On the implementation and streamlining of EU internal market rules to strengthen the single market

With 450 million inhabitants in 27 Member States, the EU is one of the world’s largest economic blocs. We meet all the prerequisites to compete well globally, but we have a single market whose full potential is not being exploited. That means that we are falling short of the level of competitiveness that we could achieve and the economic growth that we could create. That is why we need tangible action to bolster the single market and cut red tape for our businesses, especially for small and medium-sized enterprises (SMEs) – action that will enable Europe to attract investment and innovation, which in turn will bring about more jobs, more tax revenue for Member States and thus also greater welfare for all of us in the EU.

In their reports, Mario Draghi and Enrico Letta have proposed solutions to boost Europe’s competitiveness and the single market. Since those reports were submitted to the Commission, there have been further changes in global circumstances. We are now living in an age of great uncertainty. Russia’s brutal war of aggression against Ukraine is continuing. Ukraine’s fight for freedom and independence is also about the future of all of us in Europe. Together with the US, we have given Ukraine support in the form of both defence-related equipment and humanitarian aid since the Russian aggression began. It is now increasingly clear that Europe can no longer count on wholehearted support for Ukraine from the US.

US policy in relation to Ukraine has changed radically since Donald Trump became President in January 2025. The EU and Europe must now take greater responsibility for supporting Ukraine and for their own defence and security. The security policy changes we are now witnessing will have far-reaching consequences, both economically and geopolitically, which is why Europe needs to take a firm grip on its own future. In addition to our defence, we need to boost our strategic autonomy and streamline and bolster our single market, thereby generating economic growth. That is also the way to boost our competitiveness vis-à-vis countries such as China and the US.

What is at stake here, ultimately, is the defence of liberal democracy, the rule of law and human rights – the defence of our way of life, our fundamental values, freedom, equality and the free movement of people, goods and services. For that reason, too, action needs to be taken to bolster Europe’s single market, our competitiveness and thus our economy.

We need to make the most of our strengths and address the single market’s shortcomings. The message from the business community and our firms is clear. Red tape must be cut for businesses. It weakens competitiveness and takes resources away from growth-creating activities. Several important reports have been written recently; they contain a host of tangible proposals. Where Draghi’s report focuses on boosting competitiveness, and Letta’s the single market, former Finnish President Sauli Niinistö argues in favour of a preparedness union and points to the need to simplify a number of rules, also with a view to strengthening Europe’s security.

The European Parliament, for its part, now ought to highlight the need for action and reforms that strengthen the single market, cut back on red tape and support uniform ways of implementing existing EU legislation in our Member States.

To strengthen Europe’s global position, promote investment, innovation and economic growth, but also consumer confidence, we need a competitive, clear and understandable regulatory framework that treats our businesses and consumers equally, regardless of the EU country where people live and work. Complicated rules, overlapping reporting obligations and inconsistencies in implementing jointly agreed directives and regulations across Member States mean that we are not exploiting our single market’s full potential. This also means that we are missing out on investment, jobs and therefore economic growth. That is why we need action that brings about change and growth and makes it easier to operate as an entrepreneur in Europe, with a special focus on small businesses and start-ups. Legislation that makes investment more difficult, lengthens licensing processes and hampers EU competitiveness should be avoided, with due regard for the subsidiarity principle. This own-initiative report also notes the discussion surrounding a possible new EU-wide legal status, the ‘28th regime’, to make it easier for small, innovative businesses to grow.

While simplifying processes and cutting red tape, it is important that we maintain our key policy objectives, such as climate targets and strong consumer protection. We will not compromise on them. For businesses, the aim is also predictability. The more uncertainties there are about policy objectives and possible rapid changes, the more difficult it is for businesses to venture to take important investment decisions. That is why policy needs to be framed for the long term and the rulebook needs to be clear, understandable and easy to follow. We must make it easier for our businesses to develop, invest and create growth, otherwise we in Europe risk falling behind on the global competitive stage.

The Commission is now called on to set specific timetables for action to cut red tape and administrative burdens for businesses, and to put forward specific roadmaps for the future. The Commission ought to keep to its targets and take decisive action to cut red tape by 25% for larger firms and 35% for SMEs. This own-initiative report welcomes the fact that the Commission now has a Commissioner with responsibility for simplification. However, the Commissioner needs sufficient resources and tools to carry out his remit and coordinate with the relevant directorates and departments.

