President von der Leyen’s Political Guidelines are Right to Prioritise Competitiveness; Now the Commission Needs to Deliver

Europe Unlocked welcomes President von der Leyen’s political guidelines. She rightly places competitiveness at the top of her agenda. 

Her call for deepening the Single Market, a revamped competitiveness check, better enforcement, reducing reporting obligations, and speeding up permits are positive steps toward improving Europe’s competitiveness. A new Commission Vice President to oversee burden reduction across the Single Market sets the right tone.  

“Putting competitiveness and prosperity front and centre of her policy platform is hugely reassuring for business,” said Kieran O’Keeffe, executive director of Europe Unlocked.  

He added: “An emphasis on deepening the single market for services and other fields, relieving regulatory burden, improving rule making and increasing access to data for business all auger well for the future. We urgently need measures that have a proven effect on improving productivity.” 

“We also agree that Europe needs to boost investment but it’s specifically private investment that has to be a priority if we are to advance the green and digital transitions,” Mr. O’Keeffe said. “However, we have to acknowledge that the biggest barrier to private investment in Europe is the business environment. To tackle this, we need a relentless focus on reducing complexity and cost to make investment attractive for business.” 

“We should avoid adapting competition rules as a means to create European champions. The best response to the geopolitical challenges that Europe faces is ensuring open and competitive markets that can incubate high-performing firms to then go global. For that, we also need an ambitious trade agenda which places a higher priority on developing new trading opportunities with third countries,” O’Keeffe said. 

Europe Unlocked is a coalition of organisations committed to making the case for a renewed focus on competitiveness in the Single Market under the next Commission.


The EU’s Strategic Agenda (2024-29) Charts the Right Course for European Economic Growth and Improved Productivity

Europe Unlocked welcomes today’s agreement by the 27 heads of state and government on a vision for restoring Europe’s economic fortunes. 

A prosperous and competitive Europe which performs better in terms of growth, productivity and innovation is exactly the future that the continent needs.   

“It is businesses that will deliver this success if the conditions in Europe are right and in that respect there is much that we can welcome in today’s Strategic Agenda,” said Kieran O’Keeffe, executive director of Europe Unlocked. 

A reduction in regulatory burden, leveraging the untapped potential of data, deepening the single market in services, reducing fragmentation in markets like telecoms, safeguarding open markets and finding new trading opportunities in third countries - these are all laudable goals.  

Importantly, the Strategic Agenda places the Single Market, our “greatest asset”, at the very heart of what a more competitive Europe should be. 

We also share the Council’s urgency to make the green and digital transitions a success. Investment is key to achieving these goals.  

“There can be no transition without business engagement. Securing investment has to be a multi-layered approach and while measures to ease access to finance are helpful, we need to focus political energy on ensuring that the business case for the private sector to invest in our future is compelling,” Mr O’Keeffe said, adding: “if we create strong and open markets in Europe then investment will flow,” he said. 

“The incoming Commission now needs to play its part in making this vision a reality,” Mr O’Keeffe said.    

Europe Unlocked is a coalition of organisations committed to making the case for a renewed focus on competitiveness and open markets under the next Commission.  

 


Europe Needs the Private Sector to Achieve Climate Neutrality by 2050

The European Union needs to develop a robust and compelling ‘business case’ for the European Green Deal during the upcoming political cycle. Without the participation of the private sector Europe will struggle to achieve climate neutrality by 2050.

This is one of the conclusions reached by the Centre for European Policy Studies (CEPS) in a report entitled: How will the EU thrive in a low-carbon world? Delivering the European Green Deal for a more competitive EU.

The report, sponsored by Europe Unlocked, makes 30 detailed recommendations in areas such as financing the transition, boosting the circular economy, and decarbonizing the energy system.

The report is intended to contribute with ideas for the new teams of politicians and policymakers who will take over the EU decision making reins in the autumn.

Decarbonisation objectives can be aligned with initiatives aimed at safeguarding the EU’s international competitiveness, the report states.  The green transition and strengthened EU competitiveness not only can but must go hand in hand. To achieve both, a focus on market-driven innovation and technology adoption is vital. Picking technology winners should be avoided, and policymakers should create the conditions for the most carbon and cost-efficient options to emerge in a competitive environment.

