13 December 2016
Mr Donald Tusk
President of the European Council
Dear President
Unlocking the vast potential of the Digital Single Market (DSM) is a major opportunity to boost
the dynamism and competitiveness of the European economy, significantly reduce transaction
costs for business, and provide a real dividend for consumers. That is why we need to give
clear political priority to creating the right conditions across Europe for innovation, investment
and entrepreneurship, including by recognising the crucial role of fast-growing young firms in
employment growth. This was the vision which the European Council set out in our
Strategic
Agenda for the Union in times of change,
which we agreed in June 2014 and which inspired
the European Commission’s framework of Ten Priorities at the start of its current mandate.
We commend the Commission for the strong progress it has made in translating the DSM
Strategy it presented last year into concrete proposals for legislative action, reinforced by the
strong focus on implementation in the Commission’s Work Programme for 2017. Last week’s
VAT package is the most recent example, and the proposals expected in January in relation to
the review of the e-Privacy Directive will bring us one step closer to having a comprehensive
legislative underpinning of the DSM.
However we note with concern the risk of serious delay with the presentation of a legislative
proposal in relation to data localisation under the European ‘free flow of data’ initiative. The
DSM Strategy set very clear expectations for presentation in 2016 of an initiative “that tackles
restrictions on the free movement of data for reasons other than the protection of personal
data within the EU and unjustified restrictions on the location of data for storage or processing
purposes”. In our view an early legislative proposal providing for the free flow of data is crucial
to avoid market fragmentation and further obstacles to the development of the data economy
in the EU.
There should be no doubt that Member States retain the right to require data localisation
where this can be objectively justified, such as for national security and law enforcement
reasons. But there must be a common approach and this will clearly require EU legislation.
The credibility of our political commitment requires explicit recognition that barriers to doing
business digitally and across borders are now barriers to growth and jobs. We therefore
endorse strongly the recent calls that have been made for resolute Commission action to keep
the DSM ‘free flow of data’ initiative on track, in particular through early presentation of a
legislative proposal to prevent unjustified data localisation requirements.
More generally, the key challenge we face is pressing ahead with conviction to execute the
DSM legislative programme: stretching our political ambition, agreeing concrete timelines, and
delivering early and practical results, particularly for European consumers and SMEs. We
agreed in June that all DSM measures should be completed and implemented by 2018.
Delivering on this commitment will clearly require further stepping up of our work in the
Council, and setting stronger expectations for effective engagement with the European
Parliament. Otherwise we risk missing our deadline and jeopardising our ambition to establish
a dynamic Digital Single Market in the Union.