Agreement on emergency instrument creates basis for functioning single market in future crises

Following intense negotiations in which Germany was able to set the tone on important issues, the EU Member States reached agreement on the single market emergency instrument (SMEI) on 16 February 2024 (“Internal Market Emergency and Resilience Act”). Informed by experience from the COVID-19 pandemic, the European Commission tabled an ambitious proposal for an emergency instrument in September 2022, so as to render the EU Single Market resilient against future crises and supply chain disruptions.

Said Parliamentary State Secretary Dr. Franziska Brantner:

The recent crises have shown that the Single Market can be subject to particular challenges during a crisis and that its functioning is indispensable for resolving that same crisis. It is therefore good news that the negotiations for a joint Single Market Emergency Instrument have been successfully concluded before the end of the current European Parliament. In creating the new instrument, the EU and its Member States have laid the basis for crisis prevention and for crisis response to unknown future emergencies and crises, so that these can be addressed promptly, effectively, and in a coordinated way. In adopting the Regulation, we are creating a balanced and efficient instrument that does not wrap up companies and the public administration in red tape.

The Regulation is designed to improve resilience and crisis prevention in the EU and strengthen its ability to respond to future crises. For this purpose, the instrument improves transparency and the flow of information between Member States, the European Commission and companies. Crisis protocols, stress tests and simulations are to put the EU in a position to act in a well-coordinated manner during a future crisis. Also, there is to be a ban on certain uncoordinated national measures that have the power to disrupt the single market.

In response to supply bottlenecks, the European Commission, together with the Member States, can request information from companies that is needed to overcome the crisis and recommend that certain goods be produced that are relevant to the crisis and strategically important to the EU. The single market emergency instrument also makes adjustments to the harmonised procedures of standardisation, conformity assessment and market surveillance for so-called crisis-relevant goods, so that these can be put on the market more quickly in a crisis. Finally, at the request of Member States or together with the Member States, the European Commission can also centrally procure goods or services required to overcome the given crisis.

Following the approval of the text by the EU Member States, the single market emergency instrument must now be formally approved by the European Parliament. After the text’s formal approval by the Council, the European Commission and the Member States will then have 18 months for implementation, i.e. for building liaison offices and central points of contact, and to expand existing IT systems.