The single market, a cornerstone of the EU, has undeniably been a triumph in its more than 30 years of existence, contributing significantly to the growth of the European economy. Estimates suggest that the European economy is approximately 9% larger than it would be without the single market (In ’t Veld 2019), translating to more than 2700 additional euros in the pockets of each citizen every year. However, despite its success, recent years have witnessed sluggish progress, particularly in addressing obstacles hindering the ease of doing business abroad. The critical issue at hand is the impediment to trade in services, constituting 72.6% of the Eurozone economy, but comprising only a bit more than a mere one-third of intra-EU trade, as determined by Olan McEvoy in 2023. 

This discrepancy arises from national regulations that unnecessarily complicate the entry of companies from one European country into another, severely impeding economic growth.

In light of these challenges, protectionism is on the rise, with many governments opting to shield their businesses from competition rather than encouraging it. Notably, European rules on state subsidies, initially suspended during the Covid pandemic, have incompletely been rolled back. Moreover, recent discourse suggests a dirigiste turn in Europe, focusing on nurturing European champions through state interventions rather than natural growth in a competitive market. This approach risks fostering companies dependent on state subsidies rather than those succeeding due to their superior performance. To counter these concerning developments, it is imperative for LYMEC to maintain its focus on deepening the single market and promoting competition.

The economic impact of the single market cannot be overstated. Quantifying its benefits reveals its profound influence on the European economy. However, the untapped potential lies in removing barriers to trade in services and fostering healthy competition. The current protectionist trend within EU member states threatens to undermine these achievements. Protectionist measures hinder economic growth and impede the efficiency of the single market, negating the purpose it was established to serve.

At the heart of the matter is the need for fair competition. Competition is the driving force behind innovation and economic success. The recent interventionist trend in Europe contradicts the principles of a competitive single market. Regardless of location, a level playing field for businesses across the EU is essential for unleashing the full potential of the single market. Trusting in the competitiveness of the market rather than resorting to state subsidies should be the preferred approach to nurture European companies.

This is where LYMEC's manifesto pledge becomes crucial. 

The call for harmonised competition aligns with the very essence of the European Union. The manifesto advocates using the single market as a worldwide role model for the social market economy, prioritising the individual’s potential over state-owned economies. It emphasises the importance of a level playing field for businesses, common rules and standards for fair competition, and establishing a common EU patent system to protect intellectual property rights. All these measures have huge potential to boost economic growth and thus increase the salaries and purchasing power of all Europeans. Additional measures like the proposed tax cuts for European companies investing in innovative products, increased competition in tax rates, and a reformed Common Agricultural Policy for environmental sustainability are highly sensible instruments to support the efforts for a better single market.

As the European Union faces challenges to the single market, the manifesto pledge by LYMEC to expand the single market's potential through harmonised competition emerges as a beacon of hope in times where the political zeitgeist seems to go against the liberal cause. We must remember that the success of the single market lies not in protectionist measures but in a robust and competitive environment. By adhering to the principles outlined in the manifesto, LYMEC must counterbalance the calls for increased state intervention, ensuring a more prosperous and competitive future for European businesses and citizens alike. 

As we navigate the path towards the European parliamentary elections, let us champion the cause of a strengthened single market, grounded in fair competition and individual potential.

Sources

• McEvoy, Olan. 2023a. ‘Intra-EU Goods Trade by Product Category 2022’. Statista. https://www.statista.com/statistics/1375025/eu-internal-trade-total-trade-product-categories/ (January 26, 2024).
• ———. 2023b. ‘Intra-EU Services Trade by Product Group 2021’. Statista. https://www.statista.com/statistics/1376236/eu-internal-trade-value-services-traded-product-group/ (January 26, 2024).
• Structure of the Euro Area Economy. 2022. European Central Bank. https://www.ecb.europa.eu/mopo/eaec/html/index.en.html (January 26, 2024).
• in ’t Veld, Jan. 2019. ‘The Economic Benefits of the EU Single Market in Goods and Services’. Journal of Policy Modeling 41(5): 803–18.

The views expressed herein are those of the author(s) alone. These views do not necessarily reflect those of LYMEC.

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