30 Years of the EU Single Market: A Referee for Fair Competition and a Coach for Economic Growth I Blog of Commissioner Thierry Breton
As we celebrate the 30th anniversary of the Single Market this year, we will continue to look back at how far we have come in the past decades – including by weathering a succession of crises – and how a strong Single Market remains vital for our collective future.
Today, against the backdrop of the consensus across the EU on the need to urgently boost European competitiveness and productivity, I would like to share two main messages: Firstly, the Single Market is and will remain our main instrument to ensure a level playing field among all 27 EU Member States. Secondly, the Single Market is and will remain our source of growth, job creation and exports.
Because if there is one area where Europe needs a referee who is also a coach, it is the Single Market.
The Single Market, our ”referee” to ensure a level playing field among all 27 EU Member States
The US Inflation Reduction Act is of course front of everybody's minds. With a total support of 369 billion dollars offering subsidies for both initial investments (CAPEX) and operational costs (OPEX) of sometimes as much as 80% of project costs, the US – which had lost its industry in past decades – is building a new industrial ecosystem in strategic clean energy sectors (wind, solar, batteries, hydrogen, automotive).
But this is not just a passing or isolated phenomenon. Other countries across the globe – suffice to name China – are adopting measures to attract our industrial capacities. It's not just a temporary issue. It's the new reality. So Europe needs its own plan, not only to accelerate the deployment of clean technologies, but also to develop the necessary manufacturing base . It's not about a subsidies race. It's a matter of ensuring our security of supply, competitiveness, export ability and job creation.
Faced with this new structural reality, the framework we put in place cannot only be about short-term temporary solutions. And it cannot simply favour big industrial countries. We need solutions that work across the European Union, with its different specificities and varying levels of fiscal capacity.
There is consensus across Europe that State aid procedures need to be faster – with Member States and industry alike highlighting that IPCEIs now sometimes taking more than a year to be approved harms our Single Market competitiveness – simpler, and more flexible to support mega-factory projects for the production of batteries, solar cells, electrolysers, wind turbines and all related value chains.
But beyond rendering State aid more flexible, we need to provide a common, predictable long-term framework that guarantees a level playing field, ensures the competitiveness of European industry and preserves the integrity of our Single Market – for all 27 Member States.
Needless to say, the Commission will continue to play its full role as Guardian of the Treaties to ensure that commonly agreed rules are applied on the ground. In doing so, we will continue to work hand in hand with Member States, as we are doing successfully with the Single Market Enforcement Taskforce, because enforcement and removing barriers is a shared responsibility. And because a well-functioning Single Market and a strong future-proof industry are two sides of the same coin.
The Single Market, our “coach” for growth, job creation and exports
Secondly, we need to continue deepening our Single Market and leveraging its role in ensuring that Europe remains an industrial powerhouse and the major trading bloc.
Deepening our Single Market, to ensure that people and businesses have access to the goods and services they need, when they need them. This entails reducing remaining barriers, securing supply chains and ensuring the availability of skills.
And leveraging the Single Market so that our regulatory ambitions translate into competitiveness and jobs.
With the Digital Decade, we set the objective of doubling the EU's global market share in semiconductors to 20% by 2030. To translate this ambition into reality, we quickly proposed the EU Chips Act to build a thriving semiconductor sector from research to production and a resilient supply chain.
Now, we need to ensure that decoupling from Russian fossil fuels and reaching our ambition of becoming a climate-neutral continent by 2050 does not result in importing technologies and products and exporting our jobs.
We have seen how our dependencies are used against us. We have learned (take the example of vaccine production) that without a strong manufacturing base, Europe's security of supply, export ability and job creation is at risk. We already see a trend emerging of being relegated to net importers of electric vehicles or solar panels, thus replacing our dependence on fossil fuels with industrial and technological dependencies.
So while our legislation already encourages the acceleration of the Green Deal and deployment of clean tech, we also need to build a strong manufacturing base – and by that I mean entire ecosystems with suppliers and SMEs – in clean technology.
A clean tech manufacturing base is also what will provide us with a source of growth, quality jobs and exports to the rest of the world.
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When the Single Market came under attack in the first weeks of the COVID-19 pandemic, we learned that when the Single Market does not work, we all pay the price. Because the dichotomy between so-called “Friends of the Single Market” and industrial countries has become outdated and irrelevant. With our economies and supply chains so closely interlinked, we are all in the same boat.
So today, once again, the answer to our common challenges is more, not less, Single Market integration. Europe has always found and should continue to work on common solutions, in solidarity, in the common European interest.
A recent survey by the European Roundtable for Industry shows that the level of confidence is at the lowest ever. More than a third of CEOs plan to temporarily either pause or decrease their investments in existing businesses. 15% intend to do this permanently. Even for German SMEs, the impacts are already significant. Price developments force around 40% of companies to withhold investment in the green and digital transformation. And almost one in four companies are considering transferring shares, production or jobs abroad.
Without decisive and urgent EU action, the Single Market risks fragmentation on a national basis, further affecting public confidence and the functioning of supply chains.
That is why we are working on a comprehensive answer to address the deindustrialisation challenge linked to energy costs and the race for clean tech and ensure the competitiveness of European industry and protect the Single Market integrity.