Transposition

Introduction

This report takes into account all transposition notifications made by 5 December 2023 for Single Market directives with a transposition deadline on or before 30 November 2023. As of that date, 1001 directives and 6492 regulations were in force to ensure the functioning of the Single Market. All comparisons are with the figures for 10 December 2022, the previous reporting date.

Single Market legislation can only achieve its intended effects if the provisions in the relevant directives are completely and correctly implemented in Member States’ national laws by the deadline set out in these directives.

Monitoring transposition helps make the Single Market work by ensuring that Single Market rules are implemented properly in Member States.

Such monitoring shows the transposition deficit (the gap between the number of Single Market directives adopted by the EU and the number of directives transposed by each Member State) and the conformity deficit (the percentage of those directives incorrectly transposed). It highlights what Member States are doing to ensure that Single Market law is implemented correctly and, by doing so, encourages them to improve their performance.

Transposition and the Single Market – why does it matter?

Incorrect transposition, implementation and application of EU rules creates barriers to the smooth functioning of the Single Market. Delays or gaps in transposition deprive people and businesses of the benefits stemming from the agreed rules, sometimes even for years.

The December 2016 Communication on EU law: Better results through better application pointed to the need to strengthen the assessment of the compliance of national measures implementing EU law and clearly demonstrated the Commission’s determination to ensure fast transposition (to learn how the Commission handles cases brought to the Court of Justice under Article 260(3) of the Treaty on the Functioning of the European Union (TFEU), see “More information”).

It is up to each Member State to implement EU directives in an accurate and timely way. The March 2020 Long-term action plan for better implementation and enforcement of Single Market rules (the “enforcement action plan”) highlights that the Single Market is built on EU law and is at the heart of the European project. It has fuelled economic growth and has made life easier for European consumers and businesses. However, timely and correct transposition of Single Market rules remains a challenge.

To support Member States more effectively in transposing directives and prevent new barriers to the Single Market, the Commission (in its Better Regulation Guidelines of November 2021) proposed implementation strategies to assist Member States and to monitor the transposition of new directives. These strategies identify the challenges that Member States face during the implementation process and explain what support the Commission can provide to Member States. Support measures include preparing guidance documents, organising expert groups and workshops, creating dedicated websites, and promoting training for practitioners.

In October 2022, the Commission adopted the Communication Enforcing EU law for a Europe that delivers that set out how the Commission has deepened and developed its work on enforcement. The goal is to ensure that EU law is upheld equally in all Member States and to maximise the concrete benefits that its implementation and enforcement work delivers in the everyday lives of people in the EU (the scope of the Communication is described in “More information”).

To mark the 30th anniversary of the EU’s Single Market, the Commission published on 31 January 2023 the third edition of the Annual Single Market Report. The report took stock of the integration of the Single Market and analysed how it helps the EU to navigate current geopolitical tensions, improve its competitiveness and support the economy’s green and digital transitions.

The Communication The Single Market at 30, published on 16 March 2023, looked ahead and called for a renewed focus on removing national barriers and enforcing existing Single Market rules. This should be supported by benchmarks to address deficiencies in the transposition and implementation of EU rules.

In particular, the Communication, building on the Commission’s previous call to Member States, proposed setting specific enforcement targets to limit both the transposition and the conformity deficit to 0.5%.  Similarly, it proposed reducing the duration of cases on the non-communication of transposition measures to 12 months from the sending of the letter of formal notice to the resolution of the case or its referral to the Court of Justice. This second indicator has been added for the first time to the Transposition part of the Scoreboard, as indicator [6] (for more details on the publications linked to The Single Market at 30, see “More information”).

The Communication Long-term competitiveness of the EU looking beyond 2030 also presented by the Commission on 16 March 2023, intended to provide a basis for boosting competitiveness beyond 2030. It identified 9 mutually reinforcing drivers and 17 key performance indicators (KPIs) and committed to “present[ing] the update on an annual basis in the Single Market and Competitiveness Scoreboard”. This means that the Single Market Scoreboard is now expanded to make sure it includes the 17 KPIs relevant for the analysis of the 9 competitiveness drivers. It is becoming a key tool to monitor the EU’s and Member States’ competitiveness under a new Single Market and Competitiveness Scoreboard (SMCS), without changing the tried and tested overall structure of the Scoreboard. The conformity deficit, as presented in this page (see indicator [5]), is one of the agreed KPIs.

