Commission monitors strengths and challenges of EU’s competitiveness

This article is brought to you in association with the European Commission.

Today, the Commission is publishing the new Annual Single Market and Competitiveness Report.

The report details the competitive strengths and challenges of Europe’s Single Market, tracking yearly developments according to the nine competitiveness drivers identified in the EU’s 2023 Long-term competitiveness Communication. Those are the functioning of the Single Market, access to private capital, public investment and infrastructure, research and innovation, energy, circularity, digitalisation, education and skills, and trade and open strategic autonomy. The 2023 Communication established a set of Key Performance Indicators to serve as a dashboard of progress regarding these drivers. While it is too early to establish stable trends, the report notes that 9 KPIs have improved, against 5 that have disimproved; 3 are stable, and 2 do not yet have new data.

The report recalls that the Single Market is one of the world’s largest integrated market areas, and that it boosts the EU’s economy with a large demand pool, diversified supply sources, opportunities for innovating and scaling up production, strong social rights, and fair working conditions, while serving as a geopolitical lever. It points to the needs to step up enforcement of agreed rules, and to simplify their implementation.

Regarding investment, the report concludes that public investment has recovered from the low levels after the financial crisis, partially thanks to the Recovery and Resilience Facility, while private investment remains high. To increase the availability of risk and venture capital funding and scale up innovative companies, the report recommends to further strengthen the Capital Markets Union, building on the initiatives already approved since 2020. It also points to public procurement as an instrument to support our green and digital transitions in a strategic way.

Although high energy prices remain a challenge, the report points to important steps taken over the past years in order to update the EU energy policy toolbox and support EU clean tech manufacturing.

The report also notes that the EU is a major trading power accounting for 16% of global exports, and that trade continues to be a source of competitiveness. It also points to the need to defend the level playing field and to protect our economic security.

The Annual Single Market and Competitiveness Report – building on the annual reporting introduced by the Commission in 2020, and in its 2024 format responding to a request from the European Council – provides a basis for discussions in the European Parliament, the European Council and the Council on how to promote our Single Market and competitiveness agenda this spring. The report also comes ahead of the findings expected from Mr Mario Draghi and Mr Enrico Letta in their upcoming reports on the future of European competitiveness and of the Single Market respectively.

In addition, the Commission is today publishing several documents complementing the Annual Single Market and Competitiveness report:

• Two staff working documents, the first of which presents, among others, further detailed information on key performance indicators for competitiveness. The other one presents the findings of the “European Monitor of Industrial Ecosystems” on the green and digital transitions across individual industrial ecosystems.
• The 2024 Single Market and Competitiveness Scoreboardoffers a wide range of additional data on the integration of the Single Market. The Scoreboard focuses on the progress made in implementing EU law, overall business conditions, integration of the Single Market and other major policy goals like growth and jobs, resilience, and digital and green economy.
• The 2022–2023 Single Market Enforcement Taskforce (SMET) report: This annual report highlights the work of the SMET, where the Commission and Member States work together to remove unjustified barriers in the Single Market, such as checks imposed on professionals, barriers to permitting for renewable energy, and administrative burdens for cross border service providers.

Background  

The Annual Single Market and Competitiveness report responds to the request of the March 2023 European Council to monitor the state of Europe’s Single Market and competitiveness. It builds on previous Annual Single Market reports as first envisaged by the 2020 EU Industrial Strategy.

As to the next steps, the June 2023 European Council announced its plan to hold the first annual progress review on enhancing the Union’s competitiveness and increasing productivity and growth at its March 2024 meeting. 

The Single Market Scoreboard was first published in 1997 and was initially set up to assess the performance of the Member States on the implementation of Single Market acquis. It was extended over time to cover the use of related governance tools. This year, it includes new competitiveness indicators, in line with the Long-term competitiveness Communication.

For More Information

Annual Single Market and Competitiveness Report (ASMCR)

Staff Working Documents accompanying the ASMCR

Single Market Scoreboard 

Report of the Single Market Enforcement Task Force (SMET)

Quote(s)

Today’s report confirms Europe’s many competitive strengths, and that a strong Single Market remains key for our businesses to thrive and exploit new opportunities. But more efforts are needed to pull in investments, boost our strategic technologies and ensure that our workforce is equipped with the right skills.

Margrethe Vestager, Executive Vice-President for a Europe Fit for the Digital Age

The Single Market and industrial policy go hand in hand to support the EU’s competitiveness. Today’s report presents facts and figures highlighting the many strengths of the EU economy, its Single Market, its innovation potential, and its regulatory framework in the green and digital spheres. Despite these strong assets, more efforts are required to address energy costs, avoid trading old dependencies in fossil fuels for new dependencies and to ensure better coordination of EU and national investments in the technologies of the future, for quality jobs in the EU.

Thierry Breton, Commissioner for Internal Market