Digitalisation and artificial intelligence (AI) as drivers of growth and as administrative tools

Digitalisation and AI are here to stay. The EU needs to encourage Member States to invest in digital infrastructure so as to facilitate the goal of becoming a leader in digitalisation, quantum computing, AI and cutting-edge technologies.

This also involves the tools we provide businesses with. This own-initiative report notes the considerable potential of digitalisation and AI as key tools for streamlining administrative processes, including reporting and licensing processes. It is equally important that businesses should have access to funding. The Capital Markets Union can also facilitate that.

After the Commission’s planned review of digital policy legislation, the need to lessen unnecessary burdens on businesses has to be addressed. Because of the volume of new digital policy legislation adopted during the last term of office, it is important that the Commission should also clarify how the various laws relate to each other. A single eGovernment solution, also using AI, would make things easier for businesses across the EU. For smaller firms, it would be particularly welcome if there were a single digital platform, a ‘one-stop shop’, where they could find all relevant information on applicable rules, manage reporting and all other administrative requirements, and obtain instructions on how to apply for different authorisations, etc. With regard to reporting, it must be sufficient for a firm to submit information only once. Similarly, both the e-wallet for businesses and e-ID for citizens should now be implemented quickly in all Member States.

This also concerns the availability of digital services across the single market. For instance, progress ought to be made on geoblocking audiovisual content in the single market so that streaming services would be more accessible across the EU. That would be of great importance for language minorities throughout the EU.

The voice of business must be heard in the legislative process

Business views need to be taken into account more effectively, and the Commission is called on to make use of regulatory sandboxes so as to allow businesses to test at an early stage how proposed rules might work in practice, particularly in innovative sectors. Regulation that hampers growth should be avoided. Special attention needs to be paid to cutting red tape for SMEs, which could be subject to lighter regulation than larger firms. Similarly, the Commission ought to promote the scaling-up of start-ups.

To ensure that the voice of business is better heard, expert groups’ work should also be reformed in line with the Draghi report in order to reduce overlapping and streamline the drafting of legislation. SMEs, too, should have a powerful voice.

Proper implementation is the cornerstone of the single market

There are 27 countries in the EU, each of which is responsible for implementing EU legislation. Clearly, as things stand, not all countries meet the requirements for implementation in all respects, which in turn brings about imbalances. Streamlined processes and proper implementation of EU law are therefore called for. The single market needs to be fair both to businesses and to consumers. Single-market rules must be uniformly implemented.

Much new legislation was adopted during the last term of office. Now, the focus needs to be on effective implementation and uniform application of existing legislation. Instruments to enforce compliance with single-market rules, such as SOLVIT and SMET, should be strengthened in line with the Draghi and Letta reports. Member States must also take responsibility for creating a powerful single market and avoid phenomena such as gold-plating.

New legislation requires impact assessments

In order to ascertain what the consequences of a proposed item of legislation will be, impact assessments are needed. Without proper impact assessments, situations may arise where legislation has consequences that the legislative authority did not intend. The regulatory framework today is complex; it is therefore crucial to take various impacts into consideration as comprehensively as possible at an early stage in the legislative process.

It is crucial to consider the cumulative effects of different items of legislation; and it is crucial that new and existing rules should operate in a complementary manner. Any assessment ought also to include a competitiveness check, focusing in particular on the impact of the regulatory framework on SMEs and start-ups.

Similarly, there need to be impact assessments for amendments proposed by Parliament or the Council during trilogues that may have a major impact on the legislation concerned. Nowadays, in practice, significant changes may be made during trilogues that are not subject to impact assessments. That, in turn, can produce unexpected consequences in practice which the legislative authority did not intend. At the same time, of course, it is important to safeguard the ability of individual MEPs to propose amendments. That is a fundamental democratic right. It is nonetheless also important – so as to maintain full confidence in the EU’s legislative process – that major proposals for amendments at the final stage of that process should also be subject to proper impact assessments.

Europe’s competitiveness and security are at issue

Enhanced competitiveness and greater security go hand in hand with a more powerful single market. We must therefore cut needless red tape so that our businesses can focus on the things that matter. That is the responsibility we all bear.

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