30 years of single market – taking stock and looking ahead

Frank Vandermeeren ()
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Frank Vandermeeren: European Commission, DG for Internal Market, Industry, Entrepreneurship and SMEs (DG GROW)

No WP2022/5, Single Market Economics Papers from Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs (European Commission), Chief Economist Team

Abstract: This note analyses the state of the Single Market 30 years after its establishment and explains the role of the Single Market as driver of EU resilience. Trade in goods and services have enabled increasing integration over the last decades, both within the Single Market as well as with the rest of the world. The Single Market continues to be the main source of trade for EU businesses, also in the EU-27. Taking into account the role of cross-border establishment, the difference in overall Single Market integration between services and goods (assessed in this note as around 16% and 37%) is lower than traditionally understood. The EU services landscape presents a wide variety of individual sectors with different levels of integration (highly integrated sectors being 4 to 5 times more integrated than services with lower levels of integration). Several elements may explain this, including intrinsic factors of specific services (e.g. some still requiring physical proximity between provider and customer) as well as different degrees of regulatory and administrative complexity. The Single Market is a dynamic and ongoing process. It has come a long way in stimulating growth and making the life of EU businesses and consumers easier. Opportunities remain notably in the area of services, where persisting challenges are often related to a large variety of rules and general bureaucracy at the level of Member States (including at regional and local levels). This highlights the primary role of Member States to manage the Single Market through reforms and administrative simplification as well as increase cross-border cooperation between national authorities. The Single Market is the EU’s driver of resilience, both in the short-term (crisis management) as well as in the long-term to address strategic dependencies and develop capacities. Based on case studies for wind and solar technologies, this note highlights the importance of Single Market flows both for areas of EU capacities as well as EU dependencies. Further improving the functioning of the Single Market – addressing challenges across inputs, production, services, infrastructure and internal demand – has the potential to increase the effectiveness and efficiency of policy actions to strengthen EU strategic autonomy and ensure the availability of critical goods and services.

Pages: 50 pages
Date: 2022-12
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Persistent link: https://EconPapers.repec.org/RePEc:bda:wpsmep:wp2022/5

DOI: 10.2873/34087

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