05 April 2024

EU Single Market: the priorities of the European business community

30 years after its creation, the Single Market has unanimously convinced the business community of the benefits it brings, so much so that, today, the big companies are asking Europe for "more market". However, there is still a gap between the Market and the SMEs, for these companies mostly see its bureaucracy and the increase in compliance costs. In addition to these differences in perception, the Single Market moves at different speeds depending on the sector. In some key industrial areas for Europe’s future, such as energy, transport and the financial sector, there is still no European Single Market. On the other hand, overabundance of rules, a tendency to risk aversion, and difficulties in implementation contribute to increasing compliance costs and creating barriers.

A new development of the Single Market should be the priority of the next European Commission, simplifying the regulatory framework, creating new opportunities to finance large projects of European public interest through the market, and balancing risk prevention with the drive for innovation and competitiveness. The evolution of the Single Market will be crucial to ensure the sustainability of the European economy in the current context of overlapping global crises, economic competition and geopolitical tensions.

These are the main outcomes of the Report "The Future of the EU Single Market", presented during the 35th “The Outlook for the Economy and Finance” Workshop, organised by The European House – Ambrosetti.

The report is the result of meetings with European companies, who were asked about their priorities and experiences between October 2023 and March 2024 through the business communities of TEHA Club and TEHA Club Europe. The Report also showcases issues, recommendations and proposals for improving the Single Market. The document was shared with Enrico Letta, EU Rapporteur on the Future of the Single Market, appointed by the Belgian Presidency of the European Council.

Enrico Letta at the 35th "Outlook for the Economy and Finance" (Cernobbio, April 6, 2024)

While acknowledging the value of the Single Market for European economic integration, disparities persist in the commitment of large companies and SMEs, and this shows a need for new initiatives to improve its accessibility. The Report identifies two key issues that European businesses are facing: regulatory and administrative burdens (including lack of harmonisation and the absence of standards in some areas, and the over-abundance of often risk-averse standards in others) and the need for increased investment in the productivity of the European Union to effectively address key systemic projects, as well as to improve regional economic security and competitiveness on a global scale.