Could we imagine, in Europe, that it would be easier to send an employee to work in another EU country than to send them to the United States or Taiwan? This is not the case today, but this is the challenge posed to Stéphane Séjourné, Vice-President of the European Commission. Multiple examples of hidden costs penalize the EU. Such constraints limit the ability to venture into new European markets, curb market opportunities, reduce innovation potential, penalize competition, and ultimately limit growth.

This situation is not effective, and the objective of the recent report “Single Market Strategy” published by the Commission on May 21 is to propose measures to remedy it. The observation on the barriers between European countries is not recent. Robert J. Gordon spoke of the political tensions that, in the 19th century, encouraged production to be exported to the rest of the world rather than fueling organic growth in Europe. More recently, the IMF indicated that non-tariff barriers acted like customs duties to the tune of 45% in the manufacturing sector and 110% in services.
The observation of these hidden costs is old, but the Letta report, published in April 2024, brought it to the forefront. Europe needs to find ways to achieve greater autonomy in a world that is now more heterogeneous.

On Thursday, June 26, the 27 EU leaders will meet in Brussels to validate an autonomy strategy, including the emphasis placed on deepening the internal market.

The European Union has four building blocks to address the changing balance of the world.

The first is the one mentioned here concerning the ability to develop a more integrated European market, comparable in size to that of the United States. Such a situation would allow considerable economies of scale and therefore the ability to have the means to invest and innovate.
The second building block is the need to innovate in order to regain reassuring technological autonomy and mitigate dependence on the United States and China. The Draghi report addresses this issue and the need for massive investment.
The idea of ​​the report is also to invest in renewable energy to gain energy autonomy, a weak point in Europe.
The third building block is the military dimension that the Union must take on over the coming years. To gain autonomy, Europe must also be capable of defending itself.
The fourth building block is the Capital Markets Union, now called the Savings and Investment Union. Greater homogeneity in European financial markets, driven by European, rather than national, assets, should help maintain the excess savings it has in Europe.

The four building blocks are complementary and essential to Europe’s success. Let’s start with the integration of the internal market.