The European Economic and Social Committee favours a European Sovereignty Fund

In an exploratory opinion on the 30th anniversary of the single market, the EESC has backed the Commission's idea of an EU fund pooling resources to invest in key green tech projects, rather than relaxing competition rules.

Loosening State aid rules to shield European industries from US competition following the Inflation Reduction Act could create asymmetries between wealthier Member States, such as Germany, which can subsidise their industries, and Member States with less fiscal space which cannot afford to, stressed the EESC in a new report that takes stock of 30 years of the single market and looks towards its future.

A European Sovereignty Fund is the best way to provide new momentum to European industrial policy and investment in green technologies, said rapporteur Felipe MEDINA MARTÍN from the EESC Employers' Group, who also stressed the need to review and reform current state aid rules.

There must be a reflection on the criteria for allocating State aid, their effects and their utility, said the rapporteur. We know that there are specific sectors that have been able to benefit from State aid, and from State aid derogations and exemptions, and others that haven't. Add to this the imbalances between Member States and you get huge differences in competitiveness within the EU.

Challenges ahead

The EESC report stresses that the single market has unquestionably been one of the EU's greatest political, economic and social achievements, but must remain an ever-evolving project which keeps adapting to changing realities and rising to the challenges ahead.

Among these, open strategic autonomy should come first: supply and trade, energy and critical raw materials should be top priorities, and agreements with countries that share the same principles and values are one path worth following in this regard.

Within the internal market, the EESC flags up the worrying fact that most of the regulatory burden continues to be generated at Member-State level, with national rules sometimes entering into force before EU initiatives are put forward, preventing harmonisation and potentially causing distortions in the single market. To pre-empt this, the EESC suggests that the EU should come up with legislation more proactively and swiftly.

No more dumping

From workers' perspective, the EESC would like to see measures to promote business competitiveness and sustainability being matched by measures to protect the quality of work and ensure citizens' rights, consumer protection and fair conditions for smaller businesses.

"The world is changing, and the paradigm that's been used for the single market over the last 30 years is also going to have to change, probably radically, if we are to overcome the new geopolitical challenges," stressed the co-rapporteur Angelo PAGLIARA, from the EESC Workers' Group. "If we don't change, we will lose our competitiveness and the prosperity brought to workers by the single market. If we are to guarantee genuine competitiveness, we need to fight all forms of dumping – social dumping, fiscal dumping, all kinds of dumping. Because dumping is a tool that undermines competition."

This umbrella report will be followed up by opinions addressing specific issues concerning the single market.

Read the EESC opinion on The Single Market at 30 – How to further improve the functioning of the Single Market