European single market
European single market | |
---|---|
Policy of | European Union |
Official languages | Languages of the European Union |
Demonym(s) | European |
Type | Single market |
Member states | 27 EU states 4 (non-EU) EFTA states |
Establishment | 1 January 1993 |
Area | |
• Total | 4,986,038 km2 (1,925,120 sq mi) |
• EU | 4,324,782 km2 (1,669,808 sq mi) |
Population | |
• 2021 estimate | 448,350,000 |
• EU 2021 estimate | 441,350,000 |
GDP (nominal) | 2020 estimate |
• Total | US$16.3 trillion[1] |
• Per capita | US$39,537 |
Currency | Euro (EUR) |
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The European single market, also known as the European internal market or the European common market, is the
This is achieved through common rules and standards that all participating states are legally committed to follow.Any potential EU accession candidates are required to agree to association agreements with the EU during the negotiation which must be implemented prior to accession[citation needed]. In addition, through three individual agreements on a Deep and Comprehensive Free Trade Area (DCFTA) with the EU, the post-Soviet countries of Georgia, Moldova, and Ukraine have also been granted limited access to the single market in selected sectors.[6] Turkey has access to the free movement of some goods via its membership in the European Union–Turkey Customs Union.[7] The United Kingdom left the European single market on 31 December 2020. An agreement was reached between the UK Government and European Commission to align Northern Ireland on rules for goods with the European single market, to maintain an open border on the island of Ireland.[8]
The market is intended to increase competition, labour specialisation, and economies of scale, allowing goods and factors of production to move to the area where they are most valued, thus improving the efficiency of the allocation of resources. It is also intended to drive economic integration whereby the once separate economies of the member states become integrated within a single EU-wide economy.[9] The creation of the internal market as a seamless, single market is an ongoing process, with the integration of the service industry still containing gaps.[10] According to a 2019 estimate, because of the single market the GDP of member countries is on average 9 percent higher than it would be if tariff and non-tariff restrictions were in place.[11]
History
One of the core objectives of the European Economic Community (EEC) upon its establishment in 1957 was the development of a common market offering free movement of goods, service, people and capital. Free movement of goods was established in principle through the customs union between its then-six member states.
However, the EEC struggled to enforce a single market due to the absence of strong decision-making structures. Because of protectionist attitudes, it was difficult to replace intangible barriers with mutually recognized standards and common regulations.
In the 1980s, when the economy of the EEC began to lag behind the rest of the developed world, Margaret Thatcher sent Lord Cockfield to the Delors Commission to take the initiative to attempt to relaunch the common market. Cockfield wrote and published a White Paper in 1985 identifying 300 measures to be addressed in order to complete a single market.[12][13][14] The White Paper was well received and led to the adoption of the Single European Act, a treaty which reformed the decision-making mechanisms of the EEC and set a deadline of 31 December 1992 for the completion of a single market. In the end, it was launched on 1 January 1993.[15]
The new approach, pioneered at the Delors Commission, combined positive and negative integration, relying upon minimum rather than exhaustive harmonisation. Negative integration consists of prohibitions imposed on member states banning discriminatory behaviour and other restrictive practices. Positive integration consists of approximating laws and standards. Especially important (and controversial) in this respect is the adoption of harmonising legislation under Article 114 of the Treaty on the Functioning of the European Union (TFEU).