The report will be discussed this afternoon at an event hosted by CEPS. Yvon Slingenberg, Director for Strategy, Analysis & Planning, DG CLIMA, European Commission, Stefan Moritz, Secretary General, European Entrepreneurs CEA-PME and Irina Kustova, Research Fellow, CEPS will lead the debate, assisted by moderator Vasileios Rizos, Associate Senior Research Fellow CEPS.


Election Reflections: Time to Get Growth Going in Europe Through Open and Competitive Markets

With the European elections now concluded, it’s time for Europe to get to work in tackling its substantial economic challenges. Without generating growth, we will not be resilient enough to meet this test. For that, the new mandate must build the basis for an economic renaissance that creates conditions for healthy, open, and competitive markets.

Europe’s ills lie in its economic underperformance. It is vital that Europe gets back to basics. The answer is, to quote an ex-US president, “the economy, stupid!”

Rather than doubling down on protectionism and closing ourselves off from the rest of the world as a reaction to policies abroad, Europe should lead by example by pushing for an open and competitive approach to trade.

Closer to home, we need to create the conditions for a properly functioning Single Market.  Europe’s long-term competitiveness and economic resilience rely on a stronger and deeper Single Market, creating jobs, growth and prosperity for Europe and its citizens.

Prosperity is a prerequisite for European security. Europe must recognize that businesses are not only capable of addressing pressing societal challenges – they should be leading the charge.

Nowhere is this truer than in Europe’s efforts to tackle climate change. The green transition requires enormous investments that cannot be met with public funding alone. The money is in Europe, but investors are withholding. The new mandate must ensure that regulation acts as an enabler of innovative enterprise, rather than restricting their capacity to invest, drive value, and meet this momentous moment.

Businesses are likewise best placed to activate the digital transition by unlocking data-driven solutions for the benefit of all. Best-in-class regulation at the EU level is essential if companies here are to compete with their US and Chinese counterparts.

We urgently need a Competitiveness Deal for Europe which addresses all these points and puts our Single Market at its heart.


Tapping the Potential of the Single Market is Urgently Needed to Secure Our Future Prosperity

Tapping the potential of the Single Market is urgently needed to secure our future prosperity. Reducing cross-border frictions to trade in both goods and services is a significant task that will require immense political leadership and focus.

Focus has been lacking from discussions on the Single Market in recent months: The Letta Report has some positive ideas in terms of harmonisation of areas such as telecoms, which Member States have jealously guarded for too long, and also better regulation; however, his report also suggests that a progressive expansion of European spending and changes to competition rules to enable the scale up of more European champions may also help to boost Europe’s economy, the latter a proposal also picked up by several of the candidates for the European Commission Presidency including the incumbent President Von der Leyen.  This lack of clarity will cost Europe. We need to focus on strengthening the market and not intervening in it. We need more European champions in Europe but the market should pick them rather than politicians.

The Competitiveness Council Conclusions on the Single Market are similarly mixed. There are some good proposals that we would certainly support, especially the call for a new horizontal Single Market Strategy by June 2025. Member States are also calling out the urgency of harmonizing the Single Market for services, something which is sorely lacking today. Practical mechanisms like Points of Single Contact and the Single Digital Gateway also get a mention but in our view these will need regular evaluation to ensure that they actually deliver tangible benefits for business.

On better regulation, it is encouraging to see the Council pushing the “think small first” principle, and calling for a systematic stock take on the cumulative impacts of new obligations. We further welcome the call for a dynamic impact assessment to clarify political choices, but we would also like to see impact assessments which capture the substantive legislative changes tabled by the Council and Parliament during the legislative process.

Regrettably, the conclusions also call for a more assertive industrial policy. We remain suspicious that this means market intervention and ultimately distortion. Strong companies will emerge from a strong market. State intervention to subsidise the economy at large or adapt competition rules to favour certain companies may provide ephemeral boosts, but will not solve Europe’s problems.

For Europe's economy to prosper, it must fully commit to pro-competitive policies. A new Competitiveness Deal for Europe has to have as a starting point the notion that there is no competitiveness without competition.


