The European Union needs to speed up competitiveness reforms

Europe is falling behind on competitiveness and needs to address the shortcomings of its single market urgently but in a way that benefits both business and Europeans

The EESC plenary today held a debate on European competitiveness and the future of the internal market. The EESC opinion at the centre of this debate was requested by the Belgian presidency of the Council of the EU, which has pledged to use its six months to focus on competitiveness and the single market. The opinion will also help shape Enrico Letta's high-level report on the future of the single market, set to be presented to the European Council in March.

Opening the debate Oliver Röpke, president of the EESC, said that "A properly functioning single market is one of the EU's greatest assets. But today's challenge goes beyond economics; it calls for a commitment to improve social and economic convergence. We must strive to reduce inequality, ensuring that deepening social imbalances do not hinder the path to European integration."

The EESC opinion stresses that the internal market needs to rise to the challenges of a very different world to the one it was created for back in the 1990s. Since then, we have witnessed globalisation and the rise of China as an economic superpower plus a series of macro crises, from the climate emergency to COVID-19 and the war in Ukraine. As a result, the EU is subject to opposing pressures: keeping the level playing field while subsidising its industries to help finance the green transition; keeping jobs in Europe while ensuring EU businesses stay competitive; securing raw materials while upholding labour and environmental standards.

Sandra Parthie, rapporteur for the opinion, said that "The single market has helped make the EU one of the most powerful trading blocs in the world - but this powerful position is about to be eroded. What we propose in our opinion is to focus on the development of a European industrial policy that is not the sum of 27 national industrial policies, but rather a truly European view of our industrial potential."

Alain Coheur, co-rapporteur for the opinion, said that "The internal market is supposed to protect companies, workers, consumers and above all, European citizens. But it's also supposed to make us dynamic and spread innovation."

Speaking at the debate, Markus Beyrer, Director General of Business Europe, said that "We have an issue with competitiveness. We are falling behind our global competitors, and the single market is one of the tools available to us to remedy this. The goal is to produce the margin we need to feed the European model as we know it, including the social aspects."

He considers that the future strategy for the single market should be based on 1) a competitiveness check for all EU legislation; 2) opening up the market for services; 3) standardisation without overregulation; and 4) structural reforms in the Member States, because "there is a lot the single market can do, but also a lot it cannot do."

"You cannot compete with China on China's terms. We need a different approach, centred on quality rather than low costs", said Ludovic Voet, Confederal Secretary of the European Trade Union Confederation (ETUC). "In our competitive system, businesses have to pay fair salaries, offer good jobs and not harm the environment. Europe has to keep the momentum for a just green transition."

He stressed that the European social contract is the basis of the single market and that contract needs to be reinforced.

Julia Blees, Policy Director, European Recycling Industries' Confederation (EuRIC), shared the view of her sector: "We want to have another Green Deal after the elections, but a Green Deal mixed with an Industrial Deal."

The EESC opinion includes a proposal to appoint a commissioner for services of general economic interest (SGEI) in the next Commission, with a five-year plan to develop secure, good-quality and sustainable SGEI. These account for 25% of EU GDP and 20% of total employment and cover key sectors such as transport, energy, communications, access to water and sanitation. However, they are also very important in healthcare and social services. "They are crucial not only for the operation of our businesses, but also for the balance and social, economic and territorial cohesion of our society", flags up the opinion.

Read the EESC opinion.

For more information, please contact:

EESC Press Unit – Daniela Marangoni

+32 (0)2 546 8422

daniela.marangoni@eesc.europa.eu

@EESC_PRESS