Volatile energy markets, high inflation rates and geopolitical unrest at Europe’s borders have dominated the EU agenda during the last months. Against this ever-increasing list of challenges, this year, the EU is nonetheless celebrating a significant milestone – the 30th anniversary since the establishment of the European Single Market.
As the European Commission itself noted, “anniversaries are an opportunity not only to look back at past achievements, but to set the expectations and objectives for the future”.
The European Single Market is home to 23 million businesses employing millions of people. Consequently, it needs to consistently have a forward-looking and well-defined framework. The Single Market plays a vital role in enhancing the global competitiveness of the EU. By removing internal barriers, it promotes economic integration, boosts internal trade and facilitates market entry.
Trade without barriers fosters healthy competition and allows businesses to benefit from economies of scale, with improved efficiency and resource allocation. As a result, market integration contributes to higher economic growth as well as job opportunities and improves overall welfare.
Thirty years since its foundation, however, the Single Market remains highly uneven, with the depth of integration varying substantially across the four freedoms. Free movement of goods and people work far more seamlessly compared to some of the evident barriers that still exist for cross-border services and capital.
The inconsistency between procedures covered by the Single Digital Gateway and national Points of Single Contact, and the restriction to access public procurement due to additional requirements placed by member states are just a few examples.
Moreover, Europe is lagging somewhat behind global competitors such as the US and China with regards to innovation and future-oriented technologies that are key components to the digital transition. All this to say, that although the Single Market achievements deserve celebration, the EU faces substantial challenges that must be addressed in the short- to medium-term if it wishes to remain competitive internally and globally to enable European companies to prosper.
As part of its forward-looking agenda linked to the 30th anniversary of the Single Market, the European Commission published a strategy on the ‘Long-Term Competitiveness of the EU’. This provides a policy framework and key performance indicators aimed at achieving sustainable competitiveness, economic security, open strategic autonomy, and fair competition.
The European Single Market is home to 23 million businesses employing millions of people- Alison Mizzi
An important element is the prioritisation of the ‘competitiveness check’ for better regulation – an important outcome of the Conference on the Future of Europe – which is concerned with evaluating the effects of new policy proposals by conducting more comprehensive analysis to gain a deeper understanding of how proposals will impact competitiveness.
In addition to the competitiveness check, the Commission is also committed to adopt a ‘one-in, one-out’ approach, to offset any burden for businesses resulting from new proposals by removing an equivalent existing regulatory burden in the same policy area.
While appreciating the fact that the Commission is aiming not to increase the legislative burden on businesses, the objective should be more ambitious and focus on reducing regulatory burden more broadly, rather than simply offsetting new ones.
Regular evaluation of existent EU legislations needs to be conducted to ensure their relevance and effectiveness and review where necessary to reduce burdens and improve the competitiveness of European businesses.
This would require reinforcing the Single Market governance infrastructure to continue identifying existing barriers and ensure the consistent application of Single Market rules. For this, enhancing the effectiveness of monitoring and enforcement tools like the Single Market Enforcement Taskforce (SMET) and Solvit, a service for citizens and businesses when their rights in another member state is breached, is crucial.
This is particularly relevant in areas such as the digital economy for instance, where landmark legislations such as the Digital Markets Act, Digital Services Act, Data Act, and Artificial Intelligence Act were recently adopted or are in the process to be adopted, and whose proper application is essential to support businesses’ advance in technological innovation, development, and commercialisation.
From a Maltese perspective, despite the challenges and trade barriers that remain, Maltese businesses should feel privileged to be part of the world’s biggest market and remain open to take up opportunities by making use of its full potential.
Whenever encountering difficulties, companies must come forward and discuss with national public agencies and business support organisations that can help them navigate their way through and bring their grievances forward to the relevant EU institutions.
Alison Mizzi is the president of the Malta Business Bureau. The MBB is the EU business advisory organisation of The Malta Chamber and The Malta Hotels and Restaurants Association.