Next European Commission Must Remove Barriers and Embrace Free Trade

European Union trade policy isn’t delivering: progress on securing new agreements has been slow. Member States need to take their share of responsibility for that, there has been a general shift in tone away from efficiency in trade towards security which has seen the political momentum behind the free trade agenda falter in Europe. At the same time two of its biggest trading partners the US and China have both followed a more isolationist, protectionist approach to trade.

That’s the stark assessment of ECIPE, the European Centre for International Political Economy, in a report titled Trading Up: An EU Trade Policy for Better Market Access and Resilient Sourcing. The report was the focus of a debate, hosted by ECIPE. The report and the event were sponsored by Europe Unlocked.

The report blames the lack of political commitment to pursuing free trade on splits within the European Commission and between member states, as well as on the shift among many trading partners away from free trade.

It’s a dispute between those that support open trade with the EU’s trading partners around the world, and others that want to follow the US and China down a more isolationist road.

In her keynote speech at the event, Sabine Weyand, Europe’s top civil servant in charge of trade, made it clear that she supports trade diversification and integrated policy approaches ensuring that our own internal policies do not negatively impact our trade relations.

However, she also warned that the world has moved on from the 1990s and early 2000s, when there was widespread support for free trade around the world. Strains on trade relations and supply chains have intensified in recent years due to war and Covid, Weyand said. There’s been “an inward turn in economic policy, and a new focus on economic security”, she said.

In recent years “interdependence (of global trading partners) has been seen as a risk rather than an opportunity. We need a paradigm change from this,” she said.

There’s a lot at stake for Europe in particular. Its share of world trade stands at 15%. With slower economic growth here, Europe risks falling behind.  “We need a more attractive offer. Our weight in the world is declining,” she said.

The challenge is to push for open trade while at the same time standing up to protectionist measures of others, Weyand said.

The burning question now is what approach the new European Commission, due to take office in the autumn, will take? Will we see further underperformance in trade? Or will the next Commission deliver more in terms of trade promotion rather than protection?

Europe Unlocked believes it is essential that the balance should shift towards promotion and market access. The Commission would do well to look at ECIPE’s recommendations in this regard.

To name a few, it recommends modernizing existing free trade agreements (FTAs) with Latin America, Australia and Asia. It also calls for the EU to strike ‘mini deals’ – sectoral agreements in areas where global regulatory requirements diverge.

Europe Unlocked, believes that competitiveness and open markets should be at the heart of the policy programme for the next Commission. International trade beyond Europe’s borders is a necessity for a more competitive and therefore more prosperous Europe.


Europe Unlocked Welcomes the Renewed Sense of Urgency in Restoring the EU’s Competitiveness, but Warns Against Detracting from a Focus on Removing Barriers, Embracing Competition and Enhancing Mobility

Europe Unlocked welcomes the sense of urgency injected into the debate about Europe’s competitiveness at this week’s European Council, and in particular it supports efforts by former Italian premier Enrico Letta to strengthen the EU’s Single Market.

Dr Letta is right to point out that Europe is falling worryingly behind its main trading partners in terms of GDP growth per capita, and we agree that now may be the “last window of opportunity” to put this right.

The report he presented to EU leaders on Thursday contains many good ideas that will, if supported by EU leaders, help restore the continent’s economic prospects, and create a better environment for European businesses to flourish.

A proposed 5th freedom to enhance research, innovation and education in the Single Market could help to leverage the innovative capabilities that Europe has but which historically have not translated into significant competitive advantage. Similarly, Dr Letta’s proposal to streamline the decision making process for agreeing trade deals with third countries would help Europe to grasp the opportunities offered by fast growing economies outside of Europe.

However, some of Dr Letta’s ideas appear to repeat the mistakes of recent years by calling for more public money to restore Europe’s economic fortunes. Commenting on this point, Executive Director of Europe Unlocked, Kieran O’Keeffe said:

”Calls in Mr. Letta’s report for a “progressive expansion of EU level funding” as a trade-off for stricter state aid control detracts from the need for a relentless focus on improving the business case for private investment in Europe.

“Amongst other things, this will require a stable, clear and enabling regulatory environment and a reduction of existing points of friction in cross-border trade for goods and services.

