Former Italian prime minister Enrico Letta recently published his new report on the future of the single market – ‘Much More Than a Market’ – it sets the scene for an urgent upscaling of Europe’s competitiveness. Opening a Euractiv debate on the single market, Letta emphasised the need for speed, security, and solidarity.

The European single market is described as one of the European Union’s greatest achievements, but industry stakeholders say it’s now stuttering, burdened by too much fragmentation, excessive bureaucracy, and a lack of harmonised rules.

Enrico Letta, author of the report on the future of the single market and President of the Jacques Delors Institut, told the Euractiv audience that the report has been delivered with a sense of urgency. “There’s no more time. We are wasting time. We need to act, because [we must ask] how do we complete the single market? How we relaunch it (…) this is the core of my report.”

Letta explains that his report is an attempt to convince leaders that national sovereignty and European sovereignty together, can boost competitiveness at the European level.

He said: “This is why I propose three different roadmaps on energy, on telecoms, and first of all, on financial services – and on how to integrate more sectors, to give power to a system where the national authorities can work together with the European authorities in an integrated system.”

Consolidation and scalability

The report, he said, looks to the possibility of consolidation and scalability, but the single market must not work against consumers, instead, by applying rules, consumers must be protected – this he says, is at the core of the European single market.

“We need to find money to finance (…) the transition to a green, digital, and just transition (…) That will be important for all the different aspects of our economy for the change of our industrial system.”

Letta argued for a ‘Freedom to Stay’, which means that the single market cannot be only considered as freedom to move. Europe, he said, must address social problems, stopping the brain drain that is impacting many regions, and has become such an urgent social problem.

Addressing the role of SME’s which make up the backbone of European business, Letta said the single market cannot be interesting just for the big companies, “Until now, too few SMEs are taking advantage or exploiting the advantages of the single market.”

“Why? Because the single market is too fragmented. We have 27 legal systems, 27 taxation systems, and for SMEs that’s very complicated. It’s very difficult to deal with this fragmentation and these difficulties. This is why, one of the main proposals of the single market report, the future of the single market report is based on this idea of the 27 regimes.”

A new political push

Speaking on the panel discussion following Enrico Letta’s keynote address, Karl Haeusgen, President of VDMA said: “We represent over three million employees in Europe and over a million in Germany alone. The success of this industry is to a large extent due to the success of the single market in the last 30 years.”

However, Haeusgen said a new political push is needed for the single market completion, saying: “It has to be the top political priority for the next commission and the next Parliament.”

He explained why more needs to be done urgently, illustrating with an example of transporting a hydrogen turbine: “[It] needs to be transported on public roads. You have 27 different regulations. You know, when you have this heavy transport coming to the border between Germany and the Netherlands, it is a nightmare. So, the guy who was transporting this part has to look at different legislations to get this part transported, just cross-border in the EU.”

A real capital market

EU lawmaker, Dita Charanzová, Vice-President of the European Parliament, said that the EU needs “to make sure that we have a real capital market in the European Union. Of course, I also welcome [Letta’s] call for high-speed trains between the European capitals… on the side where I would have question marks are the calls for how to create European champions.”

Referring to Haeusgen’s explanation as to why more harmonisation is needed, Charanzová said “When we have a directive there is the so-called ‘Christmas tree effect’ in every member state, and sometimes the Commission must double-check whether the additions, by the national parliament, reach the goal of the directive itself.”

Charanzová said: “Let’s do the same as we do for competitiveness in the internal market and let’s get another commissioner for enforcement. We have to reshuffle the portfolios. We have to reshuffle the priorities in Europe, and make sure that the next five years will be really about how to deliver on this report.”

Sandra Parthie, President of the INT section, EESC & Head of Brussels Office, IW Köln took a similar line, said: “The focus should be now on actually implementing it, helping companies to deal with all these new proposals, all these new requirements before we start adding more.”

She added that to prevent further fragmentation of the single market, Europe needs to go “more in the direction of regulation as opposed to directives that tend to be implemented rather diversely across the member states.”

Investment and savings union

Parthie offered strong support for Letta’s approach to an investment and savings union. However, she highlighted that private investments currently, make up more than 85% of all investments in the EU, “including, obviously, for the green and digital transition. So, sometimes it might sound as if there’s only public money, that is driving the change, but that’s not the case.”

Speaking about the temptation of protectionism, openness, and strategic autonomy in Europe, Charanzová remarked: “I’m a liberal person, so you will not hear me, squaring [this] question by saying that we should have Europe become more inward-looking. I still want to have Europe that is open, of course, Europe that thinks about its companies, about the European framework, about a European level playing field for European SMEs.”

[By Brian Maguire | Euractiv’s Advocacy Lab ]

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