Europe’s single market depends on a new industrial and competitiveness strategy
Europe’s single market is a precious, ever-evolving project that underpins cooperation and solidarity between member states. It is based on removing long-standing obstacles to cross-border movement of people, goods, services and more. As the EU institutions shape their policy strategies for the next five years, it is imperative for Europe to adopt a new approach focused on political, regulatory, and economic measures that deliver tangible advantages to all businesses within the single market, irrespective of their sector or scale. New and effective actions should aim at 1) improving the single market overall as an attractive location for green and digital investment, 2) addressing investment gaps, 3) mitigating reporting and data collection requirements for companies, and 4) adopting concrete steps to foster innovation and competitiveness in the areas of free movement of data, research and technology, and digital financial services.
At the heart of the single market lies also a robust industrial policy which contributes to Europe’s growth and competitiveness. With a rich legacy of innovation and craftsmanship, EU industry is essential to driving technological advancements, fostering employment, and stimulating economic activity across a range of economic sectors.
From automotive and aerospace to pharmaceuticals and renewable energy, Europe's industries are still ahead of many of their global peers and can serve as catalysts for progress, generating value through research, development, and production. Moreover, this industrial strength underpins the continent's global standing, enabling it to compete effectively in international markets while shaping standards for quality and economic sustainability. Nevertheless, the chamber network is concerned with the increase of geopolitical tensions and the fragmentation of policies that could create more barriers, raise the cost of trade and make it harder for small businesses and entrepreneurs to grow and scale up.
The risk of deglobalisation affects Europe’s prospects for more growth in key industrial sectors. This fragmentation will bring unpredictable effects on trade and global supply partnerships, affect foreign direct investment and financial flows, and result in less incentives to allow for more innovation and access to cutting-edge technologies. It can also impact more strongly specific sectors such as energy or semiconductors and affect downstream production along their respective supply chains.
The success of Europe’s single market and its industrial fabric will ultimately be defined by whether it manages to address the financing requirements raised by the green and digital transformations adopted during the 2019-2024 EU mandate. Channeling much-needed capital that has been set aside according to securitisation laws adopted in the aftermath of the global financial crisis to cover for associated risks which no longer exist is crucial. The EU must allow its institutional investors and banks to complement the investment needs of the real economy, provide more access to alternative funding and recenter public-private partnerships to guarantee that its future industrial policymaking goals are fulfilled.
As Europe navigates evolving challenges and opportunities in the global landscape, leveraging its industrial prowess remains fundamental to sustaining growth, fostering innovation, and securing a prosperous future for all economic actors.
Frederico Martins,
Senior Policy Advisor for Single Market