“Europe needs a market-driven approach to its economic revival if we want to secure our long-term prosperity and simply spending our way to economic success won’t cut it”.

Nevertheless, Dr Letta’s report appears to have hit a nerve among EU leaders.

“We’re pleased that Member States are now putting political momentum behind the competitiveness agenda and acknowledging the importance of addressing Europe’s shortcomings in productivity performance compared to other regions of the world,” Mr O’Keeffe continued.

“At the heart of this has to be a big push to deepen the Single Market and we’re heartened that both the Summit Conclusions and Mr. Letta’s report share this thinking with calls for a new strategy and a focus on addressing barriers to the cross-border provision of services. Combined with calls for better regulation, these commitments are positive ingredients for future economic success,” he said.


EU Can Do A Lot Better – CER Report On Better Regulation

Under its last two presidents, the European Commission has become a more political body.

In the process, it has lost one of its strengths: its technocratic law-making role, focused on designing laws based on evidence and good practice.

This is one of the conclusions of a report entitled ‘Better Regulation in Europe – an action plan for the next Commission’ by the Centre for European Reform (CER) published today. The report is sponsored by Europe Unlocked.

The Commission, it argues, should be less beholden to short-term politics, in the way the European Parliament and Council inevitably are.

It also urges the next Commission to broaden the decision-making circle, which under President Ursula von der Leyen has become unhealthily narrow.

And it sounds the alarm bell about the sharp rise in the proportion of laws adopted by the Commission alone as delegated acts, as opposed to ordinary acts which are adopted by the elected bodies, the Council and European Parliament.

The next Commission needs to rebalance, giving less weight to politics, and it must consult more widely before proposing laws, CER argues. It needs to “improve the credibility of its consultations – the process by which it invites stakeholders to comment on its proposals – to show it is driven as much by evidence as by politics.”

The Council and European Parliament also should adopt a Better Regulation approach to their respective roles in the lawmaking process, CER says, by, for example, assessing the impacts of their own proposed substantial amendments to Commission proposals.

And it calls for more independent scrutiny and accountability of the law-making process by beefing up the Regulatory Scrutiny Board, which CER says “could be more effective with more resources and institutional independence”.

Europe is searching for ways to boost economic growth and competitiveness. It has tasked two senior former heads of government, Enrico Letta and Mario Draghi to chart a course to restore Europe’s economic fortunes.

While we wait for their recommendations in the coming weeks and months, the CER report points to low hanging fruit: better regulation, it concludes, will lead to better productivity and more innovation.

Read the full report here


A Europe Unlocked Wish List for Enrico Letta

Enrico Letta, the former Italian premier, is preparing a much-anticipated report examining ways to improve the workings of Europe’s cherished Single Market.

The report, which is due to be presented to the Council of Ministers from the 27 EU countries in April, is expected to contain a call for the EU to strengthen the Single Market through better regulation, better enforcement of state aid rules, and less protectionism.

Under the current administration, the European Commission has watered down many of the rules designed to keep the European economy functioning properly. This includes state aid rules designed to stop national governments from giving the companies from their country an unfair advantage.

Unfortunately, in the wake of major challenges including Covid and the war in Ukraine, and facing tough competition from trading partners, the Commission has allowed the rules to be diluted. Protectionism and an obsession with economic ‘sovereignty’ have become the norm, while the principles of sound economic management and respect for open markets have fallen by the wayside.

In a letter to Mr Letta submitted last week, Europe Unlocked calls for a comprehensive and fully-fledged Single Market Strategy that provides strategic leadership to identify the barriers that Member States have been reluctant to tackle for far too long.

We also would like to see the Letta report call for strong governance mechanisms to hold relevant actors to account, track progress and expose laggards, and it calls for targeted actions to protect state aid control, and encourage better regulation.

The new Commission which will take office in the autumn must ensure the evaluation of mechanisms like the Points of Single Contact and the Single Digital Gateway achieve the desired result, creating a culture of continuous improvement in economic management.

Here is our letter. The Single Market – Europe’s economic crown jewel – must be strengthened. Mr Letta has a unique opportunity to push EU policy in this direction.


