The European Commission published the new Annual Single Market and Competitivness Report. The report details the competitive strengths and challenges of Europe’s Single Market, tracking yearly developments according to the nine competitiveness drivers identified in the EU’s 2023 Long-term competitiveness Communication.
The Annual Single Market and Competitiveness report responds to the request of the March 2023 European Council to monitor the state of Europe’s Single Market and competitiveness. It builds on previous Annual Single Market reports as first envisaged by the 2020 EU Industrial Strategy.
The Single Market Scoreboard was first published in 1997 and was initially set up to assess the performance of the Member States on the implementation of Single Market acquis. It was extended over time to cover the use of related governance tools. This year, it includes new competitiveness indicators, in line with the Long-term competitiveness Communication.
The newest report recalls that the Single Market is one of the world’s largest integrated market areas, and that it boosts the EU’s economy with a large demand pool, diversified supply sources, opportunities for innovating and scaling up production, strong social rights, and fair working conditions, while serving as a geopolitical lever. It points to the needs to step up enforcement of agreed rules, and to simplify their implementation.
Regarding investment, the report concludes that public investment has recovered from the low levels after the financial crisis, partially thanks to the Recovery and Resilience Facility, while private investment remains high. To increase the availability of risk and venture capital funding and scale up innovative companies, the report recommends to further strengthen the Capital Markets Union, building on the initiatives already approved since 2020. It also points to public procurement as an instrument to support our green and digital transitions in a strategic way.
Although high energy prices remain a challenge, the report points to important steps taken over the past years in order to update the EU energy policy toolbox and support EU clean tech manufacturing.
The report also notes that the EU is a major trading power accounting for 16% of global exports, and that trade continues to be a source of competitiveness. It also points to the need to defend the level playing field and to protect our economic security.
“The single market is at the core of our competitiveness. However, given the challenges we face between now and 2030, it will not be enough just to maintain the status quo of the European single market. Better enforcement is not enough. Stagnation is a step backwards. We need more ambitious plans to complete the internal market and finally make it easier to work across borders. This includes applying the same rules everywhere to drastically reduce costs for businesses. We need the Capital Markets Union, and we also need a fully integrated telecommunications and electricity market. This is the only way our businesses and consumers can benefit from more competitive prices. In 2020, the Commission calculated that a better functioning single market could generate €713 billion by 2029. This money is urgently needed. The further development of the internal market must be one of the tasks of the next Commission,” says Andreas Schwab MEP, the EPP Group spokesman on the single market.
The Annual Single Market and Competitiveness Report – building on the annual reporting introduced by the Commission in 2020, and in its 2024 format responding to a request from the European Council – provides a basis for discussions in the European Parliament, the European Council and the Council on how to promote our Single Market and competitiveness agenda this spring. The report also comes ahead of the findings expected from Mr Mario Draghi and Mr Enrico Letta in their upcoming reports on the future of European competitiveness and of the Single Market respectively.