The Communication Annual Single Market and Competitiveness Report is the successor to the previous Annual Single Market Report. In a single communication and within one annual cycle, it implements the processes set out in The Single Market at 30 and Long-term competitiveness of the EU looking beyond 2030. The Communication provides the basis to measure the state of (i) the Single Market and (ii) EU long-term competitiveness and productivity. This will help inform and lead discussions on any necessary policy measures. It is published together with the Annual Single Market and Competitiveness Scoreboard, which provides supporting data. It also integrates insights from the work of the Single Market Enforcement Task Force (SMET) to eliminate Single Market barriers.

Iceland, Liechtenstein and Norway are also subject to Single Market rules under the EEA Agreement. They are monitored by the EFTA Surveillance Authority.

However, there is a time lag between the adoption or repeal of a legal act in the EU and its addition to or removal from the EEA Agreement. This means that the body of EU law that applies in Iceland, Liechtenstein and Norway may differ from that which is in force in the EU. On 1 December 2023, 799 directives and 4230 regulations were in force to ensure the functioning of the Single Market in the EEA. This should be considered when comparing the Single Market Scoreboard with the EEA Scoreboard.

Focus on “short-overdue” directives

The European Council set a zero-tolerance target in 2002 for delays of 2 years or more in transposing Single Market directives. One purpose of the Scoreboard is therefore to report on the number of long-overdue directives in each Member State. However, successive Scoreboards reveal that Member States may have difficulties in transposing directives by the agreed deadlines (time between the entry into force of the directive and the date agreed for notifying national transposition measures to the Commission). The average delay this year is particularly long, at 18.3 months.

• The transposition deficit is 16.8% considering only the 22 directives that needed to be transposed in the reporting period and that then had the most recent transposition deadlines (1 December 2022 to 30 November 2023). This is more than a year ago, when the transposition deficit for the recent directives was 12.7%, and 24 times the average deficit for all directives (0.7%). The transposition rate varies by Member State, from 100% for Hungary, which transposed all 22 directives, to less than 70% for others: 59% for Belgium (13 directives transposed), 64% for Bulgaria and Luxembourg (14 directives transposed), 68% for Cyprus, Austria and Poland (15 directives transposed). 
• In addition to a high transposition deficit, these directives have an incompleteness rate of 32% as 15 of the 22 directives have not been transposed by at least one Member State (the incompleteness rate for all directives is 5%).
• In most cases, short transposition deadlines do not account for the long delays, nor do administrative burdens or the complexity of the directives. Looking at the 22 directives due in this reporting period, there is an average transposition period of almost 3 years (33 months) for the 9 directives adopted by the European Parliament and the Council; there is, an average transposition period of 10 months for the 13 execution directives adopted by the Commission (or by the Council for taxation issues).
• Most Member States need to better plan their transposition and notification processes for directives that must be incorporated into national law. As the guardian of the Treaties, the Commission strives to launch infringement proceedings for non-communication of the expected national measures within 2 months after the transposition deadline. Too many of these infringement proceedings are being launched because of delays for logistical reasons unrelated to the complexity and/or sensitivity of the directives.
• The 2022 Communication Enforcing EU law for a Europe that delivers outlines the many tools the Commission uses to support more efficient and effective implementation (e.g., IT tools, meeting-based tools, reporting tools, prevention tools, ad hoc tools). The stocktaking report published by the Commission on 14 July 2023 focuses on the swift transposition of directives and the Commission’s support to Member States to better anticipate implementation challenges and improve transposition planning and guidance.

In addition to today’s transposition deficit, it is also important to look at new Single Market directives whose transposition deadline will expire between now and 30 November 2024.

