How single market dysfunctionalities contribute to the rising cost of living

Background

As inflation in the Euro area peaked at 10.6% in October 2022, the cost of living surged. Although inflation fell to 2.5% by January 2025, it remains high in several EU Member States. Prices tend to rise quickly but fall slowly— a pattern known as ‘rockets and feathers’— which means many citizens still feel the pinch. The impact is especially severe for the 94.6 million Europeans at risk of poverty or social exclusion.

This opinion examines how fragmentation in the EU Single Market contributes to the high cost of living. It forms part of a wider EESC initiative addressing the crisis through seven opinions, each focusing on a specific policy area and offering targeted recommendations to EU and national policymakers, civil society, and other stakeholders.

In this opinion, the EESC warns that persistent regulatory and non-regulatory barriers continue to limit the free movement of goods, services, capital, and people. Despite boosting the EU’s GDP by 6–8%, the Single Market is still fragmented and this costs the economy up to €500 billion annually. Non-tariff barriers are strikingly high – equivalent to 44% for goods and 110% for services – and new barriers continue to emerge, driving up prices and reducing competition.

The EESC explores the sources of fragmentation – whether from private actors, Member States, or lack of EU-level action – and calls for urgent steps to strengthen the Single Market and ease the burden on businesses and citizens.

 

Key points:

In its opinion, the EESC:

  • finds it regrettable that the cost of living in Europe is being fuelled by persisting dysfunctionalities in the European Single Market, and believes that more decisive action by the European Commission is needed to protect it;
  • calls on the European Union to urgently tackle persistent barriers that decrease competition and affect the cost of living, such as territorial supply constraints; 
  • encourages Member States to avoid unnecessary regulatory complexities, that could weaken essential social and labour protections;
  • urges the Commission to ensure that Member States respect their notification obligations (e.g. under TRIS), speed up proceedings against national rules which infringe EU law and consider temporary measures against clear violations of EU rules to prevent harm while checking if national rules comply with EU law.

Read the opinion.

 

Additional information

Section: Single Market, Production and Consumption

Opinion number: INT/1078

Opinion type: own-initiative opinion

Rapporteur: Emilie Prouzet

Reference: Rule 52(2) of the Rules of Procedure

Date of adoption by section: 8/4/2024

Result of the vote: 75 in favour/0 against/0 abstentions                                                   

Date of adoption in plenary: 29/4/2025 – 30/4/2025

Result of the vote: in favour/against/abstentions

 

Contacts:

Press officer: Laura Lui          

Tel.: 00 32 2 546 9189

Email:  laurairena.lui@eesc.europa.eu

Administrator: Annalisa Tessarolo

Tel.: + 32 2 546 9732

Email: Annalisa.Tessarolo@eesc.europa.eu

 

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