production and lower prices of inputs as well as more legal certainty and predictability.
Moving forward, the MBB will be analysing the proposed SMEI in more detail and will strive to ensure that it is aligned with the Maltese businesses’ interests. To this end, it shall continue following the developments in the European Parliament and the EU Council in the coming months where EU negotiations on the SMEI proposal will follow.
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