What hampers the EU’s single market? Some members states want fewer national barriers, others blame too much regulation, scarce investment, or lack of support for European industry. The Commission’s ‘One Europe, One Market’ roadmap aims to bring some relief.
The stakes are high. The EU’s single market covers around 450 million people. Yet companies still encounter different rules, administrative procedures and national restrictions when they try to operate across borders.
The ‘One Europe, One Market’ roadmap, agreed by the European Commission, European Parliament and Council in April, is to change that. The institutions have committed to delivering its measures by the end of 2027, with progress reviewed every quarter.
What is holding Europe back?
A meeting of EU competitiveness ministers in Dublin last month showed that agreeing on the destination is much easier than agreeing on the route. There is broad agreement that the single market is not working as smoothly as it should. The disagreement starts when governments explain why.
For Ireland, which is steering the debate as holder of the rotating EU presidency, the answer is fairly traditional. Europe needs to finish the job. The Irish Presidency’s July meeting focused on ‘long-standing barriers’. These include enforcement of EU rules and cooperation between member states, with particular attention to obstacles affecting SMEs operating across borders and digital services.
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Irish Enterprise Minister Peter Burke summed up the approach. “Strengthening our competitiveness means delivering a fully-functioning single market,” he said.
The minister went on to list support for “our industries through the green transition, and ensuring our innovative companies can start, scale and succeed here in Europe”. But other governments are putting different parts of that equation first.
Fewer rules or better rules?
One of the biggest tensions is over regulation. The roadmap calls for deeper integration while also making simplification a central objective. The Commission wants to cut reporting requirements by at least 25 per cent for all companies and 35 per cent for SMEs. It estimates the simplification measures could save businesses €37.5bn by 2029.
For countries such as the Netherlands, Denmark, and Sweden, cutting unnecessary regulation has become a central part of the competitiveness agenda. France and Italy, meanwhile, have put greater emphasis on strengthening Europe’s industrial base and helping European companies compete globally.
Another group of governments sees a different weakness: even if the single market worked perfectly, European companies will still struggle if they cannot grow. That was the first topic at the July meeting, which focused on mobilising private and institutional investment for scaling SMEs.
Europe needs scale-ups
Finland’s Economy Minister Sakari Puisto put the emphasis on financing. Ahead of the meeting, the Finnish government said rules should be eased to improve the availability and price of funding, while maintaining financial stability. It also stressed the importance of equity financing for growth companies, linking it to “innovation, technological development and economic growth.”
Ireland’s Finance Minister Simon Harris made a similar argument from the financial-market side. Discussing the Savings and Investments Union, he said there was “strong political will” to reach an agreement on integrating European financial markets
He also acknowledged that “compromise from member states will be required”. The aim, the minister said, was to create “deeper and more efficient capital markets” for European citizens and businesses.
Keeping factories in Europe
Then there is the industrial question. The second Dublin session focused on industrial decarbonisation, including high energy costs and regulatory pressures facing European industry.
This is where Europe’s larger industrial economies have pushed the debate beyond the traditional single market logic. France has called for stronger European industrial policy, while Italy has stressed the need to support European industry and reduce the burden of energy costs and regulation. Germany has made cutting bureaucracy and improving conditions for industry a major competitiveness priority.
These positions reflect a wider shift. The traditional single market approach is to remove barriers and let companies compete. The newer competitiveness agenda increasingly asks what happens when competition itself is not enough. European governments are worried about energy prices, Chinese competition, strategic dependencies and investment moving elsewhere. The EU is therefore trying to make it easier for companies to compete inside Europe while also making Europe a more attractive place to produce.
A fifth freedom
The debate became even broader when EU research and innovation ministers met in Dublin later in July. Their argument was that the traditional four freedoms—concerning goods, services, capital, and people—may no longer be enough. Europe also needs to make research, innovation and knowledge move more freely across borders.
Irish Research Minister James Lawless called for genuine researcher mobility. It includes attractive and portable research careers, better cross-border access to world-class research infrastructures, and the free flow of research data and knowledge. “Europe’s future competitiveness, security and prosperity will depend on how effectively we support research and innovation today,” he said.
A compromise from member states will be required. — Ireland’s Finance Minister Simon Harris
The idea has been dubbed a fifth freedom. Croatia’s Hrvoje Meštrić, head of the Science and Technology Directorate in Croatia, identified the underlying problem. Europe’s challenge is “no longer generating excellent research, but turning scientific excellence into innovation, competitiveness and economic growth,” as he put it.
The different debates reveal a single market that is being asked to do much more than it was originally designed to do. Increasingly, competitiveness is also about industrial strength: keeping production in Europe, reducing strategic dependencies and making energy-intensive industries viable. The institutions have given themselves until the end of 2027 to deliver the roadmap.