The commission also relied upon the
By 1992 about 90% of the issues had been resolved
In 1997 the
The official goal of the
Four Freedoms
The "Four Freedoms" of the single market are:
- Free movement of goods
- Free movement of capital
- Freedom to establish and provide services
- Free movement of people
Goods
The range of "goods" (or "products") covered by the term "free movement of goods" "is as wide as the range of goods in existence".[22] Goods are only covered if they have economic value, i.e. they can be valued in money and are capable of forming the subject of commercial transactions. Works of art, coins which are no longer in circulation and water are noted as examples of "goods".[22] Fish are goods, but a European Court of Justice ruling in 1999 stated that fishing rights (or fishing permits) are not goods, but a provision of service. The ruling further explains that, both capital and service can be valued in money and are capable of forming the subject of commercial transactions, but they are not goods.[23]
Council Regulation (EC) 2679/98 of 7 December 1998, on the functioning of the internal market in relation to the
Customs duties and taxation
The customs union of the European Union removes customs barriers between member states and operates a common customs policy towards external countries, with the aim "to ensure normal conditions of competition and to remove all restrictions of a fiscal nature capable of hindering the free movement of goods within the Common Market".[25]
Aspects of the EU Customs area extend to a number of non-EU-member states, such as Andorra, Monaco, San Marino and Turkey, under separately negotiated arrangements. The United Kingdom agreed on a trade deal with the European Union on 24 December 2020, which was signed by Prime Minister Boris Johnson on 30 December 2020.[citation needed]
Customs duties
Article 30 of the Treaty on the Functioning of the European Union ("TFEU") prohibits border levies between member states on both European Union Customs Union produce and non-EUCU (third-country) produce. Under Article 29 of the TFEU, customs duty applicable to third country products are levied at the point of entry into EUCU, and once within the EU external border goods may circulate freely between member states.[27]
Under the operation of the Single European Act, customs border controls between member states have been largely abandoned. Physical inspections on imports and exports have been replaced mainly by audit controls and risk analysis.[citation needed]
Charges having equivalent effect to customs duties
Article 30 of the TFEU prohibits not only customs duties but also charges having equivalent effect. The European Court of Justice defined "charge having equivalent effect" in Commission v Italy.
- [A]ny pecuniary charge, however small and whatever its designation and mode of application, which is imposed unilaterally on domestic or foreign goods by reason of the fact that they cross a frontier, and which is not a customs duty in the strict sense, constitutes a charge having an equivalent effect... even if it is not imposed for the benefit of the state, is not discriminatory or protective in effect and if the product on which the charge is imposed is not in competition with any domestic product.[28]
A charge is a customs duty if it is proportionate to the value of the goods; if it is proportionate to the quantity, it is a charge having equivalent effect to a customs duty.[29]
There are three exceptions to the prohibition on charges imposed when goods cross a border, listed in Case 18/87 Commission v Germany. A charge is not a customs duty or charge having equivalent effect if:
- it relates to a general system of internal dues applied systematically and in accordance with the same criteria to domestic products and imported products alike,[30]
- if it constitutes payment for a service in fact rendered to the economic operator of a sum in proportion to the service,[31] or
- subject to certain conditions, if it attaches to inspections carried out to fulfil obligations imposed by Union law.[32]
Taxation
Article 110 of the TFEU provides:
- No Member State shall impose, directly or indirectly, on the products of other member states any internal taxation of any kind in excess of that imposed directly or indirectly on similar domestic products.
- Furthermore, no Member State shall impose on the products of other member states any internal taxation of such a nature as to afford indirect protection to other products.
In the taxation of rum case, the ECJ stated that:
- The Court has consistently held that the purpose of Article 90 EC [now Article 110], as a whole, is to ensure the free movement of goods between the member states under normal conditions of competition, by eliminating all forms of protection which might result from the application of discriminatory internal taxation against products from other member states, and to guarantee absolute neutrality of internal taxation as regards competition between domestic and imported products".[33]
Quantitative and equivalent restrictions
Free movement of goods within the
