EU launches strategy to dismantle internal market barriers and boost competitiveness

The European Commission has unveiled on Wednesday (21 May) a comprehensive plan to revitalize the EU’s single market by reducing internal barriers that hinder cross-border trade and economic growth. This initiative aims to enhance the EU’s competitiveness, particularly in the face of escalating global trade tensions and protectionist measures.

Key objectives of the strategy

• Elimination of internal barriers: The Commission seeks to address obstacles such as limited mutual recognition of professional qualifications, inconsistent packaging standards, and sector-specific monopolies that fragment the internal market. According to the International Monetary Fund, these internal barriers are equivalent to tariffs of 44% for goods and 110% for services, significantly higher than actual import duties.
• Facilitation of cross-border services: The strategy includes developing guidelines to allow companies to provide services temporarily in other EU countries, aiming to open up sectors like construction, postal services, telecommunications, energy, transport, and financial services.
• Promotion of digital tools: The Commission encourages the use of QR codes on product labels to provide consumers with accessible information and plans to act against producers who restrict retailers from selling in certain countries.
• Support for regulated professions: Efforts will be made to encourage coalitions among willing EU member states to liberalize regulated professions, such as nursing and mechanics, to improve labor mobility across the bloc.
• Reduction of administrative burdens: The plan proposes cutting regulatory reporting requirements related to data privacy and battery supply chains, aiming to save medium-sized companies approximately €400 million annually.
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Implementation measures:

To ensure effective application of the strategy, the Commission calls on EU member states to appoint high-level representatives, referred to as “Single Market Sherpas,” responsible for overseeing the enforcement of EU single market rules and preventing the introduction of new national barriers. The overarching goal is to reduce red tape by 25% overall and by 35% for small and medium-sized enterprises (SMEs) by the end of 2029.

Context and rationale:

The initiative comes in response to growing concerns over the EU’s economic resilience amid global trade uncertainties, including recent U.S. tariff increases. By streamlining internal regulations and fostering a more integrated market, the EU aims to provide businesses with a more conducive environment for growth and innovation.

The strategy also aligns with broader efforts to enhance the EU’s strategic autonomy, particularly in critical sectors where dependence on external partners is high. By prioritizing internal market reforms, the EU seeks to strengthen its position in the global economy and ensure sustainable prosperity for its member states.

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