A survey by a European business organisation has identified differing contractual and legal practices across the EU as one of the main barriers to doing business within the single market.

The finding came from a Eurochambres survey of more than 1,000 business owners and entrepreneurs across the EU.

Almost 70% of firms said that differing contractual and legal practices were ‘significant’ or ‘very significant’ obstacles to the single market

Varying rules on services (63%), and limited accessibility to information on different rules and requirements (61%), were also seen as key issues for EU businesses.

Disputes

Almost 60% of businesses expressed concerns about resolving commercial or administrative disputes, also because of deficits in legal protection before national or European authorities and courts

Asked what action they took when confronted with an obstacle to cross-border activity, more than 75% said that they were ‘likely’ or ‘very likely’ to contact a lawyer. Just under two-thirds said that they reported the issue to their national chamber of commerce.

Ian Talbot (Chambers Ireland Chief Executive) said: “30 years after the creation of the single market, we see that differences in regulation continue to be the greatest impediment to deeper and wider integration of trade within the EU.”

Contrast

Talbot (pictured) added that the contrast between common law and the civil code in different jurisdictions can have “a huge impact” for Irish firms.

“We are used to a system where offers can be withdrawn up until they have been accepted by the counter party, whereas, in German law, an offer can only be withdrawn after a period of time that is stipulated within the contract.

“As a consequence, agreeing as to which country has jurisdiction over the contract, should there be a dispute, and what language the contract is written in, can have large and unexpected effects for businesses that are unfamiliar with these differences.”

Eurochambres President Vladimír Dlouhý urged policymakers to work with the business community to define and implement practical solutions to these obstacles.

Online portal

According to the survey, businesses are seeking a number of practical measures to reduce or remove these barriers.

These include clearer information on a multi-language EU online portal containing all necessary procedures and formalities to operate in another EU country, cutting unnecessary red tape, and greater consideration of the impact of new regulations on SMEs.

Dlouhý highlighted what he described as “a creeping sense of single-market fatalism” among chambers’ member companies about recurring obstacles.

“Despite what is set out in EU treaties and legislation, the reality is that our businesses do not have unrestricted access to the 450 million consumers across the EU. The theory must be put into practice swiftly,” he stated.

The organisation is calling on the next European Commission to prioritise the “rigorous” transposition by member states of EU legislation, and the implementation of a strategy to reduce the EU regulatory burden on businesses.