It also means states can be responsible for private actors. For instance, in
More generally, it has been increasingly acknowledged that fundamental human rights should take priority over all trade rules. So, in
Often rules apply to all goods neutrally, but may have a greater practical effect on imports than domestic products. For such "indirect" discriminatory (or "indistinctly applicable") measures the
In a 2003 case,
In contrast to product requirements or other laws that hinder
Capital
Free movement of
In
Capital within the EU may be transferred in any amount from one country to another (except that Greece currently[
The final stage of completely free movement of capital was thought to require a
Within the building on the Investment Plan for Europe, for a closer integration of capital markets, in 2015, the Commission adopted the Action Plan on Building a Capital Markets Union (CMU) setting out a list of key measures to achieve a true single market for capital in Europe, which deepens the existing Banking Union, because this revolves around disintermediated, market-based forms of financing, which should represent an alternative to the traditionally predominant (in Europe) bank-based financing channel.[79] The EU's political and economic context call for strong and competitive capital markets to finance the EU economy.[80] The CMU project is a political signal to strengthen the single market as a project of all 28 Member States,[81] instead of just the Eurozone countries, and sent a strong signal to the UK to remain an active part of the EU, before Brexit.[82]
Services
As well as creating rights for "workers" who generally lack bargaining power in the market,[83] the Treaty on the Functioning of the European Union or TFEU also protects the "freedom of establishment" in article 49, and "freedom to provide services" in article 56.[84]
Establishment
In
In regard to companies, the
Types of service
The "freedom to provide services" under
The Court of Justice has held that
If an activity does fall within article 56, a restriction can be justified under article 52 or over-riding requirements developed by the Court of Justice. In
Digital Single Market
In May 2015 the Juncker Commission[118] announced a plan to reverse the fragmentation of internet shopping and other online services by establishing a Single Digital Market that would cover digital services and goods from e-commerce to parcel delivery rates, uniform telecoms and copyright rules.[119]
People
The free movement of people means
Broadly defined, this freedom enables citizens of one Member State to travel to another, to reside and to work there (permanently or temporarily). The idea behind EU legislation in this field is that citizens from other member states should be treated equally to domestic citizens and should not be discriminated against.[citation needed]
The main provision on the freedom of movement of persons is Article 45 of the TFEU, which prohibits restrictions on the basis of nationality.[citation needed]
Free movement of workers
Since its foundation, the Treaties sought to enable people to pursue their life goals in any country through free movement.
The
For workers not citizens of the union but employed in one member state with a work permit, there is not the same freedom of movement within the Union. They need to apply for a new work permit if wanting to work in a different state. A facilitation mechanism for this process is the
Free movement of citizens
Beyond the right of free movement to work, the EU has increasingly sought to guarantee rights of citizens, and rights simply by being a
First, article 4 of the
Fourth, and more debated, article 24 requires that the longer an EU citizen stays in a host state, the more rights they have to access public and welfare services, on the basis of
Schengen Area
Within the
Public sector procurement of goods and services
Public procurement legislation [152] and guidance based on "a set of basic standards for the award of public contracts which are derived directly from the rules and principles of the EC Treaty",[153] relating to the four freedoms, require equal treatment, non-discrimination, mutual recognition, proportionality and transparency to be maintained when purchasing goods and services for EU public sector bodies.
Integration of non-EU states
Only the EU member states are fully part of the European single market, while several other countries and territories have been granted various degrees of participation. The single market has been extended, with exceptions, to Iceland, Liechtenstein, and Norway through the agreement on the European Economic Area (EEA) and to Switzerland through sectoral bilateral and multilateral agreements. The exceptions, where these EFTA states are not bound by EU law, are:[154]
- the common agricultural policy and the common fisheries policy (although the EEA agreement contains provisions on trade in agricultural and fishery produce);
- the customs union;
- the common trade policy;
- the common foreign and security policy;
- the field of justice and home affairs (although each EFTA country is part of the Schengen area); and
- the economic and monetary union (EMU).
