The Single Market is celebrating its 30th anniversary. At what point are we with its implementation?
This is an important anniversary. At 30 years old, the single market has become much more than a legal framework or a simple market. It is a space of freedom, progress, opportunity, growth, shared prosperity, resilience, and a tool for geopolitical projection. With 440 million citizens, over 24 million businesses, and 15% of the world's GDP, it constitutes the largest integrated single market region in the world, while remaining one of the most outward-oriented.
The single market is now the fundamental asset of the EU and the engine of its competitiveness. Over more than 30 years, it has contributed to improving the lives of citizens, facilitated business activity, and brought significant economic benefits, increasing European GDP by 9%. It is also the means to accompany and guarantee Europe's green and digital transition. It is the source of the EU's regulatory, financial, and supply chain integration, which helps create economies of scale and facilitates business growth. The single market is a major factor in Europe's economic resilience during crises and gives it a crucial geopolitical weight that strengthens the EU's position and influence in the world.
We have done a lot in these 30 years, and the integration process continues: the single market must continue to strengthen and adapt to new realities and take into account changes in the geopolitical context, technological developments, the green and digital transitions, and the need to strengthen the EU's long-term competitiveness and productivity.
What priorities has the Commission set to resolve outstanding issues?
Looking to the future, there is first and foremost a need for renewed attention to the following aspects:
enforcing existing single market rules, with the support of targeted benchmarks to resolve shortcomings in the transposition and implementation of EU rules;
eliminating obstacles at the Member State level, particularly barriers to the cross-border provision of services, and in the industrial ecosystems with the greatest potential for economic integration (retail, construction, tourism, business services, and the renewable energy sector).
To this end, the Commission will continue its essential cooperation with Member States within the Single Market Enforcement Task Force (SMET) and in other forums for structured dialogue with businesses as stakeholders. The Commission also proposes to set a benchmark focused on resolving at least 90% of cases submitted to national SOLVIT centers within 12 months. Among the various measures planned to reduce and prevent persistent obstacles, the Commission also aims to simplify Member States' obligations to notify national rules and to establish national offices for the single market.
We must also continue to stimulate the green and digital dimensions of the single market as sources of innovation, growth, and competitiveness. For example, the single market approach will ensure that the EU maintains leadership in clean technologies and a competitive advantage in decarbonization. To this end, the Commission is implementing common EU rules to help companies join the circular economy (e.g., eco-design rules for sustainable products, the product passport initiative), better integrate renewable energy into the energy system (e.g., new rules on electricity market design), and make the most of the opportunities offered by digitalization (e.g., utilizing digital services and digital market regulations and creating new data spaces for health and public procurement).
A collective effort is needed, based on joint responsibility for the single market at both the national and EU levels, to keep it active, make it deeper, and fully exploit its potential. The Commission will continue to monitor the progress of the single market and pursue discussion and reflection with Member States and all stakeholders to ensure that the single market continues to produce results and improve the lives of its citizens.
How can the competitiveness of European businesses be guaranteed in the medium and long term?
The European model of economic growth, based on sustainable competitiveness, economic security, open strategic autonomy, and fair competition, has been a source of prosperity in recent decades. Strong common action at the EU level has stimulated economic activity and productivity in the past and can still encourage long-term competitiveness and prosperity.
To promote competitiveness, the Commission now proposes focusing on nine mutually reinforcing factors:
a functioning single market by expanding it and making it deeper, as well as promoting the integration of services;
access to private capital and investment through a more integrated Capital Markets Union and the completion of the Banking Union, as well as by developing EU regulatory frameworks in fiscal and financial services to support businesses;
public investment and infrastructure through the reform of the European economic governance framework;
research and innovation through tax incentives, public-private partnerships, and large-scale projects to reduce the riskiness of innovation investments, particularly in the key sectors of technology, digital, and biotechnology while respecting the environment;
energy, through the rapid deployment of renewable energy, the digitalization of energy systems, and energy storage facilities;
circularity, promoting the transition toward a more circular economy in the EU;
digitalization through a wide deployment of digital tools throughout the economy and increased support for leadership in key digital technologies such as artificial intelligence, quantum computing, microelectronics, Web 4.0, virtual reality, digital twins, and cybersecurity;
education and skills, developing and recognizing skills as essential elements for attractive and quality jobs, increasing the labor market participation of women, young people, and third-country citizens, and promoting vocational education and training;
trade and open strategic autonomy by continuing to open markets to EU businesses through deeper relationships with allies and trading partners, safeguarding the principles of fair trade, and addressing risks in a targeted manner.
How do you assess the impact on SMEs of the instruments put in place by the Commission to respond to the current economic crisis?
The sequence of crises following the pandemic has shown us how exposed SMEs are to supply chain disruptions and subsequent solvency issues. After suffering the consequences of the COVID crisis, SMEs are now particularly affected by rising energy prices, inflation, and supply chain bottlenecks.
Our approximately 24 million European SMEs employ nearly 85 million people and are the backbone of our industry and our economy. As Internal Market Commissioner Thierry Breton says: "for Europe to recover, SMEs must recover." This is why Commission President Ursula von der Leyen decided to offer our SMEs a lifeline, announcing an "SME relief package" in her 2022 State of the European Union speech. Earlier this year, she also committed to reducing reporting burdens by 25%.
The package was adopted on September 12, 2023, and includes a series of concrete measures to support SMEs. It focuses on making it easier to do business in the single market, including reducing regulatory burdens; improving access to finance; and strengthening skills to support SMEs in the green and digital transitions.
The Commission has also presented a proposal for the revision of the Late Payment Directive to support the liquidity and investment capacity of SMEs, and a comprehensive solution for business taxation in the EU called Business in Europe: Framework for Income Taxation (BEFIT).
In addition to these new initiatives, it is important to remember that the Recovery and Resilience Facility (RRF) provides SMEs with unprecedented support, amounting to approximately EUR 109 billion. Furthermore, InvestEU provides important debt and equity products in support of SMEs, which are expected to mobilize EUR 145 billion in investments.