Without Clear and Consistent State Aid Rules, the Single Market Cannot Function Properly

Without clear and consistent state aid rules, the European Union’s cherished Single Market cannot function properly, and long-term hopes of European economic success don’t stand a chance. Covid and the war in Ukraine have posed significant threats to Europe’s economy but these short-term crises must not be allowed to determine the EU’s long term economic fate.

Nor should the longer-term challenges posed by Europe’s green and digital transitions be used as an excuse to water down the rules. Quite the opposite. The best way to meet these challenges is to harness the innovative potential of Europe’s private sector.

As EU ministers gather in Brussels this week to discuss the EU’s economic competitiveness two opposing visions are being pushed. Some are calling for further loosening of the state aid rules, while others share the concerns of Europe Unlocked, and are demanding the opposite.

Last week officials from nine EU member state governments issued a joint statement warning of the dangers of loosening of the rules. State aid controls, they said, have been the cornerstone of EU competition policy, aimed at preserving the Single Market. The rules allow governments to intervene where there is market failure and to ensure delivery of basic societal needs such as energy supply, transport infrastructure and housing.

However, in response to the challenges mentioned above the state aid rules have been revised to give governments more leeway in responding to the challenges and there are many voices calling for further loosening of the rules.

In their joint letter the officials warned that “public funds must not crowd out private investment.” This is a crucial point we fully endorse.

EU governments should apply a cautious and evidence-based approach before resorting to state aid interventions, the nine officials argued. And when they do, interventions must be targeted, proportionate, WTO-compatible and in keeping with the workings of the Single Market.

To ensure that state aid doesn’t undermine the Single Market the European Commission should conduct a Single Market impact assessment in its annual monitoring of the EU’s long-term competitiveness.

Arguments in favour of boosting Europe’s economic security must not be used to undermine the level playing field logic of the Single Market and the multilateral trading system. Europe Unlocked shares the widely held concerns that the loosening of state aid rules could trigger a subsidy race not just with its global trading partners but also among EU member states.

Open and sustainable trade, governed by the rules-based trading system remains an indispensable pillar supporting Europe’s long-term competitiveness, the nine government officials wrote.

This vision must prevail over the more protectionist instincts also being expressed. Robust state aid rules are the only way to preserve the Single Market and to create conditions for increased global competitiveness and an attractive investment climate.


Helping Europe's Digital Economy Take Off

Turning Europe into a truly digital economy will take years, but there are several courses of action that the European Commission can take to boost digital-led growth in the short-term, according to a paper published this week by the think tank, the Centre for European Research (CER).

The paper gives an upbeat assessment of Europe’s digital prospects. The number of tech start-ups is on the rise in Europe, but scaling up is a massive challenge largely because of the fault-lines that remain in the Single Market.

It points to the benefits that can be enjoyed by European businesses through a properly functioning Single Market and an open approach to trade.

The Single Market and open trade should be given top priority by the next Commission, the paper states.

Entitled “Helping Europe’s digital economy take off: an agenda for the next Commission”, the paper points out the biggest constraints holding back Europe’s digital transformation.

The paper recommends that the new Commission due to take office in the autumn should pursue three lines of action. It should ensure that the existing rulebook is properly enforced, and where necessary it should make amendments in order to future-proof the rules.

It also calls for Europe’s data economy to be unlocked. This can be done by updating the regulatory framework so that it promotes data-driven innovation while at the same time protecting citizens’ privacy. This can be achieved through the use of anonymizing and synthesizing datasets.

And third, Europe’s digital infrastructure must be improved. This will require investment in resilient, robust and high-quality digital connectivity. The European Commission plays a central role here, enforcing strict competition rules and pushing for a true single market for telecoms across Europe.

“The number of European tech start-ups has grown dramatically in recent years. The task for the next Commission is to capitalise on this opportunity – by giving these firms opportunities to scale and thrive, and by ensuring all sectors of the European economy can take full advantage of new innovation,” said the paper’s author and assistant director at CER, Zach Meyers.

Read the full report here

 


EU Won’t Strengthen the Single Market with an Interventionist Industrial Policy

A teacher writing an end-of-term report on a pupil whose progress resembled that of the EU Single Market would no doubt end the report with: “Could do so much better”.

The annual Single Market and competitiveness report published by the European Commission acknowledges the challenges the EU faces in realising the full potential of the Single Market. How could it not?

