The Impact of Mutual Recognition: Inbuilt Limits and Domestic Responses to the Single Market

What have been the consequences of integrating the single market via mutual recognition? Did competitive deregulation result? Or were its implications less significant than expected? In this paper I analyse two previously highly regulated service sectors, insurance and road haulage, and study the impact of European policies in Germany and France. I find that the Council instituted mutual recognition in a restrictive way. This limits its impact on member states, which is moreover mediated by national factors. In both sectors, the use of the freedom to provide services has stayed much below expectations. Consequently, the single market rules have primarily resulted in a liberalization of national markets, where this had not already been achieved, for instance, in Germany. The domestic insurance and road haulage markets have become very competitive, but they remain largely national markets