Switzerland
Switzerland, a member of EFTA but not of the EEA, participates in the single market with a number of exceptions, as defined by the Switzerland–European Union relations.[citation needed]
Western Balkans
Stabilisation and Association Agreement states have a "comprehensive framework in place to move closer to the EU and to prepare for [their] future participation in the Single Market".[155]
Turkey
Turkey has participated in the European Union–Turkey Customs Union since 1995, which enables it to participate in the free movement of goods (but not of agriculture or services, nor people) with the EU.[7]
Georgia, Moldova, and Ukraine
Through the agreement of the Deep and Comprehensive Free Trade Area (DCFTA), the three post-Soviet countries of Georgia, Moldova, and Ukraine were given access to the "four freedoms" of the EU single market: free movement of goods, services, capital, and people. Movement of people however, is in form of visa free regime for short stay travel, while movement of workers remains within the remit of the EU Member States.[6] The DCFTA is an "example of the integration of a Non-EEA-Member into the EU Single Market".[156]
Northern Ireland
The
Under the terms of the Withdrawal Agreement the Northern Ireland Assembly has the power by a simple majority to exit the protocol arrangements. In the event that consent is not given, the arrangements would cease to apply after two years. The Joint Committee would make alternative proposals to the UK and EU to avoid a hard border on the island of Ireland.[160]
Further developments
Since 2015, the European Commission has been aiming to build a single market for energy.[161] and for the defence industry.[162]
On 2 May 2017, the European Commission announced a package of measures intended to enhance the functioning of the single market within the EU:[163]
- a single digital gateway based on an upgraded Your Europe portal, offering enhanced access to information, assistance services and online procedures throughout the EU[164]
- Single Market Information Tool (a proposed regulation under which the commission could require EU businesses to provide information in relation to the internal market and related areas where there is a suspicion that businesses are blocking the operation of the single market rules)[165]
- SOLVIT Action Plan (aiming to reinforce and improve the functioning of the existing SOLVIT network).
New Hanseatic League
The New Hanseatic League is a political grouping of economically like-minded northern European states, established in February 2018, that is pushing for a more developed European single market, particularly in the services sector.[166]
See also
- European Union law
- Community preference (EU)
- Belarusiancitizens
Notes
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3. The Union shall establish an internal market. It shall work for the sustainable development of Europe based on balanced economic growth and price stability, a highly competitive social market economy, aiming at full employment and social progress, and a high level of protection and improvement of the quality of the environment. It shall promote scientific and technological advance.
— Treaty of Lisbon Article 3, point 3 - ^ a b Publications Office of the EU, Free movement of goods: Guide to the application of Treaty provisions governing the free movement of goods, page 9, © European Union, 2010. Reproduction is authorised provided the source is acknowledged, save where otherwise stated. Published 7 July 2010, accessed 3 January 2021
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- ^ Official Journal of the European Communities, RESOLUTION OF THE COUNCIL AND OF THE REPRESENTATIVES OF THE GOVERNMENTS OF THE MEMBER STATES, MEETING WITHIN THE COUNCIL of 7 December 1998 on the free movement of goods,L337/10, accessed 1 January 2024
- ^ Case 27/67 Fink-Frucht
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- TFEUarts 28–30
- ^ (1974) Case 8/74, [1974] ECR 837
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- ^ See D Chalmers et al, European Union Law (1st edn 2006) 662, "This is a ridiculously wide test."
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- ^ (1983) Case 261/81
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- ^ (2009) C-110/05, [2009] ECR I-519, [56]. See also Mickelsson and Roos (2009) C-142/05, on prohibiting jet skis, but justified if proportionate towards the aim of safeguarding health and the environment.
- ^ (1993) C-267/91
- ^ See also Torfaen BC v B&Q plc (1989) C-145/88, holding the UK Sunday trading laws in the former Shops Act 1950 were probably outside the scope of article 34 (but not clearly reasoned). The "rules reflect certain political and economic choices" that "accord with national or regional socio-cultural characteristics."
- ^ cf Vereinigte Familiapresse v Heinrich Bauer (1997) C-368/95
- ^ (1997) C-34/95, [1997] ECR I-3843
- ^ (2001) C-405/98, [2001] ECR I-1795
- Unfair Commercial Practices Directive 2005/29/EC
- ^ Capital Movement Directive 1988 (88/361/EEC) Annex I, including (i) investment in companies, (ii) real estate, (iii) securities, (iv) collective investment funds, (v) money market securities, (vi) bonds, (vii) service credit, (viii) loans, (ix) sureties and guarantees (x) insurance rights, (xi) inheritance and personal loans, (xii) physical financial assets (xiii) other capital movements.
- ^ (2000) C-251/98, [22]
- Eurobondwas unjustified discrimination. It was disproportionate in preserving, as Belgium argued, fiscal coherence or supervision.
- ^ See Commission v Netherlands (2006) C‑282/04, AG Maduro's Opinion on golden shares in KPN NV and TPG NV.