Given the number of directives to be transposed in the next 12 months (see Focus on short-overdue directives above) and some particularly high backlogs, several Member States are not expected to be able to meet the 1% target if they do not take drastic action. 

Single Market directives are legal acts considered to have an impact on the functioning of the Single Market, as defined in Article 26(2) of the Treaty on the Functioning of the European Union (TFEU). This includes the four freedoms (freedom of movement of people, goods, services and capital) across borders within the EU, and supporting policies that have a direct impact on the Single Market. These policies include taxation, employment, culture, social policy, education, public health, energy, consumer protection, transport, environment (except nature protection), and information society and media.

The December 2016 Communication on EU law: Better results through better application pointed to the need to strenghten the asessment of the compliance (the effective assessment of the completeness and conformity of national measures implementing EU law). For cases brought to the Court of Justice under Article 260(3) TFEU, the Commission now systematically asks the Court to impose both a lump sum and a periodic penalty payment on Member States that do not communicate their transposition measures. This approach is in line with other infringement cases that can result in financial sanctions.

In its judgment of 8 July 2019 in Case C-543/17, Commission v Belgium, the Court of Justice clarified the scope of Article 260(3) TFEU. On 16 July 2020, the Court of Justice reconfirmed its position in rulings C-549/18, Commission v Romania, and C-550/18, Commission v Ireland, and clarified further the calculation and imposition of daily penalties and lump sums for the non-communication cases. Consequently, the Commission proposals under Article 260(3) TFEU are binding as regards the maximum amount of the penalty. In the context of the calculation of the lump sum, the Court clarified that the calculation of the duration of the infringement starts from the transposition deadline of directive.

The principle of primacy of EU law is grounded in the principle of equality before the Treaties. It ensures equal rights for everyone across the EU, meaning that all provisions of EU law should have the same meaning and are to be applied in the same way in all Member States. In October 2022, the Commission adopted the Communication Enforcing EU law for a Europe that delivers setting out its work to ensure that EU law is complied with and individuals and businesses can benefit from the same rights across the EU. The Communication is structured around six major themes, that can all play a role in improving timely and correct transposition: 

1. increased cooperation with Member States and specialised authorities
2. increased transparency and monitoring
3. technical assistance and financial support available from the Commission
4. possible use of pre-infringement process for faster compliance
5. use of infringement procedures to mainly tackle breaches with the biggest impact on the interests of people and businesses
6. flexibility in response to crises.

The Annual Single Market Report was first published in 2021. The third edition was published by the Commission on 31 January 2023, complementing the publication of the 2023 Single Market Scoreboard alongside it. It marked the 30th anniversary of the EU’s Single Market and took stock of the integration of the Single Market over the last 30 years. It highlighted the benefits and key achievements for people and businesses, and its impact on growth and jobs in the EU. It also discussed the Single Market from a longer-term perspective through the current challenges that the EU is facing (increasing geopolitical tensions, global competition, climate change and strategic dependencies risks).

In particular, the report explored the potential of new approaches, partnerships and collaborative tools in strengthening trust among authorities and of better cooperation in addressing persisting Single Market barriers and obstacles. It also touched upon the potential of digital technologies and user-friendly e-government solutions to help reduce the administrative burdens on businesses and administrations.

The Communication “The Single Market at 30”, published on 16 March 2023, highlighted how the Single Market is the EU’s key asset and driver of its competitiveness and major factor of the EU’s economic resilience during crises; it also provides a crucial geopolitical lever that boosts the EU’s standing and influence in the world. However, the Single Market must continue to adapt to new realities and take account of the changing geopolitical environment, technological developments, the green and digital transitions and the need to boost the EU’s long-term competitiveness and productivity. A collective effort, based on joint ownership of the Single Market at EU and national level, is required to continue maintaining and deepening it, and harnessing its full potential.

Looking ahead, the Commission called for a renewed focus on enforcing existing Single Market rules, supported by benchmarks to address the deficits related to transposing and implementing EU rules. It also underlined the importance of removing national barriers, in particular barriers to providing services across borders, and in the industrial ecosystems with the greatest potential for economic integration (retail, construction, tourism, business services and the renewable energy sector).