A prolonged cost-of-living crisis is pushing tens of millions of Europeans towards poverty and driving political polarisation. To restore economic dynamism, policymakers must tear down intra-EU trade barriers so the Single Market can live up to its name.
At least 93.3 million Europeans were living at risk of poverty or social exclusion last year, according to Eurostat — more than one-fifth of the EU population. These people may struggle to afford adequate food, housing, energy, healthcare and education. A more efficient single market would bring down costs, easing the burden on consumers.
While the single market prevents the imposition of tariffs within the EU, many non-tariff barriers to trade persist at national borders. These include domestic subsidies, differing technical standards, a lack of cross-border infrastructure, labelling requirements and so on.
The International Monetary Fund (IMF) estimates that non-tariff barriers within the EU single market equate to tariffs of around 44% for goods — three times higher than between states in the US. For services, the figure is 110%.
At the EESC, I led work on a recent report that identified many of the problems with the single market and called urgently on the European Commission to remove trade barriers with legislation and proper enforcement of existing rules.
National governments also have work to do. To overcome such deep-rooted dysfunction we must all act together: Member States, the private sector, and the EU institutions.
National constraints increase prices
Companies are able to exploit gaps in the single market to differentiate between national markets, using different packaging or product composition to restrict the free movement of goods and thereby harm competition. The EESC, governments, consumers, trade unions and business representatives have all called for concrete measures to curb such territorial supply constraints (TSCs).
But despite a couple of high-profile enforcement cases — against brewer AB InBev in 2019 and confectioner Mondelez in 2024 — these practices remain embedded. According to a 2020 study by the Commission’s Joint Research Centre, consumers paid an additional €14 billion per year because of TSCs in just six product categories.
This year’s Single Market Strategy from the European Commission was an opportunity to tackle the problem. We were pleased to see TSCs identified as one of the ‘Terrible Ten’ in the strategy document, but I see no reason why the proposal to eliminate TSCs was removed from the list of actions proposed by the Commission. We need a stronger commitment.
Fragmentation and protectionism
Growing protectionism from national governments, coupled with a lack of infringement actions by the Commission, has progressively eroded single market rules — a barrier also identified in the Commission’s strategy.
This recent trend of re-fragmentation of the single market imposes additional costs and weakens market dynamics. Despite this, it appears to be politically tolerated.
The undermining of trade flows even extends to critical goods such as medicines. Restrictions on cross-border trade limit the ability to allocate medicines efficiently between member states, reducing competition and driving up prices for healthcare systems and patients.
Worse, medicines often expire before they can be redirected to areas where they are needed, further exacerbating cost pressures. Ensuring a well-functioning single market is crucial for preserving and strengthening affordability, supply resilience and availability of medicines and others critical goods across the EU.
The EU’s single market is unfit to meet the challenge of our times. By working with the Commission, national governments and other actors, we at the EESC hope we can start implementing the large number of fixes that will be necessary.
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