After a long spell on the back burner, the Single Market is back as one of the EU’s top priorities.
The EU’s flagship project to ensure the “four freedoms” of goods, services, persons and capital across European countries has always been the bloc’s core mission and arguably ranks as its most impressive achievement. But after its heyday in the 1980s and 1990s, it ran into a number of structural challenges. An enlarged EU membership sharpened concerns over migration and competition in a more diverse Europe. Roadblocks surged, political and technical, as the Single Market moved from its first focus on goods into the more complex realm of services.
In parallel, the EU agenda took on other priorities. The single currency and its troubles came to dominate the scene. China’s rise and American digital dominance encouraged a focus on Europe’s global influence over internal openness. The green transition, rule-of-law confrontations, Covid-19, and Putin’s invasion of Ukraine all made the Single Market look rather quaint within the overall mix of policy challenges to deal with.
Only one big development cut the other way: the Brexit trainwreck. The Brexiteers unintentionally showcased what the EU’s Single Market does and rallied the Continent in its defense. Still, even with that impetus, the EU’s original internal-openness mission has remained in the background since 2020.
Now that is changing. Worried about the cumulative effects of these dynamics on the centerpiece of European integration, and also conscious that European security and influence ultimately depend on economic competitiveness, Europeans leaders commissioned forthcoming reports from two ex-Italian Prime Ministers—on the Single Market by Enrico Letta, and on competitiveness by Mario Draghi—to lay out paths forward.
As an American observer, I will leave it to Mssrs. Letta and Draghi to tell Europeans what to do with their Single Market. I simply offer two points to consider in that conversation. They reflect my ongoing research with an international team of experts that compares the EU to the other vast advanced-economy single market: the United States.
‘Europe already enforces stronger principles of openness than exist inside the United States’
How does Europe’s Single Market look different next to the American one? The comparison highlights not how little but how much the Single Market has achieved in reconfiguring market governance. Few realize that Europe already enforces stronger principles of openness than exist inside the United States. Most goods are marketable across Europe under one set of requirements. This is less true in the U.S., as a recent Supreme Court ruling made clear. It upheld California’s right to exclude pork products from other states that fall short of its animal-welfare laws, even though California produces little pork. I am personally sympathetic to animal welfare, but this ruling is striking in its dismissal of concern for an open American economy. It authorizes states to set different requirements for almost anything. Not so in the EU: member-states may set higher standards for their own producers, but generally cannot exclude other members’ goods or services that meet EU-level requirements.
‘Even in services – where many barriers remain in cross-border service provision, the EU is ahead of the U.S.’
Even in services—the huge part of the economy where Single Market champions most bemoan “incompleteness”—the same contrast exists. Many barriers remain in EU cross-border service provision, but it is ahead of the U.S. in this area. For example, American professionals typically must carry duplicative licenses to work across borders (and pay fees and do extra training to do so). To note one tangible consequence, interstate telemedicine is authorized in only 14 of the 50 U.S. states. The EU, meanwhile, has a strong (if imperfectly enforced) regime for mutual recognition of qualifications. Telemedicine has been authorized EU-wide since 2001.
If we shift from internal-market rules to economic flows on the ground, it is true that the Single Market project has not delivered US-style levels of trade or individual mobility—but that was never a reasonable expectation. Econometricians attribute quite substantial effects in trade, mobility and growth to the Single Market’s reforms, but Europeans still trade and move less across internal borders than Americans. This is easy to explain as a function of Europe’s vastly greater cultural diversity and generally lower geographic mobility. Socially-integrated and geographically-mobile Americans, by contrast, trade and move more across states despite their more fragmented, less “complete” regulation of cross-border openness. The Single Market has had major payoffs, and could still have more, but Europe will not become America. Most Europeans surely don’t want it to.
‘We find a major ‘Europe effect’ on attitudes about these issues. It makes EU residents substantially more likely than Americans to be aware of their internal-market rules and to support allowing businesses and individuals “to move freely” across internal borders.’
Second, comparison to the U.S. suggests stronger European support for the Single Market than many expect. In an original survey fielded with IPSOS in May 2023 in the U.S. and 11 European countries, we find a major “Europe effect” on attitudes about these issues. When controlling statistically for political ideology, wealth, education, and many other factors, EU residents are substantially more likely than Americans to be aware of their internal-market rules and to support allowing businesses and individuals “to move freely” across internal borders. Even more striking, relative to what Americans say about their federal government, this effect makes EU residents over 35% more likely to agree that the EU “makes things better,” over 50% more likely to agree that the EU “has good intentions,” and even—remarkably—25% more likely to agree that citizens have “a lot of influence” over these central institutions.
‘The EU has been more successful at persuading citizens to support the Single Market, and EU action in general, than we tend to think.’
How can that be true? Our main interpretation is that Europe’s Single Market message has gotten through. The EU has been more successful at persuading citizens to support the Single Market, and EU action in general, than we tend to think. It has been drawing attention to border barriers and mobilizing interest groups and citizens about them for seventy years. Interstate barriers also exist in the United States, but it is nobody’s job in the federal government (or anywhere) to identify or address them.
This underlying support may not make Single Market issues the dominant theme in the upcoming European Parliament elections, but it suggests a reservoir of goodwill that EU politicians should heed on the campaign trail and build upon during the next political mandate. Despite all the noisy populism today, most Europeans see the Single Market as good governance. They’re ready to welcome more of it.
Prof. Craig Parsons (University of Oregon and University of Oslo)