The report shows no improvement in the transposition of EU directives into national laws.  The so-called conformity deficit means that in many fields companies and citizens are faced with a patchwork of laws instead of enjoying legal certainty across the internal market.

Venture capital investment as a proportion of GDP is falling, R&D spending by companies and governments as a proportion of GDP is down too.

The number of patent applications per capita – a common metric to assess the level of innovation in an economy - is also in decline.

Meanwhile, the regulatory burden on companies was lifted slightly but remains heavy, and productivity growth remains less than half that of the US, as it has over the past 30 years.

These are all worrying statistics. But more concerning still is that elements within the current European Commission remain wedded to an economic strategy that will further undermine Europe’s economic crown jewel – the Single Market of some 450 million consumers.

"The Single Market and industrial policy go hand in hand to support the EU’s competitiveness," said Commissioner for the internal market, Thierry Breton in the Commission press release.

But the prevailing view from economists and from companies themselves is that efforts to boost Europe's competitiveness will in fact be undermined by industrial policy.

The Single Market is just that - a market. Industrial policy is short-hand for lax state aid rules, favouring national champions, protectionism and European economic sovereignty - the very things that undermine the functioning of the Single Market.

Europe must abandon its obsession with interventionist industrial policy if it is to strengthen the EU's Single Market and boost the competitiveness of the European economy.


Time for Major Reforms to Strengthen our Single Market

The Centre for European Policy Studies (CEPS) has unveiled a report on the EU Single Market that pulls no punches. It says that while there has been progress in some areas, for decades the Single Market has been largely neglected and there has been a lack of political will pushing it, especially when it comes to enforcement.

As a result the project that was conceived by Jacques Delors in the mid-1980s is still far from completion, and poorly enforced due to political inertia and vested interests at member state level, the report says, while acknowledging that Europeans have enjoyed some benefits over the years.

Its author, CEPS Senior Fellow Professor Jacques Pelkmans calls for a shake up in the way EU institutions manage what many people see as the EU’s economic crown jewels. If his 10-point plan is followed, Professor Pelkmans believes EU gross domestic product in the EU could be boosted a whopping 9 percent over the next decade.

“That’s the equivalent of the combined GDP of Belgium, the Czech Republic and Ireland,” he said, adding: “It sounds a lot, but that illustrates how much the Single Market today is underperforming.”

“The EU needs the Single Market much more than some people realise. In the long-term the Single Market is the key determinant of Europe’s competitiveness,” he added.

The CEPS report, sponsored by Europe Unlocked, identifies the broad obstacles holding the Single Market back and proposes concrete action to address them. They include call for a detailed programme of medium-term priorities to be adopted this summer, and for the incoming European Commission and European Parliament to commit to meeting the targets during their term in office.

The plan calls for reforms in the three key EU institutions, as well as in infringement procedures that end up at the European Court of Justice.

European Parliament

The Internal Market Committee (IMCO) needs to be beefed up so that it plays a more supportive role to the Commission in enforcing single market laws. Once a year the committee should meet to address infringements by member states. The Single Market hearings will give voice to third parties including companies and consumers, that are impacted by member states’ failure to uphold EU laws.

The Committee will have no powers to punish member states, but it will add to European Commission pressure being put on countries that don’t transpose EU laws properly.

“The Commission is tip-toeing through this problem. There needs to be much more pressure on member states to respect the laws underpinning the Single Market,” professor Pelkmans said.

“There are many infringement cases each year. Dealing with them takes so long and costs so much. If a company is impacted negatively by an infringement it could take years for it to be resolved. There has to be more pressure on member states,” he said.

Council

Beef up the Council Troika comprising past, present and future EU presidencies. The European Council of heads of government should instruct the presidencies to work closely together on a revolving basis based on the overall  commitment to implement Single Market programme. them a specific mandate to ensure continuity and commitment to the Single Market.

“In the early years of the Single Market in the mid to late 1980s the Troika was used to push priority areas of policy, but more recently it has limited itself to being a vehicle to help with the practicalities involved in the handover from one presidency to another, “ the professor said.