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- ^ (2010) C-171/08
- TFEU art 345
- ^ "Regulation (EC) No 2560/2001 of the European Parliament and of the Council of 19 December 2001 on cross-border payments in euro". EUR-lex – European Communities, Publications office, Official Journal L 344, 28 December 2001 P. 0013 – 0016. Retrieved 26 December 2008.
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- ^ European Central Bank. "TARGET". Archived from the original on 23 October 2007. Retrieved 25 October 2007.
- ^ See Delors Report, Report on Economic and Monetary Union in the EC (1988)
- J Stiglitz, The Price of Inequality(2011) ch 9 and 349
- ^ Vértesy, László (2019). "The legal and regulatory aspects of the free movement of capital - towards the Capital Markets Union". Journal of Legal Theory HU (4): 110–128.
- ^ "Mid-term review of the capital markets union action plan". European Commission - European Commission. Retrieved 23 December 2019.
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- )
- ^ See Asscher v Staatssecretaris van Financiën (1996) C-107/94, [1996] ECR I-3089, holding a director and sole shareholder of a company was not regarded as a "worker" with "a relationship of subordination".
- P Craigand G de Búrca, EU Law: Text, Cases, and Materials (6th edn 2015) ch 22. C Barnard, The Substantive Law of the EU: The Four Freedoms (4th edn 2013) chs 10–11 and 13
- ^ (1995) C-55/94, [1995] ECR I-4165
- Gebhard(1995) C-55/94, [37]
- TFEUart 54 treats natural and legal persons in the same way under this chapter.
- ITWF and Finnish Seamen's Union v Viking Line ABP and OÜ Viking Line Eesti(2007) C-438/05, [2007] I-10779, [34]
- ^ (1974) Case 2/74, [1974] ECR 631
- ^ See also Klopp (1984) Case 107/83, holding a Paris avocat requirement to have one office in Paris, though "indistinctly" applicable to everyone, was an unjustified restriction because the aim of keeping advisers in touch with clients and courts could be achieved by 'modern methods of transport and telecommunications' and without living in the locality.
- ^ (2011) C-565/08
- ^ (2011) C-565/08, [52]
- ^ Kamer van Koophandel en Fabrieken voor Amsterdam v Inspire Art Ltd (2003) C-167/01
- Employee Involvement Directive 2001/86/EC
- ^ (1988) Case 81/87, [1988] ECR 5483
- Überseering BV v Nordic Construction GmbH(2002) C-208/00, on Dutch minimum capital laws.
- Brandeis Jand W Cary, 'Federalism and Corporate Law: Reflections on Delaware' (1974) 83(4) Yale Law Journal 663. See further S Deakin, 'Two Types of Regulatory Competition: Competitive Federalism versus Reflexive Harmonisation. A Law and Economics Perspective on Centros' (1999) 2 CYELS 231.
- ^ (2002) C-208/00, [92]-[93]
- ^ (2008) C-210/06
- ^ See further National Grid Indus (2011) C-371/10 (an exit tax for a Dutch company required justification, not justified here because it could be collected at the time of transfer) and VALE Epitesi (2012) C-378/10 (Hungary did not need to allow an Italian company to register)
- business lawpolicies, have brought about other corporate law changes in Europe that were neither intended by the Court nor by policy-makers".
- TFEUarts 56 and 57
- ^ (1974) Case 33/74
- ^ cf Debauve (1980) Case 52/79, art 56 does not apply to 'wholly internal situations' where an activity are all in one member state.
- ^ ECJ First Chamber, Omalet NV v. Rijksdienst voor Sociale Zekerheid, Case C-245/09, 22 December 2010, see also case C-108/98 RI.SAN (1999) ECR I-5219 and Case C-97/98 Jagerskiold (1999) ECR I-7319
- ^ Council Directive 71/304/EEC of 26 July 1971 concerning the abolition of restrictions on the freedom to provide services in respect of public works contracts and on the award of public works contracts to contractors acting through agencies or branches.
- ^ Belgium v Humbel (1988) Case 263/86, but contrast Schwarz and Gootjes-Schwarz v Finanzamt Bergisch Gladbach (2007) C-76/05
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- ^ 2006/123/EC
- ^ "Digital Single Market". Retrieved 17 June 2016.
