On the occasion of the 30th anniversary of the Single Market, the EESC held a debate about the future of the world's largest trading bloc with Commission Executive Vice-President Margrethe Vestager. The Single Market is widely considered the EU's greatest achievement, but has also shown its limitations in the face of current crises. The Commission has a plan to overcome these and will release its Communication on the Single Market in February. The EESC suggests specific ways to further develop it, while recommending focusing on Europe's competitiveness.
The ability of the EU to absorb shocks and overcome adversity strongly relies on the Single Market. But ongoing crises, such as climate change, COVID-19 or the war in Ukraine, and the increased state aid in response to these, have shown its vulnerability in the event of unforeseen disruptions. How do we ensure the green and digital transitions in the EU without infringing the free-market principles and hurting the competitiveness of European businesses?
Competitiveness is a priority
Competition policy has been one of the cornerstones of the Single Market from the beginning. The Commission is currently reviewing its rules and guidelines in an effort to improve the resilience of the Single Market and enable the green and digital transitions.
EESC President Christa Schweng comments:
Only a competitive Europe can create prosperity and wellbeing, as well as sustainable solutions to climate and environmental problems. It is vital to provide EU businesses with a favourable environment to innovate, invest and trade, including a level playing field with foreign competitors.
The EESC suggests that the Single Market should be able to provide reciprocity in trade standards – economic, social, and environmental. The EU must promote research, strengthen circular and digital skills and ensure fair prices that include higher input costs and costs for increased sustainability. In addition, while putting the right policies in place is important, it needs to make sure that it effectively enforces existing legislation. Across all this, it is key to hold a permanent, constructive social and civic dialogue.
Commission Executive Vice-President Margrethe Vestager acknowledges that the Single Market is something the EU needs to keep working on, while recalling that
Europe would be a completely different place if the Single Market hadn't been created thirty years ago". She adds: "We will keep on listening to the EESC to make sure that the Single Market remains the crown jewel of the EU.
The question of state aid
Tensions rise in Europe over states using subsidy schemes to help their economies recover faster and achieve the green and digital transitions. The US has adopted the Inflation Reduction Act (IRA), only available to American firms, and Germany has announced its package to subsidise its own economy. The fear is that such initiatives, while they seem justifiable at national level, put smaller economies and global trade at risk if they become more than a short-term boost.
Ms Vestager explains that
the combination of country subsidies with high energy prices is a great threat for European competitiveness on a global scale. Our products become more expensive while American products, for example, become cheaper. A worrying sign of this is the price of European Defence industry products.
The Commission is working on a proposal for a Sovereign Fund for transnational investments.
President of the EESC Civil Society Organisations' Group Séamus Boland, explained how crises over the last decade have transformed the EU.
An improved Single Market needs to cope with future shocks and leave nobody behind.
Oliver Röpke, President of the EESC Workers' Group said that the Single Market is not a goal in itself, and that people need to see and feel the positive impact of it.
Fundamental social rights should never be subordinated to business interests.
Member of the EESC Employers' Group Felipe Medina, finds it worrying to see some national initiatives affecting European competitiveness.
We need to think about adapting state aid because sometimes they can be used in an unbalanced way.