In a time of growing geopolitical tensions, economic uncertainty, and global competition, the European Single Market remains one of the EU’s greatest achievements and most powerful tools for ensuring prosperity, stability, and resilience. With an impressive €18 trillion GDP, representing nearly 18% of the global economy, the Single Market serves as the backbone of Europe’s economic strength, integrating 30 countries, 450 million consumers, and over 26 million businesses into one of the most robust economic areas in the world.
Yet, the Single Market faces increasing pressure. It needs to evolve rapidly to remain competitive, adapt to the green and digital transitions, and shield the EU from external shocks, trade disruptions, and supply chain vulnerabilities. This is the backdrop for the European Commission’s 2025 Communication titled “The Single Market: Our European Home Market in an Uncertain World – A Strategy for Making the Single Market Simple, Seamless and Strong.”
The Case for a Revitalized Single Market
The Single Market has already delivered significant benefits, raising EU GDP by 3–4% and creating over 3.6 million jobs. But much more is possible. Estimates suggest that further removing barriers could double these gains.
With a sluggish 1% productivity growth trend compared to other major economies, Europe must leverage the full potential of its Single Market to close competitiveness gaps, particularly with the United States, and safeguard the European social model.
The strategy is informed by the work of key European figures such as Enrico Letta, Mario Draghi, and Sauli Niinistö, whose reports emphasized the importance of the Single Market in ensuring strategic sovereignty, economic security, and resilience.
Core Pillars of the New Strategy
1. Removing the ‘Terrible Ten’ Barriers
The Commission has identified the ten most harmful barriers that undermine the Single Market:
- Overly complex EU rules, leading to administrative burdens.
- Lack of ownership and enforcement by Member States.
- Fragmented rules for business establishment and operations.
- Delays in recognition of professional qualifications, hampering worker mobility.
- Slow standard-setting, restricting innovation.
- Fragmentation in packaging, labelling, and waste rules.
- Outdated product compliance regulations.
- Diverging national services regulations, blocking cross-border service provision.
- Complex procedures for posting workers temporarily across borders.
- Territorial Supply Constraints, allowing large manufacturers to restrict cross-border supply, inflating prices for consumers.
Addressing these barriers is critical to unlocking competitiveness, sustainability, and resilience.
2. Boosting European Services Markets
Despite services representing 75% of the EU’s GDP, cross-border services trade remains shockingly low—about 7.6%, equal to EU trade in services with non-EU countries. This underscores the underperformance of the internal services market.
The strategy proposes a sectoral approach, focusing on:
- Construction: Simplifying permits, improving mutual recognition of qualifications, and streamlining liability rules.
- Retail: Removing disproportionate establishment restrictions to improve competition and consumer choice.
- Industry-related services: Facilitating installation, maintenance, and repair services crucial for manufacturing.
- Energy services: Supporting the clean transition, grid modernization, and energy efficiency.
- Telecommunications: Establishing the Digital Networks Act to foster a truly European telecoms market.
- Financial services: Advancing the Savings and Investments Union to connect savings with productive investment and improve access to finance.
- Transport and logistics: Enabling paperless mobility, a single digital rail ticketing system, and harmonizing cross-border services like car rentals.
3. Empowering SMEs and Scale-ups
SMEs are the lifeblood of the EU economy, representing 99% of all companies. Yet, they are disproportionately affected by regulatory fragmentation and administrative complexity.
Key initiatives include:
- Launch of a digital SME ID, reducing the need for repeated paperwork when accessing support schemes.
- Formal recognition of Small Mid-Caps (SMCs)—companies with 250–749 employees—allowing them to benefit from tailored regulatory relief.
- Extending SME-specific mitigations, such as reduced reporting obligations, to SMCs via Omnibus packages.
- Support for intellectual property (IP) protection, including expanding the EUIPO SME Fund to cover IP commercialization.
- Addressing the burden of sustainability reporting, ensuring that SMEs are not overwhelmed by the reporting demands imposed on large corporations under the CSRD and CSDDD.
- Improving SME access to sustainable finance, revising disclosure rules, and offering simplified pathways for green financing.
4. Accelerating Digitalization and Simplification
The Commission emphasizes that digitalization is a key enabler for a well-functioning Single Market. Measures include:
- The development of a Digital Product Passport (DPP), offering digital access to product compliance information.
- A move toward paperless administrative processes, from business registration to cross-border service provision.
- A Digital Omnibus package, streamlining digital rules and reducing friction in compliance.
- Advancing common marketplaces for cloud services and AI infrastructure under the proposed Cloud and AI Development Act.
- Introduction of the Single Digital Gateway and the European Social Security Pass (ESSPASS) to facilitate smoother labor mobility.
5. Enhancing Enforcement and Governance
A key element of the strategy is ensuring that rules are not only written but also applied and enforced consistently across Member States.
- Introduction of Single Market Sherpas in every Member State—senior officials directly linked to the heads of government—responsible for coordination and removal of barriers.
- Strengthening the Single Market Enforcement Taskforce (SMET) to monitor, prevent, and resolve barriers proactively.
- A proposed Single Market Barriers Prevention Act to ensure new national laws do not fragment the Single Market.
- Consideration of an EU Market Surveillance Authority, with special focus on monitoring e-commerce imports, counterfeits, and non-compliant products.
6. Fostering Sustainability and the Circular Economy
The strategy complements the EU’s Green Deal and Circular Economy Action Plan, with actions to:
- Harmonize labelling and packaging rules, introducing QR-based digital labels.
- Simplify Extended Producer Responsibility (EPR) schemes, removing duplicative reporting requirements.
- Streamline rules around waste shipments, end-of-waste criteria, and by-product definitions, creating a true Single Market for circular materials.
- Support industries in meeting environmental goals without adding excessive administrative burdens.
A Call to Action: Choosing Europe
The European Commission’s message is direct: the time to act is now. A more simple, seamless, and strong Single Market is essential not only for economic growth but for geopolitical resilience, social cohesion, and the success of the green and digital transitions.
In a world of economic giants and rising protectionism, Europe’s strength lies in its unity. By completing the Single Market, Europe can defend its social model, compete globally, and ensure that its citizens and businesses thrive in a fair, sustainable, and innovative economy.
Summary by DigitalTrade4.EU