- ^ Ian Traynor. EU unveils plans to set up digital single market for online firms. The Guardian. 6 May 2015.
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- P Craigand G de Búrca, EU Law: Text, Cases, and Materials (6th edn 2015) ch 21. C Barnard, The Substantive Law of the EU: The Four Freedoms (4th edn 2013) chs 8–9 and 12–13
- P Craigand G de Burca, European Union Law (2003) 701, there is a tension 'between the image of the Community worker as a mobile unit of production, contributing to the creation of a single market and to the economic prosperity of Europe' and the 'image of the worker as a human being, exercising a personal right to live in another state and to take up employment there without discrimination, to improve the standard of living of his or her family'.
- ^ Defrenne v Sabena (No 2) (1976) Case 43/75, [10]
- ^ Lawrie-Blum v Land Baden-Württemberg (1986) Case 66/85, [1986] ECR 2121
- ^ (1988) Case 196/87, [1988] ECR 6159
- ^ Dano v Jobcenter Leipzig (2014) C‑333/13
- ^ Angonese v Cassa di Risparmio di Bolzano SpA (2000) C-281/98, [2000] ECR I-4139
- Free Movement of Workers Regulation 492/2011arts 1–4
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- ^ See NN Shuibhne, 'The Resilience of EU Market Citizenship' (2010) 47 CMLR 1597 and HP Ipsen, Europäisches Gemeinschaftsrecht (1972) on the concept of a 'market citizen' (Marktbürger).
- Grzelczyk v Centre Public d’Aide Sociale d’Ottignes-Louvain-la-Neuve (2001) C-184/99, [2001] ECR I-6193
- JHH Weiler, 'The European Union belongs to its citizens: Three immodest proposals' (1997) 22 European Law Review 150
- ^ 5th Report on Citizenship of the Union COM(2008) 85. The "First Annual Report on Migration and Integration" COM(2004) 508, found by 2004, 18.5m third country nationals were resident in the EU.
- CRD 2004 art 2(2) defines 'family member' as a spouse, long term partner, descendant under 21 or depednant elderly relative that is accompanying the citizen. See also Metock v Minister for Justice, Equality and Law Reform (2008) C-127/08, holding that four asylum seekers from outside the EU, although they did not lawfully enter Ireland (because their asylum claims were ultimately rejected) were entitled to remain because they had lawfully married EU citizens. See also, R (Secretary of State for the Home Department) v Immigration Appeal Tribunal and Surinder Singh[1992] 3 CMLR 358
- Communist Manifesto
- ^ (1998) C-85/96, [1998] ECR I-2691
- ^ (2004) C-456/02, [2004] ECR I-07573
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- ^ (2005) C-147/03
- ^ (2014) C‑333/13
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References
- Books
- Barnard, Catherine (2010). The Substantive Law of the EU: The Four Freedoms (3rd ed.). Oxford, New York: ISBN 978-0-19-929839-6.
- Chalmers, D.; et al. (2010). European Union Law: Text and Materials (2nd ed.). New York: ISBN 978-0-521-12151-4.
- Vaughan, David; Robertson, Aidan, eds. (2003). Law of the European Union. Oxford, New York: Oxford University Press. ISBN 978-1-904501-11-4.
(looseleaf since)
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- Easson (1984). "Cheaper wine or Dearer Beer?". European Law Review. 9: 57.
- Hedemann-Robinson (1995). "Indirect Discrimination: Article 95(1) EC Back to Front and Inside Out". European Public Law. 1: 439–468. S2CID 143943870.
- Danusso; Denton (1990). "Does the European Court of Justice Look for a Protectionist Motive under Article 95?". Legal Issues of Economic Integration. 1: 67–120. S2CID 156285940.
- Gormley, Laurence W (2008). "Silver Threads among the Gold: 50 years of the free movement of goods". Fordham International Law Journal. 31: 601.
- Szczepanski, Marcin (2013). Further steps to complete the Single Market (PDF). Library of the European Parliament. Archived (PDF) from the original on 2 March 2017.