European Commission

There hasn’t been a dedicated Single Market commissioner since 2015, when the Commission combined internal market, entrepreneurship, SMEs and EU industrial policy into one directorate, unclearly called DG Grow, under one commissioner.

“There needs to be a senior member of the next Commission dedicated to the Single Market. This should either be a vice president, or there should be a structure created linking the Commission president with the Single Market Commissioner,” professor Pelkmans said.

European Court of Justice

For cases of significant Single Market concern, the report calls for the creation of a fast-track procedure  to the European Court of Justice (CJEU), and/or the automatic suspension of a national law that contradicts Single Market laws at the outset of an infringement proceeding.

The CEPS report also calls for a specific action plan on the implementation of the Services Directive. It focuses on professional services, retail and construction, which it said are in particular need of intervention.

And it warns that deep-rooted resistance by some member states to opening their markets up to competition from within the Single Market has been economically damaging, especially in telecoms, spectrum, air traffic control and copyright.

The report also points to a “steep and unmatched increase in the regulatory burden” for businesses, especially during the mandate of the current Commission. And it urges the EU to establish a methodology  for measuring the cumulative burden of regulation.

And while the report sees the Single Market helping the EU to address the challenges posed by the green and digital transitions, it also warns that well-intended initiatives “often create rigidities”, and could even feed vested interests that hinder common EU solutions.

“Do we want the Single Market to become significantly more dynamic or do we want to continue with a half-baked Single Market?  With a limping Single Market, the engine of economic progress risks stuttering, no longer engendering the expected mobility and dynamism,” Professor Pelkmans said.

The report said that if we don’t act now there’s a serious risk that world class EU enterprises would be inclined to invest elsewhere. Meanwhile, more must be done to encourage European start-ups and mid-caps. Member states and the EU should do far more to help these companies to become more dynamic. That means, for example, giving them easier access to markets and to private risk finance from venture capitalists and capital markets, he said.

But there is much more to be done to realise the full potential of the Single Market, the report said.

“There needs to be a common commitment on the main elements of this medium-term programme from all three institutions, and there needs to be follow-through afterwards, setting milestones” he said.

Download the full report


The Calls to Strengthen Our Single Market are Becoming Deafening

Business has been saying it. Now 15 EU member state governments are saying it too. The Single Market has not been given the prominence it deserves. And there's currently a lack of political will to further develop what is widely seen as the EU's crown jewels.

Companies and countries alike are now demanding that the Single Market be put at the top of the agenda of the incoming European Commission. It is essential for Europe's long-term competitiveness and strengthening it will bring growth and prosperity for Europe.

In a so-called non-paper or unofficial government position released on Wednesday (drafted by Finland and co-signed by 14 other small and medium size EU member states) the countries state that "competitiveness requires investments in research and innovation, continuous efforts to tackle unnecessary burdens on businesses, particularly SMEs and micro-enterprises, a competitive legislative and policy framework, an attractive business climate and maintenance of a functioning market economy."

They argue that three things will strengthen the EU's competitiveness: "a more integrated Single Market, a more prominent role in digital development and an active policy of free and rules-based trade with the rest of the world."  This chimes with Europe Unlocked’s members and the wider business community.

Meanwhile, Enrico Letta, former Prime Minister of Italy, is preparing a report on the future of the EU Single Market to be presented to the European Council in March 2024. The SOS calls for action to Strengthen Our Single Market are becoming deafening.


Simply spending more won’t restore Europe’s competitiveness

Simply spending more won’t restore Europe’s competitiveness, regardless of whether it comes from national or EU coffers

Belgium takes over the Presidency of the Council of the EU on 1 January and Belgian Prime Minister Alexander De Croo is sending some mixed messages on how to restore the European Union’s economic fortunes in a recent interview with the Financial Times.

He was right in saying that we need to deepen the Single Market and that relaxation of state aid rules is the “exact opposite” of what is needed to regain competitiveness.

State aid has been on the rise since 2013 and ballooned during the covid pandemic. EU Member States trebled the amount they handed to companies. According to European Commission figures state aid reached EUR335 billion in 2021, compared with EUR103 billion in 2015.

But state aid has continued to rise in the wake of the pandemic. According to figures cited by the FT, approved aid totalled EUR733 billion between March last year and August 2023. Exceptional circumstances increasingly are becoming the norm and a pretext to continue splashing the cash on firms.

