The new European cycle for the period 2024-2029 is decisive for Europe’s future competitiveness. The European institutions face the challenge and responsibility to set the region back on the path of competitiveness. This shift is key to Europe’s economic security and relevance in the new global order.
On the 30th anniversary of the European single market, its strengthening is seen as an opportunity for the region to reverse its loss of competitiveness. This is highlighted by the European Round Table (ERT), the European business coalition, in its Joint Declaration published on 13 February. In it, it emphasises that the well-being of European citizens is intrinsically linked to the competitiveness and innovative capacity of their companies. It therefore proposes that the deepening of the Single Market should be the main European political priority until 2030.
The ERT’s proposals for moving towards a more dynamic Single Market
After ERT, over the past two decades, the economic divergence between EU Member States and the United States has been reflected in an 82% gap difference in terms of GDP per capita. Moreover, the US, China and others have already overtaken Europe in terms of economic growth and innovation. The cost-of-living crisis and the challenges hampering business development in Europe require an urgent response.
According to a recent ERT survey, 86% of its members believe that regulation hinders Europe’s competitiveness.
This is why the ERT and other business organisations have worked tirelessly, making recommendations for EU competitiveness in the ERT Vision Paper and identifying more than 100 real cases in the compendium, which identifies the regulatory, political and administrative barriers that limit the full potential of the European Single Market and proposes concrete solutions. This work demonstrates the strong commitment of the private sector to a more dynamic and prosperous Europe.
In this context, European business hopes that both Enrico Letta and Mario Draghi, who have been mandated by the European Commission to lead a “comprehensive programme” to deepen the Single Market and foster resilient competitiveness, will take account of work done by the private sector. The concrete experiences, case studies and recommendations compiled by business associations provide an essential roadmap for moving towards a more cohesive and prosperous Europe.
ERT recommendations to address challenges and deepen the Single Market
The well-being of European citizens is directly dependent on the competitiveness and innovation of their enterprises. This is why further integration of the EU’s Single Market requires special attention to policies that remove regulatory and other barriers that run counter to the founding principles of the Single Market based on the free movement of goods, services, capital and people.
The ERT, together with 25 business associations, calls for a more proactive European Commission and sets out in its joint statement the key recommendations of business sector to address the current challenges:
- Deepening the EU’s Single Market to boost competitiveness and raise the living standards of citizens.
- Setting a headline target for 2030 and launching an ambitious agenda to overcome fragmentation in all areas.
- Remove cross-border barriers to trade, which could generate significant economic value without the need for additional funds.
- Adopt a holistic approach to competitiveness, simplifying EU rules and strengthening competitiveness monitoring.
- Streamline the activities of public administrations and improve coordination to better implement the Single Market.
- Interact more frequently with the business community to remove barriers and improve the efficiency of existing tools.
The relevance of the Digital Single Market and the ERT recommendations
The Digital Single Market is a fundamental catalyst for digital and green transformation of both European economy and society. The quality of connectivity and digital solutions accelerate this process, providing opportunities to expand and consolidate the benefits of digitalisation across the region, in terms of growth, prosperity and competitiveness.
In its recent report on connectivity, the ERT underlines the importance of connectivity for Europe’s competitiveness and confirms that there are barriers in the telecoms sector related to the regulatory approach and to regulatory and competition policy that limit its competitiveness.
In line with this report, the ERT, in its Compendium of obstacles to the Single Market, makes some recommendations on how to move forward in this direction in the area of infrastructure and digital services. More generally, it highlights the need for regulatory simplification adapted to the digital age, reflecting the realities of technological change and user behaviour.
Firstly, with regard to infrastructure, the ERT calls on the European Commission to consider revising its approach to mergers in order to promote sustainable competition and allow consolidation within countries. In other words, the EC should take into account not only the short-term impact on consumer prices, but also the long-term sustainability of investments, recognising the need for minimum viable scale. The local dimension, which is inextricably linked to the deployment of fixed and mobile networks, should be recalled. This underlines the importance of market structures that facilitate a minimum scale in network deployment areas to ensure a reasonable return on investment.
Regarding spectrum, the ERT calls for greater coordination between Member States in its allocation and implementation in order to reduce deployment costs. It also stresses the importance of establishing a timetable for spectrum auctions across the EU and common licensing criteria.
In terms of proposals for Digital Regulation in the European Union, the ERT documents focus on data protection, data availability and interoperability and the fragmented regulation of digital services.
On the one hand, it stresses the importance of harmonisation of the interpretation and implementation of the General Data Protection Regulation (GDPR), due to variations between Member States. The current regulatory flexibility allows for this diversity, but steps towards a more uniform interpretation are needed. For example, the ERT suggests unifying cloud certification under a single European scheme, such as ENISA’s European Cybersecurity Scheme for Cloud Services (EUCS), simplifying the process and fostering interoperability.
In addition, some current initiatives, such as the EU Cloud Rulebook and the Guidance on Cloud Public Procurement are non-binding. Moreover, existing directives limit the Commission’s ability to achieve effective harmonisation. A review of existing legislation is therefore required before proposing new regulations.
Towards a renewed commitment to competitiveness and innovation
The road to a more prosperous and promising future for Europe requires a renewed commitment to competitiveness and innovation. The proposals put forward by the European Round Table (ERT) and other business organisations provide important guidance on how to overcome regulatory, political and administrative barriers to the European Single Market.
Deepening the Single Market is not only an economic necessity, but also a matter of cohesion and prosperity for Europe’s citizens. Removing cross-border barriers, simplifying regulation and strengthening cooperation between Member States are key issues that need to be tackled with determination.
It is essential that Enrico Letta and Mario Draghi carefully consider the recommendations and experience of the private sector to ensure the success of this ambitious undertaking.
All in all, the future of Europe is at stake. It is time to turn challenges into opportunities and work together to build a more competitive, innovative and cohesive Europe.