Unfortunately, Prime Minister De Croo favours bloc-wide incentives and EU coordination of industrial policy to help boost Europe’s economy. His gripe is that larger countries with deeper pockets will hand out more state aid than Belgium can.

He’s not opposed to handouts, rather he believes the money should be distributed at EU level, not national level. This wrongly assumes that Europe can just spend its way to a more competitive future. It can’t.

This mindset puts market mechanisms at risk. We hope that Mr. Draghi will also reach similar conclusions in his competitiveness report when that is published next year. If we really want a more competitive Europe then, amongst other things, we need to create the right conditions for private sector investment, a regulatory framework which supports the innovation needed for the green and digital transitions and overcome needless barriers to cross-border trade. This is a far better way to boost productivity and the only sustainable long-term way to grow the EU economy.


An Open Letter to Mario Draghi

We are delighted to announce the launch of Europe Unlocked, a new industry coalition whose goal is to increase the competitiveness of the European region by strengthening its Single Market. To this end, Europe Unlocked is sending an S.O.S to the Commission, Member States and the incoming Parliament to Strengthen our Single Market.

We invite you to explore our open letter to Mr Draghi, highlighting the need for a new approach to the economic and security challenges we face, focused on opportunity. This letter sets out our call for a commitment to boost competitiveness in the EU by urging the Commission to prioritise the strengthening of the Single Market in its next mandate.

Join us in this journey to unlock the full potential of Europe, fostering a brighter future for all.

Read the full letter here.


Introducing Europe Unlocked

Europe Unlocked is launching today !

Our newly formed industry coalition aims to increase the competitiveness of the European region by strengthening its Single Market. To this end, Europe Unlocked is sending an S.O.S to the Commission, Member States and the incoming Parliament to Strengthen our Single Market.

Europe needs to embrace competition and trade, ensure that the green and digital transitions deliver productive and sustainable outcomes, and help prepare Europe’s workforce with the skills needed to compete in a modern, global economy.

Looking ahead to a new European Commission and the European Parliament elections in 2024, Europe Unlocked will push for a radical re-think of how to boost productivity, and therefore prosperity across the continent.

We encourage you to read our associated press release, which provides further context and insights into the initiatives Europe Unlocked will be undertaking across the next year.

Follow us on LinkedIn and X to keep engaged with our activities throughout next year and unlock the full potential of Europe.


New business initiative forms to push for open and competitive markets in the EU

Europe Unlocked will campaign for greater focus on competitiveness, a stronger Single Market and it will fight against the drift towards protectionism in the EU

BRUSSELS - November 7th 2023: A broad coalition of organisations representing European businesses both large and small launched under the name Europe Unlocked today, to push European policy makers to address serious weaknesses in Europe’s economy.

The Europe Unlocked initiative continues to grow and the organisations whose names appear below were members at the time of launch.

At the time of the global financial crisis the EU and the US economies were roughly the same size. However, by 2020 the EU economy was significantly below the level of the US and this divergence continues (International Monetary Fund, GDP figures).

“This trend is alarming,” said Kieran O’Keeffe, Executive Director of Europe Unlocked.

Over the past decade the European economy has lurched from one crisis to another. The global financial crisis of 2008 was followed by a European currency crisis and unfortunately many others since, not least the pandemic and the war in Ukraine.

The risk is that exceptional measures that were needed to address the crises will become the norm. “That mustn’t happen. It is time the EU re-established some of the core elements that underpin the Union - in particular, the Single Market” Mr O’Keeffe said, adding: “Under the current European Commission the Single Market has been neglected.”

Looking ahead to a new European Commission and the European Parliament elections in 2024, Europe Unlocked will push for a radical re-think of how to boost productivity, and therefore prosperity across the continent.

Productivity is by far the biggest, and the only sustainable driver of economic growth in the long-term. The prosperity that would result from a more productive economy would in turn strengthen Europe’s security.

“The current Commission is too keen to treat the EU as a war-time economy. Europe should not run its economy from a bunker. We need a positive and confident policy programme from the next Commission which puts open and competitive markets at its heart,” Mr O’Keeffe said.

Current Members: